Author: Peter Freilinger

Mark recently posted an essay speaking to the notion that it is incompetence which makes banking a reviled profession, much more so than any moral failings on the part of its participants.

“What makes banking truly disreputable is not that some of its practitioners have moral failings, but that large numbers of its practitioners are inept: mediocrity, not malevolence, is the dirty secret of the sector.”

I wholeheartedly agree with him, although his digression in his article, in which he mused about the relationship between people who are moral and people who are competent – which he wrote as an aside – was, I think, actually the core of the essay.  Having been a banker now for just shy of 25 years – it’s funny to think that Mark met me just a few years into my career – what he wrote in that aside struck a painful chord.  What I have found is that banking seems to attract the worst people: those who are fully, truly inept, not just at banking, but at life itself.  The problem is that very, very few people understand and appreciate what banking is, but – to quote a famous bank robber –  banks are where the money is.  It’s actually not true; banks are not, in fact where the money “is”, it’s just a kind of transit station that all money has to pass through at some point.  But because all money does have to pass through banks, banks get to “see” all the money, and morally inept people see that and think “gosh, if only I could skim a bit from the top”.  And not just morally inept people: clever morally inept people.

An old friend of mine once said the worst insult she could give to a person was to say that they meant well, that they had a good heart: the implication of course being that while they meant well, they were functionally too stupid to do anything useful about it.  I’m actually of a different vein: give me a transparently dim but good hearted person any day over a clever person without morals.  I’ve met many such people – heck, I’ve dated a few, because I’m a little too optimistic about what’s inside people’s hearts most of the time – and they are the real devils.  If I say you’re clever, then you know I think you’re evil, and you have been warned.

The thing about clever people, though, is that the modestly clever people are caught out by complexity.  Indeed, that’s where banking regulation has historically played a good and fine role: banks deal with the most complex human problem that we’ve created for ourselves, the dynamic expression of social value embodied in the exchanges we make amongst ourselves for goods, services, information, and labour, and while modestly clever people can invent things (CLOs, CDOs, CDO squareds, flavours of ETFs, alternative Tier I capital, contingent capital instruments – you get the picture), eventually the complexity of the system and the tendency of highly complex systems to generate completely random and unforeseen outcomes quickly means that modestly clever people blow up eventually.  This has been my experience, at Washington Mutual, at the British global megabank that should have failed but didn’t because they paid the Qataris to bail them out, at the asset manager that Mark and I both worked for.  The market – money – is too complex to allow the modestly clever to last for long.

The really evil ones, though – the truly clever – on some level know that the system will catch them out.  They live in fear of that moment of chaos which will catch them.  Some of them check out of banking, realizing that it is a game that they will eventually lose; most of those, though, are attracted to other shiny objects than simple wealth or power.  They like drugs more, say, or sex, or they realize they can play other, simpler games (like art or charity or real estate) and they won’t face the same risk of losing.  I don’t mind those so much; given that I’m not interested in other, simpler games, they can go do what they like.  As a manager in banking, I’ve spent countless hours of coaching and mentoring such truly clever people to get them out of the building, away from the complex, dynamic, and accelerating machine that is the money system, that teaches humanity what value means to itself.  Eliminating their corruption is a good thing; when I’m in senior enough roles, I can do a lot of good by doing so.

But enough of the truly clever – not incompetent, as Mark calls them – but the clever and the perverse, get through the gates to make banking terrifying and, actually, to attract more of them to the system (until recently, when the Internet offered even more opportunities to the clever and perverse: think WeWork).  These are the people who end up managing most banks.  Their cleverness lies in embedding themselves in the transit station of banking like a leech, but unlike a leech – which sucks until it can’t eat any more – they devote most of their energy to listening to when their host is becoming aware of their scam.  Then they detatch, and reattach at another bank, and resume their gorging.  Their success lures other clever young people – men and women both, although there is something about masculinity that seems to make such leeching more tempting – to join the feast.  Most of the joiners will end up being just modestly clever, and will either be caught out and fail or they will lose the internal political games and get stuck at a low level.  But some will succeed, their ears tuned for the faint but feared signs of discovery, and end up repeating the process.

Oddly, I think banking has always been this way.  There’s a reason Christ overturned the money lenders’ tables outside the temple in Jerusalem; there’s a reason Muhammed condemned usurers to hell: it’s because the truly clever hive into banking.  But there are very few intelligent people in banking – intelligence being not the ability to solve puzzles for one’s sole benefit as cleverness is, but being the ability to self-reflect that puzzle solving ability onto one’s own struggle for purpose and meaning.  Clever people are barren; they serve no purpose except to feed their own hedonism.  Cleverness is not incompetence, though – rather, it is problem solving without reflection, without recursion.  Clever people are, in essence, computers without any ghost in the system: they can’t recognize that they are part of a whole, and at the same time, cannot see their own needs or desires or attractions as part of a larger system.  Intelligent people, on the other hand, recognize that doing themselves good is inherently barren: we all will die.  Serving our needs is inherently meaningless, and an intelligent person sees that and reflects and seeks to find – maybe impossibly – some meaning to serve.  And real intelligence continues to self-reflect – it recurses on itself, it challenges the notion of meaning that first comes to mind, it dives deeper and deeper and refuses to accept even a complex and well-articulated notion of meaning, no matter how tempting it is.  I find it interesting, in fact, that some of the “smartest” people who have made fortunes in banking while also being philosophers – David Ricardo, say, or John Maynard Keynes – have produced only morally vacant thought.  Only Spinoza has managed to combine a stint in the business with a truly insightful moral philosophy – and he remains the most humanistic of the early Enlightenment thinkers.  Intelligent bankers are rare, but they can exist.

In any event, what’s been astonishing to me in the last few years – as I took a break from banking for a few years, and then returned – is how many intelligent people there are on earth who look at banking and both marvel at and revile it.  I’ve had great conversations with lots of them, and usually by the end they see what I see, this marvelous complex and oh-so-very human construction, this money system which encapsulates everything there is about being human – self-aware, social, connected, afraid, exchanging, sharing, taking, giving, and doing it at levels beyond our own awareness.  But at the end they see the same thing Mark sees: the system is run by clever, and many truly clever people, who are not that intelligent at all.  Intelligent people can see that – and when you connect intelligent people with senior, very clever bankers, the very clever bankers quail and retract.

Mark was very kind in his essay in reference to me, actually far too kind – but his choice of title was spot on.  The Good, The Bad, and The Ugly stars Clint Eastwood, Lee Van Cleef, and Eli Wallach, respectively.  Most people want to identify with Clint Eastwood – after all, he gets away in the end and is tall and handsome.  But he’s also forced to understand his own motivations, and he reflects on them, and he acts based on those reflections.  The battle scene where he is confronted by the alcoholic Union captain who can’t stand the sight of the slaughter he must by duty create gives me chills every time I see it – and I watch the film annually at least.  On the other hand, most people would think Lee Van Cleef is the kind of banker in the story – and he is enormously clever, ultimately to his detriment, and an earlier scene reveals the depth of his depravity as he takes advantage of the Confederate losers of the war without consideration or remorse.  Most of us, however, are really like Eli Wallach.  We stumble through life, trying to win at a game here and there – a career, a relationship, an investment – while at the same time forgetting that the system that contains us – the human system, the system which embraces everything we do, including the planet that cradles us while we’ve been growing through our infancy and often shitting the crib while doing so – remembers our every act and is preparing for its revenge, or rather, the feedback loop that teaches us the moral lesson. The truly clever fear this; they’re listening for it and are on guard.  The good, well, they listen too, and they actually hear, and reflect, and incorporate, and change.  But most of us just stumble.

I can still remember when I first saw The Good, The Bad, and The Ugly; it was on Maine public television, starting at 11pm on a Friday night, and while I was planning to watch Cinemax at 11:30, once the movie started I couldn’t change the channel: I was hooked.  I knew that what I needed to be in life was the Man with No Name – Clint Eastwood – but I also knew, if I reflected on it, if I turned my own intellect with honesty towards my heart, that I was Tuco, Eli Wallach.  I knew that I would be balancing on the box at the end, hoping that the Man with No Name would shoot the rope, and hoping that when I fell I wouldn’t crack my head on the fortune, knowing that I probably would.  I’ve been balancing there ever since.  I’m not clever – not truly, not modestly, barely intelligently.  I’m human.  Forgive me.

Facebook is attempting to create an online currency for the internet, the libra, which I find enormously entertaining because Libra is my astrological sign.  I’m sure some branding consultant figured that the symbolic meaning of the sign – it being the sign of the scales, the historical symbol of money changers, perhaps appropriate given that I am proudly a banker – would subconsciously resonate, thus earning themselves a hefty fee (to be paid, surely, in dollars).  This may be because I’m a Libran, but the name struck me as being pleasingly non-“crypto”: in a world where blockchain solves all the worlds problems, but comes at a cost of bearing up with newspeaky words like “bitcoin” or “ethereum” or the like, the idea of using libras to buy in-app purchases seems, well, vaguely adorable.

The mainstream press coverage of the libra concept has focused, naturally, on the incongruity of placing trust in a store of value managed by perhaps the world’s least trustworthy individual, Mark Zuckerberg, who seems convinced that maintaining a menacing, narcissistic public face as a kind of youngish cyber James Bond villain is a good idea.  Financial writers have had a field day describing this as the beginning of the end of money as we know it, the dawn of a new era of money, the initiation of the live world of blockchain taking over every nook and cranny of our lives.  My favorite financial columnist, Matt Levine, has basically summed it up as “blockchain blockchain blockchain blah blah blah.” An old colleague of mine has tried whipping up a scare wave on LinkedIn, describing the financial distortions that will evolve as the Libra Foundation – the organization which will manage the libra currency, again named by Zuckerberg with his usual flair for the sinister; the libra as unit is cute, but the Libra Foundation as manager is awfully close to being SPECTRE – periodically buys or sells trillions of dollars or euros or yuan of government bonds which will back the currency – more on that in a bit.  Central bankers, meanwhile, have started to focus on what, exactly, this does mean, with Mark Carney – the George Clooney of central bankers – stating that if well-designed, the Libra Foundation which will manage the libra will have access to pound sterling deposit facilities at the UK central bank.

First, a quick explanation of what I understand as the theory behind the whole shebang.  Libras will be backed by a pool of central bank deposits (to the extent central banks allow it), government bonds, and short-term bank deposits in a basket of currencies representing the rough balance of what people buy into when they purchase libras.  Libras will then be used to denominate purchasable goods and services on Facebook and other platforms that buy into the Libra Foundation instead of, or alongside, purchases denominated in dollars or euros or rubles or leks or what have you.  The Libra Foundation will allow individuals to buy libras with their local currency, which will then be usable on any platform which accepts libras for payment, with the real-world money that’s used to purchase libras then being used by the Libra Foundation to buy said low-risk central bank deposits, government bonds, et al. I haven’t read the whitepaper yet to understand how the basket of currencies will be managed, but I’m assuming it will be something similar to how the IMF manages special drawing rights (SDRs) – some kind of a formula based on the relative weights of the currencies used to purchase the libras, subject to some overarching balancing equation based on liquidity, blah blah.  Of course, libra transactions will be blockchain registered – which for those of us in the real world means nothing, because blockchain is just a handshake mechanism which isn’t terribly different in a metaphysical way from how any wire transfer works in the current world, only it uses some nifty programming to distribute the verification of the transactions which are currently subject to centralized verification in modern central bank systems and SWIFT, the existing private sector standard for institutional payment transfers.  But because it’s “blockchained”, it’s now meta-officially blessed.  Blockchain, after all, is the new metaphysical endorsement of moral certainty.  Right – to quote Matt Levine, blah blah blah.

In any event, what’s interesting is that the libra will be, in effect, a currency not tied to a state, and thus value becomes disconnected from the state in an essential way: in theory – or rather, on Facebook and on other sites which join the Libra Foundation – individuals will buy and sell things to one another with “value” defined by the number of libras, which themselves have “value” equal to an increment of a floating collection of governmental value.  The Libra Foundation will fund itself via the float – the interest paid on the collection of interest-bearing very low risk securities and deposits it holds, although it’s not clear what will happen if the trend towards negative interest rates which already sucks in a good portion of OECD country debt continue to accelerate.  People will be able to convert their libras to the underlying currency basket at a rate which will float based on the underlying currency basket that the Libra Foundation manages, presumably with some bid-offer which again will be a source of income for the Libra Foundation (seriously, the more you say it, the more evil it sounds).

For financey-types among the readership, this will probably sound like an amalgam of several concepts.  To my ear, it feels a lot like the original concept of the Bank of England, which most people forget was a private corporation – not an instrument of state – for most of its existence.  They accepted deposits in specie – gold or silver – and used that specie to buy government bonds bearing a rate of interest.  Depositors then could use “bank notes” – essentially promises of the Bank of England to convert the note back into a given amount of specie – to exchange value amongst themselves.  In a physically defined world, this was much more convenient than carrying around sacks of coins or gold bars, and thus most people came to prefer exchanging notes.  Meanwhile, the Bank of England had to make a profit for its shareholders; just sitting on gold didn’t earn anything (and, indeed, it cost money to store the gold safely: visit the Bank’s building on Threadneedle Street and think about what it cost to build that pile).  So the Bank took most of the gold and bought interest-bearing bonds issued by the English crown, or by buying the notes of other banks at a discount and redeeming them at maturity for par.

This, indeed, is exactly the same as the Libra Foundation proposal.  The kicker for libras seems to be that, just as in the 17th century, people were finding that the inconvenience of paying in gold was hampering their ability to accelerate finance and investment in the physical world, people are finding that banking in the 21st century is too inconvenient in the now virtual world of the internet.  On a certain level, there may be some merit to that: a recent Financial Times article on the inconvenience of the German banking sector, with the result being that the author found it almost impossible to use a UK bank card to get cash, pay for dinner, or the like, shows that there remain areas of personal purchase power which are effectively prohibitively inefficient.  To the extent that people on Facebook and other sites find it challenging to use their existing dollars and euros and rubles to pay for things online, the proposal – in essence, “give me a bunch of your real world cash and I’ll give you a different, but still valuable and convertible, cash that’s completely efficient to use in the virtual world, and I’ll also let you convert back to real world cash in a convenient and seemless (sort of – I’ll still charge a vig) way” – this argument makes sense.  Again, it’s no different than what the Bank of England did in the seventeenth century, and the Swedish Rijksbank did even earlier.

So far, so uninteresting.  In fact it’s more than uninteresting from a financial perspective.  It actually represents a step backward: private currencies are four hundred years old, and over that time, the inherent risks of such a system resulted in the nationalization of those currencies because private banks couldn’t be trusted to buy totally safe instruments.  Even when they thought they were – when, for example, the Bank of England bought only British government debt – the government itself would do something like, oh, fight a horrifically destructive war against Napoleon, come close to losing, and people would want their gold back.  My ex-colleague on LinkedIn imagined something similar to this, where a stampede of libra holders all seeking to convert back to, say, dollars, would force the Libra Foundation to dump all of its holdings on the market, driving down the value of government bonds and creating a spiral where libras would convert to fewer dollars, the remaining libra holders would panic further and try to convert more, resulting in more government bond sales, etc.  Eventually the poor saps at the back of the line would get nothing and would be forced to exchange their now-worthless libras for anything, presumably leaving only Facebook able to accept them for payment against online advertising…

… which gets me to my real point about what makes money reliable as an exchange of value.  At some point, every government with a private currency system reaches the point described above.  In the US, it happened during the Civil War; indeed, war is the constant theme in the point at which a money system requires transformation.  At some point, there is a crisis of confidence in the currency, and people rush to exchange their now-doubtful notes (or bank accounts) denominated in shaky currency X into less-doubtful notes in safe currency Y, or into gold, or into other physical and mobile goods which will retain value.

Interesting but relevant aside: back when I was working for the incompetent global megabank, and has some modest oversight responsibilities for our African treasury operations, I visited Johannesburg rather often, and was struck by the number of really expensive cars – Maseratis, Porsches, and especially Mercedes and Audis and BMWs.  Houses, meanwhile, were incredibly cheap on a dollar-adjusted basis.  An Audi costs the same for Audi to make no matter where it is sold – let’s say the base model A4, which was everywhere, is $50,000.  People were paid much less on a dollar-equivalent basis than in the US – the average bank employee probably made around $25,000 after tax, versus the equivalent in the US of maybe $60,000 – but in the US, they’d drive a Corolla; in Johannesburg, they’d drive a Mercedes C-Class.  Then again, their flat in South Africa would cost maybe $40,000, while the US person was buying their house for $250,000 or more.  It made no sense until the head of the South African bank’s treasury operation explained it: most people in Johannesburg were anticipating some kind of Zimbabwe like collapse.  In that event, the escape plan for everyone was to drive to Botswana – well known as the Switzerland of sub-Saharan Africa – and since at that moment, they’d need to take as much value as possible with them, they put far more of their savings into a fancy car than into their immovable home.  It made perfect sense.

So to return to the main thread: every currency (including gold, mind you; gold also has had panic attacks in the past when large quantities of it suddenly hit the market, say when Spain looted the Incan and Aztec stores and dumped it overnight on the market in the 16th century, or when the roughly contemporaneous California, Australian, South African, and Yukon gold rushes did the same in the mid to late 19th century) eventually hits a crisis moment.  And when it does, either one of two things happens: either a strong, ideally hegemonic state power forces people to accept the currency as valid, or hyperinflation destroys the currency and it gets replaces by an exogenous alternative.  For most of historical time, the exogenous alternative was some form of relatively difficult to corrupt base metal – gold, silver, or electrum, which is just an alloy of the two – but for the past few hundred years first the pound sterling, then the dollar, have emerged as replacements.  Uneasy replacements, it should be added: there’s a reason gold is now worth a heck of a lot more than it was twenty years ago.  But what I want to emphasize is the role of the power of the state in enforcing the currency as a means of exchange.  It comes in two directions: one is taxation, and the other is the naked exercise of violence, of the state’s rough oligopoly on the use of violence without consequence.  They are, of course, related.  And we’re standing in a moment, due – to repeat a theme of mine – to the emergence of abundance onto the human scene, where violence may not be as relevant as in the past.

On an American dollar, it quaintly states “This note is legal tender for all debts, public and private.”  What that means is that the state – with all the power it has, of police, of war, of violence – will recognize the use of the dollar to extinguish tax obligations to the state, and just as importantly, it will recognize its use in the world of law, which has behind it the threat of the application of the state’s ability to compel via force, to extinguish private obligations as well.  That is to say, if someone gives you notes with face value of $10,000 to pay off a contractual obligation that has a reasonable and legally demonstrable value of $10,000, the state will compel you to accept those notes as payment to extinguish the liability.  You don’t have a choice.  You might want something else – libras, euros, cows, cowrie shells, Green Stamps, frequent flier miles – but the US government and its agents will compel you to accept the notes that are imprinted with that statement – “This note” etc etc – and will then cease to recognize any further obligation of the person who paid you using the currency.  It’s a political statement: this is government imposing itself at the most primal root of human relations, of basic exchange and definition of value.  You might want to value things differently, but the power of the state – with the gun, with the weight of tradition and history but most and, really, only importantly with its relative oligopoly of violence – will compel you to accept its definition of value.

Weak states can’t do this – Weimar Germany couldn’t; Mugabe’s Zimbabwe couldn’t – but strong states can.  A victorious Union could in the wake of the Civil War, when “greenbacks” were forced into circulation as a means of paying the government’s debts incurred in winning the war.  A victorious United Kingdom could do so in the wake of finally defeating the Napoleonic empire, as it suspended payments of specie against presentment of Bank of England notes until it finally had accumulated enough specie and, more important, prestige and trust to make such exchanges irrelevant.  I have a sense that Zuckerberg – I’m sorry, I mean Facebook – whoops, I mean the Libra Foundation will be a test state, much like all sorts of startup countries (the US in 1789, England in 1694, Canada in 1934) who test their ability to enforce a notion of value.

What’s fascinating is the idea that this startup will not be a state, but it will simply be a collection of online exchange platforms.  I suppose there is a kind of compulsion available to such a platform, namely the dreaded “network effect”: once a network is used by a critical mass of the population, the rest of the population can’t avoid it.  The compulsion now becomes not something of violence, but something of, for lack of a better word, virtual shaming.  Either accept libras or be shunned from the network; since being shunned from the network is akin to the ancient Greek notion of exile, containing at once the loss of identity and meaning, it is so horrid to contemplate that nearly all will accept the value proposition, as it were.  It makes the name “libras” even more compelling: fundamentally, this is a return to the ancient idea of membership as the only means of creating identify, and thus of creating value.  It rejects the medieval but inherited into modern notion of identity being linked to nation, nation being the primal source of violence and control and, thus, of enforcement of value.

But I return in my mind to South Africa.  I have a sense that what will really happen will be an inefficiency.  There will be some good that will be viewed as portable across borders – in this case the border between the virtual and the real, the real being maybe more porous and in flux than before, but still an “other” relative to the virtual.  Some kind of good will emerge as the online equivalent of the Maserati in Johannesburg: a mobile object into which the citizens of the online world can have an escape hatch into an alternative world of value.  Goods in the Libra Foundation would will trade at a discount to those goods which have the capacity to cross the border.  And in the real world, as the threat or lack thereof of violence of the state varies and changes, and as the value of dollars and rubles and pesos and rands and gold varies, even these will become simply markers of relative violence, of virtual versus real violence.

One of the smartest bankers I ever worked with once pitched a capital raise to the bank I worked for which failed (excuse me: the bank that I know failed.  I’ve worked for other banks since, all of which retain the option of failure).  My CEO, who was incompetent to a rather extraordinary degree, advised by the guy who has been spinning up LinkedIn panic about libras, listened to the pitch, and at the end said, well, if the world is as bad as you think, what would we use all the equity we raise to buy?  The smart banker said, in the best line I’ve ever heard in my career – “well, easy: shotguns and canned goods.”

I’m not sure I’m that pessimistic.  And I think we have constructed a world of truly human proportions, with human resiliency, and I’m amazed at how resilient we really are, even when we’re damaged by traumas ranging from divorce, to war, to suicide, to emotional homicide.  I look to the goods that can cross worlds, of the virtual, the real, the worlds of the mind and of the heart.  I’m investing in relationships.  I’m investing in people.  You, my son, I’m investing in you.

And despite my sun sign, I’ll refrain for the time being from any accounts denominated in libras.

As sometimes happens, after I wrote my last essay, I started noticing more things in the media on the same subject – or at least, which shared some of the themes I’d been writing about.  (I’m fully aware that that’s just a classic instance of selection bias at work in what my eye catches when I surf the internet, by the way.)  There was an essay in the New York Times yesterday, for example, on how we can now realize a luxury, vacation-filled form of communism, the way the pre-purge Trotskyites imagined it – written with slightly more verbal elan than the Trotskyites ever managed but with less intellectual rigor and a kind of winking po-mo materialistic-but-trying-to-mock-it-as-a-lame-fade style, which, as a proper Trotskyite (the kind that would have been shot by the NKVD in a boarding house in San Francisco in 1937), really cheesed me off.  Separately, there have been a number of articles across the internet questioning whether or not we have any hope of actually “halting” or reversing climate change, or whether we need to accept the fact that the climate has and will continue to change.  One article sent by a friend took an apocalyptic view; another was more balanced but still took the point that “the world is changing and we need to think of it as undergoing change, not somehow as a project we can reverse or overcome”.

It’s a problem in modern economics and environmental studies – both of which are more related than most of their practitioners realize – that the writing is just dreadful, so I’m not providing links to the articles above, simply out of a desire to not waste your time or offend your aesthetic sensibility, dear reader.  But my essay had three primary points, each of which kept getting echoed in the online postings of the last week:

(a) we are living in a post-scarcity era, yet our economic systems and even our ways of imagining economics remain stuck in concepts which are only sensical in the presence of scarcity;

(b) we also seem to have crossed the threshold where the technology we initially built to surpass the limits of scarcity have created a new environment of existential threat; but,

(c) we’re building and assimilating technology so fast at this point, that it seems highly unlikely that we’re truly facing a physically existential threat – although all of the above factors mean we are at a kind of psychological and intellectual inflection point.

I’ve been wrestling especially with the third point, mostly because I don’t like the idea of being predictive about the future and I’m crossing that predictive line with such a statement.  I’m willing to make observations about the present which are unconventional if supported by historical data – both causal and what I’d call “field based”, that is, judgments which aren’t rooted in cause and effect but which show a field of related and sometimes correlated trend vectors which point to an obvious basis for current conditions.  I’m really reluctant to draw that forward, even though as a human being you kind of have to because you’re trying to position yourself for “the good life”, as Mark and Viktoria keep reminding me, at all times.  We can disagree on what the good life consists of, but we’re all trying to achieve it, and to either get closer to the goal of the good life or maintain a good life that we’ve already discovered.  So you have to project, if only to then be able to evaluate different choices against a backdrop of what you think the future may be while you ignore the fact that you have a poor and blinkered view of what “choice” and “possibility” actually are and you’re ultimately stumbling about in a dark of your own creation.

But I don’t think it’s particularly interesting to note that we are building and assimilating technology incredibly quickly, faster than ever before.  It’s not even interesting to note why: communication is now essentially free (other than due to self- or societally-imposed censorship barriers), transportation of the goods and service providers required to create interesting new stuff is also essentially free (especially in terms of time), and there are lots more of us clever hominids around to have ideas and see where they go.  So if the equation that leads to the quantum of innovation in a given period is something like:

Innovation = ∫ f(population, lifespan) • g(proximity) d(f(), g())/dt

Inserting some numbers into the above, we’ve gone from less than a bit less than a billion people, to nearly eight billion people (increasing by call it a factor of 10).  By proximity, I mean both physical closeness and the proximity of ideas or of values.  Initially we were separated in space and with immense time costs to overcome, but now with almost no separation materially in space (factor of 10⁴, meaning it’s literally at least 10,000 times faster for two human beings to interact via trade or the like than pre-industrial times) and with time compressed in terms of the time used to connect and share information as well (at least a factor of 10⁴ and rising), it’s an almost supercritical implosion of ideas and people and the things we share amongst ourselves.   Even the number of years of life in which we can share amongst ourselves has vastly increased and thus the idea of “usable lifetime” has doubled – small change compared to the other accelerations but still material.  In other words, we’ve increased the potential for innovation by something like 2×10⁹in roughly two hundred years.[1]

That’s a pretty big shift in potential.  We have 2 billion times the creative capacity for innovation over a given period of time (call it a year, or a decade) as a species as we had in 1750, if I’m roughly correct on these orders of magnitude.  Unsurprisingly, it would seem, we’ve not only gone to the moon, split the atom (for good and for ill), cured or found preventative mechanisms for most of the diseases that used to kill us, continue to raise more food than anyone thought possible, and managed so far to not kill ourselves – either intentionally through war or unintentionally via poisoning the planet beyond recognition.

It’s that last bit that has media articles focused on risks and the potential for some kind of accelerating Venus greenhouse effect planetary spiral (albeit in the face of 4 billion years of evidence to the contrary), but I’d argue even there, our innovation and potential as a learning species is coming to the fore.  In all developed economies, the birthrate is now comfortably below replacement; that’s a kind of learning as the species becomes accustomed to abundance.  With expanding lifespans and material plenty, we’d be idiotic to continue to reproduce at pre-modern levels, and sure enough, we don’t.  As we reproduce at lower levels, which, demographically speaking, compensates for the expanding lifespans by not overly stressing population growth in the moment, we demonstrate the system’s ability to learn.[2]

So our capacity for innovation has exploded, like nothing ever seen before in the history of the species, and we seem to be initiating a strange combination of changes – societal and technological – which are tuning us as a species to the new condition of both abundance and innovative potential.  We’ve not completely lost our chance with the planet, either, although we might have to get used to a bit of a stampede as we all migrate to northern Manitoba and deal with some not insignificant and probably quite violent shifts along the way towards dealing with a planet which will take millennia to cool down again.  As a species obviously capable of violence, it should surprise no one that – even as we learn (hopefully) less violent ways of collectively navigating change, we’ll engage in a lot of killing one another along the way.

I hope I’m not coming across either as optimistic or callous.  I’m not optimistic about the future simply because the capacity for narcissism in us as individuals means the future will be awful no matter what happens to the environment, or to our ability to solve cancer or create new diseases, or what have you.  Our own selfishness – our individual inability to love for its own sake – will ensure that on any given day in the future, most of us will wake up and struggle to hold back tears of despair for a race so God-forsaken as ours, while others of us wake up, snort a couple lines, and spend another day viewing other individuals as objects for their own consumption.  And while I think too much in terms of statistical dynamics, which often risks allowing one to ignore the individual souls who are affected by the processes of complex systems such as the system of human society, or the linked systems of humanity and the non-human natural environment of our planet, I also am choked up every day, trying to deal with the terrifying duality of an effective learning system being built on the backs of individuals who suffer, who are confused, who harm one another with a kind of smug contempt, who are ground down into dust, who die without a viable hope other than the myths we invented back before we knew how to live with abundance.

One (again poorly written) essay I read recently, riffed on the idea that, if the planet (or our species, which to us is the same thing) were to be destroyed at a time certain in the future, our very notion of time would change.  Public figures often talk about needing to do things to preserve our way of life – or at least, life itself – for our grandchildren or what have you, but the essay raised the question “well, what if we knew there would be no grandchildren – we’d all be dead from an asteroid in 30 years?”.  They used this to introduce what should be an intuitive thought, that we’re motivated at a certain base level not by preserving life for our grandchildren, but we’re preserving life for the idea of the species continuing to have children ad infinitum.  We cherish that idea of the species living far more than we acknowledge – preferring to hide behind the vaguely recognizable faces of as-yet-unborn-but-surely-imaginable children of our children’s children.

Where I’m optimistic is for the species, and for the system we call Earth.  We – and this is a collective we, humanity and its host – seem to be getting better and better at learning and responding to one another.  The system seems to be holding up well; Earth is getting deadlier to us at an individual level, which is good in terms of thinking about how a learning system should work (bad for individuals, obviously), and collectively, the system is getting more innovative, and we’re even starting to get less damaging with our innovation (read about changes in mining pollution from pre-1970 times to today and tell me that’s not true).  There are more of us – but we’re somehow hearing a kind of system feedback, and we’re responding in our collective individual lives, leading us to have fewer children as we live longer and face a more challenging existential environment.

This is a different concept than worrying about “mankind on earth” or even about my grandkids.  I struggle with what I’ve imposed on my son in terms of how his life will be able to unfold, beginning as it did in a specific moment in May, 2012.  I’m mostly not worried about the long-term effect of his parents’ divorce on him; he’s been loved and he so clearly understands what that love means, in the varying ways we both show to him, that that side of him, the side that will discover and add new meaning to what love can be, will be fine.  No, I worry about the choices he might be forced to make, about him being potentially the first generation to live confronted with the full effect of abundance while being stuck with a human set of wiring that has its breakpoints, whether around social jealousy or the power of chemical addiction.  And I’m worried about what I’ll tell him about those choices, and about the why at the heart of the matter: why his mother and I had him.  We made a great decision, I know – but will I be able to express why?

My son’s offspring are literally not real and won’t be, likely, for a couple decades or more; I’m not worried about them yet as concrete beings.  On the other hand, the species, and the sentient-species / earth system that really makes up who we are, is very real. It is mine just as it is everyone’s, and I’m fascinated by it.  That system is having a bit of a growth spurt problem, but I’m not worried about that either – not merely because I have a vanishingly small impact on that system, but because even in its growing pains, it shows the unmistakeable signs of learning. Even as some lessons don’t get learned well or quickly (“hey, should we really burn 100 million years worth of carbon accumulation in 200 years?”), the act of learning is clearly taking place, including the painful discipline that results from getting things wrong for awhile.  That all makes sense to me.

When you center that process on a specific sentient individual, however, that’s where it becomes hard.  That’s where I worry.  Especially when you were part of the process to bring that sentient being into the world.

My dog passed away last summer, and I wrote about how I felt the need to state that I killed him, or had him killed.  I’ve come to realize both (a) I was right, and (b) I was wrong, and (c) the words I have available to me are so sparse, so impoverished, that capturing the full force of what I felt was impossible, so I simply need to be nicer to myself.  That being said, once you help a creature – a dog who otherwise would have been abandoned or put to sleep alone – you also condemn them to a new, future death.  Once you give birth – or you participate in a birth as a father – you do the same thing.  You’re not selecting the moment, and you’re not killing them outright (unless you’re a monster) – that is to say, their death, even if you bring it about out of kindness, is not your fault.  But calling into being a sentient creature, capable of giving and receiving love, capable of understanding the world on their own terms, also involves setting them on the path towards death without, fundamentally, asking for their input in the decision.  It was your choice, not theirs, and you have to own that, just as much as they will own the actual act of dying.  I helped bring my son into the world – which means I also condemned him to leave it someday.[3]

This is, I think, maybe the more fundamental existential demand of our emergence into abundance. Back when lives were properly nasty, brutish and short (Hobbes got it right for all of human existence up until around 1960 or so), we brought life into being unconsciously, and stared somewhat incomprehensibly at our offspring if – if – they asked us why.  We faced our mortality as if in a constant daily lottery, as did our children.  Any of us could die tomorrow, due to famine or accident or disease most likely, but lurking just around the corner was the imminence of death by war and crime (crime, interestingly, has been falling as a cause of death pretty much since we have archaeological records to infer it).  We brought our children into the world as both insurance and as a reaffirmation of our own existence in a world where scarcity and the fear created by that constantly challenged that existence.  But now, we don’t need children to affirm our life tomorrow – we know we’ll die, but in awhile, and most likely due to a “disease” which is really just the slow accumulation of our own poor nutrition choices or overindulgences. And since society runs, well, pretty efficiently, we don’t need children to care for us in retirement.  We might want companionship, but that’s existentially different from needing children to actually supply us with food and shelter in our post-working years.

As such, we’ve lost the answer to “why am I here, parents?”.  It used to be quite simple, if a bit selfish: “you’re here because we’ll need you, and if we’re being perfectly honest, we need a lot of you because most of you will die prior to full recovery of the cost of husbandry in a world cursed by scarcity”.  Now, when our children ask us why they exist, that answer is completely discredited. So we damn well better have an answer more compelling than “well, I was bored” or “your mom and I were acting out of a kind of societal habit” or “because maintaining a steady path of GDP increase requires a certain base level of population growth in an economy still dependent on resource distribution in an overall Ricardian framework of land and primary good scarcity.”

The primary philosophical impact of the end of existential insecurity – the beginning of abundance – is that it demands of us some clarity for not just why we’re here, but why we’re participating in others being here.  It’s terrifying because we can no longer hide behind a few static questions – “why am I here”, “what is the good life” – and instead we face an insistent demand for a dialogue, not between ideas in a Kantian dialectic, but an actual dialogue amongst sentient, and therefore unpredictable and limited but differently limited and thus not wholly intelligible, individuals.  And the dialogue then extends to include a learning discussion with nature as a whole, implicitly trying to discover whether our sentience makes us the adults, or whether the conjoined complexity of the earth makes it the mentor and reduces us, both as individuals and as a collective, to preschoolers – or whether we’re all just infants blindly searching.  It becomes a dialogue with those who brought me into being, and those who I bring into being, and that cradle of nature from which all of us sprang, about why we all chose to be here.

The existential terror of our time is facing that question without the crutch of fear, of the uncertainty of survival tomorrow or even today, giving us a morally justifiable way out of resolving the question.  It’s facing Sartre’s guilt over being alive in the midst of death, but just as much, facing our own confusion as to why our parents brought us into being, and looking at the future and telling all of them, too, yes, you’ll die, you were born (in a certain accurate way of saying it[4]) in order to die.  But that is no reason for despair, even though many of you may die painfully or willfully at the hands of others.  Fear – and despair – are easy but no longer credible cop-outs to that question now that abundance exists.

Until now, we’ve gotten a bit of a free ride.  It wasn’t free: we paid for it in scarcity, in famine, in plague, in war.  But now we have to look at ourselves – our system, the whole system, sentient us plus Earth that’s too complex to fathom or understand – and every day come up with a why.  Abundance is the signal that our childhood, as a species, as a planet, is over.

If you, reader, remember the moment when you first realized childhood was magical – that moment when you also realized it wasn’t truly real anymore, even if it had been when you were living it – you’ll probably remember thinking that adulthood remained an abject mystery.  You knew that something whole in childhood couldn’t be authentically felt any longer, but that the new – that thing that you were supposed to understand – seemed terrifyingly out of reach.  My response to that moment was a bit obsessively intellectual, and it’s taken me thirty years to claw back to a point where I can recover the body memory of being a child while still being ready to face what will, inevitably, come. Tying those loops together – tying together time before I was born and time after it, tying together nature and being human, tying cords of love and letting them bind or fail as they will – will never be easy.  But, dear reader – and my son, for whom I’ve always been writing – we’re here to learn. I wanted to bring you here to learn, and for you to teach me.  You’re doing great.

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[1]I know, the factor of 10 increase in population means that we have a physical impact on the environment greater than ever before.  And the impact of the technology required to reduce the physical separation of each of us means that we accelerate that impact even faster.  But, I’d argue, even a physical impact equation would not have the 10⁴multiplier associated with our communications. Innovation, in other words, travels at the speed of communication; environmental impact travels at the speed of a truck, or a pipeline, or a smokestack, and with a dissemination function (time to get plastic bag from factory to Great Pacific Trash Gyre to whale’s stomach) slowing it down from there.

[2]Demographics are fun and easy, by the way – you can set up your own world population model in an hour or so in Excel, and in a few more hours, build a fun model to test your own theories about birthrates, expanding lifespans, shifts in mortality trends, and you can even throw in some random variables for things like wars on the downside or sudden upticks in lifespan due to, say, a cure for cancer. Seriously, it’s fun!

And in other news, I still have no girlfriend.

[3]That doesn’t happen in relationships, oddly; we find someone already on that path, and we see if we’d like to walk together for awhile, and if it doesn’t work out, we resume separate journeys but, after all, that other individual didn’t send us on the path, and didn’t really even change our path.  They just made it more or less enjoyable while they walked nearby.  Topic for a different day, I suppose.

[4]Accurate but burdened by the poverty of language – I’m trying to learn from putting down Gordy.  But this is important as well: part of the existential fear of this transition to abundance, and the dialogue it forces on us, is that we can’t use simple language to have the conversation.  We need to rediscover the roots of where we came from back when we were pre-sentient – and we have to anticipate a dialogue at the level of the system as a whole for which we still lack any real tools.  Our language is both far more complex than anything existing in nature – and far less complex, and far to poor in complexity, to comprehend that nature taken as a whole.

I was riding in the weathered naugahyde wonderment that is the front seat of a 1973 Chrysler Imperial Lebaron earlier this evening, my friend and my son’s namesake in the driver’s seat, looking like he had been born to drive such a monstrously beautiful automobile.  It was a perfect Maine summer day – a little humid but not too hot, humid enough that the clouds were puffy and the air still, making it essential to drive with the windows down on back roads to get some air movement, to feel a breeze, between stops for lobster rolls and fried scallops and Diet Coke.  My friend pointed out that fried seafood – and, for that matter, shellfish in mayonnaise on a hot dog bun – is quintessentially downscale summer seaside fare, but it’s not cheap.  The lobster roll was sixteen dollars, the fried scallops twenty-two, each beyond the reach of a family trying to stretch a vacation budget who would thus maybe, maybe get a box of clams for eighteen dollars and three hot dogs and fries to round things out.

What they wouldn’t do – no matter how down on their luck – is worry fundamentally about starving.  Don’t get me wrong, malnourishment and actual hunger is a problem in the US, particularly for lower income families, but actual starvation – famine, dying of hunger – is not on the radar screen for anyone except those with some kind of mental affliction which prevents them from being in the light of other human beings.  This, we forget, is something rather new in the history of mankind.  Up until the mid 19th century in the west, and sometime in the last fifty or seventy years for the rest of the world, people of almost any age would have had personal exposure to a famine, where thousands of their local friends and neighbors would, in fact, have lost their lives, or come close to it, due to a fundamental inability to find enough to eat for an extended period of time.  When that happens locally now – in third world areas for a variety of reasons, or in more advanced areas which have transport problems due, say, to earthquakes or flooding or the like – local government or the UN or various non-governmental organizations fire up a fleet of aircraft or littoral landing ships and import massive amounts of food to relieve conditions on the ground.  In most cases, the transport cost far outweighs the actual cost of the food.  In many instances, because it’s easier and cheaper to piggy back transport costs, they will also bring temporary shelters, stacks of clothing in various sizes, potable water, latrines, and pretty much all that’s necessary to survive.  Not thrive, perhaps, but definitely survive – and that, again, is a completely new phenomenon on earth.

We forget that routinely.  First, that it’s new – postmodern humanity is burdened with a terrible memory and an incomprehension of the scale of time, enhanced by our recently invented ability to fob off memory onto digitized storage banks and to the utter breakdown of our sense of duration due to the almost instantaneous delivery of change which now occurs in our lives.  The end of regularly occurring death on a massive scale due to famine is a very new phenomenon, but we don’t consciously recognize that.  We also, however, forget – or maybe simply don’t consider – that this is totally, completely new in the history of the planet.  At all times past, pre-sentient and even sentient creatures have had to accept that their lives exist, on some level, solely at the whim of the availability of nutrients and shelter, and that availability is roughly consistent but not totally so, and sometimes vanishes altogether.  But as long as we don’t lose the manuals that we’ve written describing how to engage in mass scale agriculture, and to build and maintain the machines that allow it and also allow for delivery of the harvest across vast distance and to store it over time just in case something happens, we’re going to be well-fed forever.  We are the first species to do this.  It’s actually more novel than language – we can see signs of abstract communication ability in dogs, chimpanzees, and even crows – and certainly more novel than tool building.  Admittedly, it’s a product of all the nifty cool intellectual and physical and inventive toys we have as sentient human beings, but that product makes us totally, completely different as a biological system than anything that’s ever grown up on our planet.

There’s something notable about totally new things, however, especially totally new biological realities.  Mostly it’s that if something is completely new, then the lessons or systems or learning frameworks which have come before it are now, if not no longer valid, likely not going to work the same way as they did before.  Literally every part of a living organism – every species that has been successful to date – has evolved in a condition of potential and often actual scarcity of the items which are required to survive and reproduce.  Human beings no longer are subject to that condition (again, assuming the vanishingly small number of us who do, in fact, know how to farm and build the machines which farm, convert produce to food, store food, and create fabrics and shelter items continue to do their jobs reasonably well, which I think can be taken as a given right now given how few people actually do this and how little investment is required relative to the overall human project to do so).  So we’re no longer subject to the one condition which has been a constant since life started to evolve.  Give that, I think it’s almost a given that we’re going to require some period of experimentation to get used to our new-found, utterly unheard of in the history of time gift of abundance.

Taking a step further, though, one could imagine that for a sentient, self-reflective species, which has already had hundreds of generations of reflection and thinking about how to thrive (giving rise to its own science of thriving, economics), and how to be happy (philosophy and religion and their various more or less ridiculous cousins), we’d face a further quandry of this novelty.  Scarcity – or the likelihood of scarcity, to the point of the almost-predictable assumption that mass death and destruction will occur, if not regularly in time then certainly regular in existential reality – is a sometimes spoken assumption of our thinking (in the case of economics, for example) and is an often unspoken assumption as well (say, in morality – “property is theft” really only works when property is scarce; if it’s not, then there really can’t be “theft” of an overabundant, valueless commons good, or if there is, it’s because a system has artificially walled off access to something which has no real scarcity value in the first place).  Our entire facade of thinking about how society should be ordered, how a good life should be lived, is based (at least in part, and admittedly to a greater extent in some contexts and a vanishingly small part in others, which I’ll get to in a moment) on at least a leg of assumptions that are now utterly, completely wrong.

In such a setting, we should not be surprised that the old organizing mechanisms – indeed, even the old discursive mechanisms which allowed us to analyse and critique the organizing mechanisms – seem broken and unworkable.  And it shouldn’t surprise us that the responses in the public sphere take on two, traditionally Kantian, end points of thesis-antithesis.  On the one hand, there is a community of those who deny that there is, in fact, an abundance: this would be the right wing of today’s world, demanding that walls be built and resources withheld from those who haven’t “earned” them when, in fact, there isn’t anything to earn any more except social prestige: how can you “earn” access to food which is able to produced in quantities which is tens of times more than what humanity can safely consume?  On the left, the response is to create artificial supply constraints – “we can’t use energy or land anymore because the world will boil up due to human climate change” – when those constraints simply don’t exist.  It’s not that human climate change isn’t real; it is, and plenty of cities will be submerged, and plenty of historically constructed mechanisms for how humans live will be uprooted.  But our ability to produce and move a surplus of the stuff we need to live and thrive really isn’t impacted by such change; it’s a red herring.  We’ll be hotter and want to live in northern Manitoba in a way which no one, ever, in history, has ever wanted to live in northern Manitoba (if there were other options on hand; admittedly, plenty of Cree people wanted to live in northern Manitoba when offered the chance to move to Nunavit), but we’ll be fine.

In fact the emergence of that dichotomy gives me reason to believe that I’m on to something here, that this totally new phenomenon of abundance does represent a real, new thing that humanity is failing to grasp.  I see few, if any, people talking about “well, we screwed up the climate, and sea levels are going to rise and the world will be hotter and deserts will grow, but I guess that means we should be planting more wheat crops in Siberia.”  I mean, some Canadians are thinking about how land prices should rise around Hudson’s Bay, but that’s about it.  (Canadians, by the way, are going to make out like bandits in the future.  Literally, Canada couldn’t have been designed to better exploit a warming Earth.  Maybe Toronto housing prices are for real.)  In general, though, people are either denying that change has and is happening, or they are saying that the “change” will lead to apocolypse, despite no evidence whatsoever to imagine that a technologically armed earth and human species can’t solve pretty much any problem thrown at it, at an increasingly rapid pace.  The emergence of a failure to understand a condition is actually a fine marker that the condition itself is real, given that human beings are a slow, plodding, and generally stupid race.

I have no idea what will emerge; driving around in a pre-oil-crisis Chrysler, which was dumping aerosoled gasoline into the air a pint at a time everytime we pulled away from a stop sign, isn’t an ideal environment in which to come up with original thought.  Although it is a rather pleasant one, I must admit.  My unoriginal concept at the time was to guess that humanity will make survival goods essentially free, or at least, subject to trivial barter economies in which the basic desire for human services – a haircut, a massage, life coaching, maid services, decorating, creating small objects of beauty – will allow most of us to not be bored and in return, we’ll get food, shelter, comfortable clothing, and basic health and mental care.  Meanwhile, those goods which remain “scarce” – remarkable items of human or natural origin, like artworks and diamonds and real estate – will continue to exist in a parallel but increasingly abstracted “market” which has less and less to due with day to day survival, and access to such network will be subject to as-yet-unknowable “criteria” of admission on which we will base our social and hierarchical battles of the future.  Literally battles, I think: we will end up fighting and creating new immoralities so as to be able to be a part of that market, even though it will be increasingly self-referential and thus absurd.  That is, “real” goods and services will exit the market, while Geffen goods – goods of sheer privilege, whose possession is not actually important except to express the possessor’s ability to possess – and what I call control goods – rights to social control or direction of others – will exist in a market with a denominator which is increasingly irrelevant to day-to-day life.  And over time, there will be fewer of us – because who wants to raise new children in a world irrelevant to striving? – and our ingenuity will absorb more and more goods and services into the unpriced, free world, and the Geffen and control goods will become increasingly irrelevant, but never entirely.

It will take millenia – if ever – before the Geffen and control goods lose their meaning because those are the hangovers of our past existence, a period so far as we can tell of over three billion years, of scarcity.  As sentient, self-referential beings, who have also been clever enough (and have the opposable thumbs to enable it, sorry dolphins) to create the technology required to eliminate scarcity for survival goods, we’ve actually been building for a few millenia the artificial notions of scarcity which will allow us to continue to “want” to strive in the future.  We don’t “need” to strive – now that we have Deere GPS-navigated tractors which can till soil, sow seeds, weed, harvest, and re-till at the rate of an acre every five minutes, with no human engagement whatsoever – to survive.  But we do need to strive, to feel like we have a point for doing anything, because that’s how we got past the billions of years of scarcity.  Scarcity made us strive; we re-invented scarcity, albeit of a derivative and purely social kind, to keep us striving.  Thus until we actually do get past the idea of survival scarcity completely, we’ll just create new trophies to strive for because we have to.

I really can’t imagine a world past scarcity in an absolute sense because of that genetic defect.  I have to hope that there will be a mutation in the future of the genome that will drop the notion of scarcity entirely.  That being said, I think it exists: I think that’s actually the basis of what love is, as I know it.  Love exists without limit, and is given without need of return.  It’s the perfect example of a non-scarce good, a limitless good that actually gets even more abundant as it is “used” or “consumed” or, really, shared.  But the last few years of my life have made me realize how much we are too terrified of love to make it our own.  Most people think “love” is just another Geffen good, another thing to strive for.  Even when you try to escape that, our coded expectation of scarcity usually overwhelms and, in this new world of being human, distorts and corrupts.

But then again, abundance is new.  Maybe love is just a step ahead of its time.  Hopefully, anyway.

I wrote in my last essay in passing about a belief I have, that value will become decoupled from money in the foreseeable future.  What that decoupling will consist of was left unstated, but I got a couple of requests for more detail, and then I read a collection of essays, The Wisdom of Money by a French philsopher and writer, Pascal Bruckner, and what struck me about the book – which examines recent historical and contemporary attitudes towards “money” in modern capitalist societies – was how money, wealth, and the measurement of relative value is almost universally conflated when people think about money.  And that made the strange lock mechanism that is my thought process shift, and twist, and align, and I realized I was ready to describe what I meant by “decoupling.”

At its core, Bruckner’s argument – and most discussions of money in our current Pinketty era of inequality – perpetuates a core confusion.  That is, they collapse the very different concepts of the pursuit of wealth and the process of translating labor or intellectual effort into money. That is, they posit that when we pursue wealth,we actually pursue the accumulation of money.  This creates a definitive confusion, which I think most of us experience when we try to talk about “money.”  On the one hand, when we rail against value disparity, we are talking not about the normatively false differentiation of value between a CEO and a schoolteacher, but rather about the different amount of moneythey make.  And when we talk about money itself, we rarely clarify what role it is playing at a given moment – that is, is it a store of value, a transmission device of relative value between actually realizable goods and services, or is it a point-in-time comparator between different value regimes as it expresses itself against other forms of money or value transmission devices or potential stores of value.

Bruckner regularly conflates meaning across these three dimensions, and he’s smart enough to occasionally realize what he’s doing, but by and large he can’t escape his own confusion.  I don’t find any fault in this; he’s doing what we all do, and if he were extremely precise in his understanding, I think the essays would suffer in their role of trying to understand how we have come to have a fraught relationship between ourselves, both as individuals and as members of overlapping societies of people, and money as a dynamic social construct.  But our relationship is going through a time of massive transition, just as the information revolution is destroying long-held notions of “society” – built-in geographical spaces and subject to normative constructs of race and dialect – and creating instead dynamically created and destroyed “societies” which exist and die both in time, space, and virtually.

It should be no surprise that money – existing as a means to allow societies to transmit within themselves commonly held notions of value, to store and move that value through time and space, and to convert that value in trade and in competition with other societies, depending on its role at any moment as store, transmission medium, or comparator – would need to go through a similar redefinition.  Money is, after all, the supreme abstract creation of any given society; its use is in effect the purest mirror of the norms and expectations of a society, far more natural a portrait than anything put on canvas or sculpted in stone or bronze.  Perhaps only the law as a construct can match it, but even that has a kind of conscious intent to it; money, on the other hand – as revealed by the inability of economists and philosophers to pin down a common way of discussing it but nevertheless being forced to observe it and comment on it – is an unconscious abstract. It is defined by its use, which is itself defined only indirectly, through how society chooses to use it.

As a monolithic and reliably static notion of “society” breaks down, however, it’s not surprising to see money as a construct also start to fragment.  Take, for example, money in the form of a store of value.  Fundamentally, money no longer plays a role in storing value except in small quantities and for very short periods of time.  Rather, ownership interests are the primary store of value.  Equity – be it in the classic legal form of common stock, or the very traditional older form of real estate title, or ownership of unique items of artistic or cultural value – has more or less completely replaced money and money equivalents (bonds, which are nothing more than rights to future money) as value stores. And we observe this in financial markets, where equity valuations are now decoupled entirely from any future money generation and instead are based on newly ephemeral concepts such as brand value, the ability of an enterprise to accumulate data or user hits, or in the case of real assets, the likelihood of future demand value increasing due to population, decay of existing stock, or scarcity.

This phenomenon has been observed in the financial press but only indirectly through the recognition that “equity valuations” no longer reference dividends or cash flow, and that accounting profit and loss (which defines enterprise value in terms of money as a unit of account and reference to a primary unit of value) no longer drive the actual market price of a company.  That valuation decoupling is what allows the value of financial assets to skyrocket without any noticeably impact on the prices of use goods – but the idea that the reference point no longer serves as reference point has largely been ignored.

What I’d posit is that the market for ownership of real assets now exists in a separate society, consisting of a defined set of actors – mostly corporate actors, including pension funds, mutual funds, and other cooperative players which dip into the world of “real” individuals, but also including some individuals who by virtue of their ownership of sufficient assets or access to intangibles now largely express value in this separate world.  This society always existed to some extent but is now more or less completely decoupled from the actual requirements for survival and daily living.  Oddly, many of the “real” people – you know, physical people named Larry or Melanie or Greg – live lives which look very much like “ordinary” middle class people.  They might have better houses or better cars, but they aren’t living like the robber barons of the last time we went through this round of wealth accumulation, where the Rockefellers and their ilk constructed the estates and ranches of the New World – or married into or bought the formerly feudal estates of the old world.  They have no pressure, as do the rest of us, to budget carefully, but by and large their wealth lives in a world fully decoupled from the items that they might purchase in the “real” world.

The only time most of us come up against this world is when we purchase an equity object like a house – indeed, a home purchase is effectively the only time most of us encounter this new decoupled world of value storage.  And fewer and fewer of us are encountering that world, because like all value store objects today, the valuation in terms of value of money in its role as a short-term value exchange item gallops ever higher. Our use-value wages, the prices of use goods (food, clothing, immediate shelter such as a room overnight or a monthly rent, Legos), have remained largely constant, which is a good thing when you think about it because we’re humans, temporal, real, concrete – massive disruptions in prices have a consequently massive emotional and physical impact (ask the people of Venezuela).  But the end result is that there has already opened up a world where the same unit of account has almost entirely eliminated its ability to play a role in intermediating transactions between two distinct societies, the society of entities who own future ownership value and the society of individuals who exchange current use value.

With this decoupling, I’m increasingly of the opinion that the society of owner-value transactors will develop a much more direct barter economy.  Why bother converting into the unit that describes use-value when it’s so much easier to trade ownership interests directly for one another? Indeed, even temporarily using the unit of account of use-value makes one’s wealth dead for a period of time, and no one wants that.  There is even historical precedent for this, albeit the inverse of what I think will occur today in a world of informational efficiency.  Throughout much of the Middle Ages, coins and bills of exchange were only used to facilitate trade over distances (confined to luxury goods in large measure or in goods used in war, ie., state goods), while use-value exchange was conducted entirely in kind.  “Money” only existed in the real world when real estate or civil and state penalties were involved (including levies for war); only then would the “average” citizen encounter pricing in the form of shillings or pounds. Prices in pounds, indeed, would be absurd to most people, much as the idea of exchanging pre-IPO non-SEC registered ownership interests in Uber or Pinterest or whatever non-publically tradable ownership right would be absurd to most people.

In that historical world, “money” existed only for those large purchases between state or quasi-state actors who would deal in items which implied ownership or the potential for future ownership in productive assets, and it existed because the ability to exchange in kind was limited due to the spatial and geographical limitations on transfer.  In our modern de-materialized world, fully abstracted, there are no limits to transfer, and few limits on information – the only differentiations are on demand preferences and opportunity sets.  Similarly, in the medieval world, small-scale transactions were extraordinarily limited in variety, making barter and in-kind exchange actually quite simple – whereas today, individuals are faced with effectively limitless choice, even among those living at or below the poverty level.  In-kind exchange is impossible when choices are unlimited and in constant flux, making an intermediary descriptor of stable valuation in the form of a dollar essential.

I’m not at all bothered by this bifurcation of exchange societies; it is what it is. Historically, I’m pretty confident that the world of ownership exchange will periodically be destroyed, because human beings show an amazing capacity for slaughtering one another in war and revolution.  The losers in such events invariably – although not obviously – are the holders of ownership interests; the markets, state structures, and exchange norms upon which they depend to make ownership worth owning are the prime casualties of war, even if the most obvious casualties are the people who own nothing who are killed.  I don’t like the fact that the ownership class – owing to a different but no less human yet inexhaustible demand for pleasure and satiation and the sensation of control and power – tend to misuse their wealth, to take advantage of the bifurcated worlds to occasionally translate their ownership value into baroque displays of use value, but “not liking” that fact doesn’t mean I’m exercised about it.  Humanity, in a word, sucks; to get upset by it does nothing but upset ones digestion.  It certainly doesn’t result in a change in human nature.

Ah, there’s a term I’ve been avoiding – but now that I am forty-four, I am completely convinced that there is a human tendency – not an absolute behavioral imperative, but definitely a tendency – towards selfishness and narcissism.  I’ve seen too much of it in others, including those who purport to being “enlightened” or “awake” or “conscious”, to think otherwise.  And that includes me, and I make no pretence of thinking that I’m particularly enlightened at all.  I think about morality – the art and science of how we value one another as intangible and indefinable objects, or beings, or worlds – but that doesn’t make me moral. If anything, it just focuses a lens on my own immorality and failings.  I see in myself my own tendencies towards selfishness and bias, and while I might try to rise above them, I see every day how I find new ways to wallow in my own desires. Human nature is to fool oneself.

And human nature has very little to do with money.  Money is simply an expression of how we value things within our worlds, our societies – the clusters of human beings that share a critical mass of commonalities such that they create the ability to define a clear and internally understood notion of purpose and meaning.  Money is created wherever such communities form – which is why online “communities” of gamers take so readily to the creation of in-game money forms, and readily exchange real-world dollars for them – and I think that will only proliferate, only it will increasingly involve exchanges of real world goods as well as online virtual stuff.  But the more isolated money circulation pools that are created – whether it be of ownership value exchange, or online virtual rights exchanges, or scrip among small businesses in a given community, or in-kind exchange in areas where state decay or local hyperinflation induce it – the more every such community will still want what’s called a numeraire currency, a comparator object – that third function of “money” – that facilitates cross-border transactions by providing a stable and more or less universally acknowledged denominator.

In our world today, that is the dollar – and I see no reason why it will be anything but that in the future, mostly because the United States remains the place which, unique among nations, seems able to balance the seeming contradiction of dynamically creating societies while at the same time facilitating both ownership rights and the ability to create new notions of what is own-able, and yet can proliferate choice among use objects without limit.  In every other country that I’ve lived in (with the exception of Canada, but proximity may prove the concept here), either a lingering sense of the stasis of tradition, or the inescapable lure of the will-to-power of the totalitarian state (or both, China), effectively means that the equilibrium that seems to exist in the dollar economy doesn’t and can’t exist in other potential comparator units of account.

My father and I once had a long argument about what makes a country, and I said a “country” is by definition a coherent body of law coupled with the infrastructure to enforce it.  It’s not a geographical construct – although often that infrastructure requires geographical coherence to enforce the law consistently and efficiently.  It’s also not a people, or a race, or a group of people united by common cause.  In that regard, Rome was truly the first country, coming about at a time when geography supplied ample limits to its ability to enforce its law, but defined truly by the concept of “citizenship” and the legal rights that entailed.  Because of what money does – as store of value, as transmission of value, and as comparator of different conceptions of value – it needs to have some connection to legal rights to “work” in a sustainable way.  The only major currency in the world that has that linkage is that of the United States.

And that, in its way, has made the philosophical concept of money that much harder.  With the numeraire currency also effectively the sole currency for ownership value, and with the US economy being the one that produces most of the economic research and financial innovation, with American economists consistently producing the most research into monetary theory and what limited bits of the philosophy of value that get produced, it takes a supreme act of self-consciousness and self-criticism to examine a system in which the researcher has been embedded since birth, in language, transactional norms, and in observable history.

Bruckner, on the other hand, is from France, a country which has lost its currency – excuse the multifaceted meaning of that phrase – while being unable to lose a kind of quintessential need to impose a single definition of “society” and “culture” on itself, in a way which American society couldn’t care less about.  It’s unsurprising that coming from such a place, Bruckner would be able to identify the tension points in what money is today, even if he can’t escape the linguistic, cultural, and academic ambiguity when one starts to use the term “money” with rigor.  But I think understanding the next stages of evolution for money’s role in society – and for understanding what forms money will take in fulfilling those roles – we as humanity will need to become more self-conscious, will need to be aware of how we can abuse the notion of money even as we acknowledge the fact that we’ll continue to abuse it.  Complaining about inequality or about wealth accumulation or the like will get us no where; thinking about what we want money to do for us, as opposed to how much or what kind of money we want, is the only path forward.

That’s a facile way to end, however.  Ultimately, there is no path “forward” – at least so far as I can tell.  Unless we see an evolution of human motivations that shifts definitively away from the unconscious bias towards physical and emotional gratification, we’ll just cycle back and forth between a now fairly routine rotation of money as value store, money as use value representation, and money as translator. The path forward would decouple value from money entirely, and release “value” into the space spiritual. Our physical use needs would be recognized as secondary, and our representations of value – and our most diligent and imperative needs to trade that value – would be based on a set of moral needs which would have little, if anything, to do with simply gratification.

My sense – especially reinforced over the past few years, of both self-criticism but especially a kind of observational critique of those who claim spiritual truth – is that we are quite some distance from that.  That is to say, that particular decoupling of value and money is not in our foreseeable future.  In our lifetimes – and in the “lifetimes” described by the modern press, enamored of the time scales of the internet where today’s world is declared obsolete once the IPO gets past the employee lockup date – we have nothing to look forward to except the proliferation of money spaces, and a resulting dissolution of the money concepts of ownership value storage and use value exchange.  The authors of this site are trying to live by example for our children (and everyone’s children, frankly) for what a more complete decoupling might look like.  We are neither optimistic, nor are we declaring defeat.  Pragmatically, we just continue to live, and write, and reflect.