The Satoshi Revolution – Chapter 3: Wall Streeting Bitcoin (Part 5)

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 1 : The Trusted Third Party Problem
Chapter 3: Trying to Undo Satoshi
by Wendy McElroy

Wall Streeting Bitcoin (Chapter 3, Part 5)

Bitcoin was supposed to demonstrate the power of a true free market. Instead it’s full of scams, rent-seekers, theft, useless for real purchases…. Mission accomplished.

— Adam Chalmers

Blaming the free market is a tried-and-true excuse for government wedging itself into situations that would normally resolve themselves. The free market is also a reliable scapegoat for messes created by government and its crony capitalists. Many people believe in the turpitude of the market place because the accusation is so often repeated and because it has a surface credibility. Financially awful things happen to people in the free market. It cannot be denied. But who or what is to blame?

The free market is nothing more than individuals exchanging with each other in the absence of the state and other forms of force, including fraud. Some individuals will act badly because that is a choice human beings make on occasion. Not all bad behavior will involve force or fraud. For example, opportunists may prey on the vulnerable and convince them to make poor investments without necessarily misrepresenting them; the investor does not perform due diligence because some individual will behave foolishly.

If force (theft) or fraud does occur, then no real true exchange is present, and the interaction ceases to be a free market act; it becomes a criminal one. The free market corrects for criminal behavior in many ways, including a court system for redress and ruination of the criminal’s reputation. The faux exchange is often one-on-one, which further limits damage because the injured party can refuse further contact and proceed with greater caution.

This is not a market failure; it is a reflection of human nature, which would haunt any economic system. Otherwise stated: human beings are fallible, and some are given to vicious behavior. The free market is a massive collection of individual choices that are driven by an almost infinite number of motives upon which no ban is passed as long as the expression is peaceful and not fraudulent. Overwhelmingly, people will act in their own rational self-interest. But a significant minority will act like fools or like rogues. The free market is not to blame; they are.

The question is not whether the free market is perfect; it is not. No human arrangement is utopia. The question is whether any other system is better. More pointedly, does a centralized system under government control contain more or less force and fraud than a free market one? Consider only one issue. The free market allows individuals to assess situations and decide the best course for themselves. It allows them to learn from experience and mistakes. It allows individuals to take control of their own lives.