> He worries that they enable illicit activity by making money transactions less transparent. Still, he sees the value in digital payments systems and supports electronic use of government-backed currencies like the dollar.
> “I’ve been a great advocate of moving to an electronic payments mechanism. There are a lot of efficiencies. I think we can actually have a better regulated economy if we had all the data in real time, knowing what people are spending,” he says.
This is almost written like a parody. Government backed electronic money is utterly dystopian to me. Imagine all the "nudges" that could easily be introduced. You're buying too much [bad thing], card declined. You're costing the health care system too much by being overweight so we'll restrict your food allowance. Your carbon emissions are over the limit this month, we'll have to deny your flight purchase. A gas station charges "too much" for gas, payment declined.
I find it alarming how authoritarianism and totalitarianism are perfectly acceptable views if people work in particular academic and political circles and mask it in the 'better regulation', 'better government' or other pro-government sentiment. It feels like a whole section of society is trying to shoehorn in a fully regulated society by playing coy and fooling large portions of society at large into believing it's going to be to their benefit by not being completely honest with the implications and historical outcomes of a totalitarian state.
> Imagine all the "nudges" that could easily be introduced. You're buying too much [bad thing], card declined. You're costing the health care system too much by being overweight so we'll restrict your food allowance. Your carbon emissions are over the limit this month, we'll have to deny your flight purchase. A gas station charges "too much" for gas, payment declined.
Why would they do this when they can (and already do) use taxes and tax breaks to dis/incentivize behavior?
I agree but I actually wouldn't mind if carbon emissions and offsets were tracked and ensured to be not too negative. There are easier ways to do that though - e.g. just include money for offseting in the flight price.
With natural monopolies like those promoted by the network effects crypto projects pin their hopes on the stable point is the same, minus democratic institutions ensuring some semblance of justice and equity.
Government backed and transparent doesn’t mean all my purchases are exposed. It’s (technically) possible to have a system of tokens where it’s only known how much I spend for example, but not where. Having (say) transactions under $1000 or $10000 anonymous would make a lot of sense as a cash replacement.
You have declined to get a credit or debit card, I suppose? If not, you may want to check out the data a “Level 3” transactor provides regarding your purchases. Data the card company subsequently sells to insurance companies, etc. Tip: pay for your “sin” purchases with cash.
"Economists want real time data" --> "They are controlling our toughts!"
1) Please - enough with they hyperbole.
Data is not the same as control.
Yes - we should be wary, we don't want the government using our money to nudge us.
At the same time we definitely want our governments using data to help us.
There was a story in Canada about the government buying anonymoized cell tower data to understand our behaviours during a pandemic, misrepresented as 'they are trying to control us' - which is a disingenuous lie.
Literally we're faced with a pandemic, we want to get rid of restrictions, the best way to do that is to know where and how COVID is spreading. We wouldn't bat an eye if some garbage advertising company bought that data.
2) "Government backed electronic money is utterly dystopian to me. I"
Hyerbole.
You already use 'Government Backed Electronic Money' - that the way it works and it works fine.
It's 1000% better than 'Ponzi Scheme Money 80% Owned by Elon Musk' or 'Google Controlled Money'.
And FYI - the 'Government Backed Money' we use today flows through VISA network and they are 100% selling every bit of your data to anyone who will buy.
What you probably want is even stronger regulation of 'Gov Money' so that private entities cannot trace, transact or sell, i.e. even better privacy laws.
And maybe some kind of legislation that forbids the Central Bank from doing anything other than targeting inflation/employment.
"He worries that they enable illicit activity by making money transactions less transparent."
I always have to prefix that I'm no fan of crypto, don't own any, never have, but this seems like a shill to me, and brazenly opposite to reality.
Blockchains show every transaction ever, to everyone, albeit the transactees are pseudonymous.
But the traditional system is totally opaque to most people. And even to government, when complex webs of tax-haven shell-companies are involved (unless records are leaked, as in the panama papers, etc). So billionaires, mafia groups, corrupt government, get away with all kinds shenanighans, because the transactions themselves are secret.
The complete opposite of what Stiglitz is arguing.
Level 2 chains don’t generally put everything back on the main chain. Lightning, for example, is peer to peer, and then only does net settlement to the main blockchain very infrequently (maybe after a couple months of transactions). This also makes it vastly more energy efficient on a per-transaction basis, the marginal energy cost of a transaction can approach zero. But also, my understanding is that the transaction history isn’t really preserved in a format that would be easy for a government to put together after the fact.
You say that because we know about it because it's transparent. We don't prosecute every crime but we can get some of them and we can deter a lot of them. If you've ever worked at a financial firm they are typically extremely rigorous about compliance.
This is just pure evil. There is no "we". It's mind-boggling how some economists have become complete puppets for governments. He is just straight up lying in most of his arguments.
Economic inefficiency is a problem of the current monetary system, caused by its centralization and inflationary nature, and this is the problem which bitcoin is trying to fix. Most of the issues in the world today are caused by our current monetary system, from wealth inequality to consumerism and environmental problems.
He is suggesting that the monetary system should be even more centralized, and we should move into even more centrally planned economy, like in Soviet Union. This time however, they're planning to use big data to solve the economic calculation problem and to control consumer behavior. This is completely immoral, and ends up destroying both personal and economic freedoms in a society. This problem is very well understood, and no one seriously suggests central planning unless they are evil and want to decrease freedom and equality in a society.
We already have too much central planning in our current system. Central bank digital currencies would be the last step in this process of completely monopolizing money, and giving governments and central banks the absolute authority of where money is invested and how it is spent.
I don't see any wrong in what he says. So, crypto is designed for a future where all the institutional banking fails and where political borders don't exist and where no transparency is required. All that it offers is less fee and speed. First of all such future dreamed by the cypto pundits doesn't exist. And many people don't mind paying a little commission to a bank doing my payment, so that they can call the bank and hold it accountable. All this is taken away in the crypto model just for the sake of avoiding a small fee and delay. How many times does an average person transacts across border for which their fiat currency doesn't work or too difficult to use? crypto has too little to offer at the cost of enabling crime and lack of transparency. Why all this is so difficult to understand for these crypto geniuses?
> Most of the issues in the world today are caused by our current monetary system, from wealth inequality to consumerism and environmental problems.
Of those three points, consumerism is the only one that bitcoin fixes, as it’s nigh useless as a currency right now, but excels at concentrating wealth[0] and burning carbon.
In 2011 I expected that governments will eventually try do shutdown Bitcoin and that these attempts will ultimately fail, because it would require most governments to tightly collaborate, which I think will not work out, because of conflicting incentives. Everything is taking much longer than I anticipated...
> “I’ve been a great advocate of moving to an electronic payments mechanism. There are a lot of efficiencies. I think we can actually have a better regulated economy if we had all the data in real time, knowing what people are spending,” he says.
And he likes this kind of surveillance dystopia? Is he trying to sell us CBDCs?
There will be a lot of "We should shut down the cryptocurrencies" from different perspectives (combatting crime being one) before it actually happens. But it will likely happen, starting with the US and the EU when it becomes a perceived threat to fiscal policies or national strategic interests, whichever comes first. Within 20 years is my guess, but could be much sooner. What the fallout and consequences will be is harder to predict.
I could be wrong of course, some anomaly might be buried here. But almost a lifetime of experience tells me the state structures will protect their interests when threatened. And this has the potential to be such a threat at a certain scale.
Knowing about every little thing people buy is as creepy as knowing about every little thing people say. And it's not necessary in the least. There are valid ways to measure cash flows without tracking every individual dollar. In the end cryptocurrencies play a similar role as gold and diamonds; not a great investment but useful as a store of value.
Perhaps. But considering people are already publishing their payments and thoughts on the internet in a constant stream of mediocre mental vomit, I doubt that besides advertisement agencies anything really changes if it was done at a different level.
The information availability might change mostly in areas where people are actively trying to hide (regardless if that's for good or bad reasons), but considering the size of that niche (ironically, perhaps also just a 1% of the masses) I doubt the significance of such a change.
That's not what he's saying. This isn't for monitoring individual behavior but rather macro trends. We could, for example, provide precise real-time data on metrics like inflation so we could craft better policy faster.
Perhaps the worst part about this authoritarian train of thought is that we think these things won't happen if we simply voice our opinion. History, including recent one, shows that "elites" will suddenly shove things down people's throat, passing bills against the vast consensus.
I just don't see how a centrally-controlled digital currency can guarantee privacy.
Crypto is an idea that arose for a good reason, but it's not a long-term solution.
CBDCs are coming though to most countries, including the US (eventually). It's unstoppable.
Maybe not technically but if the US or EU would ban any business activities related to crypto currencies, the entire ecosystem would collapse. Even if they continue to exist for black market purposes, their real-world usefulness would decline substantially.
"We should shut down a system where everyone can see all transactions because its not transparent, what we really need is a way for the government to track everyone."
I completely agree. But only so long as the integrity and privacy is upheld (which is very much possible). The state should now how much I earn and from where, and also how much I spend but not necessarily on what.
Anonymous small transactions on a centralized government currency would be a step up from what I do today with 99.999 (or thereabout) transactions being card/digital through systems I trust much less than my government.
We should use reverse psychology, we should offer crypto-bros to run the entire globalfinancial system via the exchanges and faulty dapps they have built to rug people.
With the condition that if one is hacked or malfunctions the responsible crypto-bro would face life in jail.
Totally. Skin in the Game should be a fundamental filter to determine social policies. How about we also make that those supporting the current global financial system face consequences for their horrible actions?
Like this: if you own stock of any global company, you'd be responsible for all and any financial crime they have committed. If you use credit from any bank operating in more than one country, you are also responsible for any crimes the banks commit. Let's put in jail all the HSBC customers, after all they also contributed to all the money laundering they did all these years.
This is exhibit A in why creating an open source monetary system is so important. Because it robs those with all the power and wealth from manipulating the system for their benefit via monetary and economic policies.
This is also why most of the critiques of capitalism fall flat in my opinion. Capitalism is not the problem, but the financial system is. The financial systems greed and market manipulation is what people are trying to eloquate when they say things like “unfettered capitalism”. You can have capitalism with an ethical monetary system, we just don’t. But we could.
So it's not the system itself, but the greed and manipulation. If any currently existing system could exist but without people's greed and manipulation, would it be as bad as it is now?
I think people who have things (imaginary power in the form of numbers in a spreadsheet) will work very hard to make sure that at the very least they can keep what they have, and generally will just want more of the same.
Then again, the scope, size and blatant abuse varies from country to country and in some cases gets re-dressed and hidden behind movements, religions, armed conflicts etc. and a universal system for everyone is unlikely to work in the real world, at least not with identity politics and borders.
Crypto currencies are also make graphic cards for playing computer games more scarse. A reason graphic cards can be used for mining crypto currencies. Secondly crypto currency proof of compute is power hungry and we have global warming. Crypto currency will probably become state issued with a transparent strong id transaction ledger of who did what.
[+] [-] bko|3 years ago|reply
> “I’ve been a great advocate of moving to an electronic payments mechanism. There are a lot of efficiencies. I think we can actually have a better regulated economy if we had all the data in real time, knowing what people are spending,” he says.
This is almost written like a parody. Government backed electronic money is utterly dystopian to me. Imagine all the "nudges" that could easily be introduced. You're buying too much [bad thing], card declined. You're costing the health care system too much by being overweight so we'll restrict your food allowance. Your carbon emissions are over the limit this month, we'll have to deny your flight purchase. A gas station charges "too much" for gas, payment declined.
[+] [-] boredumb|3 years ago|reply
[+] [-] scoopertrooper|3 years ago|reply
I haven't been denied my god given right to murder myself by purchasing tobacco and sugar products so far.
[+] [-] eganist|3 years ago|reply
Why would they do this when they can (and already do) use taxes and tax breaks to dis/incentivize behavior?
[+] [-] Tenoke|3 years ago|reply
[+] [-] igorkraw|3 years ago|reply
[+] [-] _ZeD_|3 years ago|reply
[+] [-] Maf1|3 years ago|reply
[+] [-] alkonaut|3 years ago|reply
[+] [-] moistly|3 years ago|reply
[+] [-] adrianN|3 years ago|reply
[+] [-] andrenth|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] dpweb|3 years ago|reply
[+] [-] outime|3 years ago|reply
[+] [-] jollybean|3 years ago|reply
1) Please - enough with they hyperbole.
Data is not the same as control.
Yes - we should be wary, we don't want the government using our money to nudge us.
At the same time we definitely want our governments using data to help us.
There was a story in Canada about the government buying anonymoized cell tower data to understand our behaviours during a pandemic, misrepresented as 'they are trying to control us' - which is a disingenuous lie.
Literally we're faced with a pandemic, we want to get rid of restrictions, the best way to do that is to know where and how COVID is spreading. We wouldn't bat an eye if some garbage advertising company bought that data.
2) "Government backed electronic money is utterly dystopian to me. I"
Hyerbole.
You already use 'Government Backed Electronic Money' - that the way it works and it works fine.
It's 1000% better than 'Ponzi Scheme Money 80% Owned by Elon Musk' or 'Google Controlled Money'.
And FYI - the 'Government Backed Money' we use today flows through VISA network and they are 100% selling every bit of your data to anyone who will buy.
What you probably want is even stronger regulation of 'Gov Money' so that private entities cannot trace, transact or sell, i.e. even better privacy laws.
And maybe some kind of legislation that forbids the Central Bank from doing anything other than targeting inflation/employment.
[+] [-] jacknews|3 years ago|reply
I always have to prefix that I'm no fan of crypto, don't own any, never have, but this seems like a shill to me, and brazenly opposite to reality.
Blockchains show every transaction ever, to everyone, albeit the transactees are pseudonymous.
But the traditional system is totally opaque to most people. And even to government, when complex webs of tax-haven shell-companies are involved (unless records are leaked, as in the panama papers, etc). So billionaires, mafia groups, corrupt government, get away with all kinds shenanighans, because the transactions themselves are secret.
The complete opposite of what Stiglitz is arguing.
[+] [-] ericd|3 years ago|reply
[+] [-] seydor|3 years ago|reply
Given how the most heinous economic crimes of this century were done in official ceremony in broad daylight , maybe there is value to it.
Academics are known in general for their controlling nature
[+] [-] tootie|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] Geee|3 years ago|reply
Economic inefficiency is a problem of the current monetary system, caused by its centralization and inflationary nature, and this is the problem which bitcoin is trying to fix. Most of the issues in the world today are caused by our current monetary system, from wealth inequality to consumerism and environmental problems.
He is suggesting that the monetary system should be even more centralized, and we should move into even more centrally planned economy, like in Soviet Union. This time however, they're planning to use big data to solve the economic calculation problem and to control consumer behavior. This is completely immoral, and ends up destroying both personal and economic freedoms in a society. This problem is very well understood, and no one seriously suggests central planning unless they are evil and want to decrease freedom and equality in a society.
We already have too much central planning in our current system. Central bank digital currencies would be the last step in this process of completely monopolizing money, and giving governments and central banks the absolute authority of where money is invested and how it is spent.
[+] [-] bluefone|3 years ago|reply
[+] [-] moistly|3 years ago|reply
Of those three points, consumerism is the only one that bitcoin fixes, as it’s nigh useless as a currency right now, but excels at concentrating wealth[0] and burning carbon.
[0] 0.04% own 63% of bitcoin; 2% own 94% https://medium.com/coinmonks/bitcoin-and-the-concentration-o...
[+] [-] ls15|3 years ago|reply
> “I’ve been a great advocate of moving to an electronic payments mechanism. There are a lot of efficiencies. I think we can actually have a better regulated economy if we had all the data in real time, knowing what people are spending,” he says.
And he likes this kind of surveillance dystopia? Is he trying to sell us CBDCs?
[+] [-] djohnston|3 years ago|reply
[+] [-] stareatgoats|3 years ago|reply
I could be wrong of course, some anomaly might be buried here. But almost a lifetime of experience tells me the state structures will protect their interests when threatened. And this has the potential to be such a threat at a certain scale.
[+] [-] entropicgravity|3 years ago|reply
[+] [-] oneplane|3 years ago|reply
The information availability might change mostly in areas where people are actively trying to hide (regardless if that's for good or bad reasons), but considering the size of that niche (ironically, perhaps also just a 1% of the masses) I doubt the significance of such a change.
[+] [-] tootie|3 years ago|reply
[+] [-] hereme888|3 years ago|reply
I just don't see how a centrally-controlled digital currency can guarantee privacy.
Crypto is an idea that arose for a good reason, but it's not a long-term solution.
CBDCs are coming though to most countries, including the US (eventually). It's unstoppable.
[+] [-] game_the0ry|3 years ago|reply
You can't "shutdown" crypto currencies. Technically not possible. Anyone who believes otherwise does not understand crypto currencies.
[+] [-] ProjectArcturis|3 years ago|reply
[+] [-] EveYoung|3 years ago|reply
[+] [-] faangiq|3 years ago|reply
[+] [-] victorvosk|3 years ago|reply
[+] [-] ekianjo|3 years ago|reply
Oh so you are also against cash? By the way is he even aware of the concept of open ledger?
[+] [-] sebmellen|3 years ago|reply
[+] [-] voldacar|3 years ago|reply
[+] [-] alkonaut|3 years ago|reply
Anonymous small transactions on a centralized government currency would be a step up from what I do today with 99.999 (or thereabout) transactions being card/digital through systems I trust much less than my government.
[+] [-] sudden_dystopia|3 years ago|reply
[+] [-] Bubble_Pop_22|3 years ago|reply
With the condition that if one is hacked or malfunctions the responsible crypto-bro would face life in jail.
Let's see how many accept
[+] [-] rglullis|3 years ago|reply
Like this: if you own stock of any global company, you'd be responsible for all and any financial crime they have committed. If you use credit from any bank operating in more than one country, you are also responsible for any crimes the banks commit. Let's put in jail all the HSBC customers, after all they also contributed to all the money laundering they did all these years.
[+] [-] VoodooJuJu|3 years ago|reply
[+] [-] toolz|3 years ago|reply
Remind me again how many people went to prison after the market crash of 2008?
[+] [-] sudden_dystopia|3 years ago|reply
This is also why most of the critiques of capitalism fall flat in my opinion. Capitalism is not the problem, but the financial system is. The financial systems greed and market manipulation is what people are trying to eloquate when they say things like “unfettered capitalism”. You can have capitalism with an ethical monetary system, we just don’t. But we could.
[+] [-] oneplane|3 years ago|reply
I think people who have things (imaginary power in the form of numbers in a spreadsheet) will work very hard to make sure that at the very least they can keep what they have, and generally will just want more of the same.
Then again, the scope, size and blatant abuse varies from country to country and in some cases gets re-dressed and hidden behind movements, religions, armed conflicts etc. and a universal system for everyone is unlikely to work in the real world, at least not with identity politics and borders.
[+] [-] rysertio|3 years ago|reply
[+] [-] acd|3 years ago|reply
[+] [-] xtracto|3 years ago|reply