Learn more about BPI Senior Fellow Josh Hendrickson in the first of our Meet the Fellows series.
We've been supporting academics and researchers who study Bitcoin since BPI's inception in January of 2022. To date, BPI has awarded fellowships to 15 individuals. In the first installment of this blog post series, Meet the Fellows, we sat down with BPI Senior Fellow Josh Hendrickson to learn more about his work and how he began researching Bitcoin.
Dr. Hendrickson is an associate professor of economics and chair of the Economics Department at the University of Mississippi. He is a senior fellow at the American Institute for Economic Research’s Sound Money Project, a senior affiliate scholar at the Mercatus Center at George Mason University, and serves on the board of the Mississippi Council on Economic Education. Hendrickson’s research focuses on the intersection of monetary theory and political economy. He has written extensively on the political economy of bitcoin. He has published articles in scholarly journals such as the Journal of Money, Credit and Banking, the Journal of Economic Dynamics and Control, the Journal of Economic Behavior and Organization, Macroeconomic Dynamics, the Journal of Macroeconomics, Economic Inquiry, Economics and Politics, and Contemporary Economic Policy.
I first heard about Bitcoin on a podcast called EconTalk back in 2011. I was fascinated by the idea of Bitcoin because I recognized in its design characteristics of alternative monetary systems that I was interested in. Within a couple of years, I was writing academic papers about it.
Within economics, I am primarily interested in monetary theory, history, and policy. I'm also interested in the role that money and monetary institutions have played in public finance. Outside of economics, I'm increasingly drawn to reading (and re-reading) the great thinkers and pondering those questions that humans have asked from time immemorial.
When I first heard of Bitcoin, I thought that it was an amazing idea. However, I assumed the most likely outcomes for Bitcoin would either be that (1) it was something that only money nerds like me, cypherpunks, and maybe some libertarians would care about, or (2) that governments would attack it in any way that they could to prevent it from gaining traction. In fact, the impetus for my early academic work was to study under what conditions states could successfully do so.With regards to cryptocurrency more broadly, I erred in thinking that this stuff was mostly harmless (and potentially interesting) tinkering with some scams and scammers mixed in. Over the years, I came to think of this stuff as mostly scams and scammers with some harmless tinkering mixed in.
Something I find quite amusing is that academics who dislike Bitcoin will often send me stories from the mainstream media about significant reductions in Bitcoin's price. I heard about Bitcoin when the price of a bitcoin was somewhere in the vicinity of $1 and virtually no one that I talked to knew anything about it. Now, CNBC shows the bitcoin price on the ticker. Thus, I'm not sure what lesson I'm supposed to draw from these articles about the purported or impending death of bitcoin due to its price being several orders of magnitude higher than when I first heard about it. In economics, the equilibrium price of any good or asset is equal to the willingness to pay of the marginal buyer. It seems like the willingness to pay of the marginal buyer has a long way to go just to get back to where it was in April 2011 -- and it wasn't dead then either!
Bitcoiners who come to Bitcoin through economics often find it through Austrian Economics. Sometimes, those who have done so seem to have an implicit assumption that an economic understanding of Bitcoin requires a path that goes through Austrian Economics. I myself have made (modest) contributions to Austrian Economics. However, I do not consider myself an Austrian economist and I think that both standard price theory and mainstream monetary economics can provide all of the economics necessary to understand Bitcoin. (I'm currently working on a project to do just that.) Unfortunately, a lot of the loudest voices in what might be called the mainstream of the economics profession have blurred the lines between what economics says and what some economists say. Economics can be your guide. Any particular economist can lead you astray.
One of the great things about BPI is that it brings together people from a bunch of different backgrounds, who all discovered Bitcoin in their own way. As a result, each person seems to have a unique perspective on Bitcoin and a unique way of explaining Bitcoin to others. Given that BPI's mission is primarily about education, it seems to me that BPI is poised to reach quite a large audience.
No Country for Old Men by Cormac McCarthy
Washington
Two economists: Armen Alchian and Earl Thompson
