Bitcoin And The Cantillon Effect 2.0 – Bitcoin Magazine

This essay strives to explain the Cantillon Effect and how the natural unfairness of all previous monies have always created a world in which the privileged few could take advantage of the unprivileged many. We explore how bitcoin, as the world’s most fair money, alleviates the prevalence of the Cantillon Effect and creates a fairer, more equitable and prosperous world for all. 

What Is The Cantillon Effect?

“The Cantillon Effect refers to the change in relative prices resulting from a change in money supply. The change in relative prices occurs because the change in money supply has a specific injection point and therefore a specific flow path through the economy. The first recipient of the new supply of money is in the convenient position of being able to spend extra dollars before prices have increased. But whoever is last in line receives his share of new dollars after prices have increased.”

Nicolás Cachanosky, American Institute For Economic Research (AIER) 

We saw the Cantillon Effect in 2008 and 2020 when banks and other companies were given bailouts to avoid bankruptcy. These are practical case studies that demonstrate the effectiveness of having direct connections to Wall Street and the Federal Reserve. Only those closest to the individuals controlling the money supply were able to greatly benefit from each recession, while many in the middle and lower classes did not.

Today, this can be easily observed in the recent stimulus package being debated in the United States. While senators squabbled for months over the amount of money citizens would receive, there is nothing but bipartisan, silent consensus on the billions of dollars in fresh money going to support massive organizations and interests outside of the direct stated purposes of the bill.

The Cantillon Effect runs the world.

Money Has Never Been Fair

Non-neutrality of money means that money is not created and distributed among a population evenly…

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