The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

Hyperinflation is a far more pernicious phenomenon than just the loss of a lot of economic value by a lot of people; it constitutes a complete breakdown of the structure of economic production of a society built up over centuries and millennia. With the collapse of money, it becomes impossible to trade, produce, or engage in anything other than scraping for the bare essentials of life. As the structures of production and trade that societies have developed over centuries break down due to the inability of consumers, producers, and workers to pay one another, the goods which humans take for granted begin to disappear. Capital is destroyed and sold off to finance consumption. First go the luxury goods, but soon follow the basic essentials of survival, until humans are brought back to a barbaric state wherein they need to fend for themselves and struggle to secure the most basic needs of survival. As the individual's quality of life degenerates markedly, despair begins to turn to anger, scapegoats are sought, and the most demagogic and opportunistic politicians take advantage of this situation, stoking people's anger to gain power. The most vivid example of this is inflation of the Weimar Republic in the 1920s, which not only led to the destruction and breakdown of one of the world's most advanced and prosperous economies, but also fueled the rise of Adolf Hitler to power.