Bitcoin: How Economists Dead for a Century Became the Bible of Bitcoiners?

<< All we can do is introduce, by a roundabout and cunning means, something they cannot stop. >> (Friedrich Hayek, filmed interview, 1984)

Go to a Bitcoin conference and listen for two minutes. You will hear the same names repeated over and over. Menger, Mises, Hayek. Austrian economists, most of whom have been dead for more than half a century. Now, push open the door of an economics faculty and look for those same names in the courses. You will find almost nothing. How did a school born in the cafés of Vienna a hundred and fifty years ago, a school thought to be defeated, become the bible of bitcoiners? This is the whole story of one of our latest videos on our YouTube channel. Here’s something to whet your appetite.

Back to Vienna, in 1871. People are still lighting candles. A professor named Carl Menger publishes a book that will change everything. Until then, it was believed that the value of a good came from the labor put into it. This was the thesis of Marx and Ricardo. Menger, however, says that value is in your head, at the precise moment you need the thing.

Take his example, a simple umbrella. Bright sun, no one wants it, even for 2 euros. Torrential downpour, you in a suit, late for an appointment, and the same umbrella goes for 20 bucks without negotiation. The object hasn’t changed. Your need has. Value has just become subjective.

Around this idea, a school of thought takes shape in Vienna. Its name, Austrian? At first, it’s an insult. The German professors, who then dominate the discipline, use it to mean "provincial," the thing of losers. The insult will come back to bite them.

This school is not just about ideas. It’s about characters. Eugen von Böhm-Bawerk, a finance minister who stands up to Emperor Franz Joseph in the middle of the Council of Ministers to defend a balanced budget. Ludwig von Mises, who fights against the printing press by day and reimagines the world at night in his office, before fleeing the Nazis and seeing the Gestapo take away his entire library. It will be found decades later... in Moscow.

And then Hayek, Mises’ student, who arrives in London in the 1930s and becomes the great rival of John Maynard Keynes, the most listened-to economist of the century. Their disagreement is simple. When the economy collapses, Keynes wants the state to spend to restart the machine. Hayek, on the other hand, swears that this forward flight leads straight to inflation. Yet, history tells that one war night, the two rivals stood guard together on a roof in Cambridge, armed with shovels, to fend off incendiary bombs. Embellished, surely. But it says something about their relationship.

In essence, Keynes wins. For decades, it is his recipes that governments apply. And the Austrian school falls into oblivion.

Until a small book by Hayek, in 1976, poses a crazy question: what if we took away the state’s monopoly on money? A quarter of a century later, a few lines of code that no one controls will answer it. Supply capped at 21 million, no central bank, a currency born all by itself on the market. Bitcoin checks almost all the boxes of sound money that the Austrians dreamed of. The ECB itself wrote it in black and white, as early as 2012.

Almost all the boxes. Because there is a catch, and it is significant. According to the rule that Mises himself laid down about the birth of currencies, Bitcoin shouldn’t even be able to exist. A theory that Bitcoin realizes and tramples at the same time.

We’ll let you discover why in the video below!

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