A Paean to Gold
Why Some Remain so Unrefined
The idea of governments cooperating to make currency less of an individually definable thing doesn't seem too outlandish to me Dazed but I can only comment on the very last part of your provocative letter on gold. Don't think me a member of the church of gold; I'm just joining everyone in the deconstruction of the stuff. Most traders I know look at it as a trade to make standard currency in the civilized world but I must admit I still respect the idea of gold having inherent value than the currencies it was based on - probably because of my preconceived notions about what constitutes value and the unfettered transfer and storage of the wages of labor. I'm not sitting on a chest of doubloons with a cannon waiting for the end of days but I dig the essence of the value argument. And it's easy to see how some less-than-civilized central banks - representatives of the fragile national experiments they represent in the ostensibly post-Hobbsean world - are eager to hang onto something closer to nature than paper ink and those plastic shiny things that prevent counterfeiting; eager to see themselves as mavericks in a world with still divergent value systems. As for the shenanigans they get up to I would defer to others.
Humans reify or create intricate and convoluted structures to define just about everything. After crafting weapons and learning to move with herds to acquire our ferritin reserves high enough to procreate at a sustainable level, we harnessed the crude tools of survival and little by little removed ourselves from the state of nature through mutually beneficial actions codified in social contracts. These general agreements were full of strife and so many forms of government were distilled down to the lesser of multiple evils. The final agreements held up according to cultural constraints or sensibilities of the age or even just their profound merits.
But we kept refining things. Someday we'll just be brains floating in jars talking to each other via little vibrations or something and won't care about money anymore. It will be all about good feelings perhaps sponsored by whatever recreational substances the sector overlords pour into the drips that sustain us. Don't worry I will come up with a way to tell you it really is me cause I know you care.
So yeah we structure everything. Take law for instance. Common Law systems are multi-tiered, multi-layered and coded reifications of ancient principles to the natural law theorist or merely the "will of the sovereign” to the positivist; but both sides agree that modern legal systems are by necessity many steps removed from Hammurabi's Code or the circuit courts of William the Conqueror and his progeny. Most of us are thankful for that refinement but many feel that constitutional evolution tends to get ahead of itself. The purists, thinking there is something unique about the legal underpinnings to our modern decision making process, opt for conservative interpretation in their arguments and judgments. The progressives, justifiably peeved at the unfair state of nature and our perverse reaction to its injustices, use activism to bring us closer to the rack of jars with their oozing green mediocrity sustaining mediums. Jurists seldom admit to all this you know.
And then there's property ownership. Some subscribe to the Lockean idea that the product of the soil you work should be yours - even if the rock underneath is ultimately the crown's - while others side with Marx that even notional property ownership creates great evils. And then there's freedom of religion. We took raw monotheism and turned it into massive volumes of text to administer a vast theocracy that lasted for millennia -- only to end up fighting great civil wars to remove ourselves from what we came to define as bondage. Much of the world remained under that yoke long after others had constitutional code law and backup precedent to make sure one gets to think of - and openly proclaim - that something might be more powerful than government. This led to something a bit less voluminous and perhaps more practical: state constitutions dedicated almost exclusively to negative human rights.
The structure and struggles include ideas of what money and value are or should be. Economics, after all, is the thing that makes it all possible. Similar to property ownership, the capacity to retain a store of value earned is a negative liberty; as opposed to a positive liberty that grants you some kind of protection from nature in exchange for something you surrender to the collective. Some seem to prefer the right to be left alone to the right to be taken care of and they get well into the ancient mechanics of avoiding the collective will. To be taken care of by the state entails the giving up of rights. Westerners accept the necessary tradeoffs but yearn to preserve symbols of the frontier attitudes that got us all that we have. I don't mean to sound derisive - I agree with the need and feel it's more important than we know. It's true that we have established happy mediums and are living in welfare states with positive and negative rights intermingled, but many prefer to regard positive rights as privileges associated with your particular social contract. For them, negative rights are where it's at. For them, 'real money' is the connection to independence.
Currency - no matter what form - is an extension and reflection of effort. I worked this much and have this much to show for it. That precise amount is reflected in a precise item created for the store of value; one that cannot be easily altered after said effort has been expended.Yes, oh great arbiter of money, I appreciate that you are so good with ones and zeros and that you can print money and assign its cost and ultimate value but I'd prefer something unique. Something finite...something of which there is only so much and something that cannot be easily made and something that took blood and sweat and danger and risk and hardship and worry to acquire. Something unique to the place from which my carbon based cells emerged and to where my bones shall ultimately rest. But that's supposedly barbaric and leads to fights. Its uncivilized talk I know and you'll all forgive me. Freedom is actually quite dangerous and probably always will be. Peejay, you won't let anyone push my jar off the countertop rack will you?
In our social contracts we move farther and farther away from the ungainly, uncontrollable stores of value. Our promises to provide for one another negated the need for contrivances past. As we move further down this path many prefer comfortable surrender to the notion that one’s happiness and safety can gladly depend on nothing more than the state and its determination of value, moral and otherwise. It happened big time just last century when nearly 100 million perished either from starvation or resistance. Even now, given to the comforts of the happy social welfare state, people still seem to want something finite and "real" to reflect the sometimes extreme physical and mental effort they put into acquiring a store of value during the most energetic parts of their lives. They can't seem to bring themselves to turn completely into drooling wards of the powers that be. They want a theoretical backstop. They want something universally appreciated. Something that can only exist in a world of sovereign nation states diverse interests. Something that is totally unsuited to central value systems conjured by the human mind.
You could argue that if the world becomes unruly enough to make metals the ultimate currencies, your gold will not help you. A society where modern mechanisms of commerce are that broken is a society that no one would want to live in anyway. That may be true but it could also be argued that much of history's human-occupied space has been a twilight zone where moderate degrees of dangerous and risk- fraught freedom take the place of extremes of slavery and anarchy. Gold seems to be another element in the control of personal destiny; a means helps to define individualism.
Clear answers are elusive in economics and the philosophy of money. That's just how it is and maybe that's how we like it. Perhaps we are part of a world that really is the constant and never ending fight and flux that the pre-Socratic philosophers spoke of. We know the harm bureaucracy can do if we nurture it to the point of self-automation. We also know it is indispensable to orderly functioning so we tolerate it and constantly seek to minimize its burden. As with high court decisions, every once in a while we let out primal screams of resistance when the insipid control mechanisms get too far ahead of our evolution. Perhaps gold will turn out to be only a fairytale. It is most certainly another human reification. But perhaps it is good for us to hold onto a part of sustaining structure that is only once removed from nature. Cash and credit are many times removed from their essence. To many, gold is a way of modifying our surrender to the potential dystopian world where the apathetic collective would turn us all into whimpering couch potatoes -- a world where the few would constantly seek to redefine value for the many... again and again.
Those who imply that the psychology behind the modern strain of gold fever is a hangover from when the collective limbic system had more dominance over the cortex may be right. Or maybe it’s just that we don't want to force conclusions about value upon ourselves in a world that is still finding itself.
Dan
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