Bitcoin can Kill the State’s War Machine

Posted by: Evan Faggart July 28, 2014

“War is the health of the state,” and money is the lifeblood of war. Money is the essential factor to any function of the state. Any government program, job, or any war must be funded by money. So, it is no wonder why the world’s governments were so eager to monopolize the supply of money. If only they had the power to create money from thin air, to disguise their destruction of wealth with inflation, their existence would become apoditic. The existence of governments would no longer be a historical datum, but rather a universal fact of social interaction. With a monopoly on the issuance of money and the control of its supply, the State becomes immortal. Granted, governments do rise and fall; however, the State as a concept, a social construct, persists long after the collapse of some of its physical manifestations. Governments may collapse and rot away, but a million more individuals who are eager to rule over their fellow humans will immediately fill the gap.

But even though the people have not always understood this essential connection between the monopolization of money and the existence of the ever expanding, increasingly oppressive state, they have always had a desire to curb the violent power of the State. One of the earliest instances of such a restriction of the State’s power enacted by the people was the Magna Carta. Then, throughout the rest of history, these restrictions became greater, governments grew less powerful. The culmination of the battle between the violence of the State and the people’s desire of freedom was seen in the writing and ratification of the United States Constitution. This document is one of the most liberating pieces of legislation to have ever come into existence. It was supposed to be the ultimate balance between individual liberty and the “necessary evil” of government. It was supposed to tame government and make it the servant of the people, its actions dictated by the democratic process. Nevertheless, even the United States government, bound by this contract of human liberty, still grew into the oppressive regime it is today.

How are governments, even when contractually restricted, able grow infinitely and almost always with the arduous approval of the nations’ populations? Obviously, governments would not be able to achieve any substantial growth at all if they did not have monopoly power over their respective currencies. That power allows them to fund the welfare state at the expense of the unwitting population, which makes the citizenry dependent upon the State and in turn ensures the citizenry’s undying loyalty. But that only achieves the goal of dependency; even when living under the government’s wing, the people still expect civil liberties, which are antithetical to totalitarian control and the capability of central planning that the governmental bureaucrats desire. They need a way to erode the liberties of the people without causing uproar. The people have to willingly give up their freedom. Thus, the State turns to war, the ultimate experience of terror for the common man, to maintain political dominance and achieve total power.

Even the most liberty minded scholars have exclaimed that essential freedoms must be handed over to the state in times of dire emergency, especially during war. F.A. Hayek himself, an ardent supporter of limited government, individual liberty, and free markets, stated in The Road to Serfdom that liberties must be relinquished in times of war so that the government can do its job in protecting the citizens from foreign threats.

So, if a government wants to achieve unlimited power and keep that power indefinitely, then the only reasonable course of action– in the eyes of the bureaucrats– is to strive towards a state of perpetual war. They must wage war for whatever reason; these motivations for war do not even have to be justified or logical. In reality, these motivations are often fabricated by the government bureaucrats completely; they simply make up reasons for why they should be able to go to war. The goal here is to instill fear in the hearts of the citizenry so that they will eagerly undo the constitutional restrictions that keep the government in check. “We have to give up our liberty to preserve our liberty,” they say. And so the government must create constant inflation so as to fund these never-ending wars. This need for an unlimited supply of money is precisely why they have clinged to central banks, tried to justify their actions, and defend their destructive policies.

As we can see, the existence of the central bank is a government’s lifeblood, because it fuels the war machine that maintains it’s endless power. This is why it is unlikely for a central bank to ever be abolished through political action, now that the bureaucrats know the full extent of the things they can achieve with money creation. The only concrete solution is to create a monetary system that no government can ever control, no matter how hard they try. This system must decentralized, so that governments cannot destroy the system without tracking down and eliminating every user of that system. Also, the new monetary system must be anonymous, so that if and when governments do start hunting down the users of this system, it will be almost impossible to find them. Anonymity will make it easier for people to use this new system, because the risk of legal or physical harm from the government will be much lower. As we know, this system already exists. Bitcoin does all of these things, and there are new crypto-currencies– constantly being developed– that aim to be more decentralized and more anonymous than Bitcoin. Governments may try to ban these currencies and hunt down the people that use them, like China has tried doing several times, but they will always fail in these endeavors. Now that crypto-currency has been unleashed upon the mainstream, monopolized monetary system, there is no going back.

Bitcoin has the potential to tear down the government monopoly on the issuance of money and the control of its supply. All that is needed for this goal to be achieved is its wide acceptance. Many Bitcoin critics cite the lack of wide acceptance as a sign of Bitcoin’s inevitable failure, but they are ignoring the fact that this lack of acceptance is not an inherent feature of Bitcoin. This currency can very well become widely accepted world-wide if enough people choose to start using it. That can be achieved through education and social activism.

It seems as if people are starting to realize the things that their governments are doing with their monetary monopolies. Bitcoin acceptance is growing. If this trend continues, it will only be a matter of time before Bitcoin becomes a lethal threat to the governmental monopolies on money. These central banking institutions will be forced to shut down because the people will not want the paper that they are printing out, and governments will not be able to effectively force the people to use these pieces of paper. Finally, the life support for the war machines will be cut off, and people will start demanding their individual liberties once again.

Updated: 2014-07-28