I don't see any contradiction here? Both systems are opaque and vulnerable, and both may need government regulation. Some people would have it that the repeal of Glass-Steagall is what indirectly lead to the '07 crisis.
Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats?
Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin.
I heavily disagree with your assessment that regulation is to blame. If anything the removal of regulation, specifically the repeal of the parts of Glass-Steagall that separated commercial and investment banks, is what caused the banking catastrophe.
> Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats?
No, despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all. Bitcoin will be regulated in these two, and probably more, ways: 1) It will be categorized as an instrument of value, in which case it can be taxed in USD, require licenses to transact with it etc. 2) It will be regulated at the point of currency exchange.
> Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin.
I'm not even sure I understand fully what you mean here. What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs.
This is like saying that pulling a card from a house of cards is what "caused" its collapse. When in fact, the imposition of the unsustainable system onto us in the first place was the true problem. Everything else is just consequences.
> despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all.
Both are p2p protocols designed to enable censorship-resistance by eliminating centralized points of failure.
Just as Napster was replaced by Bittorrent, so also E-Gold is replaced by Bitcoin. The persecution is actually what is driving the development of these liberating protocols.
> What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs.
This is exactly true! We can never "regulate" drugs (or Bitcoin) -- we can only regulate how we use _violence_ against people who use drugs (or Bitcoin.)
But the question is, do we have a _right_ to use violence against people who are not thieves and murderers? And is it even possible to delegate such powers?
For example, I have a right to defend myself using force. Therefore I have a right to hire a _bodyguard_ to defend me. Therefore we have the right to elect a _sheriff_ to defend us. (In fact it is the same right -- delegated.)
But I do NOT have a right to beat and rob people. Therefore, neither do I have any right to hire a _bodyguard_ to beat and rob people.
...Therefore, neither does our _sheriff_ have any right to beat and rob people -- even if we voted for him to do so! Because you cannot delegate powers you never had.
Perhaps you should be asking what makes us believe, as a society, that we have any right to use violence at all, except in defense from violence. Because if the authorities use violence for any other purpose, then aren't they the true criminals?
Careful not to throw out the precedent from the Nuremberg Trials -- that just because someone is in authority, doesn't give them the right to victimize people. (Even if they were voted into power.)
No it's more like saying removing one pylon from a bridge is what caused it to collapse.
> Both are p2p protocols designed to enable censorship-resistance by eliminating centralized points of failure.
This is simply not true about Bitcoin, nor Bittorrent. Especially with Bitcoin the people who seem to be taken seriously in that community do not seem to feel that the transgressive aspect of it is either true or valuable.
There is no free market in money. Therefore the problems we see in banking are not problems of a free market.
The entire market is sewn up vertically. The Federal Reserve, at the bottom, consists of the member banks. At the top, it consists of those who regulate those banks.
Therefore The System represents the ultimate "public/private partnership" where the entity that regulates, is the same entity being regulated.
The true purpose of their actions? To protect their cartel.
===> In that case, deny it. Go ahead, present your case that banking and finance isn't the most cartelized, regulated, corrupt industry on earth.
The financial industry: http://en.wikipedia.org/wiki/List_of_financial_regulatory_au...
The software industry: [Google] No results found for "list of software development regulatory bodies by country".
In fact, this is my whole point: that finance (and healthcare) are heavily-regulated, and that this is precisely the cause of their problems.
You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies.
Similarly, you could never claim that our monetary issues are the result of a free market, because there is no free market in money.
You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies.
Well, I wasn't making that claim, but you appear to have a curiously binary view of these things. Healthcare in Europe, where I'm from, is in many ways far less competitive and far more heavily regulated, yet Europeans seem to have better outcomes despite lower public expenditure on healthcare. I attribute this primarily to the information asymmetries mentioned above.
My definition would be, "one without violence and coercion, enabling decisions to be made based on voluntary choices."
> Healthcare in Europe, where I'm from, is in many ways far less competitive and far more heavily regulated, yet Europeans seem to have better outcomes despite lower public expenditure on healthcare.
"Competitive" ?
I know a doctor in Alaska who was aghast at the high prices charged by the monopoly hospital in his region. He decided to open a surgery center, so as to offer better service at lower prices.
Unfortunately he discovered that competition is illegal. You cannot open operating rooms, you see, without first obtaining a "certificate of need" from the State, certifying that your community "needs" more operating rooms. And of course, such certificates are never actually handed out, since the state boards are always manned by hospital flunkies.
Does that sound like a free market to you? There is no competition in American health care.
I'm also surprised at your characterization of European health care as being "far more heavily regulated" in contrast to American health care. You must not realize just how heavily regulated American health care is.
The American health care system is a combination of socialism and fascism, and has been for quite some time. It features all manner of central planning, forced subsidies, regional monopolies, welfare programs, hospitals and insurance "companies" protected from any competition by legislation, unfunded mandates, price charts, and tax authorities.
The problems of health care in America are the problems of socialism and fascism, because that is what we practice. We do not have the benefits of the free market because we do not have a free market.
> yet Europeans seem to have better outcomes
Saying that Europeans have "better outcomes" than Americans (with regards to health care) is like saying that Cubans have "better food" than North Koreans. You are comparing two authoritarian systems, neither of which have any semblance of a free market.
Coercion does not innovate -- it does not lower prices, nor does it improve service. Even in Europe:
"While Sweden is a first world country, its health care system - at least in regards to access - is closer to the third world. Because the health care system is heavily-funded and operated by the government, the system is plagued with waiting lists for surgery. Those waiting lists increase patients' anxiety, pain and risk of death."
http://www.nationalcenter.org/NPA555_Sweden_Health_Care.html
Clearly you have an axe to grind, so I'm not expecting this discussion to go anywhere, unless you want to get back on the point and provide some evidence for your original claim that finance is the most heavily regulated industry there is. Meanwhile, I suggest you move to Singapore, Hong Kong, or New Zealand, the three countries which the world bank considers to have even more business-friendly regulatory environments than the US. http://data.worldbank.org/indicator/IC.BUS.EASE.XQ?order=wba...
I'd say that removing the regulation that separated investment banking from deposit banking also contributed to the collapse of one deposit bank after another in the aftermath, banks that were relying on insurance companies that barely held any capital to cover their swaps.
The fact that either no one in the financial industry committed a crime during the housing bubble, or there was no one to prosecute for crimes that were committed is proof that the financial industry is either effectively unregulated, or that there is no body that has an interest in enforcing any regulations that exist.