Forthcoming Book Review in Cato Journal Examines ‘The Bitcoin Standard’
A book review called “The Bitcoin Standard: A Missed Opportunity” is coming out later this year in the Cato Journal, an Austro-libertarian public policy journal. In the piece, its author Tyler Whirty looks at Dr. Saifedean Ammous’ increasingly popular The Bitcoin Standard, noting what he thinks Ammous got right but making a wider case on where he thinks the bitcoin economist went astray.
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A Dash of Cold Water
The Bitcoin Standard has already become a hit among Mises-minded bitcoiners. Hundreds of its copies have already flown off the shelves since its publication in April 2018 — no small feat in an age where books are no longer in vogue. Put forth by economics professor Dr. Saifedean Ammous, the text lays out his case for how and why bitcoin is the “the Internet’s decentralized, apolitical, free-market alternative to national central banks.”
So it’s got the popularity. It’s got the sales.
And now it’s receiving some collegiate criticism, too.
That’s per Tyler Whirty’s new book review “The Bitcoin Standard: A Missed Opportunity,” which is set to appear in the coming edition of the Cato Journal due out later this year. The journal is a publication of the Cato Institute, a libertarian think tank in the U.S.
Delving Into the Review
First, as with any book review, Whirty outlined the general structure of the book at hand. He highlighted how The Bitcoin Standard‘s first four chapters delve into the history of money and its evolution, the following three chapters deal with contrasting unsound and sound money, while the final three sections make the case that bitcoin is the sound money of the future.
From here, Whirty noted what he thought Dr. Ammous got right in his work, namely that the economist did a “fine job” explaining “salability, hard money, stock-to-flow ratios, and money as a medium of indirect exchange.” The reviewer also wrote that the book “should be commended for pushing the narrative forward that free-market money would […] ‘make the world a better place’ by limiting the power of the state over the individual.”
After this rhetorical point, Whirty pivoted toward his critiques and didn’t hold his punches.
Whirty: Book ‘Does Little to Advance Our Collective Understanding’
Going further, Whirty raised several concerns, starting out by arguing that Dr. Ammous exaggerates in the text the historical role sound money had in “everything from the fall of the Roman Empire [to] the ‘breakdown of the modern family.’” The reviewer commented accordingly that “such assertions are better suited to Twitter posts than to a work purporting to convey serious lessons about monetary economics, Austrian or otherwise.”
Whirty also knocked Dr. Ammous for not delving more into the “large part played by credit and the different forms of money based upon it, including most bank deposits,” his “strawman treatment of John Maynard Keynes,” and his analysis of the gold standard:
“Yet his analysis of the gold standard leaves much to be desired and fails to provide readers with historically accurate facts that are relevant to the book’s supposed subject — the future of the global monetary order. For example, his assertion that the rise of Hitler and Mussolini, along with World War II, was triggered by European nations’ abandonment of the gold standard and the embrace of Keynesian economics is historically inaccurate. Likewise, he lets his imagination run wild in blaming what he calls the ‘Keynesian deluge’ for the murder of classical liberal (free-market) economists in Russia, Italy, Germany, and Austria.”
Whirty moved toward closing his review in saying that he was disappointed Dr. Ammous didn’t spend more time dealing specifically with bitcoin and its surrounding questions in the text:
“It is disappointing that Ammous spends so little time discussing Bitcoin and its potential as a replacement for central-bank money […] Ammous doesn’t spend any time addressing the concerns held by many economists that Bitcoin’s limited supply — an attribute lauded by Ammous but exacerbated by the unknown amount of Bitcoin lost forever — would eventually result in undesirable deflation. Nor does he summarize and confront the more technical arguments about mining power centralization or whether the incentive system can survive once the 21 millionth Bitcoin is released and miners are only rewarded by transaction fees. These are important questions if a Bitcoin standard is ever going to supplant central banks.”
The reviewer concluded his piece in saying The Bitcoin Standard “does little to advance our collective understanding of the topic the book professes to address.”
Whirty’s takes will surely be derided by some and lauded by others. But his review’s upcoming publication in the Cato Journal will ensure that its signal is boosted nonetheless.
As for the bitcoin economist, Dr. Ammous didn’t immediately respond to Bitsonline‘s request for comment on the review. This story will be updated accordingly if he chooses to do so.
What’s your take? Does Whirty make fair points, or are you firmly on Dr. Ammous’ side? Let us know in the comments below.
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