Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin and positive vs. normative economics

krugman.blogs.nytimes.com

Post reply on HN
Print view View original

301–310 of 520 posts

Re: Bitcoin and positive vs. normative economics

#301

Post by mcguire »

sans-serif wrote: post #78
jamroom wrote: post #48

Earlier quoted context omitted.

But does Bitcoin really have a floor related to the energy put into the mining? Since the energy cost is paid for by the miners, do other players in Bitcoin "respect" that floor? I don't see that - there's nothing keeping a Bitcoin from going all the way to zero - regardless of the energy consumed in it's production, and Krugman argues that gold (and the feds) have a bottom that is greater than zero. My understanding…

No, the floor is unrelated to the energy put into mining. The intrinsic value of Bitcoin is the ability to facilitate financial transactions. Brinks' entire CIT vehicle business is based upon just a subset of this function, and we can agree their value is not zero.

So, bitcoin's ability to store value is due to its ability to be a medium of exchange?

Re: Bitcoin and positive vs. normative economics

#302

Post by Rogerh91 »

I had recently thought about this very topic, and having spent just a bit more time than Krugman on it, and knowing a bit more about bitcoin, I find it somewhat interesting that we arrived at drastically different opinions about the morality of it. I have a rather more positive (haha, pun intended) take on it given what has happened with the conventional monetary system, one that Krugman and any mainstream economist would probably agree with: the system is (largely) broken, and we must look for solutions. If Bitcoin is the technologist's experimental solution, it is worth embracing because it delivers on change. Krugman's solutions will focus more on government force as a constraining framework, instead of extensions of innovation---but I believe at the core of it all, the "libertarians" he decries are also the same people he would agree with on the utter folly of our current banking/finance dominated economy.

My expanded thoughts can be read here: https://medium.com/technology-meets-policy/fd097809f88f

Re: Bitcoin and positive vs. normative economics

#303

Post by dgacmu »

Ok. Krugman actually annoyed me enough with this one to respond. Here's an attempt to start a slightly more technically sophisticated dialogue with Krugman about Bitcoin. http://da-data.blogspot.com/2013/12/to-krugman-finding-intri...

Now if I could find one of my economist colleagues to actually get him to read it... :-)

Re: Bitcoin and positive vs. normative economics

#304

Post by etjossem »

nhaehnle wrote: post #210
etjossem wrote: post #121

Earlier quoted context omitted.

It's still a totally inaccurate bait and switch title, which annoys me and makes me like his column a little less. If I click through to an article called "Bitcoin is Evil", maybe I actually want to read about how a Bitcoin-dominated world is going to making exploiting the poor trivially easy. I'm not convinced yet, but it's a plausible (if normative) argument someone could make, so there's no sense in making a joke…

Judging from a follow-up discussion, I believe you're using the word "redistribution" in a way that is meaningless and/or needlessly gives ground to a libertarian framing of the situation. In a nutshell, if you say "redistribution", you must have some baseline in mind. Many people are fooled into accepting an "everyday libertarian" distribution of resources as a baseline, but this is both philosophically problematic…

Interesting read from Bruenig! While it's true that the term "redistribution" (as opposed to "distribution") implies a default where everyone gets back exactly as much value as they paid into the system, it's also common parlance for progressive taxation and equal benefits. That was the sense in which I used the term.

Re: Bitcoin and positive vs. normative economics

#305

Post by SilasX »

thaumasiotes wrote: post #250
dnautics wrote: post #216

Earlier quoted context omitted.

that's not in any way "intrinsic" value.

Yes it is. The intrinsic value of food is that you can eat it; the intrinsic value of art objects is that you like them. All "intrinsic" value refers to is the use you can make of something without exchanging it for something else. If you were the only person in the world, and you appreciated the appearance of gold, than gold would be intrinsically valuable to you.

But for the case of jewelry, its usefulness as such depends on it being valuable. So the buck can't stop there: what other use propped up its value?

Re: Bitcoin and positive vs. normative economics

#306

Post by greyman »

DrJokepu wrote: post #265
greyman wrote: post #181

Earlier quoted context omitted.

I am not a libertarian and do not have a political agenda, but it is imaginable that certain parts of the government could be replaced with the structure like this one. I don't know how the transition could happen, but at the end, the mining in the network will be done by citizens, bitcoins will be named "bitvotes", and every citizen will mine those bitvotes, or they could be distributed fairy (one bitvote to each ci…

Voting is a solved problem. I’m not saying that the idea of using bitcoin technology to solve problems beside monetary systems is a bad idea (in fact, I think it’s a very interesting concept), but really, democracies around the world already have established and efficient voting systems that work well enough.

Yes, but you need a trusted authority.

But I probably didn't explain it well enough. I didn't mean that you would vote which politicians will rule, you would vote on concrete decisions state such make. Nowadays, you vote politicians and they make decisions, and with blockchain network, you would directly vote for such decisions, making the politicians an unnecessary layer. ;-)

Re: Bitcoin and positive vs. normative economics

#307

Post by frabcus »

guscost wrote: post #126
steveklabnik wrote: post #117

Earlier quoted context omitted.

There's an assumption here which may or may not be true: technologies are ethically neutral. Some reasonable people disagree with this assumption.

But can technology be immoral? I'm a bit rusty on all that stuff but it sounds like we're talking about two (subtly) different questions. I would argue that technology can be used for evil, but technology just sitting there by itself is no more evil than rocks or sand. If you can prove that a certain technology can not or will not be used for good, then that raises different questions.

It's pretty clear that the hydrogen bomb is, in the sense you give, "immoral".

Sure, you can come up with complex, hypothetical scenarios where it has value, but fundamentally it has but one purpose, which is to murder millions of people.

In most moral systems, murder of one person is immoral, never mind millions.

Re: Bitcoin and positive vs. normative economics

#308

Post by ubernostrum »

dnautics wrote: post #276
notahacker wrote: post #262

Earlier quoted context omitted.

The reality is inevitably more complicated than stylised examples: most obviously because wages tend to be directly or indirectly linked to inflation. In general, a person tending to spend virtually all their income within a month of earning it will lose out less than someone who hoards their wealth; if they're due a 2% annual pay rise and the Central Bank is pretty good at keeping inflation within a 2% range they're…

one, you're crazy thinking that wealthy people hoard their wealth in dollars. two, if you think people won't consume if the money is deflationary, you're crazy. The US had net deflation for most of its history (except during wars) from 1600-1910, and certainly there was plenty of growth. Also, analogous to the "why do you ever bother buying computers knowing that they depreciate rapidly". three. If you think laborers…

The US had net deflation for most of its history (except during wars) from 1600-1910, and certainly there was plenty of growth.

And for all but the last 45 years of that 410-year period, the US also had the ability to obtain labor by force and without compensation. And even afterward, for many decades and well beyond the 1910 cutoff, the US had labor arrangements which only were not classified as slavery due to legal hair-splitting over the definition of the term.

Thus, we can just as easily argue that slavery is correlated with economic growth. Or that disregard for the intellectual-property laws of other countries is associated with growth (see the US in the 19th century, China in the 20th and early 21st). Or... well, lots of complicated factors that you seem to want to gloss over to make an argument in favor of one and only one factor.

(and that's without getting into the volatility of gold-backed currency, the boom/bust cycles, the fights over whether to have a single or bimetallic standard, etc. etc.)

Re: Bitcoin and positive vs. normative economics

#309

Post by lukifer »

natrius wrote: post #184
paul wrote: post #159

I'm most bullish on bitcoin when I read articles such as this one, and most skeptical when I read the thoughts of the bitcoin believers. It's truly the most interesting technological development in years, if only because it reveals how little anyone really understands money or economics. Here's another interesting (though imperfect) way of thinking about bitcoin: it's a decentralized corporation, where bitcoins are o…

My current answer to that question is that any industry that relies on trust could be structured in this way. If DNS were implemented on a blockchain, purchasing that chain's currency would be betting on increasing demand for that chain's transactions, domain names. What other industries are fundamentally about trust?

In case you're not aware: there is a BitCoin fork which seeks to compete with DNS, called NameCoin. Though the primary purpose is domain resolution, it's also a generic key-value storage system using the block chain.

Re: Bitcoin and positive vs. normative economics

#310

Post by ubernostrum »

dnautics wrote: post #182
natrius wrote: post #11

Ignore the flamebait headline. The distinction Krugman makes between positive and normative economics is a useful one. On the positive side, I think Krugman and DeLong are overestimating the strength of the floor for the value of a dollar. Hyperinflation would make it impossible for the Federal Reserve to buy up enough dollars to stabilize the value of the currency. Sure, you can pay taxes with them, but the governme…

"our society will have to figure out how to make the economy work with endemic deflation" So, 1600-1900 in the US (minus wars which were incredibly inflationary but always temporary in that era) not enough for you? The counterargument is this: In the era of central banking we have struggled to figure out how to make the economy work with endemic inflation . And it's failing. The two eras where the gap between the ric…

Look at all the things you're sweeping under the rug in your defense of deflationary currency:

https://news.ycombinator.com/item?id=6977547

Post reply on HN