The transparent motivations of libertarians, and why private currencies are a bad idea

Ha!   I reckon it's perfectly clear that the enthusiastic reception to the Facebook currency (and future alternative private currencies) given by the RMIT libertarian set of Potts, Davidson and Berg in the AFR this morning (which can be read via the ever ridiculous Catallaxy) is explained by their thinking that it will give them the form of government they want - small, tax starved and with limited spending power.

As such, they spend next to no time talking about the obvious problems of private currency - instead they see both dollar signs in front of their eyes (Australia should enthusiastically try to become a base for future private currencies, they argue) and the thrill that governments will be crushed if they try to step in the way of the inevitable, glorious, future of having less control over an economy.   Take this line, for example:

Governments that pursue irresponsible fiscal policies will see even greater capital flight.

As usual, then, libertarians are best ignored as ideologically driven money lovers always prepared to downplay the common good if it steps in the way of anyone - especially the already rich - making more money.  Their worst sin, of course, for which they should never be forgiven:  address global warming?  -  no, that might mean a new form of tax, so they would rather run a disinformation campaign to cripple united Western political action for 30 years while their mining friends add to their billions.  

As for why private currencies are a problem that should not be welcomed, the New York Times has a good article today:   

Launching a Global Currency Is a Bold, Bad Move for Facebook 

It lists four problems with the idea:  the first, that there is doubt it will be set up with all of the safeguards for misuse of a currency that governments and banks spend much money and time on establishing:

Banks pay attention to details, complying with regulations to prevent money-laundering, terrorist financing, tax avoidance and counterfeiting. Recreating such a complex system is not a project that an institution with the level of privacy and technical problems like Facebook should be leading. (Or worse, failing to recreate such safeguards could facilitate money-laundering, terrorist financing, tax avoidance and counterfeiting.)

Second, the US (at least?) stops banks from getting into other commerce areas in order to prevent exploiting commercial information against customer interests.  Can any Facebook associated enterprise be trusted not to do that?

The third:  if as successful as Zuckerberg hopes, it may be yet another financial entity that is "too big to fail" on a global scale.

And last, I'll just quote this one:

Enabling an open flow of money across all borders is a political choice best made by governments. And openness isn’t always good. For instance, most nations, especially the United States, use economic sanctions to bar individuals, countries or companies from using our financial system in ways that harm our interests. Sanctions enforcement flows through the banking system — if you can’t bank in dollars, you can’t use dollars. With the success of a private parallel currency, government sanctions could lose their bite. Should Facebook and a supermajority of venture capitalists and tech executives really be deciding whether North Korean sanctions can succeed? Of course not.

A permissionless currency system based on a consensus of large private actors across open protocols sounds nice, but it’s not democracy. Today, American bank regulators and central bankers are hired and fired by publicly elected leaders. Libra payments regulators would be hired and fired by a self-selected council of corporations. There are ways to characterize such a system, but democratic is not one of them.