Ep. 17 Alex Tabarrok on Tolerant Rothbardians, the Market for Kidneys, and Potential Security Flaws in Bitcoin
Alex Tabarrok is a professor of economics at George Mason University and co-author (with Tyler Cowen) of the very popular blog, Marginal Revolution. Bob and Alex cover a wide range of topics, including his early experience with Rothbardians, the brief window when economics blogs were the center of discussion, problems with the FDA, how a kidney market might work, and why Bitcoin is not as secure as some of its fans believe.
Mentioned in the Episode and Other Links of Interest:
- Alex Tabarrok’s homepage and blog, Marginal Revolution.
- The online economics courses created by Tabarrok and Cowen, MRUniversity.
- Cowen & Tabarrok’s economics textbooks.
- Tabarrok’s edited collection, The Voluntary City.
- The Great Debt Debate–an intuitive intro and the epic fable with all of the relevant links.
- Scott Sumner’s book, The Midas Paradox, as well as Murphy’s (critical) review of it.
- Tabarrok blog post on problems with the FDA.
- Murphy’s book (co-authored with Doug McGuff) highlighting flaws with the FDA, The Primal Prescription.
- Tabarrok on the U.S. organ shortage.
- Murphy’s introductory booklet (co-authored with Silas Barta) on Bitcoin.
- Tabarrok blog post on why Bitcoin is less secure than most people think.
The sound engineer for this episode was Chris Williams. Learn more about his work at ChrisWilliamsAudio.com.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
[…] My interview with Alex Tabarrok is up. A fun discussion between two economists geeking out. […]
Cryptocurrencies that are vulnerable to 51% percent attacks do not have that necessary feature of decentralization to uphold the system, and is therefore a shitcoin (99% of the blockchains out there).
In 2017 we saw this scenario play out in the Bitcoin blocksize debate, when over 80% of bitcoin miners signaled their support to increase the size of each block, which ultamtely was resisted. This episode highlights the unique feature of bitcoin comapred to other coins. Miners, developers, business, and other stakeholders are ultimately beholden to the preferences of the individual users who run full nodes, and will follow the emergent economic consensus (to stay profitable).
If anyone is interested in this subject i recommend researching the Bitcoin blocksize debate, UASF, Segwit2x, and the importance of running a full node. I also recommend having a crypto-austrian like Pierre Rochard, Michael Goldstein, or Stephan Livera to come on the Bob Murphy show and talk Bitcoin & Freedom!
I have to admit I don’t understand the appeal of cryptocurrencies. I can’t pay my taxes using them, so what’s the point?
I’ll be happy to check out any link that provides an answer to that basic question before commenting further.
Cheers
Well cryptocurrencies have the same effect as a sound money supply. Specifically whatever crypto coins you do have will increase in value over time (in the long run) as the goods and services priced in the cryptocurrency outpaces the ‘mining’ operations that create new money. So you wont always have to be fighting inflation and instead you’ll be benefiting from deflation. I guess in theory, if you live your life buying stuff in bit coin (for example) whenever you can, you would be a wealthier individual in the long run (assuming you don’t get screwed over by short term volatility in dollar-bitcoin conversion).
Theres also the decentralized aspect of some of them. The US government got rid of the gold standard. Current and past governments debase their monies by putting cheaper metals in them. With the fiat currencies that is obviously easier to do. Basically, with a central authority over the money supply you never know when you are going to get screwed over. This stuff cant happen – at least not easily (blocksize debate btw) – under the decentralized cryptocurrencies.
US law also presents an interesting scenario. Lets say you accept your wages in gold and silver coins. Because the face value on the coins is so small, on paper you are being paid barely anything. This means less taxes. Now when you sell/convert your coins to dollar bills you will be hit with taxes, but I think its still less overall than had you accepted dollar bills. Enter cryptocurrencies. What if you can find apartment rent payable in Bitcoin? Or a nearby grocery supply store that accepts Bitcoin? How about a movie theater that accepts Bitcoin?
When you convert your gold/silver wages directly to bit coin well then you are back at the little to no taxes scenario.
True enough, but you can send them to your friend traveling (or living) abroad, in minutes, without paying Western Union fees. You can accept them as payment or donations online, without having to give your bank account information to PayPal. And you can use them to pay for goods and services at a number of online retailers. Whether you want to mine them, or hold them is a separate question, but if you live somewhere with cheap electricity, it is reasonably profitable to mine them.
Great show.
I like that he talked about more moving parts to the economy than just the fed
[…] Bob Murphy has a new podcast interview with Alex Tabarrok. (As Tyler would say, self-recommending.) One of my favorite segments discussed the shortage of kidneys for transplant, a topic I blog on quite often. Alex pointed out that the kidney shortage could be eliminated if there were suitably strong incentives for people to donate kidneys. And since the US government already pays for kidney dialysis, which is more expensive than kidney transplant, this sort of program would actually save money. Alex estimates that as many as 30,000 Americans who die prematurely could have their lives extended for a considerable period of time if we could eliminate the kidney shortage. Al Roth has written extensively of the subject of “repugnant markets” and the sale of kidneys is certainly an example of a potential market that most people find to be repugnant, at least at first glance. Alex discusses ways of doing this in a less repugnant way, such as paying the lost wages for people who volunteer to donate a kidney, or paying funeral expenses for kidney’s donated from people who die. One particularly interesting example was to have a kidney market where the buyer and seller never interact, even indirectly. This would avoid a situation that many people mistakenly fear, the spectre of rich people buying kidneys from the desperately poor. One could have the government offer cash rewards to anyone who donates a kidney, and then have the kidneys allocated via a non-profit institution in exactly the same way as they are today, via a waiting list based on medical need. While it’s true that the wealthy might still be able to game the system in some way, they already do so to some extent, even under the current need-based regime. More importantly, if the cash award were made large enough then there would be no kidney shortage and even the poorest Americans would get the kidneys they need. Iran’s system works something like this, and they have no kidney shortage. It occurred to me that another tweak might also have some PR value (although personally I don’t believe it’s needed.) That would be to have background checks on all potential donors, and make sure they have a stable life with a job and no drug addiction. (Or at least their spouse has a job.) This would remove the scenario of homeless people selling a kidney to obtain the money for drugs or alcohol. Again, I offer this more as a PR suggestion, but with 30,000 needless deaths each year, we need to work hard to think of creative solutions. The kidney discussion starts after the 1:04:00 mark, and is preceded by a fascinating discussion of the FDA approval process. Alex points out that we already have a vast drug sector that is free of FDA regulation, the so-called off-label drugs that were originally used to treat one illness and are later used for another illness for which they have never been approved by the FDA. The existence of […]
[…] Bob Murphy has a new podcast interview with Alex Tabarrok. (As Tyler would say, self-recommending.) One of my favorite segments discussed the shortage of kidneys for transplant, a topic I blog on quite often. […]
[…] Bob Murphy has a new podcast interview with Alex Tabarrok. (As Tyler would say, self-recommending.) One of my favorite segments discussed the shortage of kidneys for transplant, a topic I blog on quite often. […]
Do not listen to the above poster. He is part of a corporate-sponsored propaganda machine which is paid to spread misinformation about Bitcoin.
Full nodes provide no security to the network, only security for the user of the node. Only miners prevent censorship of transactions and double spending.
Posters like the above are part of the continued misinformation and censorship campaigns like this: https://medium.com/@johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43