economics

Bitcoin and the Generational Choice

Every generation is faced with a choice, a decision, a moment of agency to determine their future. The “Greatest Generation” had the choice to go to university or not. The “Boomer Generation” had the choice to buy a house or not. Now the millennial and Gen Z generations have the choice to buy Bitcoin or not.

Generational choices are difficult. They break us from the mold we are accustomed to and bring heightened risk and uncertainty to the naturally risk-averse realities of human nature. Why do something new when we already have something that works well? The problem with this thinking, though there is wisdom in such pragmatism, is that it doesn’t take into account the flow and passage of time and history.

In the aftermath of the Great Depression and the Second World War, the Greatest Generation and the Silent Generation lived through the fall of an old world and the birth a new world. The world of agricultural and subsistence farming, the nuclear family, and hardy work (work without the need of an extensive education) was on the way out. The new, urban, post-industrial, high-skills world was emerging.

Part of the problem of the nostalgia for the 1950s and 1960s is the misrepresentation that you didn’t need a quality education to have a high paying job. This romanticism over-indulges in the industrial fallacy that anyone could have gotten a good paying factory job. It is true that industrial jobs were plentiful during the 1940s-1960s. However, the data we have today shows that those who put their future in the industrial economy rather than the emerging post-industrial economy which demanded high-skills and a college education made the wrong choice. Those who forsook college for an industrial or other technical job lost out in the long-run. Those who made the decision to go to university, long a bastion of the elite 10%, ended up in the more prosperous upper middle-class and passed on a greater legacy to their children.

Next are the Baby Boomers and Generation X. The children of the Greatest and Silent Generations can be categorized into the two groups we just overviewed. Those who were the children of undereducated industrial workers and families and those who were the children of first generation university graduates. The 1960s-1980s were transformative times in the United States (and the world at large). Decolonization set in as the old European empires were finally erased from the map. The Civil Rights movement challenged de jure and de facto segregation in the United States. The global arms race and ideological struggle between liberal capitalist democracy and Stalinist communism was reaching its height with the Cuban Missile Crisis, the Vietnam War, and the Soviet invasion of Afghanistan.

The children of those who had attended university in the late 1940s and 1950s were at a distinct advantage over the children of those who did not. Second generation university graduates among the Baby Boom and Gen X had a head start in the next big choice in the emergent life of the post-1950s: buying a house. As industrial jobs vanished, the children of working class parents had to either stay the course in a dwindling market and changing urban landscape or attend university for the first time. While attending university seemed like a good decision, the lack of the same educational benefits that accompanied the Greatest and Silent generations (like the GI Bill) made college more unaffordable and burdensome. Moreover, the prime years of their lives were squandered with debt for degrees that were at a disadvantage of legacy university graduates. These children couldn’t make the important decision that Baby Boomers and Gen Xers who were second generation university grads could: buy a house.

Baby Boomers and Gen Xers who were able to buy a house in the 1970s and 1980s set themselves up for their future lives and their children lives. Almost all outright own their properties rather than being saddled with mortgages and high interest payments (like those first generation Baby Boomers and Gen Xers escaping the collapse of the post-industrial economy). While many did buy a house, they got what was left over: often in poorer and shabbier neighborhoods that were in the decline; they didn’t end up in the new suburbs as their second generation university graduate counterparts.

We see, here, the false wisdom passed onto us by our parents: go to school, get a job, buy a house. That is old order thinking. That is the thinking of the bygone world that may have helped their parents and themselves (our grandparents and parents), but every generation’s important choice changes. The Baby Boomers and Gen Xers’ important decision wasn’t college (though they think that), it was being able to buy a house (preferably in the suburbs with low mortgage and interest rates whereby they are now comfortable owners). The importance choice for college was with their parents as we can see. Those Baby Boomers and Gen Xers’ whose parents went to university set their children up for the success in choosing to buy a house (in the suburbs) in comparison to those Baby Boomers and Gen Xers who didn’t go to university and therefore set their children up for a disadvantage against their peers.

Now the millennial generation and Gen Z are tasked with a choice. We are the children of the people who tell us old order wisdom: go to university and buy a house. How is that working out for millennials and Gen Zers? We see a college debt crisis that has crippled two generations for going to college. High interest rates, mortgages, and rising housing costs also make buying a house, on top of all that college debt, stressful and probably unwise (though many still do it because they think that is what they must do). The old choices that helped our grandparents and parents are not the choices we need to be making.

This brings us to Bitcoin.

During the same lifespan of the Silent Generation through Gen Z we have witnessed a significant transformation in economic realities. From work and savings to consuming and debt, the world of personal finances changed in less than 100 years. We went from a gold-backed system of economics to a debt-finance fiat system with endless printing and negative savings interests (real value). At the same time, we saw the replacement of gold and silver coins with paper money writ large, the suspension of the conversion of paper money for gold and silver, the replacement of paper money with credit (to further the debt-finance system), and now we are witnessing the death throes of that system with the digital economy as it emerges and will replace the credit economy (at least in importance).

Millennials and Gen Z are tasked with an important choice for themselves and their families and prospective families. What is it? It is not going to university and buying a house which were the choices of the previous generations. It will be buying Bitcoin and entering the digital economy with a substantial first mover advantage than everyone who fails to do so or does so late. Millennials and Gen Z can saddle themselves with university and housing debt because they think the choices of the past generations still applies to them, or they can enter the digital economic and property future offered by Bitcoin. Just as with our grandparents attending university was their transformative choice, and just as with our parents buying homes in the suburbs was their transformative choice, our transformative choice will be whether we position ourselves for the digital reality that is already here, we just don’t necessarily realize it yet.

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Hesiod, Paul Krause in real life, is the editor of VoegelinView and a writer on art, culture, literature, politics, and religion for numerous journals, magazines, and newspapers. He is the author of The Odyssey of Love and the Politics of Plato, and a contributor to the College Lecture Today and the forthcoming book Diseases, Disasters, and Political Theory. He holds master’s degrees in philosophy and theology (biblical & religious studies) from the University of Buckingham and Yale, and a bachelor’s degree in economics, history, and philosophy from Baldwin Wallace University.

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