"Chaos was the law of nature; Order was the dream of man" - Henry Adams
In the early days of evolution, humans observed their hostile circumstances they were in and utilized their opportunities to the best of their knowledge and invented tools, standards and protocols that were used for the survival of the species. Evolution and innovation went hand in hand. In the same way, free market capitalism sets the platform for innovation. It taps into the localized pools of knowledge and comes up with the best solution to existing problems. Free market capitalism, as opposed to its criticisms, actually favors people and their opinions. On the other hand, socialism is a top down system where the decisions are made by a few bureaucrats. Entrepreneurs are the ones who go out of the boundaries and come up with ideas that can completely change how societies function. They look at the existing challenges and figure out ways to overcome them through innovation. They are able to do it best if there is a free market economy. The ones that are successful tend to become monopolies which end up controlling the whole supply chain of the product. For example, the Rockefeller's Standard Oil company had a near monopoly on the oil business in the U.S. Even though Monopolies accumulate a lot of wealth over time they also break down when they become too big. But what they contribute to societies are the new standards and protocols they set which can be taken forward for the benefit of society. The wealth that was once centralized eventually redistributes itself among the people in the form of innovation.
"Evolution is the organic form of innovation and Innovation is the inorganic form of Evolution".- Robert Breedlove
Economy, thus is much like a complex weather system which should be allowed to grow on its own. No central planning is necessary for the money market. In the digital age, many people have lost jobs because certain tasks have been standardized and have been taken over by machines such that humans can focus their energies on more complex and creative tasks.
Standards and protocols help us progress as a species. Bitcoin is a standardized protocol for moving value in the same way internet is an open source protocol for moving information. We haven't had such an invention before in human history in the realm of economics and monetary policy. To understand this a little better, let us look at the 3 fundamental principles on which Bitcoin is founded:
Principle of radical truth- The market price is an accurate understanding of reality and is essential for making the best decisions. In short, price equals truth in a free market. It is where demand and supply intersects which gives us the precise value of the asset, commodity, stock etc. Therefore, there is a natural interaction between scarcity and value. Inflation corrupts and distorts this price which leads to misplaced priorities that we seen in our lives today. Central planning distorts while decentralized monetary systems restore the market price. As Bitcoin is the perfect conveyor of data packets of value and scarcity without much noise, it is a universal unit of measurement for money like other forms of measurements such as kilogram, seconds, degrees etc.
Principle of radical transparency- Bitcoin is a public ledger of transactions that everyone can see. It respects the relationship between people and assets. Money, ideally, should be managed by the economy itself while central banks should remain politically agnostic. Bitcoin is the transparent system as opposed to the opaque system of central banking which is highly politicized.
Principle of believability weighted decision making- The best performing currency in history, the pound, lost 99.5% of its value in 317 years. This alludes to the deceptive business model of central banking. They have not only devalued currency but have distorted the whole economy. As they do not have skin in the game and are bestowed with the power to print money in order to control the economy, this leads to the lack of believability. Therefore we need a credit worthy monetary networks like the bitcoin which are purely based on mathematics and thermodynamics.
It is only a matter of waking up to the fact that Bitcoin is an invention that most of us do not yet understand in the same way a monkey doesn't understand what a smartphone is. Most of today's challenges stem from the lack of an inefficient system that can secure and move monetary value across time and space efficiently. The decentralized monetary system has the potential to unlock unimaginable wealth and prosperity and at the same time entirely transform the way our future societies function.
2. 12 Rules for Life: An Antidote to Chaos : Peterson, Jordan B