Year: 2013

Carl Miller ponders a future when “normal people like you and me” commonly use digital currency like Bitcoin. “When bitcoin does indeed step over the threshold and into our world as a living currency,” he writes, “the possible challenges will make Silk Road trading seem like small fry”:

Peer-to-peer currencies reduce the ability of central banks to manipulate the money supply; have significant implications for how to track illegal transactions and may erode tax raising powers. Rubbing salt into the wound, it is now bitcoin miners, not Governments that receive ‘seigniorage‘, revenue earned by issuing the currency. Many bitcoiners are avid anarchists, who may wish and actively work to keep bitcoin separate.

In truth, no-one can be sure what will happen. Chinese authorities have in the last few days banned their banks from handling bitcoin and, anyway, it may not be bitcoin that eventually triumphs. Peercoin, Anoncoin, Zerocoin, Litecoin are all bring different strengths and benefits, from privacy and anonymity to the efficiency of the transaction. What bitcoin is however showing us is that Vires in Numeris [“Strength in Numbers”] is not ringing hollow. We will likely wake up to a world that uses currencies secured by cryptographical systems, and it is time that our social and political institutions seriously consider what this will mean for them and the people they protect and represent.

But, for Alec Liu, China cracking down proves that Bitcoin has a long way to go toward becoming a respectable currency:

[A]s much as the Bitcoin world loves to tout the latest store to accept Bitcoin, its utility in buying regular things still lags behind traditional currencies and platforms.

As we’ve already seen, Bitcoin’s ability to circumvent regulation is the sort of stuff governments won’t put up with for very long, and given Bitcoin’s reliance on centralized exchanges, it’s only a matter of time before those gateways are closed. China’s out, too. Hopeful Bitcoiners looking to India as the new hotbed of demand from a populous developing nation will likely be disappointed. The world’s second largest country by population will presumably follow the lead of its peers, while its relatively low per capita means that its citizens wouldn’t have the appetite or disposable income to make a real dent anyway. The only solution then is for Bitcoin to actually become useful.

Yglesias adds that Bitcoin has always relied on the laxity of regulators:

By using a bitcoin exchange as an intermediary, a Chinese person could sell yuan and a non-Chinese person could buy them. But this was going on more or less because the Chinese government was letting it go on. Like one of those “tax loopholes” that stays open because members of congress agitate in favor of keeping it open. Now the Chinese government has decided to close it—BTC China, the country’s main exchange won’t be taking any new deposits—and bitcoin prices are tumbling. Now if this does manage to play out that somehow the technology behind bitcoin is so sound that the PRC government can’t stop people from using it to implement exchange controls, that’ll be interesting (and probably unfortunate—judicious use of capital controls is good policy). But as of [last Wednesday] morning it looks like the party is over.

Previous Dish on Bitcoin here, here, and here.

Reflecting on the first Christmas, Matt Emerson urges us to resist “sugary exhortations about love and goodwill” that usually accompany the holiday, adding that “so secure are our lives and fortunes, so long have we connected Christmas to parties and candy canes, we rarely wrestle with the reality of what happened”:

The news of Jesus’ arrival confused Mary; caused Joseph to consider divorce; and, in King Herod, commenced a genocidal fury. Once Jesus is born, Mary and Joseph have to flee Bethlehem to evade Herod’s assassins. The Holy Family wait there until an angel tells Joseph to return; but Joseph, fearful of Herod’s son, and warned by another angel, decides to head to Nazareth. That’s the first Christmas. It rattles a marriage. It exiles a family. It endangers lives. And it provokes a madman to murder. The brisk descriptions in the New Testament fail to capture what must have been, for Mary and Joseph and many others, a bewildering, terrifying ordeal.

Kenan Malik breaks down what monotheists inherited from their Greek forebears:

In redrawing the line between humanity and God, monotheism both adopted and discarded major themes in Greek philosophy. Greek philosophers had recognized human moral frailties, but had also believed that through reason and education some individuals at least could overcome the lure of the baser aspects of the soul. It was in the use of reason to accommodate life to the exigencies of fate that human dignity lay. At the same time, there was a strand within Greek philosophy that helped make more profound the distinction between Man and God. The distaste for the idea of capricious gods, and the desire for naturalistic explanations, evident from the Presocratics onwards, led some, like Democritus, to dismiss the very idea of gods and to insist on a purely materialist universe. Others redefined the nature of godliness. …

Xenophanes (c 570-476 BCE), one of the earliest of the Presocratics, savaged Homer and Hesiod for ‘attributing to the gods everything that men find shameful and reprehensible – stealing, adultery and deceiving one another.’

Humans possessed false ideas of gods because they fashioned them in their own image. So, ‘Ethiopians say their gods are flat-nosed and black, and Thracians that theirs have blue eyes and red hair.’ And if horses and cows possessed gods, they would undoubtedly be ‘horse-like gods, cow-like gods’.

There could only be one God, Xenophanes insisted, ‘since it is sacrilege for any of the gods to have a master’. This God could be ‘in no way similar to mortal men in body or in thought’. God must have always existed, for there is nothing superior that could have created Him, and He could not have been created by an inferior being. He is a living being but unlike like organic beings there are no parts in Him. He has no physical contact with anything in the world but ‘remains for ever in the same place, entirely motionless’ and ‘effortlessly, he shakes all things by thinking with his mind.’ This notion of a wholly simple God came to be important in both Islam and Christianity.

(Image of Xenophanes from Thomas Stanley’s The History of Philosophy, c. 1655, via Wikimedia Commons)

Allen Buchanan and Russell Powell look at it from an evolutionary standpoint:

Morality involves judgment, shame and exclusion as much as kindness. What is more, modelling work by the anthropologist Robert Boyd, the biologist Peter Richerson, the economist Samuel Bowles and their collaborators has shown that moralising punishment is likely to evolve only in the context of selection between groups. Which means that morality most likely evolved in an arena of intergroup conflict, in which violence and vigorous economic competition between groups was commonplace.

This conclusion is consistent with archaeological, ethnographic and ethological data, too. As the archeologist Lawrence Keeley, the psychologist Steven Pinker, the anthropologist Chris Boehm, the primatologist Richard Wrangham and others have observed, intergroup conflict is common in extant and prehistoric hunter-gatherer bands, and is well established in chimpanzees.

Given this picture, we should expect human beings to extend moral consideration to members of their own group, while at the same time ruthlessly exploiting people from other groups. In short, we should expect evolution to have produced a human moral psychology that is group-ish and strategic in nature — one that takes other individuals to be part of the moral community if they are part of one’s co-operative group, or otherwise capable of contributing to or disrupting co-operative goods. Extending moral consideration to outsiders — especially those who are not in a position to reciprocate or who could be exploited without fear of reprisal — is maladaptive in a moral system that arose from competition between groups. In other words, a conventional evolutionary view is that morality involved as a way of bolstering in-groups and excluding others – that we are ‘hard-wired’ for tribal loyalties and conflicts.