What’s Eating Frances Coppola?
“I am generally a little bit libertarian in some respects, so I don’t have a problem with bitcoin existing. I have a problem with bitcoiners trying to cease the moral high ground. Something can exist just as a thing, as a product, as a good, if people want to invest in it, that’s their choice. I’m not going to interfere with that.” Frances Coppola, What Bitcoin Did, 15 January, 2021 (circa 9:50 minutes).
Frances Coppola’s statement is made in response to a question from Peter McCormack, should bitcoin be banned?
Ms Coppola elaborates further on her faith and her position as a writer and economist by saying she is troubled by bitcoin providing an immutable moral anchor believed so reliable, it can replace the role of God.
Fast forward 29 January 2021:
Economics and Game Theory
Ms Coppola makes a point about an economy being made of people, rather than machines subservient to systems:
The idea of understanding human behaviour in scenarios of economic character is not new: game theory evolved by showing economists (human behaviour) could be reasoned beyond psychology, by becoming amenable to systemic analysis.
We hope to obtain a real understanding of the problem of the exchange by studying it from an altogether different angle; that is, from the perspective of a “game of strategy” — von Neumann and Morgenstern, The Theory of Games and Economic Behaviour (1944)
The incentive of understanding the economic interaction of bargaining by strategic analysis was to arrive at the idea of determination: in The Limits of Economics (1937), Morgenstern took the view governments are not capable of coordinating markets, and also observed on the incompleteness of economic statistics.
The origins of game theory can be linked to Austrian economics, since Morgenstern was a student of Ludwig von Mises while in Austria, as was Bert F. Hoselitz, who subsequently went to teach John Nash Jr.’s only course (Nash) took in economics:
“By coincidence the person who taught the course was someone that came from Austria. . . . Austrian economics is like a different school than typical American or British. So by coincidence I was influenced by an Austrian economist which may have been a very good influence.” John F Nash Jr., (Nobleprize.org 2004)
The Utility of Inflation
By 1950, von Neumann, Morgenstern and Nash were all at Princeton University. Nash differed from von Neumann in regards to their views on how people interact: Nash tended to think of people as out of touch with one another, acting on their own; where von Neumann was more natural in emphasising the central importance in coalitions and joint action in society.
In later works, Nash began working (The Agencies Method in Cooperative Games Modelling) toward solving problems requiring coalition formation of the type needed for co-ordinated and effective international action, where it was realised contracts could help in achieving such (coalition formation):
Alongside this work, Nash was also writing about, and delivering lectures on, the Ideal Money, which in the same way bitcoin describes its coin issuance, had a steady and constant rate of inflation, which can be indexed into contracts:
Nash had criticised the “Keynesian” approach to inflation as that of having an insufficient set of axioms — redolent to how Nash’s Bargaining Problem (1950) evolved von Neumann’s and Morgenstern’s game theory, by introducing an axiomatic approach — so that the chagrin of Frances Coppola toward bitcoin might be explained by an inflation standard being ideal for contractual indexation rather than macroeconomics, showing how the economics has evolved into econometrics, in the determination of representation in majority decision making, and rational forming of expectations between players in a game not subservient to a system.