Common Sense; Addressed to 99% of Inhabitants of America!
During the American revolution, when Thomas Paine wrote the “Common Sense; Addressed to the Inhabitants of America”, to change the minds of people who wanted to peacefully settle their differences with the British government and encourage them to fight for independence instead, he clearly stated that:
“In America the law is king. For as in absolute governments the King is law, so in free countries the law ought to be king; and there ought to be no other.”
“The rule of law” was undoubtedly one of the most important properties of the government we wanted to build after winning the independence in the Revolutionary War. In 1780, John Adams enshrined this principle in the Massachusetts Constitution by seeking to establish: “A government of laws and not of men.”
As the Roman statesman Cicero said two thousands years ago: “We are all servants of the laws in order to be free”. We owe our political improvements and the freedom we experienced in the recent centuries to “the rule of law”. But were we allowed to experience “the rule of law” in economy just like in politics, or are we still in the kingdom age of our economic life? Who is ruling our economy? Law?!
It is clear from economic perspective that money rules the economy. But is money ruled by the law?
97% of our today money is being created by private banks. Bankers are the king of our today economy and they rule it in a way that maximizes their interests not in the interests of society as a whole. In fact, bankers’ monocracy in the economic world not only affected our economic freedom, but our political freedom and democracy; as this Positive Money video explains:
Power of Banks vs Democracy
You may have heard this quote from Mayer Amschel Rothschild, German Jewish banker and the founder of the Rothschild banking dynasty:
“Let me issue and control the money of a nation, and I care not who makes its laws!”
So, is the solution getting the money creation power from bankers and giving it to the governments’ officials?
No! Fortunately we are not limited to choose between “the rule of banks” and “the rule of governments” anymore. Blockchain enables us to replace these old inefficient approaches by “the rule of law”!
Blockchain makes us able to write simple, clear, and comprehensive monetary laws as smart contracts. These smart contracts provide the clear response to the important questions each monetary policy should answer, like:
Blockchain opened a new window to the economic liberalism and taught us how to apply “the rule of law” to the economy just like in politics. “The rule of law” in economics can even make a bigger revolution than what it made in politics. In the political world, only one single law is applicable to all the people in a country. But in the economic world, blockchain technology can easily eliminate the geographical constraints in governance and allow minorities to follow the law they believe in.
Ethereum is a new free economic territory we have just discovered exactly like America.
What is Ethereum from this perspective? Ethereum is a new free economic territory we have just discovered exactly like America. In Ethereum, the law is king. For as in absolute economic governments the King is law. Ethereum is a government of laws and not of bankers. Here, law determines how much money should be created and who this new money should be created for. But not a single law! In this new free economic territory, anyone can define a new money as a simple smart contract with a different response to the common monetary questions and let market competition show if this new money is better than others or not.
The Oxfam report, An Economy for the 1%, shows that just 62 people in the world own the same as half of the world! Is this because they were smarter or worked more? No! This is because our today banking system is creating money for 1%!
We have many prominent monetary reformists struggling for many years with governments and bankers to encourage them to fix this corrupt monetary system. If we want to find the real social impact of Ethereum, we had better stop searching it in helping displaced refugees with Ethereum! Instead, we should invite these monetary reformists to stop useless struggling with governments, immigrate to Ethereum territory and participate in making the future in a way where money will be created to benefit 99%!
Monetary reformists may have different views on either the problem of today monetary system or its solution. They may have different responses to monetary questions, like “how much money should be created?” or “who should this new money be created for?”. No problem! Competition makes the freedom and growth. In our new territory, all of these answers can be implemented as smart contracts to compete with each other. As F. A. Hayek, a liberal economist and philosopher explains:
“The interesting fact is that what I have called the monopoly of government of issuing money has not only deprived us of good money but has also deprived us of the only process by which we can find out what would be good money. We do not even quite know what exact qualities we want because in the two thousand years in which we have used coins and other money, we have never been allowed to experiment with it, we have never been given a chance to find out what the best kind of money would be.”
Finding a monetary system that works for 99% is not simple, but Ethereum is a territory where we can start stepping towards “the only process by which we can find out what would be good money.”
This is the 2nd hackernoon story from the “Freedomland: Ethereum from monetary viewpoint” series. I try to discuss monetary aspects of Ethereum in these posts. Here is the list of “Freedomland” posts:
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