What is Money? (Part 7)
Asking yourself "What is Money?" is the 1st step into a philosophical rabbit-hole that could prove to be the most fascinating intellectual journey of your life…
The question “What is Money?” is deceivingly simple. One would expect the answer to be abundantly clear given its prevalence in daily life, but upon further reflection, most find money to be mysterious. Money is an all-pervasive economic ether, an interpenetrating field influencing human perception, thought, and action. Yet despite the “everywhere and nowhere” nature of money, its deepest truths remain hidden in plain sight. Here, we explore yet another answer to this question, money is…
The End of Economic Inquiry
“Your problems would be greatly simplified, if, instead of saying that you want to know the ‘Truth’, you were simply to say that you want to attain a state of belief unassailable by doubt.”—Charles Sanders Peirce
“Any idea upon which we can ride, so to speak; any idea that will carry us prosperously from any one part of our experience to any other part, linking things satisfactorily, working securely, simplifying, saving labor; is true for just so much, true in so far forth, true instrumentally. This is the ‘instrumental’ view of truth.”—William James
As the American Pragmatists taught, truth is found “at the end of inquiry.” In the sphere of human action, it is difficult to disentangle truth from that which is useful. An accurate map of reality will get us to our destination more quickly: is this because the map is true, useful, or both? Any instrument that accelerates us along the path to the attainment of ends sought may be called a pragmatic truth. In this way, truth is invaluable, and free markets exist to promulgate pragmatic truths. Innovations that are successful in the marketplace represent particular convergence points of many branches of economic inquiry across spacetime. For instance, speaking pragmatically, the truth of digging holes manually is a shovel. After countless entrepreneurial experiments related to hole digging across history—with many variations on the tools intended to facilitate the attainment of this aim including handle design, shaft length, step width, and blade shape—this ongoing sequence of economic inquiries currently ends with the shovel selection in hardware stores today. Clearly, the entrepreneurial process is continuous and the tools it generates are subject to further refinement, but at any given point in time and at any given price point, a tool successfully adopted in the marketplace is a pragmatic truth in and of itself.
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As the most important tool of market actors, money is subject to inquiry-driven refinement over time. As is true for any other tool, money that is freely selected on the market is a form of pragmatic truth. Whereas a shovel is the truth of digging holes, money is the truth of voluntary value exchange across spacetime. Of these two dimensions, money must first be successful at holding value over time before its spatial utility can be realized; as clearly a money that cannot hold value over time (self-evidently) will not be freely selected to move value across space. Accordingly, the money that is successful on the free market, which emerges first as a superior store of value, is the end of economic inquiry: the most useful current result of countless entrepreneurial experiments with various other stores of value over time. On the free market, money is the highest form of pragmatic truth, since it is redeemable for all other tools. Money is also the end of economic inquiry in another sense of the word “end”—as money is the ends sought by entrepreneurial action. Some may argue that entrepreneurs work for other purposes, which may be true, but to be successful they must aim at profitability, which is a favorable balance of monetary inflows and outflows. Money, then, is the end of economic inquiry both as a discovered innovation and as its accumulation is the aim of entrepreneurial efforts. Money is the end that further perfects other means in human action.
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With this final perspective on money in mind, we must ask ourselves another question: what is the free market signaling to us with the meteoric rise of Bitcoin? As the fastest growing asset in human history, could it disrupt gold to become the ultimate end of economic inquiry? An ingenious combination of incentives, mathematics, and work, Bitcoin is a monetary network that converts electricity into a singular, global, and indisputable truth. Events test the validity of ideas over time. To be verified is to become true. Self-verifying money, then, could quickly become an economically invaluable idea in a digital world. To quote the emphatic words of William James:
“Truth happens to an idea. It becomes true, is made true by events. Its verity is in fact an event, a process: the process namely of its verifying itself, its veri-fication. Its validity is the process of its valid-ation.”
In light of the truth surrounding this potential digital disruptor to gold, it seems wise to heed the advice of Satoshi: “It may make sense to get a little just in case it catches on.” Witnessing the transition from one age of human history to another is rare, and if you’re reading this then you are alive to see the Industrial Age give way to the Digital Age. Bitcoin ascending is where the current line of inquiry into the nature of economic water currently stands, and only time will tell where truth will flow.
This is Water
Hopefully this small sample of the many possible answers to the question “What is Money?” helps to expand your understanding of monetary reality. Life is a process of continual learning, and to grow requires a balance of developing awareness and accumulating knowledge. Knowledge is static and frozen, a symbolic aggregation of discoveries from the past awareness of others. Awareness is dynamic and current, the mode of being open to the revivification of old knowledge. Awareness advances, while knowledge resists retrogression. Awareness asks, knowledge tells.
I heard this story about a fish.
He swims up to an older fish and says, “I’m trying to find this thing they call ‘the ocean.'”
“The ocean? the older fish says, “That’s what you’re in right now.”
“This?” says the young fish. “This is water. What I want is the ocean!”
No destination nor answer can deliver final satisfaction. The true treasures of life are found in the struggle; in the swimming upstream toward the valuable. And no matter when you read this or where you are, the journey always starts here and now, so be grateful for the adventure. As we advance our awareness by asking “What is Money?” and choose to construct civilization out of the resultant knowledge, we must remember to keep reminding ourselves all along the way that: “This is water.”
Although there are a great many more to write about, that’s all for the answers to “What is Money?” for now. The Freedom Analects will be back soon with some fresh written work.
Thank you for reading What is Money? (Part 7).
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