Previously
In Part 1 of this opening series, here, we examined the pernicious effects of governments stealing your purchasing power, ruining your ability to save for the future, corrupting your value system, intruding into huge swaths of your lives, and fostering rot in our nation’s federal finances.
The singular mechanism for all of this is fiat currencies (soft money). Soft money has allowed states to operate with impunity and a complete lack of accountability to the citizenry.
Now, in Part 2 of this opening series, we begin to look at the fundamentals of money in order to answer that most basic question, “What is money?” If we can understand the philosophy of money and just how crucial good money is to the stability and prosperity of any civilization then we can understand how and why governments steer societies away from hard money into fiat currencies for the purpose of power acquisition.
Mega-Politics & The Long Arc Of History
Before we get into a high level examination of money throughout history, let’s set the stage for looking at the impact of technology throughout the long arc of history.
Let’s take a look back through history, specifically, a very brief look at the relationships between mega-trends, money, and government.
We can examine history from the point of view of “mega-politics” (a term I have borrowed from the book “The Sovereign Individual” [1]. As I have interpreted them, mega-politics are ubiquitous events or technological implementations that are orthogonal to (independent of) politics and, thus, change the “logic of violence” [2], which results in the destruction of the status quo of an old (and usually rotted) order and enables the establishment of a new political or functional order. What makes mega-politics so unique is that no amount of legislation, regulation, nor pontification ever stops a mega-political event from happening. Hence, why they are orthogonal to politics.
Some mega-political events take days, weeks, months, years, even centuries to unfold. They can be natural (such as earthquakes and tsunamis) or man-made (i.e. warfare). Some are readily identifiable in the moment (i.e. a highly virulent and deadly disease) while others have effects which are almost entirely unseen and unrecognized or simply taken for granted (such as written language).
Psychotechnology As A Type Of Mega-Politics
Not all mega-politics are physical. Some are intangible. “Psychotechnology” is an intangible form of mega-politics.
In short, psychotechnologies are mental models (frameworks) or ways in which we think about the world around us which provide coherent methods of expressing certain ideas as representations of reality. Examples of psychotechnologies are:
- the double entry accounting system
- spoken language
- written language
- numbers
As with all technologies, older psychotechnologies can be made obsolete and supplanted by newer and more complete psychotechnologies. As an example, both Roman numerals and Arabic numerals, which are psychotechnologies, express quantities of things yet Arabic numerals replaced Roman numerals due to the fact that they made mathematical operations (i.e. addition, multiplication, division, exponentiation, etc.) easier and faster than the previous psychotechnology of Roman numerals. As a result, the proliferation of Arabic numerals readily spread throughout the world and quickly benefited those who adopted it.
Another example of a psychotechnology is the double-entry accounting system with its balanced equations of assets, liabilities, and equities. Those who adopted this psychotechnology were able to track their business activities and express how efficiently they were deploying their capital.
As we develop this series on “Monetary Revolutions“, we will see that, not only is money a type of mega-politics, it is, more specifically, a psychotechnology.
Mega-Politics Via Technological Revolutions
Below, I created a very brief list of man-made mega-political events:
- Agriculture
- Written Language
- Kingdoms & Empires
- Gold as a Monetary Standard
- The Fall of the Ancient Roman Empire
- The Riding Stirrup [3]
- The Religious State
- The Gunpowder Revolution [4]
- The Gutenberg Press [5]
- The Scientific Method [6]
- The Nation State
- Age of Enlightenment [7]
- The Industrial Revolution [8]
- The Fiat Currency Standard
- The Information Age [9]
- The De-Centralization Revolution(?)
- Beginning with Napster
Mega-politics might take seconds (i.e. the first deployment of an atomic weapon) to centuries (i.e. gunpowder) to develop, deploy, and come to fruition. In many cases, their effects can only be identified, studied, and understood centuries later.
Written language is my personal favorite because it allows for the accurate transmission of ideas over both space and time. The Gunpowder Revolution is my second favorite because it provides self-defensive capability to all and levels the playing field, thus permanently changing the “logic of violence”. The Gutenberg Press is my third favorite as this is the amplification of the written language mega-politics.
The reason why these are my favorites is because they helped to push power back to where they belong – with the individual because it decentralizes power and changes the logic of violence. It makes the cost of committing violence much greater than the benefit of committing violence, thus becoming completely disproportionate. Consequently, this allows the average person more readily to defend his right to property from theft (from common thieves and oppressive states alike).
Let’s take the Gutenberg Press as a prime example of the changing of the logic of violence. Prior to its invention, had a nation-state wished to stymie the spread of ideas via written word, then it merely had to arrest the author and seize copies of the author’s works. With concerted efforts, this could be done relatively quickly with minimal cost and effort. The efficacy of this approach comes from the fact that, prior to the Gutenberg press, books could only be recreated by hand, which was a long, laborious, expensive, and error-prone process.
With the advent of the printing press, though, ideas could propagate faster and further than any government or institution could conceive of. The resources necessary to curtail the spread of printed literature would be greater than anything that any of these institutions could muster. In fact, if only one copy of an author’s works survived any sort of purge, then that person’s thesis could be reprinted en masse in short order, both quickly and easily. Hence, the Gutenberg press forever changed the logic of violence because states could no longer easily control the flow of information and ideas; the costs of engaging in violence significantly outweighed the benefits. In future articles, we will see how bitcoin has become the embodiment of shifting the logic of violence in the favor of property rights and individual liberties.
The Decentralization Revolution
In the long list of mega-politics, I think the “Decentralization Revolution” is where we are now.
Nerd Note: I’m am using the phrase “Decentralization Revolution” for lack of a better term. As far as I know, I have coined this term but this is probably due to ignorance on my part.
This revolution started with Napster, [10] the first peer-to-peer network (“P2P”) which allowed the ubiquitous distribution of valued information (typically songs) without a central party needed to clear these transfers. [11]
Overall, this decentralization revolution moves power out of the hands of centralized institutions and back into the places where it belongs – with the common person.
Historical Note: Decentralization removes power from the hands of our federal executives, legislators, and regulators, many who were born during the Great Depression and World War II. These individuals have absolutely no conception of modern technologies and their implications on the citizenry’s ability to act orthogonally to governmental power. If we play our card correctly, we can leverage this fact to our advantage, not by defeating centralized power… but by transcending it.
Next Up
In the next article, here, we’ll take a very brief and high level look at the history of money going back about 2,100 years. Within that historical view, we’ll examine why hard money is the key to success, prosperity, and liberty of a nation’s citizenry.
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End Notes, References, & Citations
[1] “The Sovereign Individual“
Literary Note: For anyone who has an interest in mega-trends (sometimes spanning millennia), I highly recommend the book “The Sovereign Individual: Mastering The Transition To The Information Age” by James Dale Davidson and Lord William Rees-Mogg.
[2] Logic of violence
This is my over-simplification (and, thus, incomplete) explanation of “logic of violence” from “The Sovereign Individual“. The logic of violence is the estimation (calculation) that anyone performs to weigh the costs of committing violence (to take something that isn’t the perpetrator’s) versus the benefits of committing that violence. If the benefits sharply outweigh the costs, then a perpetrator will commit resources to commit violence (unethical taking). If the costs are greater than the benefits then the perpetrator will not dedicate the resources because of the high risks. I encourage everyone to delve deeper into this topic in “The Sovereign Individual“.
Note: With regards to the “logic of violence”, “violence” does not necessarily mean causing physical harm via assault. In the context of this article, logic of violence can simply mean the de facto taking of something for gain even if threats or physical assaults are never used as the means of acquisition. For example, in regards to fiat currencies, governments can “print” more currency and take (steal) your purchasing power by de facto and de jure (by law) with minimal effort on the government’s part but with great benefit to those in government.
[3] The riding stirrup
Brave search engine summary “the riding stirrup changes warfare“
“Stirrup and Warfare
The riding stirrup significantly changed warfare by providing riders with greater stability and control, which allowed for more effective combat from horseback. This innovation enabled riders to stay in the saddle during intense fighting, making it possible to use weapons such as lances and swords more effectively. The stirrup also allowed for better balance, which was crucial in delivering powerful blows and maintaining control during charges.
The introduction of the stirrup is often credited with revolutionizing mounted warfare, as it made cavalry charges more effective and formidable. This change had a profound impact on military tactics and the structure of societies, particularly in Europe, where it is linked to the rise of heavy cavalry and the feudal system. The stirrup allowed for the development of new fighting techniques, such as the use of lances and bows while riding, which gave mounted warriors a significant advantage over infantry.
However, the extent of the stirrup’s impact is debated among historians. Some argue that while the stirrup was an important innovation, it was not the sole factor in the changes in warfare and society. Others suggest that the stirrup’s role in the rise of feudalism and heavy cavalry is overstated, and that other factors, such as political and economic changes, played a more significant role.
In summary, the stirrup changed warfare by enhancing the effectiveness of cavalry, influencing military tactics, and contributing to the development of new social structures, although the degree of its impact remains a subject of academic debate.”
[4] The Gunpowder Revolution
Brave search engine summary: “the gunpowder revolution summary“
“Gunpowder Revolution Summary
The gunpowder revolution refers to the significant changes in military technology and warfare practices brought about by the development and use of gunpowder. First developed in China, gunpowder was first used militarily in the Middle East before arriving in Europe in the fourteenth century. By the fifteenth century, it became increasingly widespread in war, leading to a shift in how battles were fought. Early gunpowder weapons were inaccurate and dangerous, but they were still lethal and relatively easy to use, making them a game-changer in warfare. The introduction of gunpowder weapons reduced the effectiveness of traditional cavalry charges and changed the dynamics of medieval warfare. The impact of gunpowder extended beyond the battlefield, influencing various aspects of society, including literature and historical events such as the Gunpowder Plot of 1605. The use of gunpowder also had a significant impact on infrastructure, such as railway construction, where it was used extensively for excavations and tunneling.“
[5] The Gutenberg Press
Brave search engine summary: “The Gutenberg Press“
“Gutenberg Press
The Gutenberg Press is a revolutionary invention attributed to Johannes Gutenberg, a German goldsmith, around 1440 AD. It marked the beginning of the Printing Revolution in the western world, significantly impacting the history of information and learning. The press combined the use of molded movable metal type, a press, and printer’s ink, allowing for the mass production of texts.
Gutenberg’s press was built around the traditional screw press, a precursor to today’s drill press, with an added matrix on which individually-cast letters and symbols could be arranged to form the desired text.
This moveable type design allowed pages of text to be quickly assembled from a pre-cast selection of letters and symbols rather than laboriously carved from a block of wood as in the block printing method.
Despite its significance, Gutenberg’s actual press, the very first printing press, has been lost to history. The earliest surviving press is from the mid-16th century, and the earliest illustration of a press is the work “La Grant Danse Macabre,” which was made in 1499.
A replica of the Gutenberg Press is displayed at the International Printing Museum. This replica was created specifically for the Museum in the 1990s, based on woodcuts from the 15th and 16th Century, such as the ‘Danse Macabre‘. The Lindner Gutenberg measures 7 by 5 feet and is over 8 feet tall, made of ten different hardwoods.
The invention of the printing press by Gutenberg had a profound impact on society, leading to the rapid dissemination of information and ideas, which transcended borders and challenged the power of political and religious authorities. It also led to the rise of literacy and the middle class, and it accelerated the development of European vernaculars.
However, it is important to note that the concept of movable type existed prior to 15th century Europe, with the first known application dating back to the Phaistos disc. The first movable type was invented by Chinese engineer Bi Sheng in the 11th century during the Song dynasty, and a book dating to 1193 recorded the first copper movable type.“
[6] The Scientific Method
Brave search engine summary “The Scientific Method”
“Scientific Method Summary
The scientific method is an empirical method for acquiring knowledge that has been used in science since at least the 17th century. It involves careful observation coupled with rigorous skepticism, as cognitive assumptions can distort the interpretation of observations. The scientific method includes creating a testable hypothesis through inductive reasoning, testing it through experiments and statistical analysis, and adjusting or discarding the hypothesis based on the results.
Although it is often presented as a fixed sequence of steps, it actually represents a set of general principles. Not all steps take place in every scientific inquiry, and they are not always in the same order. The process involves making conjectures (hypothetical explanations), predicting the logical consequences of hypotheses, then carrying out experiments or empirical observations based on those predictions. The scientific method is critical to the development of scientific theories, which explain empirical laws in a scientifically rational manner. In a typical application of the scientific method, a researcher develops a hypothesis, tests it through various means, and then modifies the hypothesis based on the outcome of the tests and experiments. The scientific method is a systematic way of conducting experiments or studies so that you can explore the things you observe in the world and answer questions about them.“
[7] The Age of Enlightenment
Brave search engine summary: “The Age Of Enlightenment“
“Enlightenment Summary
The Age Of Enlightenment, also known as the Age of Reason, was a European intellectual and philosophical movement that spanned from the late 17th to the early 19th century. It emphasized the use of reason to advance understanding of the universe and to improve the human condition, with goals of knowledge, freedom, and happiness. The movement was centered around the idea that reason is the primary source of authority and legitimacy, advocating for ideals such as liberty, progress, tolerance, fraternity, constitutional government, and the separation of church and state.
The Enlightenment was influenced by the ideas of ancient Greek philosophers, the Renaissance, and the Scientific Revolution, which began in the 16th century. Key figures included thinkers such as John Locke, René Descartes, and Immanuel Kant, whose works spurred new ideas and fresh thinking throughout Europe. The movement also saw the publication of significant works like the Encyclopédie, a multivolume work by Denis Diderot and Jean Le Rond d’Alembert, which aimed to compile and disseminate knowledge.
Enlightenment thinkers sought to curtail the political power of organized religion, promoting the concept of separating church and state. They introduced novel ideas such as Deism, which involved a belief in God as the Creator without reference to the Bible or other miraculous sources. The movement also influenced political theories, contributing to the development of natural rights and the social contract theory, which addressed the origins of society and the legitimacy of state authority over the individual.
The Enlightenment had a profound impact on the American and French Revolutions, as well as on the development of modern political and social institutions. It encouraged a shift from tradition and authority to exploration, individualism, and advancements in industry and politics. The ideas of the Enlightenment continue to influence human societies today, despite the challenges posed by events such as the Reign of Terror during the French Revolution.“
[8] The Industrial Revolution
“Industrial Revolution
The Industrial Revolution was a period of significant transformation from an agrarian and handicraft economy to one dominated by industry and machine manufacturing, beginning in Britain in the 18th century and spreading to other parts of the world. It marked a shift from small-scale, largely agricultural economies to more industry-intensive ones, driven by technological advances that enabled more efficient production. This period saw the rise of mechanized textile production, canal construction, steam engines, and the factory system, among other key developments.
The Industrial Revolution began in Britain around 1760 and spread to continental Europe and the United States by about 1840.
It was characterized by the transition from hand production methods to machines, new chemical manufacturing and iron production processes, and the increasing use of water power and steam power. The textile industry was the first to adopt modern production methods, becoming the dominant industry in terms of employment, value of output, and capital invested.
Technological innovations such as the steam engine, the water frame, and the spinning jenny played a crucial role in this transformation.
The adoption of coal as an energy source was also significant, as it provided three times more energy than wood and was abundant in Britain. The Industrial Revolution led to increased productivity, economic growth, and the rise of capitalist economies, although it also brought about challenges such as pollution, poor working conditions, and child labor.
The effects of the Industrial Revolution were far-reaching, influencing almost every aspect of life and leading to sustained growth in average income and population. It is considered one of the most important events in human history, comparable only to the adoption of agriculture in terms of material advancement. The term “Industrial Revolution” was first used in 1799 by French envoy Louis-Guillaume Otto, and it became more common by the 1830s.“
[9] The Information Age
Brave search engine summary: “The Information Age“
“Information Age Summary
The Information Age refers to a historical period that began in the mid-20th century, marked by a rapid shift from traditional industries to an economy centered on information technology. This era is characterized by the development of the transistor in 1947, which significantly impacted information processing and transmission. The Information Age is also known as the Third Industrial Revolution, distinguished by the digital revolution, which converted technology from analog to digital formats, enabling the easy copying and transfer of information.
Manuel Castells’ work, “The Information Age: Economy, Society, and Culture” is a trilogy that includes “The Rise of the Network Society” (1996), “The Power of Identity” (1997), and “End of Millennium” (1998). Castells describes the shift from an industrial society to an informational society, which started in the 1970s, and emphasizes the interrelationship of social, economic, and political features of society, with the ‘network’ being the defining feature of the current epoch.
The Information Age has been marked by the adoption of fiber optic cable, which uses light to convey data, significantly accelerating the pace of information exchange compared to previous eras. The Information Age is also characterized by the increasing importance and availability of information, especially through computers, as opposed to previous eras like the Industrial Age. The Information Age has transformed various aspects of life, including entertainment, commerce, research, work, and communication, with the Internet playing a central role.“
[10] Napster
Brave search engine summary: “Napster”
“Napster summary
Napster was an American proprietary peer-to-peer (P2P) file sharing application primarily associated with digital audio file distribution. Founded by Shawn Fanning and Sean Parker, the platform originally launched on June 1, 1999. Audio shared on the service was typically encoded in the MP3 format. As the software became popular, the company encountered legal difficulties over copyright infringement. Napster shut down in 2001 following a series of lawsuits and subsequently filed for bankruptcy in June 2002. The P2P model employed by Napster involved a centralized database that indexed a complete list of all songs being shared from connected clients. While effective, the service could not function without the central database, which was hosted by Napster and eventually forced to shut down. Following Napster’s demise, alternative decentralized methods of P2P file-sharing emerged. Napster still exists despite its colorful history of being shut down by the RIAA to rising from the ashes and being acquired by Rhapsody International. In 2011, the streaming music service Rhapsody inked a deal with Best Buy to acquire Napster subscribers and “certain other assets.” The financial details of the acquisition were not disclosed, but the agreement enabled Best Buy to retain a minority stake in Rhapsody. Napster is a legal, online music service currently operating in selected countries. The Napster brand has seen many changes over the years. The first was Best Buy’s takeover deal, which was worth $121 million. At that time, the struggling Napster digital music service reportedly had 700,000 subscribing customers. In 2011, the streaming music service Rhapsody inked a deal with Best Buy to acquire Napster subscribers and “certain other assets.”. Even though the iconic Napster name disappeared in the U.S. for many years, the service was still available under the Napster name in the United Kingdom and Germany. The Most Underrated Wired Earbuds That Deserve Your Attention · Rhapsody continued to develop the product and focused on reinforcing the brand in Europe. In 2013, it announced that it would be rolling out the Napster service in 14 additional countries. In 2016, Rhapsody rebranded its service internationally as Napster. As of 2022, Napster continues to expand as a source for music-on-demand for other services, including iHeartRadio. That same year MelodyVR, parent company of Rhapsody, was planning to sell Rhapsody to the U.S.-based NM Inc. In 2023, the company acquired Mint Songs, a Web3 startup. The goal is to take the company private again and later relist it on the U.S. stock exchange. Napster, music file-sharing computer service created by American college student Shawn Fanning in 1999. The file sharing that resulted set in motion a legal battle over digital rights and the development of digital rights management software to prevent computer copyright piracy. When Napster emerged on the internet 25 years ago, many knew it represented the future. The record labels and artists pushed back. Napster’s legacy: 4 ways the software changed the music industry, from streaming to how artists make money · After Napster shut down in July 2001, the company went into bankruptcy and reemerged as a subscription service in 2003 after being purchased by software maker Roxio. By then Apple had opened its iTunes Store for consumers willing to pay for tracks and albums. Record industry attorneys were left fighting newer, harder-to-shut-down illegal networks for sharing music freely. But none captured the zeitgeist to the extent as the original Napster, which reset consumer expectations for music – and, eventually, movies and video games. … Digital downloads and music streaming services – from Amazon Music and Apple Music to Deezer, Pandora, Spotify and Tidal – were all foreshadowed by Napster, says Ken Pohlmann, professor emeritus at the University of Miami, an electrical engineer and author of “Principles of Digital Audio”. Napster didn’t exactly sound like something that would cause consternation in the boardrooms of record companies. But within a few short years it would spell the end of the gold rush record companies had enjoyed in the age of the CD, and change how music is consumed and even written. Napster was the brainchild of Shawn Fanning, a 19-year-old US computer hacker who had worked out a way to share music for free. It was, essentially, a cataloguing system that searched your hard-drive, listed all the MP3 music files contained in it, and allowed those to be shared with and played by anyone else using the software. Together with Sean Parker, Fanning created a service that made music discovery almost instant and without cost. “It was something that provided a better, more reliable and fun way for people to share music and see each other’s music collection,” Fanning told the BBC World Service.“
[11] Moral Note: I am neither justifying nor condemning Napster nor any other peer-to-peer (P2P) file-sharing platform (which allow for the free flow of massive quantities of data with logarithmically lowered costs across legal jurisdictions which have almost zero ability to enforce intellectual property laws). My aim is to point out that P2P technology is a mega-political event in its own right due to the fact that it can operate (mostly) without any real governmental oversight and interference. As of the publishing of this article, BitTorrent (“torrents”), which you can read about here, is the most successful and ubiquitous P2P protocol. This is a fascinating topic that I recommend anyone take five minutes to research.