Oddbean

Well first I would point out that I didn't use the word "collapse" in my post. I said crisis and trend change. Sometimes those are collapses, and sometimes they are not. The 1930s/1940s in the US was a crisis and trend change but not a collapse, for example. Whereas Europe did have collapses. I would also consider the late 1970s in the US and parts of Europe to be a smaller crisis and trend change. I also didn't say much along these lines: "The idea that the “bad money” being used to fuel the armies and weapons will blunt the ability of states to prosecute World War III is pretty much, to me, one of the most naive hopes that I see in these conversations." So, I'm not really sure if your line there was directed at my post or not. Now, I do think that central banking fuels war, with UK's involvement in WWI being a prime example, and US's involvement in the Iraq war being a smaller one. With currency dilution comes less transparency and accountability, since things can be funded without 1) taxation or 2) issuing bonds that people voluntarily buy. Currency dilution and debasement is a big factor in fueling war, but by no means the only one. Wars have been fought for millennia, and indeed tribalism is a big part of that. And in this particular case, the biggest weapons of war, the nukes, are already there. It doesn't cost much money to use what is already there. What I'm saying is that, both based on my reading of economic history and current events, incrementalism causing a monetary/fiscal/economic trend change tends to be uncommon, and rather the trend is usually on a pretty firm path until a crisis occurs. That doesn't mean that nobody should engage in politics, but rather, that this is the realistic cycle that things go through, especially around signs of sovereign debt problems. For example, I view the current global monetary system to be unsustainable and unsalvageable. It was based on a certain technological and geopolitical era. As the US has to keep exporting dollars to maintain the system, it hollows itself out with an ever-deeper negative net international investment position, and that has a certain limit to it. But I see very low probability that it will be changed prematurely- I think they will push the existing system and its network effects until the breaking point. Similarly, I don't think many developing countries will develop under the current system either. In the past 50 years, only a handful of countries (mostly in Asia) have gone from developing to developed country status. It's like threading a needle. As long as countries issue their own ever-diluting currencies that their people use, and get funded externally in dollar-denominated debt that can be aggressively hardened or softened without any regard to the conditions in those countries (only the US), I think the rate of development will continue to be low. Ever-more energy usage per capita and the proliferation of semiconductors have been responsible for a lot of development, which offset some of these negative monetary effects, but for energy in particular I think that's going to be harder going forward.

I agree with you in the sense that all macro patterns in complex systems are meta stable. And no system will survive forever. My disagreement comes from that abandoning incrementalism and suing for compete revolution is profoundly dangerous given the complexity of modern states, modern economies and the modern world. We agree that these breakdowns are often associated with war. But I disagree that money can be a limiting factor -- especially for say a great power conflict. Governments can just nationalize supply chains and defense production directly. They don't HAVE to go into debt to sustain a war. And if the war is considered to be existential, it's likely this is what they'll do. In fact, the US already had laws on the books that give the president expansive authority to seize control of production in the presence of a real or apprehended war -- the Defense Production Act, for example. So I get my back up against the wall when people suggest something like Bitcoin can bend us away from these kinds of risks because of any discipline they think it can impose on governments, in this sense. I'm willing to concede that wars like Iraq in 2003, conducted at the height of America's unipolar moment, within a largely peacetime framework of government debt and spending, could potentially have been attenuated if the public had felt the effects of that more directly, as you pointed out on WBD. But I think existential wars are different. The rules change. The government can just force industry into a wartime economy and use production nationalization as a tool, if necessary. Which happened under FDR in WWII.

I'm not *quite* directly disagreeing with Lyn per se. I'm emphasizing an orthogonal point about the importance of stability, and suggesting that if the dollar collapses in a catastrophic way in the near future, then I'm not confident we survive the chaos at all. I don't think we get a chance to reset with Bitcoin. I think it's just potentially game over for our civilization. If people are still living, they'll be living in a dark age.

You're both right. Hard money only would impose a structural obstacle that can still be overcome to achieve nefarious goals like war. But it's not a silver bullet for solving problems caused by our innate tendencies: Humanities biggest strengths (tribalism, empathy, cooperation) are also its biggest weaknesses (groupthink, weaponization of emotions, systemic overshoot). Technology *could* change that because it codes behavior. But that would require software (culture) to override hardware (above mentioned tendencies hardcoded into our genes). The only way you could achieve this is by literal brainwashing of civilizations with new objectives overriding our evolutionary ones. The Culture by Bainks is a good fictional example of this. North Korea comes closest to a real-world example, albeit a distorted one. Hard money alone is just a one tool in a hypothetical set of tools that would be needed to fix this.