Catherine Flick is a researcher in technology ethics at Middlesex University. She recently did a research survey on the “morality” of Bitcoin as a currency and the “dual use dilemma”. You can hear her talk about the survey and her interpretation of the results here:
The “dual use dilemma” as she puts it, is the fact that Bitcoin can be used for good as well as “bad.” In this article, I will argue that there is no moral dilemma. Catherine’s moral dilemma stems from predicating her moral foundations on mob rule rather than first principles, which is a terrible no no as far as ethical philosophy is concerned.
In the survey, she asked questions such as:
1 – What do you think of the morality of the use of Bitcoin and what issues can you see?
2 – What might happen if it were to become popular?
3 – Is true anonymity necessarily a good thing when it comes to financial systems?
First, I shall present my own answers to the questions presented, and then give a critique of Catherine’s philosophical assumptions.
1. What do you think of the morality of the use of Bitcoin and what issues can you see?
Software is an inanimate tool. Like all tools, they are neither good nor bad. Because tools are not conscious entities, have no free will and can not make rational decisions on their own, they are incapable of being assigned any kind of moral status. The people who use the tools are the only entities to which moral judgement can be applied. Therefore, there are no new moral issues that can arise from the existence of a new tool. There are only pre-existing moral issues.
For example, the creation of paper money did not create the moral issue of theft. The moral problem of theft preexisted paper currency. Paper currency simply created a new thing that people could steal from each other. Likewise, the invention of firearms did not create the moral issue of murder. Murder preexisted firearms. Paper currency and firearms are simply inanimate tools that people may employ when robbing or murdering each other. Should a god magically remove all paper currency and firearms from Earth tomorrow, it would not change the morality of murder or theft in the slightest. Moral issues deal with human action, not inanimate objects.
2. What might happen if it were to become popular?
Considering that every major war throughout history has been accompanied by the printing of money, either through new debt issuance or through direct inflationary printing, widespread adoption of Bitcoin would end and prevent all major wars. As the American system of income tax collection vividly demonstrates for us, the State can not tax enough money from the public to pay for its wars. Hauser’s law demonstrates that changing marginal tax rates have no impact on actual tax revenue collections. Therefore, the widespread use of a currency that can not be arbitrarily inflated, coupled with a system that makes theft impossible, means the State would never be able to fund a war that the public was not willing to pay for voluntarily. Since the majority of the public are not violent homicidal maniacs, unlike State bureaucrats, clearly this means there would be no more major wars.
Besides ending all major wars, widespread adoption of a currency that can not be arbitrarily inflated would also put an end to large scale systemic business cycles. Business cycles are the product of interest rate manipulation by central banks or by private banks issuing their own currency. Interest rate manipulation is primarily accomplished through inflation of the money supply.
As we can see, widespread adoption of Bitcoin would immediately result in a more peaceful and prosperous world on a grand scale. The fact that Bitcoins can not be inflated, and are virtually impossible to steal, means those who wish to acquire them must do so by way of peaceful voluntary productive interactions. If Bitcoins can not be taken by force or theft, then the only way left to get them is through voluntary trade. People must offer something of value if they wish to acquire Bitcoins. Bitcoins may still be acquired through fraud, but fraud necessitates a voluntary exchange in the first place.
A quick comparison of Bitcoin vs. typical fiat currencies demonstrates that Bitcoins eliminate two major moral issues with the money supply. They eliminate the problem of theft, either through inflation or taxation, and they eliminate the problem of violent imposition by State decree. Both the imposition of a currency by way of decree and the legitimized theft of a currency by way of taxation or inflation are serious moral issues that Bitcoin resolves.
3. Is true anonymity necessarily a good thing when it comes to financial systems?
Anonymity is not a moral issue. Anonymity is something that both buyer and seller must agree to when making a voluntary exchange. For example, if I am the seller of a product or service, it is my personal choice if I wish to sell to someone that refuses to identify themselves to me. The inverse also applies, whereby a buyer of a potential product or service can chose to do business with a seller that refuses to identify themselves. Since both the buyer and the seller have a choice about conducting an anonymous transaction, there is no moral issue to address as far as the currency they chose to trade with is concerned.
Questions about anonymity being “moral” assume that some third party to the transaction has some legitimate right to know who is trading what with who. Clearly whether or not some third party should have this ability is a moral issue, while the actual trade between the buyer and seller is not. If a third party should have this ability, then by what means should they be able to know these things? Should the buyer or seller be compelled by threat of violent force to disclose the nature of their transaction? Should the third party have the ability impose through violent means a system by which both the buyer and seller are identified against their will? Clearly some threat of force must be employed if such a system is to ever come into existence. This threat of force is a moral issue in and of itself.
Catherine is a statist who feels there are important issues of morality that need to be addressed if people suddenly were to use Bitcoin en masse as a means of tax avoidance. Of course, Catherine herself never bothers to question the morality of coercively imposed taxation or currency.
It strikes me as sublimely preposterous that someone who claims to be a “technology ethicist” questions the morality of a voluntary open source digital currency, yet has no moral qualms about the State imposing a currency AND a system of theft upon those who use it. She ignores the obvious moral problem of mob rule which legitimizes the imposition of coercive taxation and fiat money. Mob rule as a means of determining moral behavior within a society is itself a moral problem. If the mob decided that all Jews should be killed, does that make killing Jews morally acceptable behavior? Clearly the Nuremberg trials show us that is not the case at all. Morality must be predicated on first principles. Which leads to ethical propositions such as Hoppe’s Argumentation Ethics, Mises’ Consequentialism, and Molyneux’s Universally Preferable Behavior.
Professor Guido Hülsmann discusses the ethics of money production in the video below. Hülsmann’s critique of money production doesn’t gloss over the violence of the State or glorify mob rule. Flick should take some time to learn what real ethics is all about and watch this video.