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Neo-Democracy: The Evolution of the Democratic Republic

Dustin Ashley

Abstract

This essay presents a new political paradigm based upon concepts that originate from direct democracy, meritocracy, technocracy, and egalitarian ideology. I systematically redesign the common political system to where these concepts can complement each other and work as a synergistic whole. The main idea is to recreate the direct democratic system made famous by the ancient Athenians while repurposing it for use in this current era in human history and for many generations to come.

1. Introduction

Karl Marx wrote that, “The history of all hitherto existing society is the history of class struggles.”(Marx and Engels 1848) This is true in the case of many rising world powers where the rich often take advantage of the working class. For example, the American Gilded Age sets the example for what happens when laissez-faire liberalism becomes rampant. During this era, politicians set up “political machines” to keep them and whoever they’re aligned with in office for as long as they wish. This occurred while companies began to take control of single markets and created monopolies where they were able to do whatever they pleased. One major proponent of this version of free-market economy was William Graham Sumner, whose book What Social Classes Owe to Each Other (1884) agreed with laissez-faire while being against granting assistance to the poor. This type of philosophy was one major reason for the rise of plutocracy and corporatocracy that still resonates through America to this day.

To keep this from happening again, emerging nations must learn from these past follies and make sure that they aren’t repeated. In order to prevent such a system from occurring, a form of government must be set up where every person has equal opportunity to a nation’s resources while being rendered unable to usurp someone’s ability to obtain similar resources. This includes enacting a government that is based on putting people in specific offices that only deserve it by proving themselves worthy via an administered exam while solving national issues with problem solving strategies a la the scientific method. With a 21st century mindset and the aid of our finest technology, we can create a more efficient and practical form of government than before.

2. Basic Political Structure

This new political paradigm is a technologically aided form of direct democracy that consists of elements from technocracy, meritocracy, and egalitarian ideology. Its main ideology comes from Athenian democracy, where they did not vote on representatives but rather voted on their behalf. Even though they didn’t grant suffrage to women, slaves, children, and immigrants, they had no set reference regarding class and often participated in large groups. These aspects can be applied to this paradigm; in which there are no representatives and that anybody of any class can participate.

In addition, the use of technology can be used to supplement the political process and improve government to its highest state of efficiency. This includes using the Internet and enabling citizens to become more active in making decisions for their government. Such claims can be made evident by Ann Macintoch, who coined the term “E-Democracy” for the use of technology as a supplement to democracy. She states that, “E-democracy is concerned with the use of information and communication technologies to engage citizens, support the democratic decision- making processes and strengthen representative democracy.” (Macintoch 2006) Not only does this allow for a more active participation in political affairs, this can also lead to more efficient solutions to troubling problems. When technology is spliced with democracy, it is possible that democracy can evolve as technology does.

It is important that every citizen is given equal opportunity to pursue their interests without the lingering fear that something will inhibit them from achieving their goals. It is in egalitarian thought that every person deserves an equal chance, regardless of their form, ethnic background, nor intellect. This is true in both the works of Karl Marx and John Locke. John Locke states that all people were created equal and that everyone had a natural right to defend his “Life, health, Liberty, or Possessions.” (Locke 1690) On the other hand, Karl Marx believed that there should be an equal distribution of a nation’s wealth to every citizen. Even though their philosophies differ, they both had a view on egalitarianism that is still relevant today. When the wealth can be distributed equally to everyone while everybody has their ability to defend their basic human rights, there lays the key to an egalitarian society.

With the synergistic combination of egalitarianism and technological democracy, you will find technocracy. This peculiar form of government relies on a nation’s leaders to be scientists, engineers, and others with compatible skills and not politicians and businessmen. (Berndt 1982) These technocrats use the scientific method when approaching social problems rather than political or philosophical implementation. These people are voted in by who is most qualified and not by who has the most money or most connected. This form of government is partially implemented in the Communist Party of China since most of their leaders are engineers. The Five-year plans of the People’s Republic of China have enabled them to plan ahead in a technocratic fashion to build projects such as the National Trunk Highway System, the China high-speed rail system, and the Three Gorges Dam. (Andrews 1995) In implementing technocracy into a nation’s government, it is possible for the nation to become prolific and prosperous.

3. The Voting Masses

The voting masses represent every individual that is eligible to vote, for as long as they are a free person and of age to make a responsible choice. Whereas age is a subjective requirement and is open to discussion, a free individual is one that is not incarcerated. The voting masses do not have any political nor governmental responsibilities and may vote if they choose to do so. There are no requirements and they possess the majority of the political power. This is evident in their ability to influence their nation by approving or denying any laws that are presented to them. In summation, every individual has the choice to be involved in their nation’s government as much or as little as they want.

4. EDD

All new sovereigns and bills must be approved by the voting masses before such actions are enacted. This is made possible through a form of direct democracy called electronic direct democracy, or EDD. This allows for the common people to be involved in the legislative process and nullifies the necessity for a legislative branch in government. The Florida Institute of Technology is currently researching and developing the technology that supports EDD, while implementing it in their student organizations. (Kattamuri et al 2005) If proven successful, this further dissolves the need for a representative democracy while giving more power to the common people.

5. Sovereigns of the State

The Sovereigns of the State are a group of individuals who coordinate the different aspects of a nation while addressing the needs of the people. While there are numerous roles that a sovereign must fulfill, this problem can be solved by having multiple sovereigns that work together ad hoc. Each sovereign will have a different duty to fulfill and must do so in an effective and productive manner for the sake of the nation. This includes:

  • Sovereign of the Military:

The Sovereign of the Military, or High General, is responsible for commanding the nation’s military during times of war. The individual has the capability to address the nation and declare war but it must be approved by the voting masses for the declaration to be enacted. The High General regulates the military and makes sure that the nation is prepared for when an attack is immanent. In order to become the Sovereign of the Military, one must be an experienced soldier of high rank that understands battlefield tactics and can lead the nation during times of war.

  • Sovereign of the Consensus:

The Sovereign of the Consensus, or Head Chairman, plays a dormant role as a peacekeeper during times when new sovereigns are voted in. The Head Chairman also serves as a tiebreaker for when a stalemate occurs during the voting process.

  • Sovereign of Energy:

The Sovereign of Energy focuses on energy production and distribution while overseeing the development of more efficient energy sources.

  • Sovereign of Treasury:

The Sovereign of Treasury, or National Economist, focuses on financial or monetary matters and is in charge of manufacturing currency. The National Economist is responsible for formulating economic and tax policies and managing public debt. The National Economist must hold a high degree in economics and has experience in financial matters.

  • Sovereign of Education:

The Sovereign of Education, or National Educator, is responsible for education policies in public schools and institution accreditation. The National Educator must have a degree in education with experience in teaching at both public schools and universities.

  • Sovereign of Foreign Affairs:

The Sovereign of Foreign Affairs, or Chief Diplomat, is responsible for maintaining stable relations with other nations and other diplomatic duties. The Chief Diplomat is also responsible for issues pertaining to foreign policy. In order to become eligible for this position, one must have experience with matters dealing with diplomacy and foreign affairs.

  • Sovereign of Labour:

The Sovereign of Labour enforces laws involving unions, the workplace, and any business-person interactions. This also includes maintaining minimal unemployment within the nation.

  • Sovereign of National Affairs:

The Sovereign of National Affairs is responsible for issues pertaining to land management, landmark preservation, natural disaster response, immigration policies, and law enforcement policies.

  • Sovereign of Human Services:

The Sovereign of Human Services, or Head Physician, is responsible for issues concerning disease control, advancement in medical technologies, final approval of pharmaceutical drugs and medicines, food safety and management, nutrition, and welfare. To be eligible for this position, the aspirant must have a medical degree and experience in the medical field.

  • Judicial Sovereign:

The Judicial Sovereign is responsible for reviewing all bills before they are enacted as laws. This includes making sure they do not go against the principles written down in the nation’s primary social contract i.e. the constitution. The Judicial Sovereign also serves as Head Judge during trials that are considered high crimes, such as murder and fraud. To be eligible for this position, the applicant must be already a licensed attorney and/or judge with experience in legal matters.

These sovereigns can only be placed into office by merit alone and not placement within the community. This is done by giving them time to place distribute a list of their accomplishments and their criminal record. During this time period, the voting masses can decide who they believe is fit for the job. These actions are to ensure that the voting masses are voting into office those whom they think are fit for the positions and not by “popular vote”. To further ensure that the applicants are not committing acts of fraud, their paperwork is first reviewed by a group of volunteers that can verify the authenticity of the applicants and their paperwork. The identity of the volunteers is kept anonymous to ensure that they cannot be bribed or intimidated by the applicants. The volunteers form a discipline-specific administration system and are not under the influence of any focus group. In order to be selected, they must show that they are experts in their selected field and are not already under any influence.

6. Judicial System Within The Political System

In a governmental sense, the judicial system is used to declare whether a bill is protected by the nation’s social contract or if it goes against. Typically, if a bill goes against the social contract then it will be vetoed and terminated. The judicial branch serves as a “political buffer” between the legislative and executive branches. This gives the leaders within the judicial branch much power. In the case for this framework, the judicial branch works as a mediator between the voting masses and the sovereigns. To keep matters fair, the members of the judicial branch are to be impartial and fair towards both sides.

7. Conclusion

This new political paradigm serves only as a framework for any political system and not as a system in itself. It can be modified, expanded, or condensed as needed as long as the main idea is not lost. This may serve as the next step in constructing a new political system based on progressive thought and pro-technology ideology. Whether it serves as a theoretical concept or someone applies these ideas to their organization, this concept is meant for anyone to read.

Works Cited

  1. Marx, K., and Engels, F. 1848. The Communist Manifesto
  2. Sumner, W.G. 1884. What Social Classes Owe to Each Other
  3. Machintoch, A. 2006. Characterizing E-Participation in Policy-Making
  4. Locke, J. 1690. Second Treatise of Government
  5. Berndt, E.R. 1982. From Technocracy to Net Analysis: Engineers, Economists, And Recurring Energy Theories of Value. Studies in Energy and the American Economy, Discussion Paper No. 11
  6. Andrews, J. 1995. Rise of the Red Engineers
  7. Kattamuri, S. et. al. 2005. Supporting Debates Over Citizen Initiatives
Giulio Prisco
Giulio Prisco

I recently interviewed KurzweilAI’s Giulio Prisco for my podcast The Eternities. The below is a short piece I posted on Disinfo.com about the interview, which has stimulated some debate there. Listen to the interview.

From Disinfo.com:

Pascal’s Wager demonstrated a certain rationality to a belief in god. The seventeenth century philosopher, Pascal, argued that if one believes, yet god does not exist, nothing is lost in death. But, if god exists, the reward is eternal happiness.

For the transhumanist thinker, Giulio Prisco, if god doesn’t exist, he believes we will create him. Or her. Or, more accurately, perhaps – them. Prisco’s reasoning results not so much in a wager as an expectation.

Speaking to The Eternities podcast, he said, “Richard Dawkins … the atheist mastermind … writes in The God Delusion [that he] finds it very plausible in the universe that there may be very powerful beings like gods. He thinks these beings are a product of natural evolution like ourselves. That’s exactly what I think myself. I don’t place any artificial limits on the achievements that will be possible to intelligent life in the future. And I do think that some of our descendants, perhaps in a few thousand years, will be so advanced … that we could only call them gods.”

Prisco is no mere kook or sci-fi fantasist but a physicist, computer scientist and ex-senior manager at the European Space Agency. Currently he is the Transhumanism Editor for KurzweilAI.net and is a director of the Institute for Ethics and Emerging Technologies. His uncompromising and ultra-optimistic “third way” philosophy combines the traditional aims of religion – existential meaning, eternal life, transcendence – with the ever-advancing means of science.

While the field of archaeology may figuratively bring the past to life for its exponents, the predicted future discipline of quantum archaeology, Prisco believes, may literally do so, and for all lifeforms that have ever lived. Though, he also acknowledges, we may already be living in a simulated reality, run by advanced god-like beings, our immortality already guaranteed.

He said, “There are people who think of … some information store which is already being filled by the natural physical processes that happen in space-time. There are some people who base the reincarnation idea on that. It’s not something that I can rule entirely out. If that does not happen spontaneously … let’s engineer resurrection and the afterlife. If there is no god, let’s build a god, or let’s become gods. And let’s make the universe a better place.”

When a programmer begins to write his code, he is not merely writing abstract messages to be translated into simple ones and zeros but creating a carefully detailed dance pattern between him and his machine. At the moment of powering up his computer and watching it boot up with controlled anticipation, he is watching decades of digital choreography come to play in front of his eyes. This dazzling spectacle is the threshold of where his creative energies take place. This is where his mind goes to work in creating precise and detailed instructions for his machine to put into action. This may be true but to the true programmer, one who puts his heart and soul into his keyboard and pushes his combined passion and creativity to the next level, is the one who truly masters the art and becomes legendary. To these people, they are not merely writing code but are creating art that comes alive at the push of a button. This is one aspect of programming that a computer jockey wishes to do: create art.

The arena that a programmer wishes to dance in is always at his discretion. Be it Eclipse, Visual Basic, or even a simple word processor, they all have their merits. This is where the artist creates. This is where the programmer takes their initial keystrokes and gingerly pecks at them with blazing speed and mechanical accuracy. To those around him, the programmer appears to be rushing to complete task but this is not the case. To those who program and write code, time seems to stand still as they carefully work on their masterpiece. They put all other issues aside and commit their time and energy into designing their next creation, their new child. They take pleasure in their work and commit much of their lives to perfecting this art and designing innovative creations. To them, this in itself is a dance within the massive operating system and their dance partner is the code itself. Around the duo is a multitude of processes, other couples composed of daemons that maintain a proper status quo and the many parent/child processes around. This may not be a dance for them, but a dance made possible by love and circuitry. This dance is beautiful, but one careless misstep will cause the fellow dancer to become dissatisfied and will refuse to dance. Even though the code may be your child, your child is a picky creature that is only satisfied by the successive combination of accuracy and precision.

After the dance is complete and with all syntax as elegant as a well-played ballad, the debugger shall take hold of the remaining tasks. She is a lovely creature that plays as the nurse for your newly born child. She makes sure that your child is flawless and only speaks when she has found your child to be defective. If this occurs, the dance resumes and the creator begins again. As one ages with time, one should strive to become perfect or to work hard enough to write perfect code. After the debugger has nursed your child into being, with one keystroke she comes alive and begins to speak with you. She will be as intelligent as you make her and as resourceful as you are, only to make as many mistakes as you made in your dance. She is a loyal child, one that completes every task that you ask of her. Your child’s only request is that you keep her safe and to give her the resources she needs. When this criterion isn’t met, she will become unhappy and will refuse to help you. Rather than showing rage and frustration, the artist must be patient and be giving to the child.

With the creation of a new child, a responsible artist will show her to the world and allow others to share similar experiences that the programmer has had. Others will shelter the child, making sure that their child will not be taken from them. The programmer must be smart, and must take protective measures to make sure this doesn’t happen. Some will ask outsiders for help, others will make sure that fellow digital craftsman will acknowledge that their child is theirs and only theirs. As with any parent, they will respect the programmer as they share the same vision and passion for the art as they do. As the programmer shows their child to the world, their child is able to help others and those in need. The programmer’s child will become another part of the user’s life as the child assists them with their needs. The programmer will take pride in their child for all the good their child has done. Eventually, other programmers will want to take the child and will execute a more intimate dance with her. This is most often out of your hands, so all you can do is hope that she is used for benevolent purposes only. This intimate dance will alter your child and create an offspring, a variant of your original design. This will continue ad infinitum until your child has aged to where she is no longer useful. With teary eyes and a heavy heart, the programmer will see his creation fade away from existence.

As many will undergo the intimate dance with your child, others will attempt to rape and defile your child with malicious code and devious intentions. Fueled by greed and an appetite for destruction, these infiltrators will use and abuse the child by exploiting her weaknesses and will corrupt her into a monstrosity capable of numerous problems for the programmer and others. These infiltrators are cunning, capable of taking the child and making her into a monster with the use of a single code. As with all artists and creators, one would hope that these nefarious individuals would be apprehended by the authorities but this is not always the case. Many of these fiends go unnoticed by hiding in plain sight, only conversing with others like them. This is not even the worst. The worst case scenario is that the child, a year’s worth of work in one result, can be defiled and used for creating a horrid abomination with the capacity of more harm than the child could ever accomplish. One could only hope that this never happens but often does more times than one could ever want. This is one negative consequence of creation; what one creates, another can destroy.

As true as in real life, there are more people willing to destroy than there are willing to create. Thankfully, creators and fellow programmers are not without protection. There are other programmers who create for the sake of creating other creators. These protectors create their own children with the intent of protecting them from those who want to corrupt them. These children are not made the same as other children, possessing code that is able to scan other children and safeguard them from harm. As with any program, they range from extremely potent to completely useless but they are all made with the best intentions. Often their designers are fellow artists that have the same concerns that any other programmer does but possess the knowledge to write code that is specifically designed to protect other programs from harm. All programmers lend their gratitude to the vanguards that keep them and their child safe from malicious individuals and criminals.

Like the continuous battle between infiltrators and protectors, other programmers tend to have their own battles. Their intentions are primarily material, fighting over the attention of users and other programmers. They will often steal from each other, use misconduct, and lie to consumers to meet their goals. These programmers are not fueled by the passion to create, but the passion to create profit. As such, their children are not filled with the love and passion that other children are filled with, but are utilitarians that do only what they are asked to do. These husks are often targeted by those who seek to defile them because they are not made with the careful craftsmanship of a passionate artist, but by the hands of greedy businessmen who are as careless as they are desperate for profit. This joke is as eternal as life itself and tends to be just as cruel.

As with any great artist, one does not stop with the creation of their child but will seek to improve her with time and carefully designed upgrades. These revisions serve the purpose of immortalizing the child and improving her like time and biology ages their fleshy counterparts. Unlike flesh children, a digital child can live forever with a continuing cycle of revision and constant upgrades. With a close eye to the voice of the users, a creator can design a child that can live forever by meeting the demands that a user asks for. These revisions can take the crude design of simple child and transfigure her into an elegant and omnipotent being that can tackle any challenge within their world. While these revisions take place, a programmer won’t stop with one creation but will create more and more programs. The constant drive to create, improve, and create again is what fuels the silicon and copper heart of a passionate programmer. This cycle will go on until the very programmer dies. The programmer will not have died without making an impact on the world and will have died doing what the programmer does best: create. With their work, the programmer is immortalized like their revised children.

At the end of the day, the programmer will power down their workstation and will rest for the next day to come. This will not be their final day of creation, for there are many other creations to come about and will beg to be created. Once again, the elegant digital waltz will begin again in the dance floor where all dances are conducted. The dance always has the same mechanical accuracy and precision as the first time it was enacted, the feverish pecking upon a keyboard to produce electrical impulses that result in ones and zeros. The important difference is that a new child is under construction, with a new set of objectives and tasks to complete. Of course, this is for another day and another time. The artist will click the shutdown icon, another beautifully crafted piece of code, and watch as the computer turns itself off. The daemons, parent, and child processes will rest until it is time for them to dance once again.

longevitize2013 med

Containing more than 160 essays from over 40 contributors, this edited volume of essays on the science, philosophy and politics of longevity considers the project of ending aging and abolishing involuntary death-by-disease from a variety of viewpoints: scientific, technological, philosophical, pragmatic, artistic. In it you will find not only information on the ways in which science and medicine are bringing about the potential to reverse aging and defeat death within many of our own lifetimes, as well as the ways that you can increase your own longevity today in order to be there for tomorrow’s promise, but also a glimpse at the art, philosophy and politics of longevity as well – areas that will become increasingly important as we realize that advocacy, lobbying and activism can play as large a part in the hastening of progress in indefinite lifespans as science and technology can.

The collection is edited by Franco Cortese. Its contributing authors include William H. Andrews, Ph.D., Rachel Armstrong, Ph.D., Jonathan Betchtel, Yaniv Chen, Clyde DeSouza, Freija van Diujne, Ph.D., John Ellis, Ph.D., Linda Gamble, Roen Horn, the International Longevity Alliance (ILA), Zoltan Istvan, David Kekich (President & C.E.O of Maximum Life Foundation), Randal A. Koene, Ph.D., Maria Konovalenko, M.Sc. (Program Coordinator for the Science for Life Extension Foundation), Marios Kyriazis, MD, M.Sc MIBiol, CBiol (Founder of the ELPIs Foundation for Indefinite Lifespans and the medical advisor for the British Longevity Society), John R. Leonard (Director of Japan Longevity Alliance), Alex Lightman, Movement for Indefinite Life Extension (MILE), Josh Mitteldorf, Ph.D., Tom Mooney (Executive Director of the Coalition to Extend Life), Max More, Ph.D. , B.J. Murphy, Joern Pallensen, Dick Pelletier, Hank Pellissier (Founder of Brighter Brains Institute), Giulio Prisco, Marc Ransford, Jameson Rohrer, Martine Rothblatt, Ph.D., MBA, JD., Peter Rothman (editor-in-chief of H+ Magazine), Giovanni Santostasi, Ph.D (Director of Immortal Life Magazine, Eric Schulke, Jason Silva , R.U. Sirius, Ilia Stambler, Ph.D (activist at the International Longevity Alliance), G. Stolyarov II (editor-in-chief of The Rational Argumentator), Winslow Strong, Jason Sussberg, Violetta Karkucinska, David Westmorland, Peter Wicks, Ph.D, and Jason Xu (director of Longevity Party China and Longevity Party Taiwan).

Available on Amazon today!

frederik.pohlOur Frederik Pohl just passed away.

Despite being 93, he worked to “Safeguard Humanity” to the end. He was a key player in this year’s “Lifeboat to the Stars” event. The award was given to the authors of “Tau Ceti”.

Fred also participated in our DARPA/NASA 100-Year-Starship proposal which eventually led to us gaining enough experience in creating NASA proposals that we got our first NASA win.

Fred will be memorialized forever on our Advisory Board Memorial.

We will miss him.

Read the press release.

black.banner.large.new.typeJust over three months ago I found an organization called “Lifeboat.” I’d been interviewing experts from a variety fields about the issues and opportunities of moving beyond our present human potential (technologically or otherwise), and decided to reach out to a community with many perspectives and different areas of expertise. When I emailed Eric Klein at Lifeboat, my message was something as simple as:

Daniel: “Might it be possible to connect with one of your experts for 15–20 over the course of the coming month? I didn’t want to email them without contacting your Foundation itself, first.”

Eric: “This is fine.”

Little did I know that a message would be cast out to the vast network of Lifeboat members, and the next three months would be a flurry of back-and-forth emails, fascinating conversations, and writing new articles.

For this I’m more than grateful, but more importantly, I’ve been able to glean something important from all these talks with Lifeboat members in so many fields. I decided that if I’m going to catch up with PhDs and future thinkers in dozen’s of fields, I need to keep at least one question the same for all of them, to glean and pool their interdisciplinary insights in a meaningful — if not interesting — way.

The question I settled on was this: “What can we do as scientists, businesspeople, leaders and thinkers to move the world forward in a beneficial way — together — despite so many differing opinions and approaches from other well-intended people working towards the same purpose?” Ultimately, I saw this question as not only the most fruitful way to encourage some of the collaboration and mutual understanding that I happen to deem vital, but also to poke and prod for new ideas on this subject from the varied corners of the intellectual and scientific universes.

So in this article I wanted to take a second and slow down from interviews, and for the first time write about the differing perspectives on this most important matter — all from “Lifeboat-ers” from around the world.

Building a Better Future — Ideas from Lifeboat’s Experts

First, I’ll explore some of the varied opinions and perspectives from individual Lifeboat members. Second, I’ll look at some of the few commonalities across my many interviews — and what we might glean from them. Third, I’ll give my own perspective on the matter of building a better future, and some insights from the journey of the last three months. Let it be known that I don’t dogmatically adhere to any of the opinions expressed, but I aim to be open-minded enough to consider and learn from each. My intention here is solely to share opinions in the kind of well-intended fashion that I hope will be productive for the purposes expressed.

Dr. Ben Goertzel — A Shift in the Nature of Philosophy and Science

Ben Goertzel Dan FaggellaOne of my first Lifeboat interviews in June was with the one and only Dr. Ben Goertzel, head of the OpenCog Project and renown father of what is known as Artificial General Intelligence. When I posed the question about the “best path forward” at the end of my hour-long interview with Ben (http://sentientpotential.com/ben-goertzel-interview-humans-n…-the-pack/), he referred to our surpassing of present notions of Philosophy and Science. “Only a few hundred years ago, philosophy and science were one-and-the-same… with scientists referred to as ‘natural philosophers.’”

In the future, Goertzel predicts a complete surpassing of our present notions of science, the universe, cognition, and philosophy. Indeed, these are merely present constructs, and to Ben, the enhancement of intelligence and consciousness will shed new light on the material and metaphysical universe than our present human perspective is capable of shedding. In this way, what will make the future better might be an openness these these huge developments, and a willingness to escape any shell-like notions of our present human perspective and condition.

Dr. Soenke Ziesche — Don’t Leave Out the 3rd World

Sentient Potential InterviewDr. Ziesche is a humanitarian, working with the United Nations since 2000 on projects varying from earthquake relief to information management, with locations as diverse as New York City and Sudan. His PhD from the University of Hamburg focused on cognitive science and AI. His advice for keeping a true perspective of “world benefit” in mind is to “keep in mind the bigger picture… the situation of poor people in countries that are not as privileged as the people are in the places where this research (about artificial intelligence and emerging technology) happens.”

He is not alone in the belief that we may “leave behind” the poorer or large technologically isolated populations when technologies develop (though Kurzweil seems to argue against the likelihood of this scenario: http://www.singularity.com/qanda.html). Soenke believes that the possibility of neglect is real, and that factoring in the opportunity and wellbeing of the huge percentages of the human populations in 3rd world conditions would be a massive oversight of technological development if it aims towards “the good.”

Logan Stroendj — Someone’s Got to Try It

Logan Streondj interview - Lifeboat foundationI ran into Logan through some of his articles, and a general interest in his “human speakable programming language” project. In our conversation about the future of humanity and the varied approaches to moving forward, he mentioned that it might make sense to have “voluntary communities” of individuals who are interested in a certain “mode” of living, or a certain dynamic of progress in the human condition. For example, there might be a geographic location where people interested in brain and cognitive research go to explore these matters in a more concentrated and concerted fashion, and another region where people interested in recycling and reusing materials can live to further apply and research in that world.

Logan’s potential vision would involve a kind of super-computer of a potential global state which aggregates the insights from these various research activities and makes it available to be used be any and all of the communities on or off of our planet. Logan goes so far as to say that there very well may be a segment of the population who would voluntarily create a community where pillaging and plundering are commonplace, and chaos rules — and that it may be best to not only allow these like-minded people to live that particular kind of life — but that like the rest of the “communities,” there is likely something to be learned and gleaned from what happens in this social experiment, as well.

Dr. Russell Blackford — Policy

Russel Blackford VimeoDr. Russell Blackford is an active writer, editor, philosopher, and more, and is presently writing a book called “50 Great Myths About Atheism.” His perspective on the matter of overall human progress was that there should be — at least in our present age — a policy and decision-making process based around the traditional liberal values of preventing harm, or bringing about a secular benefit. An example of policy that seems to go against these standards includes many laws that involve stem cells, which Dr. Blackford believes to give credence to embryos which exists within a religious notion rather than empirical evidence about the “live” or lack-there-of of an embryo. In his full interview he goes into significant detail on policy-making with a non-secular agenda.

Though he is wary of dogma, he sees these very values as keeping dogma at bay, and that there sanctity might help keep the conversations and progress of technology and humanity grounded in as much objectivity and rationality as possible.

Commonalities, Similar Themes from Experts Around the World

Though I was certainly able to drink in a good number of perspectives from my varied interviews, there were also enough common “themes” for me to take notice.

One of which is the idea of collaboration and an interdisciplinary approach to the pursuit of a “better” future. Few of the thinkers I spoke with happened to give an explicitly closed-minded conception of what “better” implies, or how we can go about attaining it. “The more perspectives, the better” seems to be a shared notion — and the recognition that the insights gleaned from one domain should be accessible and

Transparency is a second theme that appeared enough to mention here. One application of this idea is the easy transmission of knowledge across domains, countries, and languages. In another light, “transparency” implies knowing what the world is up to in order to make sure we’re keeping dangerous experiments and malicious intentions from causing serious harm. It sure is nice to know what the rest of the nanotech world is up to in terms of building off of their findings, but it’s also important to understand where the new dangers might have been found, or to stop a team of researchers working on something terribly destructive.

A final commonality with the thinkers I spoke with (Blackford and Goertzel mentioned here, amongst many others) was the idea of open-mindedness and remaining unfettered by particular ideologies. With so much change underway, not only is it likely to be harder than ever to function under an ideology (say the experts I spoke with), but a particular ideology tends to impose it’s views on the past and future, limiting growth and the potential for important change.

Conclusion, and a Word from the Author

Aubrey de Grey InterviewAll in all, my experience with Lifeboat interviews has been a rewarding one, and has certainly helped me to round out my own conceptions of what a “better” future might be, and how we might go about moving towards one.

Though I aim to be as ever-flexible with my notions (having never escaped Hume’s Fork), I am congenial with many of the common ideas that many of the thinkers I’ve interviewed have expressed. First, I have the utmost reverence for the idea of remaining open-minded in our transition forward, and in collaborating across language and geographic boundaries. I strongly believe that this kind of access and pooled effort is necessary for the heights of not just technological progress, but indeed “wisdom,” which seems equally as important in a future of greater technological power. Aubrey de Grey mentioned in our interview that science fiction books often sell because they relate to and reinforce the present more than they create reasonable new possibilities for the future. Let’s hope that we can avoid putting on the “future-blinders” as we make a transition forward in science, social policy, medicine, etc…

I would add, if I could, that maintaining a united kind of collaboration with shared positive intentions would appear to be the ideal. The shame would be any kind of conflict with it’s origin in differing approaches to a better future (especially in speaking to so many well-intended and hard-working people from around the world in various fields). If we are truly after the same “end” (though putting a definition to that “end” seems awfully dangerous) of an aggregately better future, my truest hope is that we would be open to learning from one another, and wary of “enemizing” others so long as there is no danger or malice in their approach. Escaping our tendency to fossilize certain ideological beliefs, or to take other approaches in an open-minded and not personal fashion would seem to be a greater challenge (at least in our present human condition) than many of the technological hurdles we’re trying to jump at present.

Indeed, would there be no greater shame than for this very enthusiasm for a “better future” (potentially wrought and tainted with the insidious forces of egotism, greed or glory) to be the force the prevents a “better future” from ever happening?

I’d like to thank all of the Lifeboat members who were kind enough to share their thoughts and catch up with me at Sentient Potential, including Aubrey de Grey, Ben Goertzel, Dr. Russell Blackford, amongst so many others.

With the best of intentions for a brilliant future,

Daniel Faggella

Daniel Faggella (Google + Profile) is a graduate of UPENN with a Master’s degree in Applied Positive Psychology, a national martial arts champion, and author of “Explorations into the Philosophy of Transhumanism.” Attached to no specific school of thought, his pursuit at www.SentientPotential.com is to pool the insight of the world’s scientists and future thinkers in a grander global conversation about the collaborative progress of humanity.

nasaNASA has selected our proposal at https://lifeboat.com/reports/lifeboat.rfi3.response.pdf as one of the 5 best proposals out of the 402 that were submitted.

NASA has invited us to send someone to present at an “Ideas Synthesis” workshop they will conduct in Houston and via virtual presence. We have selected Kevin Berry to be our representative at this event.

The plan for the Ideas Synthesis in Houston, September 30-October 2, is to publicly recognize the ideas rated highest, enable participants to share their idea(s) during a presentation in the Next Generation Engagement session, provide an opportunity for questions and answers after all the presentations have been completed, and enable focused brainstorming. This session will have five presenters and the session is scheduled from 1:30–4:30 pm on Wednesday, October 2. This session is focused primarily on developing ideas for the Asteroid Grand Challenge and takes place after the overall Ideas Synthesis final plenary session.

A description of NASA’s Asteroid Initiative is at http://www.nasa.gov/asteroidinitiative

A video of a presentation announcing NASA’s Asteroid Grand Challenge and a question and answer session is available at https://www.youtube.com/watch?v=f5rsJwsyni4

Learn more at https://lifeboat.com/ex/press.releases.nasa.selects.lifeboat.proposal

Leadership at the next level

By Kenneth Mikkelsen, Mannaz

Effective leaders must first learn the skill of leading themselves in order to cultivate their competencies for leading others.

Have you let your eyes wander across the management section in a bookstore or an airport newsstand recently? Chances are that your attention has been drawn to the colourful variety of easily digestible how-to-become-a-better-manager books.

In North America, books with exotic titles, such as “One Minute Manager”, “Moses CEO” and “Make It So: Management Lessons from Star Trek the Next Generation”, bring in an astronomical revenue of USD 2.4 billion every year. Most of the “voodoo” management books emphasize that you must change yourself if you want a richer and fuller life – both socially and financially.

Make no mistake

It would be easy to write off the author of books, such as “Managing Your Self” by Dr. Jagdish Parikh, as being in the same category. But, make no mistake. Dr. Parikh a professor, businessman and an author himself, has a profound knowledge of management gathered from business environments all over the world. He even found the time to co-produce the Oscar-winning movie, “Ghandi”.

“Hundreds of books and models purport to suggest the best way to become a leader. Yet many people, asked to name a leader they would consider a role model, struggle to identify even one or two individuals,” Dr. Parikh points out.

According to him, the gap between what we learn about leadership and what we actually implement exposes a fundamental flaw in most of the leadership models today. These models focus mainly on competencies required for leading an organization, but do not explain how to cultivate those core competencies. Therefore we face, in a sense, a crisis of leadership.

Conflicting values

One of Dr. Jagdish Parikh’s favorite stories is about his first day as an MBA student at Harvard Business School. Born in India, he was brought up with the belief that he had to do his utmost, whatever tasks, objectives or goals he set for himself. But, as far as the results concerned, he learned to accept them with equanimity, for such results depended on a variety of external factors and variables, over which no one could have full control. At Harvard it was a different story. During the welcoming address the dean made it clear that the MBA program was designed to ensure that there would always be more work to be done every day than the time and energy at one’s disposal.

“We were told not to feel satisfied or content with whatever we achieved, because in the moment we did so, our progress would stop along with our drive for achieving more,” says Dr. Parikh.

The message that came across to Dr. Parikh was that stress is beautiful. And if he were to progress in life, he would continue to remain dissatisfied. Going from A to B meant that C should be the next focal point, without spending time being happy about reaching B.

Cultivating consciousness

Having finished his MBA, Jagdish Parikh went back to Bombay and became successful as a businessman practicing the tenets from Harvard. However, he began to suffer negative physiological and psychological symptoms of stress after just a few years.

“I seriously began to wonder if there was another way to be successful while also remaining satisfied and happy at the same time. After deep reflection and a PhD, I discovered that the missing link between success and happiness was a lack of awareness of one’s inner dynamics,” says Dr. Parikh.

Therein lies the philosophy of Dr. Jagdish Parikh. He believes that one of the major challenges that face leaders today is to cultivate their own consciousness in a hectic business environment that doesn’t leave much time for reflection and self-discovery. However, competencies for leading others take time to grow and flourish.

“Unless one knows how to lead one’s self, it would be presumptuous for anyone to be able to lead others effectively. And, if you don’t lead your self, someone else will. The essence of leadership is to effectively manage relationships with people, events, and ideas. You can’t lead something you yourself identify with. The paradox is that detachment not withdrawal, escape, or indifference coupled with involvement not addiction – in other words, detached involvement – enables mastery. Leadership then happens to you,” Dr. Parikh underlines.

Eastern wisdom meets western science

From earlier orientations towards profit and power, up to a more recent focus on people, we are now seeing business leaders that seek alignment with global and ecological concerns. According to Dr. Parikh, this means that there is a growing interest in creating an organizational culture based on support systems, networks and shared values, rather than on power, money and personal ambition – an interest in changing outlooks through deeper insights.

“The role of management is to create within the organization a climate, a culture, and a context in which corporate enrichment and individual fulfillment collaborate and resonate progressively in the development of a creative and integrative global community,” says Dr. Parikh.

According to Dr. Parikh, leaders should have a clear stand on the fundamental issues that are facing us today, i.e. balancing “how to make a living” with “how to live” – sort of building a bridge between Western management and Eastern philosophical traditions.

“As individuals we may pursue money, power and prestige – the symbols of success – in order to be happy. But despite getting more of these we do not feel proportionately happier. After all, we’re described as human beings not human havings or even human doings. Essentially we are going up the ladder but we also have to ensure that the ladder is against the right wall. This is where a combination of Western science and Eastern wisdom would ensure a more holistic approach to leadership – and life,” says Dr. Jagdish Parikh.

Originally posted as Part IV of a four-part introductory series on Bitcoin on June 19, 2013 in the American Daily Herald. See the Bitcoin blog for all four articles.

Prologue

I am reminded of Sisyphus, King of Ephyra (later, Corinth), who was referred to by Homer as the craftiest of men. He committed terrible crimes against mere mortals and ‘worse’ still, and with great cunning, he offended Zeus and cheated Death. For his crimes he was eternally condemned to thrusting a heavy boulder up a hill, only having it come rolling back down as he got near the top. Had his earthly actions against his fellow men not violated the non-aggression principle, I could have probably warmed up to him as some sort of tragic hero, doing all he can to live life as he wanted it, while beating the gods at their own game. But given his crimes as a ruler over men, it does seem appropriate that his punishment is an ever-repeating cycle of arduous labor, engendering within him hope of a brighter future, yet concluding with dashed dreams and a return to square one. After all, to this day, rulers are notorious for repeating past mistakes while expecting different outcomes (a condition humorously defined by Einstein as insanity).

National currencies

Argentineans have had a troubled relationship with their money over the last half century. The Argentine Peso has been revalued numerous times, with 13 zeroes having been dropped (a devaluation factor of 10 trillion) since 1969. Last month the ‘blue dollar’ (the black market price of US dollars) hit 10 peso, whereas the official exchange rate was half that, at around 5 peso, causing speculations of further devaluations. Devaluating the Argentine Peso is a Sisyphean task if there ever was one. Tragic, to be sure, but would have been comic too if so many real people weren’t hurt so badly by this inevitably repetitive chain of events.

The Argentineans are trying to get dollars because these are more stable than the peso. Had they been free to hold any currency they wished, the peso would have gone down the proverbial toilet as ever more people protected their assets by divesting away from the troubled currency. Instead, the populace is forced to hold only the peso, thus the tragedy continues, hitting hardest the honest and naïve, who cannot or do not want to go down the black market route. If government wanted the best interest of their people, they would let them hold the dollar. In the name of patriotism, having a national currency is clearly more important than the welfare of the people.

While not as bad, in the U.S. some don’t think the dollar has great prospects. A preferable alternative would be gold or something else that maintains its value. The truism still holds that if government, here, wanted what’s best for us, they would let us hold gold without the penalty of a 28 percent tax, or they would let us transfer our wealth to Bitcoin without targeting exchanges and denying what would otherwise be a purely voluntary free-market transaction. The fact that the peso in Argentina, the dollar in the U.S. and all legal tenders in their respective countries have to be protected by the full might and force of the law illustrates clearly that national currencies are relatively worthless and that, given the choice, many people would not be holding them.

Then why are legal tender laws and ‘forced’ national currencies so commonplace in this enlightened age? What is it that makes them so irresistible to the legislators who dictate what is right and wrong for us (not them) to do? If an unavoidable consequence of the ongoing monetary printing press is constant inflation and potential revaluation of the currency, what is it about printing your own money (and preventing others from doing the same) that is so desirable to the political elite? To ask that question is to answer it. Everyone, if they could get away with it, would want to counterfeit money or add a few zeros to their bank account balance. However, creating money from thin air is fraudulent and immoral regardless of who does it. The outcomes of private individuals counterfeiting money include buying a new car or a new house. The implications of government being able to print its own money are far worse. These include funding wars, enriching the politically well-connected and creating policies which favor one class of citizens at the expense of another class (both of which, by the way, represented by the very same government), for example: consumers vs producers; importers vs exporters; home owners vs renters; and the list goes on.

The only alternative that is both morally superior and economically sound, ensuring no person or group of people can defraud one group and enrich another, is having either one or a competing set of commodity monies (virtual or physical commodities) whose creation and dissemination are dictated by the forces of a voluntary and free market. The number of competing currencies will also be dictated by the free market, much as how the number of shoe manufacturers, software developers and security services are not centrally planned.

The alternatives for national currencies

It goes without saying that gold and silver would be the first in line to become functioning money the world over if national currencies are no longer protected by law. These are the epitome of sound money and they are not tied to any single nation. But can Bitcoin play a role as one of a competing set of sound, international currencies?

I do believe Bitcoin has what it takes, as I’ve written previously. Despite it being virtual, Bitcoin can acquire value. Value, after all, is an attribute given to a scarce good by individual actors in the marketplace. Anything subject to finite supply and demand will acquire some value. Hence scarcity is key, rather than tangibility. Bitcoin meets all of the requirements for a medium of exchange and potentially money in the future (depending on its adoption). Furthermore, while it did not arise as a commodity with alternate uses – as gold did – Bitcoin is a different and new breed of money, and it can still fulfill the role it seeks. More generally, an economy of commodity money would naturally tend towards deflation. While not solely a Bitcoin phenomenon, it is favorable for the value for each money unit to continually rise, in contrast to the inflationary environment around us. Bitcoin’s divisibility ensures that no matter how high the value goes, Bitcoin is still perfectly usable. Objections have been raised about its volatility since money must be stable. This is true, but we must appreciate that its current volatility is simply a symptom of the pre-adoption stage. Any newly discovered commodity will have a period of extended volatility as people try to contend with its potential on one hand and the uncertainty on the other. As Bitcoin becomes better known, more readily accepted by the common man and as uncertainties subside, the volatility will decrease to levels of your average foreign currency. I contend that this is no insurmountable challenge for Bitcoin since it is a built-in payment system as well as the money itself. While people may refrain from holding it long-term or price their goods solely in Bitcoin, people can convert in and out of the currency and use the Bitcoin payment system while denominating their goods in stable currencies.

Whether in small drops at a time or in large torrents all at once, Bitcoin is being adopted by people who have realized its advantages. Some with the need for international money transfer appreciate the cheap and almost instantaneous global transmittal; those with privacy concerns flock to it for its virtual anonymity; and then there are the ones who are tired with the banking system’s fees or afraid of its potential bank runs who realize they no longer need a bank to store their money.

People are voting with their cash and showing that Bitcoin can indeed fill the need. There are those who use it as a store of value/potential speculation and there are those who use it to spend. The hoarders increase its value and the spenders increase its popularity. Eventual equilibrium, as always, is reached between spending and saving where the supply and demand curves for Bitcoin meet…that is, assuming a free market.

Free markets can make or break a currency

Legal tender laws, taxes on precious metals and regulation of firms dealing in Bitcoin all manipulate the supply and demand curves of money and of non-monetized goods. However, they won’t eliminate the demand of the forbidden fruit altogether. One needs only note the prevalence of speakeasies during the Prohibition era to understand that it is not in the human nature to simply abide by arbitrary legislation. It is quite evident that fewer people in Argentina want the peso, hence the market for a ‘blue dollar’. In much the same way, in various circles, fewer people in the US want dollars. Fortunately our alternatives (such as Bitcoin, gold and silver) are not yet illegal, which makes me a proponent with a clear conscience.

On the face of it, when commodity prices rise, they are simply more valuable. But when prices rise for Bitcoin, gold and silver (which are commodities with a history or express purpose of being money) this shows they are more desirable than peso, dollar and pound. Small fluctuations mean nothing, but large movements like those seen over the course of a month for Bitcoin and over the course of 5 years for gold makes you think whether these commodities are becoming ‘monetized’.

Fiat money (e.g. national currencies) hangs on the faith people have of it. If the faith goes, the value of the fiat money will plummet like a rock. When a currency experiences this sudden and aggressive drop, it is defined as hyper-inflation. This can simply be thought of as ‘hyper demonetization’ of the currency in favor of a replacement commodity money that gets monetized or replaced by barter conditions. Any fiat money could be subject to this, given the right environment. As long as the U.S. dollar is the world reserve currency, circumstances must become drastically worse for gold or Bitcoin to unseat it but the potential is always there. All it takes is enough people to lose trust. Take, for instance, the official national debt. At $16.7 trillion, this is a sum that can never be repaid (let alone if you include Social Security liabilities and other ‘off-the-books’ debt totaling an estimated $222 trillion), no matter how much you tax or how little you spend. To illustrate with an extreme scenario, by taxing 100 percent of the U.S gross national income and eliminating spending altogether, the U.S. is still left with a $1.5 trillion debt! To pay its debt the government is putting one credit card’s bill on another credit card. Needless to say, the thread by which fiat money is hanging is thin and flimsy. It won’t take much to snap.

As noted, individual people are realizing there is something amiss and are moving to gold, silver or Bitcoin. The Chinese government (saddled with more than $1.2 trillion in U.S. bills, notes and bonds) is showing it wants out too, while being conscious not to cause panic and hurt itself. The heavily censored nation aired a documentary last month on its state-run TV informing its populace about Bitcoin (!) and it allows (possibly even encourages) the purchase of gold and silver from local Chinese banks. Clearly the largest holder of U.S. debt is trying to divest away from the dollar. Central banks are buying gold like there’s no tomorrow. Clearly the ‘banks of the banks’ know that even paper money must be backed by real money.

Sure enough, Bitcoin is the big unknown and it is fraught with legislative risk. And, yes, gold and silver prices have seen better days. Hardly anyone alive today knows what it is like to live in a world of sound money. But as Hamlet asks, “[what] makes us rather bear those ills we have, than fly to others that we know not of”? In the long run, even Sisyphus would give up on any attempts to maintain a paper money. Whether or not one holds real assets to preserve material wealth, the first stage to anything is educating oneself to the options out there and to the reality at hand. The greatest amount of wealth is that which is contained in one’s mind. The emergence of Bitcoin, for its part, has got a lot of people thinking, and that alone has made all those involved more wealthy.

Originally posted as Part III of a four-part introductory series on Bitcoin on May 21, 2013 in the American Daily Herald. See the Bitcoin blog for all four articles.

With gold prices back in the $1,300-$1,400/oz range it is sometimes difficult explaining to non-gold bugs why owning physical gold is still a good long term strategy. Some define buying gold as ‘an investment’, and others as ‘a hedge against inflation’. I tend to look at it as an insurance policy against hyper-inflation or just simply as sound honest money. However, when describing a strategy of accumulating money (in gold form) in some far-away vault, only to be used in some end-of-the-world scenario, it goes without saying that an image of a miserly old man replaces my likeness in the eyes of my conversation partner. Few people stuff dollar bills in their mattress any more, but hoarding of gold and silver when these were de-facto money was not unusual. Commodity money, which tends to increase in purchasing power over time, is predisposed to this ‘problem’. When you ‘love money’ so much that you hold on to too much of it or for too long a time, then you are hoarding.

Can ‘hoarding’ be defined?

Robert LeFevre once joked that while he was courting his soon-to-be-wife, he was impressed when she told him how much she loved money. Yet after they were married, it turned out that she really didn’t love money. In fact, she would try to find any excuse to get rid of it… in her shopping sprees, of course! Apparently money is no different than other goods and services; you trade one for the other. You trade the lesser valued good for the more valued good. When you make a purchase, you make a choice. You value your money less than the good you are buying. Similarly, when you refrain from purchasing an item, the indication is that your money is of more value than the foregone good. This is the basic premise in anticipation of a transaction, that both sides benefit – otherwise the transaction would not take place.

Hoarding money, be it paper, an electronic account balance, gold or bitcoins is therefore just the same as buying an excessive amount of books, stockpiling on your favorite pasta sauce jars when they’re on sale or refraining from throwing out your old National Geographic magazines. You never know when you might need them. You just prefer what you are hoarding to the alternatives out there. A larger stash of money means you prefer saving the money you have now for a later monetary exchange. That monetary exchange can be a purchase, paying your employee’s wages or giving your granddaughter a gift. But the amount someone saves/hoards is a reflection of their preferences and their understanding of reality with its inevitable uncertainties (and uncertainty is in no short supply these days). The negative term ‘hoarding’ is used, as Rothbard noted, when you are keeping more cash than someone else thinks is appropriate for you to keep. How very objective.

In actual fact, if a significant amount of money is hoarded and ‘taken away’ from circulation, the result is that there is an increased demand for money, which, in a world absent of price and wage controls, results in falling prices. Said differently, the purchasing power of money increases, meaning one would be able to buy the same amount with fewer money units. No evil has been perpetrated.

The dreaded ‘deflation’

The general decline of prices is described by mainstream economists as deflation. According to the Austrian School, on the other hand, deflation is merely the reduction of the money supply. Whether through significant hoarding, widespread bankruptcies or Federal Reserve actions, a drop in the money supply would cause a drop in prices, all else being equal. The distinction is that falling prices are the effect, not the cause. The effect could have other (often positive) causes, such as increases in productivity – the reason for falling prices in the high-tech world, for instance. In a market unhampered by political forces, as long as the quantity of goods rises relative to the quantity of money, prices will fall and the value of money will rise.

A common misconception is that reduction in prices equates to reduced profits and a general decline in the economy. ‘Revenues are not profits’ is one of the first things young accountants learn. Profits are a product both of revenue and of expenses, the money coming in and the money going out. With an increased purchasing power of money, input costs fall as well. Profits can and are made in a deflationary environment. The dreaded ‘deflationary spiral’ is a situation where a drop in prices leads to reduced demand, leading to more drops in prices as well as layoffs, which further hampers demand, and so the situation exacerbates itself. This scenario may occur when the general environment is an inflationary one, where people generally expect prices to rise as a normal, natural phenomenon. Then, through a deflationary cause, symptomatic of an ailing economy (e.g. widespread bankruptcies, rather than increased productivity), prices temporarily start to drop. Most people will see this as a temporary drop and will therefore postpone purchases. However this scenario cannot be an ongoing condition – eventually people need to start buying. In contrast, where the environment is deflationary (e.g. the high-tech industry), the assumption is not that ‘prices must rise’ and that ‘the drop is temporary’. How long has anyone really put off buying a computer, knowing that if they wait just one more month, they’ll get a better one? Eventually, you live with the fact that prices fall. And should prices drop due to positive causes, such as increased productivity, falling prices would actually engender demand. Increases in demand will ensure the firms’ profitability and the workers’ employability.

Deflation is not as bad as you think…

As we have seen, if the general economic environment is one of falling prices and the increase in money’s purchasing power, people would not continuously put off making purchases. Profits will be readily made as goods will cost less and practically create their own demand. But this is not all. Holding on to your money is like having a savings account or owning bonds. Saving for a nest egg in a deflationary environment does not require a high risk approach. Merely setting aside a part of one’s paycheck each month will yield more than social security ever could.

A further impact is that as people save more, interest rates fall. This drop in interest rates is a scenario that central banks across the globe are trying to replicate by ever more money printing. However, a naturally occurring low interest rate does not harm the holders of money much like the coercive version we see before us. Though deflation is thought to be bad for borrowers, debt would actually be cheap and readily available. If profits are made, debt will also be more easily repaid. True, a bad deflation (one which results from bankruptcies and economic woes) is generally bad for borrowers, since the real value of their debt rises and they have no additional profits and cash-flow to enable its repayment.

During inflation, on the other hand, money loses value. There is no doubt that the opposite scenario of constant inflation would be good for borrowers, regardless of the state of the economy. Is it any surprise that a government indebted to the tune of $16.7 trillion would prefer inflation to deflation? Where money is not a commodity, but is 90% debt (due to banks’ 10% reserve requirement), is there any surprise that anyone in the economics profession but the very fringe would tout inflation over deflation?

…but they still make you think it’s bad

The case for inflation and against hoarding or deflation is normally made more through an appeal to emotive factors than to the intellect. ‘Unspent dollars means reduced sales, drops in profit and massive layoffs. If firms go bankrupt, the raw material, capital goods and factories vanish into thin air’. You wouldn’t want that, would you? We already showed that increased saving on a massive scale and a reduction in the money base relative to the goods on the market, in and of itself, would only affect the purchasing power of the money and would not affect sales or profits. Companies may or may not go bankrupt – it all depends on whether their products satisfy the customers, not on quantity of money ‘in circulation’. Assets of those companies that do go bankrupt will only be bought up by another group of people who will try to utilize them better by building a better or cheaper product. Those parts of the economy that people do not value will get a signal that their value is dropping. These signals are important for the efficient functioning of the economy and for the satisfaction of the population at large. Where this signal is manipulated through injection of money into the economy or unnatural interest rate manipulations, a boom occurs, naturally and inevitably followed by the bust.

Going back to their arguments, that money must therefore be spent, is quite the visceral argument since everyone is an employee and everyone’s livelihood depends on other people spending money on them. It appeals to the desire for people to get something for nothing, or at least to earn money for as little work as possible. But in a free market, where people are not forced to buy a good they do not value, the customer is always right. You do your utmost to ensure you appeal to potential or repeat customers. An entrepreneur and all of her employees must strive for others’ satisfaction in order to make a profit – and many do so, successfully. There are no shortcuts in the lives of truly free market participants; you cannot force someone to fork over their money against their will (the case, of course, being different for government agencies funded through taxation). Yet the lazy slob in us all desires just this and the tool to achieve this is inflation. Through a constant devaluation of money’s purchasing power, people trade their money for real goods and services as fast as they can, thus ensuring dollars are not left unspent. Inflation causes fear-driven spending. ‘Spend now before it’s too late and your money becomes worthless’. A mild form of inflation would have the monetary base rise at the same level as ‘economic growth’, thereby keeping the purchasing power relatively stable, but the practical difficulties and the moral dubiousness of robbing one of their money’s value is still present.

An appeal to the intellect and common sense

Money, as a transmitter of value through space and time, must be ‘hoard-able’. It has to be durable so that one can hold on to it without its value dwindling. Holding on to depreciating money is like storing your candles all lit – not the best long-term solution. As I tell my non-gold bug friends, holding on to money in the form of gold is a good long-term strategy. It cannot be printed at will, its production is subject to free market forces of profit and loss, and its purchasing power increases over time. Who would not want money that increases in value? If you are uncertain of the future, the market or the economy, hoard away. One must put aside the red herrings incorporated into the inflationists’ arguments which lead to conclusions that: deflation is evil, saving is bad, debt is good, spending is necessary, etc. Savers, who forego current pleasures and build up future capital, are the backbone of a strong economy. As Doug Casey said, “You don’t become wealthy by spending and consuming, you become wealthy by producing and saving”. As my parents repeated to me time and again, “You cannot spend what you do not have”. And as common sense dictates, “You cannot borrow what someone else hasn’t saved”. Sound money is worth its weight in gold. Resist the arguments put forward on behalf of entities that are massively indebted – there is no evil in hoarding.