3/23/14

Bitcoin is Two Things: Payments and Money

There is an enormous amount being said about Bitcoin these days. Marc Andresson thinks it's worth $50 million. Paul Krugman thinks it's evil. Ben Bernanke thinks it holds long-term promise (or maybe he doesn't). But let's face it, No One Understands Bitcoins:




That said, I think that a lot of confusion could be cleared up if people started differentiating between Bitcoin as a Payments System and Bitcoin as Money. Speaking separately about the two is hard because in the system Satoshi Nakamoto designed, the two aspects of Bitcoin are indivisible—you could even say they are two sides of the same coin—but to fully evaluate the merits of Bitcoin, a bit of coin-bifurcation is essential.  (Some shall be pardon'd, and some pun-ished).

3/8/14

Why Economics Doesn’t Understand Inequality

Note: This post is far from perfect, and in places probably flat-out wrong. This is a blog for BHAGs and controversial opinions, not for being careful. Also: this post is about within-country inequality, not cross-country inequality, and will unabashedly feature large block quotations created with mac default fonts and colors. Prepare to be visually assaulted.

Growing up I was your typical well-off wannabe do-gooder. I was sensible to the appeals of charity, into the idea of "social justice," and thought that wanting to make money when you grew up was terribly gauche. I knew there was something wrong about a society where the top 1% have nearly 40% and the bottom 40% have less than 1%. I decided that in college I would study economics to figure out the structural reasons why some people became rich and other people became poor, and from there choose a typical do-gooder career that would help make the system as a whole more fair.

Of course I knew that some economists claimed that the "invisible hand" essentially meant that the poor deserved to be poor, but I had always assumed that those people were either idiots or bigots, just as I had decided those who cried "exploitation" were missing the point.