National currency, world currency, cryptocurrency: A Fichtean approach to the Ethics of Bitcoin

• Published date: 01 June 2019
• DOI: http://doi.org/10.1111/basr.12169
• Author: Tobey Scharding
• Date: 01 June 2019

Bus Soc Rev. 2019;124:219–238.

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219wileyonlinelibrary.com/journal/basr

DOI: 10.1111/basr.12169

ORIGINAL ARTICLE

National currency, world currency, cryptocurrency:

A Fichtean approach to the Ethics of Bitcoin

TobeyScharding

© 2019 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,

MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

Department of Management & Global

Business,Rutgers Business School ‐

Newark and New Brunswick, Piscataway,

New Jersey

Correspondence

Tobey Scharding, Department of

Management & Global Business,

Rutgers Business School ‐ Newark and

New Brunswick, 100 Rockafeller Road,

Piscataway, NJ 08854.

Email: tscharding@business.rutgers.edu

Abstract

I investigate ethical questions concerning a novel crypto-

currency, Bitcoin, using a Fichtean account of the ethics of

currency. Fichte holds that currencies should fulfill an ethi-

cal purpose: providing access, in perpetuity, to the material

welfare that underwrites citizens' basic rights. In his nine-

teenth‐century context, Fichte argues that currencies fulfill

this purpose better when nations control them (i.e., when they

are “national currencies”) than when foreigners freely trade

them (as “world currencies”). After exploring conditions in

which national currencies fail to secure material stability over

time, e.g., in corrupt regimes, I develop a Fichtean model

for ethically evaluating currencies and evaluate the extent to

which Bitcoin meets its standards for ethical currency. I argue

that Bitcoin undermines the (monetary) power of nations and,

as such, threatens their ability to provide access to necessary

material goods. While offering citizens a means of defending

themselves against corrupt regimes, Bitcoin forsakes the gen-

eral welfare and is, as such, unethical by Fichtean lights.

KEYWORDS

Bitcoin, ethics of currency, Fichtean ethics

Johann G. Fichte argues that nations should abolish “world” currency (e.g., gold and silver) that cit-

izens can trade with foreigners and introduce “national” currency (e.g., banknotes issued by national

banks) to be traded only among citizens within the nation's borders. The goal of these monetary

changes is to ensure that that the currency's value remains stable over time, such that citizens' basic

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SCHARDING

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needs can be satisfied and their level of welfare will never decline: “All individuals are guaranteed that

their present state of existence will continue into the future, and, through this, the whole is guaran-

teed its own quiet, steady continuity” (Fichte, 2012, p. 107). Relying on world currency as the means

of exchange, by contrast, would leave citizens' welfare to chance as the currency's value fluctuates

in response to international trade. Nations that rely on world currency could thus become unable to

secure citizens' material stability if and when other nations outcompete them for needed resources.

Although the measures that Fichte proposed in his circa‐1800 context seem extreme—especially in

a twenty‐first‐century context—they offer insights into ethical uses of currency that remain valuable.

In particular, I interpret Fichte's account of ethical issues related to national and world currencies in

order to produce a model by which to ethically evaluate novel “crypto” currencies like Bitcoin. My

interpretation is selective1

and not intended to set forth Fichte's own view of Bitcoin. Rather, I seek to

apply the resources of one of the few accounts of the ethics of currency in the history of philosophy2

to

the difficult, important, and distinctively twenty‐first‐century questions about what uses of Bitcoin are

ethically permitted. I argue that the model condemns Bitcoin (nearly) categorically for its inability to

secure the basic welfare of populations of people. Bitcoin retains interest from a Fichtean perspective

in certain contexts, however, such as when it can help people to protect themselves against corrupt

regimes.

My strategy is as follows. I begin by describing the basics of Bitcoin's digital technology and the

ethical questions it raises. Then, I set forth Fichte's accounts of national and world currencies, explain-

ing why he holds that nations should require citizens to use only the former. His argument depends

on his understanding of nations' ethical purpose: to guarantee citizens' basic rights (and access to the

material welfare that underwrites them) in perpetuity. The next part of my article explains the reason-

ing behind this account and highlights conditions in which national currency could fail to secure mate-

rial stability over time, e.g., in corrupt regimes. Based on this critique, I develop Fichtean principles

for ethically evaluating currencies. Finally, I evaluate the extent to which Bitcoin meets the principles'

standards for ethical currency. Because Bitcoin undermines the (monetary) power of nations, I argue

that it fails to meet these standards. While offering citizens a means to defend themselves against cor-

rupt regimes, Bitcoin forsakes the general welfare and is, as such, unethical by Fichtean lights.

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BITCOIN AND THE ETHICS OF CURRENCY

In this section, I describe ethical issues that attach to a recently introduced currency, Bitcoin. Bitcoin

was the first of several types of “crypto” currencies to be developed. Cryptocurrencies are those that

rely on digital technology to secure their value. My analysis is specific to Bitcoin and might not apply

to other cryptocurrencies.3

I begin by describing what Bitcoin is. Then, I explain how its novelty gives

rise to ethical questions.

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What is Bitcoin

For my purposes in this article, I define “currency” as a tool for measuring and exchanging value.4

Useful, beautiful, and/or otherwise desirable goods have intrinsic value. Currencies allow numeric

values (“one dollar,” “0.001 ounces of gold,” “0.0001 Bitcoins”) to be assigned to such goods, where

the number measures the exchange value against other goods.

Some currencies have their own intrinsic value; others do not. The former are called “commod-

ity” currencies and are exemplified by gold and silver. In addition to their role as money, commodity

currencies can be used for other purposes. For example, gold and silver are commonly manufactured