The Bitcoin Standard — a book review
Saifedean Ammous is an academic economist from the Lebanese American University who has risen from obscurity to become one of the foremost modern voices of Austrian economics through his writings on Bitcoin.
Along with fellow Bitcoin maximalists Michael Goldstein and Pierre Rochard, he is at the vanguard of a neo-Austrian economics revival movement that holds Bitcoin as the sound money alternative that can lead the world to economic salvation. Ammous is the high priest of the ‘Bitcoin carnivory’ subculture that rejects ‘fiat food’ in the same way it rejects fiat money.
The foreword to The Bitcoin Standard is written by risk maestro and philosopher Nassim Nicholas Taleb, who denounces central, top-down control economic control by intellectual-yet-idiot (IYI) central bankers. Taleb has become the intellectual godfather of much of the crypto and blockchain movement, and many of his ideas map perfectly onto Bitcoin.
The book is basically a series of red pills on a variety of issues mostly concerned with money and the economy, but some that are only tangently related to Bitcoin.
The Bitcoin Standard provides an excellent introduction to Austrian economics for the layman. It explains the fascinating and intuitive concepts of the Austrian School such as time preference and sound money that have been neglected in all mainstream (Keynesian) economics classes.
The book explores the shortcomings of the ‘animist mythology’ of Keynesian economics and the negative implications of the Keysenian approach to economic management — particularly the consequences of unsound money.
Ammous also suggests that many societal ills of the present day have their origin in easy money created by government-controlled central banks. He makes a credible case for a culture materialism and consumption to be a direct product of unsound money -
‘By constantly expanding the money supply, central bank’ monetary policy makes saving and investment less attractive and thus it encourages people to save and invest less while consuming more. The real impact of this is the widespread culture of conspicuous consumption where people live their lives to buy ever-larger quantities of crap they do not need.’
This message resounds strongly with the millennial generation of the West who feel instinctively that materialism, conspicuous consumption and wasteful economic current growth trajectory are inherently unsustainable. He also posits that modern artwork, ugly architecture and vapid music are all direct products of a high time-preference society on the borrowed high of loose monetary policy.
‘The financial decision of people also reflect on all other aspects of their personality, engendering a high time preference in all aspects of life: depreciating currency causes less saving, more borrowing, more short-termism in economic production and in artistic and cultural endeavors, and perhaps most damagingly, the depletion of the soil of its nutrients, leading to ever-lower level of nutrients in food.’
This previews the unique aspect of Bitcoin maximalism that Ammous practices — Bitcoin carnivory. Bitcoin carnivores eat exclusively meat, stating that meat provides long lasting satiety and nourishment in the opposite manner to highly processed plant-derived foods like soy, corn and wheat that are driving obesity and ill-health across the world.
Ammous freely admits the technical software details are not his forte. Nevertheless, he does an admirable job of explaining the ins and outs of Bitcoin as a digital currency.
The Bitcoin Standard can feel at times overly sure of Bitcoin’s future success. In some ways it portrays Bitcoin it as the final iteration of a perfected technology rather than the proto-coin and sticky-taped open source project that more accurately describes it. The recent inflation bug scare was a timely reminder that Bitcoin is not immune to vulnerabilities that affects all software — the code was created by a human and is currently stewarded by humans.
This shouldn’t distract from the value of the book, which does a sterling job communicating the need for a trustless currency with a fixed supply that is immune to expansion at the whims of central bankers.
The Bitcoin Standard peels back a fascinating layer of the Bitcoin onion — it already feels like a classic. It certainly deserves to be ‘standard’ issue for anyone taking the journey down the Bitcoin rabbit hole. It also serves as an important explanation of basic economics and monetary realities that govern our daily lives. Highly recommended.
