The influential thinker says he is no longer a sceptic
Tyler Cowen is one of America’s big thinkers. A libertarian with liberal social views, the economist is regularly cited as one of the most influential thinkers on the Right. So it is always significant when he offers his opinion on anything, be it Haitian voodoo flags, Beethoven’s 32 piano sonatas or America’s bloated bureaucratic system. He’s also unafraid to change his mind — as he did with Brexit following the early success of Britain’s vaccine rollout.
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And this week, Cowen has changed his mind on a different topic, namely cryptocurrency. On ‘The Ezra Klein Show’, he said that he was being “slowly converted” to the crypto cause, and no longer believes it to be a bubble. His full answer is below, or you can listen to the podcast above (around the 41:00 mark):
“Well, I had been a sceptic for quite a few years. But I am slowly being converted. And I would say most intelligent people outside of crypto still underrate them, because they don’t get it. It’s clear to me now it’s not a bubble. It is consistently attracting talent. Even with advances in normal payments technologies, the interest — extreme interest — in somehow using blockchain and crypto to make financial transacting and also borrowing and lending better, there’s just so much force behind it.
To me, it just looks very much like something that is going to succeed and be significant. So I think too many people have the Paul Krugman attitude, like it’s all a scam, it’s a bubble. But I think it’s past that stage. It looks like it’s for real.”
“I want to double click on something you said there, which I think is interesting as a heuristic, and has been one of mine on crypto, too, which is using the clustering of talent in an area as evidence of whether or not it is going to succeed. Not just through the idea of — maybe that area is attractive to talent, but through the idea that where talent clusters, they will figure out a way to make it succeed. Can you talk about watching talent as a way of forecasting?”
“Crypto talent comes from all over the world, which I think is phenomenal. Crypto talent is often so positive and so creative. I think Vitalik Buterin in particular is just one of the most important thinkers today.”
“Vitalik Buterin, being a co-founder and the leader of Ethereum.”
“Ethereum, yes. When you’re in on crypto conversations, they have an excitement, a positivity, that you just don’t really get elsewhere. And a focus on building things, doing things — and I’ve just seen that now so consistently. That’s what’s converted me. The “can you fully articulate the actual use case?” Maybe I’d get a B- or a C+. But I’m bullish on it. Moving to using more crypto will involve big disruptions to our financial institutions.
We won’t be ready for it. We’ll do it poorly, just like with many of these other breakthroughs in world history, but I think it’s going to happen and probably should happen.”
“…I suspect that crypto is going have a — if it matures in the way people want it to, once again, a huge number of centralising middlemen-y big companies that end up being the winners. Do you think I’m being pessimistic on that?”
“I don’t know if that’s pessimistic or optimistic. I think there will be both centralised and decentralised crypto. I’m not sure in what ratio. I suspect centralised crypto will be considerably larger, but decentralised crypto, if only as an alternative, could still be incredibly significant, because it will limit and constrain what centralised crypto can do, right, in terms of sort of implicitly taxing your users or customers.”