Home Forums Principles of Economics Spontaneous order: Esperanto Vs Bitcoin

  • Spontaneous order: Esperanto Vs Bitcoin

    Posted by Claudio on March 2, 2021 at 09:39

    I’m at lesson 2 of PoE12, Spontaneous order.

    I find the lesson super interesting, but then I stopped thinking in a sense how Bitcoin is different than Esperanto? I mean, Bitcoin is the perfect money and it is born because someone created it as the perfect form of money…not really spontaneously… What am I missing?

    Christian replied 1 year, 5 months ago 3 Members · 5 Replies
  • 5 Replies
  • Max

    Member
    March 3, 2021 at 21:28

    Natural languages are the way they are because of two factors: (i) the inner structure of the human brain, which grants a considerable degree similarity across languages; and (ii) spontaneous order, which enable them to better fit the needs of the speakers, giving rise to idiosyncrasies. Artificial languages are “centrally planned” by a designer who thinks he understands how a language should be in order to meet its purposes (but he doesn’t). Needless to say, it’s the designer himself who establishes such purposes, not leaving this task up to the speakers who will ultimately use the language. By the way, Esperanto is *NOT* nearly as well designed as many people think it is. Its grammar contains many “gaps”, many parts that are underspecified. So, Esperanto speakers, even if unconsciously, end up filling those gaps with chunks of grammar coming from languages they already speak. So, what’s the result? Many different dialects of Esperanto! Yes, that’s it. And this goes against the very goal of Esperanto’s designer of having one uniform language for the whole planet. It must be said that Esperanto was not even meant to be “more logical” than any language, neither was it built totally from scratch. There are literally hundreds of artificial languages out there, all of which are failures, and some of them aimed at being more logical and were built from scratch. Esperanto was meant to be more regular (which is not the same as more logical) and was built from adapting pieces of various existing languages. The goal was to have a politically neutral language; not as a way of replacing all languages, but as a way of having one single language which would be everyone’s second language. According to the central planner, everyone would be equally proficient in this second language. What happens in reality? Well, two things. First, most people don’t give a damn about this and go learn English as a second language because, let’s say, they value “understanding Beatles lyrics” higher than “speaking the language of world peace” (maybe they go lean Hebrew instead, because they want to know every part of the Talmud by heart). Second, many Esperanto aficionados end up having kids and speaking only Esperanto with them. In the end, those kids turn into “native speakers of Esperanto”. The “unintended consequence” of this (to stick to a hayekian terminology) is that those kids, from early on, end up “filling the gaps” of Esperanto grammar by themselves, giving rise to dialects. And those dialects are super solidly built and immutable for those speakers (for whom French/Japanese,etc will be a second language), and yet not exactly as planned by the designer. For more information, I recommend the book “In the Land of Invented Languages” by Arika Okrent (2009).

    • Claudio

      Member
      March 5, 2021 at 07:49

      Thanks so much, Max, for the long answer, very clear.

      So the analogy I’m doing with Bitcoin and Spontaneous order is more like:

      Bitcoin has been created with the goal to be the perfect money (like Esperanto for Language)

      Bitcoin is succeeding because spontaneously people are deciding to store their wealth on it, Vs Esperanto is failing because people are not using it.

      Thanks

      • Max

        Member
        March 7, 2021 at 01:17

        Hi there, Claudio. I liked it the way you subsumed it. Your question made me think deeper about the whole thing. To me, first, Esperanto was a great example of the exact opposite of spontaneous order. And I think I was right, and that’s how I read Saif’s general point, since he is talking about the economy as a whole. But when we think about Bitcoin, there’s a twist. BTC was invented by a person (or small group of people) to play the role of “perfect money”. at first, it looks very much like central planning, doesn’t it? The key point, however, is that, after BTC was invented, the creator no longer had control of it. BTC became decentralized right after its birth (which, by the way, was the Nakamoto’s intent to begin with). So, BTC is a great example of spontaneous order because its adoption is a consequence of many decisions of the agents in the market. With Esperanto, however, people have decided not to use it, for many reasons. But let me add this. I think that the failure of Esperanto is not due to people’s choices only. On top of that, there’s the fact that the very nature of what a language is and what it is used for is something that makes Esperanto a “bad choice”, a choice that is very hard (even impossible) to be made all the way exactly as planned. Esperanto’s design is such that it is doomed to fail. When it comes to BTC, its inherent properties make it “the hardest money possible”, which, from the outset, makes it very likely to succeed. Of course, “great design” helps a lot but it’s not enough. Human action must go into that direction. It looks like we are really going (gradually then suddenly) towards mass adoption. But history could have been different in the past 12 years, and we don’t really know what’s coming. In the end, it’s all about Human Action. And that includes Nakamoto’s action of inventing BTC and making it available to everyone, so that we could chose whether to play this game or not. Cheers. M.

        • Claudio

          Member
          March 7, 2021 at 08:34

          Thanks again Max, your replies are always a good stimulus for my brain :), Cla

  • Christian

    Member
    June 28, 2021 at 04:38

    It’s simple: the unit of account for bitcoin (lower case for the mining reward; upper-case ‘B’ for the network) is usually $. — https://hackernoon.com/explaining-bitcoin-and-money-to-third-graders-economists-and-bureaucrats-96y349h