This is an opinion piece by Pierre Corbin, the producer and director of the documentary “The Great Reset And The Rise of Bitcoin”.
In his book, William N. Goetzmann describes that there have been times in history when people were better financially educated than the general public today.1 One of these periods took place during the great times of ancient Greece, particularly in Athens.
Athens in 400 BCE was very special and remains special to our history because it was where democracy was invented. Their democracy, however, was different from our modern democracy. In particular, with regard to the involvement of their citizens in the day-to-day operations of government. Athens had created a complex system of bankers and insurers to simplify grain trading and increase the security of investors’ portfolios. Many ships sank in the Aegan Sea during this time, and these financial instruments enabled them to protect their investment and share the risk of their business with the industry, through insurance.
Of course, there were often disputes around these topics that had to be settled in court. The Athens court system was designed to address this particular type of problem and was also used for all other matters. Here are some rules about how their court system works that Goetzmann shares in his book.1 :
- The jury consisted of 500 citizens per trial, randomly selected from society.
- The maximum duration of the trial was one day — the case was settled at the end of the day.
- The jury did not deliberate together, it voted.
- Both the accused and the plaintiff represented themselves, but sometimes had their speeches written by famous speakers.
Athens, at its peak around the 4th century BC, had 30,000 adult male citizens eligible to vote in the assembly (there were an additional 70,000 citizens who were women, children, and other men who were not were not allowed to vote. There were also 150,000 foreigners and slaves living inside the city walls who were not counted as citizens and did not participate in city decisions), thus 500 people involved in each lawsuits accounted for 1.6% of the population.
Imagine that in today’s world: 5.3 million Americans should serve on every jury. That is 22 million Chinese citizens would be affected. It seems impossible, although we have a technology that didn’t exist in Athens that could simplify things: the Internet. Perhaps this kind of jury could be adapted today? The outcome of the trials would not be the source of such debate, as 1.6% of randomly selected individuals can be considered a large enough sample to represent society as a whole for a given trial. Beyond leading to a fair trial system, it also leads to more transparency and reduces the powers of influence that sometimes exist for important trials.
During his life, the average Athenian has attended several trials, including the most complex ones, and has been confronted with subjects such as finance, risk, long-term investment, capitalization, etc. Today, we still have recordings of these trials. An example is the story of Demosthenes, an Athenian who had his inheritance stolen by his uncles because he was too young when his father died. As an adult, he brought his uncles to justice. Here is an excerpt from his description of the situation:
“My father, men of the jury, left two factories, both doing a big business. One was a sword factory, employing thirty-two or thirty-three slaves, most of them worth five or six minas each and none worth less than three minas. From these my father received a net income of thirty mines a year. The other was a sofa factory, employing twenty slaves, given to my father as security for a debt of forty mines. These brought him a net income of twelve mines. In money he left even a talent lent at the rate of a drachma a month, the interest of which amounted to more than seven minas a year… Now, if you add to this last sum the interest for ten years, counted at only one drachma, you will find that the whole, principal and interest, amounts to eight talents and four thousand drachmas”.1
How many average citizens of our modern world would be able to follow such an argument? He mentions two businesses, loans, interest rates and their cumulative effects. Today, most people don’t understand what compound interest is, and it’s one of the simplest long-term thinking concepts in finance.
Our financial system has many levels of complexity and is presented as a complex subject, including when it comes to personal finance. I believe this has been done over time by people working in the industry for two reasons:
- By tricking individuals into thinking this is a complex subject, they will hire professionals to manage and hold their funds.
- Governments can give the impression of controlling our financial system and force their citizens to rely on their expertise, thereby diminishing their personal commitment.
Today, people are beginning to understand the impact inflation can have on their lives. They don’t necessarily understand where this is coming from, but they do understand that they have to do something about their personal finances or their savings will slowly be crushed by inflation. This inflationary way of thinking has always existed. This is part of the reason why people are investing in real estate and pushing prices so high. Today, it pushes people towards even riskier investments. This is part of the reason the cryptocurrency world has boomed and seems so appealing to many – high reward, but also high risk.
People entering the cryptocurrency space will slowly start to distinguish between bitcoin and altcoins at some point (often due to a shitcoin losing 99% of its value or a hack causing them to lose their funds). We will write a follow-up article on this particular topic: Bitcoin is not crypto.
Due to the way Bitcoin is constructed, people are gaining financial independence. You are the sole owner of your assets and no one can take control of your assets unless you provide access to them. It’s hugely empowering, but it can also be a scary undertaking: it has the potential to expose users to more risk. This means that people must take responsibility for their financial decisions. Every decision is theirs, and to avoid mistakes, people need to educate themselves.
This education starts with understanding bitcoin wallets, but quickly moves on to more complex topics:
- What is the Bitcoin Blockchain?
- How it works?
- What is money?
- What does store of value mean?
- What is Modern Monetary Theory?
- What is quantitative easing?
- Who controls and benefits from our system?
And many others who, one by one, open the mind to the functioning of our financial system. There are many great thinkers and contributors in the space who help understand these points.
People are now forced to take control of their own funds and take responsibility for their personal finances. The veil that has always weighed on the world of finance is slowly lifting and what were considered very complex subjects are becoming everyday subjects for many. This is because the trust we once had in centralized financial institutions is now gone due to decades of customer abuse, bailouts and more.
The Athenian system was unable to keep pace with the growing number of people in cities and countries. But given our current technologies, is a similar system so difficult to imagine today? Perhaps bitcoin can be the asset that leads the way in this direction, thanks to its cryptographic properties, but also thanks to the added benefit of its passive properties, including the fact that users need to educate themselves, which can only benefit them and our society.
- Money Changes Everything – How Finance Made Civilization Possible | William N. Goetzmann
This is a guest post by Pierre Corbin. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.