One of the stranger cultural alliances today is that between bitcoiners and libertarians. Within both communities there is considerable distrust of traditional institutions – to the extent that social media debate on the merits of cryptocurrency can quickly spiral into an all-out ideological conflict over the alleged tyranny of the nanny state.
In truth, bitcoin is more of a financial project than a political one. Portraying the technology as striking a blow for individual freedom – even if it’s the freedom to lose all your money – may encourage more people to invest in digital currency but building a better society will need more than non-fungible tokens (NFTs).
In a sense, crypto is just the latest attempt to allow people to create their own currency – something that has appealed to thinkers across the political spectrum at different points in history.
Berkeley is best known for his arguments for the existence of God so his views on monetary policy might seem outside of his remit
If looking for a father figure one might even turn to the former Anglican archbishop of Cloyne George Berkeley, Ireland’s most celebrated philosopher. For it was this arch-conservative who asked, in The Querist (1735-1737): “Whether the true idea of money, as such, be not altogether that of a ticket or counter?”
Berkeley is best known for his arguments for the existence of God so his views on monetary policy might seem outside of his remit. In fact, his political philosophy and his thinking on economics were very much related.
In theology, he provided an answer to the age-old question: “If a tree falls in the forest and no one hears it, did it make a sound?”
No, the tree – like you or I – needs a benevolent authority to witness its existence in order to be, Berkeley answered (albeit, strictly, the Good Bishop didn’t talk about trees). It is only thanks to God’s gaze that we are real, according to Berkeley’s theory of vision.
This logic was projected by the philosopher onto monetary matters. Could a new currency be created, he asked, by visualising it into being?
The argument was marshalled by Berkeley to support the case for a publicly owned national bank in Ireland that would issue its own currently and control it for the benefit of the Irish people.
As with today’s bitcoiners, he was commenting at a time of financial uncertainty and instability in exchange markets. He was also responding to a very specific power imbalance – Ireland’s then dependence on Britain’s currency that he and others believed was having a detrimental effect on economic development here.
Berkeley wasn't interested in a short-term fix. "In the Querist, he is clearly exploring the idea of what might constitute a Utopia," according to UCC academic Deirdre Ní Chuanacháin.
There is a fair dose of Christian paternalism in Berkeley's writings but, in their time, they were considered radical
His idealism has a parallel today with blockchain-evangelists who believe the model of peer-to-peer cryptocurrency transactions – and the creation of virtual assets like NFTs – helps to democratise the financial realm. That, however, is where the similarity ends.
While bitcoiners want rid of meddlesome intermediaries, Berkeley saw no value in a currency unless it was overseen by a credible authority. In the case of his imagined Irish currency, it required a national bank run with prudent management for the public good.
"The Querist associates the steadiness, stability, and discretion of public banks with the same qualities in the states that run them," Tom Jones writes in George Berkeley: A Philosophical Life.
Moreover, Berkeley believed monetary policy should support a particular type of economic activity – not financial speculation (what he called “stock-jobbing”), nor the accumulation of private profit, but rather the proliferation of honest labour.
"He demanded a personal reformation from his readership and condemned the fashion for foreign goods and luxurious expenditure he saw as endemic within the upper echelons of Irish society. Women in particular earned his opprobrium for ostentatious display," Michael Brown explains in The Irish Enlightenment.
“What was required for industry to flourish was a population of diligent labourers motivated by a desire for the possession of the rewards of hard work.”
There is a fair dose of Christian paternalism in Berkeley’s writings but, in their time, they were considered radical. Jones says: “Following the crashes of 1720, Irish economic patriots remained sceptical of financial innovation. Berkeley’s queries therefore constitute a risk not unlike the risk [Jonathan] Swift took in writing the Drapier’s Letters, and he may have modelled his pamphlet series as a form of civil disobedience on Swift’s letters.” (Swift produced his letters between 1724 and 1725 under a pseudonym to avoid retaliation from the British authorities for condemning absentee landlords.)
If you are feeding off the system you don't necessarily want it to change
That was then. Has Berkeley anything to teach us now?
Noel Kinahan, a policy researcher with Irish Rural Link (IRL), believes so. In the wake of the 2008 financial collapse and the loss of several banks from the Irish market, the idea of a national bank “has been revitalised”, Kinahan says. “Berkeley was way ahead of his time.”
IRL, a non-profit rural development organisation, has produced a campaign paper on public banking, partly inspired by the Irish philosopher’s work. It has received advice from the Sparkasse public bank foundation in Germany where the model has been operating successfully for decades, supporting small enterprise at a local level.
Kinahan says Berkeley acknowledged the likely resistance from the private banking sector to a scheme to establish a national bank and today it is no different. “If you are feeding off the system you don’t necessarily want it to change,” says the retired engineer.
However, he believes the decisions of KBC and Ulster Bank to exit the Irish market is concentrating minds within both the Government and the Opposition. Last year a junior minister – Senator Pippa Hackett of the Green Party – said it was time to consider introducing public banking because of the lack of proper competition in the financial sector.
“I think this is going to happen, I really do,” says Kinahan.
Berkeley would approve of his idealism. Public banking hasn’t the get-rich-quick appeal of cryptocurrency but almost 300 years after it was forcefully proposed here the idea may have finally matured.
