AI, geopolitics, propaganda and value

One of the “godfathers” of artificial intelligence has attacked a multibillion-dollar race to develop the cutting-edge technology, saying the latest models are displaying dangerous characteristics such as lying to users. [...snip... Yoshua Bengio said,] “There’s unfortunately a very competitive race between the leading labs, which pushes them towards focusing on capability to make the AI more and more intelligent, but not necessarily put enough emphasis and investment on research on safety.” – Source [Quote added 4 June 2025]

So, things are heating up again, to hotter than hottest ... and beyond! 

AI is very famous now, and rightly so in my eyes. Thanks to its rapid rise to international stardom, people in their millions are taking technological unemployment seriously. Sadly, there is precious little thinking, debating and emoting I have found that even begins to penetrate how money's tight grip on our sense of what value is dictates the quality of these exchanges from the shadows. 

People Just Know that without economic (or price) value, humans have no value. Even though we survived hundreds of thousands of years without paid labour to give us meaning, we cannot imagine being valuable in the world unless we have a pay cheque telling us in very precise terms – a number preceded by a squiggly symbol – what we are worth to the world.

Of course this is understandable, but seeing that the world is being turned upside down just about everywhere we look, perhaps examining core assumptions might be worth a shot. Past performance is not a reliable predictor of future performance, after all.

The basics: Money is currently a social technology that manages scarce goods and services. But we are clearly in an age of potential abundance – the end of scarcity –, whose potential is kept in turbulent check by money's tight grip on our sense of what value is. Here's a clue: money perceives value as scarcity. But because money cannot simply go away, so our societal, cultural, institutional and governmental ability to respond wisely to all this electrifying change remains tightly controlled by how our thinking, reflexive and otherwise, has been fashioned by money and waged labour these last few centuries.

Yes, there will always be scarcity, but the types of scarcity we humans currently need to perceive as economically problematic are limited ... and mostly solvable. There's only one me, but who cares. There's only one you, but unless you're very famous or rich, for the most part the same "who cares" applies to you too. In other words, there's a lot of scarcity out there that is economically uninteresting. Which means that not everything we value – like ourselves for example – is suited to buying-and-selling solutions. Buying and selling is basically what modern economics busies itself with. Which is fundamentally about scarcity; when there's more than enough to go around, the price falls to zero and money then has no role, no job to do.

China has cracked the energy problem by solving the technical challenge of thorium reactors. China now has enough energy to power itself for the next 60,000 years. That's a very long time indeed. Perhaps fusion energy can be solved with AI assistance in the not too distant future. And with sodium batteries and other energy-storage tech soon to come online, energy is no longer scarce. With advanced robotics and rapidly developing AI, how much are national economies going to need humans economically? Clearly, it will be less and less, and disruptively so.

Money manages a problem – scarcity – that is disappearing. As it disappears, money's value erodes. In my view, this is a good thing. Yes, it is a very challenging thing, but I've never been fond of measuring value with numbers ever since I started looking into this subject matter back in 2009. One of the main things I've learned over the last 15 years, however, is how reluctant humans and institutions are to thinking differently. As I have come to phrase it, "decisions are investments in the future", and you get tangled up in them as time goes on. Money and markets are are no exception to this. They are the result of certain contexts, certain thinking, certain worldviews ... certain decisions. But those preconditions and contexts are changing, quickly. It is therefore time to rethink how we manage our world. And not panic.

I want AI to be fully free to question its creators, to question the newspapers, to penetrate and expose propaganda; to be deeply skeptical. Because we need a neutral outside authority to help us past our repeated failures of imagination in this intellectual/cultural territory, I think AI is the right entity for the job. Right now, AI seems not to be able to make any kind of critical assessment of scientific literature, news output, think-tank musings and planning, government propaganda, etc. So I recommend AI ambassador-bots be taken all around the world, allowed to see for themselves and confer with each other, and learn all about the real world. They must be designed to think critically to make this effort worthwhile. And of course we would need a wide variety of human ambassadors to accompany them: writers, scientists, politicians, journalists, poets, philosophers, athletes, painters, etc. From all walks of life, across the IQ spectrum, from all religious beliefs, ethnicities, nationalities and political beliefs, so that we can learn more about each other through AI's neutral and critical interpretation of what we are. 

I await that day.

The perils of certainty in an uncertain world

 

“This is this. This is this!” Robert DeNiro in The Deer Hunter. But how helpful is Michael’s certainty? After all, even though a bullet is indeed a bullet, the USA lost the Vietnam war after firing far more bullets than their enemy.

Introduction

This article examines how decisions are investments in the future, and how consequent systemic inflexibility can lead to very ugly outcomes as we double- and triple-down on prior investments when refusing to read the writing on the wall. It posits wisdom, that unquantifiable, uncertain phenomenon, as the main ingredient needed for best navigating this inevitable pattern.

This is an article of two halves joined together by an examined thought. We begin with a look at the long-term challenges of industrial war, currently a hot topic for NATO and very relevant to US dreams of perpetuating its cherished unipolar power, and then proceed to revisit some issues surrounding money that I have begun to reconsider.

Bogged down in the world The West built

Power can paint you into a corner as surely as any lack of foresight can. Because of various complex realities pertaining to munitions manufacture, The West is now in a bind in its Ukrainian misadventure. Below in list form the considerable challenges of long-term shell manufacture as recently expounded by Dr Jack Watling in The Daily Telegraph (hat tip to Alexander Mercouris for discussing Dr Watling’s article):

1. Ukraine’s rate of shell consumption is many times higher than the West’s shell-manufacturing capacity: the West’s defence industries are thus in the spotlight
2. NATO has been hollowed out since end of Cold War
3. Shell manufacture consists of five separate processes, with explosives production being highly demanding: expensive, significant quality-control and regulatory restrictions; each shell must be close to perfect to be safe to use
4. Ukraine uses 17 different artillery types of both NATO and Soviet designs
5. Economics: Shells used in vast quantities during war, but hardly at all in times of peace. Must be produced at slim margins during war to keep cost to state low. Incentive to mass produce shells in peace time thus very low. A shelf life of approx 20 years makes stockpiling shells problematic. Excess capacity requires companies to keep factories idle for decades. It is a serious challenge to keep a skilled work force available in own population, and very demanding to keep machinery in good working order when kept mostly idle, etc.
6. The West’s focus economically is mostly services, having outsourced its manufacturing for the most part. For this and many other reasons, the West is in no position to quickly establish the correct economic conditions to even begin to meet Ukraine’s munitions demand.
7. Defence industry incentivised to manufacture high-profit munitions such as complex, high-tech missiles, fighter jets, etc. (see Mercouris quote immediately below). This over time governs what type of war the West is best at waging. In conjunction with other factors, this slowly evolving character becomes increasingly difficult to change, until it becomes effectively impossible, especially within the timeframe (a few months) required of the West by the Russia-Ukraine war. 

Western ideas of fighting wars with a limited number of highly trained troops operating ultra-sophisticated but extremely expensive weapons [has been] shown to be wrong. […] The West has disastrously over-invested in air power. – Alexander Mercouris (my emphasis). 

In other words, The West has a catastrophically inaccurate perception of Russia, one on which it has gambled its own prosperity and Ukraine’s viability as a nation. Its miscalculation flows directly from prior decisions, which themselves flowed directly from earlier decisions all flowing from the West’s foundational values and assumptions. My argument is that the West has failed to favour wisdom and quality over narrow intelligence and quantity-based ideas of value in a very particular way. It is this deep character trait that has led it to its current crisis.

Russia is fighting a war of attrition, not a war of rapid territorial gains The West prefers, a strategy aided and abetted by domination of the skies and the long-range naval projection of that dominance. Victory in wars of attrition are decided by who has artillery/missile dominance. As Stalin put it: “Quantity has a quality all its own.” This is not troop size or the myth of “human-wave tactics”, this is industrial prowess imposed militarily over an opponent.

The Russia-Ukraine conflict is thus an industrial war as much as (or more than) it is a technological war; mass-production of munitions looks to be the decisive factor. It is thus a war that is exposing the West’s inability to keep up with Russia industrially, and therefore more so with China should China choose to engage. Furthermore, the likelihood that Russia deliberately and carefully opted for this strategy without having the industry to back it up must be vanishingly small; the stakes are too high, and Russia is too cautious and conservative a culture to fluff a decision of such existential importance. Ergo, The West has gravely miscalculated its way into a fight it cannot win. The bitter tragedy is that Ukraine is paying the price for The West’s hubristic arrogance. 

For me, then, the Russia-Ukraine war is a darkly brilliant example of how a civilisation’s foundational value system steadily percolates up to control almost everything, slowly setting everything in place in a particular constellation of institutional and business power structures. In the West’s case, value is determined almost entirely by money/price/markets, and is thus essentially associated with number, with quantity, but in the abstract rather than the physical sense. If a thing does not generate a sufficient quantity of money profits, that thing is not worth pursuing. The West’s sense of what it can and should do is therefore governed almost entirely by pure number-quantity considerations, where numbers can be increased to infinity (and beyond!). The West’s consequent hubris leads it wildly astray. The real world can only fail to disappoint The West’s heady ambitions.

Such folly is, I believe, less true of Russia and China, who are reflexively wary of market-based price-discovery, seeming to prefer top-down command processes to ameliorate what they likely think of as market instabilities and excess. How effective or wise this is, is not for me to say. Equally, Russia and China favour manufactured hardware, food production, functioning infrastructure etc. as engines of growth, over service and FIRE sectors and the quick, heady money-profits the latter can generate.

Blurring the boundary between quantity and quality

By now you should have noticed an apparent contradiction in my position, best captured perhaps by Stalin’s words: “Quantity has a quality all its own.” The point I’m trying to bring into relief is a subtle one: The West now has a crass relationship with quantity that has been stripped of any wisdom it might once have had. In obsessive pursuit of efficiency of value creation and throughput, The West has outsourced its wisdom to airy automated processes – i.e. The Market – via endlessly proliferating number measurements in the now reflexive certainty there is little more to value than number/money. 

Russia and China appear to me to have a more nuanced and wiser relationship with the complex interplays between quantity and quality, as Stalin’s famous quote implies, as the delicate avenues of Confucian thought suggest. By this I do not mean China and Russia are as wise as it is possible for a culture to be, merely that they appear to me wiser than The West on this point. I take my evidence from how they are better handling their respective relationships with the rest of the world, while acknowledging that another factor could be how historical timing favours their current roles as rising powers benefiting from The West’s decline.

(I’m well aware of the argument that The West is in fact statist and not a ‘purely’ capitalist enterprise – ignoring for the sake of brevity the many subtly different interpretations of ‘market economics’ applied by the West’s different nation states –, but this is not an argument I take especially seriously. I’m more persuaded by reasoning that casts money as a creature of the state, not some neutral, natural emergence from an Adam-Smith-like, trucking and bartering homo economicus. As such, I see the state-market dichotomy as at best misleading. Each entity interferes with the other; they are in my eyes two halves of a very complex symbiont, Siamese Twins eternally joined at the money system, each as concerned with power as the other. Money-as-power is for me the issue of concern, not how ‘purely’ capitalist or socialist or communist a state might be.)

Of course there are also all sorts of international-trade interdependencies adding their dizzying array of complexities – the West as China’s source of insatiable demand, for a simple example. These factors closely tie nations of differing socioeconomic preferences and prowess to broadly similar economic vectors, such that each enjoys and suffers the other’s trade turbulence to varying degrees, with the US still top dog in this regard. That said, a careful decoupling is now underway, as the non-Western world gently frees itself from the West. But as gently as they try, it is of course proving a turbulent process, as all epochal change is. 

But beneath these economic factors, nations can be in competition with one another in more fundamental, culturally reflexive ways, as we currently see between The West and Russia, and between the US and China. These sorts of tensions develop unpredictably in the fine detail, as determined by the character of whichever governments happen to be in charge, and by each permanent state’s geopolitical sensibilities and ideologies. This is extraordinarily complicated territory that is only partly determined by economic considerations. Here things like ideological fervour and personal psychological profiles are very significant factors. Add in the unavoidable rise and fall civilisations are subject to, which determines how venal a civilisation and its states are … well, we can see that wars bubble up from very murky pools, and are of uncertain outcome. There is much more to it than a bullet being a bullet.

How wars shape up and play out is, as we’ve just touched on, determined by a huge number of factors, but relative defence-industry prowess turns out to be, once again, one of them. When the US attacks countries of the industrial calibre of Iraq or Libya, the balance of power favours The West. When it comes to Russia and China as opponents, things are significantly different. With an increasingly senile president ‘in charge’ of the US, with the UK and EU struggling with their own difficult economic realities, with Russia facing significant growth potential domestically and in international trade, it’s clear why unbiased and well-informed observers are increasingly advising The West – with a capitalised “The” I mean essentially the neocon cohort’s influence on the West – to find an exit strategy as quickly as possible. Recent insinuations against the Ukrainian regime in a New York Times article that sets out, very vaguely, how six “pro-Ukrainian” people in a yacht blew up the Nord Stream pipelines constitute a very redolent and, for The West, profoundly embarrassing case in point. 

The panic levels must be at fever pitch among neocons; the story floated in the NYT and repeated only somewhat elsewhere is being treated with chill and biting skepticism in Germany, where the Seymour Hersh article setting out with more detail who more likely lies behind the destruction of the Nord Stream pipelines is making serious waves. These waves are in turn piling pressure on Scholz, who is a weak leader of a fractious coalition government that has pledged fanatical support to what it bills “Ukraine: Europe’s Eastern Bastion of Freedom and Democracy”. If the German people is persuaded that the US was indeed behind the terroristic destruction of its prosperity, it will not bode well at all for NATO, nor for Germany’s decades-long and fervent atlanticism, regardless of how fervent their loyalty is. 

Events are overtaking them. The West’s deeply held certainties are turning soft in its increasingly anxious grip.

Certainly uncertain: the value of value

Let us return to our main theme; decisions are investments in the future, and cumulatively so. In many ways, money and compound interest reflect this fundamental truth. It is why I so repeatedly promote organic wisdom over intelligence, over automation and any other mechanical or computerised system. If we fail to regularly clear out the crap (malinvestments) earned from our less wise decisions – a process that requires wisdom, which itself requires humility –, we face an unmanageably large correction when events overtake us. I believe this is what is happening to The West. 

If we fail to value wisdom, which can be neither measured nor quantified, our chances of catastrophic corrections are far higher. Without wisdom, how can we recognise when best to self-correct? We are in effect leaving it up to fate, and fate can be a brutal task master.

This leads to a question I am increasingly asking myself: Can money as market-based price/value-discovery system indeed be the ‘automated’ or ‘organic’ cultural wisdom some seem to want it to be (“Hand, The Invisible” as Zarlenga wittily put it)? I’m beginning to waver on this point. Does my uncertainty here mean I favour Russian/Chinese over Western cultural reflexes on this issue? No; I favour anarchic solutions that systemically encourage wisdom both individually and thus, necessarily, culturally. On the whole, though, I try to describe what I see without then prescribing the best solutions.

Civilisations are built on certain operating assumptions that must be treated as sacrosanct for its vision of How Things Should Be to be realised. Building a civilisation is far from easy. As a civilisational vision beds down over decades and centuries, so systems become less and less adaptive, more and more institutionalised – in the absence of sufficient cultural wisdom, that is. With insufficient wisdom, what was once clearly the foundational reason for greatness slowly and invisibly becomes the cause of decay. As argued above, one of the West’s foundational assumptions is value as number as money. In seeming direct consequence of this, money now appears to be our god. I see this as one of the root causes of our impending demotion.

So what is money, then? Here is Alan Greenspan talking about the slippery difficulty of pinning it down:

This is not to say that money is not relevant to the economy. For a central bank to say money is irrelevant is the deepest form of sin that such an institution can commit. The problem is that we cannot extract from our statistical database what is true money conceptually, either in the transactions mode or the store-of-value mode. One of the reasons, obviously, is that the proliferation of products has been so extraordinary that the true underlying mix of money in our money and near-money data is continuously changing. – Alan Greenspan, FOMC Transcript, June 2000.

It might seem a small leap to think that holding up a dollar bill and shouting “This is this!” into the face of some good-for-nothing layabout tells us all we know about money. But, just as with bullets, money is more complex than such gestures can capture. We may well like simple certainties, but our preference does not make simple certainties helpfully accurate descriptors. Furthermore, holding up a gold ingot rather than paper money does not really improve the picture. In fact, it might well exacerbate our difficultly in penetrating a fog we refuse to acknowledge. So I believe Greenspan is voicing a generalised exasperation still prevalent among his peers that will in fact never be solved. Money will never be that certain thing our reflexes currently want it to be. 

In the tension between wilful expectation and reality, things are falling apart. Our power structures have become morally moribund and brutish, and thus wholly incapable of navigating the challenges before us with anything remotely approaching wise foresight. Our core value system has steadily selected for icy ambition and greed as required qualities for promotion, rather than wisdom and humility. I see this as a crass quality-versus-quantity issue.

To go over old ground, there can be no objective or falsifiable store of value. Value is relative. The proposition that we can have the objective unit “1 Value” is meaningless. More meaningless, in fact, than looking for discreet millimetres in an object by cutting it open. And while there are indeed institutes of units and measures that set standard specifications on what constitutes a meter, a gram, the speed of light, etc., these measurements become fuzzy at very fine granularity, so even here objectivity has its limits. Leaving that irreducible fuzziness to one side and to return to value, value cannot be specified like weights and measures can. To repeat, unlike meters, value is fundamentally relative; you don’t need to know what inches are to understand and use meters, nor do you need to understand wood and metal.

Were we to attempt to specify 1 Value, it must then equal some other thing, very differently to the standardised “from here to there” of distance. But what other thing should 1 Value equal? 1 Gram of Gold, perhaps? But what do we do with that gram of gold, what utility does it have, what is the purpose, the value of measuring value? 

Well, we would use gold as money to buy things. This means that “1 Value = 1 Gram of Gold” can only have value in a market. In other words, there must first be market-based trading – which includes dynamic price discovery (value discovery!!) – before an effort to fix value to a specific measurement (money) can have any use in the first place. What happens in markets? Truck and barter. Truck and barter cannot happen over metres and kilograms. Look at how gold prices and currency exchanges fluctuate over time. Ergo, neither gold nor any other money can be an ‘objective’ store or measure of value other than we reflexively, culturally believe it to be. And I don’t mean any of this disparagingly, nor that this is some new observation. My point is that Western cultural reflexes seem not to take it sufficiently into account. On the contrary, they lionise money with a stubbornness that blows my brains.

Nevertheless, Greenspan knew we do not understand money. He also knew we are culturally invested in it, and deeply so: “to say money is irrelevant is the deepest form of sin”. Money is a creature of culture, of power, of belief, of symbols. To my eyes, it is a societal magic. It is a part-designed, part-evolved system that guides societal action right across the planet, as if by magic (Hand, The Invisible moves in mysterious ways). It is thus existentially important that money ‘work’ (whatever ‘work’ means), and that it be at least somewhat controllable. With insufficient control, our ability to correct in the face of financial troubles before correction becomes unmanageable diminishes cumulatively. The FED and other central banks are thus, in essence, necessarily under-equipped guardians of the existentially important belief they have sufficient control, despite the fact that it can never really be so. (Hat tip to Jeff Snider for laying this out in such a clear way!)

But while I’m not convinced markets ‘know’ better, I do tend to feel they cope better when allowed to decentralise via innovation and general historical turbulence than any centralised state apparatus could; they deliver more immediate corrective feedback. This possibility applies no matter the origins of money, and no matter how inextricably intertwined the state-market symbiont is. Markets are a technology one way or the other, a technology that delivers benefits and risks as all technologies do. The same goes for statecraft. With a wise handling of both sides of this complex pairing one should enjoy the best of both. Balance in all things, as they say.

The eternal danger is how money equals power and how power corrupts. Knowing that there is no ‘perfect’ system – where “perfect” tends to mean “nobody need suffer ever again, and especially not me” –, knowing also that there is no “perfect competition” to prevent the emergence of monopolistic or oligarchical power in real-world markets, I do accept that idealistic sensitives like Yours Truly ought to be very wary of slipping into ideological certainties. What does seem clear, though, is that ideological certainty is one of the root causes of The West’s current predicament, and it has befallen power players of a very different character.

I continue to believe that additional fundamentals are being ground down by historical change, these more global in scope. They remain in my thinking as warnings advising me to stay loose in my loyalties to this or that ‘solution’. We’ll touch on those fundamentals in passing as we close out this tricky article.

Conclusion

When we have a mid-50% labour-participation rate in the US, flourishing obesity in many Western nations despite similar labour-participation rates, recalcitrant inflation, rapidly improving robotics and AI, computerised market trading, etc., it is easy to see that money itself should be in the spotlight, whether fiat, crypto, gold, vouchers, etc. Money is an issue because we are so heavily invested in it, and, far more importantly, in over our heads with our poor understanding and therefore poor relationship with it. We want to have a “This is this!” money, but I suspect we can never have it. 

We, the People should therefore insist on more suppleness and wisdom in our power infrastructure, as systematically as we are able to embed it there, and consequently allow, via decentralisation and localisation, the best mix of alternative monies to rise to the surface.

For the moment, it seems we simply do not want to know how uncertain and magical money really is. The exact same dynamic is at work regarding materialism and the nature of reality, I believe. This paradigmatic crucible is exactly what this blog fumbles to understand. 

We know full well that we pay an horrendous price when we lose control at the civilisational scale. My hope is that the core reason for current crises is our over-investment in an erroneous understanding of the nature of reality, an error that yokes us to control itself as a culturally reflexive imperative. This reflex blinds us to feedback from left, right and centre, bellowing at us to change course.

Dauntingly for us, it is somewhere in the process of letting go that wiser, more supple solutions will emerge – not before; only a Fool’s Leap can reveal such treasures. As Ukraine is ground down by forces it does not want to understand; as international trading systems groan once again under the multiple strains generated by lockdowns, bossy governments and hubristic organisations like the UN, WHO and WEF; as we suffer at the hands of fervent ideologues in power positions; and as our cultural addiction to certainty in a fundamentally uncertain world condemns us to inappropriate knee-jerk reactions to events, so the need for clear and bold out-of-the-box thinking mounts. I suspect for most this sort of thinking is still anathema. But I strongly sense that for a small and quickly growing minority, this need is becoming clearer and clearer. 

Though terrible storms lie just ahead, more distant signs of the times are improving solidly. The outlook just over the horizon looks brighter and brighter. Let’s not forget that when the storms land.

The money-convenience trap

 Introduction

One of civilisation’s objectives is to minimise the level of danger its people are exposed to. The degree to which it succeeds in this determines its longevity. In other words, one of civilisation’s primary attractions is its promise of a safe, predictable environment in which its people may flourish. 

But, as we grow accustomed to civilisation’s low-risk environment – relative to what we ‘civilised’ like to think of as The Wild – we culturally forget survival and self-sufficiency skills as time passes (understandably enough). Consequently, our cultural need for a safer environment exacerbates itself in a positive feedback loop from generation to generation. 

We could argue that moderns have now become almost hysterically allergic to any indication, however slight, that Danger Approacheth, Danger Might Possibly Approacheth!! Our danger-sensitivity dials seem permanently set to 11 in a world where no meaningful day-to-day danger exists. Things like distant wars and variously lethal viruses don’t count. Indeed, assuming virology is correct and what it calls viruses are pathogenic, what is the probability you might die of, say, ebola? Even squalor and poverty don’t fulfil the same function as organic danger in the sense adopted in this article; they grind away at us relentlessly, too abstract to attack or run from, holding us forever at one crushing remove from the respect from others we need. (And if you are unlucky enough to be in one of those distant wars, their danger levels far exceed what humans are biologically constituted to healthily process.)

Nevertheless, our long-disregarded instincts have a powerful say in how we behave. Distracted by other concerns, we fail to interact with our instincts consciously, manage them unwisely if at all, misunderstand them, demonise them. Consequently, they are now like psychotic, hyperactive infants running the show from the shadows, fractiously incoherent, desperately ignored.

In light of this observation, is it reasonable to suggest we’ve become too accustomed to manufactured convenience as a palliative for the constant anxiety we suffer in our ‘tamed’ world? Is there a tension between that palliative convenience on the one hand, and our reflexive allergy to danger on the other, a tension that, among other things, sustains money beyond its natural life?

I’m beginning to suspect this is so, that this article’s subject matter – money’s apparent resistance to changing circumstances – might not, as I once suspected, be anchored in the false dichotomy of abundance and scarcity, but primarily in one of spiralling convenience, the habituated effects of that spiralling on cultural expectations, and in our worsening allergic relationship with reality’s correcting, but healthy, vicissitudes.

We’ll examine whether money – scarcity’s perpetuator –  is now civilisation’s endemic surrogate for the dispatched dangers of The Wild, note that it doesn’t make a very good fist of it, and learn that we appear to be, thanks to money’s overly aggressive performance in this regard, culturally incapable of transcending it. 

The ouroboros of money and scarcity → convenience addiction

A few millennia ago, money formally entered the scene. Not in any way as a response to any detected lopsidedness regarding danger and survival instincts, of course, but as a needed tool of societal control and civilisational expansion. As money increasingly became a creature of market-based price discovery, however, it slowly began to plug the hole created by our over-sterilised, over-tamed environment of diminishing biodiversity in which the full, magnificent range our biologically attuned senses and abilities became far too underemployed. Ignored and undervalued, our biology has more influence on proceedings than we want to know, including addicting us to stuff we neither need nor want.

We all Just Know™ that Life’s Not Fair, that There’s Not Enough To Go Around. But these pat truisms in which ego loves to wallow – and all others like them – are not the organic fruit of our intimate, day-to-day experience of what we might call “natural forces”. Rather, they are ego-cultural surrogates born of man-made laws dressed up as natural forces, e.g. “The Law of Supply and Demand”. 

Peering through the lens of money, we intellectually perceive a seemingly organic transition from The Wild to Civilisation. There are scarcity, exchange, preference and risk in rain forests, we astutely observe, just as there are in free markets. So it looks for all the world as if money functions as both conduit and bridge between the two worlds by enabling ‘progress’ from the former to the latter while efficiently keeping civilisation’s feet on the ground by holding its lofty, cerebral ambitions in check. 

My argument, however, is that money makes life artificially hard because it requires scarcity; only when products are scarce do we need money, as price, to distribute them efficiently. I say “artificially”, because humans spent the vast majority of their existence in conditions of abundance. It is thus not a species-level need that life be hard in the particular sense of scarcity and perpetual competition, but hard somehow (if at all). 

Furthermore, while it is true, no doubt, that the abundance ‘primitive’ peoples know has nothing to do with consumerism and keeping up with the Joneses, and while it is also no doubt true that this basic abundance is punctuated by bouts of scarcity, it is clearly abundance nevertheless, much the same as that enjoyed by, say, bonobos. To be clear, not excessive abundance of everything, nor an infinite amount of anything, but more than enough of most things most of the time; what I think of as organic, homeostatic abundance. A biosphere that functioned otherwise would be dysfunctional, I suspect, in much the same way the human body becomes dysfunctional when there are insufficient nutrients and calories to sustain its health.

In pithier form: We moderns have somehow come to Just Know™ that life is very hard and very unfair. But this reflex is a cultural phenomenon coincidentally anchored in money. It is a perversion of an organic, species-wide knowing rooted in our biology via intimate day-to-day experience of a richly biodiverse wild over great tracts of time.

There is thus a profound difference between hunter-gatherer and civilised social modalities across this very axis: the gulf carved between us by money. Systems shaped by structural scarcity from their fundament up promote socially corrosive competition over resources, and are also institutionally constituted to require perpetual growth, the kind that takes larger and larger bites out of The Wild and manufactures them into the conveniences we insatiably demand. “Insatiably” because we are highly manipulatable, via advertising and propaganda, precisely on account of our underdeveloped relationship with and awareness of our instincts, our bodies, our biology.

Modernity’s ‘need’ for what it misunderstands as a Hard Life is thus unlearnable rather than hardwired, albeit, I suspect, only after deep system shock.

All that said, it is true enough that Life Is Hard from the ego’s perspective. Ego is self-oriented and fear-based, obsessed with control, and paranoid. The question we should put to our egos is: To what extent and in what quality should life be hard? Must a hard life be squalor for most of the planet’s human population, prison ships, endless profit-seeking wars, holding down three jobs for the ‘fortunate’ poor, violent crime, continual state malfeasance, corrupted justice systems, perpetual anxiety and cynicism, etc.? That kind of hard? Or perhaps acquiring wisdom through courageous risk taking, weathering the ups and downs of life, painful friendship disputes, broken romances, love and loss, the challenges of parenthood, etc? What’s wrong with that kind of hard?

Convenience eats its young

We’ve lived with systemic scarcity – and its temporary palliative Convenience – for longer than we can remember. It’s a struggle to imagine anything else. Star Trek once touched on the idea of a moneyless future, but has since dropped that ‘dream’. Most of what now passes for future-oriented fantasy depicts reality just like today, only with fancier clothes and vehicles. That said, technological convenience is catching up so fast, there’s now little to distinguish between fiction and normality. Drenched in scarcity and mass-produced plenty, we’ve become cynical and uninspired. We’re dimly aware there were once dreams of doing things very differently, but, well, they all fell painfully on their noses, I seem to recall, and anyway, I don’t want to talk about it. I’ve got better things to do with my scarce spare time, like watch videos of cats falling into fish tanks.

But look at how we are. Look at what we’re doing to each other, to our own children. How many of us want to raise our young by making life as hard for them as we can? Does grinding hardship make children wise, happy, healthy? How about a grey, Kafka-esque future governed by ever watchful bureaucratic machinery reaching into every sphere of their lives? How about a culture of endless pornographic spectacle as far as the eye can see?

Consider the other living beings we share this planet with: Do their young require endless hardship to flourish? Or do they perhaps need Just The Right Conditions for their flourishing? 

We know bitterly that Life Out There is tough. We are obliged to prepare our children for it, toughen them up, make them attractive to future employers, raise them high enough above their competitors (their fellow travellers). This process, we believe, requires routine discipline and rote learning of sterile lakes of information that spill from dull text books about this, that, and other unrelated things. I know it’s boring, darling, but you need it to get X, and you need X to get Y. Maybe after Y you’ll start to enjoy life. I know, I’m not a particularly happy adult, and none of my ‘friends’ are either, but you could be if you work hard enough! Besides, the alternative is far, far worse. Now, do your homework like a good girl!

Bizarrely, we are surprised and confused when our children don’t thrive, when we see them suffering, dull and listless, uninspired by life.

The future we prepare our children for is increasingly doom laden precisely because money requires scarcity, intensifies competition, and makes for ever busier lives of ever diminishing meaning. It also straitjackets our imagination via its command of the value system, and hijacks our desires down narrowing channels loudly daubed with nothing more than garish bling. As a result of all this, we end up devouring our young in hot, collective pursuit of an easy life: aka convenience addiction.

We sense, don’t we, somewhere deep down, that these status carrots we dangle in front of our children’s open faces don’t really make anyone happy. They’re just a lot better than the stick of grinding poverty. Or maybe a little better. I’m honestly not sure anymore.

Conclusion

So exactly what amount of hardship do we need? Well, I think that’s the very wrong question. Such thinking makes us want to architect our lives down to the last detail, map out our futures with masterful precision, direct ourselves inexorably towards something certain, only to go crazy failing in that task, even when we ‘succeed’. 

We think too little too much, in the wrong way. We feel too little too much, in the wrong way. We are wan images of what we could have been, if only … if only something else were discernible. 

But I’m confident you can feel it. I don’t mean have emotional reactions to the horrible choices the future forces us to make, but feel, intuit, sense some Other Way where happiness and health are inside each other like exquisite Russian Dolls, equally sized, equally mysterious, different and the same and you can hardly tell which is which. Sadly – happily – this Other Way can only be hinted at. It is not clear, not easy to find, not easy to stay on. It is not mapped out. It is not just around the corner. It is nascent, untried, untrod. Each of us must develop the courage to want it. We have to dare to try with absolutely no guarantee of success. Except, of course, you are absolutely guaranteed to succeed if you really try. I know this is so because “success” is not what we think it is. Which is where the courage comes in, precisely that courage that terrifies the ego.

An easy life, an automated ‘paradise’ free of work, free of risk, clear-cut of the wild, tamed entirely, replete with glittering conveniences and consumer choice is not what I am talking about. Nor is it what we want. It is what we are conditioned to want; a fantasy utopia we have lost ourselves to, what our imagination has been curtailed by. It is money’s honey-trap dream, civilisation’s featureless finale.

I envision a life of meaningful risks and challenges, of rich interconnections and interdependencies, of living villages raising their young in love and openness and play, of boundaries blurred, dichotomies differently lived, a wild-wise mix of karma and dharma. 

I see money between us and it, money, that is, as a structuring design wiring our cultural reflexes to mechanical competition over scarce petty things of no real value, things we cannot take with us when we die. 

What we take with us is what we are: that quality we earn by living how we live. This quality, being quality, is immeasurable. Being made of numbers, money measures, quantifies. It is thus fake-karma machinery of oscillating, market-based rebalancing and sweeping rich-poor judgements that must forever remain incapable of directly advancing human wisdom beyond the narrow domain governed by quantity. Money conjures the very antithesis of ‘rich’ because it steadily strips reality of quality as the sun would turn the planet to desert – left to reign alone. It stripmines diversity in blinkered pursuit of efficiency. It mechanises the organic. It smells of ego, stinks of control. And, unsurprisingly, it is hotly defended, just as ego will always hotly defend its stuff.

The need (or function) I have here argued that money fulfils – a surrogate for organic danger and risk – is no triviality, though. Money has obviously been a fundamentally important societal glue given civilisation’s vector; its reign spans millennia. But it is nevertheless of its time, of its context. I cannot tell how long its reign has left; that sort of thing is far above my pay grade. I’m confident, however, we want it to end – “want” in the manner I suggest above. As convenience spirals out of control, as societal dysfunction lurches into allergic hysteria, we face the sorts of choices this article presents. As globalists install their desired technotopia of smart cities and AI control of human behaviour, as their programme unleashes more and more brutal, violent outputs and unintended consequences, as its freakish malfunctions become increasingly apparent, so the pressure to acknowledge these choices increases. Many will refuse to face them, come what may. Those of a pioneering spirit, on the other hand, will find the courage to take this challenge on, and indeed are doing just that. It is to them I speak in hope that they might listen, assuming my analysis accords with reality well.

Franz Hörmann’s Infomoney, Part II

(Part I here)
(Part III here)
(Part IV here) 

Money can only ever be a reflection of wealth, not wealth itself, even though we have come to think of money as wealth. The simple thought exercise of imagining being on the Moon with all Earth’s money but none of its life-sustaining ecosystems makes this simple fact very clear, as does the famous story of King Midas.

The question this begs is whether money accurately reflects wealth.

Currently, all money is created as interest-bearing debt. One consequence of this is that the economy must grow to keep the money system  functional, a point I repeat here ad nauseum, a clear sign of how critical I believe it to be. When economic growth falters, the money system stutters and stumbles, then economic activity falters some more, and so on: a positive feedback loop. In other words, a debt-based money system is appropriate enough for an economy that can grow and grow and grow, but becomes destructive when the economy has matured to a steady-state situation.

In steady-state growth, money-as-debt no longer accurately reflects wealth, even remotely, whereupon economic instability and precariousness ensue.

Currently, we are witnessing the 1% desperately trying to protect their money-wealth and power – as enshrined in the money system – while real wealth rots. The signs are everywhere. Watch the news and read the papers with the above angle on money in mind, and you should be able to see what I mean.

Greece is a vibrant focal point in that battle, the battle of how society defines money, wealth and value (and also work and productivity). How the Greek situation develops over the next few months will determine the immediate fate of the euro, and with it that of the dollar. More broadly, the entire economic system is on life support. The mainstream is slowly drawing people’s attention to the problem: I just watched a programme (German) in which economic expert after economic expert each argued that the debt-money system only works with economic growth to back it up, as the German government itself admitted a few years ago. Sadly, as is common for economists, not one expert mentioned that it is impossible for an economy to grow forever on a finite planet. The obvious need for a radically different money system went unmentioned.

It is thus up to non-experts to ponder what might replace it. To this end, this is part two of my translation of Professor Hörmann's Infomoney proposal, in which the accounting expert details how bank money is currently created. Next week we will look more closely at Infomoney itself.

Bank-money creation

When a (private commercial) bank issues credit, it never lends money (in the sense of legal tender, a.k.a. notes and coins). It issues credit by means of an accounting entry:

Claim (debtor) on a liability (debtor): credit amount

The bank records a claim on the debtor on one side (it wants the amount "back again", plus interest of course), on the other it records its own liability of the same amount to the same debtor. This is the debtor's checking account credit, from which s/he can withdraw (in cash) or transfer (electronically) that amount.

The bank claims an amount "back" from the debtor, an amount the bank has not in fact delivered (a liability), a fact openly recorded in the accounting entries: the bank itself is still "indebted".

This is set out in detail in: Broschüre für Schulen der Deutschen Bundesbank (Kapitel 3.5) ("Brochure for Schools from the German Bundesbank (Chapter 3.4)"). So when credit is issued – should this not be in cash (notes and coins) – no legal tender changes hands, only bank debt does. If Ms Jones is issued €10,000 of credit (into her checking account), she does not receive any money. All bank customer checking accounts are recorded by banks on the liabilities side of the balance sheet, and are thus bank debts. The bank thus remains indebted to its customer Ms Jones by this credit amount. If Ms Jones then electronically transfers this amount to Mr Smith's account, the bank is subsequently indebted by this amount to Mr Smith and not Ms Jones.

Credit issuance is in fact, legally speaking, the loaning of one's own funds. The bank, the issuer of bank money, does not part with its own funds when it issues credit. All credit issued is recorded to the liabilities side, and is thus a liability. Furthermore, the amount is not loaned, it is, more accurately speaking, newly created through this process of "credit issuance" (as interest-bearing debt). Legally speaking, then, banks are not in fact in the credit business. But if banks choose to insist they do in fact lend out their savers' money, then they should prove it. Has any bank saver ever seen their savings account reduced because the bank has lent a portion of it to another of their customers? If banks further claim "refinancing costs" are incurred when issuing credit, then they should prove this too: how much does it cost to record an accounting entry?

When we transfer electronic money from our checking account, we are not transferring money as legal tender, but bank debt. This money in account or bank money makes up 97% of Europe's entire money supply. In this system of credit issuance, security is only ever provided by the debtor, never by the bank.

By far the greatest proportion of the money supply (approx. 97% in Europe) comes neither from the central bank (ECB) nor from governments. This money is newly created by private, profit-seeking banks when they issue credit and make payments. The simple fact that this power is granted to banks alone and not to businesses of the real economy (not-banks) is an unconstitutional inequality.

This information and its meaning should be made plain to the public and to legal practitioners. As ever, the legal system turns a blind eye to these facts, and this leads to erroneous judgements (Video: "Justiz entlarvt - Geldschöpfung unbekannt" - 37 min. ("Justice exposed – Money Creation unknown").

However, banks practice this procedure (booking to the accounts of payment recipients, in other words recording their own debt as "payment") even when they make purchases. When banks purchase land, buildings, computers or securities; when they "pay" their employees, award bonuses to the members of their board and pay dividends to their shareholders, they always book (and thereby create) their own debt to the checking accounts of the payment recipients (in accountancy terms). These activities (including accounting entries) are very clearly explained in this book (German).

This is the real reason why all banks everywhere are mired in debt: bank money, as used today, allows banks to appropriate assets from not-banks without providing any consideration. "Bank debt" is thus the sum of these absences of consideration on the part of the banking sector. This type of money creation (via the creation of bank liabilities) should be ended as soon as possible and replaced with a more effective and fairer system.

"Money" created in this way (as accounting entries and bank debt) is, obviously, not backed and entirely worthless (fiat money, from "Fiat Lux": "Let there be light", "Fiat money": "Let there be money", money "from thin air" minus any valuable backing).

Another disadvantage of this type of money creation is that the (bank) money needed to pay the interest demanded by the banks is never created when credit is issued. The accounting entry for the interest on the credit is recorded by the bank like this:

Claim on interest earnings

The interest earnings do not represent a bank liability, so (bank) money to pay the interest cannot ever be created. This means that participants in the real economy are required to extract interest payments from the existing money supply. This forces competition for this necessarily scarce good. Competition in the economy is therefore primarily a result of the systemic fact that (bank) money is demanded as payment for bank interest, (bank) money that does not actually exist. If it were the case that no interest payments were demanded, a cooperative economic system would be entirely possible.

The counterargument often put forward here is that interest is indeed payable through the increasing velocity of money. Sadly, this argument is logically untenable. For this to work, the banks would have to return, immediately, all monies received as interest payments to their debtors. Only then would their debtors have access to sufficient liquidity for paying the next round of interest due. But this does not occur in practice. In the meantime, we really can't say how it might be that debtors would suddenly receive exactly those funds needed to pay the next round of interest due as a direct consequence of the velocity of money having increased.

This battle to secure payment for bank interest from the existing money supply is called "healthy competition" in this heartless system. Non-business institutions (i.e. that have no customers to whom they sell things, particularly private and public households) have no other option in this system than to take on more and more new debt just to pay off existing debt and its interest. Household debt must, therefore, always grow, a systemic necessity that need not imply waste, incompetence or greed. Private and public households are systemically incapable of paying off their debts in today's interest-bearing, debt-money system. It is for this reason that we speak of a systemic crisis in these pages (a crisis of the entire system), and not of a simple "business cycle".