Looking at how the price of Ether skyrocketed this year, one can only wonder who in their right minds would have thought this could be possible? The answer might be too abstract to fathom, but it is staring at us from the depths of our college economics text books. If John Maynard Keynes were alive today, and would have gotten into crypto, he would have been able to predict that the Ethereum economy would was about to grow manifold, and that the price of Ether would advance accordingly. From a Keynesian perspective, ICOs are the shovels of the Ethereum economy, and to make it grow, the only thing needed is to boost aggregate demand with a lot of hype and fanfare.

Keynes at Work!

This effectively means having an ICO dig a hole during the day, while having another ICO dig even deeper one at night. This is not to say that all ICOs are useless, but there is a fair share of them that are. Some have decimated investors’ funds, nevertheless, the economic machine that is the Ethereum network keeps growing. Its market cap – GDP anyone? – is second only to that of bitcoin, and has no immediate contenders in the short-term, lest the Keynesian ICO bubble bursts.

Hayekians are looking at Keynesian ICO Investors and Hodling!

Alas, there is no such thing as a free lunch. That is the other old adage in economics that serves as a counter argument to boosting aggregate demand. While Keynesian economics boost aggregate demand for Ether through ICOs, Hayekians are thinking about that free lunch hard and long, realizing that resources are scarce and using them wisely is necessary to ensure long-term economic health.

Ethereum is having none of that, and right now it seems unstoppable. Warnings of an ICO bubble come and go without a bubble actually bursting, leading many to think that they can live in this Keynesian experiment forever. Those who are issuing the warnings, are probably staying out of it, hodling their coins and waiting for the bubble to burst to pick up some cheap(er) Ether.

Keynes vs Hayek: The Crypto Version

As the aggregate demand experiment continues on Ethereum, one can only ponder upon the abstract ways in which the whole Keynes vs Hayek arguments are playing out in the world of cryptocurrency. The battle rages on, decades after the iconic economists who shaped economic thought and the fate of almost every country on earth during the twentieth century, died. Now it is up for us to decide if we go full Keynes on the aggregate demand theory on Ethereum, buying and holding Ether – or even participating in ICOs – or if we go the way of Hayek, considering the perils of the free lunch, and choose to hodl our other coins.