We Live In John Law’s World

john-lawThe most interesting person in Western history who most people have never heard of is John Law, the inventor of the concept of paper money. Born in Scotland, Law began by killing a man in a duel over the affections of Elizabeth Hamilton, former mistress of King William III. Law fled to the continent, and ultimately — and improbably — became Finance Minister to King Louis XV of France in 1716.

Law believed that money is only a means of exchange that doesn’t constitute wealth in itself, and that wealth flows from trade. As such, Law proposed and implemented paper money issued by the French government, and banned gold and silver currency. Contemporary economists screamed in protest, and yet the paper money plan worked. French economy roared to life.

Sadly, Law’s other project — the Mississippi Company — spectacularly imploded. Law fled France and died broke in Venice in 1729. Law was right. The international monetary system finally fully dropped the gold standard in 1971, 300 yrs after Law was born. We live in John Law’s world.

Schumpeter later wrote: “Law is in a class by himself. Brilliant and profound, placed in the front ranks of monetary theorists of all time.” I am willing to lay odds that Satoshi Nakamoto is John Law’s great-great-great-great-great-great-great-great-great-grandson.

Recommended Reading:

Sources: Andreessen’s tweets on John Law – 1,2,3,4,5,6,7,8,9,10,11,12

Senator Joe Manchin’s Position on Bitcoin

manchinLet’s explore the newly announced positions of American Senator Joe Manchin (D-WVa):

  • Manchin is FOR suppressing pro-consumer and pro-small business innovation in financial services to increase choices, lower fees, and sell globally.
  • Manchin is FOR continuation of 2008-era US financial services industry for the long term; entrenchment of status quo and Too Big To Fail.
  • Manchin is FOR maintaining high credit-card fees for much of American economy, reducing standard of living for many Americans including poor.
  • Manchin is FOR sustaining ~10% remittance fees for hardworking immigrants toiling 60-hour hard labor in US to send money back to families.
  • Manchin is FOR crippling high-job-growth US tech industry in important new field; forcing Bitcoin innovation and jobs to foreign countries.
  • SUMMARY: Manchin is FOR high fees for regular consumers and poor immigrants, 2008’s brittle US financial system, and kneecapping the US tech industry.

Source: Andreessen’s tweets: 1,2,3,4,5,6,7

Responses:

Bitcoin Birthing Pains

photo credit: zcopley - cc

photo credit: zcopleycc

The market price of BTC (Bitcoin) dropped going into the MtGox shutdown, and then has risen since. This is exactly what one would predict for a normally functioning financial market without systemic risk.

MtGox had to die for Bitcoin to thrive. Its former role from early Bitcoin days has been supplanted by better, stronger entities. People learning about or trading Bitcoin should deal with reputable, well-run, well-backed companies such as Coinbase (our choice).

It’s important to know that Bitcoin protocol and transaction network doing just fine in wake of MtGox shutdown; there are no substantive technical issues. Every important new technology has birthing pains. PC did, Web did, Bitcoin does. Our enthusiasm and commitment remains unchanged.

Source: Andreessen’s tweets on Bitcoin and Mt. Gox shutdown: 1, 2, 3, 4, 5, 6

Responses: