What If Money Were Private?

September/​October 2013 • Policy Report

Since 2005, Cato Unbound has given readers access to a state‐​ofthe‐​art virtual trading floor in the intellectual marketplace. With its accessible format, this unique online magazine reflects the Institute’s appreciation for the way ideas are exchanged in the digital age.

Every month one of the world’s leading thinkers presents an essay on a topical issue. A panel of distinguished experts responds, each offering their case before challenging and refining the arguments in an ongoing conversation. Readers are then encouraged to join the dialogue, their contributions pulled together into an easily accessible forum to create a distinct media product.

In the latest installment, “The Private Digital Economy,” scholars explore the concept of money, tackling in particular the question of how private digital money works — and doesn’t. In his lead essay, Jim Harper, director of information policy studies at the Cato Institute, reviews the traits that allow a given class of items to be used for exchange. What exactly is it that makes money convenient?

According to Harper, money’s basic value is as “a universal lubricant for trade,” and as such the greatly increased use of online “cryptocurrencies” seems inevitable, he argues. “The open question is whether the government and financial services sector will try to hold digital currencies at bay, or whether they will willingly embrace all the benefits of a new era in money,” he concludes.

The experts responding to Harper are Dan Kaminsky, a network security researcher who has advised several Fortune 500 companies; Jerry Brito, a senior research fellow at the Mercatus Center and director of its Technology Policy Program; and Chuck Moulton, associate director of the Center for Financial Privacy and Human Rights.

Over the years, Cato Unbound has featured a lineup of prominent contributors, including James M. Buchanan, the Nobel laureate and founder of the public‐​choice school of political economy; Richard H. Thaler, professor of economics and behavioral science at the University of Chicago; and James R. Flynn, a pioneer in the study of IQ. These monthly conversations have received attention from publications like the New York Times, the Washington Post, and The Economist.

An idea can be bound between covers, bound by convention, or bound for the dustbin of history. The ideas of Cato Unbound, we hope, are none of the above.