Hayek’s new money idea, and Bitcoin’s creation: What they can’t stop

Friedrich Hayek was a well-known economist of the Austrian School, and the author of several important works, including ‘Law, Language and Liberty’, a multi-volume edition that carries important ideas on the evolution of social institutions.

The basic premise of his ideas is that laws, language, morals, and other such social phenomenon, are natural and spontaneous creations that have evolved over thousands of years, rather than being the conscious creation of a human genius or some ancestor. They are an unintended product of human action, rather than of active and conscious design.

In an interview, Hayek spoke on the evolution of money. The following is an excerpt from this interview:

“Law, language, money are the three paradigms of spontaneously [unintelligible] institutions. Now fortunately, law and language have been allowed to develop. Money has originated in its original form, but as soon as it was there in its most primitive form, it was frozen.

“After two or three hundred years of coins, all governments put their hands and stopped any further developments. Governments said it must not develop any further. We were not allowed to experiment on it.

“Money has not been improved. Money has rather become worse over the course of time. And what we have had since in development were matters of government inventions, mostly wrong, mostly abuses of money. And I have come to the position of asking, “Has monetary policy ever done any good?” I don’t think it has. I think it has done only harm.

“That’s why I am now pleading for what I have called “denationalization of money”.

[Interviewer’s question]: How do you think it would work. Would the major banks such as Chase Manhattan issue currencies, or gold coins issued… how would it…

“While governments can stop people from issuing money, they can hardly stop them from opening accounts in something. After all, in the modern world, hand to hand money, coins and paper is no longer the most important. Credits and credit cards are substitutes. So I think we can forget about existing money and existing banks.

“Can we open a system of accounts which will displace money.

“I don’t believe that we should ever have a good money again before we take the thing out of the hands of the government. If we can’t take them violently out of the hands of the government, all we can do is, by some sly or roundabout way, introduce something they can’t stop.”

Here is the live interview:


On October 31, 2008, someone going by the name of “Satoshi Nakamoto” introduced a peer-to-peer electronic cash system with the following message posted on a forum.

It began thus: ‘I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”


Bitcoin whitepaper

Share & like

Related Posts