The concepts of justice and money were highlighted in the May 1st article featuring economist Paul Krugman of the New York Times, and government strongman Wesley Mouch from Ayn Rand’s 1957 novel, Atlas Shrugged. The relationship between justice and money is critical because the nature of justice and the nature of money are essential to Western Civilization.

Much like sound money and objective law are corollaries, soft money and subjective law are also corollaries. For any form of money to be sound, it will pass three tests. As a medium of exchange, it must be widely accepted as payment for goods and services. This happens when it is also a unit of account, meaning that producers can easily negotiate prices in terms of that money. In our postmodern era, the US dollar is the best global example.

Most important, sound money must be a reliable store of value. If money is expected to lose purchasing power over time, it will become less acceptable as a medium of exchange. This attribute of sound money transcends the here and now of trading values, and enters the fourth dimension of time and space. It becomes transferrable wealth, anywhere in the world, at any time.

The moral foundation of sound money is the productive work of its creator, stored as wealth, that has not been spent on other material values. Its moral purpose is to trade values with other producers, making it the keystone of civilization. In the modern and premodern eras, gold was the best global example.

While gold can be minted in many size-values, what makes it an ideal form of money is its durability and the difficultly and expense of producing more. This last attribute is gold’s very low flow-to-stock ratio, meaning the flow of new gold into the existing stock is very small and predictable.

Conversely, paper currency has the advantage of being easy to transport and secure cheaply, but it’s also very easy and cheap to produce. Corrupt and incompetent political elites are happy to mint their unlimited counterfeit money because they don’t produce anything else, and they’ll be dead before the money collapses anyway. To hell with that store of value, time and space thing, its for the public good.

As a result of their extremely soft money and morally subjective law, large Western democracies are now all welfare states. It began with their war to end all wars, funded by public debt (World War I), that led to even greater mass atrocities. Today, social justice warriors are demanding free health care and education because their government monopoly currency has inflated costs to criminally expensive levels. In Atlas Shrugged, copper fortune heir Francisco d’Anconia declared,

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion; when you see corruption being rewarded and honesty becoming a self-sacrifice, you may know that your society is doomed.

Perhaps the only way for moral justice to resume, and ignite a radical change in the dominant philosophy of American culture, is to create a new form of sound money. For a new currency to be accepted globally, it must first become a reliable store of value. To achieve this, it must be very difficult and expensive to produce, solve the portability and security issues of gold, and make the foreign exchange markets irrelevant.

This is a mind-boggling challenge, by orders of magnitude, and one accepted by the infamous Satoshi Nakamoto. On November 1, 2008 Satoshi announced the birth of Bitcoin to the world. According to economics professor Saifedean Ammous, Nakamoto (a pseudonym) sent an email to a cryptography mailing list claiming “that he had produced a new electronic cash system that is fully peer-to-peer, with no trusted third party.”

What this means is a totally decentralized system (peer-to-peer) with no institutional control (trusted third party). Network verification replaces trust. As statistician Nassim Taleb explains,

Rational markets do not require any individual trader to be rational. In fact they work well under zero intelligence. A zero intelligence crowd, under the right design, works better than Soviet-style management composed of maximally intelligent human beings.

Of course, the idea of maximally intelligent human beings concentrated in government is beyond absurd. Regardless, the design is known as Blockchain, and it is specifically engineered for Bitcoin. Its process for mining and recordkeeping is highly complex, expensive, and slow. For example, when Ammous published his 2018 book, The Bitcoin Standard, he estimated the computing power dedicated to Bitcoin mining to be the equivalent of 2 trillion laptop computers. Additional costs and infrastructure include the electricity and high speed fiber-optic cable networks needed to run the computers.

The complexity of the Bitcoin network reminds one of the human mind itself, and according to d’Anconia’s thinking, it may be no coincidence,

Men had always thought of wealth as a static quantity, to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

To make money belies the efficient deployment of capital. Under rational circumstances, capital investment is funded by wealth saved for future consumption, and owned by people with a lower time preference than political elites. They are willing to postpone consumption now for greater possible wealth to spend later.

Human beings are unique in that they can envision and shape their futures. Long-term thinking is imperative for investors, for entrepreneurs, and for civilization. Government induced, artificial, short-term incentives destroy that. Francisco relates,

They start by destroying money, for money is men’s protection and base of moral existence. Destroyers seize gold and leave its owners a counterfeit pile of paper. This kills objective standards and delivers men into the arbitrary power of an arbitrary setter of values.

Fortunately, Satoshi Nakamoto has a different plan, as computer scientist Ralph Merkle explains,

Bitcoin is the first example of a new form of life. It lives on the internet. It lives because it can pay people to keep it alive. It can’t be changed. It can’t be argued with. It can’t be corrupted. If nuclear war destroyed half of our planet, it would continue to live uncorrupted.

Until Bitcoin matures, it is merely a volatile trading vehicle for crypto speculators. Ideally, it will become a lousy investment, a reliable store of value, a tool for moral justice as gold has been for centuries, and inspire echoes of Ayn Rand laughing all the way to the bank.