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The Scottish banking system proved efficient, innovative, stable and calm. It required only slim precious-metal margins of 1–2 per cent, and introduced numerous new features such as the cash-credit account, branch banking and interest on small deposits.
In short, there is no question that a country can run a stable paper currency without a gold standard, a central bank, a lender of last resort, or much regulation; and not only avoid disaster, but perform well. Bottom–up monetary systems – known as free banking – have a far better track record than top–down ones.
To leave Fannie and Freddie out of the story of the Great Recession is impossible, and to omit the political mandates that drove them is unthinkable. They were from start to finish a top–down distortion of a bottom–up market.
The government monopoly of money leads not just to the suppression of innovation and experiment, not just to inflation and debasement, not just to financial crises, but to inequality too.
opportunities in finance ripple outwards from the Treasury. The state spends money before it even exists; the privileged banks then get first access to newly minted money and can invest it before assets have increased in cost. By the time it reaches ordinary people, the money is worth less.
‘This system of money and finance is not an unregulated free market, but protected crony capitalism. It is immoral, deeply unfair and highly perilous.
In the early 2000s, unprompted by anybody in government or industry, Kenyans began transferring mobile-phone minutes to each other by text as a form of money.
M-Pesa now allows people to pay real money into their phones or take it out via agents, and to transfer credits between phones. This proved popular with people working in cities remitting cash to their families back home in rural villages. Two-thirds of Kenyans now use M-Pesa as money, and more than 40 per cent of the country’s GDP flows through the currency.
Money serves three main functions – a store of value, a medium of exchange and a unit of account.
‘Fiat’ money, made of paper, say, avoids these problems, but since the only check on supply is the state’s promise not to print money at whim, and since that promise has been broken not just once but repeatedly throughout history by states doing just that in order to reduce their debts, the search for a way to write rules of monetary policy that will not be broken continues.
All in all, it is possible that future generations will conclude that the Fed has been to the economy as bleeding was to eighteenth-century medicine: worse than useless, but none dared say so.
Nothing can be made from nothing – once we see that’s so, Already we are on the way to what we want to know: What can things be fashioned from? And how is it without The machinations of the gods, all things can come about? Lucretius, De Rerum Natura,
Nobody is in charge. Yet for all its messiness, the internet is not chaotic. It is ordered, complex and patterned. It is a living example, before our eyes, of the phenomenon of evolutionary emergence – of complexity and order spontaneously created in a decentralised fashion without a designer.
Christopher Kedzie of Harvard points out that dictators like communication technologies that have very few originators and very many recipients. Many-to-many technologies, like the telephone and the internet, have undermined rather than strengthened dictatorial government.
Television is a few to many
A handbook for users of the Arpanet at MIT in the 1980s reminded them that ‘sending electronic messages over the ARPAnet for commercial profit or political purposes is both antisocial and illegal’.
‘Like many of the bedrock technologies that have come to define the digital age, the internet was created by – and continues to be shaped by – decentralised groups of scientists and programmers and hobbyists (and more than a few entrepreneurs) freely sharing the fruits of their intellectual labor with the entire world.’
In Cuba and China they kept the internet opaque, but in other countries too they gnawed away at freedom.
The governments of America, Europe and Asia, it emerged, all implicitly agreed that they should be free to listen to each other’s populations’ conversations. Only nobody told those populations that this was the new agreement.
As one commentator puts it, Wikipedia is ‘run by cliquish, censorious editors and open to pranks and vandalism’. It is still a great first port of call on any uncontroversial topic, but I find Wikipedia cannot be trusted on many subjects. An entirely fictional war in the Indian state of Goa was invented, and not only survived for five years on Wikipedia but became a popular entry and won an award.
Russian President Vladimir Putin has been explicit that his goal is ‘establishing international control over the Internet’ through the ITU.
For all its decentralised nature, the internet does have a central committee – the Internet Corporation for Assigned Names and Numbers, or ICANN.
he became fascinated by the history of money, writing a lengthy essay on the subject, in which he explored a throwaway remark by the evolutionary biologist Richard Dawkins that ‘money is a formal token of delayed reciprocal altruism’ – or money makes it possible to pay back favours indirectly and at any time.
‘The innovation provided by Satoshi is the idea of combining a very simple decentralised consensus protocol, based on nodes combining transactions into a “block” every ten minutes, creating an ever-growing blockchain, with proof of work as a mechanism through which nodes gain the right to participate in the system.’
Governments do not take kindly to money that is outside their control. Hence the shyness of bitcoin’s founder.
The digital expert Primavera De Filippi sees Ethereum and its ilk coming up with smart contracts, allowing ‘distributed autonomous organisations’ that, once they have been deployed on the blockchain, ‘no longer need (nor heed) their creators’.
That network has raised funds, signed contracts and taken delivery of vehicles, even though its ‘headquarters’ is distributed all over the net. That would represent the triumph of decentralised, evolving, autonomous systems.
Remember how technology evolves, whether we want it to or not.
To put my explanation in its boldest and most surprising form: bad news is man-made, top–down, purposed stuff, imposed on history. Good news is accidental, unplanned, emergent stuff that gradually evolves. The things that go well are largely unintended; the things that go badly are largely intended.
the clean-up of rivers and air;
This sounds to be contradicting the argument of this being accidental
have tried to develop in this book, namely that the flywheel of history is incremental change through trial and error, with innovation driven by recombination, and that this pertains in far more kinds of things than merely those that have genes.
