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5 sats \ 5 replies \ @mallardshead 13 Feb 2023 \ on: The one thing that makes me incredibly bearish w/ Bitcoin bitcoin
That's a function of bad money, not sound money.
I actually disagree with this. I think that some people are just inherently more high time preference. Sound money will help incentivize low time preference behavior, but it definitely doesn't guarantee it. Gambling, rehypothecation, excessive borrowing, fractional reserve banking, etc will decrease but will still very much be present in a Bitcoin standard.
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People get really hung up on gambling for some reason. Of course it is not wise financial management, but the people who do it are just consuming a leisure good. They are not doing anything different than people who enjoy going out to shows, or restaurants, or skiing, etc.
The important point is the one about incentives. Lower time preference activities are generally more socially beneficial and sound money encourages them, while promoting those who do them and demoting those who don't.
Over long periods of time sound money can generate major cultural shifts.
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People get really hung up on gambling for some reason. Of course it is not wise financial management, but the people who do it are just consuming a leisure good. They are not doing anything different than people who enjoy going out to shows, or restaurants, or skiing, etc.
Gambling is different from other leisurely activities for a few reasons. One is that it can be quite addictive. That addiction, just like any other addiction, can ruin lives and families. Bundled up with that is its effects on communities. You can't just build a casino in a town and expect it to not affect its character. Businesses and industries based on vice (sex, drugs, gambling) tend to attract people of low character. So I think the aversion to gambling is warranted.
The important point is the one about incentives. Lower time preference activities are generally more socially beneficial and sound money encourages them, while promoting those who do them and demoting those who don't.
Over long periods of time sound money can generate major cultural shifts.
Totally agree with this. I just think its misguided to think that sound money will cure all of societies ills. Those problems stem from our nature and will always be with us until an act of God changes that.
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You can't just build a casino in a town and expect it to not affect its character. Businesses and industries based on vice (sex, drugs, gambling) tend to attract people of low character.
I was mainly thinking about sports betting, since that's what the post referenced, and that's generally done online. I feel like you could make the same criticism of sporting events and concerts, but those aren't stigmatized the same way as gambling and casinos.
As to the addictiveness, I don't know that it's that much worse than other hobbies. My parents, for instance, keep buying vehicles they don't need, but they would never lose a hundred grand gambling.
This all ties into your point about high and low time preference people. High time preference people will make financial decisions that low time preference people think are wasteful, but the specifics of their spending just have to do with their consumer preferences.
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Ah I missed the part about sports betting. There are degrees on "badness" when it comes to gambling. I think that sports betting may be less bad than a casino (although I could wrong about that). A poker game with your friends where the most you lose is 5 bucks is definitely better than both.
As to the addictiveness, I don't know that it's that much worse than other hobbies. My parents, for instance, keep buying vehicles they don't need, but they would never lose a hundred grand gambling.
It depends on how negatively its affecting the person's life and how many people tend to get addicted to it. I know there's whole sectors of counseling and mental health dedicated to gambling addiction. Also, a gambling addiction can be life wrecking. Your parents are probably not using their money in the most wise manner, but the car purchases not destroying their relationships (I hope!).
High time preference people will make financial decisions that low time preference people think are wasteful, but the specifics of their spending just have to do with their consumer preferences.
This is absolutely correct. What I'm trying to get across is that while you can overdo anything, but gambling has a tendency to be come a problem much easier than other things.
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