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Making Money Function: How to Revise the Guidelines of Our Economic System, by Matt Sekerke and Steve H. Hanke, Wiley, 368 pages, $34.95.
I’m about to undertake something I’ve never attempted previously, something that’s nearly inexcusable for a book critic: evaluate a book without having read it, or even coming close to finishing it.
Imagine two esteemed, renowned economists at Johns Hopkins University authoring a lengthy, intricate, comprehensive volume on enhancing the effectiveness of monetary systems. In the year 2025, no less, the 17th year of our lord Bitcoin’s ongoing, prosperous existence, they casually dismiss this financial newcomer in a mere sentence. In such a scenario, they merit having their own publication similarly cast aside to the waste bins… thus, I ceased reading Sekerke and Hanke’s book after 33 pages, concluding ceremoniously that this title lacked the value of my attention — or indeed the focus of anyone invested in constructing a financial future to remedy the economic maladies of our past and present.
“Beneath every fiat currency utilized in trade lies a unit of account characterized by a financial standard [which is] endorsed by reliable assertions to future surpluses backed by the government and/or the commercial banking system. […] Assertions of a ‘Bitcoin standard’ or something akin are entirely indefensible” (p. 28).
The sole reason they perceive bitcoin trading at a favorable price at all — let alone record highs — is that malicious individuals wishing to utilize it “must random a substantial enough quantity in U.S. dollar terms (typically) from existing holders” (p. 33), i.e., a holding-up dilemma:
“Increases in the bitcoin price do not validate the intrinsic value (or network value, or whatever) of Bitcoin any more than a scarcity of homes available in a district makes those homes infinitely valuable” (fn 48, p. 33).
Similar to contemporary monetary theorists, Hanke and his coauthor note that bitcoin isn’t issued, in the sense of produced, by a government and not supported by that government’s tax acceptability, which consequently makes it insignificant and irrelevant for financial assessment.
This is a vital error, not at all a flaw of Bitcoin’s financial characteristics, but of the authors’ limited perspective.
Bitcoin is for anyone, but certainly not everyone. Some individuals are simply too bitter, too afflicted by Bitcoin derangement syndrome (BDS), too enamored by their own egos, or too entrenched in the swiftly decaying status quo. Science advances one funeral at a time.
BDS, a serious condition at the twilight of the fiat era, has claimed more prominent victims than Messrs Sekerke and Hanke, but it remains tragic to observe. A significant letdown and lost opportunity for otherwise quite astute minds to engage with the most fascinating financial phenomenon of our lifetimes.
This is a book critique from The Lightning Issue of Bitcoin Magazine Print. Acquire your copy here.
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