here are many wise people out there who want to share their knowledge for future generations to have a better future, this is one of the many ways you can describe Milton Friedman. A world-class economist and statistician who saw the reality of our world through numbers, and through these numbers, he was also able to easily predict what the future would look like.
At the peak of his career in 1976, when he won the Nobel Memorial Prize in Economic Science for his research on consumption analysis, he was criticized by many people who, at the time, saw his liberal view on the world in a negative manner. Today, the same people retreat their thoughts about Friedman’s views on future economics as most of what he had said came to be true.
The need for a new monetary system suitable for the 21st century
The most important as well as least believed prediction that Friedman made right before the beginning of the 21st century was cryptocurrencies. He saw the true potential of the internet and the efficiency it would bring to this future generation, but he also knew from his many years of study that the world would reach a point of never-ending inflation.
From seeing the promising platform brought by web 1.0, he also saw that there would be a need for some electronic cash that would allow the world to connect by cutting out the taxes of using different currencies. He also saw the internet as a major factor in “reducing the role of governments” by creating an e-currency that would be used internationally.
The idea was to have an electronic currency suitable for the platform of the future. If we take a look at current trends, we can see that online shopping is becoming more prominent and this, from a social perspective, is due to the convenience offered by technology. The number of consumers that use e-commerce is predicted to almost double in the next four years.
Friedman was able to see all those things as a statistician from the identified patterns in consumerism, and with every new change in trends comes a predominant adaptation to the new needs of consumers.
The prediction of Bitcoin
In an interview from 1999 conducted by the National Taxpayer Union, Friedman had predicted such an electronic currency, and it truly was the first time someone has publicly announced this thought of what we call today cryptocurrencies. Friedman described the concept of a decentralized currency:
Transfer funds from A to B without A knowing B or B knowing A. (Quote by Milton Friedman)
Or in other words, a decentralized currency, such as most cryptocurrencies today or bitcoin, is the perfect example. The concept of cryptocurrencies and their reliability is still questioned by many economists today, but Friedman assured everyone that such a change in the monetary system is inevitable. One of the aspects that I loved was admitting that there will be a negative side, such as the advantage this would offer criminals.
This aspect was very much exploited (and still is today) by criminals who perform their illegal business on the deep web by selling drugs, weapons, and other illegal services in exchange for cryptocurrencies without a record. With or without cryptocurrencies, criminals will still exist, and rather than seeing this as a forceful change, it is more of an adaptation to the norms of consumers within the 21st century.
We have reached a point in time where people are starting to change in time with the appearance of new technology. In Friedman’s opinion, this is a positive factor as it motivates the world to pursue the evolution and pursue a better life in general. One of the most important aspects that he had mentioned is that this would allow the world’s population to live as a truly free society where corporations would start to lose power as they would not have control over the production of this electronic currency.
The idea of Friedman being able to see the missing puzzle piece in the evolving standards of the 21st century is mindblowing, especially supporting his ideology of having a more stable distribution of income around the world despite cryptocurrencies making it harder for governments to collect taxes.
Bitcoin was the first cryptocurrency, or as Friedman called it “e-cash” to be created. Only a few people were aware of bitcoin in 2009 when it was launched, and a lot fewer of those people actually understood the concept. Reading the whitepaper that was published by the creator of bitcoin Satoshi Nakamoto in 2008, you can see a resemblance between the words said by Friedman in 1999 when it comes to the theory and ideology behind this electronic currency.
Sadly, Friedman didn’t get to live to see his prediction come to life and even see the financial freedom it has offered to so many people around the world. Friedman died in 2006 from natural causes. Since 1912 when he was born, he had seen this world change in different ways, but he had a bright mind that allowed him to see the future through statistics. Maybe it is time that we actually listen to some wisdom and see-through that imaginary bubble.