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2minutebitcoin
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2023-05-08 23:50:12

2minutebitcoin on Nostr: Hidden taxation through inflation is also an advantage in war. A country that taxes a ...

Hidden taxation through inflation is also an advantage in war.
A country that taxes a lot through printing massive amounts will collect more money than one that only taxes through income. Said country can allocate more to military purposes and win a war against the other country.

The game theory of a world-wide sound-money standard is unstable - once one player abandons it, it incentivizes others to do so as well.

A similar dynamic was the rise of the nation-state itself – it proved stronger than the feudal state due to having larger national armies, and that forced feudal states to turn nation-states too.

-- an excerpt from the 2-minute version of An Honest Account of Fiat Money (2018), originally posted in https://www.2minutebitcoin.org/blog/an-honest-account-of-fiat-money-2018
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