Robert Shiller, Nobel-prize winning economist and professor at Yale University, believes that cryptocurrencies are nothing but the latest iteration of century-old attempts to reinvent money.
In his blog, he recalls Josiah Warner’s “Cincinnati Time Store” that sold merchandise in units of hours of work, relying on “labor notes” - a project that lasted a mere three years. Two years later, Robert Owen tried to create the National Equitable Labour Exchange, based on labor notes, or "time money", as a currency. The experiment also failed.
A century later, during the Great Depression, economist John Pease Norton proposed the concept of an “electric dollar” backed not by gold, but by electricity. Norton’s idea quickly dissolved into comedic fodder - syndicated columnist Harry I. Phillips wrote that “it would be good fun getting an income tax blank and sending the government 300 volts.”
“Practically no one, outside of computer science departments, can explain how cryptocurrencies work,” Shiller wrote. “That mystery creates an aura of exclusivity, gives the new money glamour, and fills devotees with revolutionary zeal. None of this is new, and, as with past monetary innovations, a compelling story may not be enough.”
Shiller is the author of Irrational Exuberance, a seminal book on speculation and its devolution into mania. He has said that bitcoin is “the best example” of a bubble right now.
By Ekaterina Ulyanova