• Money, War & Fiscal Anaesthesia
• The debate
• Visibility, historically
• Fiscal anaesthesia
• What Bitcoin changes (and what it does not)
• What we as Bitcoiners sometime do not want to see
• The Ukraine War as a second case
• Benn and the hands

§Money, War & Fiscal Anaesthesia

Some two thousand corpses had passed through his hands without reflection, and it had left him exhausted in a strange and unaccountable way.

— Gottfried Benn, Brains (Gehirne, 1916)

On February 28, 2026, the US and Israel struck Iranian military installations. Close to 900 strikes in twelve hours. About a week later, the White House posted a video on X that combined real drone footage of the airstrikes with scenes from Gladiator, Breaking Bad, Star Wars, Call of Duty, Iron Man, Top Gun: Maverick, Braveheart, John Wick, and more. At the end, a voice from Mortal Kombat: “Flawless Victory.”

I had to pause when watching this video, because otherwise the enormity of it dissolves in the general sensory overload. A government conducting war produces entertainment from that war for the population that funds it. You can read this as tastelessness, or you can read it as propaganda. But it is also the symptom of a structure that runs deeper than the question of whether a social media team overstepped (what it certainly did). The population financing these strikes does not feel the costs. And because it does not feel the costs, the war can be consumed as spectacle. Anime edits and drone footage in the same timeline. The distance between violence and its experience has grown so wide that one can be montaged into the other without the contradiction registering.

The video was not an exception. The White House account has adopted an aesthetic that would be difficult to distinguish from a shitcoin project’s social media presence. Hype videos, loading screens, engagement bait, influencer aesthetics. The entire communication strategy treats war as content.

My text, however, is not about the White House video. It is about a structural property of monetary systems that makes such videos politically possible.

§The debate

There is a thesis in the Bitcoin world, most prominently articulated by Saifedean Ammous: fiat money enables war. Governments that control the money supply can finance military campaigns through credit expansion and distribute the costs as inflation across the entire population. No vote is necessary and no earmarked tax. Under a hard money standard, this mechanism breaks down. Governments must tax directly or borrow from creditors who can refuse.

Ammous’ historical argument is concrete. Had the European powers maintained the gold standard in 1914, the First World War would have been militarily decided within months, because the treasuries would have been empty. Lyn Alden extends the analysis in Broken Money (2023) to the weaponisation of the financial system itself: sanctions, frozen reserves, SWIFT exclusions. Matthew Pines offers the most careful counterposition in his essay “The Actual Impact of Bitcoin On War“: Bitcoin would “constrain (but not eliminate) most forms of national debt finance,” but it would be hubris to expect it to override the weight of complex geopolitical forces.

But there is more in these arguments than the financing mechanism and all three sense it. Ammous writes that unbacked money has erased “the notion of trade-offs and opportunity costs from the mind of individuals” (The Bitcoin Standard, p. 151). Alden distinguishes explicitly between visible taxation, to which citizens can respond politically, and opaque devaluation, to which they cannot: “Involuntary taxes are one thing — at least people can see what they are and respond accordingly if needed. The involuntary devaluation of savings in an arbitrary and opaque way is another thing entirely” (Broken Money, p. 119). Alex Gladstein presented the empirical case in greatest detail in “The Invisible Cost of War in the Age of Quantitative Easing“ (2022), drawing on the political scientist Sarah Kreps, whose research in Taxing Wars (2018) shows that debt-financed wars generate measurably less political resistance than tax-financed ones. Kreps calls the post-Vietnam wars “Hide-And-Seek” wars. The military economist Heidi Peltier puts the point most sharply: American taxpayers “don’t feel the cost of war.” Neta Crawford and Linda Bilmes have documented similar findings.

The observation that fiat money conceals the costs of war is not a monopoly of the Bitcoin community. It has an empirical basis in mainstream political science.

What’s missing is the concept. The mechanism has been identified and the political effects have been measured, but no one has described the perceptual property of the monetary system itself. The degree to which it makes the costs of state violence experienceable or inexperienceable for the population that bears them. The White House video is only a symptom.

The question I want to ask is: What happens when a population cannot feel what a war costs?

§Visibility, historically

Frédéric Bastiat described the basic structure as early as 1850, in a text that applies the distinction, in one of its chapters, even to military expenditure. In Ce qu’on voit et ce qu’on ne voit pas (That Which Is Seen and That Which Is Not Seen), he distinguished between the visible effects of a political measure (the public building, the subsidised industry) and the invisible ones: the private enterprises that were never founded, the savings that were never accumulated, because the resources were tied up elsewhere. Bastiat’s point concerns perception. The unseen has no advocate, because it never existed visibly enough to produce one. When a government finances a military campaign through direct taxation, one sees the costs. A budget item, a public debate, a political dispute over amount and duration. When it finances the same campaign through monetary expansion, the costs become unseen in Bastiat’s sense. That is the core of the matter. The inflation that results has no single originator. It manifests months or years later. It is attributed to supply chains, to energy prices, to labour market dynamics. The specific contribution of military spending to the general price level can be technically reconstructed by economists, yet it’s not immediately experienceable for us.

The relationship between monetary system and war costs has shifted three times over the last five hundred years and each shift also changed the political dynamics of warfare. In the pre-modern period, the connection was direct. A feudal lord who wanted to wage war taxed his subjects directly in labour, harvest, and soldiers. The costs were immediate and personal. Whoever could not persuade his subjects could not fight. Mercenary armies weakened this constraint (one could buy soldiers instead of drafting them), but the costs remained visible. Somebody had to be taxed and that somebody had political opinions about the matter.

The gold standard introduced a mediated but still legible constraint. Governments could borrow against reserves, but the reserves were finite and publicly known. When Britain strained its gold holdings to finance the Napoleonic Wars, the strain was visible and politically consequential. The markets reacted. Parliament debated. The costs remained as political information within the system.

The twentieth century broke the connection. In August 1914, the warring powers suspended gold convertibility within days. Britain attempted to finance the war through war bonds. The War Loan of 1914 was supposed to raise £350 million. It brought in less than a third. Newspapers nevertheless reported overwhelming subscription, capital streaming in from the patriotic public. The story, however, is not true. In 2017, researchers at the Bank of England found in the archives documents that had remained hidden for a century: the Bank had secretly covered the shortfall itself, by creating deposits out of nothing for two senior employees, the Chief Cashier and his deputy, who then subscribed to the bonds in their own names. John Maynard Keynes, who knew, called it “a masterly manipulation.” The Financial Times, which had reported the loan as a success in 1914, published a correction in 2017. 103 years later. (Alden, Broken Money, Ch. 9, drawing on the Bank Underground blog post “Your country needs funds,” Aug. 08, 2017).

One can observe in this episode how the structure takes shape that would determine the entire twentieth century. Government and central bank financed the war jointly through money creation and lied to the public about the extent of the failure. The population believed it had contributed voluntarily. In reality, the money supply was massively expanded. In the years that followed, inflation halved the purchasing power of British savings. The pound never recovered. And because Britain provided the world reserve currency, the expansion devalued not only the savings of its own citizens but also those of colonies and trading partners who had not been involved in the war at all.

As long as governments could expand the money supply and get the money accepted, the war could continue. The population paid through inflation, but the payment was time-delayed and causally opaque. Monetary expansion did not cause the war, but without it, the political endurance for a war of this scale is difficult to explain.

The pattern repeated itself at every subsequent turning point and each repetition shifted the threshold further. Vietnam became politically untenable when the costs became visible, when inflation and the death toll were large enough to generate domestic resistance. The war ended not when the military situation dissolved but when the political costs grew too large for the system to absorb. On August 15, 1971, under Nixon, the dollar’s gold convertibility was finally abolished and with it the last institutional mechanism through which the costs of American military spending were tied to a finite, auditable reserve.

The US has since waged wars and military operations in, among others, Grenada, Lebanon, Panama, Somalia, Bosnia, Kosovo, Iraq (twice), Afghanistan, Yemen, Libya, Syria, finances military aid in Ukraine, and in February 2026 struck Iran jointly with Israel. The cumulative costs are in the trillions. The mechanism through which these costs are borne is monetary expansion. The US finances its deficits through a reserve currency that compels the rest of the world to absorb its inflation. The actual message to every taxpayer is: you will pay for this war through inflation. But precisely this message is never spoken, because the system is built so that it is not supposed to be.

§Fiscal anaesthesia

Paul Virilio spent decades analysing what he called the logistics of perception (Guerre et cinéma, 1984; English: War and Cinema, 1989). His argument is that modern war is waged not only with weapons but with technologies of visibility. That is, with things like the camera or the satellite. To wage war is to control what is seen. In The Vision Machine (1994), Virilio pushed the analysis to the point where he spoke of an “industrialisation of the non-gaze”, the systematic production of non-seeing through technical apparatuses that were supposed to enable seeing. There is a fiscal equivalent of this figure and it is the monetary system. The infrastructure that is meant to store and transfer value systematically produces the invisibility of the costs that are financed through it. Virilio never made this transfer. He was thinking about images, not about money. And in the fiscal domain, the mechanism is different from his: Virilio describes the control of images by identifiable actors. In the monetary system, there are actors who control policy, but no one controls the opacity. The fact that a citizen cannot trace the price of groceries back to a specific act of monetary expansion is not a decision anyone made. It is a property of the architecture, whether by design or by accident. And that makes it harder to resist, because what needs resisting is the architecture itself. Virilio’s own concept of the ‘integral accident’ (every technology invents its own accident, e. g. the invention of the ship is the invention of the shipwreck) can be applied here. It follows that the invention of fiat money is the invention of inflation.

Every monetary system has a regime of fiscal perception. Jacques Rancière showed in The Politics of Aesthetics: The Distribution of the Sensible (2004; orig. Le partage du sensible, 2000) that every political order is simultaneously a perceptual order: it determines what is visible, sayable, and thinkable within it. “Politics revolves around what is seen and what can be said about it, around who has the ability to see and the talent to speak, around the properties of spaces and the possibilities of time.” (p.13)

Rancière means this in an aesthetic sense, but for me it’s about money. The monetary system determines what a population can know about the use of its collective resources. A tax-based system produces high fiscal visibility: one knows what one has paid, one can ask what it was used for, one can organise political resistance around the answer. An inflation-based system produces low fiscal visibility: one experiences rising prices but cannot attribute them to any concrete government decision, because the causal chain is simply too long and too branched and therefore opaque. The monetary system does not silence the taxpayer. It removes the object about which he could speak. A population that cannot attribute a cost to a decision has no political claim to make, because the claim has no addressee.

The observation that governments systematically obscure the true costs of state activity is not new. Amilcare Puviani described it as early as 1903 in Teoria della illusione finanziaria. James Buchanan applied it to deficit financing in Public Finance in Democratic Process (1967) and, together with Richard Wagner, in Democracy in Deficit (1977): governments prefer financing mechanisms that obscure the true price of public services for the taxpayer. The tradition exists. What is missing from it is the application to war as a specific case (Puviani and Buchanan write about government expenditure in general, not about the political tolerability of military violence) and the connection to Virilio’s theory of perception.

There is also a terminological problem. Puviani’s illusion implies that someone is being misled. But the population paying for a war through inflation is not, in the strict sense, being deceived. No politician lies to them about the price. But the costs are there all the same, they simply do not arrive at the citizen directly. The inflation hurts and you just don’t know whom to send the bill to.

Pain does not cause injury avoidance. Pain is the signal that enables injury avoidance. A person who cannot feel pain becomes more reckless, because the information that would have changed their behaviour is missing. Inflation-financed warfare does not remove the pain (prices rise, savings shrink) but the signal that attributes the pain to its cause. The population continues to bear the costs. But the three properties that would make these costs politically actionable are suppressed: temporal immediacy (prices rise months or years later), causal transparency (inflation has many simultaneous causes), political accountability (no politician votes for ‘finance the war through inflation’). Remove one of these three properties and the political feedback grows weaker. Remove all three and there is a system in which permanent war is politically bearable, even when the majority of the population financing it would not consciously support it. A monetary system that renders the costs of political violence invisible will (all else being equal) produce more political violence than one that renders the costs visible, because it removes the information that would enable a political response to the duration and scale of that violence. I call this fiscal anaesthesia. Not fiscal invisibility (the costs have not vanished from existence; an economist can reconstruct them), but anaesthesia, because the costs are real, the pain is real, but the attribution is suppressed. The patient is being operated on. The patient senses that something is happening. The patient does not feel where the incision is.

Ivan Illich identified the underlying structure in a different domain. In Tools for Conviviality (1973) and Medical Nemesis (1975), he argued that institutions beyond a certain threshold of size and monopoly begin producing the opposite of their stated purpose. That is, schools produce ignorance, hospitals produce illness. Illich called this counterproductivity. It is the point at which the growth of an institution undermines the goal it was created for. Michel Foucault made a related observation from a different direction in Security, Territory, Population (1977–78; English 2007). Modern government operates not primarily through prohibition or violence but through mechanisms that steer behaviour without being recognisable as steering. Inflation as a financing mechanism would, in Foucault’s terms, be a technology of government, because it distributes costs without the distribution becoming visible as a political decision. Illich asks when an institution undermines its own purpose. Foucault asks whether the undermining is the actual function.

The Federal Reserve was founded in 1913, one year before the First World War. It was designed to stabilise the American financial system. Whatever one thinks about its performance regarding that mandate, the institution created to ensure monetary stability provided the infrastructure that made invisible war financing possible on a previously unimaginable scale. Illich wrote about education and medicine, not about monetary policy. One can object that a monetary system that cannot expand also constrains disaster relief and crisis intervention. That is true. The capacity for crisis response and the capacity for invisible war financing are architecturally inseparable. But that is an argument for making the trade-off visible, not for accepting it.

§What Bitcoin changes (and what it does not)

Bitcoin does not prevent war and it does not make people more peaceful. The motivations that drive armed conflict (nationalism, religion, fear, resource competition) are untouched by monetary architecture. A government on a Bitcoin standard could still wage war, through higher taxes, property confiscation, or coercion. History provides examples of every one of these mechanisms under hard money regimes. Ammous’ counterposition, that the gold standard would have ended the First World War within months, is structurally plausible but counterfactual. One cannot run the experiment. And one must be honest enough to isolate the specific contribution of the monetary mechanism from nationalism, alliance structures, and military self-logic, which economic analysis alone cannot do. The claim I am making is simpler and, I believe, more defensible: the monetary mechanism was one necessary condition among several. And it was the only one among these conditions that operated on the level of perception.

What Bitcoin removes is the anaesthesia.

On a Bitcoin standard, a government that wants to finance a military campaign cannot expand the money supply. To finance a war, the government must tax (visible, requires legislation, generates political resistance), borrow at market rates (visible, requires willing lenders, generates interest costs that are themselves public), or confiscate (visible, generates immediate resistance). Each of these paths restores the three properties that inflation suppresses: immediacy, transparency, accountability. The pain signal is reconnected and the costs of political violence enter the political calculus as lived experience, not as abstraction in macroeconomic data. The regime of fiscal perception shifts from anaesthesia to transparency.

This does not guarantee that the population chooses peace. It simply means that the population chooses. A population that consciously wants war will find ways to finance it. The Second World War was paid for through visible mechanisms (war bonds, rationing, conscription) and enjoyed broad support. *Fiscal anaesthesia *is not the problem with wars that a population stands behind. It is the problem with the others, with what Virilio called la guerre pure, the dissolution of the distinction between war and peace, the permeation of society by military logic even without a declared conflict (Pure War, 1983, with Sylvère Lotringer). Wars that sustain themselves not because populations endorse them but because the monetary system absorbs their costs before they become politically real.

§What we as Bitcoiners sometime do not want to see

I am a Bitcoiner. A very convinced one. But I cannot support the thesis that Bitcoin prevents wars per se. Where I agree is the observation that Bitcoin’s architecture makes certain things visible that the fiat system keeps invisible.

One part of the community celebrates the strategic Bitcoin reserve, the state accumulation, the ETF inflows from pension funds. Another part (often partially also the same one) claims that Bitcoin constrains state violence. One can want both at the same time. But one should be clear about what it means to want both at the same time. The US government holds (confiscated!) Bitcoin as a reserve asset. The same government bombs Iran and publishes anime edits of the bombing as entertainment content. Part of the Bitcoin community cheers for both, the reserve and the bombs. The reverence some Bitcoiners show for American state power is difficult to reconcile with the claim of promoting a technology that constrains this state power. There are voices within the community that have been pointing this out for years. The people who worry that fitting Bitcoin into the existing financial architecture strips it of the properties that made it worth building in the first place.

A state that holds Bitcoin as a reserve asset while continuing to finance wars through monetary expansion raises a question that the community has not answered yet. Does state adoption of Bitcoin change the state, or does the state change what Bitcoin becomes?

What is being overlooked is simpler. Regardless of what a state does with its Bitcoin holdings, the mere existence of the network changes what a population knows about its own monetary system. Whoever understands why Bitcoin is limited to 21 million units understands why fiat money is not. That is political education that requires no permission. Fiscal anaesthesia works only as long as the population does not know the mechanism. Bitcoin does not only restore the pain signal. It restores the knowledge that there should be a signal. And a population that knows what its monetary system enables is harder to lead into wars it has not consciously approved. This is the plain observation that informed populations are more difficult opponents than anaesthetised ones.

But there is an even more uncomfortable possibility, one that goes beyond the community and concerns the entire argument. Perhaps fiscal anaesthesia is not just something the state imposes on its population. Perhaps it is something the population prefers. Perhaps people do not want to feel what wars cost. The White House video works because violence and experience have been decoupled. The population delegates violence to the state and delegates the experience of its costs to the monetary system, and both delegations are, in a functional sense, consensual. The anime edits of the drone strikes are not produced against the will of the population. They are produced because a government knows it can get away with it. And it gets away with it because the costs do not arrive.

The argument that Bitcoin restores democratic accountability presupposes something I’m not sure is true, that democratic populations want the accountability they currently lack. If they don’t want it, this doesn’t destroy the structural argument. But it changes its political implications considerably.

I leave this standing because I cannot resolve it.

§The Ukraine War as a second case

The Ukraine war, now in its fourth year, is the more complex case, because fiscal anaesthesia operates not on two but on many sides simultaneously. Russia expands the rouble supply and redirects energy revenues. The US finances military aid through deficit spending, covered by the reserve currency privilege. And then there is the third side, the EU.

The European NATO states have massively increased their defence spending since 2022. Germany debates one special fund after another. The EU as a whole is moving towards a common defence policy that would have been unthinkable three years ago. This is paid for through new debt, in an environment in which the European Central Bank has over the last decade shifted the boundaries between monetary policy and fiscal policy so far that government bonds are de facto backed by the central bank. The European population feels the costs of the Ukraine war as energy prices, as inflation, as a diffuse sense that everything is getting more expensive. But no one can isolate the specific contribution of defence spending. It disappears into the general price increase, and because it disappears, it does not become political.

Fiscal anaesthesia appears here in a European variant that differs from the American one. The US has the reserve currency privilege, which means it exports its inflation. Europe does not have this privilege. European populations bear the costs more directly than the American one, but still indirectly enough that the causal chain between defence spending and supermarket prices remains politically opaque. And so the war continues. The costs are distributed. And the distribution is invisible enough that no political resistance organises around it.

Since the Iran conflict has further escalated, the chain reaction runs through the energy infrastructure of the Persian Gulf. Oil exports, petrochemical precursors, fertilisers, industrial supplies. The costs of a war in which Europe is formally not involved reach European households through energy markets, through supply chains, through rising prices. The same system that renders the costs of the Ukraine war fiscally invisible absorbs the costs of a possible Gulf war along with them. The anaesthesia is not limited to one conflict, because it is cumulative.

Bitcoin has been used by all sides of the conflict. For donations to the Ukrainian military, for sanctions evasion by Russian actors, for capital flight by civilians caught between monetary systems that extract the costs of the war from their savings in different ways. The structural argument is not about who uses Bitcoin. It is about the perceptual properties of the monetary systems that make permanent war politically bearable.

In all the countries involved, a direct, earmarked war tax (with monthly billing, attributable, with the purpose stated on the tax notice) would generate a political dynamic that the inflation-based system structurally suppresses. Imagine the German population receiving a monthly tax notice: “Your contribution to Ukraine military aid in March 2026: 47 euros.” The political debate that would follow would be fundamentally different from the one we have. You don’t need to be a Bitcoiner to take this observation seriously. You only need to be willing to ask the question of whether the way a war is financed has an influence on how long it lasts.

§Benn and the hands

Let’s return to the opening quote. “Some two thousand corpses had passed through his hands without reflection, and it had left him exhausted in a strange and unaccountable way.” Benn’s protagonist has not stopped operating. He has stopped feeling what he does. The exhaustion Benn describes is not the exhaustion of work. It is the exhaustion of experiencelessness. The body works, but consciousness no longer registers.

Fiscal anaesthesia functions analogously. The population finances the war. The hands work. One earns money, spends it, pays taxes. But the connection between what the hands do and what they do it for is severed. The exhaustion arrives, but without attribution. One feels poorer without knowing why. One senses that something costs, without being able to name exactly what.

Benn was a military doctor in the First World War, the first war financed through monetary expansion on this scale. The experiencelessness he describes is an image that can be transferred from the medical to the economic domain, the severance between action and experience, between doing and knowing what one does. The result is the same, although the mechanism is the opposite. Rönne grows numb because he has experienced too much. A population under fiscal anaesthesia grows numb because it experiences too little. That both lead to experiencelessness says something about the outcome. The monetary system of the post-war order did not invent this severance, but it institutionalised it, in an architecture built precisely for this purpose, whether or not that was the intention of the architects.

Bitcoin does not necessarily enter as a solution but as a diagnostic instrument. It makes visible what the existing system wants to conceal: the capacity to wage permanent war without perceptible domestic political costs is a feature of the fiat system.

What would change if the people who pay for wars could feel what they pay?

This essay was first published on my Substack: https://substack.com/@stenreiss