The pursuit of sound money illustrates the effectiveness of democracy and politics, versus the natural order or anarchy. In democracies problems are discussed, factions formed, alliances made. But ultimately, the health of the state and its needs are paramount.

In a stateless world the needs of society are predominate. Entrepreneurs supply the needs of civilization. No government gets in the way.

F.A. Hayek famously argued in The Road to Serfdom, that in politics, the worst get on top, and outlined three reasons this is so. First, Hayek makes the point that people of higher intelligence have different tastes and views. So, as Hayek writes, “we have to descend to the regions of lower moral and intellectual standards where the more primitive instincts prevail,” to have uniformity of opinion.

Second, those on top must “gain the support of the docile and gullible,” who are ready to accept whatever values and ideology is drummed into them. Totalitarians depend upon those who are guided by their passions and emotions rather than by critical thinking.

Finally, leaders don’t promote a positive agenda, but a negative one of hating an enemy and envy of the wealthy. To appeal to the masses, leaders preach an “us” against “them” program.

“Advancement within a totalitarian group or party depends largely on a willingness to do immoral things,” Hayek explains. “The principle that the end justifies the means, which in individualist ethics is regarded as the denial of all morals, in collectivist ethics becomes necessarily the supreme rule.”

In stark contrast, in the natural order, as Hans-Hermann Hoppe explains in Democracy: The God that Failed, it is “private property, production, and voluntary exchange that are the ultimate sources of human civilization.” This natural order, Hoppe notes, must be maintained by a natural elite which would come by these positions of “natural authority,” not by election as in the case of democracy, or birth as in the case of monarchy, but by their “superior achievements, of wealth, wisdom, bravery or a combination thereof.” This is just the opposite of what Hayek describes as a characteristic of politics in democracy.

Hoppe writes in “Natural Elites, Intellectuals, and the State“ that a few individuals in every society rise to elite status by their talent. Hoppe’s natural elite fit with the description of Abraham Maslow’s self-actualizers from the famous psychologist’s “hierarchy of needs” theory. Only two percent of the population is self-actualizing according to Maslow. These people are creative and inventive. They have strong ethics, a self-deprecating sense of humor, humility and respect for others, resistance to enculturation, and enjoyment of autonomy and solitude instead of shallow relationships with many people. The self-actualizing elite believe the ends don’t necessarily justify the means and that the means can be ends in themselves.

One readily sees that Maslow’s self-actualizers have nothing in common with politicians in a democracy, who instead seek status, fame, glory, recognition, attention, reputation, appreciation, dignity, even dominance.

The natural elites approach problems with an eye to solving problems as quickly as possible, just as all entrepreneurs satisfy consumer demands. On the other hand, politicians, even the best ones, strut about to attract attention to their cause with the hope of eventually selling their souls for enough votes. Committees are formed and meet under the bright lights with C-SPAN cameras recording every inane exchange. Bills are drafted and redrafted only to be left dying in committee if the legislation is detrimental to the state’s needs.

For example, Ron Paul spent decades grilling Federal Reserve Chairman Alan Greenspan and Ben Bernanke about central bank policies. These exchanges made great YouTube theatre for Congressman Paul’s followers and helped him raise millions in campaign contributions. He was a one-man army for a sound dollar on Capitol Hill. His Audit the Fed bill actually passed the House a year ago. However, the Senate’s version of the bill is stuck in committee on orders from Senate Majority leader Harry Reid.

But, auditing the Fed would not make the dollar sounder. It would not provide citizens a choice in what currency to transact business or store wealth in. It’s merely a political charade that would provide the appearance that something is being done when in fact it’s simply the government checking up on the government.

As all this political maneuvering goes on, the Fed’s money supply inflation continues.

Meanwhile, as the financial world melted down in 2008, a person or group of people developed the cyber-currency Bitcoin under the pseudonym Satoshi Nakamoto. This innovation epitomizes the natural elite in action. He, she, or they designed and created the original Bitcoin software, currently known as Bitcoin-Qt. This brilliant work, done anonymously, is, after only four years, providing a sound alternative to debauched government currencies.

No political grandstanding. No interviews from Capitol Hill. No ghost-written rants in the Wall Street Journal. No horse trading or sausage making. This is the simple creation of a product to satisfy human desires. A product people trade with voluntarily, not through the force of legal tender laws.

No one has admitted to being Satoshi Nakamoto. No one stands to take a bow. Remembering the characteristics of the Maslow-Hoppe self actualized elite, there is no question Satoshi enjoys autonomy and solitude. His or her self-deprecating sense of humor and humility are displayed in this post of November 14, 2008 “it seems to me that simple altruism can suffice to keep the > network running properly. It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.” The care with which bitcoin was created reflects Nakamoto’s respect for others. Bitcoin’s answer to the century old flawed fiat money problem shows a resistance to enculturation.

Politicians fiddle while the dollar burns. But, a creation of the human mind and spirit (Bitcoin) triumphs.

Tags: Bitcoin, Hayek, Hoppe, Maslo, Satoshi