Deflation of individual products from innovation is not the same thing as general deflation in the economy. Economists general consider a small continuous inflation as the best outcome but I'm not an expert.
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Although inflation causes generally rising prices, it should not be understood as detrimental to all parties involved. It is highly lucrative for the government and the banking industry. When new money is printed (today, created electronically), it greatly benefits the first recipient because assimilating the new money into the economic organism takes time. Those first recipients (government and banks) can purchase goods and services at the old prices. As the money slowly works its way through the economy prices are bid up. Eventually when it reaches the salaried workers, prices have mostly adjusted. This process is a hidden tax on salaried workers, or anyone who receives the money late in the cycle. It is especially detrimental to those on fixed incomes, such as pensioners. Not only does the government understate the effects of inflation in its official numbers, any price decrease that would have occurred as a result of productivity gains are denied to the consumer as well. Inflation is nothing but wealth transfer. The government prints money and buys stuff with it. Prices rise and the salaried worker can buy less stuff. All the stuff the salaried worker could have otherwise bought has accrued to the government. Simple. Politically, it is far more palatable than raising taxes because the process is badly understood and well obfuscated. "
Again, not an expert but austrian economics is far from mainstream.
>The government prints money and buys stuff with it.
And this seems just wrong. In most economies the central bank and the government are sepparate and the government can't just create money to spend. But maybe that's what effectively happens in the end anyway?
Either way the economical argument is usually that you want a small steady inflation and that deflation is much worse. That doesn't refute it.
No, it is worse in practice. A central bank prints money, gives it to blessed private banks, who then loan it to the government so they can get tax dollars in interest for nothing. If the government had printed the money directly they would have spent less on it, but then fewer billionaires would be richer on the taxpayer dollar so that obviously can't happen.
The fact that Austrian Economics is not mainstream doesn't mean it's wrong.
Normally you have two types of deflation, by increasing productivity that reduces prices and by lack of demand where prices are reduced to incentivise buying one is good the other is bad.
But deflation of a cryptocurrency is not general deflation in the economy, because there are lots of cryptocurrencies and we can make more whenever we want. It's not like the gold standard, it's like Hayek's vision of privately-issued competing currencies.
I'm struggling with this because some people model bitcoin as a currency whose value is based on its transactions and some people value it as a store of value, a sort of cryptogold. You're arguing the first option but most other are arguing the second. For the second you can't just invent new forms of gold every day so what you suggest wouldn't work. And even for the first having to constantly invent new currencies to get around the fact that each is deflationary seems cumbersome at best. I still haven't found a use case that cryptocurrency makes possible that our current financial system can't already do.
I'm not so much arguing for it as describing what actually exists now. There are hundreds of separate blockchain cryptocurrencies, plus a bunch of tokens built on top of Ethereum.
