… to improve the conditions of people anxious to earn wages and salaries … . There is only one kind of policy … a policy that refrains from putting any obstacles in the way of further saving and accumulation of capital.—Ludwig von Mises, 1 Aug 1963
Capital goods help you get more consumer goods, raising your standard of living. But you can only acquire or maintain capital goods if there are savings, and you can only get savings if you preferentially refrain from consuming every last bit of your economic output.
Capital goods accumulation requires two things: One (1) is that you think ahead wisely, and the second (2) is that there is an economic environment devoid of institutionalized obstacles (free enterprise).
An example of an institutionalized obstacle to capital accumulation is a capital gains tax — which “punishes” you whenever the property that you own becomes super-productive or valuable.
Taxing gains in capital prevents further accumulation of capital.
Another obstacle is inflation, because it disincentives savings as people pull out cash to buyer higher priced items before prices rise yet again — it “pulls forward” the consumption of output.
But even though savings and capital accumulation are required to achieve or maintain affordability of a decent living standard, Nigeria is experimenting with an obstacle to saving and capital accumulation: Central Bank Digital Currency (CBDC).
They implemented a CBDC in October of 2021, but their real GDP per capita has since been mostly stagnant at below 0.75% growth, gross savings has fallen as a share of GDP, and gross capital formation has fallen as a share of GDP — all while inflation has been over 13% and rising by the year:
Such high inflation disincentivizes savings, reducing the funds out of which new capital could be formed.
Evidence suggests that interventionism such as CBDCs creates institutionalized obstacles to savings and capital accumulation — which reduces the affordability of a given living standard (making life harder than before).
Reference
[savings and capital accumulation are requirements for economic well-being] — The Economic Role of Saving and Capital Goods. Ludwig von Mises. 1 Aug 1963. https://fee.org/articles/the-economic-role-of-saving-and-capital-goods/
[less than 6% of Nigeria is willing to use CBDCs] — CoinDesk. https://www.coindesk.com/policy/2023/07/26/nigeria-is-altering-enaira-model-to-promote-use-of-the-digital-currency-central-bank/
International Monetary Fund, Real GDP Per Capita for Nigeria [NGANGDPRPCPCPPPT], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/NGANGDPRPCPCPPPT
International Monetary Fund, Nominal Gross National Saving for Nigeria [NGANGSGDPPT], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/NGANGSGDPPT
International Monetary Fund, Nominal Gross Capital Formation for Nigeria [NGANIGDPPT], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/NGANIGDPPT
World Bank, Inflation, consumer prices for Nigeria [FPCPITOTLZGNGA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/FPCPITOTLZGNGA