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Author: Admin | 2025-04-28
Printers.The Austrian school was founded by Viennese professor Carl Menger in the late 19th century. Even at the time, Menger was known for heterodox views and for sparring with the dominant economic thinking of the time (not much differently from many Bitcoin advocates today).Arguably, Menger’s greatest contribution to Austrian economics was the development of the subjective theory of value, a component of the study of human action known as praxeology. Menger argued the value of any good is derived from humans themselves; that is to say, no good or service holds intrinsic value.Menger’s arguments were taken further by the next few generations of Austrian economists including Ludwig von Mises and F.A. Hayek in the mid-20th century. Mises, for one, crafted an argument demonstrating that the market created money, as opposed to the view that the government created money, known as Chartalism.Hayek, winner of the 1974 Nobel Prize, would go on to advocate the creation of a money system outside of government in the later 20th century.“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government,” Hayek said in a 1984 interview. “That is, we can’t take them violently out of the hands of government. All we can do is by some sly roundabout way introduce something that they can’t stop.”Milton Friedman, the most well-known member of the Chicago school of economics, also called for the creation of a digital currency. Friedman believed an “e-cash” was not only a necessary component to the newly founded internet but also a logical tool for limiting government overreach.“Friedman famously argued for a k-percent rule (growing the money supply by a set, pre-announced % every year, regardless of what happens in the country) and for having monetary policy set by a computer (where it could not be corrupted by humans),” Paul Sztorc, former statistician at the Yale Economics Department and creator of BitcoinHivemind.com, told CoinDesk in a Telegram message.“By the 2000s Friedman believed that the U.S. should just adopt a ‘fixed supply’ of base money, and declare that they would never change it. Bitcoin instantiates all of these principles.”Bitcoin vs. inflationismIt’s important to note that Bitcoin is a technological product backed by, or even adopted by, a previous community. That, in itself, distinguishes it from other fringe monetary movements such as #MintTheCoin, which is a purely community-driven phenomenon.The central tenet of Bitcoin is its 21 million BTC supply cap. The network’s rate of inflation is fixed similarly to how much gold can be mined from the Earth every year.The issuance of Bitcoin decreases every four years in an event called a “halving.” These technical events decrease the supply of BTC created every 10
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