كيف نفهم المال؟ | بدون ورق 126 | د.سيف الدين عموص

TLDR;

This podcast episode features Dr. Saifedean Ammous discussing the history of money, the rise of Bitcoin, and the Austrian economic perspective. The conversation explores the nature of money, the problems with government-controlled currency, the concept of time preference, and the potential of Bitcoin as a solution to economic and ethical issues.

• Money is a medium of exchange, not an end in itself.
• Hard money, like gold and Bitcoin, is difficult to produce, maintaining its value over time.
• Government-controlled currencies are prone to inflation and manipulation.
• High time preference leads to short-sighted decisions and societal problems.
• Bitcoin offers a decentralised, limited-supply alternative to traditional monetary systems.

Introduction [0:00]

The podcast introduces Dr. Saifedean Ammous, author of "The Bitcoin Standard," a book that has significantly influenced the understanding of Bitcoin. The discussion aims to explore money, currency, and the role of central banks before discussing Bitcoin as a potential solution.

What is Money? [3:32]

Money is defined as a medium of exchange, something acquired to be traded for other goods or services, not for its own sake. Historically, various commodities have served as money, but those that are difficult to produce have proven most successful. Societies have transitioned from using items like shells, salt, and livestock to precious metals like gold and silver due to their scarcity.

The Story of Yap Stones [6:32]

The example of the Rai stones on the island of Yap illustrates how scarcity determines an item's value as currency. These large stones were quarried from a distant island and transported to Yap, making them rare and valuable. Their ownership was often transferred by communal agreement, similar to how Bitcoin transactions are verified on a distributed ledger. The stones lost their monetary value when an American sailor, O'Keefe, began importing them in large quantities, leading to inflation and economic disruption. This story highlights the importance of scarcity in maintaining the value of money and the dangers of increasing the money supply.

Value of Money [12:08]

The value of money is determined by its demand as a means of saving. The more people use a currency to store value for the future, the higher its price. Increasing the supply of a currency to meet demand is not beneficial because money is primarily a tool for exchange, not consumption. Increasing the money supply only transfers wealth from those holding the currency to those who create it.

Hard vs. Soft Money [15:43]

Hard money is difficult to produce, maintaining its value, while soft money is easily produced, leading to inflation. Historically, currencies that have retained their value, such as the dollar, euro, Swiss franc, pound, and yen, have had lower annual increases in supply compared to currencies that have lost value, such as those in Brazil, Venezuela, and Argentina. People in countries with devaluing currencies tend to seek hard money like the dollar to preserve their purchasing power. Bitcoin is presented as an even harder form of money due to its limited supply.

Why are Goods More Expensive? [19:43]

Despite increased production, the prices of goods rise because government currencies are increasing in supply faster than most goods. The value of goods relative to government currencies increases over time. This is not because goods are becoming scarcer, but because government currencies are becoming more abundant.

How Banks Create Money [22:10]

Most money is created through lending, not printing. When a bank provides a loan, it creates new digital currency, increasing the money supply and decreasing the value of existing currency. This system is based on debt, leading to a world where individuals, companies, and governments are perpetually in debt.

Islamic Perspective on Money [27:18]

All government-backed currencies are based on interest (riba), which is prohibited in Islam. Even without directly engaging in interest-based transactions, the currency itself is created through debt-based processes. Historically, Islamic societies avoided excessive borrowing. While some contemporary Islamic scholars have permitted borrowing due to the lack of alternatives, Bitcoin is presented as a potential solution to this dilemma.

Time Preference [34:08]

Time preference is the degree to which individuals value the present over the future. People with high time preference prioritise immediate gratification, while those with low time preference consider long-term consequences. Societies and individuals with low time preference are more likely to succeed because they invest in the future through savings, healthy habits, and strong relationships. The difficulty of producing money influences time preference; hard money encourages saving and long-term thinking, while soft money promotes immediate spending.

Gold Standard [44:12]

The gold standard emerged organically as the market gravitated towards the most difficult commodity to produce as money. Unlike government-controlled systems, the gold standard was not imposed by a central authority but arose from the collective choices of individuals. The Austrian economic school views money as a product of the market, while the Keynesian school believes the government should control the money supply.

Roman Empire [53:29]

The Roman Empire initially used a gold standard, but emperors began debasing the currency by reducing the gold content in coins. This led to inflation, price controls, and economic decline. The debasement of currency to fund government spending is a recurring theme throughout history, with similar consequences.

Inflation [58:29]

Inflation is defined as the increase in the money supply, which leads to rising prices. The Austrian economic perspective views a small amount of inflation in gold as a necessary evil, while Keynesians see it as beneficial for economic growth.

World War I [1:01:10]

The period from 1870 to 1914 was a golden age of innovation and economic progress under the gold standard. However, World War I marked a turning point as governments abandoned the gold standard to finance the war. This led to uncontrolled money printing, inflation, and economic instability. The war's devastation was prolonged because governments could continuously fund the conflict by devaluing their currencies.

Post-World War I [1:13:51]

After World War I, Britain attempted to restore the gold standard at the pre-war exchange rate, leading to economic hardship. The government manipulated the American central bank to inflate the money supply, resulting in the Roaring Twenties boom followed by the Great Depression.

Keynes [1:24:53]

John Maynard Keynes is criticised for advocating government intervention in the economy through monetary policy. His ideas are seen as a justification for governments to print money and manipulate the economy, leading to inflation and economic instability. Keynes's personal life and moral character are also criticised.

Austrian Economics [1:34:20]

The Austrian economic school emphasises production and saving over consumption. Saving is necessary for investment and economic growth. The Keynesian focus on stimulating demand through government spending is seen as misguided.

Bitcoin [1:52:36]

Bitcoin is presented as a solution to the problems caused by central banking. It is a decentralised, limited-supply digital currency that cannot be controlled by any single entity. Bitcoin is not a competitor to payment processors like Visa or PayPal but rather a competitor to central banks and government-controlled currencies.

Bitcoin Mining [2:11:38]

Bitcoin mining is the process of verifying transactions and adding new blocks to the blockchain. Miners solve complex mathematical problems to earn new Bitcoins. The supply of Bitcoin is limited to 21 million, with the reward for mining new blocks halving every four years.

Bitcoin Security [2:15:36]

While the possibility of hacking Bitcoin exists, the network's decentralised nature and cryptographic security make it extremely difficult. The potential rewards for successfully attacking Bitcoin are enormous, attracting the attention of top hackers.

Bitcoin as a Solution [2:17:08]

Bitcoin solves the problem of central banking by providing a currency that cannot be manipulated or devalued. It offers individuals a way to save and store value without the risk of government confiscation or inflation. Bitcoin empowers individuals and reduces the power of governments to control the economy.

Bitcoin and the Islamic Economy [2:43:25]

Bitcoin offers a way to avoid interest-based transactions and participate in an economy based on sound money. By saving in Bitcoin, individuals can avoid the need for debt and build wealth over time.

Bitcoin and Palestine [2:55:53]

The speaker draws a parallel between the creation of the state of Israel and the rise of fiat currency, suggesting that both are linked to the power of central banking. He argues that Bitcoin can help reduce the financial power of those who support the Israeli government and enable individuals to retain their wealth. He advocates for boycotting the dollar and using Bitcoin as a way to undermine the financial support for the conflict in Gaza.