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Allen Farrington
NUMBER GO DOWN: Deflation, Bitcoin, and Communist Lies | Allen Farrington
- Good vs. bad deflation: The essay distinguishes between natural deflation in functioning markets (prices falling due to abundance and productivity) and deflationary spirals that occur when credit bubbles pop. Fiat economists incorrectly blame deflation itself rather than the credit misallocation that precedes it. - Fiat economics as circular justification: Central banks use deflation fears to justify endless money printing, but this printing is what creates the capital misallocation and fragility in the first place. The conclusion (print more money) remains constant regardless of the economic argument presented. - Capitalism as boogeyman: The term "capitalism" has been so corrupted by association with cronyism and fiat banking that it no longer describes what people think. Central banking itself is communist (point 5 of the Communist Manifesto), making true free markets impossible when money supply is centralized. - Saving and production precede consumption: The "paradox of thrift" wrongly assumes spending enables saving; actually, production and saving enable future consumption. This fundamental confusion drives policy toward discouraging savings. - Bitcoin as Venice second edition: A revised edition publishing in Nashville at Bitcoin Magazine's next conference will include new standalone essays like "Number Go Down." The book is designed so readers arrive at Bitcoin conclusions organically without it being explicitly argued. - ARK and Lightning infrastructure: Layer 2 development (particularly ARK Labs' work) is making peer-to-peer payments seamless by hiding complexity behind the scenes, allowing self-custody while improving on Lightning's channel and liquidity requirements.
The Biggest Lie in Economics | Allen Farrington & Sacha Meyers
- The 2% inflation target is arbitrary and has no scientific basis; it originated from a throwaway comment by a New Zealand banker in a TV interview and became entrenched through Keynesian economic theory rather than rigorous analysis. - Deflation manifests in two forms: deflationary busts caused by credit collapse and fragile debt structures, and deflation from innovation and falling prices for goods; conflating these two types has led economists to reject beneficial price discovery. - The paradox of thrift—the idea that saving harms the economy—misunderstands causality; savings actually fund capital investment and entrepreneurship, and delaying consumption today enables larger future production. - Price signals in an economy with artificial inflation are corrupted, leading rational investors to make malinvestments based on false signals; this distortion causes more harm than the business cycles that would naturally occur. - Innovation intrinsically produces deflation as products become cheaper and more efficient to produce; a sound monetary system should allow these price signals to flow freely rather than mask them with monetary inflation. - Historical economies operated successfully under deflation and gold standards for centuries, particularly during innovative periods of Western civilization; the current inflationary regime is a modern anomaly, not an economic necessity.