Real Economies and Financial Economies
Financial economies only make sense in a world of scarcity.
Among the earliest fossils are bacterial colonies, which formed through acts of symbiosis. The first complex life also formed through symbiosis, and the first multicellular life also formed through symbiosis. The flowering plant is the greatest symbiosis of plants and animals ever. Many animals have formed colonies, and in our time, insects are the masters of colonial life on land, such as ants, termites, bees, etc. Vertebrates tend to be too individualistic to form colonies like insects do, with their highly specialized individuals (queens, drones, etc.), but social animals are social because sociality enhances the survival and reproductive prospects of a society’s members. Animals with sexual reproduction often engage in display, to advertise their reproductive fitness. This is all part of humanity’s evolutionary heritage, and that heritage becomes obvious in human societies, when one develops an eye for it.
To come closer to humanity, chimpanzees engage in behaviors that are strikingly similar to human behaviors, such as in politics and warfare. Humans only engage in more sophisticated versions of those behaviors, and what anthropologists think set humans apart from other apes is our ability to invent symbols. The use of symbols is humanity’s signature human trait, even more than toolmaking. This post is made from symbols that we call the written word.
In chimp societies, meat is a prized food, and the most sexually receptive females get the most meat from hunter males. Male chimps and capuchins have even been observed to pay for sex. What is called trade, or economic exchange, predates humanity. It is thought that long-distance trade began about 150,000 years ago. The low-energy transportation lane of the Danube River was used for trade at least 30,000 years ago. Through the wonders of mass spectrometers, scientists can tell where a rock came from. Scientists have even been able to trace a Neolithic stone tool found in England, for instance, to the very rock that it was quarried from in Germany, and it got to England through trade. Early trade goods included obsidian and other useful rocks.
Food and tools to obtain food (or protect food and reproductive assets (AKA women), which is the origin of war) were the earliest trade goods, and when people became settled, they could amass possessions, and even people became trade goods. Some of the earliest fortunes on Earth were amassed through controlling trade routes in the Fertile Crescent. Early on, metals became trade goods, especially precious metals such as gold and silver. What made them precious was not their utility, because they were too soft to make tools. They were precious because they were rare, and a great deal of effort, called embodied energy, went into producing them. Although they had little intrinsic value, they became a medium of exchange, as they could not be counterfeited, although debasement and other tricks were common.
Those precious metals were not wealth in of themselves, as they could not be eaten or made into productive tools, but they were symbols of it. In Aztec society, maize was used as currency, which is the ultimate form of money, as it could be eaten. Eventually money became even more abstract, and could be relatively worthless paper, which only represented the moneymaker’s promise. Today, most money exchange happens electronically, and cryptocurrency is popular, which does not even have a promise behind it. It is purely an accounting artifact. Political entities that issue money at least have the ability to tax their subjects. Cryptocurrency does not even have that.
Real economies are made from matter, energy, and human effort. Financial economies exist at a level of abstraction away from real economies, but they theoretically depict a reality. When people focus on money, they are focusing on a symbol, and this has always been the downside of symbolism: mistaking symbols for reality.
Book-learning is an inferior way to learn. Experience is the best and arguably only teacher, but the written word has allowed for people to encounter a vast array of purported descriptions of experiences, which may or may not reflect a physical reality. One virtue of science is that although its findings are generally communicated through writing, their findings can ideally be reproduced by others. However, in a world of scarcity and fear, all branches of science have been corrupted, to one degree or another. The principles behind what my friend had demonstrated to him upend today’s physics, which is arguably the least corrupt branch of science. Biomedical science is considered the most corrupt, even by the defenders of science, primarily because it is riddled with conflicts of interest and economic empires have been built on those findings.
When Spaniards conquered the Western Hemisphere, their obsession was gold and silver, and millions of natives were worked to death to provide it. Christopher Columbus literally thought that gold was the ticket to heaven. The Spanish king’s advisors warned that simply importing boatloads of gold and silver to Spain would not make it any richer, and in fact, that plunder left Spain just as quickly to Spain’s protoindustrial creditors, who were making real wealth. A mere generation after the loot from the New World began rolling in, Spain began a series of bankruptcies that marked its decline to an imperial has-been, and Spain was arguably worse off in 1600 than it was in 1500. It was a stark illustration of how money is not wealth.
Real wealth is measured in energy, tools, and the individual and collective intelligence to obtain energy and make and use tools. My Epochs of the human journey are intended to show how central energy practices have been to humanity’s wellbeing. Economists are perhaps the most deluded professionals that I have seen, with their neoclassical theories that largely ignore the real world.
Economic exchange only makes sense in a world of scarcity, as everybody focuses obsessively on the exchange aspect of economic activity: what is in it for them? In a world of abundance, which is necessarily predicated on energy abundance, exchange becomes meaningless. The financial economy is a giant abstraction that is subject to great manipulation and carefully crafted illusions (substituting symbols for reality), and it will all swiftly come to an end in what I call the Fifth Epoch of the human journey.
I think that to turn the phrase "has been" into a noun one should hyphenate the two words; viz., "has-been". I'm just sharpening up my proofreading skills, that's all.