Private property is the cornerstone of Western Civilization, in theory. Aristotle thought that men could not be truly free or virtuous without it. But in practice, owning property has been out of reach for the vast majority of human kind throughout history.
The right to private property has been asserted by people as diverse as John Locke and Pope Leo XIII, but this unequal distribution has driven countless people in the opposite direction. Pierre-Joseph Proudhon went as far as to say that property is theft, and Marx followed. But Proudhon and Marx were wrong. The solution to our unjust distribution of property is not the abolition of property. It’s a more just distribution of property.
In the past, “property” generally meant land. Thomas Paine proposed a citizen’s dividend in “Agrarian Justice,” funded with a ground rent on Land. Henry George seized on the idea of a land value tax as the one truly efficient and equitable tax. During Reconstruction, the United States proposed giving freed slaves 40 acres and a mule as part of its reconstruction plans, but this was never fulfilled. G.K. Chesterton’s distributist ideal included “three acres and a cow.” Alaska guarantees its citizens a dividend sourced from the state’s rich oil revenue. All of these have land in common. In a world starving for access to nature and quality food, the importance of land cannot be discounted.
But we are no longer an agrarian society, and no amount of romantic nostalgia will bring us back there. As such, we need to broaden our scope as we seek additional pathways to fulfilling our quest to bring about widespread ownership of property.
One such pathway is cryptocurrency. There is reason to believe that cryptocurrencies as an asset class could bring about a world where widespread distribution of private property is actually possible.
Cryptocurrency is one of the first truly new asset classes in human history. Land has been there since the creation of the Earth. Gold and silver have tenures of several thousands of years. Bitcoin has been around for 13 years, and in that time, the price has gone from 0.08 per Bitcoin to over $57,000 per Bitcoin. Michael Saylor, the CEO of Microstrategy, has called it “the greatest asset in human history.”
Despite the name, “cryptocurrency,” a case can be made that it isn’t exactly a currency.
Arguably, it is more comparable to a form of “digital property.” Crypto has a natural scarcity built into it, so that it is deflationary rather than inflationary. The ability to not only hold but increase its value over time makes it a far stronger asset than a traditional savings account, and the fact that it is infinitely divisible makes it far more accessible than real estate.
“The state should have an interest in making the opportunity to own assets open to all citizens.”
In addition to Bitcoin, other cryptocurrencies have emerged with diverse uses and better technology. Most of them run on a kind of decentralized database called “blockchain,” which has uses beyond just cryptocurrency. Ethereum, for instance, promises to provide a decentralized infrastructure for the next development of the internet. Cardano, another cryptocurrency, announced a partnership with the Ethiopian education system. Its recordkeeping will now run on the Cardano blockchain. Theoretically, the varied and seemingly endless uses of block chains and the cryptocurrencies attached to them will give them value over time. Other cryptocurrencies offer something called “staking rewards,” which function like interest. What all of these have in common are low barriers to entry and decentralization.
To point out the obvious: Poverty and low wages go hand in hand. But wages are only one part of the picture. Assets are what actually enable people to build wealth over time and achieve upward mobility. That means that we can increase wages, but without an infrastructure of widespread asset ownership, people will generally remain poor, living paycheck to paycheck. Add to this the fact that wage increases have not typically kept up with inflation and it becomes clear that increasing wages are likely to remain a game of catch up depending on the current state of the dollar.
Thus, the state should have an interest in making the opportunity to own assets open to all citizens. Toward this end, Senator Cory Booker has proposed a savings account for every baby born in the United States, but abysmal interest rates make this less than ideal.
Let me make a controversial suggestion: Cryptocurrency is going to be the most accessible way for Americans – of every class and race – to become bona fide property owners.
There are several ways that the state may accomplish this: We could provide a lump sum upon birth that may be invested in a varied cryptocurrency portfolio. Or we could store United States treasury funds in an asset, such as Bitcoin, so that its value can appreciate over time, allowing government spending to come from a surplus rather than a deficit. Or we could make cryptocurrency part of a Sovereign Wealth Fund. Or we could use blockchain as a new digital “land” where economic activity is based, and that could be the basis for a ground rent and citizens dividend.
In any case, the advent of cryptocurrency may provide the greatest opportunity in human history to bring people out of poverty and achieve widespread ownership of productive property – a kind of “digital distributism,” in which every family owns a piece of the pie, and the piece grows over time.
Broderick Hooker currently lives and works in Rockford Illinois, where he recruits owner operators for a trucking company. He received his bachelors in Public Relations from Loras College in 2018. His writing has been featured in The Lorian, Loras’ student newspaper, and more recently with Northern IllinoisPublic Radio.
James G Hanink
Broderick, thanks for the intriguing proposal. My son is a keen student of cryptocurrency!