The idea that exploitation and war are inherent to the fiat currency system is a complex concept. Fiat money, which is not backed by physical commodities and can be printed indefinitely by governments, may facilitate easier funding of wars, potentially making them more "rational" in a twisted economic sense. This ease of money creation could lower the immediate financial barriers to waging war, as governments might avoid the need for politically challenging decisions like raising taxes or borrowing.
Petter Englund's article suggests that the fiat system creates incentives that make perpetual war a logical choice for governments. However, the notion that switching to a different monetary system like Bitcoin could reduce the likelihood of war is intriguing but not without its challenges. Bitcoin, with its fixed supply and decentralized nature, might make funding wars more difficult, as governments would need to find alternative financing methods, which could be politically fraught.
Yet, while Bitcoin offers a promising alternative with its scarcity and transparency, it is unlikely to be a panacea for eliminating exploitation and war. Historical conflicts predate fiat currency, indicating that deeper, non-monetary factors drive human conflict. The transition to a Bitcoin-based economy would be monumental, facing technical and political hurdles, and governance issues could lead to new forms of exploitation.
In conclusion, while the fiat system may contribute to conditions that facilitate war, it is not the sole cause. A shift to Bitcoin could influence economic incentives, but it would need to be part of broader changes in governance and international relations to significantly reduce exploitation and war. Thus, while Bitcoin offers hope, it is not a guaranteed path to a conflict-free world.
Check out the original article Island Economics: Why Exploitation & Perpetual Wars are Rational Under FIAT
by Petter Englund.
Link: https://medium.com/@penglunds/island-economics-why-exploitation-perpetual-wars-are-rational-under-fiat-28543ce82a23
