September 25, 2016 § 5 Comments
The subject of money is pervaded by all sorts of unreal mysticisms. If you want to better understand economic reality it is important to hunt down these unreal mysticisms in your mind and kill them.
All economic exchange is barter. If you get nothing else out of this post, take this one concept to the bank. All exchange is barter.
Attempts to segregate property bartered in marketplaces into ‘money’ versus ‘other property’ is one of those fuzzy social conventions which is fine as long as it isn’t taken too seriously. Taking ‘money’ as something categorically distinct from property in general distorts and obscures reality. Any property at all might be used as money (sunk in exchange); and even property conventionally thought of as “money” — coins, bills, and the like — can be displayed or put to other uses than exchange. This was all perfectly obvious to Aquinas, but modern people are frequently incapable of seeing the obvious when it comes to the subject of money.
We typically think of money as a special kind of thing which can be easily transferred and exchanged. That is fine as long as the term “money” denotes property with the further connotation that the property is easily transferred and exchanged. Money can be thought of as a kind of property fuzzily distinguishable from other kinds of property by its ease of exchange. But it becomes insanity when “money” is viewed as categorically distinct from property in general.
The term “money”, then, does not really describe a specific thing or class of things. It describes a role that some property takes on, some of the time, in economic life. Some property is more suitable in this role than other property. If you transfer or spend some property – exchange it for different property – that property takes on the economic role we call “money”.
The property actually exchanged in barter falls into one of two categories: securities and non-securities. (As it happens, securities are for the most part very easily transferred and exchanged versus most non-security property).
Securities derive their value from the property they impair and the rights involving that property which they assert, as opposed to ‘the paper they are written on’. Yes, ‘the paper it is written on’ can be a kind of property in itself, or a sort of meta-property. But you can’t drive your car’s pink slip to work.
Non-security property derives its value from its own objective attributes.
Bitcoins and other cryptocurrencies are not a security. They are like virtual gold, except that unlike actual gold they have no useful objective properties at all other than the value intrinsic to authenticated records of wasted computation. Bitcoins are a kind of digital fool’s gold, entitling the owner to nothing other than the pleasure and bragging rights of virtually possessing them, rather like the high scores on your favorite video game.
Now it is true – because human beings are both ignorant and irrational much of the time – that you can often trade worthless things for valuable things under the ‘greater fool’ theory, based on fad and fashion and deluded/false economic theories and the like. Whether someone wants to apply the label ‘money’ to the worthless things traded to ‘greater fools’ is neither here nor there when what we are after is an accurate understanding of reality: it doesn’t turn those actually worthless things into actually valuable things.
Like the market price of gold, the market price of bitcoin is radically distorted when measured against its objective attributes qua property. The difference in the case of bitcoin is that the market price has even less reality baked into it: at least gold actually has objective attributes which anchor its economic value in reality, and has been used as a raw material for making artifacts for thousands of years. Cryptocurrencies are not an escape from the moral and ontological anti-realism of modern finance: they are its apotheosis.
This brings us to the subject of workers and wages. All exchange is barter, and the exchange of work for pay is no exception.
As I explain in the Usury FAQ and elsewhere, a worker is owed wages not simply for time elapsed but for what he, through his own powers exercised under agreement with his employer, makes actual. Because we are finite beings and can only do so many things in our lifetimes, one might poetically refer to wages as representative of human life. It is true enough that cheating workers out of their just wages is wickedness several times over, an unholy combination of robbery, dishonesty, fraud, taking advantage of the good will and often inferior position of one’s fellow man, and destroying his chance to do something different with his finite time alive in this world. (A sudden calamity preventing payment of wages is a different story of course).
But poetry about money representing human life probably obscures more than it reveals here. Burning cash or destroying other kinds of property isn’t murder.
Consider a car mechanic. He works on your car for agreed rates. Until you pay him he retains (whatever the positive law may assert) the moral equivalent of a “mechanic’s lien” against your car, the property into which he put his labor.
Consider a barber who just cut your hair. The tacit agreement is that you have money in your pocket to pay him. If you don’t, then see Question 49 of the usury FAQ for the different kinds of scenarios.
Examples can be multiplied, but note that none of this imparts mystical spiritual human qualities to some particular kind of financial security (e.g. fiat dollars), or to some other etherial being labeled “money”.
Setting aside assertions of the positive law (taxes, etc), there is no moral requirement for a worker to barter for fiat dollars in exchange for his work. Any property – or even trading one kind of work for another – will do. The idea that there is something super special about certain securities labeled ‘money’ that make them ‘wages’ and thus ‘a fungible representation of human life’ is really just errant nonsense, if it is taken literally.
Finally, we come to the idea that inflation or deflation in the market price of currencies versus other kinds of property is a moral travesty, a sin against workers, an offense against the common man: in short that people (as long as they are not wealthy) are morally entitled to have the purchasing power of their property preserved over time as long as that property is of the mystical class ‘money’. This atrocious idea really needs to be hanged in the city square where everyone can see, its broken and destroyed body beaten and desecrated to make it clear how utterly stupid and destructive it is. (It does not follow that ‘currency debasement’ is never immoral, of course).
In general people who think that they are entitled to the magical preservation of the buying power of their own property against the relentless tide of the second law of thermodynamics are in the grip of usurious entitlement. Someone ought to slap them out of it, for the sake of both the common good and their own good.
 This of course is not (and is not intended to be) a complete characterization of, or even a particularly adequate partial characterization of, economic value. It is merely an observation that any attempt to characterize the economic value of property accurately must take into consideration the objective attributes of that property. In general, economic value cannot be reduced to nothing but subjective human preferences as expressed in current market prices.
September 23, 2016 § 39 Comments
“Given an arbitrary world and arbitrary fitness functions, an organism that sees reality as it is will never be more fit than an organism of equal complexity that sees none of reality but that is just tuned to fitness.”
Now we are getting somewhere. If evolutionary theory is true, as opposed to merely sophistry which has evolved as a political defense of metaphysically naturalist hubris, then the humans who evolved to become evolutionary theorists ‘see none of reality’.
Or, alternatively, it might just be time for some folks to check their metaphysical premises.
September 19, 2016 § 35 Comments
This blog is syndicated into a few feeds here and there, and I sometimes read and very occasionally comment on other blog posts in those feeds. Here is a recent discussion involving bitcoin and cryptocurrencies which some of my own readers may find of interest. This post started as a comment in that thread.
Cryptocurrency hopefuls fail to grasp the fundamental fact that (unlike stock, bonds, demand deposits, fiat dollars, and the like) bitcoin is not a security: ownership of a bitcoin does not entitle the owner to anything at all other than possession of the bitcoin itself.
The basic suggestion is that ‘currencies’ in general (understood ambiguously), and therefore bitcoins in particular, represent a promise. But this raises the question of who in particular has promised what in particular to whom. An abstract ‘promise’ from nobody in particular, to nobody in particular, backed by no specified property at all, is no promise at all. If nobody will buy your bitcoins you don’t have anyone to accuse of breaking their promise; and there is no pool of property which you can reference, claiming entitement to a share in virtue of this ‘promise’.
Cryptocurrencies are only ‘promises’ when every day is opposite day. Bitcoins are a commodity not a security. They are not promises made by anyone in particular: they are simply themselves, that is, they are cryptologically authenticated records of wasted computation.
One of the sociological oddities of cryptocurrencies is that software people really ought to grasp the difference between references to objects and objects in themselves. Somehow when it comes to financial securities the intellectual capacity to do basic dereferencing goes out the window. With this sort of confusion it is no wonder that the ‘smart’ locks on my car seem actually rather stupid.
The conflation of references to property with actual property often serves the interests (no pun intended) of usurers and other financial hucksters, so it is no surprise that this conflation is fostered by ‘the powers that be’. Cryptocurrencies propose to ‘fight the power’, if you will, by reinforcing these same basic errors. I think the kids these days refer to this as being ‘cucked’.
That other people may or may not willingly trade for something – beads of necklaces and the like – does not make that something a security (whatever vocabulary we want to use for editorial purposes: ‘pointer’, to you software nerds, and you know who you are). Willingness to trade at this particular moment is not the same thing as title/entitlement to property. That someone is willing – at the moment – to trade for insulin or tulip bulbs is not the same thing as (for example) a bond which entitles you to regular payments backed by a pool of property recorded on a balance sheet. The latter is a pledge of property made by the owners of that property; the former may as well be a pledge made by a Pokemon. It is as real as that cartoon character you see in your smartphone.
Cryptocurrency cucks aren’t alone of course. Most modern economic theorists (Keynesians, Austrians, MMT, etc) labor under the shadow of metaphysically anti-realist error. That is just modern life in between the event horizon and the singularity.
September 13, 2016 § 20 Comments
True, the church banned usury, and indeed, it took time for the realization to emerge that charging interest is not always tantamount to usury.
As usual, this gets things almost exactly backward. What took time was the relentless effort to obscure the specific difference between mutuum loans and other contracts beneath a fog of anti-realist obfuscation and ‘pastoral accommodation,’ digging a memory hole into which to discard bedrock moral doctrine.
In the future we can expect similar chin-stroking sage and knowing pronouncements:
True, the Church banned contraception and adultery, and indeed, it took time for the realization to emerge that infertile sex and multiple lifetime partners are not always tantamount to contraception and adultery.
September 3, 2016 § 47 Comments
Normal, well adjusted people are trapped by the way liberalism structures our political reality.
If we attempt to take the demand that the exercise of political authority is justified by pursuit of liberty too seriously we end up raving anarchists in a padded cell. At the same time, when reality’s failure to conform to liberal expectations becomes acute there is an inexorable tendency to read whole populations of people out of the human race: to try to re-create the green swath of livable community but make it just for white people, just for 99-percenter workers, just for horny consenting adults, or what have you. Everyone else becomes less than human.
The options of becoming a raving anarchist, stalinist, or nazi are understandably unappealing to well adjusted people. Despite their loyalty to political liberalism — and the hidden mass violence concomitant to that loyalty — normal people aren’t usually enthusiastic about mass internment camps, mass deportations of political undesirables, gulags, concentration camps, industrial scale murder of the inconvenient, and the like. If the only escape from the gravity well is to put on antigravity jack boots and start firing up the ovens and cutting off the food supply of undesirables, it is going to take some seriously violent confrontations with reality to get ordinary well adjusted people to sign up. This certainly can happen; but when the only way folks can perceive to prevent it is to double down on liberal principles there will be significant numbers of people who prefer that approach. Normal people don’t want to become sociopaths, and will resist anything that seems to box them into becoming sociopaths.
I’ll leave it to folks to make up their own minds how this is playing out in contemporary politics. But if things get really ugly in the coming decades, don’t say I didn’t warn you. By the nature of things, as the gravitational force of liberalism compresses our reality ever tighter we get closer to both the sodomy singularity and the Final Solution at the same time. It isn’t that we move in one direction or the other as much as that the black hole continues to compress all of the human matter inside the event horizon into an ever more confined space.
A bleak picture, I know. But I have also already mentioned the critical difference between political liberalism and gravity. Political liberalism derives any force that it has from human commitment to it: from our belief in the justness of liberal principles or our willingness to invoke liberty, equal rights, and the like as justification for political acts. Any power liberalism has is power which we have willingly given over to it.
Folks who claim that repentance is not a practical solution are themselves living an illusion; a very ironic illusion, a fantasy in which they role play as hard nosed realists.
In reality, repentance is the only solution; practical or otherwise.
 Or equality, or government by consent of the governed, or democratic values, or any of the various expressions of the same underlying incoherent principle.
August 31, 2016 § 48 Comments
It would seem that there is a “Benedict Option“.
On the contrary: as the Internet Clown has observed, “Not even groups like the Amish escape the influence of liberalism.”
Picturing modern politics as a black hole is of course just an analogy, and a visual aid is just a visual aid. Hopefully some analogies and visual aids help us better grasp reality, or prompt discussion and thought which help some of us better grasp reality.
In this latest analogy political liberalism – liberty and equality as what justifies the exercise of political authority – is the singularity at the center of a black hole. What has not yet been explained is what constitutes, in the real situation, the force analogous to gravity.
A moment’s reflection reveals that the force analogous to gravity is commitment to or loyalty to liberalism on the part of individuals and communities.
Different individuals and communities have different traditions and preferences, and are thus attached to different baskets of unprincipled exceptions. Different individuals and communities face different real-life limitations. Different individuals and communities are committed to conserving different things; usually in such a way that liberalism itself is not challenged. Different individuals and communities have different ideas about what constitutes ‘authentic‘ freedom and equality. Finally, the strength of commitment to liberalism varies in different individuals and communities, everywhere from a kind of mild unreflective acceptance to intense religious fervor.
The strength of the gravity well, the amount of influence it has over you and yours, is based on extrinsic factors and intrinsic factors. That is, it is based on your own commitments and the commitments of every individual and community to whom you have ties. There is very little that anyone individually can do about the extrinsic forces. And there is really no point in worrying about those extrinsic forces before you have fully neutralized liberalism in the one place where you actually do have significant say.
A “Benedict Option” involves an attempt to create community somewhere as far from the influence of modernity’s lies as possible; so that there is some alternative to modernity in some spheres of life and/or so there are remnants of the Good, the True, and the Beautiful remaining when modernity finally destroys itself, whenever that may be.
But there is no Benedict Option which does not begin with clear identification of political liberalism, in conjunction with explicit and unequivocal rejection of it.
If your small community is fighting for its ‘religious liberty’, for example, you are kidding yourself. If your plan is to vote in the Frog Casino King or Grandma Abortion Witch – both deeply committed liberals themselves – to get things ‘moving in the right direction’, you might as well prepare yourself for an accelerated collapse toward the singularity. If your plan is to create a joint stock corporate-political formalism as a replacement for democracy so that the machine which rules over us will make sure that the right kind of people remain free to shop amongst the boutique polities on offer in the political marketplace, you have things you ought to spend time thinking about which are more fundamental than politics. You are in no position to deal with the extrinsic forces pulling you toward the singularity, because you have not yet dealt with the intrinsic force.
Those kinds of attempts at a “Benedict Option” are already betraying themselves from within, before they even get started. They aren’t a Benedict Option: they are a Benedict Arnold Option.
August 28, 2016 § 30 Comments
Libertarians are correct that their political views are, at least in a sense, more consistent with freedom and equal rights as uncompromising principles than other political views. That is precisely why libertarians (left and right) are so crazy and disconnected from reality. “Centrism” is really a concentric circle in between the singularity and the event horizon: it is a region of many unprincipled exceptions, little introspection, fairly strong comfort with the status quo, and unwillingness or inability to call liberalism into question.
UPDATE: Keep in mind that this is just a visual aid. The meaningful dimensions are left/right and distance from the singularity at the center of the picture. Up/down is not meaningful — the up/down in the libertarian diamond is simply distance from the center.