The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

Even the best-performing and most stable government forms of money have witnessed their value decimated compared to gold, with their value currently running at around 2–3% of their value in 1971 when they were all delinked from gold. This does not represent a rise in the market value of gold, but rather a drop in the value of fiat currencies.

Relative stability of value is not just important to preserve the purchasing power of holders' savings, it is arguably more important for preserving the integrity of the monetary unit as a unit of account. When money is predictably stable in value due to the small variation in supply and demand, it can act as a reliable signal for changes in prices of other goods and services, as was the case with gold.

Sound money, chosen on a free market precisely for its likelihood to hold value over time, will naturally have a better stability than unsound money whose use is enforced through government coercion. Had government money been a superior unit of account and store of value, it would not need government legal tender laws to enforce it, nor would governments worldwide have had to confiscate large quantities of gold and continue to hold them in their central bank reserves. The fact that central banks continue to hold onto their gold, and have even started increasing their reserves, testifies to the confidence they have in their own currencies in the long term, and in the inescapable monetary role of gold as the value of paper currencies continues to plumb new depths.

One of the most mendacious fantasies that pervades Keynesian economic thought is the idea that the national debt “does not matter, since we owe it to ourselves.” Only a high-time-preference disciple of Keynes could fail to understand that this “ourselves” is not one homogeneous blob but is differentiated into several generations—namely, the current ones which consume recklessly at the expense of future ones. To make matters worse, this phrase is usually followed by emotional blackmail along the lines of “we would be short-changing ourselves if we didn't borrow to invest for our future.”

It is an ironic sign of the depth of modern-day economic ignorance fomented by Keynesian economics that capitalism—an economic system based on capital accumulation from saving—is blamed for unleashing conspicuous consumption—the exact opposite of capital accumulation. Capitalism is what happens when people drop their time preference, defer immediate gratification, and invest in the future. Debt-fueled mass consumption is as much a normal part of capitalism as asphyxiation is a normal part of respiration.

This also helps explain one of the key Keynesian misunderstandings of economics, which considers that delaying current consumption by saving will put workers out of work and cause economic production to stall. Keynes viewed the level of spending at any point in time as being the most important determinant of the state of the economy because, having studied no economics, he had no understanding of capital theory and how employment does not only have to be in final goods, but can also be in the production of capital goods which will only produce final goods in the future. And having lived off of his family's considerable fortune without having to work real jobs, Keynes had no appreciation of saving or capital accumulation and their essential role in economic growth. Hence, Keynes would observe a recession concurrently with a fall in consumer spending and increase in saving, and assume the causality runs from increased savings to decreased consumption to recession. Had he had the temperament to study capital theory, he would have understood that the decreased consumption was a natural reaction to the business cycle, which was in turn caused by the expansion of the money supply, as will be discussed in Chapter 6. He would also have understood that the only cause of economic growth in the first place is delayed gratification, saving, and investment, which extend the length of the production cycle and increase the productivity of the methods of production, leading to better stan...

The well-known phenomenon of the modern breakdown of the family cannot be understood without recognizing the role of unsound money allowing the state to appropriate many of the essential roles that the family has played for millennia, and reducing the incentive of all members of a family to invest in long-term familial relations.

once one overcomes one's inherent bias to believe in the inevitability of progress, there is no escaping the conclusion that ours is a generation that is inferior to its ancestors in culture and refinement, in the same way the Roman subjects of Diocletian, living off his inflationary spending and drunk on the barbaric spectacles of the Colosseum, could not hold a candle to the great Romans of Caesar's era, who had to earn their aureus coins with sober hard work.

As economic production moves from the very primitive scale, it becomes harder for individuals to make production, consumption, and trade decisions without having a fixed frame of reference with which to compare the value of different objects to one another. This property, the unit of account, is the third function of money after being a medium of exchange and store of value.

Prices are the only mechanism that allows trade and specialization to occur in a market economy. Without resort to prices humans could not benefit from the division of labor and specialization beyond some very primitive small scale. Trade allows producers to increase their living standards through specialization in the goods in which they have a comparative advantage—goods which they can produce at a lower relative cost. Only with accurate prices expressed in a common medium of exchange is it possible for people to identify their comparative advantage and specialize in it.

While most understand the importance of the price system to the division of labor, few get the crucial role it plays in capital accumulation and allocation, for which we need to turn to the work of Mises. In his 1922 book, Socialism, Mises explained the quintessential reason why socialist systems must fail, and it was not the commonly held idea that socialism simply had an incentive problem (Why would anyone work if everyone got the same rewards regardless of effort?). Given that lack of application to one's job was usually punished with government murder or imprisonment, socialism arguably overcame the incentive problem successfully, regardless of how bloody the process. After a century in which around 100 million people worldwide were murdered by socialist regimes,3 this punishment was clearly not theoretical, and the incentives to work were probably stronger than in a capitalist system. There must be more to socialist failure than just incentives, and Mises was the first to precisely explicate why socialism would fail even if it were to successfully overcome the incentive problem by creating “the new socialist man.” The fatal flaw of socialism that Mises exposed was that without a price mechanism emerging on a free market, socialism would fail at economic calculation, most crucially in the allocation of capital goods.

Further, when the government owns all inputs into all the production processes of the economy, the absence of a price mechanism makes it virtually impossible to coordinate the production of various capital goods in the right quantities to allow all the factories to function. Scarcity is the starting point of all economics, and it is not possible to produce unlimited quantities of all inputs; trade-offs need to be made, so allocating capital, land, and labor to the production of steel must come at the expense of creating more copper. In a free market, as factories compete for the acquisition of copper and steel, they create scarcity and abundance in these markets and the prices allow copper and steel makers to compete for the resources that go into making them. A central planner is completely in the dark about this web of preferences and opportunity costs of trains, cars, copper, steel, labor, capital, and land. Without prices, there is no way to calculate how to allocate these resources to produce the optimal products, and the result is a complete breakdown in production.

The point of this exposition is not to argue against the socialist economic system, which no serious adult takes seriously in this day and age, after the catastrophic, bloody and comprehensive failure it has achieved in every society in which it has been tried over the last century. The point rather is to explicate clearly the difference between two ways of allocating capital and making production decisions: prices and planning.

It is first important to understand the distinction between loanable funds and actual capital goods. In a free market economy with sound money, savers have to defer consumption in order to save. Money that is deposited in a bank as savings is money taken away from consumption by people who are delaying the gratification that consumption could give them in order to gain more gratification in the future. The exact amount of savings becomes the exact amount of loanable funds available for producers to borrow. The availability of capital goods is inextricably linked to the reduction of consumption: actual physical resources, labor, land, and capital goods will move from being employed in the provision of final consumption goods to the production of capital goods. The marginal worker is directed away from car sales and toward a job in the car factory; the proverbial corn seed will go into the ground instead of being eaten.

As an economy advances and becomes increasingly sophisticated, the connection between physical capital and the loanable funds market does not change in reality, but it does get obfuscated in the minds of people. A modern economy with a central bank is built on ignoring this fundamental trade-off and assuming that banks can finance investment with new money without consumers having to forgo consumption. The link between savings and loanable funds is severed to the point where it is not even taught in the economics textbooks any more,8 let alone the disastrous consequences of ignoring it. As the central bank manages the money supply and interest rate, there will inevitably be a discrepancy between savings and loanable funds. Central banks are generally trying to spur economic growth and investment and to increase consumption, so they tend to increase the money supply and lower the interest rate, resulting in a larger quantity of loanable funds than savings. At these artificially low interest rates, businesses take on more debt to start projects than savers put aside to finance these investments. In other words, the value of consumption deferred is less than the value of the capital borrowed. Without enough consumption deferred, there will not be enough capital, land, and labor resources diverted away from consumption goods toward higher-order capital goods at the earliest stages of production. There is no free lunch, after all, and if consumers save less, there will have to ...

The business cycle is the natural result of the manipulation of the interest rate distorting the market for capital by making investors imagine they can attain more capital than is available with the unsound money they have been given by the banks. Contrary to Keynesian animist mythology, business cycles are not mystic phenomena caused by flagging “animal spirits” whose cause is to be ignored as central bankers seek to try to engineer recovery.9 Economic logic clearly shows how recessions are the inevitable outcome of interest rate manipulation in the same way shortages are the inevitable outcome of price ceilings.

While most people imagine that socialist societies are a thing of the past and that market systems rule capitalist economies, the reality is that a capitalist system cannot function without a free market in capital, where the price of capital emerges through the interaction of supply and demand and the decisions of capitalists are driven by accurate price signals. The central bank's meddling in the capital market is the root of all recessions and all the crises which most politicians, journalists, academics, and leftist activists like to blame on capitalism. Only through the central planning of the money supply can the price mechanism of the capital markets be corrupted to cause wide disruptions in the economy.

“We now have a tiger by the tail: how long can this inflation continue? If the tiger (of inflation) is freed he will eat us up; yet if he runs faster and faster while we desperately hold on, we are still finished! I'm glad I won't be here to see the final outcome.” —Friedrich Hayek

Central bank planning of the money supply is neither desirable nor possible. It is rule by the most conceited, making the most important market in an economy under the command of the few people who are ignorant enough of the realities of market economies to believe they can centrally plan a market as large, abstract, and emergent as the capital market. Imagining that central banks can “prevent,” “combat,” or “manage” recessions is as fanciful and misguided as placing pyromaniacs and arsonists in charge of the fire brigade.

Equivalently, central planning of credit markets must fail because it destroys markets' mechanisms for price-discovery providing market participants with the accurate signals and incentives to manage their consumption and production.

The 1920 depression saw one of the fastest contractions of output in American history (9% drop in a 10-month period from September 1920 to July 1921), and also the fastest recovery. In other depressions, with Keynesians and Monetarists injecting liquidity, increasing the money supply, and increasing government spending, the recovery was slower.

Only the vanity of the insane can be affected by changing the unit with which they're measured. Making the meter shorter might make someone whose house's area is 200 square meters believe it is actually 400 square meters, but it would still be the same house. All that this redefinition of the meter has caused is ruin an engineer's ability to properly build or maintain a house. Similarly, devaluing a currency may make a country richer nominally, or increase the nominal value of its exports, but it does nothing to make the country more prosperous.

in the mind of Keynesians, that anything that boosts exports is good. Because a devalued currency makes exports cheaper, any country facing an economic slowdown can boost its GDP and employment by devaluing its currency and increasing its exports. There are many things wrong with this worldview. Reducing the value of the currency does nothing to increase the competitiveness of the industries in real terms. Instead, it only creates a one-time discount on their outputs, thus offering them to foreigners at a lower price than locals, impoverishing locals and subsidizing foreigners. It also makes all the country's assets cheaper for foreigners, allowing them to come in and purchase land, capital, and resources in the country at a discount. In a liberal economic order, there is nothing wrong with foreigners buying local assets, but in a Keynesian economic order, foreigners are actively subsidized to come buy the country at a discount. Further, economic history shows that the most successful economies of the postwar era, such as Germany, Japan, and Switzerland, grew their exports significantly as their currency continued to appreciate. They did not need constant devaluation to make their exports grow; they developed a competitive advantage that made their products demanded globally, which in turn caused their currencies to appreciate compared to their trade partners, increasing the wealth of their population. It is counterproductive for the countries importing from them to think ...

“[G]overnments believe that … when there is a choice between an unpopular tax and a very popular expenditure, there is a way out for them—the way toward inflation. This illustrates the problem of going away from the gold standard.” —Ludwig von Mises

Under a sound monetary system, government had to function in a way that is unimaginable to generations reared on the twentieth-century news cycle: they had to be fiscally responsible. Without a central bank capable of increasing the money supply to pay off the government debt, government budgets had to obey the regular rules of financial responsibility which apply to every healthy normal entity, and which monetary nationalism has attempted to repeal and state education attempted to obfuscate.

There are today two main government-approved mainstream schools of economic thought: Keynesians and Monetarists. While these two schools have widely disparate methodologies and analytical frameworks, and while they are engaged in bitter academic fights accusing each other of not caring about the poor, the children, the environment, inequality, or the buzzword du jour, they both agree on two unquestionable truths: first, the government has to expand the money supply. Second, both schools deserve more government funding to continue researching really important Big Questions which will lead them to find ever-more-creative ways of arriving at the first truth.

Keynes was a failed investor and statistician who never studied economics but was so well-connected with the ruling class in Britain that the embarrassing drivel he wrote in his most famous book, The General Theory of Employment, Money, and Interest, was immediately elevated into the status of founding truths of macroeconomics. His theory begins with the (completely unfounded and unwarranted) assumption that the most important metric in determining the state of the economy is the level of aggregate spending across society. When society collectively spends a lot, the spending incentivizes producers to create more products, thus employing more workers and reaching full-employment equilibrium. If spending rises too much, beyond the capacity of producers to keep up, it would lead to inflation and a rise in the overall price level. On the other hand, when society spends too little, producers reduce their production, firing workers and increasing unemployment, resulting in a recession. Recessions, for Keynes, are caused by abrupt reductions in the aggregate level of spending.

The other main school of government-approved economic thought in our day and age is the Monetarist school, whose intellectual father is Milton Friedman. Monetarists are best understood as the battered wives of the Keynesians: they are there to provide a weak, watered-down strawman version of a free market argument to create the illusion of a climate of intellectual debate, and to be constantly and comprehensively rebutted to safely prevent the intellectually curious from thinking of free markets seriously.

The creed of Keynes, which is universally popular today, is the creed of consumption and spending to satisfy immediate wants. By constantly expanding the money supply, central banks' monetary policy makes saving and investment less attractive and thus it encourages people to save and invest less while consuming more. The real impact of this is the widespread culture of conspicuous consumption, where people live their lives to buy ever-larger quantities of crap they do not need. When the alternative to spending money is witnessing your savings lose value over time, you might as well enjoy spending it before it loses its value. The financial decisions of people also reflect on all other aspects of their personality, engendering a high time preference in all aspects of life: depreciating currency causes less saving, more borrowing, more short-termism in economic production and in artistic and cultural endeavors, and perhaps most damagingly, the depletion of the soil of its nutrients, leading to ever-lower levels of nutrients in food.

the classical tradition of economics, which is the culmination of hundreds of years of scholarship from around the world. Commonly referred to today as the Austrian school, in honor of the last great generation of economists from Austria in its golden age pre–World War I, this school draws on the work of Classical Scottish, French, Spanish, Arab, and Ancient Greek economists in explicating its understanding of economics. Unlike Keynesian and Monetarist fixation on rigorous numerical analysis and mathematical sophistry, the Austrian school is focused on establishing an understanding of phenomena in a causal manner and logically deducing implications from demonstrably true axioms.

the services which money renders can be neither improved nor impaired by changing the supply of money.... The quantity of money available in the whole economy is always sufficient to secure for everybody all that money does and can do.

According to the Austrian view, if the money supply is fixed, then economic growth will cause prices of real goods and services to drop, allowing people to purchase increasing quantities of goods and services with their money in the future. Such a world would indeed discourage immediate consumption as the Keynesians fear, but encourage saving and investment for the future where more consumption can happen. For a school of thought steeped in high time preference, it is understandable that Keynes could not understand that increased savings' impact on consumption in any present moment is more than outweighed by the increases in spending caused by the increased savings of the past. A society which constantly defers consumption will actually end up being a society that consumes more in the long run than a low savings society, since the low-time-preference society invests more, thus producing more income for its members. Even with a larger percentage of their income going to savings, the low-time-preference societies will end up having higher levels of consumption in the long run as well as a larger capital stock.

If society were a little girl in that marshmallow experiment, Keynesian economics seeks to alter the experiment so that waiting would punish the girl by giving her half a marshmallow instead of two, making the entire concept of self-control and low time preference appear counterproductive. Indulging immediate pleasures is the more likely course of action economically, and that will then reflect on culture and society at large. The Austrian school, on the other hand, by preaching sound money, recognizes the reality of the trade-off that nature provides humans, and that if the child waits, there will be more reward for her, making her happier in the long run, encouraging her to defer her gratification to increase it.

Further, an economy with an appreciating currency would witness investment only in projects that offer a positive real return over the rate of appreciation of money, meaning that only projects expected to increase society's capital stock will tend to get funded. By contrast, an economy with a depreciating currency incentivizes individuals to invest in projects that offer positive returns in terms of the depreciating currency, but negative real returns. The projects that beat inflation but do not offer positive real returns effectively reduce society's capital stock, but are nonetheless a rational alternative for investors because they reduce their capital slower than the depreciating currency. These investments are what Ludwig von Mises terms malinvestments—unprofitable projects and investments that only appear profitable during the period of inflation and artificially low interest rates, and whose unprofitability will be exposed as soon as inflation rates drop and interest rates rise, causing the bust part of the boom-and-bust cycle.

While the Keynesian economists have no explanation for why recessions happen other than invoking “animal spirits,” Austrian school economists have developed the only coherent theory that explains the cause of business cycles: the Austrian Theory of the Business Cycle.

controlled money was inaugurated with the first world war in human history. There are three fundamental reasons that drive the relationship between unsound money and war. First, unsound money is itself a barrier to trade between countries, because it distorts value between the countries and makes trade flows a political issue, creating animosity and enmity between governments and populations. Second, government having access to a printing press allows it to continue fighting until it completely destroys the value of its currency, and not just until it runs out of money. With sound money, the government's war effort was limited by the taxes it could collect. With unsound money, it is restrained by how much money it can create before the currency is destroyed, making it able to appropriate wealth far more easily. Third, individuals dealing with sound money develop a lower time preference, allowing them to think more of cooperation rather than conflict,

To fully appreciate the gains from trade that accrue to you, just imagine trying to live your life in self-sufficiency. Basic survival would become a very hard task for any of us, as our time is spent inefficiently and fruitlessly attempting to provide the very basics of survival to ourselves.

Trade between peoples creates peaceful coexistence by giving them a vested interest in each other's prosperity.

Being predisposed to focus on the future, individuals with a low time preference are less likely to engage in conflict than those with a present orientation. Conflict is by its very nature destructive, and in most cases, intelligent and future-oriented people understand that there are no winners in violent conflict, because the winners will likely suffer more losses than if they had just abstained from taking part in the conflict in the first place. Civilized societies function on the premise that people respect one another's wills, and if there are conflicts, they attempt a peaceful resolution. Should an amicable solution not be found, people are more likely to part ways and avoid each other than continue to agitate and remain in conflict. This helps explain why prosperous civilized societies generally do not witness much crime, violence, or conflict.

On a national level, nations using sound money are far more likely to stay peaceful, or to have limited conflict with one another, because sound money places real constraints on the ability of government to finance its military operations. In nineteenth-century Europe, kings who wanted to fight each other had to tax their populations in order to finance their militaries. In the long run, such a strategy could only be profitable for kings who would employ their military defensively, not offensively. Defensive military action always has a stronger advantage than offensive military nature, because the defender is fighting on its own soil, near its people and its supply lines. A monarch who focused the military on defensive action would find his citizens willing to pay taxes to defend themselves from foreign invaders. But a monarch who engaged in protracted foreign adventures to enrich himself would likely face resentment from his population and incur significant costs in fighting other armies on their home soil.

As it stands, a large number of firms in all advanced economies specialize in warfare as a business, and are thus reliant on perpetuating war to continue being in business. They live off government spending exclusively, and have their entire existence reliant on there being perpetual wars necessitating ever-larger arms spending. In the United States, whose defense spending is almost equal to that of the rest of the planet combined, these industries have a vested interest in keeping the U.S. government involved in some form of military adventure or other. This, more than any strategic, cultural, ideological, or security operations, explains why the United States has been involved in so many conflicts in parts of the world that cannot possibly have any bearing on the life of the average American. Only with unsound money can these firms grow to such enormous magnitude that they can influence the press, academia, and think tanks to continuously beat the drums of more war.

Unsound money, on the other hand, allows governments to buy allegiance and popularity by spending on achieving popular objectives without having to present the bill to their people. Government simply increases the money supply to finance any harebrained scheme it concocts, and the true cost of such schemes is only felt by the population in years to come when the inflation of the money supply causes prices to rise, at which point the destruction of the value of the currency can be easily blamed on myriad factors, usually involving some nefarious plots by foreigners, bankers, local ethnic minorities, or previous or future governments. Unsound money is a particularly dangerous tool in the hands of modern democratic governments facing constant reelection pressure. Modern voters are unlikely to favor the candidates who are upfront about the costs and benefits of their schemes; they are far more likely to go with the scoundrels who promise a free lunch and blame the bill on their predecessors or some nefarious conspiracy. Democracy thus becomes a mass delusion of people attempting to override the rules of economics by voting themselves a free lunch and being manipulated into violent tantrums against scapegoats whenever the bill for the free lunch arrives via inflation and economic recessions.

Unsound money is at the heart of the modern delusion believed by most voters and those unfortunate enough to study modern macroeconomics at university level: that government actions have no opportunity costs, and that government can act with an omnipotent magic wand to create the reality it wants. Whether it's poverty reduction, morality enforcement, healthcare, education, infrastructure, reforming other countries' political and economic institutions, or overriding the rules of supply and demand for any emotionally important good, most modern citizens live in the delusional dreamland wherein none of these have actual costs, and all that is needed for these goals to be achieved is “political will,” “strong leadership,” and an absence of corruption. Unsound money has eradicated the notion of trade-offs and opportunity costs from the mind of individuals thinking of public affairs. It will shock the average citizen to have the startlingly obvious pointed out to them: all of these nice things you want cannot be summoned costlessly out of thin air by your favorite politician, or his opponent. They all need to be provided by real people—people who need to wake up in the morning and spend days and years toiling at giving you what you want, denying themselves the chance to work on other things they might prefer to produce. Though no politician has ever been elected by acknowledging this reality, the ballot box cannot overturn the fundamental scarcity of human time. Any time governm...

It is no coincidence that when recounting the most horrific tyrants of history, one finds that every single one of them operated a system of government-issued money which was constantly inflated to finance government operation. There is a very good reason that Vladimir Lenin, Joseph Stalin, Mao Ze Dong, Adolf Hitler, Maximilien Robespierre, Pol Pot, Benito Mussolini, Kim Jong Il, and many other notorious criminals all ruled in periods of unsound government-issued money which they could print at will to finance their genocidal and totalitarian megalomania. It is the same reason that the same societies which birthed these mass murderers did not produce anyone close to their level of criminality when living under sound monetary systems which required governments to tax before they spent. None of these monsters ever repealed sound money in order to fund their mass murder. The destruction of sound money had come before, hailed with wonderful feel-good stories involving children, education, worker liberation, and national pride. But once sound money was destroyed, it became very easy for these criminals to take over power and take command of all of their society's resources by increasing the supply of unsound money.

In other words, the Keynesian conception of the state, from which came the modern central banking doctrines held widely by all central bankers, and which shape the vast majority of economic textbooks written worldwide, comes from a place of a man who wanted government direction of two important areas of life: first, the control of money, credit, saving, and investment decisions, which meant the totalitarian centralization of capital allocation and destruction of free individual enterprise, making individuals utterly dependent on government for their basic survival, and second, the control of population quantity and quality, which meant eugenics. And unlike socialists, Keynes did not seek this level of control over individuals in order to enhance their freedom in the long run, but rather to develop a grander vision of society as he sees fit. While socialists may have had the decency to at least pretend to want to enslave man for his own good, to free him in the future, Keynes wanted government enslavement for its own sake, as the ultimate end. This may help explain why Murray Rothbard said, “There is only one good thing about Marx, at least he was not a Keynesian.”

As money is acquired not for its own properties, but to be exchanged for other goods and services, its purchasing power is important, not its absolute quantity. There is therefore no societal benefit from any activity which increases the supply of money. This is why in a free market, whatever assumes a monetary role will have a reliably high stock-to-flow ratio: the new supply of the money is small compared to the overall existing supply. This ensures that the least possible amount of society's labor and capital resources is dedicated toward producing more monetary media, and is instead dedicated toward the production of useful goods and services whose absolute quantity, unlike that of money, matters.

The real cost is not in the direct cost of running the printing presses, but from all the economic activity forgone as productive resources chase after the new government-issued money rather than engage in economic production.

It is not possible to estimate with any degree of accuracy what percentage of the economic activity in the modern world economy goes toward pursuing government-printed money rather than the production of goods and services useful to society, but it is possible to get an idea by looking at which firms and sectors survive because of succeeding in the test of the free market, and which are only alive thanks to government largesse—be it fiscal or monetary. Fiscal support is the more straightforward of zombie-creation methods to detect. Any firms that receive direct government support, and the vast majority of firms that are alive thanks to selling their products to the public sector, are effectively zombies. Had these firms been productive to society, free individuals would have willingly parted with their money to pay for their products. That they cannot survive on voluntary payments shows that these firms are a burden and not a productive asset for society.

In the world of fiat money, having access to the central bank's monetary spigots is more important than serving customers. Firms that can get low-interest-rate credit to operate will have a persistent advantage over competitors that cannot. The criteria for success in the market becomes more and more related to being able to secure funding at lower interest rates than to providing services to society.