Alberto Mingardi  

Bitcoin and libertarians in "the great machine"

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Bitcoin is now recognized as financial instrument under German banking rules. The Guardian writes:

Germany's ministry of finance has formally recognised the digital currency Bitcoin as a "unit of account" which can be used for private transactions - meaning that the ministry will now be able to tax users or creators of the four-year-old virtual money.

As reported here, this "recognition" was laid out in a Finance Ministry response to a query from Frank Schaeffler, a member of parliament's Finance Committee.

'For the first time, the federal government recognizes Bitcoins as private money,' said Schaeffler

Schaeffler is an MP from the German liberal party, a vocal classical liberal, and one of the few torch-bearers for a common-sense economic policy in European politics.

Such a recognition of BitCoin as a unit of account is good news for proponents of private currencies. As money exists first and foremost to lower transaction costs, its "exchangeability" is key. In the contemporary world, an awful lot of our transactions are compulsory ones, with states.

But the news from Germany also raise a question about the always difficult relationship between classical liberals and party politics. I am usually skeptical about the real chances for a libertarian politicians to have an impact on decision making. Any libertarian troop in a democratically elected Parliament is likely to be extremely small. But this does not mean it can't have an impact: both in watering down or restraining bad decisions (perhaps the most important business it should be active in), and in pushing forward some small incremental improvement that could nevertheless plant seeds for future development. This is exactly what Mr Schaeffler has done in these circumstances, or so it seems to me.

In life, anybody should strive to pursue her happiness indeed--therefore specious attempts to strategize on the future of the libertarian movement as a coherent collective (that should "produce" either politicians, journalists, scholars, or future donor multi- millionaires) are always a bit ludicrous. However, by definition libertarians tend to dissuade other people to enter "the great machine." We find indeed persuasive the account of politics provided by Auberon Herbert.

But the likes of Mr Schaeffler (there are very few of them indeed) teach us that perhaps libertarians should not make a point to desert parliamentary arenas all together.

We know well, in this crisis, how most politicians, though believing themselves to be quite exempt from any intellectual influence, are indeed "the slaves of some defunct economist"--typically, of one defunct economist. On the contrary, Mr Schaeffler consciously wanted to be the advocate of quite a different defunct economist. I would personally feel safer, if there were a couple of his likes in every European state Parliament.


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