The Fiat Standard clearly explains the inner workings of the modern fiat monetary system we live under today. It compares a bitcoin standard or a gold standard to the current fiat standard.
This book highlights how this system is driven by the decisions of rulers rather than being guided by consistent rules. Those that pull the strings behind the currency have access to money at the expense of those that do not have that access.
“The Latin word fiat means “let it be done,” and in English, the term has been adopted to mean a formal decree, authorization, or rule. It is an apt term for the current money standard, as what distinguishes it most is that it substitutes government dictates for the judgment of the market. Value on fiat’s base layer is not based on a freely traded physical commodity but is instead dictated by authority, which can control its issuance, supply, clearance, and settlement, and even confiscate it at any time it sees fit.”~ Saifedean Ammous, The Fiat Standard
While this book can be categorized as a Bitcoin book, it is more accurately described as a critique of the modern financial system. Rather than focusing primarily on Bitcoin, the book uses Bitcoin as a comparative tool to analyze the fiat monetary system. This book also seems to be a follow-up to Saifedean Ammous’s bestselling book “The Bitcoin Standard”, which I would highly recommend reading!
Here is one of my favorite quotes from this book, and this makes so much more sense once you understand the role of a fiat currency:
"Under the gold standard, governments fought until they ran out of gold and could no longer tax the population. Governments can fight under the fiat standard until they have appropriated all the value held by their citizens' money. As former U.S. Representative Ron Paul explained, it is no coincidence that the century of central banking was the century of total war."~ Saifedean Ammous, The Fiat Standard
Saifedean Ammous lays out how fiat currency doesn’t just impact your wallet—it seeps into almost every corner of our modern lives, often with devastating effects. Ammous argues that we need a better form of money to truly plan for the future and build a more stable, thriving society. He identifies several areas where fiat currency has left its mark, explaining how this monetary system, controlled by those in power, enriches the few at the expense of everyone else.
Here are just a few examples of how the fiat system has impacted our world, according to Ammous:
- Family Savings through Capital Destruction: Fiat currency erodes the value of savings over time, discouraging the ability to plan for the long term or pass down wealth to future generations.
- Modern Architecture: The focus shifts from building timeless, durable structures to cheaper, short-term designs driven by distorted financial incentives.
- Farming & Soil: Fiat-driven farming practices prioritize profits over sustainability, leading to depleted soil and unsustainable agricultural methods.
- Modern Food & Diets: The rise of "fiat foods," like hydrogenated vegetable and seed oils, has transformed our diets, prioritizing cheap, unhealthy ingredients over real nutrition.
- Schools & Universities: Education systems now operate like businesses, driven by fiat funding incentives, often prioritizing revenue over true learning.
- The Science Industrial Complex: Fiat funding distorts research priorities, incentivizing grant-chasing over scientific integrity.
- Energy & Fuel: Fiat policies distort energy markets, pushing inefficient solutions and misallocating resources.
Ammous makes the case that when those in power can manipulate the currency to serve their own interests—and those of their well-connected allies—it’s the rest of society that pays the price.
“The more one reads about it, the more one realizes how catastrophic it has been to hand this class of powerful yet unaccountable bureaucrats an endless line of fiat credit and unleash them on the world’s poor. This arrangement allows unelected foreigners with nothing at stake to control and centrally plan entire nations’ economies. These organizations can easily override domestic property rights and institutions under the guise of development. The World Bank can decide on a development project and have the local government work on implementing it regardless of the domestic impact. Indigenous populations are removed from their lands, private businesses are closed to protect monopoly rights, taxes are raised, and property is confiscated to make the projects happen for the sake of development. Tax-free deals are provided to international corporations under the auspices of the IFI’s (international financial institutions), while local producers pay ever-higher taxes and suffer from inflation to accommodate their governments’ fiscal incontinence.”~ Saifedean Ammous, The Fiat Standard
If you made it this far, I'd highly recommend checking out my review and summary of Saifedean Ammous's best selling book, The Bitcoin Standard:
