India: First to Prove Binswanger's Point on Bitcoin

Forbes warns, "This article is more than 7 years old."

Is this because they think principles have an expiration date -- or because this piece has crossed some kind of line after which conservative pundits start proclaiming something "prophetic?"

Either question would be understandable from anyone who runs into the piece, "Don't Be Silly, the Entitlement State Won't Allow Bitcoin," once news that India is banning bitcoin spreads enough.

Binswanger's column focuses on actions by government in the United States, but his analysis is spot-on and applies everywhere and anytime:

Don't be blinded by the Bitcoin delusion... (Image by Thought Catalog, via Unsplash, license.)

Government suppression of private money is inevitable in the entitlement-state era. What is the alternative? Are governments going to stand idly by while more and more people avoid taxes and sidestep inflation? Government largess depends on taxation and monetary debasement. If there were private money, the welfare state could not exist. So, can there be any doubt that the government will throttle virtual currencies?

The ban goes well beyond China's ban on mining and trading cryptocurrencies:

The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets...

Oddly enough, part of the expressed rationale for the plan is that India wishes to create its own virtual currency.

News Flash: India wants to join the ranks of kleptocracies with official cryptocurrencies for the same reasons those countries have them; which is why it has its own fiat money now; and which is why private investors won't really trust it.

And which is why, per Binswanger's prophecy/analysis, private virtual currencies won't be a substitute for the hard work of cultural and political change that we will need for free money and free banking to become a reality.

-- CAV