Thank you. The elites can’t wait for digital currencies. Luckily there was a setback with the failure of the attempt in Nigeria, but I can’t help but think that in the U.K. our elites have been better tyrants. They have gulled the population with the ‘for your safety’ mantra, and, whilst they train their beedy eyes on only the most difficult of their population, I doubt very much will be done to push back on the proposal.
Canada also. Convenience wins here. Although I do see more people daily using cash than before Trudeau and Freeland let the cat out of the bag by freezing bank accounts of anyone who dared support the truckers in Ottawa.
"We don’t see the bad sort of tyranny - secret police, arbitrary executions, or torture"
It doesn't mean that they aren't happening however.....
Excellent article as usual.
Thinking about it, when have we ever not been tyrannised? In Britain, the State's tentacles of control might have been loose at the time of the Roman Conquest, say, but they have simply increased inexorably down the centuries and gone into overdrive in the 21st century with technology. Will it soon become so unbearable that it becomes the catalyst for a shift into a new paradigm - will we have a 'Great Awakening' where the rules are not just for the little people and our whole world becomes inverted to bottom up governance?
I am the “In-house IT correspondent” at the Daily Sceptic. TDS have kindly published several of my articles trying to drag the CBDC debate away from the conspiracy minded default, endemic in the sceptical community. In my opinion, CBDCs are a nuanced subject best explored through informed conversation which we do not see elsewhere in the media. Would you be interested in publishing an article on TDS, perhaps in the style of a Nichomachean conversation? The aim would be to challenge and develop the ideas of CBDCs, their regulation, Austrian economics, property rights, libertarianism and technocracy. DM me at scouse.heisenburg@gmail.com.
A couple of observations on CBDC. Firstly, the technical insolvency of all fiat currencies provides a compelling practical motivation for CBDC. US formal national debt is over $31 trillion and when you include the implied liabilities of Medicare, Medicaid and Social Security, it is over $110 trillion. This debt can never be paid. The UK and EU positions are similar, driven by the total government fiscal incontinence of totalitarian government. CBDC allows technical default on this debt by substituting one means of payment, GBP, for a new (less valuable) one, digital Pounds. The UK and US governments have done this before, suspending the gold standard in the 1930s and the Bretton Woods system in the 1970s.
Secondly, it means all transactions reconcile in one ledger, controlled by the government. We effectively have a digital currency now but each bank has to reconcile their ledger against all counterparties. CBDC concentrates that power in one place, opening control of all transactions. It also means we all bank with the Central Bank: there is no other bank. The fact the BoE is deliberately planning to retain the current banks, for appearances sake, shows they know quite how unpalatable the truth is to the public. In the same way the Nazis put the extermination camps in occupied Poland, to obscure what was going on from the public.
The assault on property rights is everywhere. The latest Energy Act allows the secretary of state to ask electricity suppliers to switch off 'smart' appliances (all types) in peoples homes in order to manage demand on the grid. The technology to do that doesn't yet exist (to my knowledge) as there would have to be standard protocols, but they have clearly laid down a marker that this is what they want to do, and there will no doubt be work going on now behind the scenes to enable this. It's quite incredible what's in that act, and our useless MPs just waved it through.
Yes. I've been writing about the Energy Act in an academic piece, and have mentioned it to colleagues. Many of them are nonplussed as to why it is a concern; their view is, basically, that it is a good thing because it can help in the fight against climate change.
The ECHR is so hedged about with exceptions as to be in practice useless. (c. f. the lockdowns, which did not breach it because of an exception for "public health").
The UN's Universal Declaration of Human Rights is another matter, although unfortunately it is not legally binding (whatever that means in the context of "international law").
Article 17 says:
1. Everyone has the right to own property alone as well as in association with others.
Yes - the gap beween the UDHR and what eventually emerged in terms of binding law is an interesting and poorly known part of history. The cynic in me says that it is no accident that the West didn't put up a huge fight when the East objected to the existence of the right to property...
Well argued. It's been baffling to see the various judiciaries step back in recent years. I don't get it because I thought the judiciary had a sense of itself as a cornerstone of democratic republics and similar political structures like those in the UK and Canada. In Canada, illegal fines that were used as a tool of intimidation during lockdowns, when met with legal challenges, found circumstances where the judge simply didn't show, thereby nullifying the fines while at once avoiding setting precedents to make sure this sort of tyrannical behaviour would have no future. One wonders how a fundamental check and balance like a judiciary would be on side when it came to curtailing their own power.
Why do you queue longer using cash? in a supermarket, it takes no longer to pay with cash than it does with a credit card, the delay is more likely because you're too slow in packing your shopping away.
Not just that. Not having my money ready. Fumbling with change. Dropping it. Checking that the computerized till has added up correctly ... I had thought I wanted to be persuaded to use cash but you're reminding me of all the ways in which Age renders me unfit for it. Sounds like cash is a young man's game.
The point is that there is already a perfectly good and efficient alternative to cash, which is commercial bank money (i.e. what comes out of your debit card). The idea that we 'need' CBDCs to make payments easier is a fiction.
Yes, but to use a debit card you need to be the customer of a bank. Why should all the benefits of modern fintech (convenience, security etc) only be available to customers of banks? Why should the providers of the currency be allowed to fall behind and let its use become marginalised? This in turn hands more power to the (woke) banks because the consequences of being de-banked become more severe as the use of cash becomes more anachronistic. The currency has to keep up. We accept innovation in the physical currency: polymer bank notes, anti-forgery devices, etc., but have hysterics when anything is even suggested in the digital space. This is to the disadvantage of its users.
This goes for the payers, the public, but also the payees, organisations. Indeed organisations arguably depend even more on banks because their digital products are the only practical solution to scaling their operations. How would substack operate on cash, for example? Why have the providers of the currency allowed this to happen? Businesses are in thrall to banks because the central bank currency is totally impractical in its only available form: physical cash.
Good points, but this is an argument for Hayekian liberalisation of currency, not for CBDCs! I am not against innovation. The problem is the state's co-opting of that innovation (and, inevitably, restriction of alternatives like Bitcoin).
Competition in money seems like something that works in theory but not in practice, or at least the theory is contemplating a rich market of currencies but in practice we end up only with “big” national level ones, which in turn means governments, central banks and multinational corporates are behind them, with all the problems that entails (speaking as a libertarian). There have been local currencies but they either don’t get past the proposal stage, such as the Cardif Pound or the Oxford Pound, or they do launch but fizzle out shortly after, such as the Stroud Pound, the Totnes Pound and the Bristol Pound, all now defunct. Other eMoney schemes such as pre-paid cards and gift cards are popular but occupy commercial niches and show no signs of becoming common currency. The arrival of blockchain-based crypto currencies saw an explosion in new coins, over 20,000 and counting, but the vast majority see little or no transactions. Even the most popular, Bitcoin and Ether, while their names are familiar to most, are held by a minority and have to be exchanged for Stirling to be spent on most goods and services. To complete the picture, we had proposals such as Libra (later renamed to Diem) a crypto offering from what was Facebook, which immediately attracted criticism from governments and the public. Would you let Facebook be the custodian of your money? No, came the answer. Can Hayekian's explain why the only widely accepted currencies and payment systems are backed by states, central banks or multinationals? Has an Austrian or Libertarian version of money been demonstrated to work anywhere? If not, then making things better is more about realpolitik than ideology.
I presume the main complaint of the Libertarian or Austrian economist against Stirling is that it is not sound and therefore suffers from inflation. This is not a problem that CBDCs pretend to solve, because it is not a problem with the payment system, which CBDCs do claim to improve, but rather with a combination of fractional reserve banking, where money is created by bank loans, plus the ability of the central bank to print more money. CBDCs cannot answer for the problems of fiat currency, although you could argue they help to sustain them by keeping them relevant to a digital economy. Would Austrian’s be any happier if CBDCs were the payment system for, say, a gold-backed currency?
Thank you. The elites can’t wait for digital currencies. Luckily there was a setback with the failure of the attempt in Nigeria, but I can’t help but think that in the U.K. our elites have been better tyrants. They have gulled the population with the ‘for your safety’ mantra, and, whilst they train their beedy eyes on only the most difficult of their population, I doubt very much will be done to push back on the proposal.
Canada also. Convenience wins here. Although I do see more people daily using cash than before Trudeau and Freeland let the cat out of the bag by freezing bank accounts of anyone who dared support the truckers in Ottawa.
"We don’t see the bad sort of tyranny - secret police, arbitrary executions, or torture"
It doesn't mean that they aren't happening however.....
Excellent article as usual.
Thinking about it, when have we ever not been tyrannised? In Britain, the State's tentacles of control might have been loose at the time of the Roman Conquest, say, but they have simply increased inexorably down the centuries and gone into overdrive in the 21st century with technology. Will it soon become so unbearable that it becomes the catalyst for a shift into a new paradigm - will we have a 'Great Awakening' where the rules are not just for the little people and our whole world becomes inverted to bottom up governance?
If I had my anarchist hat on I would say: as long as there has been a State. I highly recommend James C Scott's books on this.
Thank you! Will get. I find my anarchist hat is rarely off my head these days.
I am the “In-house IT correspondent” at the Daily Sceptic. TDS have kindly published several of my articles trying to drag the CBDC debate away from the conspiracy minded default, endemic in the sceptical community. In my opinion, CBDCs are a nuanced subject best explored through informed conversation which we do not see elsewhere in the media. Would you be interested in publishing an article on TDS, perhaps in the style of a Nichomachean conversation? The aim would be to challenge and develop the ideas of CBDCs, their regulation, Austrian economics, property rights, libertarianism and technocracy. DM me at scouse.heisenburg@gmail.com.
A couple of observations on CBDC. Firstly, the technical insolvency of all fiat currencies provides a compelling practical motivation for CBDC. US formal national debt is over $31 trillion and when you include the implied liabilities of Medicare, Medicaid and Social Security, it is over $110 trillion. This debt can never be paid. The UK and EU positions are similar, driven by the total government fiscal incontinence of totalitarian government. CBDC allows technical default on this debt by substituting one means of payment, GBP, for a new (less valuable) one, digital Pounds. The UK and US governments have done this before, suspending the gold standard in the 1930s and the Bretton Woods system in the 1970s.
Secondly, it means all transactions reconcile in one ledger, controlled by the government. We effectively have a digital currency now but each bank has to reconcile their ledger against all counterparties. CBDC concentrates that power in one place, opening control of all transactions. It also means we all bank with the Central Bank: there is no other bank. The fact the BoE is deliberately planning to retain the current banks, for appearances sake, shows they know quite how unpalatable the truth is to the public. In the same way the Nazis put the extermination camps in occupied Poland, to obscure what was going on from the public.
The assault on property rights is everywhere. The latest Energy Act allows the secretary of state to ask electricity suppliers to switch off 'smart' appliances (all types) in peoples homes in order to manage demand on the grid. The technology to do that doesn't yet exist (to my knowledge) as there would have to be standard protocols, but they have clearly laid down a marker that this is what they want to do, and there will no doubt be work going on now behind the scenes to enable this. It's quite incredible what's in that act, and our useless MPs just waved it through.
Yes. I've been writing about the Energy Act in an academic piece, and have mentioned it to colleagues. Many of them are nonplussed as to why it is a concern; their view is, basically, that it is a good thing because it can help in the fight against climate change.
Yes, the climate scam provides cover for all sorts of collectivist nonsense.
The ECHR is so hedged about with exceptions as to be in practice useless. (c. f. the lockdowns, which did not breach it because of an exception for "public health").
The UN's Universal Declaration of Human Rights is another matter, although unfortunately it is not legally binding (whatever that means in the context of "international law").
Article 17 says:
1. Everyone has the right to own property alone as well as in association with others.
2. No one shall be arbitrarily deprived of his
property.
No exceptions there.
https://www.un.org/en/about-us/universal-declaration-of-human-rights
Yes - the gap beween the UDHR and what eventually emerged in terms of binding law is an interesting and poorly known part of history. The cynic in me says that it is no accident that the West didn't put up a huge fight when the East objected to the existence of the right to property...
Well argued. It's been baffling to see the various judiciaries step back in recent years. I don't get it because I thought the judiciary had a sense of itself as a cornerstone of democratic republics and similar political structures like those in the UK and Canada. In Canada, illegal fines that were used as a tool of intimidation during lockdowns, when met with legal challenges, found circumstances where the judge simply didn't show, thereby nullifying the fines while at once avoiding setting precedents to make sure this sort of tyrannical behaviour would have no future. One wonders how a fundamental check and balance like a judiciary would be on side when it came to curtailing their own power.
So we should keep using cash, even if it holds up the supermarket queue?
Why do you queue longer using cash? in a supermarket, it takes no longer to pay with cash than it does with a credit card, the delay is more likely because you're too slow in packing your shopping away.
Not just that. Not having my money ready. Fumbling with change. Dropping it. Checking that the computerized till has added up correctly ... I had thought I wanted to be persuaded to use cash but you're reminding me of all the ways in which Age renders me unfit for it. Sounds like cash is a young man's game.
The point is that there is already a perfectly good and efficient alternative to cash, which is commercial bank money (i.e. what comes out of your debit card). The idea that we 'need' CBDCs to make payments easier is a fiction.
Yes, but to use a debit card you need to be the customer of a bank. Why should all the benefits of modern fintech (convenience, security etc) only be available to customers of banks? Why should the providers of the currency be allowed to fall behind and let its use become marginalised? This in turn hands more power to the (woke) banks because the consequences of being de-banked become more severe as the use of cash becomes more anachronistic. The currency has to keep up. We accept innovation in the physical currency: polymer bank notes, anti-forgery devices, etc., but have hysterics when anything is even suggested in the digital space. This is to the disadvantage of its users.
This goes for the payers, the public, but also the payees, organisations. Indeed organisations arguably depend even more on banks because their digital products are the only practical solution to scaling their operations. How would substack operate on cash, for example? Why have the providers of the currency allowed this to happen? Businesses are in thrall to banks because the central bank currency is totally impractical in its only available form: physical cash.
Good points, but this is an argument for Hayekian liberalisation of currency, not for CBDCs! I am not against innovation. The problem is the state's co-opting of that innovation (and, inevitably, restriction of alternatives like Bitcoin).
Competition in money seems like something that works in theory but not in practice, or at least the theory is contemplating a rich market of currencies but in practice we end up only with “big” national level ones, which in turn means governments, central banks and multinational corporates are behind them, with all the problems that entails (speaking as a libertarian). There have been local currencies but they either don’t get past the proposal stage, such as the Cardif Pound or the Oxford Pound, or they do launch but fizzle out shortly after, such as the Stroud Pound, the Totnes Pound and the Bristol Pound, all now defunct. Other eMoney schemes such as pre-paid cards and gift cards are popular but occupy commercial niches and show no signs of becoming common currency. The arrival of blockchain-based crypto currencies saw an explosion in new coins, over 20,000 and counting, but the vast majority see little or no transactions. Even the most popular, Bitcoin and Ether, while their names are familiar to most, are held by a minority and have to be exchanged for Stirling to be spent on most goods and services. To complete the picture, we had proposals such as Libra (later renamed to Diem) a crypto offering from what was Facebook, which immediately attracted criticism from governments and the public. Would you let Facebook be the custodian of your money? No, came the answer. Can Hayekian's explain why the only widely accepted currencies and payment systems are backed by states, central banks or multinationals? Has an Austrian or Libertarian version of money been demonstrated to work anywhere? If not, then making things better is more about realpolitik than ideology.
I presume the main complaint of the Libertarian or Austrian economist against Stirling is that it is not sound and therefore suffers from inflation. This is not a problem that CBDCs pretend to solve, because it is not a problem with the payment system, which CBDCs do claim to improve, but rather with a combination of fractional reserve banking, where money is created by bank loans, plus the ability of the central bank to print more money. CBDCs cannot answer for the problems of fiat currency, although you could argue they help to sustain them by keeping them relevant to a digital economy. Would Austrian’s be any happier if CBDCs were the payment system for, say, a gold-backed currency?