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Bitcoin VS Collectivism
It’s 2023, and the biggest battle we face, for the soul of the individual and the soul of civilization, is the one against the cancer of collectivism.
What do I mean?
Let’s answer a few questions to help clarify:
What is collectivism?
Why is it a cancer?
How can Bitcoin inoculate civilization from it?
What is Collectivism?
Collectivism is a political and economic ideology that emphasizes the collective ownership and control of the means of production, as well as the distribution of wealth and resources within a society.
As opposed to individualism, which advocates for individual ownership and control of property and resources, and the freedom of individuals to pursue their own interests, in collectivist societies, the government or other central authority is responsible for organizing and managing the economy and the distribution of wealth and resources.
Collectivism is often associated with socialist and communist systems of government, which seek to eliminate private property as a means of creating a more equal distribution of wealth among the population.
Of course, in doing so, these systems of government do the exact opposite and destroy the very fabric of the society they purport to be “helping” or “saving”.
Why is Collectivism a Cancer?
Like cancer, collectivism is a destructive force that undermines the health and well-being of the organism within which it operates.
Like cancer, the host ultimately breaks down and fails, or dies.
Collectivist governments fail because they violate fundamental economic principles and undermine the incentives and motivations of individuals (the cells of the social economic system).
According to Rothbard, the central planning and resource allocation mechanisms of collectivist governments are inherently inefficient, as they cannot possibly account for the complex and diverse preferences of all individuals in a society. In addition, collectivist governments tend to rely on force and coercion to achieve their goals, which creates a climate of fear and distrust and stifles innovation and creativity.
Rothbard would also argue that collectivist governments fail because they undermine the incentives of individuals to work and produce. In a collectivist system, the rewards of productivity are distributed according to the dictates of the central authority, rather than being determined by the market. This removes the incentive for individuals to work hard and be productive, as they cannot reap the benefits of their own efforts.
The result is that collectivist societies tend to suffer from low levels of productivity and economic growth, much like a human with Cancer suffers from low levels of vitality and is no longer growing healthily.
Collectivist governments erode personal responsibility and accountability, much like cancer erodes the capacity for cells in the body to effectively perform their duties. In a collectivist system, individuals are not responsible for their own well-being and are instead reliant on the state for their basic needs. As such, people, like the cells in the body do when in the presence of cancer, begin to metastasize and become cancerous to the whole.
This all leads to a culture of dependency and entitlement, by discouraging individuals from taking charge of their own lives and striving for self-improvement.
It’s a downward spiral which ultimately spells the end for society as the host.
How can Bitcoin inoculate Civilization from Collectivism?
Bitcoin fixes this through a radical localization in the consequences of economic action.
h/t @SvetskiWrites for this insight. It also influences time preference in a positive way. More on this below.
Bitcoin cultivates a culture of individualism and self-reliance, which is resistant to the negative effects of collectivism, much like nutrient dense food, sunlight and holistic medicines help give the body what it needs to naturally fight cancer. The Bitcoin ingredients are in some ways parallels to these, and if you’re a Bitcoiner already, you know them:
Decentralization: Bitcoin has no central authority controlling the network. This means that it is not subject to the same kind of centralized control and manipulation that forms the basis of collectivist systems.
Financial freedom: Bitcoin allows individuals to conduct financial transactions without the need for intermediaries such as banks or governments. This gives people more control over their own financial affairs and makes them less reliant on the state for their basic needs.
Limited supply: The supply of Bitcoin is capped at 21 million, and the rate at which new coins are created is predetermined by a simple algorithm. This prevents the kind of inflation and currency devaluation that infects the structure of collectivist societies.
Censorship resistance: This is particularly useful in collectivist societies where the government tries to suppress dissent or control the flow of information and money.
Now…this might not completely immunize a society from the negative effects of collectivism, but it forms the basis for it.
Bitcoin lowers time preference, which is an economic term referring to the degree that an individual values present goods over future goods. A person with a high time preference is more concerned with immediate gratification, while someone with a low time preference is willing to delay gratification in order to achieve greater long-term rewards. Lower time preferences are healthier - both for individuals and the societies they make up.
Collectivist systems often rely on high time preference to maintain control and compliance, as they promise immediate benefits in exchange for loyalty and obedience. For example, a collectivist government might offer free healthcare or education in exchange for support and participation in the political process. Similar to how an overweight person is easily influenced by the next slice of pizza, a chocolate or seed-oil-laden McDonalds.
Bitcoin, however, promotes a lower, more rational time preference by offering individuals a means of accumulating wealth and achieving long-term financial stability independent of the collectivist system, its promises and the inherent uncertainty it creates about the future. By providing an alternative way to save, Bitcoin undermines the reliance on collectivist institutions and as mentioned, encourages more individual responsibility and self-sufficiency.
This lowering of time preference and re-localization of consequence increases the economic health of the individuals (the cells) that make up society (the body) and ultimately inoculates us from the cancer of collectivism.
Overall, anything that promotes greater individual freedom alongside responsibility and therefore autonomy, is a step in the right direction. By solving that at the praxeological level, Bitcoin is a powerful, if not the most powerful, antidote to the disease that is Collectivism.
This is a guest post written by @WartimeBitcoin
7th Jan, 2023