According to Robert Shiller, the advent of the crypto currency market imitates some of the most failed monetary experiments in history.
Shiller: “No one can explain how crypto currencies work.”
In a new blog post published today, the Yale professor and Nobel laureate wrote that enthusiasm for the crypto market remains strong despite warnings that it might be a scam. It must be remembered that attempts to reinvent money reach far back into the past. But while new monetary innovations initially cause excitement, they don’t last long, Shiller says.
An example of Bitcoin Code
As an example, he cited Josiah Warner, who opened the “Cincinnati Time Store” in 1827, which sold goods in units of working hours. These were based on work notes that resembled paper money. However, while they were seen as a sign of the importance written this review of Bitcoin Code working people, the shop closed in 1830.
Two years later Robert Owen tried to establish the National Equitable Labour Exchange in London. This was based on ‘time money’ as a currency. But similar to Warner, Owen’s experiment failed.
This was based on Bitcoin Profit
A hundred years later, during the Great Depression, economist John Pease Norton proposed a dollar supported Bitcoin Profit not by gold but by electricity. But even that has not prevailed.
“EACH OF THESE MONETARY INNOVATIONS IS LINKED TO A UNIQUE TECHNOLOGICAL HISTORY,” SHILLER WROTE. “BUT BASICALLY EVERYONE IS CONNECTED WITH A DEEP LONGING FOR SOME KIND OF REVOLUTION IN SOCIETY.
In his opinion, crypto currencies like Bitcoin are no different:
“THE CRYPTO CURRENCIES ARE A PROFESSION OF FAITH IN A NEW COMMUNITY OF ENTREPRENEURIAL WORLDVIEWS THAT OVERRIDE NATIONAL GOVERNMENTS, WHICH ARE SEEN AS DRIVERS OF A LONG HISTORY OF INEQUALITY AND WAR. PRACTICALLY NO ONE OUTSIDE THE INFORMATICS DEPARTMENTS CAN EXPLAIN HOW CRYPTO CURRENCIES WORK. THIS SECRET CREATES AN AURA OF EXCLUSIVITY, LENDS GLAMOUR TO THE NEW MONEY AND FILLS THE FOLLOWERS WITH REVOLUTIONARY ZEAL. NONE OF THIS IS NEW, AND AS WITH PREVIOUS MONETARY INNOVATIONS, A COMPELLING STORY MAY NOT BE ENOUGH.”
This is certainly not the first time Shiller has spoken out against the crypto market. Last October he called Bitcoin a ‘fad’ when he commented on the ‘strange enthusiasm’ for the currency. He also said that Bitcoin is a bubble and that it only attracts investors because it has a good history.