Posted: Tue, January 22, 2013 | By: Zeev Kirsch
Money is at the very center of how human beings communicate with one another in complex societies and yet it is almost completely ignored in all private k-12 education in the united states and most nations. Money isn’t economics, Money is human behavior; it is social and individual psychology. Particularly now, as the world body of nations and central banks escalate currency wars(and real wars), more people are turning their attention to money. As a long time reader of futurism, science fiction, and for the last decade, transhumanist literature, I’ve wondered why these genres have all generally ignored money as a question. If future technological development inevitably depends on the productivity of complex societies comprised of many individuals operating at arms length, then why do transhumanists and futurists ignore money? This is true even in popular culture of futurism. In Star Wars First Contact, Captain Picard travels back in time and must explain to a compatriot that ‘in the future’ there is no money because society does not need it any more. The future of money needs more than a pop culture non-explanation. Practical futurism which seeks to actually create the future, instead of hope and change for it, must embrace all horizons of where our present transitions towards our future. ALL transhumanist visions require complex human coordination to be achieved and thus, going forward from here to utopia(s), they require (m)oneys. Therefore, deliberate ignorance of the money question threatens to retard transhumanist progress from actualization. Tim Collins, a noteable mind in the transhumanist movement presents his own views on practical futurism in what he calls the ‘grinder way’, I applaud him for his deep thinking and subsequent Action on the subject when it comes to human device augmentation. I’m certain he would extend the philosophy of the grinders way to include a renewed transhumanist focus upon the money question.
Let us begin at the beginning, the very beginning of humanity; Primates. Research on the social behaviors and psychology of primates has been escalating in the past decade. Chimpanzees, it turns out, don’t like to share, but they will share with fellow chipanzees under certain circumstances. In one particular repeated observation in the wild, they will trade food for sex. This means the male must obtain the food , transport the food before it spoils and then tender the food to a female in expectation for a sexual encounter. Trading bananas for sex isn’t money of course, but it’s a primitive form of prostitution transaction distinguished from the other more prevalent chimpanzee sexual relationships lacking the food-trading component. This clearly doesn’t tell us anything about Money in human society but it does tell us that human behavior underlying the creation of money far precedes the evolution of homo-sapien. The chimps are bartering for sex, and bartering is one of the behaviors that underlies the early creation of money. Barter encapsulates the use value of money.
Millions of moons later, at some point in the evolution of Mankind between chimposapiens and homosapiens, Primitive Mankind began squirreling away consumables that did not rot as quickly. From this we can assume Mankind began exchanging objects and services not only for their instant utility, but for their future utility, as a set of long term promises and expectations. This encapsulates the savings value of money. You can save something for its use value for a later date. Less than ten thousand years ago man began working advanced stone tools, metals, the sledge and roller turned into the wheel, and yes, one day (m)oneys arrived in many many forms and evolved alongside the societies that were creating and advancing their use. It is a long long story that we will never truly know, but we know that at various points things like shells, goats, shaped stones, even human beings, were used for trade, but that eventually coining precious metals became the most popular money substrate within a few thousand years ago. Since then the rise of paper notes has taken over as the predominant substrate of (m)oneys in the world. Money has evolved through various (m)onies.
An essential jump in the modern era of money, is that modern forms of (m)oney whether metal or paper have abandoned their ‘use’ value and and transitioned to become valued exclusively as a medium of exchange (hence the saying that ‘you cannot eat gold’). While precious metals generally don’t oxidize or burn easily , paper is more vulnerable and more easy to replace ( creating widespread counterfeiting problems relative to counterfeiting of coined metal). Further along the line of money history these specialized forms of money started to be lent out to other people in return for sets of promises, or sometimes for something called ‘interest’ which was an expectation of more Money in return than the amount lend out. Thus was born the ‘time value’ of money which helped precipitate growth of massive networks of promises and expectations themselves having come to define the modern world. The lending value of money turned humanity away from the fight against a history of rotting warehoused forms of money, away from a history of heavy and difficult physical coinage for transport, slowly toward simpler and cheaper methods of structuring promises and expectations. This transition could not have happened without the growth of predictable and stable institutions which have come to define complex societies.
How do we understand Money Now.
Now that we know the history of money, what is the present of money ?I am not here to describe what is going on in current events, nor what the various intellectual giants of Money would explain to you about how various forms of credit comprise or don’t comprise different tiers of our modern Money system. There are literally thousands of articles a day you can read about that. However, after years of trying to understand what Money is based on studying its past, I would like to offer my own personal definition of money, which is best suited to our present understanding. I believe that ‘Money’ comprises the fungible parts of the dynamic network of promises and expectations held between individuals and groups in a society;
[Fungible] because there are many commitments , promises and expectations in society that are not fungible. Some of those promises and expectations are interpersonal and even ideological in nature. For example, Some are commitments and expectations based on Loving relationships, or strict Hierarchical positions in secular and non-secular institutions that cannot be exchanged in a more or less fungible manner. Interestingly, the definition of which relationships and objects are fungible changes with the values of societies and individuals themselves. Money is thus intimately connected with our personal and social value systems.
[Dynamic] because promises and expectations are not discrete platonic quantities to be metered out in units, but fuzzy neurological outputs based on our common understanding of the persons’ and groups’ behaviors and communications.
[Parts] because many things, in addition to legal tender, serve as a money in any given society. The aggregate of all these (m)oneys simultaneously represent all nodes on the infinite network of promises and expectaions comprising Money in society. Anything people find highly liquid for the purposes of trading goods and services can and does function as a (m)oney in our society. For example, In the the American Neogulag , cigarettes candy and bagged instant coffee serve as a money for millions of people. Yet as we all know, the major component of Money in the u.s. is the legal tender currency titled the federal reserve note, or colloquially referred to as the Dollar.
The future of (m)oney and Money.
What stops people from abandoning a (m)oney and what stops people from abandoning Money altogether? When you consider the notion of ‘abandoning’ money, it generally represents currency collapse; the failure of a (m)oney to be used for the purposes of exchange lending and savings. A (m)oney may fail slowly through time, or all once. As observed in modern monetary history, the typical path of a modern (m)oney [ money now almost always being centrally issued in the form of ‘Notes’ ] is that its failure begins in a predictable manner, slowly accelerating up a curve until a convexity point is reached where other (m)oneys or no (m)oney at all become more popular than utilizing the failing (m)oney. This tipping point is reached when a discrete change occurs to the willingness of various institutions and persons willingness to lend money at interest to one another (time value of money) to possess the money over time (savings value of money) and to use that money for payments and sales of services and products and investments ( exchange value of the money)—-All in that order. For example, if people started using currencies other than the Euro, the Euro would be abandoned in favor of other currencies and eventually be out of use, it’s value destroyed. On it’s way there, people would stop lending to each other in loans denominated in Euros, People would dump their savings of reserve Euros and last but not least people would finally stop exchange Euros altogether. This is how any number of currencies around the world have failed multiple times over the past decades. Luckily , we in the west, believe our system to be far away from any tipping points. But not everyone who is looking towards the future agrees with this outlook. I am not going to give prognostications about the future of the dollar. Needless to say, if you knew what would happen to the dollar, you wouldn’t be telling people about it.
Big ‘M’ Money however, is another story altogether. the question of Money goes beyond any one (m)oney, let alone the dollar. How is it that a transhumanist or other futurist could conceive of a star trek future where a collectivist society of enlightened humans stopped needing to use tokens to represent a network of trusts and promises. In such a society, how would individual desires be expressed in the collective frame work. If I wanted to eat ALL the apples. what would stop me? When would the collective apple limit be reached for me as opposed to for my best friend who is allergic to apples. Clearly any organized network of human beings must have a rule system. Rules implicate allowances, limits, credits, or whatever you would call them. The more collectivized a society is the more the network of promises and expectations between individuals and groups needs to be mediated by the uber-collective, what we normally call government. Would a system of ‘credits, limits, or allowances’ registered as digital entries be anything other than a digital form of centrally planned money (which appears to be happening in sweden) ? What other system could there be?
I do not think society can operate without a fungible dynamic set of promises and expectations we understand to be MONEY. Wether or not those promises and expectations can be traded more freely by individuals, or are more carefully ordered by the governing systems of that society is another question. So , what other systems could be out there? Bitcoin is selling itself as a very powerful tool for avoiding government control over money, by expediting digital exchange. Many transhumanists and futurists seem very quick to take up the bit-coin mantle. Prescious metals, while far more secure in their non-digital existence, are far more difficult to coin and trade with (especially as compared with distances allowed by digital internet). And yet, many anti-futurists believe they are better off trading their not so precious dollars for precious metals is wiser than trading them for digital registries in a relatively New digital system that relies upon telecommunications networks for maintaining , if not at least, expanding its value. The question people are asking about the future of Money is what will happen to the most popular (m)oneys out there such as the dollar, euro, yen and yuan. I"m not sure. But the increasing popularity of precious metals and alternatives like bit coin (not to mention all sorts of trading syndicates, some even using the internet) are a sure sign that people with excess savings are looking to get out of those currencies.
My question for the Transhumanist community is what do you think about the future of Money and money? Over the years, I’ve perceived that Transhumanism is splitting into two camps which would provide separate perspectives on this question. One camp embraces futurism as necessarily collectivist at the highest level. The other camp embraces a future more focussed on pockets of individualism relying upon deep comittment to technophilia and individualist interest in science; call this the Individualist camp of Transhumanism. They are the camp more attuned to the dangers of central planning and tyrannical collectivist decision paradigms—-(facism, communism, whatever…). I am positing the classic juxtaposition of the orwellian versus the huxleyian fears for the collective. It seems to me Transhumanists trending towards the individualist camp would emphasize the importance of developing robust Money systems where the Collectivists would emphasize the Overall Strength of the entire network of promises and expectations. The former fearing the Transhuman social aggregate will suffer excessively under capricious powerful collectives ( namely government and central banks) , and the latter submitting their faith in collective leadership will provide a network of promises and expectations in the overall best interests of the Transhuman social aggregate.
The Collectivist and Individualist Camps are not entirely mutually exclusive, and like a ying/yang seem to define each other in a relativistic sense. However, both camps seem to be taking note of bit coins recent success. I’ve learned a lot about bit coin, and while there have been many interesting developments with it as of late, I think the transhumanist community is overlooking the actions of a nation in the world that many consider ‘the future’; China. China is buying gold coins not bit coins. So please tranhumanists of both the Collectivist and Individualist persuasion, or both or neither, I am asking you to help me reconcile why one of the most forward thinking, futurist, and seemingly Collectivist nations on earth has been busy hoarding gold for a number of years. I am not asking you to ignore bit coin or embrace gold, I am simply asking you for a little more help and to pay a little more attention to the great money question.
[ [Disclosure] I am not endorsing or dismissing bit coin. I do not use bit coin nor have I ever used it].
Zeev Kirsch has also predicted, at the Long Now, the following scenario:
“By the end of Obama’s second term as President, The Central Bank of China will publicly announce that they have an amount of gold in reserve that is greater than Germany’s.”
the link to that “LongBet” is HERE