A healthy currency must reflect our relationship with nature.
Two trillion dollars is the estimated cost of the fiscal stimulus bill that was passed this week by the US senate. Over the past two weeks, governments and central banks worldwide have taken the decision to combat the effects of the coronavirus by cumulatively conjuring over $10 trillion of fiscal stimulus programs, extraordinary quantitative easing policies, and emergency tax incentives. All of these programs, well-intentioned as they may seem, will ultimately have the same disastrous outcome: debasing the historically earned money owned by savers today and increasing the amount governments owe society tomorrow.
The past two decades have increasingly revealed that monetary debasement is the default policy of choice among our political and economic leaders in any crisis, from wars, to plagues, to banking failures. This is a condition we can diagnose as the money virus. Its presence can be detected if its host exhibits the following symptoms: (1) a refusal to engage in intellectual discourse surrounding the role of money, nature, and human cooperation in the modern age; (2) the belief that money is a contrivance by which man can master nature; and (3) the disregard for the natural order intrinsic to the external world, from crop yields, to harvest cycles, to geological scarcity, to time and energy.
Put simply, our leaders do not have a philosophy of money. Instead, they rely upon projections of economic trends and statistical models that reside in abstract thought rather than reality. This causes our leaders to make rash and arbitrary decisions, from shutting down economies to capriciously declaring what constitutes an “essential business.” They believe that as long as we stay home and they print enough money, nature will magically provide the vitality upon which we are all dependent.
In all of this, what we see in those who are infected with the money virus is a lack of understanding and appreciation for the innate relationship between man and nature which is the ineluctable guiding force of all human cooperation.
I want to propose a cure to the money virus by advancing a philosophy of money which reveals the mysterious synergy between money, man, and nature for those who seek a return to natural meritocracy. By meritocracy I do not refer to a form of government or hierarchical organization of society, but to a system in which one is compensated and rewarded for work that provides value to others in a cooperative system. Our confused, modern understanding of money results in a parasitic relationship between man and the natural world. To establish real social equity and collective prosperity, we must re-establish what money truly is and how it must properly function.
The Economy of Nature
In contemporary economic theory, an abstract “division of labor” and subjectively measured “aggregate demand” are taken as the lodestars of prosperity. Such theories disregard the existential time-dependency of all cooperators within a non-clannish cooperative system upon the products of the primary cooperative, namely, upon metabolic energy foods and fuels. Simply put: not all products are created equal. Herein lie the natural limitations of such economic giants as John Maynard Keynes and Adam Smith: You can survive for a long time without bicycles and high art, but no civilization can survive at all without food.
My understanding of money is simple: the natural world, human cooperation, and the financial world are one and the same, as inextricably interconnected now as they have been since the dawn of human civilization. An economy is a human cooperative system, and the invisible thread tethering the natural world to the human cooperative is a self-evident system of natural laws.
Chief among these natural laws is the omnipresent tension between energy and entropy on the one hand, and natural scarcity on the other. These forces perpetually govern the world within the irreversible, forward-moving flow of time. As a thermodynamic system, the fundamental currency of the natural order in time is metabolic energy in the form of foods and fuels which are corporeal and ephemeral. Metabolic energy is the source of all life, work, and movement; it can only be produced by human agents who negotiate directly with nature in order to generate and conserve a surplus beyond their immediate needs for survival.
All human action takes place in the objective present: the continuous “now” in which we perceive and act, common and universal to all human beings. The continuous present or “now” is explicitly objective because it unfolds within the natural order, such that any act of human agency becomes an outward reality which is met with real consequences in accordance with natural law. Time, scarcity, and thermodynamics conspire to ensure our perpetual dependence on a constant flow of metabolic energy. Foods and fuels must be continuously harvested by man in time if he is to survive.
In systems of human cooperation wherein one segment of the population engages in the production of foods and fuels beyond their individual needs (the primary cooperative), and another segment of the population engages in vocations and industries that do not produce foods and fuels (the secondary cooperative), the secondary cooperative becomes time-dependent upon the primary cooperative for the metabolic energy which makes all life and work possible.
Indeed, all members of the cooperative society, are necessarily time-dependent, meaning that there exists an immediate, inescapable, and constant requirement for the production of metabolic energy on the part of the primary cooperators, namely, the farmers. (The primary cooperative consists of both metabolic energy food and fuel producers. This includes farmers, hunters, fishers, foragers, coal miners, lumberjacks, and so on. However, for the sake of simplicity, I will often substitute the ‘farmer’ as the agent who stands for the whole host of the primary cooperative to which I refer.) The farmers, in turn, are time-dependent upon the provision of nature and their willing engagement with it in the present.
The primary and secondary cooperators are evidently both energy consumers, but there is an important distinction to be made: the secondary cooperators consume energy but do not produce it. Let us consider an example which clearly demonstrates this. Ask yourself: which industries could engage in a strike without materially impacting the collective quality of life of a human cooperative system?
A politician, for example, can strike for weeks and months (and they often do during government shutdowns), but the farmer or the electric utility employee cannot strike for more than a few days before the resilience of societal prosperity is threatened. Without metabolic energy, secondary cooperators are forced to revert to more primary forms of cooperation. This is precisely what happens during a recession.
The fact that the secondary cooperative is time-dependent upon the activity of the primary cooperative, coupled with the reality of natural scarcity, introduces observable, measurable, and predictable opportunity costs in lived time and in the expenditure of metabolic energy on the part of the primary cooperative, to which all human action remains beholden. These opportunity costs, in turn, set relations of meritorious rewards in the production, transport, and storage of foods and fuels as they diminish and must be reproduced afresh. This feature exemplifies the feedback loop between nature and mankind: from the ground, to the farmer, to the greater community, and back again.
Source: Roy Sebag | The American Mind
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