To end the contagion of rent-seeking, ubiquitous politics and lack of truth, we must destroy the fiat system.
This is an opinion editorial by Jimmy Song, a Bitcoin developer, educator and entrepreneur and programmer with over 20 years of experience.
I’ve been saying this phrase for about 2.5 years now and have been ending my podcast, newsletters and speeches with this phrase. In this piece, I wanted to get to the heart of what this means and why I keep repeating this.
Carthago Delenda Est
The phrase fiat delenda est comes from the phrase in Latin, Carthago delenda est, which means Carthage must be destroyed. The phrase is attributable to Cato the Elder. He would end all of his speeches in the Roman senate with this phrase, no matter what he was talking about. He was like a nagging mom shouting for her teenage son to come down for dinner. And, like the teenage son letting his food get cold, Rome ignored Cato until they suffered losses to the Carthaginians.
Who were the Carthaginians? They were the enemy of Rome. Like the Romans, Carthaginians were a competing empire along the Mediterranean. As both expanded, they clashed and the two competing empires had some epic battles. Two Carthaginian generals, Hamilcar and his son Hannibal inflicted some serious losses to the Romans,
We actually don’t know that much about the Carthaginians because Cato’s words were finally heeded. Rome didn’t just sack Carthage, they completely pulverized the city. They were determined to erase them, so the Romans made sure to leave the city in ruins for over a century.
In short, Cato wanted to destroy Carthage because otherwise Rome would itself be destroyed. The victory over the Carthaginians was a major conquest that would lead to the Roman Empire’s legendary status in history that it has now. The destruction of Carthage was the signature victory that propelled the empire to the heights that it eventually achieved.
The word fiat in Latin is not an adjective like it is in English. Here’s Genesis 1:3 in Latin: “Dixitque Deus fiat lux et facta est lux.” Which means, “And God said let there be light and there was light.” Fiat lux here means “let there be light.” Fiat is a verb in Latin meaning “let there be.” And indeed that’s where the phrase fiat money comes from. It means let there be money. The money requires no work and is decreed into existence, so as a result, fiat is an adjective in English meaning “by decree.”
Fiat is the idea that you can create something by telling it to exist and not by doing the work to make it exist. The fiat mentality is the illusion that you can decree something into reality just by saying so.
But as any child can tell you, wishing something into existence doesn’t work. Someone has to do the work to create. I can say let there be steak all day long, but it won’t happen unless someone raises a cow, someone butchers the cow, someone cooks the steak and someone delivers the steak.
Who Does The Work?
In other words, we have to ask the question, who or what actually fulfills the decree? Who makes it so? Someone or something has to put in time and energy for the thing to be made. Someone has to do the work. The work is not voluntarily given in a fiat system, but through tyranny. Force and violence are how you get involuntary labor.
Force and violence aren’t popular and they generally escalate tension and make it very difficult for a government to stay in power. Tyranny is justifiably resisted and revolution is not far behind. The former Soviet bloc used mandates and decrees to “create” things at the point of the gun. They were particularly cruel and authoritarian, all because they had the fiat mentality that they could decree new things into existence. That’s not new, of course. Civilizations as ancient as the Egyptians used force and violence to get things created by decree. It’s no wonder so many rulers thought of themselves as gods. What they decreed would come to pass, but only at the cost of massive human suffering.
By contrast, the modern Western world used a different form of decree through fiat money. Fiat money allows for soft mandates. Fiat money is still decreed into existence, but all other decrees are not forced on others as much as they are paid for through money printing. The main advantage of fiat money is that it is an indirect system of mandates. By paying people for their labor through inflation, fiat money creates the illusion of market forces. Because there’s monetary compensation and monetary incentives, fiat money makes government mandates look like a normal functioning of the market. Yet as we all know, inflation is a form of theft and their action is akin to a thief using your wallet to pay you.
Fiat money is a decree limited to the most tradeable good in the market — money. But because money can be used to buy almost anything, the end result is that the authorities can force the market to do its bidding. The authorities get what they want and the governed become unwitting slaves. Instead of being forced to do the work, they get tricked into doing the work. The authorities look like a generous employer, but in the background, they’re stealing from your savings to pay you. Like Tom Sawyer, they’ve managed to get us to do something through a trick.
Problems Of Fiat Mentality
The advocates of fiat money at this point might say, well, what’s wrong with this system since people feel good about providing these goods and services and we’re not forcing people into gulags? While not as severe as a traditional authoritarian regime, there are some serious problems with this fiat mentality.
First, fiat money centralizes power. The theft is very subtle and the result is centralized power with a gentle form of authoritarianism. The fiat money controller can get us to do whatever we want, just by paying us for it. It’s a softer form of slavery, than, say Communism, but it’s still slavery. The ability to steal money through inflation means that those in power can control our work output.
Second, fiat money creates some serious civilization-destroying incentives. Cheating and theft become widespread. I had a friend who in high school was trusted with some computer systems that mistakenly gave him access to the school’s grading system. He discovered this and he gave himself good grades. Of course, being a teenager, he couldn’t keep this information to himself and soon, his friends offered him money to change their grades. He took their money and changed their grades. Then cute girls would ask him to change their grades and he would do so. Soon, the entire school knew and as you might expect, he got expelled from the high school when the news finally reached the school authorities.
Fiat money is a lot like that. While it lasts, working for fiat money is a cheat code to civilization. You don’t have to provide any value and few people even know you’re stealing. Unfortunately, the bureaucracy created by fiat money grows like cancer and destroys civilization.
And that brings us to the final consequence which is the ubiquity of politics. Fiat money makes everything political. To see why, let’s go back to the bureaucracy that keeps growing. Rent-seeking positions are by nature political and everyone wants one. After all, who doesn’t want to do little work and make lots of money? Nevermind that they’re taxing lots of transactions without providing any value. It’s easy to rationalize such choices when there’s money involved. Rent-seeking is an easier way to make money than providing goods and services to a fickle market.
So how do people give out rent-seeking positions? By politics. In politics, the moral high ground is a great way you get what you want. This is particularly true in fiat money societies because there’s an implicit obligation for those in power to do something about any kind of suffering. The assumption ultimately means that everyone is motivated to make themselves into a victim of some kind. There’s a reason we are deluged with claims of victimhood. It’s because they all want the stolen money!
Lack Of Respect For Truth
What this means is that the truth doesn’t really matter. In politics, who gets the money is not the truth teller, but the one who can argue that they’re being oppressed. And ultimately, this penetrates everything as the fiat contagion spreads.
This is in sharp contrast to a world that’s based on sound money. In a fiat money system, we have enslavement via tricking people into doing the work. There’s significant rent-seeking that leads to the destruction of productivity. Finally we get a society and a political environment based on lies. Bitcoin, on the other hand, gives us freedom from government interference, incentivizes production and is based on truth. As you might imagine, real production and real building are aligned with Bitcoin and not fiat money.
This is why I say fiat delenda est. Fiat must be destroyed because this fiat mentality, this illusion that you can create something from nothing, is destroying civilization. Fiat is an existential threat. We must destroy fiat because otherwise, it will destroy us.
How To Destroy Fiat
So how do we accomplish this? First, we destroy the entitlement mentality. Many people think that they can decree that others do something for them whether they realize it or not. For example, making health care an entitlement means someone is being forced to provide that service. All entitlements are ultimately paid by someone and theft and/or violence are what provide it..
Second, we must punish rent-seeking. The best and the brightest minds of the past 50 years have been going into rent-seeking businesses like investment banking. We must make such behavior shameful and offensive. Why is it that someone like Warren Buffet, someone that’s just moved money around all his life, is one of the most respected people in the world? Contrast this with 100 years ago where people that created stuff, like Edison or Tesla were some of the most respected. Whatever a society reveres, it’ll get more of. We’re giving reverence to the wrong types of people. Too many people would rather rent-seek and avoid productive work. We must create shame for these tax collecting leeches.
Third, we need to make truth great again. Fiat money would not have been possible had the truth prevailed. Unfortunately, lies prevailed and we’ve all been suffering for it since. A market economy cannot function on lies. There has to be a fundamental respect for truth for markets to work. We must not allow ourselves to be deceived.
The truth is that there’s significant theft in the current system. This is at the root of how the fiat mentality thrives and the obvious counter is to adopt a money that’s very difficult to steal. Bitcoin is that money.
Fiat must be destroyed if we are to preserve civilization.
Fiat delenda est.
This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.