Jethro Knights is clearly the protagonist of ‘Transhumanist Wager’. Equally obviously, Reverend  Belinas is the antagonist. But is the Reverend Jethro’s opposite? I would argue that in some crucial ways, these characters are really quite similar.

Most importantly, they are both ‘authentic persons’. What is meant by that? I mean that both men are wholly committed to what they believe in. There is no ulterior motive at work, no hidden agenda that is contrary to what they seem, on the surface, to believe in. Their beliefs form a philosophy of life that they practice unwaveringly.

In the case of Reverend Belinas, we are told that his more wealthy followers “bought Belinas’ goodwill and paved the way for his ministry with their resources. In return, he promised them God’s favour, both in this world and the next. He meant it, and they believed it”. On the basis of that quote I think we can say of Belinas that he really means it when he promises God’s favour, in this world and the next. It might not have been the case that he really meant that. We can imagine a person who finds it useful to pretend to sincerely believe in God’s favour, as that encourages others to part with their money. In that case, it is amassing material wealth that is the true motive, and surface-level faith is merely used to obtain it.

Now, Reverend Belinas- or rather his Church- has amassed a considerable fortune, “worth hundreds of millions of dollars”. But, for Belinas that fortune is merely a means to an end. He is not interested in wealth for wealth’s sake. “Belinas never splashed out on fancy living”. He is, however, quite aware of how useful and essential money is in getting things done, and he is quite willing to use the rich and vain- “people for whom riches came too easily and freely, celebrities, royalty, and heirs”- in order to obtain funds for the greater purpose of “helping the faithful, the downtrodden, and the destitute”.

I think it is fair to say that Belinas makes sure the money he raises goes to fund his mission in life, and the same can be said of Jethro. There is a moment in the story where he turns down an offer for a huge amount of money from a Russian businessman, because the money was offered on the condition it was used to achieve something Jethro did not consider to be plausible in the near-term. Jethro could have pretended to agree to do what was asked and take the guy’s money but he stuck to his principles.

Just to make it clear that Belinas is an authentic person, we are told: “Belinas was an authentic man, singular in his absolute faith and servitude to The Lord and to his people…If God demanded that he fly a fully fueled commercial liner into a skyscraper filled with thousands of people, he would do it. And not think twice about it”. What does that tell us about him? “It tells us that he is a nutter” might be one reply. But it also tells us that he is an existentialist, like Soren Kierkegaard.


Kierkegaard’s philosophy arose partly from observations of his fellow citizens of Copenhagen. At that time, in the 19th century, the people of the capital of Denmark were extremely religious, at least by today’s standards. But, for Kierkegaard, the faith of his fellow citizens came too easily. People attended church, they read the Bible, they said their prayers, but these acts of devotion were carried out within a more general existence of avarice, vanity, and greed. In his most famous book, Soren (who always wrote under various pseudonyms) said:

“Not just in commerce but in the world of ideas too our age is putting on a veritable clearance sale. Everything can be had so dirt-cheap that one begins to wonder whether in the end anyone will want to make a bid”.

What bothered Kierkegaard was whether what his fellow citizens took to be sufficient justification to call themselves ‘Christian’ really was sufficient. Attend church on a Sunday, say Grace before meals and the Lord’s Prayer before bed, was that really all it took to secure one’s place in Heaven? For Kierkegaard, if Christianity was to be at all meaningful, and provide a central purpose to one’s life, then practicing it ought to be more difficult than that. 

Kierkegaard’s existential philosophy was built around what it means to have faith. For most people, faith is defined as ‘believing in something when there is insufficient evidence for it’. By that definition, we might say that Jethro and all transhumanists have faith that scitech will one day defeat death. It might. After all, today modern medical and surgical practices can save lives that would surely have been lost in the past, and in the future who knows what miracles will be performed? But of course we cannot know for sure that scitech will make us immortal at some point in the future. 

Kierkegaard took a more radical view of faith in that he considered it not simply as believing in something upon insufficient evidence, but rather believing in something irrespective of the evidence. In that regard, Kierkegaard disagreed with Kant’s view that religious belief could be founded on reason. Faith was utterly irrational and completely unprovable.

For Kierkegaard, the famous Biblical tale of God commanding Abraham to sacrifice his son Isaac reveals the true commitment one needs to be a Christian, and that commitment is unwavering faith. He focuses his attention not on what the tale tells us, but rather on what it misses out. In Genesis 22 we’re told that God commands Abraham to “get thee to the land of Moriah, and offer him (his son) there for a burnt offering”, and the next day Abraham did as he was told. So it seems like a pretty simple act of obedience.

But what the tale misses out are the thought processes that Abraham went through between receiving God’s command and carrying out those instructions. What was he thinking? How did he feel? The story does not tell us, and Kierkegaard considered such details crucial information for understanding Abraham and for having the kind of faith he had.


The crux of the matter is this. How did Abraham know what to do? What lead him to interpret God’s instructions as orders to be carried out to the letter? He could have thought, “God is testing my moral character and the right thing to do is disobey”. He could have thought, “that was not God speaking, it was the devil or just an hallucination. I will pay it no credence”. Kierkegaard insisted that the process Abraham or anyone went through in receiving a supposed message from God and deciding what to do about it, rests entirely on the individual. You alone can decide whether the voice was really God; you alone must interpret the message and only you can decide, ultimately, to comply. Faith is always subjective.

Remember, for Kierkegaard faith is believing irrespective of the evidence. True faith, the philosopher insisted, involves both a movement of infinite resignation and a movement of faith. For Abraham, the movement of infinite resignation was knowing his son was lost to him, while his movement of faith was simultaneously believing Isaac was not lost to him. Logically they cannot simultaneously be true, so Abraham’s faith transcends logic. As Kierkegaard said:

“All along he had faith, he believed that God would not demand Isaac of him, while still he was willing to offer him if that was indeed what was demanded… and it was indeed absurd that God who demanded this of him should in the next instance withdraw that demand”.

In other words, at the very moment Abraham gave up his dreams and every hope for this world, he continued to expect the impossible. Kierkegaard called Abraham a ‘knight of faith’, someone totally prepared to give up the very thing they most hope to keep, while simultaneously believing it is not lost. This is no mere act of self-deception. It is not a case of somehow forgetting about your resignation. No, Kierkegaard tells us that the knight of the faith believes on the strength of the absurd.

Knights of faith are both admirable and scary precisely because of what they might be prepared to do at any given moment in virtue of their faith. They are quite prepared to act contrary to ethics. Kierkegaard’s view was that ethics is identified with the universal. The killing of one’s own son is forbidden by morality that applies to everyone at all times. By acting on their faith, knights of faith instead act on the personal, on reasons that are uniquely that individual’s, pertaining to their relationship with God. Objectively, it is not possible to distinguish between those who disobey universal ethics so as to obey God from those who have murdered in response to insanity or delusion. As Kierkegaard concluded, “either Abraham was a murderer, or we are confronted by a paradox which is higher than all meditation”. Choosing the latter interpretation, Kierkegaard argued for “the teleological suspension of the ethical”. In other words, the personal can override the universal or ethical, when done in obedience to God. Kierkegaard’s philosophy does not prove that Abraham or anyone who carried out the ‘teleological suspension of the ethical’ is a hero rather than a villain. It requires a leap of faith in order to reach that conclusion.

Kierkegaard’s book was called ‘Fear And Trembling’ and what left him in fear and trembling was both the idea that people such as Abraham could exist, and that his faith might be similarly tested via instructions to sacrifice that which was most dear to him. From what we are told about his commitment to carry out a 9/11, Reverend Belinas is a knight of faith.

Now, when it comes to belief irrespective of the evidence, we can hardly say that Jethro Knights holds such convictions. On the contrary, he is forthright in his insistence that logic and reason are the only viable methods for gaining knowledge, and he is just as vocal in his position of faith:

“They want you to dedicate your life and subjugate your reasoning…all because it feels right to them. Their beliefs are absurd, completely lacking in sound judgement”.


It would seem then, that whereas Belinas very much fits the ‘knight of faith’ mould, Jethro could not be more different. But there is another aspect of Existentialism that very much defines the protagonist of ‘Transhumanist Wager’. When Soren Kierkegaard died, he requested that just two words be engraved on his tombstone: THE INDIVIDUAL. Why those two words? Because they get right to the essence of existentialist philosophy.

Philosopher Matt Lawrence wrote, “existentialism focuses on the issues that arise for us as separate and distinct persons who are, in a very profound sense, alone in the world. Its emphasis is… on taking responsibility for who you are, what you do, and the meanings you give to the world around you”.

I doubt one could find a better description of Jethro’s philosophy of life. He himself wrote, “I will fail to achieve my goals if I lose myself in another, live for another, or place my happiness and aspirations in another. I am self-sufficient, not needing anyone or anything else”. 

Jethro Knights is unwavering in his dedication to his version of transhumanism, and as committed to working to realise his goals, as Belinas is dedicated and driven by his. In a confrontation between Belinas and Jethro, the latter admits, “I would kill my wife a thousand times over if I absolutely had to in order to reach my goals”, which some might say is not all that different to Abraham making a sacrifice of his son on the strength of his personal conviction.

I have been a member of a few online transhuman groups, and sooner or later somebody always accuses the members of those groups of being all talk and no action; spending their time discussing transhumanism but not doing much at all in terms of practical work. I would imagine that Jethro Knights is what those people would regard as an exemplary transhumanist, for he works incredibly hard for its cause, and any roadblock put up by the movement’s opponents only causes him to push himself further. It actually gets to the point of absurdity. We are informed that “Jethro continued labouring for the transhuman movement at a gruelling pace, always seven days a week” and later that “Jethro Knights pushed himself with renewed vigour, working 20 hour days” and later still, “if the days were desperate, Jethro didn’t seem to notice. He chose only to work harder, putting in longer hours”.

So, what, by this time his work schedule is 21 or more hours per day, seven days a week? We are never told that Knights is genetically modified or augmented in some way so as not to need sleep. He is just an ordinary (albeit obsessively driven) human being. Methinks anyone who pushed themselves that hard would just collapse.

There is something almost paradoxical about Jethro, in that he is wholly committed to living forever but at the same time risks his life. Not just in terms of working himself to death but also by deliberately placing himself in lethal situations. Indeed, our very first introduction to him finds him out on the ocean somewhere, in the middle of a hurricane, about to be drowned by a rogue wave. Later in the story, he is working as a correspondent for ‘International Geographic’ and is asked to take on an incredibly dangerous assignment, after the previous correspondent is killed. “yeah, I’ll do it”, he says.

Why would anyone who is determined to live forever choose to place themselves in such dangerous situations as “skimming down an erupting volcano on a sandboard”? Maybe because the point is not just to survive but to LIVE. The story tells us that “journeys that illuminate and change lives are not defined by schedules, money, or agendas- but by experience”.


Time and again, while reading about Jethro, his philosophy of life and his attitude toward others, I am reminded of a phrase in a song by Laurie Anderson:

“Freedom is a scary thing. Not many people really want it”.

Now that seems like a strange thing to say. Everyone wants to be free, don’t they? Existentialists like Jean-Paul Sartre have argued that, actually, people really are afraid of freedom and protect themselves from it by living in bad faith. 

The story informs us that “Jethro only took notice of values, not people”, and that most people feel “enmity and resistance to that type of harsh machine like objectivity”. But why should that be? Jethro cares “only for the core value of a person, judging them solely on their usefulness”. He does not discriminate on the basis of age, gender, race, or sexuality. He considers such things as whether you have a criminal record or not as being completely irrelevant. He cares only for how useful somebody is to him.  His attitude sounds very much like the ideal that society is reaching for as campaigners strive to end discrimination based on anything other than ability. But such a society has always had conditions that don’t seem all that appealing to some.

Consider the question: “If you compete in a completely free, fair, open, merit-based society and you lose, what does that make you?”. The point is that, in such a society, there is no one and nothing to blame but yourself. You have to accept personal responsibility for your own failings. Sartre argued that a great many people are not willing to accept the personal responsibility that goes along with absolute freedom, and adopt bad faith in an attempt to trick themselves into believing they are not as free as they really are.

An example of bad faith is to take the meaning of events to be a given, rather than something created or invented. People say things like “Yesterday was boring” or “Such and such happened and it made me sad”, as if events occurred that were intrinsically dull or melancholy. In actual fact, boredom and sadness are simply those individual’s responses to those events, in other words their freely chosen way of relating to them. We as individuals are always free to chose how we feel about any given situation.

Another form of bad faith is pretending one’s actions are not free. Sartre argued that whenever somebody says they have to do something, that is bad faith, for there is absolutely nothing that one must do. Such a conclusion seems to radical for many people, and they try to refute it by citing examples of actions people must do. Death and taxes are familiar examples, but neither really refutes what Sartre is saying.

In the case of “everyone has to die”, we have to distinguish between something that is going to happen, and an action you have to perform. You don’t actually have to do anything in order to die a natural death. As for paying taxes, it is true that failure to do so will likely result in punishment. But, again, such consequences are simply things that happen to you, not something you have to do (you can always yell ‘you’ll never take me alive, cops!’ and take your own life rather than go to prison). 

Time and again, we hear people say they ‘have to’ do something when they really don’t. For example, somebody might say “I would love to meet up with you tomorrow, but I cannot. I have to work. The boss is making me come in on weekends, now”. The implication is that this person’s situation is not ideal but it is not their fault. Rather, the boss is to blame. Of course, in actual fact, this person does not HAVE to go into work, but could chose to disobey and accept whatever consequences come from that. 

Prejudice is at once a hateful thing that we should strive to overcome but also a convenience for people with bad faith. Take the idea of a ‘glass ceiling’ in the form of sexism that makes it hard or impossible for women to rise up the ranks of professionals. This is at once frustrating for those who should excel but are prevented from doing so by some stupid prejudice. It is also very convenient for women whose merits simply do not warrant success but do not want to admit personal responsibility for their failures. “I tried and failed, but it’s not my fault. There is a glass ceiling in the way, after all”. 

In the Transhumanist Wager we are told that “few people wanted to be judged solely on their usefulness and then dismissed because they had little or none”. I have said that although Reverend Belinas is the antagonist, he is not the opposite of Jethro. Both are authentic men, very much dedicated to achieving their goals in life. From a story point of view, it helps to have an adversary who is, more or less, the equal of the hero. It makes for a worthy nemesis.

Considering the point about being judged purely on usefulness, and the sting to pride in being found to have none, I would not like to turn our attention to a character who really is Jethro’s opposite, and who represents the real social condition that opposes Jethro’s version of transhumanism.


If Belinas is not Jethro’s opposite because both characters are authentic men, who is inauthentic? The answer is: Gregory Michelson. Remember, that an authentic person is defined as somebody whose values go right to their core, so that what they appear on the surface to believe is an accurate reflection of the values they hold most dear. The story makes it quite clear that Gregory is inauthentic. In a confrontation that occurs between him and Jethro during a philosophy class at Victoria University, the story’s protagonist says:

“You’re not the real thing…You’re future is in law, and maybe worse: Politics. These classes are just stepping stones to your BMWs, your fancy parties, your pretence at power in society. For me, this class, my thesis, and my degree are really about philosophy and how I apply it to my life”. 

Later in the story, when Gregory has indeed gone to law school and has also married into a very wealthy family, he is working as a public defender and again his inauthenticity is made quite explicit:

“He found it both perplexing and amusing to sit across from a criminal who would spend 3 years incarcerated for stealing a beat-up station wagon. He liked to secretly think to himself: ‘I’m worth about ten million times more than this dumb bastard'”.

Now, there are a few points to pick up on here. First of all, notice how he views his clients as criminals who are going to be incarcerated. There is no pretence at ‘innocent until proven guilty’, no indication that he is committed to working in their defence. Beneath the surface, he thinks of them contemptuously as ‘poor dumb bastards’. Also, take note of his belief that ‘I am worth ten million times more’ than his client. In what sense is he, Gregory, worth so much more than the average person? Is he a great entrepreneur who amassed a personal fortune? No. He is ‘worth’ so much only because he married into an extremely wealthy family. But, the marriage came with an ironclad prenuptial agreement which means Gregory won’t get a cent should he and his wife ever get divorced:

“He would be practically broke without her…He could never touch the real wealth, just smell it”.

Gregory only appears, on the surface, to be wealthy. The true wealth belongs to others. He feels entitled and superior but really is incapable of doing anything to earn that entitlement or superiority.

“The world revolved around him, Gregory remembered thinking as a young teenager. It was true, so long as it was others that did the revolving. Without others, though, Gregory did not know what to think”.

With Jethro Knights, substance wins over style every time. During these character’s first encounter with each other, we are invited to compare the effort they have put into their appearance. Jethro is unkempt, his T-shirt is torn, his shoes are old, his jeans stained with paint. He hasn’t so much as bothered to put on any underwear. It is obvious that he has simply thrown on any old clothes so that he may go and do his work. It is his work that is important to him, not how stylish he looks while doing it.

Contrast him with Gregory, who is resplendent in “a tight aqua-blue polo shirt, white linen pants, and Italian shoes”. His hair is immaculately styled. He wears a “diamond-studded gold watch, which dangled loosely, carelessly on his wrist” (a sign that wealth comes too easily to him). He has bothered to put on underwear. And not any old pair but one clearly displaying the name of some fancy French fashion label. He is, quite simply, all style and no substance.

This is true not just of himself but also with regards to how he views the world. Both he and Jethro Knights are at a town hall meeting that is discussing the ethics of transhumanism. Jethro is concentrating on the content of the speeches and is frustrated at how lacking in substance they are. But, as for Gregory:

“Gregory Michelson felt poles apart from Jethro. He was at home with the speeches. The Texas senator’s meandering voice was pleasant and soothing”. But, really, he is not really listening to what anyone is saying, but is instead passing judgement on how stylish (or not) they look. 

These are the things I think are important to know about Gregory. He is inauthentic. He cannot be taken at face value because what he appears to believe in is not a true reflection of his core values. He prefers style over substance. He has no ability to make a fortune for himself, but he does have superficial qualities that make him useful to people with true power. He is the kind of person who looks good on camera: dazzling smile, impeccably turned out, eloquently parroting words somebody else prepared for him.

I think it is also important to note that Gregory is a star athlete and a connoisseur of fine foods, because this too clues us up to the sort of person he represents. That is, a person suited to a particular period in an empire’s life. Jethro, in contrast, represents somebody suited to a different period.

You see, Gregory is very much a product of the Age of Decadence, whereas Jethro is more suited to the Age of Pioneers. 


These ages refer to two of the six stages that empires go through. An empire typically begins with an outburst, in which a small nation- one treated as insignificant- begins to spread out of its homeland and conquer new territories. Transhumania fits this mould. Before its formation, the transhumanists could in no way be said to be organized into a nation. They are merely a very loose organization of roughly like-minded individuals. They are also more or less dismissed as a joke. Early on in the story, Reverend Belinas is largely dismissive of the movement, considering it “an undersized group of soft-spoken individuals…Defeating them on every issue was rarely a problem”. Gregory is similarly dismissive. “They seem so small and weak. They’re only 50,000 strong or so”. In fact, even Jethro can be said to be dismissive of the movement. In a speech given at the World Transhumanist Institute, he tells the audience, “I will not become just another cog of your lethargic movement…Your watered-down version of transhumanism is too weak for me”.

Jethro then goes on to announce that he is launching a transhumanist revolution, and through his tireless efforts funds are raised to literally build a transhuman nation. The kind of people deemed fit to become citizens of ‘Transhumania’ are the same kind of people one finds during the period of outburst, when a hitherto small and ignored nation begins to expand outward. Such people display extraordinary courage and energy. They are hardy, enterprising and aggressive. But the new nation does not just distinguish itself in battle, but by its citizens displaying unresting enterprise and amazing initiative in every field. These are the kind of people who hack through jungles and struggle up mountains in their quest for new territories to possess. 

On Transhumania, we are told, “there was no pity or even pretence at pity. There was just usefulness- or not. And if you didn’t like it, or didn’t agree with it, then you didn’t belong on Transhumania”. This period of outburst is called the Age of Pioneers, and it should come as no surprise to find that it is people with a pioneering spirit that Jethro takes inspiration from. He reads “stories of heroic explorers, of spirited generals, of resilient scientists, of immovable philosophers, of intrepid founding fathers of nations”. It is people who have these kinds of qualities who are welcome to be citizens of transhumania. People like Gregory, needless to say, are not.

As the smaller nation expands and captures more territory, it will likely encroach on land that has already been claimed by older empires. The citizens of those older empires may not have the same fighting spirit as a nation in the ‘outburst’ stage, for reasons that will be explained later. It is reckless bravery and daring initiative that secures early victories for the fledgling empire. But the attacked empire will almost certainly use more sophisticated weaponry and more militarised organisation and discipline. The advantages of such methods are appreciated by the invading hordes, and are increasingly adopted until they are no longer a rabble of rampaging barbarians, but an efficient, organised and highly motivated war machine.

Thus, the age of pioneers gives way to the second age of empires- the Age of Conquests. In this stage we see more organised, disciplined and professional campaigns. But the tactics used by the young empire tend to be more experimental, since its people are not tied to centuries of tradition as is the case with more ancient civilisations. As Glubb put it, “the leaders are free to use their improvisations, not having studied politics or tactics in…textbooks”.

Of course, this is all based on events that happened generations ago, from 895-612 BC (the Assyrian empire) to 1700-1950 AD (the British Empire). So much of what went on in pre-globalization days may not apply to an imagined war between a transhuman nation and the combined forces of contemporary nations. Nevertheless we can perhaps say that Transhumania’s preference for cyberwarfare over more traditional bombs and bullets and teleoperated fighting machines over human warriors counts as the kind of improvisation and experimental tactics of a nation in the Age of Conquests.

Combine the hardiness and daring initiative of people from the Age of Pioneers with the well-oiled military discipline typical of the Age of Conquests, and you have an expanding empire taking over vast territories with ruthless efficiency. Think Genghis Khan,  Attila the Hun, and Alexander the Great. The conquest of territories not only secures the leaders a place in history (and, perhaps, infamy) it also sets the stage for the next age: the Age of Commerce. If the empire covers vast areas of land, within its boundaries there will be places with varied climates that naturally produce different goods, and there will be an incentive to establish trade networks if people in one territory covet the produce made in another. And since this trade occurs within a single empire, commerce is freed from such things as import permits, customs, and various forms of political interference.

Glubb wrote, “even savage and militaristic empires promoted commerce, whether or not they intended to do so. The mongols were some of the most brutal military conquerors…Yet, in the 13th century, when their empire extended from Peking to Hungary, the caravan trade between China and Europe achieved a remarkable degree of prosperity- the whole journey was in the territory of one government”.

This stage and the subsequent ones are probably of least relevance to the fictional nation of Transhumania. After all, we are talking about empires established long before there was global telecommunications and multinational companies. Jethro’s transhumanist nation does not exactly adhere to the model of a barbarian rabble evolving into a militarised nation that goes on to discover the numerous benefits of commerce. But it is worth looking at the other stages, for they shed light on what gives rise to the kind of people Gregory represents.


It is during the Age of Commerce that the conditions which ultimately topple an empire begin to take root. Glubb wrote, “gradually, the desire to make money seems to gain hold of the public. During the military period, glory and honour were the principal drivers of ambition. To the merchants, such ideas were but empty words, which add nothing to the bank balance”.

The combination of military conquest and commercial enterprise (which, at this stage, shares some of the same daring initiative that typifies the Age of Conquests) results in an accumulation of great wealth. And so we enter the next stage, the Age of Affluence. The commercial classes grow immensely rich, and splendid municipal buildings, wide streets, and investment in art and luxury imbue wealthy areas of cities with beauty and dignity. 

But beneath the surface a change in attitudes is taking hold. Glubb wrote, “the first direction in which wealth injures the nation is a moral one. Money replaces honour and adventure as the objective of the best of young men. Moreover, men don’t normally seek to make money for their country or their community, but for themselves”.

It would seem that Glubb considers money the root of all evil. But he apparently missed a change which occurs as empires go from the Age of Commerce to the final Age of Affluence. That change consists of a transformation of ‘quality money’ into ‘quantity currency’. For anything to act as a currency, it has to have these attributes:

Portability. You need to be able to easily carry it around.

Durability. It cannot perish too quickly

Divisibility. You need to be able to make change out of it. This is why barter is such a sub-optimal economic system. If you want to trade your cow for something worth less than it, you get no change to make up the difference.

Fungibility. In other words, interchangeability. Every unit of currency must buy the same as every other. Functionally speaking, every dollar is the same as every other.

All currencies require those four attributes. But money requires something additional. It must be:

A store of value that is fixed over time. 

This means it must be- and remain- in limited supply. So what is in limited supply as well as portable, durable, divisible, and fungible? Time and again, markets have converged on the same answer: Gold and Silver. Many things can and have been used as currency, but only gold and silver is money par excellence. 

In the ages of commerce and affluence, quality money is used to pay for a great many things. Military campaigns, merchant enterprises, and all kinds of public works. As it needs to be stretched further and further, there is a growing temptation to expand the supply of money by debasing the coinage. In more ancient civilizations, this was achieved by adding impurities like copper to your gold or silver. So, say your taxes are bringing in a thousand gold coins. If you melt them all down and mix in 50% copper, you can stamp out two thousand coins. Where modern money is concerned, debasing the money supply consists of moving off a gold or silver standard and adopting a fiat money system where ‘money’ (technically, a currency rather than real money) can be conjured out of thin air by the stroke of a pen or a tap on a keyboard. And so, as empires go from an Age of Commerce to the Age of Affluence, quality money transforms into quantity currency via a debasement of the currency.

There is one more stage an empire goes through before it enters the final Age of Decadence. As small nations grow into large empires, the wealth they accumulate is at first used to supply the basic necessities of life, and then later on in the Age of Affluence there is enough to invest in luxuries. Once the necessities and luxuries of life are paid for, history tells us that empires use funds in pursuit of knowledge. Alexander the Great was famous not only for his conquests, but also for founding the city of Alexandria, which was not only home to one of the Seven Wonders of the World, but also to a library which was the largest in the world at the time. Glubb wrote, “the princes of the Age of Commerce seek fame and praise, not only by…patronising art and literature. They also found and endow colleges and universities. It is remarkable with what regularity this phase follows on that of wealth, in empire after empire”.

The transition from an Age of Affluence to an Age of Intellect may give the impression that the corrupting influence of power and wealth are but temporary, and that society corrects itself and people turn to loftier ambitions like the pursuit of knowledge. But this is not really the case. In the Age of Intellect, education undergoes much the same transformation as morality does during the Age of Affluence. Priorities change from education whose purpose is to produce adults ready to serve their country and gain glory in battle, with the emphasis instead on gaining those qualities which will command the highest salaries. So, once again, greed for wealth replaces duty and service. The effect of this desire for wealth, power, and material possessions is to produce leaders who vie for positions of authority, not really in order to better carry out their civic duty, but because they anticipate it making them richer.


Something else that may contribute to this selfish attitude is the ‘resource curse’ or ‘paradox of plenty’. This refers to the seemingly bizarre situation in which the people of nations blessed with an abundance of rich resources like gold, oil or diamonds live in poverty, handicapped by crappy government and slow economic growth. This happens because the richest natural resources tend to be non-renewable and easily monopolised. Whoever gets exclusive access to such resources can acquire tremendous power and wealth. Typically, it is those people who have military muscle- a governing elite or regional warlord- who monopolise this bounty.

Once they gain control of this cash cow, the number one priority is to maintain control. This obsession with fending off rival monopolists means the ruling elite have no incentive to build networks of commerce that make a society richer through reciprocal obligations. Nor do the leaders require their citizens to be highly educated, because they can generate plenty of wealth by selling the valuable commodity they have monopolised. The wealth thus generated tends to be concentrated into the hands of the monopolists, and if they care more about protecting their asset than developing raising the standards of living of their country, the result is an absurdly wealthy elite coexisting with a poor and backward nation.


In his classic dystopian novel 1984, George Orwell wrote about how the aim of the ‘high’ is always to remain in power. There are two possible threats to their position, which we may refer to as ‘without’ and ‘within’. ‘Without’ refers to other nations in the ‘outburst’ stage, looking to conquer their territory. Provided enough of the ancient virtues of patriotism survive to enable the empire to defend its borders, this threat can be dealt with.

‘Within’ refers to an empire’s own citizens. By definition, an elite is always in a minority. The constant fear of the ruling elite is that the majority of people whom they exploit in their lust for power and wealth will come to realise that they serve no real purpose, and use their collective strength to sweep them away.

How to prevent this? Well, obviously physical force and intimidation can be used to terrify the masses into submission. But a more subtle and effective tactic is to gain control of the cognitive map. A pivotal figure in the development of classical Marxism was the Italian, Antonio Gramsci. He took issue with Marx’s belief that economic changes determined social values in the superstructure of institutions like religion, law, and culture. Gramsci sought to eliminate this economic determinism. A key step in achieving this was the notion of ‘ideology’, defined as the set of attitudes, values and perceptions through which we understand and relate to the world. Gramsci realized that the ruling classes dominate the majority in two decisive ways: Sheer force or economic domination (the threat of a lost job, say) and controlling the ideology of the masses. Gramsci called this control of ideas which manipulate social consciousness ‘hegemony’.

By gaining control of the cognitive map (ie, determining prevailing beliefs) the ruling elite ensure that the subordinate masses regard the ideological constraints of their social and political world as “natural”. The state of the world in which they live comes to be seen as evident common sense by the majority of people, which of course means certain things get left unsaid and unquestioned. Notice, for example, how you can go through the writings of the greatest philosophers of the Dark Ages from Augustine to Ockham, and not find a single word of criticism of the established societies in which they lived. No word of criticism aimed at absolute paternalism, divine right of kings or feudal bondage. As far as they were concerned, these artificial constructs were just part of the natural order of things. Similarly today, most people do not question artificial constructs like money and private property. Now, as then, hegemony ensures that the moral and political values of the masses coincides with those of the ruling classes.

The political economist Frederic Bastiat said, “when plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorises it, and a moral code that glorifies it”. If hegemony works to make the attitude of of society as a whole coincide with that of the ruling elite, and the ruling elite choose to behave in ways that are unsustainable, then so too will the rest of the citizenry adopt runaway consumerism as the way to a better life.

Of course, by the time the Age of Decadence has arrived on the scene, systems have been modified, manipulated and corrupted to serve the interests of the few. The end result is an absurdly wealthy elite and a growing inequality gap between rich and poor. Conspicuous displays of wealth is one of the symptoms common to every Age of Decadence. But rather than repelling the masses, the wealthy elite is admired and celebrated, and the availability of easy credit encourages aspirations to similar levels of consumption (very convenient for those who profit from debt).

It would be wrong to place the blame for the Age of Decadence entirely on the shoulders of the ruling classes. As Glubb said, “decadence is the disintegration of a system, not of its individual members”. During the Age of Decadence, both leaders and citizens scramble for the spoils, and selfishness and idleness replaces duty and service throughout society. At the ‘high’ end this corruption manifests itself in the absurdly disproportionate rewards the ruling class lavishes upon itself. At the ‘low’ end, it manifests itself in the desire to live off of a bloated welfare state.

As runaway consumerism becomes more widespread, a moral and spiritual vacuum inevitably opens up. As silver investor David Morgan said, “you can never get enough of what you don’t need. What you need is a strong moral conviction that’s pervasive throughout and integrity reigns”.

A combination of conspicuous displays of wealth and an underlying pessimism at the fag end of empire are ideal conditions for the emergence of a particular type of individual: The celebrity. Remember how Gregory was noted for being a connoisseur of fine foods? The Ottoman, Spanish and Roman empires likewise all made celebrities of their chefs. Why?


By the time an empire is in the Age of Decadence, its supremacy and power are fading. Everybody is searching for that greatness that they used to feel. Maybe it is in the best food? Or the best music? Gregory is also noted for being a great athlete. Just as sports events are massive spectacles today, so too were gladiatorial events of Roman times. You may think today’s sporting heroes are overpaid, but top Roman charioteers earned the equivalent of several billion in today’s money.

Why do they earn so much for what is hardly the most important job? Because, in a way, they do have an important job. The old saying ‘let us drink and be merry, for tomorrow we die’ tells us that frivolity is the frequent companion of pessimism. When an empire is sliding into decay, its citizens seek distractions and this need to escape from societal pessimism is something the ruling elite are all too happy to exploit. As former economic hit man John Perkins said, “people of Rome were always being distracted by gladiatorial events, and the politicians knew that they did this. Whenever there was unrest in the people they would have a huge event…Today…you find an enormous emphasis on TV programs that distract people from what’s really going on. Sport is a big part of that”.

Cheap pleasures like voyeurism and consumerism always fail to compensate for the lack of meaning in people’s lives. On the surface, in the Age of Decadence, conspicuous displays of wealth dazzle, but the system itself is rotten. The debasement of the currency grows to the point where ‘Gresham’s Law’ comes into effect. According to this law, ‘bad money drives out good’. People take debased currency at face value at first, but as it begins to flood the market people tend to save the thing that’s rare and spend the thing that’s common into circulation first. In Rome what began as a silver coin became a copper coin plated with silver (in circulation, the plating came off). In today’s fiat monetary systems, we have paper and digital currencies heading toward their intrinsic value of zero.

As things decline further still, it becomes harder to find meaningful involvement in the community, and people’s potential goes unfulfilled. Growing numbers are denied access to work. The same kinds of distractions are seen throughout all decaying empires. Binge drinking. An obsession with sex. In the early tenth century, contemporary historians of Baghdad wrote critically about increasing materialism and corruption in government. They commented bitterly on the influence pop singers had on young people, resulting in a decline in sexual morality. Those could be articles lifted from today’s news media!

‘Transhumanist Wager’ is clearly set in the Age of Decadence. Running searches on the word ‘economy’ brings up passages like:

“The American and global economies had recently begun another decline. Stock market losses lead to some business empires literally vanishing- and millions of jobs with them”.

I said earlier that Istvan’s plot may seem at first glance to revolve around transhumanism versus religion. On deeper examination, one can argue that it really depicts a clash of empires, one in a state of decay and corruption typifying an Age of Decadence, the other entrepreneurial and aggressively competitive, typical attributes of a fledgling empire during the Age Of Pioneers. Gregory Michaelson is symbolic of the Age of Decadence, which means his character opposes Jethro, symbolic of an Age of Pioneers. 

Lucius Annaeus Seneca said, “religion is regarded by the common people as true, by the wise as false, and by the rulers as useful”. In ‘Transhumanist Wager’, we see Christianity being manipulated and modified so as to be useful to those who rise to power in an Age of Decadence. As Jethro puts it:

“In so many unmistakable ways, we are living within their Judeo-Christian-inspired framework…Their management and regulation of our lives spans the total spectrum of the American experience…From their lobbyist-ruled government bureaucracy, to their consumer-orientated religious holidays like Christmas. From their brainless professional sports jocks, to their anorexic supermodels warping the concept of beauty…America is a nation of dumbed-down, codependent, faith-minded zombies obsessed with celebrity gossip, buying unnecessary goods, and socialising without purpose on their electronic gadgets”.

Transhumania seeks to sweep away this old, decadent Western empire and in so doing remove any pretence at power by those who benefit from decadence. In Jethro’s world, there is a place for Amanda Kenzington’s father. He, after all, was an orthopedic surgeon who invented a tissue supplement for joints and who made a fortune from the equity of his patents. Obviously an entrepreneur-surgeon has the right to exist in a world that deems usefulness and profit the only qualities worth preserving.

But what about Amanda herself, that ‘textbook case of a spoiled American brat’? She, perhaps even more so than Gregory, epitomises the vacuous celebrity. All style and no substance, living off of the wealth and fame that others have produced. Toward the last half of the story, it may seem like Gregory has discovered a work ethic and is putting in enormous effort to thwart Jethro’s schemes, but I do not think we should take that to mean he has come to epitomise the Age of Pioneers, for it is clear that he is motivated by the fear of losing his celebrity status and affluent lifestyle rather than by the hope of doing something useful with his power. If Jethro were given access to Amanda’s father’s fortune, you can bet he would not use it to fund a personal life of lavish indulgence and idleness. You can also bet that Gregory would.

Gregory and Amanda have no place in an Age of Pioneers, nothing to offer Transhumania during its period of outburst. They also have a vested interest in trying to preserve the decadent empire for as long as possible. Gramsci pointed out that, provided the majority acquiesce, physical force can be used against a minority of dissidents so as to re-establish consensus. For example, in 1968 left wing students and industrial workers nearly brought down Charles De Gaulle’s government. But the majority consensus was that the rioters represented a threat to normal life, and that force against them was justified. Gramsci himself said, “The opportunity must be taken at the right time, otherwise the old hegemony will reassert itself”. In other words, it is only when a genuine alternative world view is accepted by the widest range of exploited groups that revolution can succeed. The massive campaign against Jethro and his colleagues, culminating in a ‘War Against Transhumanism’ can be seen as the ruling classes of a decadent empire using hegemony against its enemy.

Coming up next time: a look at how Transhumanist Wager is similar to a certain novel by one Ayn Rand.

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In March 2002, the Taliban, on orders from Mullah Mohammed Omar, destroyed two statues of the Buddha, which had been carved into the side of a cliff in Banyan valley, central Afghanistan. Several explanations have been offered to account for this destructive act. Some say they were destroyed in protest to international age exclusively reserved for maintaining those statues at a time when Afghanistan was in the grip of a famine. Others claim the statues were destroyed in accordance with Islamic law.

That latter reason epitomises everything bad about religion. It speaks of intolerance of the beliefs of others, and the need to assert one’s own dogma on everybody else, whether they like it or not. It is the kind of intolerant behaviour I never thought transhumanists would endorse.

But then I read ‘The Transhumanist Wager’ by Zoltan Istvan.

More on that much later. But I have lots to say about other topics, too. What follows is not a review of that story, but rather some thoughts inspired by its plot and the issues it raises. My intended audience are people who have read the book, so I do not intend to give a synopsis of its plot, nor will I shy away from spoilers. 


The main plot of ‘The Transhumanist Wager’ can be said to be loosely based on Hugo de Garis’ warnings of a coming ‘Artilect War’. According to de Garis, artilects are ‘artificial intellects’, whose existence is made theoretically possible by the physics of computation plus an assumption that the brain is, in some sense or other, a kind of computer. de Garis estimates the computing capacity of the human brain to be around 10^16 bits and pointed out that, if Moore’s law were to be extended long enough, we would eventually have nanotechnology that achieved one bit per atom. The computational capability of a handheld object whose every atom is processing a bit is 10^40 bits. In other words, it is theoretically possible, given the assumptions mentioned above, that artificial brains could be a trillion, trillion times better at thinking than human brains are.

Although it is called the Artilect War, what de Garis sees coming is not a conflict between humans and artilects. The final part of Istvan’s story nicely illustrates why such a conflict would be so one-sided it would be more like an extermination than a war if artilects were to turn against us.

In part 4 of ‘The Transhumanist Wager’, the story’s protagonist, Jethro Knights, has succeeded in obtaining not just life-changing but world changing money. With this huge investment, he recruits a workforce of the brightest and best individuals from various fields, all fully subscribed to his vision of what transhumanism ought to be. They quite literally build a new transhuman nation, constructing an artificial island out of oil platforms. Positioned 200 miles out to sea, the newly created land of ‘Transhumania’ is exempt from international law, according to the U.N Convention Act of 1984. Finally free from overbearing government regulations and religion-tainted ethics, this nation of super-geniuses quickly becomes the world’s top technological superpower.

The A10 countries, fearful of what technological horrors might be amassing on Transhumania but also eager to steal such technology for themselves, combine naval forces and attack Transhumania. But the island is well protected by its technological might. They have state-of-the art robot fighting machines with pinpoint accuracy, which can be teleoperated by human pilots who are champions in the  E-sport of online first-person- shooters. They have drone warplanes that fly at hypersonic speeds, so fast there is nothing on Earth that can shoot them down. Most importantly, they have the world’s best cyber-terrorists and huge supercomputers that can swiftly hack just about any computer network. The result is that the A10 countries find their weapons turn against them, and Transhumania suffers only minimal damage from one missile which makes it through the island’s defence shield, while the others are sent back to rain death and destruction on the entire fleet of the enemy forces. 

In Hollywood sci-fi blockbusters like ‘The Terminator’ and ‘Independence Day’, we are lead to believe that, if humanity was to come under attack from an invading force with vastly superior technology, somehow the plucky, resourceful humans would emerge from the conflict victorious. Ever noticed how, in Battlestar Galactica, the Cylon fighting machines look like they could not hit a barn door their aiming is so bad? In ‘The Transhumanist Wager’, ‘soldierbot’ comes equipped with micro-GPS satellite triangulation, and its weapons have built-in sensors that enable it to take into account wind, moisture, and dust in the air when aiming. It never misses. 

Now imagine such robots are artilects, equipped with brains a trillion, trillion times more powerful than human brains. In one second, they can engage in the equivalent of a million years or more of human thought. Imagine going up against an invading force of machines with perfect aim, executing military strategies that were the equivalent of a million years in planning, every conceivable strategy of the enemy simulated for weaknesses that can be exploited. 

So if de Garis’ Artilect War is not  war between humanity and artilects, what kind of war is it? It is a war of ideologies, waged by two human groups which de Garis called ‘Terrans’ and ‘Cosmists’. The ideology that divides them is based on how they answer what de Garis claimed would be the most important question of the 21st century: If we could build artilects, should we? For Terrans, the answer is ‘no’. They fear that we would have no control over such beings and if, for whatever reason, they decided to exterminate the human race, we would be powerless to stop them. Better, surely, to impose some kind of global law forbidding the creation of artilects.

Cosmists, on the other hand, also consider the extermination of the human race as a (perhaps very remote) possibility, but consider it a price worth paying. Just imagine the astonishing acts of scientific discovery, philosophical inquiry, and artistic creations minds trillions of times more capable than human minds could engage in. Every mystery and problem that has haunted the human imagination since time immemorial could be solved in an instant by these ultimate Oracles. What is consciousness? What is the secret to obtaining immortality? The gap between human intelligence and artilect intelligence is so vast, it would almost be appropriate to call them gods. Surely, the ultimate achievement of a technologically-capable species would be to build gods who could go forth into the universe and unlock all those secrets forever out of reach to mere human intellect? Why, not building artilects would be akin to ‘Deicide’- murdering gods!

You can imagine how, if artilects really are possible and we really are progressing toward being able to actually build them, a bitter conflict would break out between those ‘for’ creating artilects and those ‘against’. Perhaps this war would begin with essays published and lectures given, presenting the arguments from both sides of the ‘we should/ shouldn’t’ divide. For a time, while the technology seems too fantastic to take seriously, only academics with too much time on their hands- the sort who debate extensively over whether we have free will and other lofty philosophical questions- would give serious consideration to the question of whether or not to build artilects. 

But, as robots become a daily feature in our lives and it becomes obvious that each new generation is smarter than the last, a question may arise in more minds: ‘Will these robots carry on getting smarter until they surpass us?’. Terrans would begin campaigning for sanctions aimed at preventing AI from becoming too smart. Cosmists would look for ways around these laws, perhaps campaigning for the freedom to invest time and resources in the development of super-artificial intelligence that could be of immeasurable value to humanity. For the more radical Terrans and Cosmists, polite debate and laws would not be enough; they would be willing to go to war in order for what they so strongly believe. 

This is pretty much how the conflict in Istvan’s story develops. But it would be wrong to say that the plot straightforwardly borrows from de Garis’ ‘artilect war’. Rather, it raises similar questions concerning technological power and what it means for humanity and its evolution. There is no mention of artilects in the story, but one can make an association between artilects and Jethro Knights’ concept of the ‘Omnipotender’. He wants to evolve into the most powerful intellect the laws of physics allow for. What is that, if not a kind of artilect?

Nor is there any mention of ‘terrans’ or ‘cosmists’. The war of ideology in this story is waged between ‘transhumanism’ and ‘religion’. This raises two questions. Could transhumanism cause conflict? Is religion necessarily opposed to transhumanism?


Considering the first question, given that transhumanism requires us to develop incredibly powerful technologies that affect the course of human evolution, there is scope for conflict depending on how those technologies are handled and the state of the world into which they are introduced. What, for example, would happen if mass technological unemployment was to happen in a world clinging to the belief that everybody must earn a living?

If ‘Transhumanist Wager’ is any indication, Zoltan Istvan certainly believes in everybody earning a living. Whenever ‘welfare’ is mentioned by transhumanists in the story, it’s pretty much always cast in a negative light, to the extent where it almost seems like welfare recipients rank second only to followers of monotheistic religion in terms of being the scum of humanity in the eyes of the heros in this tale.

Running searches on the word ‘welfare’ on my Kindle edition of the story brings forth passages such as:

“You spend hundreds of billions of dollars on lazy welfare recipients, on mentally challenged people, on uneducated repeat criminals, on obese second-rate citizens bankrupting our medical system”.

“We will not throw away years of our lives for uneducated consumers, for welfare-collecting non-producers…or for corrupt politicians who know law but don’t stand by it or practice it”.

“Transhumanists will halt all free government handouts to people- transhumanists do not believe in welfare; your freebies are over”.

Goodness. Clearly, in such a world as Jethro Knights would establish, you should fervently hope that you do not work for a business that is subjected to a hostile takeover and major layoffs of its employees. Nor would it do to live in world where those in the financial markets create speculative bubbles and a consequent collapse of the housing market, foreclosures, and you being turned out onto the streets. Not only would there be no welfare to prevent you from falling all the way to absolute rock bottom, you would find yourself being compared to repeat criminals, corrupt politicians and obese second-rate citizens every time you asked for help. 

In a world like ours, which is designed to allow the crony capitalists to grow wealthier when things go well (and not always as a result of their industriousness but rather because the monetary system as it exists today redistributes wealth from the bottom of the financial pyramid to the top) and to put the burden of failure on the poor while allowing the rich to grow richer when their high-stakes financial gambling generates high levels of debt, those are pretty tough breaks.

Now, arguably, I am being too generalist. A defender of Jethro Knights’ vision of transhuman utopia might argue that a phrase like ‘lazy welfare recipients’ is not intended to mean all on welfare recipients are lazy, but only that some are. You know, those with a ‘won’t work’ attitude. 

Be that as it may, it would still be very harsh to live in a world that expects everybody to be employed, provides no welfare for those out of work, and has also entered an era of massive technological unemployment.

The idea of technological unemployment is not one that causes everybody concern. Writing in the online magazine ‘Slate’, tech journalist Farhad Manjoo commented:

“Most economists aren’t taking these worries very seriously”.

And in ‘Robots Are Out To Steal Your Job But That’s OK’, Frederico Pistono wrote:

“Over the past two centuries we have continued to rely on machines to increase our productivity, but we have not been displaced by them. On the contrary, we have created new jobs, new sectors and new opportunities”.

That last passage sums up why many do not believe in technological unemployment. It is because past observations have shown that technology does not just eliminate jobs, it also creates them. For example, there was a time when pretty much everybody worked the land. But then machines like tractors and combine harvesters made us so efficient at agriculture, the human workforce was reduced to a tiny percentage of its former size. But all those who were no longer needed to work in agriculture were not permanently jobless. They found new work in factories and, eventually, in offices and IT. 

But the fact that technological innovation creates new jobs even as it reduces the number of people needed in old occupations or eliminates those old occupations altogether, is dependant on a couple of things. One is that machines have always tended toward specialization. They are designed to perform very well within a narrow range, but outside of this area of expertise they are utterly useless. A 1969 NASA report nicely summed up the great advantage people have over machines, and the reason why it is people who fill positions in new jobs:

“Man is the lowest cost, 150-pound, nonlinear, all-purpose computer system which can be produced by unskilled labour”.

The other thing that prevents technological unemployment from being a reality is that the tide of automation rises slowly enough for there to be a significant time delay between that tide catching up to newly created sectors and eliminating jobs. Even now, in 2015, there remains work in both white and blue collar employment that people can do better than machines, or cheaper, or both.

Once it is appreciated that technological unemployment is avoided so long as machines lag behind people in terms of general capability and adaptability, or that there is a significant delay between job creation and job elimination, it becomes obvious what could make it a reality. Either the rate of technological innovation speeds up to the extent where the rising tide of automation wipes out jobs faster than people can be trained to do them, or a type of machine is invented that beats humans in terms of being the cheapest, most efficient, and most flexible worker that can be found. 

Let’s look at what impact the successful development of humanoid robots with artificial general intelligence would have on a world that insists all must earn a living and provides no social safety net for those who do not have jobs.

According to Wikipedia, an AGI can:

“Reason, use strategy, solve puzzles, and make judgements under uncertainty;

represent knowledge, including commonsense knowledge;


communicate in natural language,

integrate all these skills toward common goals”.

In short, an AGI robot could do anything that people can do. This means that, unlike all the specialised machines we have ever known, who cannot compete with people outside of their narrow range of abilities, you are always in competition with an AGI. Although, actually, just as in the case of a war between humans and artilects, being in competition with AGI robots for jobs would be no competition at all, because such robots would have advantages humans could not match. A robot can work at optimal levels at all times. It does not get tired, it never gets bored. Once it has learned to do a task, it always does it superlatively. Robots can share knowledge and skills. Once one robot learns a task, it can upload that knowledge to the web so that other robots can download it and instantly become experts themselves. Humans take rather longer to pass on knowledge and skills.

Most importantly, robots work more or less for free. There is an initial purchasing cost. They need power and that would probably cost something (even if only a tiny amount). They are machines which could break down, so there would be maintenance costs from time to time (even if the robots repair themselves, the materials needed to carry out physical repairs would cost something). But other than that, it costs nothing to employ robot workers. They work for no wages, no holiday pay, no company or state pension. They take no lunch breaks, they do not require sleep, they never organise themselves into workers’ unions and demand higher pay or better working conditions. 

So, if you are a boss and your mandate is to increase productivity and cut costs, the only viable option is to replace your human workforce with robots.

It would seem, then, that in a world that insists on everybody earning a living, the owner/investment classes would reap all the reward of robot slave labour. Wages would drop to zero, and the money thus saved could be turned into more profit for the owners, and higher dividends for shareholders.

As for the working class (and in this context ‘working class’ is everybody who works for wages, white collar as well as blue collar) they no longer have any means of employment. AGI could conceivably cause the greatest inequality gap the world has ever known, between a fabulously wealthy owner/investment class and a working class faced with permanent joblessness. It would like the reality depicted in the movie ‘Elysium’. Only without Matt Damon or anybody working in factories or any other business. 

It is not hard to imagine how a world like that could breed bitter resentment that could boil over into full-blown conflict. That conflict could be further amplified if biotechnology or some other tech that can be applied to understanding and modifying our bodies finally achieves that goal which Jethro Knights sees as the most pressing concern of transhumanism: Achieving eternal youth. Throughout all of human existence there has been equality in the sense that, beggar or king, slave or emperor, we all grow old and die. Now imagine that, not only must you endure a harsh existence along with the heaving mass of other economically useless people while a minority live in splendour within gated communities, the rich and powerful also get to buy themselves eternal youth.

It could be that the actual cost of manufacturing the elixir of eternal youth is cheap but the price charged for it is very much higher. The actual ingredients in an average bottle of perfume cost between $1.20 and $1.50 but the final product is sold for a 3-figure sum. How much is it worth paying to remain fit and healthy indefinitely? Just considering the cost of some forms of plastic surgery ($25,000 for a full facelift, for example) which, let’s be realistic, does nothing to extend life and makes you look like you had plastic surgery rather than someone blessed with youth everlasting, we may conjecture that people would be willing to pay millions.

But why price it so high? Why make it so exclusive? One motivation might be population control. Whenever the possibility of ending ageing is raised, the first question people nearly always ask is, ‘if nobody dies, won’t we run out of space?’. If I were a transhumanist intent on developing a master race with me as its eternal, all-powerful leader, as Jethro Knights is portrayed as being, I would most likely be inclined to think, “hmmm, good point. Obviously we cannot allow just anybody to gain entrance into the immortality club. It should be a right reserved for those who are most successful in life”. In our world, success is almost always defined in terms of material wealth. Whenever somebody is called ‘successful’ it is always because they have a lot of money. Indeed, we may not know anything else about them, like for example, whether they have a friend in the world. So if you insist on defining success in terms of material wealth, and you think only successful people should be permitted not to die, wouldn’t you price the elixir of life highly enough to ensure only the worthiest- the wealthiest- obtain the transhuman gift of eternal youth? 

Getting back to AGI robots displacing all human labour, leading to a vast gap between an elite owner/investment class ‘haves’ and a massive, economically-excluded and impoverished class of ‘have-nots’, there is a major point we have neglected to talk about, and that is the paradox of automation.

The paradox is as follows. Imagine you are the boss of a company, and your mandate is to cut costs and raise productivity as much as possible. You become aware of the existence of AGI robots and you learn all about how they will work 24/7 for free (or almost free, since there is the cost of purchase and maybe other fees) and always work at optimal levels. You compare these machines to your human employees- those workers who demand wages and paid vacations, and who get bored and distracted and need sleep- and it becomes plainly obvious that robots should replace the workforce. The shareholders and owners will love you for it, when they see how much profit this cost-cutting initiative results in.

But then, some time after your business is fully automated, figures from the sales department come in and they make for grim reading. They show sales of your company’s product are going down, down, down and, consequently, so is profit. Why? Well, who is buying your product? People? No, they have been squeezed out of the job market by robots, as other bosses reach the same conclusion about the low labour cost and high productivity of robots compared to human labour that you reached. The robots? Obviously not. They work for free, which is why you replaced human labour with robots to begin with.

In the past, this paradox was avoided because tech was much more specialised and the tide of automation rose slowly, and that gave people who were displaced from one form of work to find employment in other areas. Thus, they could carry on fulfilling their dual role of workers and consumers, earning wages and spending their money on goods and services and thereby generating profits for the companies that provided them. But AGI made humanoid robots so adaptable there was no job that a human could do that they could not. From a cost-cutting and productivity perspective, robot labour seems ideal. But in terms of consumers with purchasing power, they are disastrous. And that’s the paradox. 

So how do we resolve it? I put this question to members of a Facebook group I belong to, and got a variety of responses. Manney Coleman’s response struck me as being rather like the solution Jethro Knights would advocate:

“It’s solved pretty easily, actually. Those who are the owners of roboticized factories will have capital. They’ll be the only ‘consumers’ left. This means that we can have a dieback of the now pointless 99% and let the 1% elite finally produce and consume in peace without having to endure all the Jerry Springer-watching, tractor pull-loving idiots that are dragging them down”.

There is a weird perspective in a response like that. It views the ‘1% elite’ as being the only true producers and consumers of the world, while the 99% who do all the manual work and service-related jobs that enables an economy to function, have nothing to offer except high viewing figures for trash TV. Like all crass stereotypes there is a grain of truth in such a statement. Some individuals on the list of the world’s richest people have set up companies that have produced products and services that make a genuine contribution to the economy and, for the most part, have brought improvements to our lives. And some of the 99% do indeed just watch TV all day long.

But, equally, there are those who have accumulated extreme wealth not by providing actual goods and services, but rather by operating within a financial industry that makes money simply by buying and selling nothing but money. As Andrie Gorz wrote in the essay ‘Exit From Capitalism':

“Money itself is the only commodity the financial industry produces- through operations on the financial market that are more and more risky and less and less controllable. The amount of capital the financial industry siphons off and manages far exceeds the amount of capital valorized in the real economy….The value of this ‘capital’ is entirely fictitious; it is based largely on debt and goodwill or, in other words, on expectation…The real economy is becoming an appendage of the speculative bubbles sustained by the financial industry- until that inevitable point when the bubbles burst, leading to serial bank crashes and threatening the global system of credit with collapse and the real economy with a severe, prolonged depression”.

Of course, by the time the bubble bursts, the financial elite have grabbed so much money for themselves they are largely insulated from the effects of the crash. It is those at the bottom of the economic pyramid who suffer the most, not necessarily out of any fault of their own but because the fiat money system is set up to ensure that happens. We can also assume that the richest would have the capital to buy large amounts of stock in robotics companies, which in Manney Coleman’s solution buys your way out of a holocaust which affects all but the monied elite. We might therefore call this the ‘Final Solution To the Proletariat Question’.

Not all proposed solutions were as harsh and inhuman. Some, like Mike Lorrey and Alexander Biersack, pointed out that, since intelligent robots would lower the cost of providing manual and service-related jobs, that would also lower the barriers to starting businesses and more people could therefore be entrepreneurs. 

A comparison might be made with mobile phone technology. When mobile phones were introduced they were so expensive just being seen with one was as sure a sign that you were of the monied elite as the Lamborghini you just climbed out of. But over time, not only did the phones get smaller, not only did the range of services they provided go up, but the cost of access to such technology went down. Today, billions of people have access to mobile phones that are handy, pocket-sized web-enabled computers. Micro-financing initiatives emerged which enabled even the poorest nations to provide Internet access.

There are a billion people in the world who cannot afford to open a bank account (this costs $700 in Cameroon- more than most people make in a year). Mobile banking services dramatically lower the cost of banking, thereby enabling access to this service to more and more people. In Zambia, farmers without bank access use smartphones to buy seeds and fertilizer, and in India they are used to coordinate business transactions between fishermen and the markets who buy and sell their catch.

It is in no way absurd to suppose that the next great app or web-based industry- the next ‘Angry Birds’ or ‘Google’- will not be started by some MIT undergraduate but rather by somebody in the developing world who never went to school and whose family never knew any life other than subsistence agriculture. 

If robots follow the same trajectory of better performance and lower cost, that would open up access to many more business opportunities. As more and more physical devices join the Internet of things and gain some degree of intelligence, there will be more opportunity to create new products and services through mashups of existing products and services. Combinatorial explosion outruns exponential growth, so that may be how human ingenuity (perhaps augmented through Intelligence Amplification technologies like neuroprosthetics) stays ahead. There are no limits to the amount of new markets that can be created.

Alan Carl Brown commented, “If robots can do every job, this will enable you to just think up things, hand money to a robot and then wait for the product or service to become available…A world of abundance where you just have to come with with one idea that 1% of 1% of the world is willing to give you $1 in order to make your first million”.

This attitude sees the 99% not as a useless burden, but as a huge potential market, individually contributing negligible profit but collectively bringing very tidy returns to those who, like ebay’s auctions and Amazon’s retail, can make money out of the ‘long tail’ of lots of small transactions. 


I want to move on now and talk about the idea that religion is opposed to transhumanism. Is it? It is certainly true that if you seek you will find opponents of transhumanism whose objection is religiously motivated. In ‘The Transhumanist Wager’ there are various government organizations like the NAH (National Association of Health) and the NSFA (National Future Security Agency) that are supposedly ethics committees charged with assessing the potential risks of technology, but are actually theocratic organizations whose purpose is to thwart transhuman agendas. 

This sounds rather like the ‘President’s Council on Bioethics’, which was established in 2001 by George W. Bush and later closed by President Obama. Bioethicist Leslie A. Meltzer criticised the PCB for wrapping ‘political and religious agendas in the guise of dignity’, and argued its members were mostly christian affiliated neoconservatives. Elizabeth Blackburn accused the PCB of existing mostly to justify President Bush’s position on stem cell research and abortion. 

Go on Youtube and put ‘transhumanism’ into the search engine, and you will easily find videos with titles like ‘What Is Transhumanism? Is This Why YHVH (GOD) Destroyed Everything in a Huge Flood’? and ‘Satan’s New Lie: Transhumanism’. Does this count as proof that religion opposes transhumanism? Not, really, no. It’s just proof that some people with religious beliefs are critical of transhumanism. That’s not surprising, given that transhumanists hold some controversial views and the major religions have billions of followers. Among that many people you are bound to find some that have a negative opinion of any controversial topic.

If you seek, can you find people who do not see their faith as incompatible with transhumanism? Yes, and that is not surprising given how religion and transhumanism share many dreams in common, even if they disagree on the best methods to realize them. Religious anticipations of ascending to heaven in immortal angelic bodies, and of a returning Messiah who will establish a kingdom of Heaven on Earth, can be seen as analogous to transhuman dreams of uploading into immortal robotic bodies, and a coming Singularity that will transform civilization into paradise on Earth. 

The word ‘Transhumanism’ was first introduced in a book written by Julian Huxley in 1927, the title of which was ‘Religion Without Revelation’. The word obviously has its roots in ‘Humanism’. The Humanists were originally a group of practicing Catholics who believed that human ability was the best way to celebrate God.

Fast forward to modern times, and you can find people mixing scitech with religion. Rabbi Youseff Kazan said:

“The prophecy of isaiah is that the time will come when the world will be filled with the knowledge of God…We, today, are actually able to see this happen…You have…Satellites which are bringing the whole world connected into one small unit, where telephone and wireless technology is being able to bring everybody together”.

Look closely at two of the largest scientific projects of the 20th century- the Space Race and the Human Genome Project. Here, too, you will religious beliefs mixed up with secular science. In Russia, the origins of manned spaceflight can be traced back to Konstantin Tsiolkovsky, who preached that it was mankind’s destiny to dominate the cosmos and become reunited with God. Over in the West, the former Nazi rocket scientist Wernher Von Braun became a born-again Christian who argued that humans must go into space to spread the gospel. Historian David F. Noble pointed out how “the astronauts have carried literally thousands of Christian banners, flags…copies of the Bible etc into space with them”. One of the most memorable film sequences captured by astronauts was ‘Earthrise’- our home planet rising over the Moon’s horizon. What words were chosen to accompany this jaw-dropping sight? The Bible’s most famous passage, ‘In the beginning, God created the heavens and the Earth…”

What about the Human Genome Project? It was run by Francis Collins (there was also, of course, a parallel project headed by Craig Venter). Collins was an evangelical Christian who has written about how he thinks the resurrection of Christ was the most important event in history. Strictly speaking, there is no such thing as ‘the’ human genome. Everybody’s genome is unique. When asked whose genome was being sequenced, the reply was (according to Noble) “it will be sort of a composite, and it will be male, sort of an Adam 2″.

Considering the way religious beliefs were mixed up with secular science, David F. Noble commented:

“Technological development, which appears to be the most worldly of activities, is in actuality an otherworldly project, rooted in Christian notion of redemption, the resurrection of original perfection. And the story, which is a peculiarly Christian one, is the story of the fall of Adam, and the promise of the recovery of Adam’s original divinity”.

Rather than the Christian Right being fundamentally opposed to transhumanism, we seem to have found evidence that it supports transhuman tech like genetic engineering for its promise to restore Eden. Again, not really. All we have done is find some religious scholars who interpret the mumbo-jumbo of Scripture in terms of prophecies that foresaw the Internet, and projects conducted by countries with histories steeped in religion, supplying a large body of religious imagery that some are tempted to apply to large scientific projects.

But it does at least show that someone whose beliefs sit at the conservative Christian Right need not necessarily be anti-transhumanist. Nor should we assume that someone whose beliefs lie at the opposite end of the political spectrum would necessarily be pro-transhuman. Indeed, many on the Left are distrustful of modern technology, most of which is designed by corporations, and therefore (they would argue) intended primarily to serve the interests of corporations and the wealthy owner/ investment classes that run them.

‘Transhumanist Wager’ is full of images of religiously-motivated folk opposing the agenda of Jethro Knights. In a town hall forum, “the conflict of religious imperatives versus transhuman aims was being called the next great civil liberties war”. Opponents of transhumanism in the story describe it as “anti-theistic… steeped in blasphemous egoism”. But this is arguably only a surface-level phenomena. Look deeper and there is another agenda at work in the story which in real life could very well oppose transhumanism as Knights defines it. By way of introduction to the agenda, and part two, I will leave you with the question: Who, in the story, is Jethro Knights’ opposite?

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So as you should all know by now, I have been promoting the idea that jobs=slavery.

It is something of an oversimplification to say all jobs are a kind of slavery, though. There are some jobs that count as work as I understand the definition. So, how to tell whether you are enslaved, or whether you are engaged in work?

I have devised a thought experiment that determines the answer.

Imagine you have been given your very own ‘Robo-you’. Robo-you is a humanoid robot with two key features: It looks like you, and it is programmed to do your job. It is deactivated at the moment, but if you should so choose, pushing the button on its back will turn Robo-you on, and when the time comes for you to commute to your place of employment, Robo-you will commute there instead, and do your job for you. But who gets the wages? You do. Yes, that’s right, Robo-You goes off to work every day, and does your job, and you get paid.

If you had a Robo-you, would you press the button? Would you have this android version of yourself do your job for you, while you spent your time doing something else instead?

If your answer is ‘no, I would not want Robo-you to do my job’, then congratulations. Your employment provides you with genuine work. You think of your job as productive, meaningful, and rewarding.

If your answer is ‘hell, yeah, send Robo-you to do my job, I got other things I would rather be doing’, this goes to show that you are a wage-slave, somebody who derives little to no reward or pleasure from their job, with the paycheck that comes every now and then the only incentive for turning up every day.

My educated guess is that most people would rather have Robo-you do their job, which means most people are wage-slaves. I base this guess on the observation that most people think the best days of the year are weekends, bank holidays and vacations, and the worst day of the week tends to be Monday. Oh, and the observation that number one on the ‘list of things to do when I win the lottery’ is ‘quit my job’. Not everybody thinks that way. A few really like their jobs and can hardly wait for those annoying days off to end so they can get back to doing what they are passionate about. But most do not think that way at all. Most don’t like their jobs, hence monday is the worst day, days off are better, and winning enough money to buy your freedom is best of all.

This goes to show that (rare exceptions to the contrary aside) most jobs are not personally engaging and fulfilling. They are ‘miserable temporary necessities’ Why necessary? Because these jobs need to be done in order to provide the products and services we want, which means somebody has got to do them. Why miserable? Because, while we want all the stuff of a runaway consumerist culture, we tend not to really want to do all the horrid jobs required to get all that stuff into our homes. Why temporary? Because one day robots that can do those jobs for us will exist.

The reality, for now, however, is that such robots do not exist, at least not robots sufficiently skilled enough to replace all wage-slaves. So the fact is that jobs are a miserable necessity. But we do not like to admit that, do we? We would rather pretend that jobs are great. That if we had no jobs life would be awful, and totally lacking in purpose.

Imagine this story, which might be true for all I know. For all of human history, pain and surgery have gone together. If you had to have surgery, you were going to experience pain. In order to deal with this miserable situation, we invented reasons for why pain should accompany surgery. ‘Without pain, how would we ever truly know pleasure?’ ‘Pain is there to strengthen moral fortitude!’ We convinced ourselves that pain was necessary and good.

Then, one day, somebody goes and invents anaesthesia. Now, it is possible to have painless surgery. But we have indoctrinated ourselves with the delusion that pain is necessary and good. This results in people rejecting the idea of painless surgery.

Robots are like anaesthesia. Jobs are a miserable necessity and we have dealt with that fact by convincing ourselves that, actually, jobs are not miserable. Jobs are synonymous with work, vital for a healthy mind and spirit. But now that robots are coming to liberate us from our jobs, this cultural baggage so many of us carry, the attitude that all must have jobs, is a serious impediment to the flowering of a better way of life.

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Thinkers lecture 2014 ‘money: its failure and its future’ (part two)


In the last lecture, I talked about how the West may well be in the age of decadence, and devoted much of the talk in explaining how financial and monetary systems have been manipulated over the centuries to bring about unfair distributions of wealth. That lecture was, I have to admit, largely pessimistic in tone. So, I think it is time to change the mood. In the last lecture I said that we could consider our age of decadence as a reason for hope: we stand on the cusp of change. The old, failing systems will be replaced and a new civilization with arise, one that is better placed to enable transhumanist dreams of individual excellence and social well-being. What would money be like in a next-gen civilization?

A fairly common assumption among transhumanists is that, in the future, there will be no money. The thinking behind this assumption is that the current system demands endless growth and a neverending search for higher efficiency from the workforce. Human beings are limited in how much mental and physical work they can do, and those limitations encourage R+D in automated manufacturing and AI. Transhumanists by and large take it as given that one day artificial intelligence will be smart enough to be relied on to do absolutely anything needed to keep the economy going. It is also assumed that robots could be designed to want to work for free. They would toil away, twenty-four hours a day, seven days per week, never taking a holiday, never expecting any pay. There would be no wages and everything would be free.

Now, I can definitely see AI and robotics squeezing humans out of the job market, if AGI is realized. And I hope it is, because I believe that humans have better things to do than be components in some process for no reason other than the pressures that force one to volunteer for wage slavery. And I do rather like the idea of everything being free. Wouldn’t it be nice to go on Amazon and be able to order anything from a pencil to a luxury private jet, and not have to pay for any of it?

Well, yes, it is nice but perhaps not all that realistic. I do not believe money will disappear, because it serves more purposes than just paying wages. It is (or can be) a useful tool for allocating resources, helpful in calculating the right quantity of a product so as to match preferences of consumers with the activities of producers. Money helps facilitate the processes by which natural resources are converted into the things we need and the things we want. Even if we one day have robots running the economy, it is still an economy. That means the robots would have to do the same kind of calculations that drive resource allocation and matching of supply with demand that money is designed to facilitate.

So, there will be money in the future. But not simply more money (which would just mean more debt if we are talking about a debt-based fiat currency) but rather more kinds of money. These new types of currency would have functions designed to promote those psychological traits that would encourage societies to develop in positive directions. Now, obviously, ‘the best possiblle society’ is somewhat subjective but I do think it is possible to sketch out the conditions for a positive society that most sensible people would agree stand a good chance of encouraging social cohesion and individual excellence. In a market economy we have competitors, and that means winners and losers. But what kinds of winners and losers should we hope for?


Ideally, success in the marketplace would be none-zero sum. In other words, your ‘win’ as an individual or company should have a positive outcome for society as a whole. The most obvious way to achieve that would result would be if monetary and financial systems were focused not on making money out of money (which, as explained in the last lecture, actually entails inventing ways of extracting wealth from those who contribute to the real economy and giving it to those who gamble in a global virtual casino) but rather on productive enterprise: Producing goods and services that make people’s lives better in some way. What would also help bring that kind of market about would be effective matching of supply and demand, using natural resources as efficiently as possible, and removal of all barriers to entrepreneurship.


There will inevitably be losers. After all, people have varying skill levels; some get lucky breaks and others do not, and not all products and services will strike a chord with the general public. But what should losing mean? Being a loser in a hypercompetitive society can be pretty dire: A slide into economic exclusion, homelessness and despair. Under such circumstances, losing seems like a punishment. But it need not be so. There is an old saying: ‘we learn from our mistakes’. What that saying tells us is that losing can be an opportunity, a way of educating ourselves through experience. The best way to change ‘losing as punishment’ into ‘losing as learning’ would be to have social safety nets in place which would prevent people from falling so far that they have little hope of clawing their way back. Does that necessarily have to be safety nets enforced by government, taking money from those who succeed in life so as to provide support for those who don’t? I do not think so. In a more altruistic, collaboratively orientated society, I would expect people to have a more charitable outlook. There would be a fairer and more just view that some resources should be considered the common heritage of all citizens, not the private posession of a minority. Could it be that, one day, would-be winners strive to be rewarded with the admiration of their peers and the veneration of society, but consider mere material wealth to be something people should have roughly equal access to? If the world were not so agressively competitive, I do not see why not.


If you are trying to capture a corner of the market, you can be sure that there are competitors trying to achieve the same goal. How should you view these rivals? As deadly foes who you need to destroy by any means you can get away with? That attitude does not seem conducive to the development of greater social cohesion to me.

Instead, why not view your rivals as collaborators who are exploring alternative ways of achieving whatever result your own product or service is intended to achieve? I know of at least one entrepreneur who has that kind of attitude. As most of you doubtless know, Palmer Luckey is the founder of the company Occulus VR, which hopes to bring to market a VR-headset. A common device in science fiction, VR headsets never really took off as a viable consumer device and were relegated to expensive setups for military use and other organizations with very deep pockets. But then Palmer Luckey assembled a prototype VR headset which provided proof of principle that an effective headset could be produced, and for a cost that made it suitable for a mass-market demographic.

Needless to say, by revitalizing the possibility of decent and affordable VR headsets, Occulus inevitably found itself one player in a market of competitors out to capture the same corner of the market. There are now at least ten rival headsets in development, from kickstarter-backed products to ones in development by electronics giants such as Sony.

But rather than view those rivals as foes to be destroyed at all costs, Luckey considers them useful allies. It only adds to the evidence that VR can be a viable mass market product if many rival companies- including big names in home entertainment- are also trying to bring such products to market. Do not get me wrong, I am sure Occulus VR want to be number one. But the greater good is the successful development of commercial VR. So Luckey considers those rival headset manufacturers as competitors for the number one slot, but also as collaborators in the meta-goal of finally bringing mass-market VR out of sci-fi and into reality.

In a marketplace that emphasised non-zero sum results and social support and decent standards of living for all people, I would expect more companies to have Occulus VR’s attitude to their rivals: Not foes, but collaborators exploring alternative paths to the same desired end.

How to rearrange our financial and monetary systems to achieve this outcome? Some people think the answer is to do what Robin Hood did, which is to take from the rich and give to the poor. But that kind of wealth redistribution was more justified in Robin Hood’s day because England at that time operated under a feudal system. In feudal economics, the rich get richer by expropriating property and forcing people into servitude. In a market-based economy, though, people can become wealthy by producing goods and services that many people find improve and enrich their lives in some way. Arguably, the money thus aquired is better left in the hands of such people, where it may be invested in further products and services, rather than simply taking it from them and redistributing it among people with no track record of entrepreneurship.

If simple wealth redistribution is not the solution, what is? The answer has to be: Reconfiguring the economy so that it provides real opportunities for everyone. The good news is that this is already being done. Around the world there are examples of communities redesigning money to achieve results where conventional money fails. Those communities range from families in deprived towns seeking ways out of poverty, to multinational companies looking for ways to remove obstacles to trade.

The alternative currencies these experimentors have developed are identified under various names. There are ‘local currencies’, so-called because they are designed to work within a limited area. There are ‘cooperative currencies’, or money who’s functionality is designed to encourage cooperation among its users, rather than competition. The groups and organizations that invented these alternative currencies understand that money can be remodelled with a specialized outcome in mind. It is possible to link unmet needs with resources that are underused by conventional currencies; to encourage desired behaviours such as providing care for the elderly or revitalizing failing communities. Although they have various names, denoting the outcome they are purpose-built to achieve, there is one name that all these new kinds of money can be labelled as: Complementary currencies. This is because these alternative currencies are not intended to replace conventional money, but rather to work in tandem with it, helping to make financial and monetary systems less competitive and hyperagressive and more socially responsible.

So, how do you redesign money? First of all you need to understand what money is. In my last lecture, I said that the definition of ‘real money’ was ‘that which is used to pay taxes’. But that was more accurately a definition of what gives fiat money value. I also said that just about anything can be used as ‘money’- beads, shells, bones- you name it. This is because money is not really a physical thing at all, it is just convenient to have it represented by some physical thing. For anything to act as money, a community is required to agree that this particular thing is acceptable in an exchange. Money is therefore a social contract, like marriage. It is real, even if it only exists in people’s minds.

Ok, so money exists by social agreement. As money is really a form of social contract, it can be rewritten to, say, keep separate exchange circuits of different natures (as local currencies do by being invalid for use outside of the area for which they are designed) or for different monetary functions. For example, conventional money operates both as a means of payment and a store of value, and those dual functions are really rather conflicting. On the one hand, money is meant to function as a means of exchange, and is therefore intended to be spent. But on the other hand, its role as a store of value means there is a built-in tendency to save it, which of course takes money out of circulation. Cooperative currencies are designed to facilitate transactions by being a medium of exchange exclusively. They tend to have lower intrinsic value compared to conventional currencies, but, since money that is not used as a store of value will tend to circulate more than money that tends to be accumulated, cooperative currencies make up for their lower intrinsic value with their higher velocity. The economist Irwin Fisher proved that the volume of economic activity is not just dependent on the quantity of money in circulation but also on the number of times it circulates.

I think it is time to start talking about some examples of alternative currencies. The first one I want to talk about shows there is much truth in the saying that one person’s trash is another person’s treasure, for it concerns a currency that encouraged perhaps the highest percentage of recycling in the world.

This story takes place in Caributa, which is the capital of the southeastern state of Parania, Brazil. The favelas had a particular problem with garbage. The terrain they were built on was very hilly, and the pathways were too narrow to allow trucks to enter in order to carry away refuse. Furthermore, there were insufficient funds to deal with all that trash.

The government, which was then under the leadership of Jaime Lerner, noted that there were a couple of underutilized commodities. There was a municiple bus system that was underused, and there were a lot of people with time on their hands. So, large metallic bins were placed on the streets at the edge of the favela neighbourhoods, and whoever collected and sorted the trash received tokens to ride the bus system.

The sixty-two poorest neighbourhoods alone exchanged eleven thousand tons of garbage for a million bus tokens and one thousand two hundred tons of food (the bus tokens were soon acepted as money at local markets). In a three-year period, over a hundred schools traded two hundred tons of garbage for one point nine million notebooks, the paper-recycling component alone saving the equivalent of one thousand two hundred trees per day. Sixty to seventy of Curibata’s trash is recycled in-situ, which, as I said, is probably the highest percentage in the world.

The system then moved beyond the favelas to other areas that had a problem with garbage. As Jamie Lerner explained:

“We didn’t have the money to clean our bays. So instead we made agreements with our fishermen. When they catch fish, the fish belong to them. When the days weren’t good for fishing, they catch garbage, we pay for the garbage with our tokens. The more garbage they fished, the cleaner the bay became; the cleaner the bay became, the more fish they catched”.

Various cooperative currency schemes were used to tackle various initiatives. By inventing a currency that utilized underused commodities and resources, and extracting wealth from trash via recycling, Curibata funded environmental cleanup, job-creation, city restoration, and improved education. And, what is more, it achieved all that without having to raise taxes or go to organizations like the world bank for a loan.

Now, maybe some of you are thinking “yes, well, this is just an example of poor and desperate neighbourhoods doing menial work for a bite to eat, and a means to travel to look for more work. This does not prove cooperative currencies can do much for wealthy countries”. Perhaps, then, we should next look at a cooperative currency that operates in a rich country.

Switzerland is blessed with an economy that is among the most stable in the world. A major contributor to the country’s resillience is a business-to-business currency and a dual currency banking institution. This currency, which is known as the WIR, can trace its origins back to the 1930s. This was, of course, the time of the Great Depression. Two businessmen, Werner Zimmermann and Paul Enz, were faced with bankruptcy, having received a notice from their respective banks that credit was going to be reduced or eliminated.

It was clear that one company needed a loan to buy goods from another company, and that company, in turn, needed money in order to buy material from its own suppliers. So, Zimmermann and Enz got together with a dozen or so other business associates, and they created a mutual credit system. In simple terms, it worked something like this:

A baker requires ingredients which a farmer can supply and so, said baker incurs a debit from a local farmer in exchange for whatever produce he needs. The farmer uses that credit in order to obtain supplies from another business, while the baker supplies somebody with baked goods, which brings his balance back to zero. These transactions all take place without being mediated by conventional money.

This system saved the businesses involved, despite a massive press campaign that the country’s banks mounted, intent on preventing the idea from ever taking off. These people then created their own currency, the WIR. The value of the WIR was identical to the national currency (ie one WIR equalled one Swiss Franc) but it did not bare interest. All debts in WIR have to be settled in WIR. There is no convertability into national currency. A cooperative was set up among the users to keep the accounts dealing with that currency.

The WIR is not represented by paper money, but is instead an electronic currency. Business in WIR is conducted by cheque, credit card, and mobile phone payments. As of 2010, some sixty-thousand businesses or sixteen percent of all Swiss enterprises, were trading in WIR. Depositors tend to be small and medium-sized businesses, but more than a third of all construction companies in Switzerland use WIR, and construction is a massively capital-intensive sector.

So, how does WIR help with economic stability? As with most cooperative currency schemes, WIR does not replace the national currency but rather works in parallel with it. There is a countercyclical nature in the way WIR is issued. During times of recession, when regular banks reduce their lending, more WIR is used. When the economy is in better shape and banks are lending again, there tends to be less WIR in circulation. What this achieves is a smoothing out of the booms and busts of the Swiss economy, which contributes significantly to the country’s economic stability.

This conclusion was backed up by several macroeconomic studies conduced by Professor James Stodder of the Rensselaer Polytechnic Institute. According to these studies, “growth in the number of WIR participants has tracked Swiss unemployment very closely, consistently maintaining a rate of about one-tenth the increase in the number of unemployed”. What this means is that, whenever the conventional Swiss Franc economy slows, job losses are spontaneously reduced as more people join the WIR economy.

You may have noticed a rather strange attitude that the conventional banking system has, which is a seeming reluctance to invest in productive enterprise. Of course, this would come as no surprise to those of you who attended my last lecture, since I explained that in an Age of Decadence those in positions of power are more motivated to take money from others rather than make it, and so loans for investments in actual goods and services are minute in comparison to money created for the purpose of wealth extraction. Furthermore, the way conventional money is created (by bank debt) has the effect of amplifying the ups and downs of the business cycle. When business is good, banks are likely to be generous with credit, which can potentially amplify a good period into an inflatory boom period. But should the business horizon darken even slightly, banks reduce credit availability, which can easily lead to full-blown recession.

Avrinede Ives Cordeiro, a resident of Conjunto Palmeira, Brazil, and now a very successful local businesswoman, has first-hand experience of the reluctance of banks to lend money for investment in productive enterprises, particularly when you are poor:

“Any person of low income that visits a conventional bank is likely to have his or her dreams crushed in an instant…there is a complete disconnect between the priorities of the banking system and the real economy… we had no access to credit or any other financial service in our town”.

Now, I did say Cordeiro became a successful businesswoman, so she must have found some way out of the poverty trap. And that way out was a dual currency community banking system- Banco Palmas. Banco Palmas was established by Joao Soaquim de Melo Neto Segunda, following a neighbourhood meeting he attended in Conjunto Palmeira in the late 1990s. The community had conducted research which mapped consumption patterns of the population of the area. It was estimated that around one point three million Brazilian Reals circulated within the community, but eighty percent of that currency quickly left the local community. As Segunda explained:

“We’re poor because we lose what we have, and aditionally we lose what little savings we have. So neighbourhoods are not poor, they become poor. And that realization was the beginning spark of Banco Palmas”.

This community bank issues two kinds of loans: consumption loans and production loans. Consumption loans are used to cover essentials like food and clothing. Such loans are issued in the local currency, which is called Palmas, and are not convertable into national currency. There is no interest fee and just a flat one percent fee for administration. Consumption loans are relatively small cash infusions, equal to around £50 at most. Production loans range between $5,000 to $10,000. Unlike consumption loans, they can also be provided in national currency. If that is the case, an interest fee is attached to them. Banco Palmas has created more than one thousand eight hundred jobs and there are now similar dual currency banking systems operational in some sixty-six communities around Brazil, with the full support of the Brazillian government and the nation’s central bank.

Avrinede Cordeiro said, “thanks to our community bank, we have managed to have access to these services…Every time I needed help, people at Banco Palmas were always ready to provide it”.

So far, these examples of local, dual, and cooperative currencies have not been too disimmilar to conventional money. They may not charge interest; they may only be valid in a localised region, but other than that there is not much that turns conventional thinking on its head.

But, since we are talking about redesigning money, sometimes radical thinking does occur. This is the case with LETS and its attitude toward a negative balance. LETS- it stands for Local Exchange Trading System- was invented in Courtney, a town near Vancouver in Canada. The reason for its invention is, yet again, the failure of conventional money to serve the real economy of goods and services. In the early 80s, forty percent of the population of Courtney were unemployed. Although there was plenty that needed to be done and a large labour force willing to do it, a lack of money meant the requisite transactions could not take place.

As Micheal Linton explained, “The greatest deficiency of conventional money is that, for far too many, it is simply not available…And as conventional money must come from outside the local community, it inherently doesn’t understand or concern itself with the needs of a particular community”.

And that is why LETS was invented, to facilitate much-needed trade within circuits in local neighbourhoods, villages and towns. LETS is known as a mutual credit system, meaning a currency that is created by a simultaneous credit and debit in a transaction. Being a mutual credit system, the LETS money supply is self-regulating. This is because members issue their own currency within the framework of their community. This enables participants to use what is available within their trading community, which overcomes the limitations imposed by a scarcity of national currency. And, since open records are kept of both credit and debit, LETS is also customarily transparent. Combined with its self-regulating nature, this transparency promotes greater trust, since people are held more accountable.

OK, so the Local Exchange Trading System is designed to better facilitate trade in local communities, but what about turning conventional thinking on its head? Well, with conventional money, if you have a negative balance, that is a bad thing. But as far as LETS is concerned, a negative balance is no problem at all. Quite the contrary in fact, because a negative balance shows that people have been buying goods and services from others in their local community. It is therefore an indication of community activity. If you are a member with a negative balance, you can be called upon to offer goods and services in return, which has the effect of further increasing the community’s wealth.

Maybe it comes as a surprise to learn that there are all these different kinds of money working in tandem with conventional money? But if you stop and think about it, it is not such an unheard-of thing. Most of us, I guess, have used local currencies in the form of gift vouchers that are valid only in a certain store. And the idea of a currency purpose-built to match an unmet need with an underused resource is most popularly known in the form of commercial loyalty currencies such as frequent flyer miles programs that airlines have been using for decades (in this particular case, from the perspective of the airline, the unmet need is customer loyalty and the unused resource is empty seats). Currently, there are approximately four thousand mature cooperative currencies operating around the world, mostly in Latin America, Continental Europe, Japan and Australia. Most of these monetary innovations have tended to be relatively small in scale, consisting of struggling local communities seeking ways of getting the fundamental circuit of buying and selling working again.

But, despite their mostly modest scale, we should not be dismissive of these monetary innovations, because they are proof of principle that society can lift itself out of poverty, create more work, build sustainable networks (and more besides) all without needing to raise taxes or by securing funding from government departments and agencies. We are talking about communities who have found that, by creating new kinds of cooperative currencies that work in tandem with conventional currencies, the features of scarcity and hypercompetitiveness that predominate in the conventional system can be shifted toward new options that encourage more social cohesion and more efficient matching of underused resources with unmet needs.

Attorny Edgar Cahn devised ‘Time Dollars’, which is a cooperative medium of exchange backed by time. One time dollar is equal to one hour of service. Meltem Sendag, who helped found a Timebanking network in Istanbul, said:

“We both want to move from the competitive society, which we both experienced working in the corporate world, to one of cooperation. With our former careers, we would have had to live with the values we do not believe in…Now, with the Timebanking community, we are experiencing what it would be like if the world were designed for generosity…experimenting with the idea that we have what we need if we use what we have by trading services and acts of goodwill, thereby emphasising the values of time and relationships”.

Are these innovations destined to remain solutions by and for smallish communities, or are we potentially seeing the development of something grander in scale? According to futurist John Nesbit, “change occurs when there is a confluence of both changing values and economic necessity”. I think that what we are seeing here is a shift from a monetary monoculture, one in which debt-based fractional reserve systems controlled by governments and banking cartels dominate, to a monetary ecology where the power returns to communities operating at different levels of society.

What would be the economic necessity that would drive this transformation? Most likely, it would be the realization that an economy based on endless growth and extreme concentration of wealth is completely at odds with long-term sustainable community building. It so happens that the current economic downturn is resulting in significant increases in the development and adoption of cooperative currencies around the world. The more people see that it is possible to build communities around non-zero sum gains, the less they are likely to put up with the agressive ‘all for myself and nothing for others’ attitude.

No doubt the Internet, that greatest of computational and communications technologies, will play a major role in facilitating this transformation. This is partly because computers would be so handy in crunching the numbers involved in the multilateral barter systems cooperative currencies make possible. You certainly would not want a frequent-flyer miles program run by countless clerks shuffling papers! But, perhaps its more important job will be as a communications tool, one in which increasing numbers of people add to the voice speaking out about the current system, one which crushes the entrepreneurial spirit and denies decent living to billions, and the real possibility of a viable alternative to corrupt finance, inescapable poverty and environmental destruction.

Ok, so what would this money ecology look like? Before talking about that perhaps we should remember the caution not to demonize the current system. It is not inherently evil or anything, it is merely an imperfect work-in-progress that needs fixing, same with all technologies. Particularly in the last lecture, I said some harsh things about interest, inflation, growth, consumption and banks, but any monetary ecology that aspires to build a better civilization had better understand that all these do good as well as harm.

Take interest, which I objected to in the last lecture for creating debt that cannot be repaid and concentrations of wealth that have nothing to do with ability. Despite these dubious concequences, there are legitimate reasons to apply interest to a loan. If you are a lender, you will want some protection against defaults. If, say, five percent of borrowers are expected to default on their loans, charging five percent interest will ensure that at least the entire principle is paid back. Since interest acts as a fair precaution for lenders, it would be unwise to simply abolish it.

Then again, we certainly do not want to retain current outcomes such as short-term thinking and unearned concentrations of wealth, so what to do about that? Many cooperative currencies apply demurrage, which works in the oposite way to interest. In other words, whereas with interest money that sits in a bank increases in value, demurrage causes money to lose value if it is held onto for too long. This may seem like a strange idea if you are used to money that is both a unit of exchange and a store of value, but remember that cooperative currencies tend to be mediums of exchange exclusively. The whole point of them is to get an economy moving again and a demurrage charge provides an incentive to spend that money before it begins to lose value. If such a currency is designed to be counter-cyclical, cooperative currencies carrying a demurrage fee can balance out the effects of interest-baring fiat money. As we saw with the WIR, cooperative currencies tend to be issued in greater quantities whan an economy is on a downturn and banks are not inclined to make loans. Another advantage of demurrage fees is that, unlike regular interest, it does not contribute to enormous concentrations of wealth and that means there is less income disparity and greater equality. Having demurrage-baring cooperative currencies working counter-cyclically with interest-baring currencies therefore smooths out the boom and bust phases of the business cycle, leading to stronger communities rather than money eroding social capital.

All this talk of issuing new kinds of money seems to be ignoring a serious and undesirable consequence: It would create uncontrollable inflation. But that objection is only valid if applied to the issuing of fiat money. Local currencies can be designed specifically to avoid contributing to inflation. Remember, how, in the last lecture, we saw how inflation results whenever there are insufficient goods and services produced for the quantity of money in circulation? Well, mutual credit systems like LETS facilitate multilateral barter, which means that for every credit generated there is a simultaneous creation of a debit within the same community. Because the supply of products and services is simultaneous with the creation of the currency, such currencies are designed to not create inflation. By the way, as was the case with interest, inflation is not all bad so later on I shall talk about ways in which it can do useful things in an economy designed to serve the people rather than the self-serving interests of a few.

So, then, a monetary ecosystem: What might it look like and what is it supposed to achieve? Its main goal, I believe, should be to enable us to abandon an economy that prioritises short-term thinking over long-term planning, and endless consumption, for one that is sustainable and socially responsible. According to John Boik, who is a medical doctor specializing in cancer by profession but now applies his expertise to natural systems of governments, there are two key mechanisms of contemporary society that make it unsustainable:

1. The financial system demands continuous growth.
2. Financial and political power is centralized within a small subset of the population.

The thing with money is, it is like god: If it did not exist it would be necessary to invent it. This fact is illustrated by something that happened in Ireland during the decades of 1966 to 1976. During that time, there were three separate bank strikes that caused the banks to shut down completely. It did not take long for the Irish to realize that, if the banks were closed, nothing prohibited writing a check and using it like cash. Once official-issued checks were used up, citizens created their own checks using supplies from local stationary shops and news agents. Antoin E. Murphey, who is economics professor at Trinity College, Dublin, said:

“The Irish created an unregulated, totally anarchistic community currency matrix. They were operating on the basis of the Irish pound at the time. But there was nobody in charge and people took the checks they liked and didn’t take the checks they didn’t like. So the whole world revolved around that simple fact. And it worked! As soon as the banks opened again, you’re back to deprevation and scarcity. But until that point it had been a wonderful time”.

What happened in Ireland, and what is evident from various other cooperative currencies around the world, is that people can get on with their lives without centralized authority and financial institutions. It should be pointed out, though, that the Republic of Ireland at that time had a small population, which meant there was a high degree of personal contact among members of the community, even in cities. Knowing one’s clientele very well is what enabled a trust-based system to work. As Murphey joked, “one does not after all, serve drinks to someone for years without discovering something about their liquid resources”.

Obviously, in modern cities there is a lot less personal contact and, consequently, less information regarding credit-worthiness. That could change if the Internet, smart phones and all that enables us to create spaces where much more information can be pulled into a decision and interconnectivity empowers both the individual and his or her community. In that case, life would be more transparent and democratic, and possibly the ‘anarchistic community matrix’ could work on a larger scale. But until then, such systems will be a small part of the money ecology.

Bernard Lietaer and Jacqui Dunne, authors of ‘Rethinking Money: How New Currencies Turn Scarceity Into Prosperity’, describe what a money ecosystem might look like. They think of it as consisting of many monetary systems designed to work at various scales. At the largest (global) scale, there would be a ‘global reference currency’, which is a “new non-national currency… designed both to provide a safety net to support the conventional monetary system and to mobilize global corporations toward a sustainable future”.

The authors point out that goals like sustainability are more effectively accomplished via strong financial incentives rather than regulation, legislative imperatives or moral prodding, and highlight the so-called ‘war against drugs’ as evidence that “whenever attempts at regulation or moral persuasion run up against financial interests, the latter tends to win”.

An example of a supranational cooperative currency would be the ‘Terra Trade Reference Currency’, which is designed to address several key issues that are global in nature and, thus, beyond the scope of any individual nation’s ability to repair. Specifically, it targets three systemic economic issues:

1. Alleviating the problem of monetary instability.
2. Curtailing booms and busts of the business cycle
3. Making long-term sustainability possible.

According to Bernard Lietaer and Jacqui Dunne, the TRC (who’s unit of account is called a ‘Terra’) works in parallel with the current international monetary system, providing a mechanism for worldwide contractual, payment, and planning purposes. Think of its purpose as being similar to the old Gold Standard: Providing a robust, inflation-resistant standard of value.

One layer down we find multinational currencies. Bernard Lietaer and Jacqui Dunne write:

“It has indeed become obvious that regional economic integration can reach maturity only when a single currency levels the playing field for all economic participants”.

Along with something that evolves from the Euro, the authors foresee multinational currency zones forming in Asia, thanks to a deal between China and Japan, and that a reform of the Dollar will give rise to the ‘Amero’, a multinational currency for the North and South Americas.

Another form of international currency is ‘International Corporate Scrip’, the first large-scale application of which were airline loyalty currencies. The company Apple has two hundred million users accessing its iTune store, providing it with perhaps more direct customer billing relationships than any other company. A smartphone that can debit a credit account can just as easily credit it as well. Talking about these international corporate scrips, the authors of ‘Rethinking Money’ write:

“The net result will be that several corporate scrips will be competing on the Internet… some (may) create special subsidiaries, with strong and liquid balance sheets, to issue these currencies and imbue them with greater creditability”.

Next level down we come to the currencies we are most familiar with: National currencies like the Pound and the Franc. Given that the age of decadence is driven to a large extent by power power’s sake, and the monetary system as it is provides immense power for those who control it (Amschel Rothschild famously said, “give me control of a nation’s money supply, and I care not who makes its laws”) the question arises as to whether governments and the banking cartel will fight the establishment of a money ecosystem.

There are examples of cooperative currencies being effectively run out of town by the dominant banking system. A large number of cooperative currencies arose in the aftermath of the German hyperinflation that took place in the 1920s. One such cooperative currency was the ‘Worgl’, invented by Micheal Untergenberger who was mayor of the town that gave the currency its name. The town of Worgl had thirty percent unemployment and Untergenberger’s idea to get the town back to work was to create a currency that functioned soley as a medium of exchange and with a demurrage charge to ensure its circulation. The Worgl lasted thirteen months, during which time the council carried out all intended works projects, built new houses and a reservoir, and became the only town in Austria with full employment.

Other towns and villages took note of the Worgl’s success, and it was not long before over two hundred towns and villages adopted it. That was when the Austrian central bank panicked and asserted its monopoly rights by making the issuing of Worgls a criminal offense. The town of Worgl returned to thirty percent unemployment almost overnight.

Could the same thing happen with regards to the monetary system? I suppose it could, but we are trying to take an optimistic perspective here. So, let’s focus instead on the alternative. As the Internet communicates success stories of money being re-invented to resolve the inadequacies of regular money, and the impossibility of reconciling a monopolistic debt-based currency that demands perpetual growth with long-term sustainability becomes more apparent, the weight of popular pressure may demand that national currencies change to better suit the non-zero sum achievements and greater social cohesion that a monetary ecosystem would help make possible. Assuming that national currencies become part of a monetary ecosystem, they would continue to play an important role in countries that have not joined a multinational currency integration system.

Next level down we come across ‘Regional Currencies’. According to Bernard Lietaer and Jacqui Dunne, “genuine regional development requires a regional currency. If the funding for such strategies is made available only from the federal level, there will be less flexibility and creativity than if both state and federal levels create their own currencies”. Regional currency projects are being spearheaded in Austria and Germany, where they are generically known as ‘Regios’. Regios complement the Euro, and are designed to give regions the necessary autonomy to deal directly with their particular social, ecological and financial problems.

To give one case in point, net cash flow spent by big business usually flows in the direction of corporate headquarters outside of the region. For example, an evaluation of independent businesses in Chicago found that, for every $100 spent with a local firm, $68 is left in the Chicago community, whereas for every $100 spent in a chain store, only $43 is left in the Chicago community.

Currently there are some thirty four types of regio operating in the regio network, each with a different name, structure, and purpose, tailor-made to meet the specific needs of a given region. One such regio is called the Chiemgaurer, based in Bavaria, southern Germany. Designed by six teenagers at the Rudolph Steiner school, Chiemgaurer supports local production and enterprise by encouraging locals to shop at neighbourhood businesses rather than chain stores. Regional nonprofit organizations wishing to participate in the system pay ninety seven euros per one hundred chiemgaurers, and the latter currency can then be used to purchase goods and services in participating stores. It is possible to have the chiemgaurers cashed back into euros, but a penalty of five percent discourages this. At the end of the process, ninety five percent of profit remains with the business, three percent goes to the nonprofit chosen by the buyer, and two percent goes to the chiemguarer currency administration to cover overheads.

Margrit Kennedy, who in 1987 wrote the book ‘Interest and Inflation-free money: Creating An Exchange Medium That Works For Everybody And Protects The Earth” said of regio currencies:

“The time outlay is considerable: It takes three to five years until you get into the zone where the whole operation can be self-financing, so it’s not a trivial task. Those who run these groups do it because they love it. They really feel they are doing something useful”. This feelgood factor can be attributed to the fact that, by using a regio currency such as the chiemgaurer, participants have a stronger feeling of belonging to the local community.

Next level down we come to local cooperative currencies, which are designed to link unused resources with unmet needs within a specific geographical area, business or segment of society. Bernard Lietaer and Jacqui Dunne foresee more local currencies being created to facilitate local exchanges between members as the information revolution erodes production and service-related jobs (that is, jobs considered economically viable under conventional money, which does not always coincide with the needs of local communities, as we have seen).

Finally, we come to the most localized level of all, that of functional currencies. Whereas there would be, by definition and necessity, only one global reference currency, there could be millions of different kinds of functional currencies working within the money ecology. A functional currency is one designed to bring about a particular outcome. Want to encourage good behaviour and discourage bad practice? Ebay did and so they implemented a reputation currency in the form of seller ratings. Want to encourage and improve learning and education? Then why not see what a learning currency like the sabre, talents, or algres can do for you?

Let’s take a closer look at the Sabre. It gets its name from the Spanish and Portugese word meaning ‘to know’ and is a specialised education paper currency allocated to primary and secondary schools, particularly in depressed areas. Sabres are first given to the youngest students, who use it to fund tutoring help from older students. Those in turn use the sabres they earn to buy mentoring from older students, and at the end of the chain we have seventeen-year-olds using sabres to pay for part or all of their university education.

What you gain from using the Sabres education currency is a more effective retainment level compared to conventional teaching methods. That involves lecturing and reading through which, respectively, five to ten percent of what is taught is retained. Compare that to the ninety percent retention rate which applies to whatever one teaches to others. According to Bernard Lietaer and Jacqui Dunne, “when the learning retention rates increase from five to ten percent (normal education methods) to ninety percent (teaching others)…spending $1 billion through the sabre system could roughly be estimated to generate as much as $100 billion worth of retained learning, in comparison to the conventional grants approach”.

So that is the money ecosystem, comprising of many layers of monetary systems, from one global reference currency to a few international currencies, to multitudes of local currencies and, finally, countless functional currencies. The further down we go, the more money becomes designed to tackle localized, specific problems. Conversely, the higher up we go, the more money addresses national or international concerns. This certainly does not mean our purses and wallets will become overswollen with all these new monies; any one individual or business would only participate in a few of these systems.

We are nearly done, but there are a few points left unaddressed. I said earlier that the monetary ecosystem could provide an incentive to change national currencies. I said earlier still that not all inflation is bad.

Inflation is bad when you have an unrestrained money supply chasing a constant quantity of wealth. It should really be the other way around: a fixed money supply that is used to purchase a variable amount of wealth. Governments that were interested in establishing money supply stability could use legislation to stop banks creating money at will. We would need to know how much money should be in circulation, so economists would calculate what that figure should be, aided by statiticians’ predictions of changes in population size. Politicians could agree on a mechanism for increasing or decreasing the money supply so that it remains constant relative to the population.

Under such conditions, one in which the money supply is constant in relation to the population, additional wealth creation would drive prices down and a reduction in wealth creation would cause prices to rise. In this scenario, inflation is not necessarily problematic; less wealth creation and associated price increase could result from people simply being happy with less.

So long as profitability and bonuses are linked to making loans by creating new money, the real economy of goods and services will continue to be undermined by the banking system. The real economy should not be sacrificed to the selfish interests of the banking and financial sector; rather those should be services supporting the production of goods and services that make a positive difference to people’s lives. In ‘Creating New Money: A Monetary Reform For the Information Age’, James Robertson and Joseph Huber say that banks should act purely as credit brokers, that is they should act as intermediaries between savers and borrowers and provide a safe haven for people’s money. The role of the central bank, they say, should be to issue whatever quantity of money is necessary to ensure adequate levels of investment. The government would spend this money into circulation, and if the money supply grew too much, it could be reduced by the government spending less than it received in tax revenues.

When the USA began its industrial revolution, it was Abhraham Lincoln’s view that plants would be owned by those who worked in them. Under such a scheme, businesses are not pressured into having to deliver dividends to absent shareholders, and whenever increase in productivity efficiency is achieved, its benefits are distributed among the workforce in the form of increased wages or reduced working hours. The result would be employees reaping the benefits of their investment. Earnings would be spent on wealth created by others- genuine wealth in the form of beneficial goods and services- and thus there would be a steady circular flow of money between consumption and production.

One company that is owned by its workers is John Lewis. The ‘John Lewis Partnership’ is a company owned by a trust on behalf of all employees, who have a say in how the business is run and also receive a share of annual profits. Of course, not everybody earns the same; like every other business, John Lewis pays market rates to recruit and retain the best senior staff. But because it has no obligations to absent shareholders, its profits are distributed among its employees, ensuring even the most junior staff takes home a decent wage.

By any rational and moral argument, natural capital is the birthright of all Earth’s citizens. In that case, something has to be done about private land ownership and a taxation system that supports unearned wealth. Peversely, the current tax system mostly targets the wrong things- labour and enterprise rather than consumption and resources- and the result is an unnecessary burden on wealth creation and the encouragement of unsustainable exploitation of natural resources. Some countries collect a proportion of unearned wealth through property taxes, but this is usually seen as a way of topping up conventional tax revenues. But the rational and moral argument comes down decisively on placing the tax burden on revenues derived solely from use of land and the natural resources it contains. Note that such a scheme does not disallow the ability to make profits if you are a landowner. You could make investments to improve your land and since that would involve an expenditure of labour and capital, you should be able to profit from the effort you have expended and the investment you risked. That is quite different from any increase in wealth due to the general uplift in land values. That, after all, results from the efforts of the wider community and not the land owner.

Any scientifically valid economic model has got to take into account which forms of growth are bound by physical laws and which are not. Again, this places the tax burden on consumption of physical resources, which obviously cannot be exploited without limit. Unrestrained growth is not always destined to have harmful consequences. Nothing but benefits would come, for example, if one’s knowledge base continues to grow exponentially. Therefore a monetary ecosystem that seeks long-term sustainability will encourage the ephemeralization of money and banking by moving them out of the physical world and into the virtual. Gone would be bank branches, ATM networks and physical money. Banking would be a pure relationship business accessible through web-enabled devices.

When you consider that, in Uganda circa 2005, there were just one hundred ATM machines for twenty seven million people and when you consider that opening an account in Cameroon costs more than most make in a year, it becomes aparrent that ever-cheaper computing and growing access to the Internet will dramatically change the global banking scene, facilitating greater prosperity and further innovations as billions of currently disenfranchised people join the money ecosystem. As the authors of Rethinking money said:

“An economy of relationships is trying to emerge: An economy in which interconnectivity empowers the individual, along with his or her various communities, evolving into a more democratic, transparent, and viable economic life, enabled by various consciously created currencies operating at all levels of society, from neighbourhoods to the world at large”.

This sentiment was echoed by Jean Luc Rox, a member of the Brussel’s chapter of the HUB network, a social enterprise operating in over twenty six countries worldwide:

“What happened since we established the system? We see increasing relationships between social entrepreneurs…Before, people were working alone, looking at each other not necessarily as a friend.. but more as a potential competitor. And now, because they can offer services among themselves, they see they have more to win by working together”.

As is usually the case, Nature discovered the benefits of cooperation long before we did. In a lecture I gave a couple of years ago, I talked about how evolution achieved greater orders of complexity through organizations of societies:

Transition one: The increasingly complex biochemical systems that ultimately evolved into bacteria-like organisms.

Transition two: The combination of bacteria-like organisms into cells, resulting in the eukaryotic cell.

Transition three: The organization of eukaryotic cells into multicellular life.

Transition four: The organisation of individual animals into social groups and networks such as tribes, villages, towns, and nations.

The human animal has developed societal organizations so large they impact on the international scale and may very well affect the future course of evolution itself. If we are to achieve long-term stability and better standards of living for all we have to learn that individual achievement is a reflection of strong teamwork. We have to understand that we are one global family, bound by physical laws to evolve efficient economic market systems that take us away from agressively competitive zero-sum behaviour and toward methodologies that enable winners to flourish in an environment of non-zero sum, socially beneficial activities. As I have tried to show in this lecture, communities of various scales, from groups of people in small towns to multinational companies, are re-inventing money so as to aid rather than discourage this outcome. These innovators are therefore doing their bit in bringing about the transition to a new era of civilization, one much better placed to make the best and widest possible use of the amazing transhuman capabilities which our tech gurus see coming over the horizon.

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Thinkers lecture 2014: Money: Its failure and its future (part one)



Welcome to this year’s lecture, ‘Money: Its failure and its future’. Actually, it is two lectures this year. Part one will deal with money’s failure and part two will be about its future. This unfortunately means that the lecture you are about to here is a rather bleak one. Since I do not want it to be all doom and gloom, I am going to start on an upbeat note and talk about about something that applies to a wider context than the main topic of this year’s lectures.

I want to begin by talking about the fishermen of the Indian state of Kerala, and a problem they faced, prior to 2001. It was this: The fish they caught were intended to be sold at market, but the only way they had of finding out if they had a buyer was to go to a market and engage in face to face communication. If the market they went to had no need of their fish, they would not be able to visit another, because the markets were about ten miles apart, the fish were perishable and the markets closed at 8AM. Choose the wrong buyer, and the whole catch would have to be thrown back into the sea. Economists call this a ‘coordination problem’.

But then these workers got hold of technology familiar to us all that matched buyers and sellers much more effectively. They got themselves mobile phones. Now, while they were still out at sea, they could phone ahead and arrange the best deal for their catch.

Now, I am not really interested in fish, but rather the fact that these workers made the jump from what was essentially stoneage communications to 21st century communications. What if developing countries can achieve a similar leap forward with agriculture, banking, education, energy, money and civil engineering and so on? If so, what they might develop into would be a new kind of civilization. Some people, for instance Marshall Brain, call this a ‘4th generation civilization’. But, since I am unsure as to how many civilizations there have been, I will play safe and call it a next-generation civilization.

So what is this next-generation civilization? I see it as being a civilization that uses the only resources we have- natural capital and human potential- with maximum efficiency. Because it has achieved this, it has eliminated- as far as is physically possible- the obstacles to greater social cohesion and personal development. Citizens of next-generation civilization would find themselves much further up Maslow’s famous pyramid of the hierarchy of needs than is the case for all but a few of the nations’ population today. This would make next-generation civilizations the best platform we have ever had for realizing the transhuman pursuit of social and individual excellence.

To achieve such goals, next-generation civilizations must become more than just life-as-we-know-it but with cooler technology. It would require a reinvention of all the systems, institutions and beliefs of which our lives are comprised, many of which are centuries old. Now, obviously we would be here until the Rapture if we were to embark on a comprehensive survey of all that needs to be done. So, I will be focusing mainly on a technology without which any civilization more complex than the most basic would be impossible. I am talking about money.

Speaking of money or, rather, wealth, a thought may have ocurred to some of you. If we acknowledge that a next-generation civilization could be achieved, why should we suppose it would emerge in developing countries? In many ways, these are places that have barely reached the 20th century. Dreaming up some glitzy, high-tech civilization sounds like an undertaking for people of affluent countries with plenty of time on their hands, not something that would concern those struggling to get by on one or two dollars per day. And then there is the matter of corruption. Stories abound of the terrible misallocation of wealth that goes on in the world’s poorest countries. The African Union estimated that some 25% of its annual GDP is lost to corruption. As they are so far behind, and the corrupt and criminal tend to thwart dreams of a better life, why look to such countries for the rise of NGC?

We should not think that developing nations have no advantages. There is, for example, the ‘latecomer’s advantage’. There is no rule that says a country has to retread all the steps that lead to the modern world. They can leapfrog straight to the latest technologies and practices. Indeed, this leapfrogging makes a great deal of sense, because the most modern technologies often do the same job as predecessors, only more cost effectively and less wastefully. The cost of purchasing and burying copper wire for a communications infrastructure would be more than $100 million. Cell tower infrastructure would cost a relatively small tens of thousands of dollars. If a city like Zinder in South Niger were to adopt PCs, then by the time 10% of the population were using them, the power they consume- 1,500 KW- would exceed that of all households today. Mobile devices, on the other hand, would consume just 74KWs, and as they run off of batteries they would be more useful in areas where power outage is a common experience. It is for reasons such as these that countries like El Salvdore and Panama have adopted mobile communications faster than the USA.

The fact that the rich nations have well-established systems and infrastructures could be an impediment to progress. W. Brian Arthur, External Professor at the Santa Fe Institute and author of ‘The Nature of Technology’ has written about how established technologies and practices can delay the adoption of new methods, even though those new methods are superior. In 1955, the economist Marvin Frankel noticed that cotton mills in Lancashire were not using the more modern and efficient machinery. This was because the old brick structures that housed the old machinery would have to be torn down before the new machinary could be installed. As Arthur wrote, “The outer assemblies thus locked in the inner machinary and thus the Lancashire mills did not change”. To this day, whenever a technology is so interwoven with the fabric of everyday life or business practice that replacing it seems too much bother, we say it has become ‘locked-in’.

There is also a psychological aspect to consider. Established technologies and practices can lead people to adopting certain ways of doing things, and upstart technologies that obsolete the old ways can be threatening. Sociologist Diane Vaughan called this ‘Psychological Dissonance’ and wrote:

“(We use) a frame of reference constructed from integrated sets of assumptions, expectations, and experiences…This frame of reference is not easily altered or dismantled, because the way we tend to see the world is intimately linked to how we see and define ourselves in relation to the world. Thus, we have a vested interest in maintaining consistency because our own identity is at risk”.

Therefore, established technologies, infrastructures and methods can create hysterisis- a delayed response to change- that holds the new at bay, at least until the old ways simply cannot be stretched any further. So, it could be that developing countries which lack many of these established infrastructures and technologies, would adopt the new and accomodate themselves more quickly to the methods and practices they make possible.

As for the problem of corruption, we should not think that it only goes on in the poor nations of the world. The reason why the corruption that goes on there seems so overt and in-your-face may be because it is immature. In the West, centuries of adjustments and fine-tuning have evolved instutions that divert real wealth from those who create it to those who set the rules. As world-renowned linguist and social philosopher Noam Chomsky pointed out, using violence in order to get people to obey, as the Soviet Union did, will ultimately fail. What is needed are systems of indoctrination to ensure that citizens agree to what the ruling class want. This can be achieved by, among other things, entering the school system and educating the nation’s future workforce toward’s the ‘correct’ way of thinking (one third of textbooks in American schools are provided by corporations) and censoring material that questions state dogma (a study by Vincent Navarro of John Hopkins University that found a correlation between class and race and wealth inequality was refused publication by every major medical journal in the US). These and other insidious practices successfully hide much of the elite wealth appropriation that goes on from view. It would be no mean feat to successfully unentangle those immoral methods of wealth creation from the beneficial forms that is vital for any successful civilization.

But much of the corruption in developing countries will be relatively easy to deal with. Much of it consists of plain old bribery, for instance having to pay your boss before he will hand over your wages. If you were working online for a foriegn company and your wages were wired directly into your account, that form of corruption would be much reduced. Moving to a cashless society using mobile devices that recognize their rightful owner and refuse to work for unauthorized users- say by using biometrics to identify users- would leave folks less vulnerable to theft. In countries like Niger, Senegal and Uganda, parents may have to pay bribes to get their children into school. With Internet access and availability of free educational resources like Kahn Acadamy and Granny Cloud (the latter being a service in which retirees voluntarily give some of their time to running lessons over Skype) that form of corruption is rendered obsolete. Many other forms of overt corruption would be harder to get way with in a country where the mass adoption of camera-phones and social networking makes sousveillance possible.

Now, we are getting close to the point where I say some negative things about modern money mechanics, capitalism, and free market libertarianism. So I think it might be wise to say something about what I shall call the ‘Catagorization Fallacy’. When thinking about such things as

‘The Rich’

I have noticed that people tend to label them as ‘good’ or ‘bad’, and which label they apply depends to a large extent on their political ideology. If you lean toward the right, you probably think ‘government’ and ‘taxes’ are bad; ‘The Rich’ and globalization are good. For those who lean more to the left, ‘The Rich’ are evil and so is globalization. Government and taxes (or rather, government that taxes the rich) is good.

But this black and white good/bad attitude is overly simplistic and can lead to flawed conclusions. If you think government is bad this may well lead you to conclude that the solution is no government. No, the solution to bad or ineffective government is always better government. Taking the stance that anything on that list is ‘good’ can lead to an ‘it ain’t broke so don’t fix it’ attitude. But all products of human ingenuity are imperfect works in progress. Rather than slap a simple good/bad label on the technologies, systems and institutions underlying and supporting the modern world, we should instead lift the hood on all of them, examine the way they function, how that influences us psychologically and how that, in turn, affects the behaviour of societies and civilization as a whole. What aspects succeed in favouring greater social development and personal achievment and how might they be improved? What acts against these goals and what might replace them?

So, before we get down to critizing current monetary and financial systems, let’s say some nice things. Such systems can claim to have done a great deal to increase wealth and raise living standards. It is easy to forget just how well off are in comparison to our ancestors. They longed for a world in which there was ample leisure time, an abundance of food and other material pleasures. For the averagely well-off citizen of a country like America, their daily life is, more or less, the realization of utopia that our ancestors dreamed of. When criticizing the negative aspects of globalization, I think there is a tendency to view it in light of the remarkable affluence we enjoy in the West. Anti-globalization protestors speak darkly about predator corporations moving to poor countries in order to exploit workers by putting them in sweatshop factories for shockingly low wages. But, those wages are only shockingly low by our standards. In countries like Vietnam they represent premium pay. If Western production were kept out of the developing world, that would only condemn workers in so-called sweatshops to return to subsistance agriculture. Globalization is not all bad and great harm would befall developing nations if it were simply ended.

That said, the richer the world becomes the less tolerant we should be of poverty and hardship. No blame for hunger and famine can be attributed to a world that does not have the capability to produce enough for everybody. But a world like ours, which does have the capacity to feed the world, should face constant pressure to do so. Particularly as the health issue in rich countries is no longer the hungry poor but rather the obese poor.

It is often said that developing countries cannot aspire to reach the same standards of living as first world nations. I agree- they should aspire to do better. We might view the capitalist system and the markets that support it as a centuries-long experiment testing the question ‘does material comfort bring happiness?’. The answer to that question is, ‘yes, but only up to a point’. Beyond that point, competing to out-do your neighbours in the fight to achieve ever-greater levels of material wealth does nothing whatsoever to improve life quality and can even have dire results for civilization.

In 1976, a retired army officer called General Sir John Grubb wrote a series of essays about empires past and present. There were, he noted, remarkable similarities between them. Empires last around two hundred and fifty years or ten generations, and during their lifespan they pass through several identifiable stages.

These are:

The Age of Discovery
The Age of Conquests
The Age of Commerce
The Age of Affluence
The Age of Intellect
And, lastly, the Age of Decadence.

The ins and outs of most of these stages need not concern us, but it would be worth examining that last stage in a little more detail. The Age of Decadence preceeds the collapse of an empire, and what drives it toward collapse is greed, the corrupting effects it has on society and the detrimental impact it has on the environment. The historian Arnold Toynbee showed how the collapse of 21 civilizations could be attributed to just two causes: Excessive concentration of wealth in the hands of a few, and an inability to introduce significant changes in response to shifting sociopolitical or socioeconomic circumstances.

During an age of Decadence, material wealth becomes less a means to an end and more an end in itself. The powerful compete to fill positions of authority, not really in order to better carry out their civic duty, but because they expect it will enable them to grab an even larger slice of the pie. Conspicuous displays of wealth are a common theme in an Age of Decadence.

This lust for more wealth is not restricted to the elite. The citizens, too, crave more and are encouraged to pursue materialist desires via the availabilty of easy credit. The desire to live off of a bloated welfare state is another common symptom. Others are an overstretched, poorly disciplined army, an obsession with sex, the veneration of celebrity, and a debasement of the currency resulting in severe economic and financial crises.

If all that sounds familiar, that could be because the West is now in its own Age of Decadence. There are two ways of responding. We could adopt a kind of pessimistic fatalism: We are heading for collapse. Or we can be optimistic and recognise that we stand on the cusp of change. There will be great challenges ahead of us, but it would be foolish to ignore the fact that there is also great opportunity. Thanks to the amazing advances in computing and communications technologies, ordinary people are more capable than ever of educating themselves about what is going on, viable alternate ways of doing things, and more able to organise into groups large enough to have a strong influence on the world’s stage. But, in order to guide the future in a direction that is positive, we must have a clear understanding of the deficiencies of the current system.

I would imagine that, in any Age of Decadence, there is a temptation to seek out somebody to blame. In our day and age it is politicians and bankers who are often singled out as the culprits. But that is unfair, because these are issues that run deeper and wider than anything that can be conveniently attributed to any one group. The problems are systemic, involving decades or even centuries long changes to politics, the financial system, religion, economics, the educational system, and more, modifications that we all, one way or another and to a greater or less extent, share some responsibility for having brought about.

So, since the answer to the question ‘who is to blame?’ is the general and rather unhelpful ‘everybody’, we should focus instead on WHAT is to blame. I suspect that a thorough understanding will necessitate not considering politics on its own, or anything else, but rather the way the political system, the monetary system etc are interconnected, with cause and effect propogating back and forth along the network of systems, organizations and institutions that form the basis of our current civilization. And when we focus our attention on a particular aspect of the overall system, as we shall shortly do with the monetary system (always baring in mind that it is part of something larger and therefore not entirely responsible for the situation we are in) we must be careful not to be distracted by non-problems, or problems that do not matter as much as we may think.

As far as most people are concerned, there is only one problem with money: Lack of it. The hardship poverty causes is not in question. But a careful analysis of the financial and economic crises we have faced reveals a different root cause. Our problems are not caused by a lack of money, but rather because we are using the wrong kind of money.

Money, you see, is not value neutral. It has a design (I do not mean how it looks; I mean how it functions) and that design affects us psychologically which, in turn, influences the kind of society we build for ourselves. Money can be designed to encourage cooperative, altruistic behaviour resulting in societies with a strong sense of community where wealth is distributed fairly (which is to say ‘not equally’ as that would be unfair given that individuals make disproportianate contributions to the economy). Alternatively, the ‘engine’ of money can drive competitive, aquisitive behaviour resulting in a society ( if that is the right word) were selfishness rules and wealth is concentrated in the hands of a few, leaving many in desperation. Throwing more bad money at the problems it has caused will ultimately only serve to exaggerate those problems. The solution has to involve rethinking money.

As we think about building our next-generation civilization, a critical question to answer will be how it can be that the current monetary system can generate such great wealth and yet there are still billions living below the poverty line. Part of this understanding comes from seeing how money was changed over generations from a convenient unit of currency and medium of exchange to a tool for social manipulation.

What we use as money originated in Venice in the thirteenth century. Back then, people used gold coins as money. As you can imagine, walking around with gold in their pockets made folk vulnerable to theft and the goldsmiths saw a business opportunity in that unfortunate fact. They could charge customers a fee for keeping their gold safely locked away in the vaults. The townsfolk agreed that this was a good idea, handed over their gold along with the fee, and were issued with receipts that could be later exchanged in return for their gold.

The townsfolk then adopted the attitude that those receipts were as good as real money. Indeed, in one way they were more convenient. It was much easier to carry around slips of paper rather than gold coins. And so tradesfolk accepted those receipts in payment for goods and services.

So far this all sounds like legitimate business practice, and that is because it all fits comfortably into the category of ‘profit making’. That tends to be generalised to mean any scheme that produces more money than was spent setting it up and maintaining it. But I think it more helpful to apply a more refined definition. Profit making applies to those schemes in which an individual or group risks its own capital in bringing to market a product or service that an informed public chooses to pay so that they may have access to it. The essentials of profit making are that it is wealth accumulation through democratic consent and it is non-zero sum. After all, it entails bringing to market something that makes a mostly positive contribution to our lives. To give a simple example, Apple gets rich, we get iPhones.

Given that definition we can see that there are ways of accumulating wealth that do not count as ‘profit making’. Most obviously, there are all those overtly criminal ways in which one may increase one’s own wealth. I guess any reasonable person would agree that people who get rich using such illegal methods do not deserve their fortune as the likes of Steve Jobs did. There are also methods that, while not illegal, do occupy a moral gray area and there can be disagreement as to whether those who get rich using such methods really deserve their wealth or not. One of these methods forms the very basis of modern money and came into being when people began using those receipts as money.

The goldsmiths noticed that the townsfolk preferred to use those slips of paper as ‘money’. The more astute goldsmiths also noticed that when their customers did withdraw their gold, they rarely withdrew it all at once. Instead, they preferred to withdraw just a part of the total deposit and leave the rest where it was. So, the goldsmiths figured they could get away with issuing loans in excess of the gold that was in the vaults. Customers came along, receiving receipts they assumed were ‘real money’ ie represented a certain amount of gold. In reality, that gold did not exist.

The idea of selling somebody something you do not have sounds like fraud. Remember, though, that the goldsmiths did have some gold, just not enough to back all the paper money they were issuing. Since their customers rarely demanded all their gold, their scheme worked so long as debt repayments provided sufficient reserves to meet those needs. On the other hand, if word got around that a lot of that paper money was essentially worthless, there would have been a rush to withdraw what gold there was before somebody else got to it. As for the act of issuing loans rather than buying and selling gold, it meant the customer was no longer dealing with a goldsmith but rather a bank, an organization whose main source of income comes from other other people’s debt. Issuing loans is not intrinsically bad. There are times when it is very useful to borrow money. But when you are profiteering from debt there is a temptation to increase it as much as possible, since the more debt there is the richer you get.

The rest of the goldsmiths’ story is a rather familiar one of great wealth made and reputations lost; of rules and regulations established and subsequently eroded as the lure of riches overrode common sense. And the reason why it is familiar is because the practice of making money out of debt now forms the very basis of the modern monetary system.

When a person, business or country borrows money, they are not given money that somebody else deposited or that the bank has in its vault. Instead, if a person wants to borrow, say, £10,000, the bank types £10,000 into that person’s account and, hey presto, there it is. This kind of money is called ‘Fiat money’ after a phrase in the Latin version of the Bible, ‘Fiat Lux’ or ‘let light be’. The reference is obvious: Banks have the ability (or rather, the authority) to make money out of nothing.

Eventually, that newly created £10,000 will end up being deposited in another bank account. When that happens, that bank is obliged to hold ten percent of that deposit in reserve and is entitled to issue the other ninety percent as new loans. However, that ninety percent does not come out of the original deposit. Instead, it is £9,000 created on top of the original $10,000. This process repeats every time money is deposited in an account. Thus, the supply of credit money is expanded. This process is known as ‘Fractional Reserve Banking’.

What gives fiat money value? One answer is: The money that already exists. The new money steals value from the money already in circulation. When the money supply is expanded irrespective of demand for goods and services, that upsets the equlibrium of supply and demand and diminishes the buying power of each pound, dollar or whatever. This devaluing of the currency manifests itself in higher prices for goods and services. In other words, you get inflation. Today one would need $405 to purchase goods that cost $100 in 1975.

You may have noticed that this provides only a partial answer to the question of where fiat money gets its value from. After all, if the new money gets value by stealing it from the money that already exists, where does that money get its value from? The answer to that question can be found in the definition of ‘real money’ in a fiat money system.

If you have ever played Monopoly, chances are that somebody held up a pretend banknote and said, “imagine if this was real money!”. But have you ever wondered why it is not? The reason why is because you cannot pay taxes with it. Why do we pay taxes? Not really for the reasons most often given. We are told taxes are essential if we are to have services such as road maintainence or garbage disposal. But that is not true because even if we did not pay taxes all such services would still be provided. This is because there is a demand for them, and wherever there is demand market economies adapt to meet it. That is just good business sense. And it does not require so-called ‘real money’ in order to make this happen, because just about anything can serve as a medium of exchange and unit of currency: Stones, beads, bones, seeds…and, yes, Monopoly money.

But you cannot pay taxes with anything other than what the law says is to be used for that purpose. And since you are required to pay taxes, you are therefore obliged to procure that which is used for this purpose. So the real purpose of taxes is to give value to whatever government decrees to be ‘real money’ and the definition of ‘real money’ in a fiat money system is, yes, ‘that which is used to pay taxes’.

The fact that this is what ‘real money’ is under the current system, coupled with the way the fractional reserve system creates money out of debt through the issuance of loans, has implications for what money represents. The common assumption is that money equals wealth. It is not hard to see why: The more money you have, the richer you are. But, the money creation process commences with government defining what is money by saying what is to be used to pay taxes. Since we never stop paying taxes we always owe money to the government, which is to say, we are always in debt. Furthermore, the way the fractional reserve system works inherently creates more debt. In fact, today ninety seven percent of all money is created as debt. So, in a fiat money fractional reserve system, money equals debt. It may be the case that the more money you have the richer you are, but it is also the case that the more money there is the more debt there is.

It is also debt that can never be repaid and which somebody must be burdened with. This is because of the application of interest. Whenever money is loaned it almost always has to be paid back with accrued interest. This is the banking system’s main source of income. But the money needed to pay back all debts as well as the interest does not exist. It is never created. This means that whenever a bank assesses somebody’s credit rating, they are determining how successful or agressive that person will be in taking money from others. Every pound or dollar that exists is money owed by somebody to somebody and the debt-based monetary system is akin to a game of musical chairs. When the music stops, there is an inevitable loser. Only, the stakes are high because, while banks get to make money out of nothing and lend it at interest and government steps in to bail them out whenever the system is losing them money, you will not get that loan unless you agree to forfeit something of real value should you fail to make replayments. Since that something is often your home, being the inevitable loser in this financial game of musical chairs is dire indeed.

As Peter Joseph explained, “The fractional reserve policy…is in fact a system of modern slavery. Money is created out of debt, and what do people do when they are in debt? They submit to employment to pay it off…And it is the fear of losing assets, coupled with the struggle to keep up with the perpetual debt and inflation inherent in the system, that keeps the wage slave in line, running on a hamster wheel with millions of others”.

Now, obviously, there must be some benefits to this system, otherwise it would not have spread in practice to the great majority of banks in the world. Basically, the earlier you get the newly created money the more you benefit. Therefore, those who have the authority to issue money benefit the most: Governments and banks. Borrowers who get this money early- for instance large corporations and government contractors- are next in line of those who benefit. They can spend the money before inflation caused by the new money raises prices. Prices do rise due to inflation, so holders of assets such as houses or shares will see gains in the value of that asset without there necessarily being any real improvements made. As for those at the bottom of the pyramid- for example people on fixed wages or incomes- by the time the money trickles down to them, the prices of things they need to buy have increased. Since their wages remain largely unchanged and their savings now buy less, in some cases they have to take on debt just to be able to afford what they were previously able to buy. Which means, of course, going back to the banks. And so the rich-poor divide gets bigger and bigger. In practice, then, the debt-based fractional reserve system is one designed to redistribute wealth from the bottom of the financial pyramid to the top.

This conclusion was borne out by studies conducted by the monetary analyst Helmut Cruz. He found that there was an upward concentration of wealth from the bottom eighty percent to the top twenty percent, especially the top ten percent, and this transfer of wealth ocurred independently of the cleverness or industriousness of the participants. It was, instead, due exclusively to the interest feature of the monetary system.

The problem here is not inequality. Unless you are some kind of idiot socialist, you have to concede that some degree of inequality is essential in any fair and just economic system. This is because there are individuals and businesses that are cleverer and more industrious than others and it is right and proper that they are duly rewarded. The belief that ‘the rich do not deserve their fortune’ is too general to take seriously, but the same could be said for its opposite: That everybody who occupies that exulted ‘one percent’ position deserves every penny or cent or whatever they have accumulated. As the economist Joseph E Stiglitz wrote:

“Economists long ago tried to justify vast inequalities…The justification they came up with was called ‘marginal productivity theory’…this theory associated higher incomes with higher productivity and a greater contribution to society…Evidence for its validity, however, remains thin…Those who have contributed great positive innovations to our society…have received a pittance compared to those responsible for the financial innovations that brought our global economy to the brink of ruin”.

Banks create money through loans, but what are those loans used for? Money is created for three purposes. There is, for instance, the purpose that I would guess most people would think was the main reason banks loan money: For investment in productive enterprise. Sometimes, somebody trying to start a new company or an established company seeking to expand into new markets will lack sufficient funds to do so. They will therefore require a loan. If the company is successful, it will make a profit, resulting not only in the lender being properly compensated but also in society benefitting from capital accumulation. Banks do not produce wealth. But, as this example shows, they do play a supporting role in wealth creation by funding direct investment in the creation of new wealth, as well as generally supervising the monetary system.

Arguably, this purpose for which loans are issued is the most socially beneficial contribution the banking system makes. So you would think that the vast majority of loans would be used for this purpose. But no: Currently in the UK, only eight percent of bank loans are made for investment in productive enterprise. So what is the remaining ninety two percent used for?

They are used to fund consumption in goods and services, and mostly to fund investment in secondary markets for stocks and shares, bond markets, stuff like that. Such investments have no direct link to the creation of real wealth. But language is cleverly used to make it seem like they do. We hear about workers trading in ‘financial products’ in the ‘market for financial derivatives’ and this is all part of the larger ‘financial industry’. Terminology like ‘product’, ‘markets’ and ‘industry’ make it seem like this is as much a contribution to the real economy of goods and services as, say, greengrocers selling their produce. But it is not.

That is not to say that only physical products have real value. Consultants can earn high wages because their knowledge is so valuable. When a painting is sold at auction for a six-figure sum, obviously the raw materials of the artpiece had little to do with that price. More intangible qualities are what attracted such a high pricetag. There are all kinds of genuinely valuable, nonphysical commodities circulating in the economy.

But what we are talking about here has nothing to do with the real economy. If you look through the smoke-and-mirrors use of language, a more honest description becomes clear: One of players betting on abstract concepts within a virtual global casino, entrance to which is limited to the already wealthy. That would be OK, I guess, if these games had no real life consequences. But they do.

Profit making is a synonym for earning money. But what this casino for the wealthy does is not profit making, since it is not investing effort and resources in trying to generate real wealth. Instead, it involves finding ways to secure for oneself a greater share of the wealth others have created. It is therefore a parasite, feeding off of the real economy. Furthermore, whenever top executives of banks and financial institutions are awarded huge saleries or bonuses, the labour market mechanism dictates that senior executives in other areas should be similarly rewarded. But, in order to do this, shareholders have to be kept happy, and this is achieved by paying them higher dividends.

The money needed to pay for all this does not come out of nowhere, but rather out of the company’s revenue. As this is obviously finite, greater financial rewards for executives and shareholders means lower wages for ordinary people. Now, I said before that unequal outcomes are essential in the interest of fairness. But at some point that inequality gap becomes so large that any sense of fairness is lost. The banker, J.P Morgan, considered a pay ratio of 20:1 between the highest paid and lowest paid to be optimum. In today’s largest corporations the ratio is 1000: 1. My favourite story of pay injustice is the revelation that Wal-Mart made its employees clock out and work part of their shift for no wages. And the owners of Wal-Mart, remember, have as much combined wealth as the bottom one hundred million American families.

Morally dubious as this is, it is perhaps not quite as objectionable as speculative investment. A lot of investment made in raw materials play no part in the production process that gets products into the hands of ordinary people. Instead they are made in the hope that the ‘asset’ will rise in value and so make money for the holder of that asset. This would be OK if we were talking about nonessentials like vintage wine. But speculative investments are made on staple foods, such as wheat. This betting of food prices in financial markets has lead to an average increase of fifteen percent for food prices, resulting in over 44 million people being driven into extreme poverty.

According to the logic of the free market, consumption is good and must continue, but paying wages is bad and to be avoided wherever possible. But, as many have pointed out, if you have no wages what are you supposed to consume with? The debt-based monetary system thinks it has the answer: More debt. Or, more precisely, generating loans to fund the consumption of goods and services. In the UK, personal debt is roughly equal to the entire annual output of the economy, a crazy result of a culture with an obsessive focus on consumerism, promoting the belief that we can have all we want whether we can afford it or not. It makes you wonder how such a large debt can ever be repaid.

But maybe we are making a wrong assumption in thinking debt is intended to be repaid? It is easy to see why such an assumption would come to our minds. We all learn as children that the word ‘loan’ refers to something that must eventually be given back. But the financial world does not always adhere to basic rules of social conduct.

An American economist called Hyman Minsky showed how there are three catagories of debt, which he labelled ‘hedge lending’, ‘speculative lending’ and ‘ponzi lending’. Of those three, only hedge lending fits the definition of a loan as commonly understood: the borrower expects to pay both principle and interest out of cash flows from current investments. But ponzi lending is a thoroughly different beast. A ponzi borrower has no cash flows to service their debt, preferring instead to constantly refine to avoid default. The act of continually borrowing, accumulating interest (and the fact that other ponzi borrowers behave similarly) ensures that the value of the underlying asset keeps rising. So long as the banks keep extending credit, the ponzi borrower can cream off a tidy sum for themselves, extracting revenue from assets whose value keeps rising simply because banks keep extending credit. As you might expect, this cannot last forever. After the boom period there is the bust. But by the time the system comes crashing down, the ponzi borrower is largely insulated from the fallout because they have gotten so rich. The rest of society is not so well insulated.

Then there is the use of debt as an alternative to conquest as a means of getting hold of another country’s assets. We saw earlier how, under the fiat-money fractional reserve system with its built-in inflation and interest, people are obliged to take on debt and so come under pressure to join the ranks of wage slaves. This does not just apply on an individual basis, but sometimes to entire nations.

The country Nigeria borrowed around $5 billion from the World Bank, but because of the interest charges it was made to pay back $16 billion. Then it was told it still owed a further $28 billion. Little wonder that President Obasanjo lamented, ‘if you ask me what is the worst thing in the world, I will say it is compound interest’. The developing world spends $25 in debt repayment for every dollar received in foreign aid and grants. Former economic hit man, John Perkins, claims this is a deliberate ploy:

“We economic hit men…will identify a country that has resources our corporations covet, like oil, and then arrange a huge loan to that country from the World Bank or one of its sister organizations…It’s so typical of the way the IMF and World Bank work. They put a country in debt, and it’s such a big debt that it can’t pay it, and then you offer to refinance the debt and pay even more interest. And you demand this quid pro quo which you call ‘conditionality’ or ‘good governance’ which means basically that they’ve got to sell their resources, including many of their social services…to foreign corporations”.

What is going on here? Why do the elite consider their privaleged position entitles them to so much that entire countries can be brought to the brink of ruin, just to benefit a few rich people in addition to foreign corporations?

We have to remember to stay away from ‘who is to blame?’ type questions and focus instead on what is to blame. That is, examine the underlying system. Taking the broadest view first, we are talking about economic theory that was largely established prior to the twentieth century. Why should that matter? It matters because, prior to the twentieth century, it was assumed we lived in a Newtonian universe. The Newtonian universe was a perfectly ordered mechanism and its success in accurately predicting orbits lead to expectations that everything could be understood with linear cause-and-effect thinking.

But Newtonian physics had always been limited in what it could achieve. It could only accurately predict the orbit of two bodies assuming no other celestial bodies were involved. In other words, Newtonian physics can be applied successfully only to a highly simplified model of the universe, one which removes all the complex interdependent systems.

But this fact was either missed or ignored by economists, who sought to apply newtonian mechanical models to the economy, one of the most complex, adaptive, open systems imaginable. And, just like the astronomers, they had to simplify the economy. Economists imagined perfectly functioning free markets, corporations run with impeccable efficiency and individuals who know everything taking place in markets. Or, to put it another way, players with the mind of God. Does that sound like the real world to you? Me neither.

Advocates of the free market are big on putting down state intervention and defending the free choice of players. Their argument, at first glance, seems reasonable enough. The world should be thought of as comprised of individuals who are free to participate fairly in an open market. If only government did not interfere, competitive self-regulation, defined as ‘the causal, resulting, and adaptive mechanism that guides and shifts rational decisions, based upon the logic of seeking and maintaining success in the marketplace”, would naturally achieve a balanced, equitable society with everybody properly compensated for their work.

But there is a very great difference between how the free market should work according to its advocates, and what actually results from its mechanisms. What actually results is freedom alright, only it is freedom of the powerful to dominate, supress and beat others by whatever competitive means possible, and the freedom to exploit the desperate and misfortunate. The flaw in this thinking lies in the fact that the free market is too myopic. This is not caused by people being evil in any traditional sense, but rather because the free market system cannot rationalise anything that cannot be turned over through money, and certainly not anything that has an interest to slow consumption. This means that the real world is full of ‘externalities’ that result as either an inherent biproduct of the narrow, mechanistic logic of the free market system, or something unrelated and unforseen. And these effects put pressure on an individual or company to reduce their ethical and moral standards, since that is the only way to reduce survival deficiency (ie make them, once more, competitive in the free market).

This is best illustrated with Peter Joseph’s thought experiment about a nice guy called Geoff. He owns a T-shirt store. Naturally, Geoff needs inventory, so he purchases his shirts at bulk rates, always mindful to assure customer satisfaction by competitive association, basing his decision on what to buy, pricewise, on the price competition of rival stores in his region. Geoff has employees who he cares about. He wants to see them be well. He drives their pay- in a competitive manner, of course- in order to reduce the likelyhood of them seeking more lucrative employment elsewhere. Geoff is not greedy, nor is he corrupt in any traditional sense. He is merely a player in a free market mechanism that is the director and orientator of proper social action through free enterprise and competition.

Now let’s introduce an externality and see what effect it has. A few years back, a typhoon struck Thailand, damaging its industries. This resulted in limited means to keep money flowing, and there would be limited to no state intervention, as that is deemed an interference in this world. Now let’s add another externality. A Western company has been hit by massive lawsuits, losing it lots of money. This company decides to offer contracts to manufacture clothes to the vulnerable, typhoon-decimated society. But, due to their own externality, the only way this company can keep afloat is to offer 12 cents an hour for a ten hour work day. The misfortune that the Thai community suffered leaves them no recourse but to ‘voluntarily’ agree to submit to what is almost slave labour. And the company offering such low wages is not doing so out of greed; they are merely trying to recover from a major lawsuit.

What can the market see? Only competitive cost efficiency. It cares nothing for humane working conditions, the health of workers or the community as a whole. It is indifferent to these things so long as they do not affect the bottom line. Obviously people need some rest and some means of aquiring the basics of life, so you cannot get away with making people work 24/7 for no wages. Having said that, there are places where people can be bought for a price cheap enough for them to be considered disposable commodities. There are some twenty seven million slaves in the world today. And that is REAL slavery, btw, not the ‘wage slaves’ we talked about earlier. From a humanitarian point of view this is not to be tolerated. But from a free market perspective it is very beneficial. People labouring for little to no pay? It does not get more cost effective than that!

What has all this got to do with Geoff? Well, it has everything to do with the ethical integrity of the labour that produces the shirts he sells. He is driven, by the pressure of competitive association, to buy shirts offered at the most competitive price possible. So, logically, he buys the shirts made in Thailand. He is an exploiter of what is virtually slave labour. This also brings into question Geoff’s ‘green’ credentials. Geoff does try. He recycles religiously, rides a bike to work in order to do his bit to cut down on CO2 emissions. But the cotton his shirts made from is produced in the USA, sent all the way via shipping frieghter to Thailand, before being brought all the way back. This makes no logical sense whatsoever from an environmental perspective because one of those shipping containers has been found to pollute as much as 50 million cars. But it makes perfect free market sense because it is cheaper to produce shirts this way.

Now let’s talk about Geoff’s own employees. Yet another externality compromises Geoff’s ethical integrity. The town he lives in used to be home to an automative manufacturing plant that provided employment for hundreds of people. But no longer. Maybe market logic dictated the company moved overseas where labour is cheaper. Maybe mechanization lead to a downsizing of the workforce. Whatever the reason, there is now a surplus of labour in town and this translates both in a reduction in the cost of labour and to a loss of purchasing power.

In such a climate, could Geoff stick to his ethical principles and stock only locally made shirts produced by workers paid a decent wage? If he did so, the shirts he sold would have to be sold at a higher price. With people feeling the pinch (today, fifty percent of Americans do not have enough savings to go three months without employment) is it likely that his customers will forgoe the far cheaper offerings of his rivals? If customers cannot afford to be ethical, neither can he.

Loss of purchasing power would lead to a reduction in the amount of spending going on in the town. Geoff would notice his rivals reducing their paid wages and the price of their merchandise. Market logic would dictate that he, too, must pay lower wages in order to remain competitive.

Can we consider Geoff to be an ethical person, when he has sweat shop labour making his T-shirts and the wages he pays his staff are so low daily life is a huge struggle for them? Peter Joseph commented, “obviously it is a trick question, because it assumes isolated behaviour, and free will decisions, absent external forces and pressures that inhibit and alter our behaviour”.

The point here is not that nobody benefits from a free market system operating within a debt-based monetary system. Obviously, some benefit a great deal. The point is that it produces more losers; those people hit by externalities, lumping them with misfortune that the system ruthlessly exploits in its ceasless drive torward greater cost efficiency and endless consumption. Advocates of the free market seem blind to this fact. To them it is like, I dunno, like a competitive sport with everybody starting on an equal footing and inequality of outcome dictated by individual ability and nothing else.

But the fact is there is no equality of opportunity and if ninety two percent of all bank loans are not for investment in productive enterprise, but rather for purposes of rent extraction, then the rich-poor divide cannot be the result purely of self-made millonaires earning profit as it I define it.

Rent extraction is not to be confused with rent as in, say, somebody running a taxi service who rents out spare seats to those who need a ride. That counts profit making because it generates real wealth in the form of a useful service, and people can choose whether or not to pay to access it. Rent seeking, by contrast, has nothing to do with investing one’s own effort and resources in trying to generate real wealth, but rather in trying to secure for oneself a greater share of the wealth that already exists. Lobbying politicians to enact legislation that will make it harder for new products to gain entry to a particular market is one example, private equity takeovers of perfectly viable businesses is another. There are many forms of rent extraction and all have a cost in terms of resources that could otherwise be applied to the creation of real wealth.

The amount of economic power we bring to the table has a great influence on our capacity to secure the wealth we need to live and prosper. Rent seeking activities ensure the distribution of economic power is extremely unequal. Such extreme inequality encourages the emergence of an elite who can use their power to further entrench their position, working to change the rules of the system to favour them. This is clearly illustrated by considering the issue of land ownership.

Before there was neo-classical economics, there was classical economics. In classical economics, Adam Smith divided inputs into economic activity into three classes- or factors- of production, those being land, labour and capital. According to Smith, no wealth is possible without some application of each of these factors. Smith provided a key contribution to economics because, by assessing the economic contribution to participants and the rewards they received in terms of social class (rent for landowners, profit for capital providers and wages for labourers) classical economics encouraged examination of the impact of power relations on the distribution of wealth.

However, classical economics predicted a world of diminishing returns, anticipating that as population numbers increased, production would intensify and growing demand would drive up the cost of land and, consequently, drive down the returns of labour and capital. But what really happened was that not only did land values steadily rise, wages and profit did as well, all thanks to technological advances that classical economics failed to take into account.

Neoclassical economics was established in response to this deficiency, but it too made a number of mistakes. One of the biggest was to consider land and capital to be the same thing, rather than distinct factors of production. Even today, nothing of tangible value can be created without some contribution of land, since ‘land’ includes natural resources that provide raw materials. But neo-classical economics was established to support the vested interests of land ownership. As Martin Wolf explained, “the powerful owners of natural resources wanted to protect their unearned gains. In practice, therefore, the tax burden fell on labour and capital”. By excluding land from economic models, landowners ensured that revenue earned by land ownership was exempt from tax, unlike revenue earned by labour and capital. I know that some people some people think that taxes of any kind are theft, but if we must have taxes wouldn’t it be better if it were consumption and resources that were taxed rather than labour and enterprise? After all, one could argue the case that the current arrangement encourages an unsustainable exploitation of natural resources and places an unnecessary burden on wealth creation.

It also hides the massive advantage that landowners have, whereas under classical economics and its analysis of land as a distinct factor of production, the advantage of that tiny proportion of the population who control access to most of the world’s resources would be laid bare for all to see.

That advantage is the ability to charge non-landowners for the right to use their land. Land, particularly the most valuable and in-demand land (which these days means land in or near the central business districts of major cities) is obviously of fixed supply, and therefore demands a greater share of income earned from production than it otherwise would.

Sometimes, landowners invest labour and capital in improving their land, and extra revenue earned as a result of such investment can be considered profit. But that is quite different to increase in wealth from the general uplift in land values. If you happen to own land in an area chosen for structure investment, the value of your land rises automatically, and not because of any effort you have expended or any investment you have made. As land reformers would say, land values arise not from the efforts of the landowner, but rather from those of the wider community. Wealth generated by the general uplift in land values is therefore wealth that the wider community is entitled to, but does not receive. Instead, it is concentrated in the hands of the land owners.

The social deficiency of our current economic system lies in the way it takes what should be basic human rights and tangles them up with a government and banking system motivated by money creation. Because resources that should be basic human rights are used as investments, we have the bizzare outcome of a surplus of supply of resources and people going without those resources. There can be, for example, homeless people in a city with peopleless homes.

During the millenium, so much money (ie, debt) had been created that lending became a production line process. As Micheal Hudson explained, banks and other players in the global casino understood that “the poor are honest. They’ll do anything they can to repay their debts even if the debts are not valid; even if the debts are much more than they expected”. A market trading in packages of debts rose up, further swelling the profits and bonuses of the players who traded in them. Such was the complexity and lack of transparency of these ‘products’ that many simply did not nor could not know if the homes that were the underlying assets had any tangible value. For a while, the existence of a thriving market was considered security enough, but eventually, with so many having no idea of the origin or validity of such loans, the market for mortgage-backed securities turned to the principle of the ‘greater fool’ theory, which basically entails selling dubious investments for a greater price than you paid for it, your customers obviously being the type P.T Barnum had in mind when he said, “there’s one born every minute”. Inevitably, the bubble burst and tens of thousands of sub-prime borrowers suffered foreclosure. In Baltimore, for example over 30,000 homes lie empty and tens of thousands of people have nowhere to live.

I want to narrow focus now and look at the influences the kind of money we are using has on us, psychologically. As we have seen, debt-based money requires endless growth because borrowers must find additional money to pay off interest. It requires endless consumption, and endless cost efficiency, which means losing jobs to cheap overseas labour and, once competitive enough, automation and robotics. That would be be OK if the technologies of abundance were used to fairly distribute the incredible quantity of stuff we are now capable of producing, but sadly the mindset of the corporations views mechanization as not a means for abundance but rather as a way to save even more money in the process of production, delivering much of the productive economy into the hands of a minority while condemning many to economic exclusion and social deprevation. The result is economic competitive behaviour driven by fear and insecurity.

Under such a system it is little wonder that we focus, almost to a point of obsession, on making money. Ever noticed how, when an individual is described as ‘successful’ it is almost always because they have a lot of money? We may not know anything else about this person like, say, whether he or she has a friend in the world. But they have lots of money and that is all that matters, apparrently.

We can all recognise that there are socially valuable roles that people take on without expectation of payment. The most obvious example is parenting. Raising the next generation is considered by many to be the most important job anybody can undertake. But, because this is voluntary work, it is considered to have no value according to the rationale of the Gross National Product. As far as the GNP is concerned, anything that does not involve the direct exchange of money is to be disregarded. But, anything that involves monetary transactions is considered a gain. As a consequence, should social decay get to a point where paid intervention is needed, in the form of psychological counselling, say, or social work or increased police and private protection, that then registers as an improvement according to the GNP. As economists Cliff Cobb, Jed Halsted and Jonathon Rowe explained, “the GNP not only masks the breakdown of the social structure and the natural habitat… it actually portrays such breakdown as economic gain”.

As well as focusing on money creation, the kind of money we use also compells us to adopt short-term thinking. Since sustainability requires intergenerational thinking, the way the importance of the immediate future totally outweighs the long-term future in the business and financial world is clearly at odds with the premise of the next-generation civilization. Of course, the monetary system cannot be held solely responsible for short-termism. Long-term planning is inherently risky, due to the difficulty in accurately forecasting events that are located further in the future. But that being said, there is a key impetus toward short-termism that is very much a consequence of the conventional monetary system. When it comes to the discounted cash flow techniques used in financial decisions, analysts take into consideration the intrinsic risk of the investment project, the cost of equity capital and the current and anticipated interest rates. Now, if an entrepreneur can make the same amount of money simply by leaving it in a bank where it will accrue interest rather than invest it in productive enterprise, why risk one’s money on the latter? This is why, in a world that used interest-baring currency, financial investments are focused mainly on the short-term.

So, our debt-based monetary system places a firm preference on short-term thinking, encourages us to be obsessive consumers, is relentlessly working to displace as many of us from the labour market as it possibly can, considers voluntary work like parenting or caring for elderly relatives to be of no value, registers social decay, ecological disaster and war as improvements to a nation’s economy, and leads to an unrelenting concentration of wealth in increasingly fewer hands, while simultaneously burdening more people and even whole countries with debt and condemning them to competition driven by fear of deprevation.

Of course, it is not all bad. The rich may be getting richer and often in ways that have nothing to do with any real contribution to the real economy of goods and services, but the poor are seeing their standards of living improve as well, and that is mostly attributable to the genuine profit-making ventures of those who apply their talents in bringing products and services to market. There is planned obsolesence and other dubious ways of ensuring scarcity, meaning we do not use our technologies of abundance as efficiently as we might, but despite these dubious practices modern industry does succeed in delivering astonishing technological innovation into the hands of ordinary people.

But let us not let the glitz of shiny new tech toys mask the deep structural problems inherent in our current economic system. According to the IMF, there have been around four hundred and twenty five systemic crises, which amounts to an average of more than ten countries in crises each and every year. And, given that it would require two or three Earths-worth of resources to support us if all nations were to adopt the consumption levels of the richest countries (which they are striving to do) we are clearly heading for ecological disaster if we continue behaving as we have been. Empires in the past have collapsed as a response of runaway greed and there is no reason to suppose ours is exempt from this possibility.

Well, that is enough negativity. In the next lecture, we will see how money can be re-invented in ways that would make it more useful to the ambitions of the next-generation civilization.

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It struck me the other day that many people hold two beliefs that are incompatible with one another. Those beliefs are the idea that people have a fundamental right to life, and the notion that everybody should earn a living.

How are these two beliefs incompatible? People who believe that everyone should earn a living say ‘why should others get something for nothing when I have to work?’. But if you have a fundamental right to life, then you must have a fundamental right to access whatever you need to make life possible. Food, water, protection from the elements, these things should not have price tags attached to them, forcing you to submit to wage slavery or begging in order to obtain such essentials. They should be freely accessible, the common property of all people.


Now, clearly, there is a practical problem with this sentimentality. Work has to be done to produce food, clean water, and pretty much all other essentials of life. The right to life is, of course, a purely human invention. There is no fundamental right to life built into the natural world. Were it not for our technological capabilities and social systems built up over millenia, human life would be like daily life for the rest of the animal kingdom: An ongoing struggle to survive in a world indifferent to suffering. We would have to strive to obtain the basic necessities of life. Well, not necessarily. Some percentage of the human race would be fortunate enough to live in an area that provides an abundance of food and clean water, and a clement enough climate to not worry about freezing to death during the winter. The hunter-gatherer lifestyle is a pretty decent one involving minimal work if you happen to live in a place where foodstuff and building materials are all readily available. But, of course, most areas of the world are not like that, demanding instead that animals and people alike work hard each and every day, if they are to survive to see tomorrow.

We have to accept, then, that people have always needed to work if they wanted to live. But, notice how the mentality is not that people must have a job of some sort and that nobody can get anything for free, like ideally this situation would not apply but hey ho this is how the world works, so we should just accept it. No, the argument is that people should not get anything for free and should earn their living. And that is saying something quite different to arguing that the world compels us to labour away. It is saying that, even if we could get away with not having a job but at the same time not face the prospect of material deprevation, it would be immoral for people to simply live their lives without earning a living.

I fail to see how this mentality is compatible with the notion of a fundamental right to life. It does not matter that this right exists only in our collective imaginations. Plenty of things exist in our world which are entirely a product of our minds with no objective existence outside of human thought. If there were no people in the world there would be no films, no music and no religion. But there are people in the world and those things- along with an uncountable list of other cultural creations- exist because we willed it. We can believe in the right to life, and work to make it a reality. But there can be no fundamental right to life along with a belief that nobody should get something for nothing.


Technological progress and societal organizations have made our lives much easier than they were in previous generations. In the past, food production took up the vast majority of most people’s time. Today, agriculture employs only a fraction of the numbers of people that used to be employed in order to grow crops and raise livestock. For our ancestors, preparing dinner took up most of the day. Those of us fortunate enough to live in wealthy countries with access to supermarkets, convenience food and microwaves can have a meal ready to eat within minutes. And our notions of retirement as a decades-long holiday as due reward for all those years of loyal service to the world of employment is a recent innovation. For most of history, people worked until they were fit only for the deathbed.

In affluent countries it is actually not the expectation that everybody must have a job or die. The elderly, the disabled, children, they are not expected to either be in employment or to live grim lives of hunger and material deprevation. Society has established systems of child support, welfare, and pensions which support these members of society without forcing them to go out and get a job. Not everywhere. Some parts of the world still have child labour, still require people to work right up until their death and still condemn the disabled to beg on the streets to secure enough money to pay for their next meal. But it is obviously true that in some parts of the world if you are below or above a certain age, or you have a disability which makes it too much of a struggle to function in any job, you are not forced to live in deprevation.

Personally, I see this as progress. But I suspect there are others that do not. People who see any form of socialism as an attack on liberty and spit blood at the very notion that any of their or anyone’s earnings should be used to fund the lives of those not in work, even when some people’s salaries ensure them a personal fortune orders of magnitude beyond anything required for material comfort and they would still be rich by any decent measure if 90% of their savings were taken and distributed among the nation’s children, disabled, and elderly.

Now, maybe these people would say I am misrepresenting their stand here. Maybe they would say, ‘look, Extropia, we are not saying that the child labour is right, that state pensions ought never to exist, and that the disabled should get no help from the government. We are just saying that anyone who is of working age and fit to work should be in a job, and contributing to society instead of just taking from it’.

This attitude assumes that there are people in the world who are not in employment simply because they are too lazy to be in a job. And you know what? Such people exist. There are benefit cheats who know how to work social systems and extract money to which they are not entitled. This, needless to say, means there is less money than there otherwise would be to give to the unfortunates of society who, due to genuine disability or ill health, really cannot be in work, just as there is less money due to the most affluent hoarding it in vast personal fortunes. We ought to put pressure on anyone who is taking a lot more than they really deserve or need, regardless of what social class they are in.


But we should also acknowledge that there are people whose sole job is to close down employment opportunities for other people. Who are those people? Why, the engineers of automated systems that replace manual labour, the software writers who design programs that do white-collar office jobs. Both robots and artificial intelligence systems are becoming less inflexible, and therefore more able to function adequately in a wider variety of tasks. It takes minimum skill to show a robot like Baxter how to perform any manual task that is in reach of its arms, no highly trained technition is required. And bare in mind that a Baxter is to robots what 70s and 80s Pcs were to computers. In the beginning, computers were bulky, expensive machines that required rare skills to operate, and were useful only in a very limited range of services. These mainframe computers evolved into minicomputers like the PDP1 (mini as in not taking up entire rooms, but still pretty big- the PDP1 was as big as a domestic refrigerator), and- by the 70s and 80s- into desktop computers, small, cheap and user-friendly enough to be of service in offices, factories, and eventually, our homes. Today, of course, computers are absolutely ubiquitous and our entire economy is dependent on these machines performing jobs which were either once the responsibility of people, or not performed by anyone due to humans being fundamentally incapable of doing such work.

If robots are about to become as ubiquitous as computers were in the 80s and 90s or today, then that has to have serious consequences for notion that people should earn their living. Bare in mind that, during the Great Depression, 25% of people were out of a job. Given the capabilities of robots and intelligent software being demonstrated in R+D labs around the world and piloted in some real world scenarios, it is perfectly reasonable to suppose that pretty soon 45% of all jobs will be lost to automation. It is always tempting to believe one’s own job is immune to robotic takeover, or that technology will always create new jobs. But, as CGP Grey pointed out in his short documentary ‘Humans Need Not Apply’, if our ancestors had thought ‘more and better technology means new jobs for horses’ we can see that they were simply wrong. Today, there exists only a fraction of the number of working horses. They are simply unemployable, not economically viable thanks to the ‘horsepower’ we get from our machinery. Jobs for horses have not been reduced to zero. The Amish and developing world nations use horses or oxen to pull their farming instruments, we breed horses to race, the police use horses, England’s spectacle of trooping the colour would not be the same without those magnificent drum horses, but these amount to a paltry number of working horses compared to what there used to be.

Similarly, human employment may never be reduced to zero. There may always be some jobs which nobody or nothing has figured out how to automate in a cost-effective way, or jobs which we could automate but choose not to, feeling such work ought to be done by people and not machines. Childcare, for instance, may be a job that ought not to be offloaded to machines (though we may well want to make the task easier through machine assistance). However, such jobs must surely amount to a tiny percentage of all employment opportunities that exist today, so once all jobs except those rare unautomatable jobs are gone (assuming that there actually are jobs that could not or should not be automated) the stark truth is that most people will be as unemployable in the job market as a horse is.


If we have succeeded in achieving that level of automation, and have blue-collar robots doing most if not all manual labour, white-collar AI doing managerial, legal and financial work, and the economy is pretty much fully automated, or at least predominately automated requiring only a tiny percentage of the population to do anything, then for heaven’s sake why not extend the benefits system to support not just those who cannot work due to their age or ill health, but those who were made unemployable through no fault of their own? Why make them feel guilty about not having a job when the number of jobs still open to humans has been so drastically reduced there are more people out of work than there are vacancies available to be filled?

Why not, instead, see the ephemeralization of technology- its ability to enable more work to be performed with increasingly less effort- as a golden opportunity to make reality the stirring words of the American Declaration of Independence, that we hold as self-evident truth that all people are endowed with certain unalienable rights, such as life, liberty and the pursuit of happiness. The fundamental right to life means the right to have access, without restriction other than greed which restricts accessibility for others, to the material resources required to make life, liberty, and happiness possible. With our upcoming technological capabilities we could make it a reality that nobody need be in a job in order to have a decent life, and in such a world the attitude that people should earn their living would be objectionable by any decent ethical standard.

Posted in technology and us, work jobs and all that | Tagged | 4 Comments



Danger and death feature pretty heavily in videogames. There are various reasons why this is so. One is due to what you actually do while playing such games, which is pushing buttons. Since that is a purely physical act, it is best mapped to situations where there is not much thinking and success or failure is dependent on how good your reactions are. Hence the prevalence of sports sims and life-and-death situations. Modern computing power and advances like rag-doll physics enable reasonably naturalistic depictions of bodies responding to a hail of bullets but we are still lacking the technology and the knowhow that can successfully reproduce subtle social skills.

But so much danger presents videogames with a dilemma. Most games these days have a narrative arc with your character as the protagonist in the story. There is an ultimate goal that he or she is striving for and which, since it has already been written by the game’s authors, must reach. It is likely, though, that the protagonist will meet some untimely end before reaching the preordained end of his or her story. The dilemma is what to do in event of the protagonist getting killed.

The solution taken by most videogames is to pretend like it never happened. One moment your character is falling to her death because you totally misjudged that jump, the next moment Lara is back standing before the precipice as if that fatal error was nothing but a bad dream.

But a few videogames have come up with more inventive solutions than that. Here, in no particular order, are a few.


This game by Cinemaware cast you in the role of a world war one fighter pilot. The game interspersed gameplay which consisted of engaging the Hun in dogfights with diary entries written by a real life fighter pilot, describing his daily life. In real life these guys were known as the ‘20 minuters’, because the average lifespan of a rookie pilot was just 20 minutes. Inevitably, then, you the video gamer get shot down and killed at some point during the campaign.

At that point, scene depicting a funeral is shown along with all the victories and awards that pilot amassed before his death. And then a new pilot comes along, picking up the story where it was left by his predecessor.


You are Luke Skywalker, dishing out JedI justice to the nefarious forces of the empire. Only the force is not strong with you today because you just got shot to pieces (didn’t Han Solo tell you that hokey weapons were no match for a good blaster by your side?).

But that is OK, because you are Lego Luke Skywalker and your scattered lego parts reassemble themselves and on you go!


It had to happen. Living so dangerously, you were bound to get yourself fatally wounded. But fortunately for you this state has the best hospital ever to have existed and no matter how bad your injuries, you wake up from unconsciousness with nothing worse than a sum of money deducted from your bank balance.


ARRRRGH! You are dead. Cue cut scene of Elizabeth, the girl you are charged with protecting, administering an injection to bring you back from the dead.


There was a game involving mechs- huge bipedal walking tanks- and it might have been called Steel Batallion but I am not sure about that. The game cost a whopping £130, with most of that buying the huge twin-joystick 40 button controller you used to control your mech. One of those buttons was used to activate your ejector seat, enabling you to get out of harm’s way before your mech exploded.

If you did not eject in good time, you were dead. Really dead. The game would wipe your memory card clean of any progress saved up to that point.

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