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@ Infognomics
2025-03-23 18:42:41Imagine a world where governments couldn't fund wars simply by printing money...
Would history have changed? Could World War I have ended in months instead of four bloody years?
August 1914. A small incident in Central Europe triggers a snowball effect no one foresaw. British newspapers call it "the war of the August bank holiday"—a brief summer campaign for the troops.
No one imagined that this "short conflict" would turn into the first global slaughterhouse in human history.
But how did a local war between Austria-Hungary and Serbia spiral into such devastation?
The answer lies in something few suspect: money.
In hindsight, the key difference between World War I and earlier, more limited wars was not geopolitical or strategic—it was monetary.
Before the war, the gold standard imposed strict fiscal discipline on all nations. Money was directly tied to the gold reserves of each country, automatically limiting military expenditures.
Yet, within weeks of the war’s outbreak, every major warring nation did something unprecedented: they suspended the convertibility of their currency into gold.
With this single move, governments gained access not only to their own treasuries but effectively to the entire wealth of their citizens.
As long as a government could print money and people accepted it, it could fund an endless war. Without the gold standard’s constraints, states could keep sending young men to the slaughter.
History might have taken a different course if gold had been in the hands of Europe's citizens, forcing governments to rely on taxation instead of inflation. The war might have ended within months, as one of the alliances would have run out of financial resources.
The absurdity of this war was not lost on those at the front lines. On Christmas Eve of 1914, something remarkable happened: French, British, and German soldiers defied orders, laid down their weapons, and crossed enemy lines.
Men who were supposed to be enemies exchanged gifts and played football. Ordinary people realized what their leaders could not: they had no real quarrel with each other and no true reason to kill.
By the war’s end in 1918, the currencies of all major European powers had collapsed. In the defeated nations, Germany and Austria, money had lost more than half its value.
And for what? The territorial changes resulting from the war barely justified the slaughter of millions. None of the victorious powers gained lands significant enough to warrant such sacrifices.
World War I forever altered our relationship with money. After the war, money ceased to be a matter of the market and became a tool of political control.
Gold would never again serve as the world’s uniform currency, as central banks monopolized its reserves. But decades later, the invention of Bitcoin would lay the foundation for a new kind of money—one beyond national borders and state control.
Could a truly independent currency have prevented a world war? And what can this history teach us about the future of money and global peace?
| From "The Bitcoin Standard", Saifedean Ammus