Economists are never going to accept Bitcoin any more than buggy whip makers accepted the automobile.
They only have a profession at all in a world in which governments control the money. A Bitcoin world means their experience and their fancy degrees might qualify them for a job flipping burgers, assuming that job hasn't already been given to robots by then.
https://www.youtube.com/watch?v=JvebxYILfZQ#t=9m5s
They only have a profession at all in a world in which governments control the money. A Bitcoin world means their experience and their fancy degrees might qualify them for a job flipping burgers, assuming that job hasn't already been given to robots by then.
https://www.youtube.com/watch?v=JvebxYILfZQ#t=9m5s
I have one of those fancy degrees, and I'm obviously a huge bitcoin proponent.
Academics have a few predictable issues with bitcoin:
1) The whole idea of the Fed and central banking is academically elegant. It's a really nice idea to be able to tweak constants in the economy in order to maximize employment, etc. The fact that it's ultimately a small organization acting on imperfect information, subject to both political pressure and human failure, is ultimately an implementation detail in an academic's eye, and therefore irrelevant to overall validity of the idea. Bitcoin obviously takes all that away; arguably replacing it with inevitable and uncontrollable more frequent and medium-sized bubbles/panics. That's debatable, but that's how they'll see it, and they conclude that humanity can do better via properly implemented central banking. I disagree for the reasons alluded to, but that's the issue.
2) These guys are thinking of bitcoin as an 1800s style gold-standard, which was fraught with imperfect information, and a pretty non-fluid economy for many reasons. Humanity has never tested a monetary system with credibly perfect information available to all participants. Furthermore, in our electronic era where things like re-pricing can be done at the click of a button (or even programmatically with zero manual intervention), inelasticity in currency supply shouldn't matter nearly as much. But the lesson academics learned from the 1930s is that an elastic currency supply is necessary to stimulate an irrationally non-performing economy. I'd argue that given that structural framework of the economy of the 1930s, maybe that makes sense, but our current far more fluid, information-liquid economy is a different beast. People can rationally adjust much more quickly.
And as to generally calling bitcoin a bubble, it's hilarious to me how people just look at the absolute price per bitcoin and cry "bubble!" or "expensive!". If "1 bitcoin" meant "100,000 satoshis" instead of "100,000,000 satoshis", would they say the same thing (ie, the "price" would be $0.80/btc). The whole supply is only worth $10B no matter how you slice it. The M2 of a small nation like New Zealand is ~$70B. What do these guys think the total supply of the world's first truly global electronic currency should be?
