Ines AissaniDuring his recent UFC fight which he won, the Brazilian MMA (Mixed Martial Arts) champion Renato Moicano delivered a rather astonishing speech. He has encouraged the public to read " The 6 lessons » by Ludwig Von Mises. A few days later, sales of the author's books on Amazon experienced an explosion in sales.
On ZoneBitcoin, it seemed like a good time to talk about Ludwig Von Mises, especially since he is often cited (rightly or wrongly) in economic articles interested in Bitcoin.
In the world of finance and economics, Ludwig von Mises is a figure that could not be more emblematic. His influential works left their mark on the field of the Austrian school of economics. But what is the link between Ludwig von Mises and Bitcoin?
In this article, we will explore von Mises' influence on monetary theory and its application to Bitcoin. We will discover how his ideas have contributed to our understanding of cryptocurrency and its potential role as money.
Who is Ludwig von Mises?
Ludwig von Mises was an Austrian economist and philosopher born in 1881 and died in 1973. He is considered one of the main representatives of theAustrian school of economics. The supporters of this school mark a break with the ideas defended by classical economists and in particular Keynesians. Von Mises studied at the University of Vienna and was a student of the economist Carl Menger, another eminent member of the Austrian school.
Von Mises formulated numerous economic theories and wrote several important works, including " Summary of Human Action, economic treatise " and "Socialism." He was a staunch defender of classical liberalism and a staunch advocate of the market economy.
His work has influenced many economists and helped shape our understanding of monetary theory and economics in general.
The monetary theory of Ludwig von Mises
Ludwig von Mises's monetary theory is based on the concept of the subjectivity of value. According to von Mises, the value of a currency is determined by the subjective demand of individuals for that currency. In lHe argues that money does not need to have intrinsic utility or a physical medium to have value. More specifically, he argues that the value of money is based on trust or faith in the authority that issues it, rather than on intrinsic value. Recall that the term "fiduciary", from the Latin " confidence » which means trust refers to that which is “based on trust in the one who issues them”.
Von Mises developed this concept in his famous "regression theory." According to this theory, the value of a currency today is based on the subjective value it had in the past. In other words, the value of a currency is established by past voluntary exchanges between individuals.
This theory has important implications for Bitcoin, a cryptocurrency that has not ( beforehand) of intrinsic value and which is not supported by any physical asset. Some economists like Saifedean Ammous then rethought Bitcoin from the perspective of my regression theory.
Bitcoin and the theory of regression
Bitcoin is a cryptocurrency that was created in 2009 by a person (or group of people) known under the pseudonym Satoshi Nakamoto. Unlike traditional government-issued currencies, Bitcoin is decentralized and operates on a peer-to-peer network. It is not supported by any government or financial institution.
Whether Bitcoin can be considered money in the sense of von Mises's regression theory is a subject of heated debate among economists. Some argue that Bitcoin cannot meet the criteria of regression theory because it has no intrinsic value and was not used as money before its emergence as a medium of exchange.
However, others argue that regression theory can be applied to Bitcoin in a slightly different and offbeat way. They argue that Bitcoin's value lies in its underlying technology, blockchain, and the trust users place in that technology. According to them, the value of Bitcoin is the result of individuals' subjective demand for this technology and their belief in its future potential.
Von Mises' influence on Bitcoin
Although Ludwig von Mises did not live at a time when Bitcoin existed and it may be difficult to think what he would have thought of Bitcoin, some people raise interesting parallels.
His ideas have certainly had an influence on our understanding of cryptocurrency. Von Mises' monetary theory, particularly his regression theory, provided a conceptual framework for analyzing the value and role of Bitcoin as a currency. Indeed, it is still a conceptual obstacle to think about the "intrinsic value" of Bitcoin and Mises' theory allows us to find a reason for this: the trust placed in the bitcoin protocol would be enough to give it the intrinsic value criticized by so many detractors.
The von Mises regression theory has also inspired many economists and researchers to study the monetary aspects of Bitcoin. They explored the question of whether Bitcoin can be considered a currency, what the implications of its decentralized nature are, and how it might influence existing monetary systems.
Limit of Von Mises’s thinking with Bitcoin
Ludwig von Mises was an influential Austrian economist whose ideas helped shape our understanding of economics and monetary theory. However, it is important to remember that not all of his thinking is adaptable to the design of Bitcoin. We can not a posteriori decree that the thought of Ludwig von Mises is a thought that radically supports Bitcoin. Although one can see analogies with Von Mises's thought, it is equally crucial to remember that one can just as easily find other analogies with authors belonging to other schools of thought.
Ultimately, analyzing the relationship between Ludwig von Mises and Bitcoin raises important questions about the nature of money and how new forms of money can be analyzed in light of traditional economic theories. Whether or not one agrees with the application of regression theory to Bitcoin, it is undeniable that this cryptocurrency has sparked lively debate among economists and researchers.
Most certainly, a new school of thought will need to emerge, one that is contemporary with the creation of Bitcoin, in order to avoid any over-interpretation that prevents us from thinking creatively and original about what Bitcoin is from an economic perspective.
