October 29, 2015 § 48 Comments
19 Their silver shall be cast forth, and their gold shall become a dunghill. Their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord. They shall not satisfy their soul, and their bellies shall not be filled: because it hath been the stumblingblock of their iniquity. Ezekiel 7:19
I’m a metaphysical realist. What that means to me in very general terms is that I accept that things have objective essences independent of the subjective perceptions or projections of human beings onto things. It isn’t that the perceptions of the subject are irrelevant; it is that objective reality is not reducible to nothing but the perceptions or projections of subjects. Objective reality is not reducible to perception, will, or desire. Intentions and desires matter, but they are not all that is the case.
This affects how I approach everything, and in particular it affects how I approach questions about property, money, finance, etc. This puts me in conflict with all modern schools of economic thought, because all modern schools of economic thought are metaphysically anti-realist. To modern schools of economic thought, economic value is reducible to the subjective perceptions or projections of groups of people (markets).
So the fact that markets – groups of people – perceive gold as valuable and act on that perception is taken as proof that gold actually is just as valuable as they perceive it to be. And the fact that this value arises almost entirely from purely subjective evaluations, as opposed to arising from any useful objective qualities of gold, is taken as a virtue of gold qua ‘store of value’. Gold’s relative independence of any actual objective usefulness is the very thing that makes it a pure store of value.
The most pure form of anti-realist value is distilled and concentrated human subjective evaluation: value with no object. The only thing more pure than gold would be nothing at all, but of course even the most ardent anti-realist cannot escape from objective reality. Because he cannot store pure concentrate of human will in a vault, the anti-realist stores gold; because at least as an historical matter gold is the substance that human beings have most irrationally desired, desired in a way most purely disconnected from objective reality.
What is fantastically ironic about the whole situation, from my perspective, is that so many people flee to the idea of gold and gold-backed currencies in order to escape what they think of as the unreality of finance. Indexing all of economics to gold, they think, will somehow anchor economies so that they cannot be manipulated by banksters and plutocrats.
But you can’t escape from unreality by fleeing into it.
UPDATE: Added epigraph.