When Bitcoin’s price spiked in 2017, so did public mentions of the cryptocurrency, as measured by a Google n‑gram plot. When William Jennings Bryan promoted bimetallism during his run for President in 1896, mentions of bimetallism similarly spiked. Noting this parallel, economist Robert Shiller compares the two monetary systems more generally in chapter 12 of his 2019 book Narrative Economics, “The Gold Standard versus Bimetallism.”[1] Shiller was the 2013 Economics Nobel Prize co-recipient. He recently appeared to discuss the book on Russ Roberts’ EconTalk podcast.
Shiller observes (p. 161) that “the enthusiasm for bimetallism in the nineteenth century seems similar to the excitement for Bitcoin we have seen in recent years.” Later he goes a bit further to propose that “narratives about gold and money have a peculiar emotional tone, analogous to the emotions we see in cryptocurrency narratives today.”
“Analogous to”? I would say antithetical to. Shiller overlooks a critical contrast between bimetallists of Bryan’s sort and Bitcoin advocates: bimetallists wanted inflation, whereas Bitcoin maximalists support its deflationary tendency. They praise the hardness of the gold standard as a precursor to Bitcoin. Bryan embraced the softness of bimetallism, and famously cursed the gold standard. Shiller (p. 158) rightly observes that Bryan’s plan—resuming free coinage of silver at 16:1 when the market ratio was 30:1—would have been deliberately inflationary: “Thus the bimetallism proposal would have allowed debtors to cut their debts roughly in half by choosing to repay them in silver rather than gold. In effect, the result would have been a default on about half the value of all debts denominated in US dollars.” But Shiller does not mention that Bitcoin supporters embrace its deliberately deflationary design whereby the stock of Bitcoins grows increasingly slowly and eventually stops growing altogether.
And there is a second important contrast: the 1896 peak discussion of bimetallism came in the context of a political campaign. Bryan sought to impose bimetallism on all American money-users, while the majority of voters rejected the policy. Bitcoin, by contrast, is a payment system whose advocates seek voluntary joiners, one at a time. Theirs is not a political winner-rules-all campaign.
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