What would John Stuart Mill think about Bitcoin?

By all accounts, John Stuart Mill was a prodigy – and if he lived in our times, he would most definitely become interested in developing open-source solutions for Bitcoin. If the English philosopher was capable of learning ancient Greek by the age of three, and five years later was well-acquainted with the dialogues of Plato, what makes us think that his exceptional intellect wouldn’t make him pursue coding and blockchain programming as ways of increasing his own and everyone else’s autonomy and liberty?

The argument isn’t just strengthened by a projection of Mill’s intelligence, but also by his documented interests: at age thirteen, John Stuart was already reading the works of Adam Smith and David Ricardo. And just to further prove the interest in economics and classical liberalism that the young Englishman displayed, it should be noted that David Ricardo himself would invite the prodigious teenager to his house in order to discuss political economy. To present the argument in Bitcoin terms, we can say that John Stuart Mill would have been a lot like Peter Todd, Matt Carallo, and Andrew Chow.

As he got older and managed to critically assess the teachings of his mentors, the English philosopher published two of the most influential works in classical liberal literature: “On Liberty” (1859), and “Utilitarianism” (1863). To further develop the bridge between the ideology of Bitcoin and John Stuart Mill, it should be noted that other works include “A Few Words on Non-Intervention” (1859) and “Centralisation” (1862). And even though his views on these latter works are dissimilar with the ideology of Satoshi Nakamoto and the Austrian School of Economics (both of which emerged later), John Stuart Mill would have definitely enjoyed having his opinions challenged and presented in a different context where technological innovations take away centralized bureaucratic requirements.

Bitcoin “On Liberty” by John Stuart Mill

If you ask anyone to name one work of John Stuart Mill, then it’s most likely that both academics and casual readers of liberal philosophy will mention “On Liberty”. And each time we mention that our own liberty should only be limited to the extent that we’re preventing from doing harm to others, we’re basically paraphrasing the English philosopher. The ideas have been so influential that they’ve become part of popular culture and we absorb them from various forms of media even if we never hear of Mill.

It’s a work which defends individualism, whose fourth chapter is specifically dedicated to the issue of limits of the society over the individual. In this regard, the English philosopher would definitely defend Bitcoin development as elements that can spearhead technological evolution, while still attacking all the scams and Ponzi schemes in the space. The critical point of his distinction would be the extent to which the project brings something good to society. This utilitarian idea, first developed by Bentham and perfected by Mill, says that one should focus on the actions which create most pleasure and project most good onto the world.

By offering the world an alternative form of currency which fulfils the criteria of sound money, Bitcoin brings innovation in technological and economic ways and therefore has a beneficial effect. However, all the projects that are lesser decentralized and are financially-malevolent in the long run by seeking individual greed would be frowned upon by Mill. At the same time, it’s likely that the English philosopher would also have reservations in relation to the wasteful Proof of Work mining of Bitcoin and think about society as a whole being harmed if the environment gets further damaged. However, the criticism for mining can be refuted when referring to the bigger picture of world energy consumption (there are entire industries whole purpose and ways of conducting business can be rendered obsolete, as pointed out by my colleague Blakely Jones in his article “Bitcoin Mining and Power Use“) and it’s very likely that John Stuart Mill would be wiser and lesser biased than the likes of Nouriel Roubini.

In the same chapter, Mill clearly states that free markets are preferable to government intervention. At page 130 of the original release of “On Liberty” he reflects on the exact limits of legitimate intervention of authorities, only to seek particular applications of these principles.

The maxims are, first, that the individual is not accountable to society for his actions, in so far as these concern the interests of no person but himself. Advice, instruction, persuasion, and avoidance by other people if thought necessary by them for their own good, are the only measures by which society can justifiably express its dislike or disapprobation of his conduct. Secondly, that for such actions as are prejudicial to the interests of others, the individual is accountable, and may be subjected either to social or to legal punishment, if society is of opinion that the one or the other is requisite for its protection.

By today’s standards, John Stuart Mill can be called an anarcho-capitalist who seeks the maximization of individual freedom, as his writings argue that government intervention on the free market and economy is counter-productive. If everyone wants to be a part of the hierarchical state bureaucracy, he argues at page 155, then there is very little incentive to innovate and think outside of the existing framework.

In this regard, very few philosophers could ever develop an argument which makes Bitcoin look so promising and great for our societies. Even when Nick Szabo refers to Bitcoin as an element of social scalability, it’s still not as obvious. John Stuart Mill would also appreciate the virtues of privacy coins, as economic autonomy and secrecy are really great as long as they respect the no-harm principle which he helped formulate.

Now let’s discuss the more controversial part of his treaty on liberty: J.S. Mill is convinced that lesser developed or civilized societies deserve centralization and despotism. Much like Plato, he sees a cycle in political regimes and thinks that a form of colonial authoritarianism is required in order for the people to reach a certain level of development which also brings a thirst for more liberty and independence. In Plato’s classification of polities, he said that societies become tyrannical in the beginning, then overthrow the despots in order to create egalitarian democracies (which, in their own right, evolve towards unequal oligarchies).

According to John Stuart Mill, civilizations like India’s deserve colonialism until they reach the same living standard and education as Britain. The argument is completely against today’s standards of political correctness and might be use by radicalized thinkers to completely refute Mill’s contributions to our civilization.

If we consider that national currencies are part of the history, culture, and civilization of a country, then Bitcoin in itself is a colonizing element. This detail is important to also explain the hard-headed opposition that some folks display whenever libertarians and Bitcoin proponents present the issues of fiat. Often times, people define their national identity, independence as citizens of a state, and economic freedom through a national currency which has been around since their political system had been established. And it takes something as disruptive, radical, and ultimately colonial as Bitcoin to challenge these ideas and prove an objective superiority.

By Mill’s standards, India was barbaric– and he has even worked for many years as an administrator of the British East India Company (a predecessor of the full-fledged colonial government). If he were to look at today’s global financial system, he would also call it barbaric and advocate for Bitcoin as a better form of money which actually provides more autonomy and financial independence in relation to governments. It’s that simple.

Bitcoin and “Utilitarianism” by John Stuart Mill

Just like Satoshi didn’t create the first form of cryptographically-secure digital money, John Stuart Mill wasn’t the first individual to write on utilitarianism. If the inventor of Bitcoin was influenced by David Chaum and Wei Dai, then the English philosopher benefited from the direct educational assistance of legal reformist Jeremy Bentham. However, both of these innovators are known for their refined versions of the concepts they introduced, which brought them more fame and acknowledgement than their predecessors ever received.

In Bentham’s version, utilitarianism was mostly quantitative and revolved around the idea that we should get as much happiness and pleasure as we can in order to grow as a society. Conversely, Mill has completed this image by adding a qualitative dimension through which he tries to classify what kinds of happiness is most elevated and worthy of having. He is also famous for saying that the unhappy overthinker (presented as the Socrates archetype) is actually happier than the hedonistic person who isn’t much different from a pig. Therefore, in Mill’s version of utilitarianism, the joys of intellect have greater value than the common pleasures that money can buy.

Accordingly, if Bentham saw the “Lambo” and “moon” culture within the crypto community, he would say that there’s nothing wrong with it as long as it brings people happiness. But if Mill reflected upon it, he would be highly resentful of these primal expressions of greed. While there is nothing wrong with liking something and aspiring towards material possessions, they are still worthless if they don’t elevate the owner in spiritual or intellectual ways. Winning the crypto lottery by investing in the right coin at the right time can bring great wealth, but in the absence of human virtues which transform the money into something that’s more beneficial for the entire society as a whole, they’re pretty empty and void of meaning.

This doesn’t mean that Mill would have ever endorsed socialist ideas like solidarity as a way of collecting taxes to help the lesser fortunate. He would, however, suggest that happiness is greater when it’s willingly shared under considerations of both moral virtue and an elevated application of utilitarianism. As a reader of Adam Smith, John Stuart Mill would definitely advocate for charity and ways of distributing Bitcoin via donations that ultimately help entire communities out of poverty and bring about a fairer financial system. Private property is not to be seized by force through governmental branches, but offered as a donation by those who consider that their contribution helps the society and civilization flourish.

The ultimate goal of utilitarians is to create the greatest possible amount of happiness in the world. And even though this sounds utopian, it’s something to which Bitcoin can contribute by strengthening the private sector and innovation, while also removing layers of government interference in the economy. In itself, it brings to the world a digital form of sound money. But if it’s used to its greatest potential, it can create a better and fairer financial system. And maybe that it would be a shame to end up replicating the same bureaucracies and hierarchies that we nowadays have, but only replace the money. That’s definitely not utilitarian.

Cover image courtesy of NYPL/Wikimedia Commons

 

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