Almost 30 years ago, Nobel Prize-winning American economist Milton Friedman said he would like to have money controlled by a computer. He also said it would be a better world without the Federal Reserve. One of his two desires is already happening in the form of Bitcoin. In fact, he seems to have predicted its formidable rise in 1991. And with the FED’s incessant money printing causing growing criticism–is it a question of time before the other one comes true as well?
Milton Friedman Would Have Been All-in on Bitcoin
It’s almost eerie watching this short clip in which Friedman appears to talk about Bitcoin, an invention that would come some 18 years later.
"I would like to have money controlled by a computer" – Milton Friedman 1991 pic.twitter.com/V07aznLTMd
— Bitcoin (@Bitcoin) April 13, 2020
As the main advocate opposing the Keynesian government policies in place today, Friedman promoted a macroeconomic viewpoint known as “monetarism.” Rather than the FED stepping in and printing money as they see fit, he argued that there should be a slow and steady expansion of money supply.
The Fed can print endless money, but the rest of the world cannot.
— The Wolf Of All Streets (@scottmelker) April 14, 2020
With the historic bailouts and QE that we see going on today in response to the coronavirus pandemic, Friedman would probably be turning in his grave. He expressed his desire back in 1991 to have money controlled by a computer that could not interfere and adjust the policy at will.
The video clip was posted on the Bitcoin Twitter channel and naturally garnered scores of likes, retweets, and applause. Some of the comments said:
He would prolly be all in with Bitcoin if he was still alive
And others stated:
We’ll make it happen, Milton
Digital Money Was Already Being Talked About at the Time
Of course, with Bitcoin being the most successful experiment of tamper-proof decentralized money running across computers (nodes), it’s easy to forget that there were precursors to Bitcoin.
David Chaum released DigiCash in 1989 which made use of cryptography for private payments and introduced the concept of public and private keys. The project garnered support from libertarians and small groups in favor of a digital currency that could be transferred internationally free from government control.
While DigiCash and other projects pre-Bitcoin failed to gain traction, Friedman was no stranger to the fact that there was a need for electronic money. He believed that it would happen in the future. In fact, in that same year, he said:
One thing we are still lacking and will soon develop is reliable e-cash — a method by which money can be transferred from A to B on the Internet without A knowing B and vice versa
With Bitcoin proposing a viable alternative to fiat and entirely free from central actors; will Friedman’s second desire come true as well? Will the FED be removed completely? It’s going to be interesting to how things unfold