Paul Krugman Goes on the Attack: Calls Bitcoin “Antisocial”

Anyone on the fence with regard to Bitcoin should consider coming to the side of supporting it after reading Paul Krugman’s ridiculous and riddled with errors hit-piece in the New York Times this weekend.  The key tipoff as to where he is coming from in this absurd editorial is in the title itself in which he calls Bitcoin an “antisocial network.”  Anti-social is one of the most favored collectivist/fascist terms and concepts of all time.  A term meant to demonize those in a particular society that think for themselves rather than conform to whatever the oligarchs or dictators in charge of the state deem appropriate or “social.”  Jews would have been seen as “antisocial” in Nazi Germany, just as anyone with glasses would have been deemed “antisocial” in Pol Pot’s Cambodia.  This is a very dangerous term and one that is intended to guilt people into the acceptance of a stale, authoritarian and conformist society.

Now let’s get to some of the more ridiculous passages from his editorial.  From the New York Times:

The economic significance of this roller coaster was basically nil. But the furor over bitcoin was a useful lesson in the ways people misunderstand money — and in particular how they are misled by the desire to divorce the value of money from the society it serves.

The similarity to goldbug rhetoric isn’t a coincidence, since goldbugs and bitcoin enthusiasts — bitbugs? — tend to share both libertarian politics and the belief that governments are vastly abusing their power to print money. At the same time, it’s very peculiar, since bitcoins are in a sense the ultimate fiat currency, with a value conjured out of thin air.  Gold’s value comes in part because it has nonmonetary uses, such as filling teeth and making jewelry; paper currencies have value because they’re backed by the power of the state, which defines them as legal tender and accepts them as payment for taxes. Bitcoins, however, derive their value, if any, purely from self-fulfilling prophecy, the belief that other people will accept them as payment.

This paragraph is so riddled with blatant errors it is almost difficult to know where to start.  First, either Krugman is extremely lazy and intellectually dishonest by misdefining “fiat,” or he is purposefully misleading his readers with full knowledge that they have zero understanding of money and will simply take his word for it.  As I have mentioned many times before, fiat is defined as:  1. A formal authorization or proposition; a decree and 2. An arbitrary order.  Synonyms include: decree, diktat, directive, edict, rescript, ruling.  So Bitcoin is actually the exact opposite of fiat money.

Second, he implies that the value of gold comes from its uses in jewelry and dentistry.  Really Paul?  I guess Vladimir Putin must have some really rotten teeth and I suppose that Fort Knox still holds billions of gold bricks in anticipation of a massive dental epidemic sure to hit the United States in the near future.  Absolutely ridiculous.

The practical misconception here — and it’s a big one — is the notion that we live in an era of wildly irresponsible money printing, with runaway inflation just around the corner. It’s true that the Federal Reserve and other central banks have greatly expanded their balance sheets — but they’ve done that explicitly as a temporary measure in response to economic crisis. I know, government officials are not to be trusted and all that, but the truth is that Ben Bernanke’s promises that his actions wouldn’t be inflationary have been vindicated year after year, while goldbugs’ dire warnings of inflation keep not coming true.

Temporary?  So I suppose four and a half years of rampant money printing and bank bailouts is “transitory” in Krugman’s mind.   I’d love to ask Krugman when this becomes “un-temporary” in his mind.  Ten years?  Twenty?  I’d love to know.  For some background, I wrote a lengthy piece called It’s Transitory back in June, 2011.

The philosophical misconception, however, seems to me to be even bigger. Goldbugs and bitbugs alike seem to long for a pristine monetary standard, untouched by human frailty. But that’s an impossible dream. Money is, as Paul Samuelson once declared, a “social contrivance,” not something that stands outside society. Even when people relied on gold and silver coins, what made those coins useful wasn’t the precious metals they contained, it was the expectation that other people would accept them as payment.

This goes back to Bitcoin somehow being “anti-social.”  In reality, Bitcoin is the definition of social.  It represents the market deciding for itself whether another currency can compete with Central Bank currencies.  It was created by humans for humans in social interactions with one another.  How is Bitcoin use (free choice) less social that a useless piece of paper that government forces you to use and pay taxes in at the barrel of a gun?  If anything, the U.S. dollar is anti-social since it is used to bail out corrupt oligarchs that made bad investments at the expense of the rest of society.  That’s what I call anti-social.

It should now be clear that all statists are virulently against Bitcoin because it challenges government and Central Bank power.  I hope those on the fence can now see this reality and start supporting it going forward.

Full Krugman article here.

In Liberty,

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  1. Gold Market Update

    So, is the gold bullmarket over? Only if the Fed and other Central Banks choke off QE, and there is no sign of that happening, nor is it logical for them to do so as it would trigger a devastating deflationary implosion. The bull case for gold remains intact, as a friend in California put it this weekend – “Did gold fall off the cliff because the dollar index ripped higher? NO! Did Uncle Ben Bernanke say they were stopping the $85 billion + QE immediately? NO! Has physical gold become more abundant than any time in the recent past? NO! Are the world’s central banks stopping their counterfeiting operations by devaluing their currency by stopping the printing presses? NO! It’s quite the opposite, Japan, U.S., and the EU are increasing the money supply.

    Things to look at that are happening. Are Russia, China, and India amongst other nations still buying huge amounts of gold? YES! Is QE going to continue? YES! They cannot stop it now, because they’ll have a HUGE deflationary episodes which those in power do not want. It would be what is needed to reset the scales of the financial system and debts around the globe, but would mean huge financial losses to the powers that be. Silver isn’t becoming more abundant, it is rarer than gold, so why is it around $26 bucks per ounce?

    As we look at the charts on the precious metals, just remember, not all is what it seems. In chess you disguise your true intentions by moving the pieces around the board, setting them up for the attack; better deception skills you have, the more likely you’ll win the game. Think 2-3 moves ahead of your opponent, and you’ll always come out a winner.”

  2. Did single entity trigger gold plunge?

  3. Just another propaganda krugman article. Bitcoin is getting hammered in the mainstream sheeple press. Yahoo called bitcoin a hacker currency. How hilarious. The globalist plan has always been to move the planet to a digital currency. But guess what? Bitcoin beat them to it and they are pissed off like the little school children they are. Accumulate bitcoins and silver as much as possible and hold them. When the dollar collapses you will get your reward. Not much time left.

  4. Krugman shares 8 balls with the Bernak late night
    Behind the curtains of oz. funny today i was calm watching
    Gold go no bid. Some headlines are now comparing
    It to subprime !! Money of kings in 3 days parity to
    Subprime MBs on Vegas methblab. Holy meme brain
    Drains !

    • The physical market is totally on fire. Physical silver almost 100% sold out at all the bullion dealers in the country. The no bid is at the criminal Comex paper exchange. I wouldn’t be surprised if the Comex goes belly up soon.

  5. How funny is it to see Krugnuts invoke the Mises regression theorem?

  6. Here’s anti-social for you:

    One of bitcoin’s lead developers Mike Hearn on what could be coming in the future for bitcoin:

    P2P exchanges.

    @24:50 (the whole talk is well worth the time):

  7. wow paul must be smoking some fricking incredible crack……..hay paul put down the crack pipe ……..get up out of the chair your ass is occupying and call your friend Ben the broke dick Bernake……..and ask him ….hay bud you got a new lighter………I got six big fricking rocks I need to smoke………..Paul is a proud grauate of UUI (the University of Useful Idiots…………he grauduated Pina Cum Latta………..and when he order food at a Thai Restrauant he always orders his favorite “Cum from some young guy”……….tasty hum there paul……….our labor is our money…………..and is reflected on where we place the asset of our labor and this man places his labor in to substance like gols, silver, beans, rice, water, QTips, batteries, bars of soap..oh and yes lighters …….lots a lighters…….that is one’s substance…..and btw the way fricking yeh to BITCOIN…………….

  8. Krugman could not have even gotten his bachelors with this little understanding. Let’s call them what they are: PAID TOOLS and TROLLS, protecting them that got them there.

  9. I don’t understand why anyone would concern themselves with Krugman. The guy is a nullity

  10. Bitcoin is really an inexpensive, peer to peer anonymous version of Western Union. What they don’t like about it is that they can’t control it.
    I expect to see lots more Anti Bitcoin propaganda from the Central Bankers.

  11. Well, what can I say I agree…
    Whats really creepy is their definition of “social”.

  12. Although I’m not a big fan of Bitcoin, I support anything that competes with fiat. And if Krugman is anti-Bitcoin, then I support Bitcoin even more.

  13. On inflation -just one little real life example: at the farmers’ market where I get my grass fed and organic meat, poultry and dairy products, the owner apologized for an increase in the price of eggs from a pretty rich $8 a dozen to $10 a dozen now. He said apologetically that his organic feed has increased 40% in price.

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