DLGP

Doctor of Leadership in Global Perspectives: Crafting Ministry in an Interconnected World

“Change money? Change money? Dollar? Marks?”

Written by: on November 11, 2022

“Change money? Change money? Dollar? Marks?” This phrase still haunts me when I am in certain places in Poland. These persistent pleas of individuals with hopes to unload the local currency for a more value stable one.[1] Every Westerner knew these cries, as the hard currency they had could buy their way out of any challenging situation.[2] The long lines of people waiting in line in anticipation of acquiring a long-awaited commodity they do not need, were another standard feature of the highly controlled market system. The long lines due to government control of production caused every item regardless of individual need to have an elevated value. Every product was a means of direct exchange of that item,[3] which was necessary because the money in their pocket no longer retained its value. Meanwhile, those hard currencies were the golden ticket to a more secure future, and imported products, such as Levis, Coke, electronics that could be purchase at the dollar store. These are very real imagines in my mind of a person’s desperate attempt to gain some control over the economic world around them. My longitudinal observations of Polish friends attest to the stifling of the human spirit that “government(s) can cause…by controlling monetary policy.” [4]

The Bitcoin Standard: The Decentralized Alternative to Central Banking,[5] by Saifedean Ammous surprised me with its systematic and historical “discussion of sound money,”[6]while introducing the possibilities of “cryptoeconomics.”[7] Ammous’ clear explanation of the “benefits derived from an economy that grows in a rational and sustainable way.”[8] Dr. Ammous uses his engineering and economic background to lay the foundation for the need of an independent currency that is “without inflation or the negative consequences of the nationalization and politicization of fiduciary money.”[9] He also points out why, in his opinion, the Keynesian economics is deeply flawed.[10] Although, it is the preferred theory of universities and governments, it neglects to consider human behavior while in times of scarcity.[11] Individuals who have options will find a way to overcome the scarcity they encounter if the system does not get in their way. He argues that a free market exchange of goods within a stable monetary system is necessary to produces the futile ground for healthy investments, entrepreneurship, and personal control of one’s financial future.[12] Ammous sees Bitcoin as the cryptocurrency with the greatest potential for being an “international decentralized liquidity network based on sound money principles” [13] that can compete with the centralize banking systems of the nations.

This book definitely gave me a crash course in economics that made sense to me. However, the high risk and uncertainty of Bitcoin have not convinced me to jump into that pond yet. Overall, there are a number of questions this book has stirred in me:

  • Given the high global inflation that many nations are experiencing as a result of Covid 19 measures, economic recovery plans, fuel shortages, and war in Ukraine are we looking at another great depression?
  • Today, I wonder if there is really a hard currency anywhere.
  • Is it really possible to have an independent currency or will the government just step in anyway?
  • Have we been too eager to replace God’s gracious provision that requires faith in the unknown, for a quick fix of a powerful, self-serving government?
  • Is Bitcoin and other cryptocurrencies really hack free?

There is a lot to wrestle with in terms of governmental controls in finance and personal independent control. I have seen how extreme government control of economics snuffs the life out of the eyes of individuals. I have watched the same individual gain new life through a free market system with an ever-stabilizing currency become creative entrepreneurs.

Below on the left is a coupon receipt for five liters of fuel. Only foreigners could purchase. On the right is a visa requiring the mandatory exchange of $15/day for foreigners. Keep in mind there were no goods to buy for the amount of money that was exchanged. It was illegal to take the leftover funds out of the country. It was a type of gold exchange.

 

[1] Saifedean Ammous, The Bitcoin Standard: The Decentralized Alternative to Central Banking (Hoboken, New Jersey: Wiley, 2018), 57.

[2] Ibid., 5.

[3] Ibid., 1.

[4] Jamil Civitarese, “Saifedean Ammous, the Bitcoin Standard: The Decentralized Alternative to Central Banking Hoboken, New Jersey: John Wiley & Sons, 2018,” The Review of Austrian Economics 33, no. 3 (September 2020): 404, https://doi.org/10.1007/s11138-019-00446-z.

[5] Ammous, The Bitcoin Standard.

[6] Civitarese, “Saifedean Ammous, the Bitcoin Standard,” 403.

[7] Ibid.

[8] Luis Torras, “THE BITCOIN STANDARD: THE DECENTRALIZED ALTERNATIVE TO CENTRAL BANKING by Saifedean Ammous Wiley (2018), 304 Pp. ISBN: 978-1119473862 (Hb, £22.99); 978-1119473862 (e-Book, £17.99),” Economic Affairs 39, no. 1 (February 2019): 160, https://doi.org/10.1111/ecaf.12339.

[9] Ammous, The Bitcoin Standard, 160.

[10] Ibid., 53.

[11] Lex Fridman, “Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics,” youtube.com, n.d., https://video.search.yahoo.com/yhs/search?fr=yhs-fc-2212&ei=UTF-8&hsimp=yhs-2212&hspart=fc&param1=7&param2=eJw1i8sKgzAQRX9llgoSJw8Tip%2FRVREXqaYajEZ8YOnXdwItsznn3juD75u6vT84opRKNkW7kJPdCFOFHLkQJB2JUAR%2BTQsj2E0woxmXaTq4SOm5E56WaI4fH4ItK4aQXX7p47XDcgBHhjVQoFUNb61ysOsa3OWekz%2FKShomNWTTeMyhgOAnB4PrpphDN25xdiVHzTAd7PZlN%2F9%2Fcf3w67g0yJT5Ah0NPuA%3D&p=saifedean+ammous&type=fc_A30C76C6185_s58_g_e_d010122_n1009_c24#id=1&vid=5d3c6591ba0495fac7929baaf45bd44f&action=click.

[12] Ammous, The Bitcoin Standard, 52.

[13] Torras, “THE BITCOIN STANDARD,” 161.

About the Author

mm

Denise Johnson

Special Education teacher K-12, School Counselor K-12, Overseas field worker in Poland,

5 responses to ““Change money? Change money? Dollar? Marks?””

  1. mm Roy Gruber says:

    Denise, thanks for you well informed post based on your experience and the book from this week. You sure had a front-row seat to economic instability in ways I have never known. I appreciate your list of questions near the end of your post. One of them asks, “Is it really possible to have an independent currency or will the government just step in anyway?” As you think about cryptocurrency, do you see government intervention as a positive or a negative? Ammous sure sees government involve as a negative. I also see the unchecked heart of humanity in economics as a scary proposition.

  2. mm Troy Rappold says:

    You ask good questions, Denise. I don’t buy into the idea that Bitcoin is completely hack-free. The same mind that creates computer firewalls, is the same mind that can circumvent them. There will always be a cat-and-mouse dynamic to this part of cryptocurrency. I also like your question about hard money being anywhere? It is always changing, markets always fluctuate and so do nation’s economies. Sometimes Ammous sounds like Bitcoin will be the savior, a stable economic base for the global economy. He has a bit of a utopian view with Bitcoin.

  3. Kayli Hillebrand says:

    Denise: I resonated with your post a lot this week and found myself in a similar position and appreciated the questions you asked. Specifically, when you ask “Have we been too eager to replace God’s gracious provision that requires faith in the unknown, for a quick fix of a powerful, self-serving government?” – could we also add ‘for an… easy blame of a powerful, self-serving government?’ when things don’t pan out how we want?

  4. mm Eric Basye says:

    Great post, Denise. It is interesting to hear you look through the lens of Poland. Fascinating. I love the questions you pose, as well. You ask, “Is it really possible to have an independent currency or will the government just step in anyway?” A great question. And when there is a “free market,” of course that has benefits… to some, but not all. There is tension in that it seems there is not one perfect system.

    From your experience, to what degree should the government be involved in “controlling economics and do you believe Poland or the US has done it better?”

  5. mm Nicole Richardson says:

    Denise what authority you speak from!

    Your experiential story helps raise the question about what is the power of privilege in the determination of economic monetary systems?

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