BLOCKCHAIN: A Tool For Freedom or Enslavement by Gagnon Kevin

Author:Gagnon, Kevin
Language: eng
Format: epub
Published: 2022-07-07T00:00:00+00:00

Blockchains from the Austrian Economics POV

Many believe the cryptocurrencies to be the only bridge between Austrian economics and the emerging technology of the future. But, this would have to be a limited view of the unfolding situation. While it is, of course, true that cryptocurrencies provide the most direct connection to the school of Austrian economics, blockchain as the big picture technology also doesn’t stray too far from the principles of this school of economic thought.

Somewhere around the late 1980s as the information technology (IT) emerged as the long player, many began to consider its impact on the market structures. The electronic market hypothesis was formulated stating that the IT industry would impact the markets in three ways—by making communications easier and more efficient, by helping the buyers and sellers come in direct contact with each other without the need for middlemen, and lastly by integrating valuable information in a way that helps both the sellers as well as the buyers. The result, it was predicted, would be a much greater market activity.

It was hoped that the arguments previously made by Austrian economists like Mises and Hayek would finally be incorporated into this new age of markets that was about to boom. These economists had argued that the major problem facing any economy is not scarcity of resources, but the unavailability of relevant information. Now that IT was emerging as a savior, this information could be made available, leading to lesser hierarchies and better coordinated production activities. However, we all know that never happened. With the emergence of IT, big players like Amazon, Google, etc. took over this information and, rather than eliminating hierarchical structures, utilized it to create even more concentrated hierarchies. So, though the overall production has increased, small-time business owners are finding it harder than ever to survive, while the big tech companies are getting richer by the second.

Today, the followers of Hayek and Mises and other Austrian economists see another opportunity in terms of blockchain technology. If you notice, blockchain technology represents everything Austrian economics stand for, even beyond cryptocurrencies. The most significant area of overlap between the two, though, would have to be their love for decentralization. As has been discussed before, blockchains allow for minimal, if any, interference from government authorities and thus cannot be used as tools for suppression and oppression.

It is to be noted, however, that this libertarian principle would be upheld if, and only if, common people like you and me are involved with this technology. Big companies like Google, Samsung, etc. are already on the move to adopt blockchains, and if we don’t participate effectively, even this tool of liberty might soon be snatched away from us.

Since the emergence of Satoshi’s Bitcoin, a multitude of aspects about blockchains has been put under the microscope including their safety, feasibility, adoptability, and so on. But, we need to understand that blockchains are much more than these technical details. They are an embodiment of the very economic and political values that have been

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