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naddr1qv…rcupBitcoin Capitalism
But who would build the roads?
Discussing who would build the roads is the classic intellectual excersize of anarchists, everywhere. Would everyone build the stretch in front of, and within, their property? Would private entities build the roads and charge a toll? Would roads fall into disarray and we’d use more rugged vehicles, such as mule-drawn carts and offroad vehicles? Would we eventually abandon the wheel and switch to camels and hovercraft?
Most discussion participants assume it will devolve down into some combination, but Bitcoin might put a break on the toll road option. Bitcoin rises in purchasing power so quickly and inexorably, that any complex, long-term, expensive project becomes an investment with guaranteed negative nominal returns and a high probability of negative real returns.
You would struggle to demand tolls at a price high enough to cover the nominal costs of the initial investment (although they might cover maintenance and running costs), and the tolls you could demand would steadily shrink in nominal terms.
Bitcoin reduces the investment profit motive
The Cambridge Dictionary describes investing as:
to put money, effort, time, etc. into something to make a profit or get an advantage
Bitcoin means that you make a monetary profit by saving capital, rather than by deploying it. To deploy Bitcoin is always to simply spend it. The capital is consumed. Gone. Poof!
Whereas if you simply hodl it, you will rapidly grow wealthier and wealthier without commiserate effort. There will be no such thing as a profitable return on investment because the best returns will always be in savings. Your best financial bet is always to save all of your Bitcoin and use the infrastructure other people have built, at great loss to themselves.
This is correct
This is actually how capitalism should work. It is not an error.
Someone or a group of someones deploys capital, first, to build something, and they alone hold the risk of failure. They do it without expecting their (entire, nominal) capital returned because they value the building planned more than the capital trapped in it. The capital invested is primarily transformed, rather than returned, and the invested capital raises the living standard for everyone who then uses the building.
This is actually high-time preference behavior called “patronage”. This is not the opposite of saving, but something often done in addition to it. It is investment devoid of a financial profit motive.
We have come full-circle
What Bitcoin does, in perpetuity, is raise the risk of capital so high that a financial loss is expected, so capital deployments beyond those required for personal consumption will only come from the generous and the particularly far-sighted.
Bitcoin moves investments out of the purely financial realm back into a preference for the public good and a willingness to sacrifice, with returns often being tokens of gratitude, special privileges, increased social standing, hopes of indirect business advantage, or promises of treasure in the afterlife, rather than direct returns of capital, or even profits.
Who will build the roads? The nobility, the pious, the ambitious middle class, and the volunteering tradesmen will build the roads, just as they once built the cathedrals…. and the roads.