"We must recognize then that money is a pure abstraction."
Yes, this is a fact that people in the Bitcoin, and recently, Dogecoin communities have come to realize. I think this realization is a gift that cryptocurrencies could bring to the general population. There's nothing magical about a US Dollar. It's a unit of account, nothing more.
If you really want to fall down the rabbit hole, then learn about the (original) concept of Ryan Fugger's Ripple. The recent Ripple company does implement the Ripple idea of allowing individuals and communities create and trade their own units of account, but is presently emphasizing other features of their system. But you can absolutely use all the (well-done) Ripple software in the manner that Ryan Fugger originally imagined:
wrong. bitcoin has a smart contract system in it. its not just a unit of account. ripple is about as good as eGold. actually Watts had tremendous foresight when he says here: "
And one of the reasons that our technology is impeded and prevented from feeding the world properly is the failure of one of our networks. It's an information network and it's called money" here we are, and now money is a network.
Oh, and Ripple is very different from eGold since it's peer-to-peer and open source. Most importantly, Ripple allows payments to "ripple" through people until they reach the end target. All this is very different from eGold, a centralized, closed-source payment processor.
Ripple themselves doesn't hold any currency except for the base XRP (Ripple) unit of account, which they require for opening an account, transactions, and various other actions.
I agree that RippleLabs has poorly distributed this XRP they created as their system's base currency. This has left them open to accusations of scam(not really) and greed(totally), which is too bad given the incredible technology Ripple offers. RippleLabs has also done a pretty poor job marketing their increasingly advanced technology.
In the end, Ripple can happily co-exist with Bitcoin, and offers solutions to many of the problems Bitcoin will soon face (such as transaction load). But I don't see this happening unless the cryptocurrency community decides to approach Ripple with an open mind, and unless RippleLabs puts down the arrogance and actively communicate with the community.
You've probably checked out colored coins and counterparty, too. They both already have working implementations of secondary markets on top of the Bitcoin blockchain. Colored coins has two GUIs, and counterparty has a command line client with a simplified GUI, and more GUIs on the way.
Both of these projects are very alpha, so anyone checking them out should only use money you can afford to lose until they're out of beta (and the devs of both projects are pretty responsible about this, I believe).
I'm a little skeptical of Ethereum. It's notoriously difficult to build sandboxed virtual systems for browsers, much less for payment/asset exchange systems. And the money they raised with no working prototype is somewhat obscene (I think the typical HN start-up would have a conniption fit if they learned how much they raised, and still maintained ownership). But it is an incredibly cool idea. We'll see.
Can you summarize here what the original concept was and how it differs from the current implementation? I couldn't really understand that from just the wikipedia page.
The original concept of Ripple was simple: you and your friends float your own "currencies". But who will accept your currency outside your small circle of friends?
Well, the ripple concept comes from the system's ability to "ripple" payments across networks of different asset holders, at rates set by the users and/or exchange markets that the system permits.
It's pretty amazing to see how well it works in real life.
I'm rather unconvinced that the cryptocurrency folks (or at least large numbers of those who're following the movement) have grasped Alan Watts' meaning in that "money is pure abstraction".
Rather, what Watts is saying (as I understand it) is that money itself is a derivative of real wealth, it's the abstraction of wealth. It's a tokenization of wealth, but it isn't wealth in and of itself. What it is, principally, is an exchange mechanism, one which also, over short terms, tends to be reasonably consistent in value.
The crypto currencies suffer from the challenge that in order to be accepted, they've got to be acceptable. For national currencies, this is accomplished largely in taxes and petroleum transactions (both very significant aspects of the present financial system). Probably also reserve currency status, though I won't pretend to fully understand that.
This is my interpretation of Alan Watt's concept of abstraction of wealth. You can't eat money, it's just paper or coins with no inherent value in and of itself. More than that it's also a unit of measurement, which is an itself an abstraction.
The leaning I've been having is that money is a signalling mechanism. Bankers like to say they're the heart of the economy. I prefer to think of them as the pituitary gland. Money is somewhere between ion-exchange signalling and hormones. You can use it to get what you want, but it's not the thing you want in and of itself. Accumulations get out of whack, people become insensitive to it, or there's not enough of it, and things break down. But it's not of and by itself what drives the economy, and money (or hormones) without real resources still lead to failure.
That was a lot of rambling and tangents that don't relate to what I assume was the central point:
If we keep automating and laying off people, eventually there wont be enough people with money (jobs to get money) in order to purchase goods made by machines.
The proposed solution seems to be:
Alter the structure of the system such that the government creates debt and distributes money as income to the people, this way even the jobless can buy products made by automation.
Some other things in there:
* Comparison of Catholics and Protestants (particularly related to guilt)
It helps tremendously to know that in some languages, the words for "debt" and "guilt" are the same (in German, the word is "Schulden", as in "entshuldigung" meaning "excuse me").
If you're familiar with the Lord's Prayer, you should know that there are two forms of it in English: the Catholic ("forgive us our debts") and the protestant ("forgive us our trespasses"). Where again, the meanings of "debt" and "guilt" or "offense" are entwined.
Money-as-abstraction then has significance: money isn't true wealth, it's the representation of wealth, and that representation can be modified. Hence such confusions as "governments have to balance their budgets" -- not necessarily true as a governments can vary the value of money, either through inflation (fiat) or devaluation (specie). What the goldbugs fail to recognize is that when governments find themselves with debts they cannot repay (denominated in currencies under their control), they'll devalue those currencies. Regardless of the underlying standard. Look to the Roman denarius (covered by Joseph Tainter in Collapse) or the devaluations of British currency (detailed at length, as he does everything, in Adam Smith's Wealth of Nations).
Two serious problems with this essay. 1 Tim 6 doesn't say that the love of money is the root of all evil. The Greek says that the love of money is the root of all kinds of evil, as in the sense of "all sorts of different kinds."
Secondly, guilt as Watts defines it simply does not exist in honour-shame cultures. It's a very Western thing and a very recent thing in human history too.
In honour-shame societies, there is simply no concept of internal remorse or guilt. The correctional vectors are external rather than internal. A member of such a society - and they're almost always collectivist rather then individual - will strive to be honourable while avoiding shame. Here's a Chinese person talking about the difference:
"...A majority of the world is Chinese. So am I. We emphasize the extended family as a unit, we carry a monstrously vast line of traditions, and we even place surnames in front of personal names to show priorities in terms of identity. Certainly, not all of us follow the ways of our ancestors strictly, but this is due to the influence of, you guessed it, the Western world. But having been raised as in the first generation in this nation, I can say for certain that there are immense cultural differences. In particular, honor and shame rather than innocence and guilt are the issue: we do not think in terms of Jiminy Crickets in our heads, but rather base values on the group as a whole.
At gatherings, for instance, a father may yell at his child for being "diu liên"--throwing one's face away, a lovely image for what it means to be, for lack of a better word, shameful. But even in instances of moral guilt, what happens? The same phrase is applied, whether the child was caught cheating on homework, stealing a bicycle, or throwing food across the room in a restaurant. In some cases, yes, manners are the issue, but for some reason, it is not the fact that the action was in itself wrong that one is condemned for--it is the fact that it brought shame, particularly to the family name. For this reason, perhaps, Asians in general have been advocates of stricter discipline, particularly corporal. Modern psychologists may claim that punishment does no good, but for the honor-driven parents, it certainly brings about the desired behavior modification.
Of course, there are more trivial examples. There is rarely a gathering in which people will not "fight" over the right to pay the bill. Of course, each will attempt to claim it first, (not because it is morally right, or because they really want to, but because it is honorable,) and they will attempt to excuse the others by elaborating on how embarrassing it would be to accept it. Then there is the stereotype of the high grades, the good schools, the countless extracurriculars, at least piano or violin, and so forth. For what purpose? To represent the family name. You will never hear the older generation say, "It's for your own good," whether in regard to an order, or a punishment, or anything, because it simply isn't about us as individuals. And you will most certainly never hear, "Don't you feel bad?" The Chinese are notorious for their stoic attitudes. It is sometimes joked that we as a race don't even have emotions.
There is another silly game often played. One might say something intentionally belittling so as to win reinforcing praise from the other party, whether with regard to how a child never studies or how poorly the food is cooked. This, of course, is a cheap way to win, you guessed it, honor. As a result, the principle of limited good shows up all the time. People do not dispense presents or hospitality out of goodwill, but necessity, because it would be shameful to accept it without returning the favor.
Of course, a known tendency in such a society can be to become completely dishonest. So long as one is not caught, any means are fine. There is fierce competition and pressure, which is why it never surprised me that many of my fellow American- born Chinese peers ended up, in fact, doing this. They had become so obsessed with the outward favor that they took a Machiavellian approach to it all. It never once bothered them that they might be doing the wrong thing. It never once occurred to them to live for themselves. It never occurred to them that there was an internal concept of right and wrong. These are ideas foreign to us.
I was once reprimanded for inappropriate behavior during recess back in elementary school. When the teacher tried to explain how I might hurt the other children, how I should feel bad, and how I should say sorry, much of it did not make any sense, because I knew my parents would scold me for making them look bad. One view was individualistic, emotional, and personal. The other was collectivist, pragmatic, and social."
Awesome comment. I think of this as the difference between Jesus and Buddha, which I have riffed about in other HN comments. Jesus says: You stand alone judged before God. Buddha says: Your supposed self is an illusion, the collectivity is all.
EDIT: I had an Alan Watts phase growing up, started by cool Episcopalian seminary students who lent me his books; Watts got ordained, then (I think) subsequently defrocked for his carousing.
Careful - the new testament is _extremely_ collectivist and honor-shame based :) Individual judgement happens to be sure but is far from being the only one. Paul threatens the Corinthian church with a sort of collective judgement that would have brought them to their knees, the idea being that everyone's faults would have been paraded in front of everyone else publicly.
I haven't - thanks for the link. I've read The Japanese Mind, Misreading Scripture Through Western Eyes, Malina and Rohrbaugh's Context Group work and The Syrian Christ as well as a number of academic works on group-vs-individual and honour-vs-shame.
I live in a unique society - most of it is group-oriented (and frustratingly, present-oriented rather than future oriented) but there is a large minority that is thoroughly Westernised - guilt, individualist, future oriented. Needless to say, we don't understand each other much.
I believe it has been translated as the root of all evil for a long time. It is only recently that it has been changed to 'all kinds of evil'. I have been under the impression that this change occurred in English translations due to the fusion of religion and economic beliefs and due to any new historical or textual evidence.
For anyone who hasn't listened to Alan Watts (to his words and to his voice), I recommend a rather related talk of his (with video and everything!), 'Work as Play' https://www.youtube.com/watch?v=YiEzxNqw6_0
Yes, I, too, can recommend listening to any of Alan Watts' many recordings available on youtube.
I don't agree 100% with everything he says, including his view of money, but I have spent many long evenings laying quietly listening and considering his perspectives.
In particular, he teaches the concept of Atman, which is the idea that the Self doesn't end at our body, but extends beyond our bodies and eventually includes the entire universe. Battles, interactions and encounters of person against person are really one organism (not Gaia...) getting to know another part of itself.
Great essay. I remembered to pick up on of his books again. For now, this video will have to do: http://www.youtube.com/watch?v=mnFUDVpFwFQ (What If Money Was No Object?)
GB Shaw's "Money is the most important thing in the world until you have enough of it" is a truism aside from hermit existence.
On the other hand, Watts' "Yes, one can take a whole handful of crisp dollar bills and practically water your mouth over them. But this is a kind of person who is confused, like a Pavlov dog, who salivates on the wrong bell. " rings hollow if you have bills to pay.
I have never understood the 'love of money". You need money to live comfortably, but I don't understand Trump,
or Facebook money. I find it interesting a lot of men
make their "bundle" in their mating years. I have further
noticed a more than a fair amount of obtuse, fugly, mean
men have a need to make too much money. I sometimes think
it has evolutionary roots? As to Allen Watts; he was
a success for what he valued. A lot of people ask why he
drank so much vodka if he was so happy and enlightened. I personally think it was a different time, and alcoholism
just crept up on him and no one really told him to stop.
Even twenty years alcoholism was not concerned the killer
it is today. As the the money worshipers of this generation--I can't relate. I see the fitly Lookers everywhere--and you are ugly. I always felt the most beautiful women in the world are Amish. I have always felt
this way--and it's more than just good Midwestern genes.
In the South Pacific island story, when the gold was lost, the money was lost. That was a loss of a physical substance with a unique combination of specific physical characteristics. If it had been silver, copper, platinum, rhodium, or iron, I doubt they would have said "Oh well, we didn't really lose anything." The loss was real.
Some say that gold is useless, but I find it hard to imagine that any substance which is so durable, ductile, malleable, divisible conductive, rare, pretty, non-corrosive, and non-reactive could ever be "useless" to human beings. For example, it is excellent for electrical conductors in a salt water environment. Human beings have also found that those same physical characteristics make it useful as money.
There is no irony in expending effort to dig it up and then putting it back underground in vaults. That's because it is more useful in the form of bars than in the form of raw ore.
I'm not sure if you intend to directly reply to TFA. Mr. Watts does dedicate a sentence to that fact (Ctrl-F "It has some value for industry [...]" - the weakness of his assertion can probably be excused based on his profession and thesis) but the point he was trying to make was that losing the gold is not something that should gum up the rest of the economy.
I did see that comment. However, I was addressing Mr. Watt's conclusion from the story: "What this means then is that money is nothing but bookkeeping."
I disagree. What that story means is that the people were left holding paper certificates worth exactly nothing.
It is true that before the loss of gold was discovered, each individual who received a certificate and then spent it suffered no loss.
He did suffer a loss upon receiving a certificate, but he didn't know it because nobody knew the certificates were worthless. He then suffered an offsetting gain when he spent the certificate.
All along the way, people were suffering losses and transferring those losses to others. They just didn't know it was happening.
Similarly, you might receive a counterfeit $100 bill and not know it, and then spend it at a store successfully. Only the poor sap who discovers that he holds a counterfeit and consequently decides not to spend it loses in the end.
I doubt the loss of gold would devastate that economy. Some people holding large quantities of the worthless certificates would indeed be personally devastated. However, I would expect that the wealth of that society would already vastly exceed the value of the lost gold, since the people would no doubt be the owners of other physical commodities, capital equipment, trade secrets, and other forms of value.
Gold, like any form of money, does not have to exist in an amount "equal to" the amount of (other) wealth in a society. That's an infantile notion. A single piece of money can be traded thousands of times per second, and can support far more economic activity than its face value would suggest. Money is traded at the margin.
Therefore I agree that the loss shouldn't gum up the entire economy forever, though it could be very stunning and painful until the people recovered from their very real losses.
Alan Watts was a wonderful human being who spoke and wrote eloquently, kindly, and often humourously on all manner of topics concerning the relationship of man and woman to the larger universe. Some of his talks can be found at the Internet Archive:
From the talk "On Being God":
'The scanning process of man's conscious attention is very much inadequate for dealing with the infinitely many variables of the multi-dimensional processes of the universe.'
It's interesting and important to know that money is an abstraction, sure. But it's also worth knowing how belief functions in society, even if no one in the society personally believes. Our abstractions can be more real than reality. This is why money works even though it's fake.
Alan's lectures tend to cover a lot of ground. There's a bit more to what he's saying here than just 'money isn't real', the lecture also touches on what we give value to, how pursuing money as the route to happiness leads to multiple issues. He touched on guilt in society too, which isn't directly about money, but shows how the way we shape our society affects our individual behaviour, which is linked to what was said about money.
Watts has experienced a general surge in the past few years or so-- I'd attribute it to the growing number of Youtube videos featuring audio of his lectures. The 'What if Money Were no Object' video in particular was passed around a lot in art communities and college campuses about two years ago. Trey Parker and Matt Stone animated some of his lectures, adding to the surge as well. Also, the band The Books prominently features Alan Watts samples in their music too, which is how I was introduced.
Yes, this is a fact that people in the Bitcoin, and recently, Dogecoin communities have come to realize. I think this realization is a gift that cryptocurrencies could bring to the general population. There's nothing magical about a US Dollar. It's a unit of account, nothing more.
If you really want to fall down the rabbit hole, then learn about the (original) concept of Ryan Fugger's Ripple. The recent Ripple company does implement the Ripple idea of allowing individuals and communities create and trade their own units of account, but is presently emphasizing other features of their system. But you can absolutely use all the (well-done) Ripple software in the manner that Ryan Fugger originally imagined:
http://en.wikipedia.org/wiki/Ripple_(payment_protocol)