Bitcoin and the Regression Theorem of Money | The Voluntaryist Reader

Bitcoin and the Regression Theorem of Money by @VoluntaryistR #mises #austrianeconomics

Now I have already referred to the Regression Theorem of Money and its crucial place in a debate about the question of Bitcoin as money. Before getting onto that latter question, I will explain the Regression Theorem and its purpose. The Regression Theorem, as developed by the economist Ludwig von Mises , solves a particular problem in understanding the emergence of money. Because the demand for money comes from one’s ability to use it in trade for other goods, i.e. from its exchange value, and because this exchange value is in turn based on people’s willingness to accept it in exchange for goods, i.e. on its demand, we are met with an infinite regress if we simply attribute demand to exchange value, and exchange value to demand. Now, we can see in real life that these two things are based on one another in an economy where money operates, but the question is: how could th...

Full article: http://voluntaryistreader.wordpress.com/2012/12/07/bitcoi...