Imagine a world without Bitcoin. You do not have to imagine since you lived in one already. Now that we do have Bitcoin, we are able to make use of all of its capabilities.
“Bitcoin is not a community project,” said Dr. Craig Wright—the creator of Bitcoin—in this short clip. It really is not because it is the creator’s property. But still, we all profit from Bitcoin. What does that tell us?
It might be the case that humanity is better off when single high-performers and pioneers can follow their work in peace, even though property rights do exclude others. This is part of capitalism and freedom. The Trickle-Down theory tries to describe a phenomenon that many doubt nowadays.
Trickle-Down theory discussed with Dr. Craig Wright
Trickle-Down theory basically states that the growth of wealth for the elites positively impacts the rest of society, as through consumption and investments of the upper class, the so-called lower-class profits, too.
The idea goes back as far as to Adam Smith (Wealth of Nations), who wrote:
“It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extrens itself to the lowest ranks of the people.”
However, many scholars have heavily criticized this theory who argue that the exact opposite literally happens, wealthy people get wealthier.
“If we say that Trickle-Down theory does not make everyone equal, then that is correct. It won’t. But everyone is better off, and everyone having opportunities to study and develop and start a business, and have equality under law etc. is something that needs to be considered. Now a lot of people will argue ‘it is not fair, it is not equal, you had more than me’—which is reality,” Dr. Wright said.
Let us look at Bitcoin in this context: did Bitcoin distribute wealth? No, it did not, and it was never intended to. Are we in an “unequal Bitcoin world,” where some hold the most bitcoins and others barely can afford some satoshis? Yes, we live in that kind of a world.
Trickle-Down theory or theory of communism?
The Trickle-Down theory is not a way to describe how to ease inequalities in wealth or status. It instead is a way to explain why even though inequality is real and might be growing, the so-called lower class could still be in a better position than if there was no wealth at all in the first place. Equal wealth distribution would essentially mean socialism, which can be defined as a euphemism for communism or a transitory phase to communism.
“Communism is only ever pushed by rich assholes,” Dr. Wright said. “It has never in history been pushed by the lower class, the poor. They are used and being tricked into becoming mobs. Like Stalin was not poor. Marx was only self-inflicted poor, because he spent more than he ever earned.“
The problem with today’s inequality concerning wealth and other factors may be found in the elites, but not how socialists or communists claim. Taking other people’s wealth away, which is theft, by the way, cannot lead to a better society but only leads to an inherent criminal society (because it would have the criminal act of theft as its foundation). Furthermore, see the tragedy of the commons, on which Dr. Wright occasionally comments too:
“The Internet as a commons suffers the tragedy of all open socialist systems. Without value, without price, nothing is free; and the cost is a burden that even Atlas would shrug from his shoulders in utter disgust,” said Dr. Wright in his article titled, “Proof.”
But where is the failure by elites then, if lack of wealth distribution is not the problem?
“We gotta get back to nationalism and religion,” Dr. Wright said. He also mentioned “good colonialism” in our discussion.
Elites and the role they have in society
It reminds me of another discussion Joel Dalais and I had with Dr. Wright a while ago on Education:
“A hierarchy is good, but we have to owe down. This is the problem, and I haven’t got a solution for it yet: three generations from me, when people inherit money, what will they be like? How do I make people work? Every elite should work,” Dr. Wright said.
So this is the problem. Elites may have and keep their wealth. But they have to do something with it, and we are not talking about giving away money here. It is about responsibility and meaning.
Dr. Wright himself invested his resources into creating Bitcoin and continues to allocate his time to it by stewarding Bitcoin. So Dr. Wright’s invention trickled down to all of us, as all of us can use Bitcoin now and profit by using it in many ways.
Satoshi Nakamoto did not have to give away free Bitcoins, but he invented it. If we look at Bitcoin, the Trickle-Down theory does not seem to be “dead” yet.
Watch: Dr. Craig Wright’s keynote speech at CoinGeek New York conference, Set in Stone: What is a Commodity?
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.