The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

From the sky the bombs did drop, along with countless heretofore unimaginable forms of murder and horror. The war machines that the government-directed economies built were far more advanced than any the world had ever seen, thanks to the popularity of the most dangerous and absurd of all Keynesian fallacies, the notion that government spending on military effort would aid economic recovery. All spending is spending, in the naive economics of Keynesians, and so it matters not if that spending comes from individuals feeding their families or governments murdering foreigners: it all counts in aggregate demand and it all reduces unemployment! As an increasing number of people went hungry during the depression, all major governments spent generously on arming themselves, and the result was a return to the senseless destruction of three decades earlier. For Keynesian economists, the war was what caused economic recovery, and if one looked at life merely through the lens of statistical aggregates collected by government bureaucrats, such a ridiculous notion is tenable. With government war expenditure and conscription on the rise, aggregate expenditure soared while unemployment plummeted, so all countries involved in World War II had recovered because of their participation in the war. Anybody not afflicted with Keynesian economics, however, can realize that life during World War II, even in countries that did not witness war on their soil, like the United States, cannot by any s...