Is Socialism Contrary to Human Nature?

In a recent column, philosophy professor Ben Burgis takes on the idea that socialism is “unnatural”, that is, somehow contrary to basic human nature:

…one of the most persistent claims of socialism’s critics…is the idea that socialism is not just impractical or even immoral but unnatural. Economist and libertarian social critic Murray Rothbard, for example, entitled a book of his essays Egalitarianism as a Revolt Against Nature. Psychology professor and science popularizer Steven Pinker breezily asserts in The Blank Slate: The Modern Denial of Human Nature that “socialism and communism…run against our selfish natures.”

The grim view of human nature painted by these critics has roots as fresh as evolutionary psychology and as ancient as the doctrine of original sin. It’s been used to motivate arguments against socialism not just by libertarians like Rothbard, neoliberal centrists like Pinker, or various right-wing critics of progressivism … but even by someone as firmly “on the left” as The Young Turks (TYT) host Cenk Uygur. When a C-SPAN caller asked Uygur about Marxism, he flatly stated that, “Human nature does not work the way that communists want it to work.” In some versions of this critique, the point is generalized from human nature to nature in general…

Socialism and Human Nature (Arc Magazine)

Burgis goes on to debunk many of these criticisms, but I’d like to take them on from a different perspective. I’d like to use some of the historical and anthropological works we’ve looked at over the past few years. To do that, we need to take a look at some of the history of thought on this issue.

Fundamentally the question being asked here is, what is human nature? To some extent, this is an impossible question to answer. As Chris Ryan writes in Civilized To Death, “To ask ‘What is human nature?’ is like asking ‘What’s the natural state of [water]?’ So much depends on conditions. Liquid, solid, gas—temperature and pressure make all the difference.” (p. 120)

While the question of human nature may be impossible to answer definitively, let’s take a trip through the beginnings of anthropology and sociology to see if we can at least shed a little light on it. This will help us to determine whether or not human nature—so far as we can determine what it is—is fundamentally incompatible with socialist ideals of liberty, solidarity and collective ownership, as mainstream economists assert.

The Father of Anthropology.

We could start with Lewis Henry Morgan. He was an attorney and senator who lived in upstate New York in the nineteenth century. At this point in history, the Native American tribes, although decimated by disease and territorial expansion, still had remnants of their original social structure intact. Morgan became adopted into the Seneca tribe, which was part of what has come down to us as the Iroquois League (although they obviously did not call themselves that). He studied their social organization from a scientific/intellectual perspective. It was one of the first attempts by a Western-European based culture to understand other cultures rather than just obliterate them.

Morgan traveled around the western United States investigating the kinship relations of various Native American tribes. For tribes further afield, he sent questionnaires to missionaries who were living with tribal cultures on other continents.

Morgan is considered to be “the father of anthropology” for his discovery that the primordial form of human social organization was not solitary, contractual or territorial, as many Enlightenment philosophers had believed, but based on kinship; that is, descent from a common ancestor, whether real or imagined. The social arrangement based around this concept was called the tribe: “Tribes were the initial social structures human created to further their survival.” (1)

The flexibility of this arrangement stems from three features. First, if you traced your lineage further back in time to a more remote ancestor, then you could enlarge the circle of kinship. Thus, even disparate tribes could be conjoined if they had a more remote ancestor in common (again, real or imaginary—often times imaginary). Second, non-blood relatives could be “adopted” into an extended family to increase the size of the tribe, as Morgan had been. Such adoption would determine their social roles. This is called fictive kinship by anthropologists. Third was the joining of previously unrelated people through the marriage partnership, called affinal relationships. The children of such a union share the genetics of both their mother and father’s families, and therefore both families are invested in the offspring’s future and become interrelated even though they were not before (what we call in-laws in English, a rather bizarre term, as laws are usually a stand-in for kinship). As Robin Dunbar notes, marriage is not about the parent’s families; it’s about the children. Through affinity, families could be joined, recombined, and enlarged. Marriage was also a major source of political alliances until relatively modern times, even in Western Europe.

The other thing of note was that kinship was not at all uniform–whom one regarded as a parent, sibling, cousin, or other relative varied greatly across tribal cultures. For example, in the Iroquois culture, one’s mother was not just one’s biological mother, but all of her sisters as well (whom we would call aunts). Similarly, one’s father was not only one’s biological father, but also all of his brothers (whom we would call uncles). In many cultures, those whom we would call cousins were regarded no differently than our brothers and sisters, with the same terms being used for both. In some cultures, one’s biological father and his family were not even considered to be related to you at all—only your mother’s relatives were! In these cultures, the major male figure in your life would be your mother’s brother instead of your biological father. In many cultures, parallel cousins (children from a parent’s same-sex sibling) were considered your relatives, but cross cousins (from an opposite-sex sibling) were not.

Such kinship relations organized the tribe’s entire social structure. They defined one’s rights, duties, debts and obligations relative to the rest of the tribe. They also dictated whom one could and could not marry (e.g. one’s cross-cousin, but not one’s sibling, with parallel cousins often being considered siblings). Relationships were defined by status–older over younger, men (in some aspects) over women, husbands over wives, parents over children, brothers over cousins, kinsmen over strangers. etc. As later writers would put it, social relations were primarily status-based rather than contract-based (whether the contract was written or implied). Government-citizen; employer-employee; business partner, and even husband-wife relationships were examples of contract-based relationships in European societies (since marriage could be dissolved and was primarily concerned with legal matters such as inheritance).

All of this was more important than geography, which did not matter at all. You could live right next door to someone and, if they were not a part of your tribe, then you had no obligatory social relationships with them. There was no such notion as “citizenship” based on living in a common circumscribed territory, or under the same nominal government. Plus, many tribes throughout history were nomadic, and thus they could not have based their shared identity on any particular piece of land or territory. Of course, in practice, most people did live closest to their tribes and kinsmen, muddying the issue.

The notion of a social contract was equally problematic. Written contracts could not work, since most tribal cultures did not use writing. And the notion of an implied contract would be impossible without a shared cultural heritage (particularly language and religion), which only existed among members of the same tribe to begin with.

And so, it was clear from the evidence that kinship was the universal and primordial form of human social organization, with all others being later inventions, sometimes much later inventions. Such arrangements had been preserved in cultures all over the world even up until Morgan’s time (the late 1800’s), and still exist in remote places all over the world today.

Morgan wrote a book about his discovery called Systems of Consanguinity and Affinity of the Human Family. He then followed it up with his best-known work, Ancient Society, in which he outlined the basic structures along which he believed all ancient societies around the world had been constituted.

Morgan’s book was hampered by its depiction of societies progressing through definite stages from Savagery to Barbarism to Civilization. Aside from the derogatory connotations of these terms, the very notion of all cultures passing through a predictable series of stages has been soundly rejected by modern anthropologists, as has the notion of some societies being more “highly evolved” than others (although this is enjoying a recrudescence thanks to the Alt-right). Social development does not have a direction, up, down or otherwise. In Morgan’s defense, however, nearly all scholars in the nineteenth century framed their arguments as a sequence of stages, probably influenced by biological evolution. This mistaken notion colored the thinking of scholars in all sorts of disciplines regardless of their political views until deep into the twentieth century.

Despite this drawback, the core of Morgan’s work—his argument that consanguineal kinship formed the basis of human social organization, with all other arrangements following later—has proven basically correct. Subsequent anthropology was built on this foundation, even if rejected some of Morgan’s other claims.

Dunbar’s Number and fractals

If we accept that kinship and tribes were the primordial form of human social organization, is there a way of knowing the size of those tribes? In other words, apropos of our discussion of kinship groupings, is there a “natural” size of social organization?

Although Morgan didn’t know it at the time, subsequent research has come up with an answer. The evolutionary psychologist Robin Dunbar had the idea that the size of the neocortex relative to the rest of the brain was roughly correlated to group size in social animals. From this, he calculated that the “mean group size” of humans would be around 148 people, often rounded up to 150. This has been called “Dunbar’s Number” in his honor. Another group of researchers arrived at a larger number, around 290 (with a median of 231)—the Bernard/Kilworth number.

Furthermore, there are a series of widening “concentric circles” of social relations, with each having a different relation to an individual. Again, this is due to the cognitive limits in the human brain.

According to the theory, the tightest circle has just five people – loved ones. That’s followed by successive layers of 15 (good friends), 50 (friends), 150 (meaningful contacts), 500 (acquaintances) and 1500 (people you can recognise). People migrate in and out of these layers, but the idea is that space has to be carved out for any new entrants.

Dunbar’s number: Why we can only maintain 150 relationships (BBC Future)

Even though the numbers differ on the amount of close, personal relationships we can maintain, we can see that there is a definite upward limit on that number. It is not 500. It is not 1,000, or 10,000, and certainly not a million. This means that there is a “natural” size limit for human social groups, based on our evolutionary heritage.

Dunbar’s number is found all throughout human social groupings, from the size of military units, to the size of Mennonite villages, to the size of small businesses, to the length of people’s Christmas card lists (back when people still did that). And while Iroquois villages could be as large as several thousand people, the longhouse—the center of village life—tended to hold between 20-90 people, consisting of several matrilineal families, each with their own space. The longest one ever excavated could hold 180 people.

According to Dunbar and many researchers he influenced, this rule of 150 remains true for early hunter-gatherer societies as well as a surprising array of modern groupings: offices, communes, factories, residential campsites, military organisations, 11th Century English villages, even Christmas card lists. Exceed 150, and a network is unlikely to last long or cohere well.

Dunbar’s number: Why we can only maintain 150 relationships (BBC Future)

Human social organization also appears to be fractal. Again, Morgan could not have known this, since the concept of fractals was only described by mathematician Benoit Mandelbrot in 1975. A fractal is a geometric figure where each part has the same statistical character as the whole. That is, self-similar patterns occurring at progressively larger and smaller scales.

The recursive (or fractal) nature of human social organization allows it to scale up and down as needed, presumably based around the Dunbar number, above. Thus, the structure of the family is basically the same as that of the clan, which is basically the same as that of the tribe, which is the same as that of the nation, which is the same as that of the confederacy; repeating the same basic structure at progressively larger scales. Another way of describing this structure is recursive, much like Russian Matryoshka dolls nesting inside each other.

Incidentally, only humans seem to capable of doing this. Even our closest animal relatives—chimpanzees and bonobos—despite being gregarious and highly social animals, cannot accomplish this sort of flexible social scaling. Language is an example of another recursive structure unique to humans, which also plays a social grooming and bonding role.

Numerous scholars in the nineteenth century noted that In the age of monarchy, rulers would commonly depict themselves as benevolent fathers, with their subjects as the children, and the kingdom being a kind of large-scale family. Even in the twentieth century, dictators who ruled over millions of people like Joseph Stalin and Mao Zedong often depicted themselves as benevolent uncles.

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So, now we’ve limned at least a little bit of what human nature might look like. It’s based on kinship—whether real or fictive—and based around social groupings of no greater than perhaps 150-250 close relationships (what has been humorously termed the monkeysphere), repeated on progressively larger and larger scales, creating a sort of nested group of widening social circles, with different social relationships inside each circle.

By contrast, living in larger, denser environments surrounded mostly by strangers has been sometimes referred to as a Behavioral Sink. This is based on John C. Calhoun’s studies of mouse behavior in overcrowded and highly stressful environments.

The Iroquois

Morgan’s work had a huge impact in Europe, and he was cited by scholars as diverse as Charles Darwin, Sigmund Freud, and Karl Marx.

It’s that last one that especially concerns us given our topic of conversation. Morgan wrote several papers on the Iroquois system of economic organization, as well as describing it in Ancient Society.

However, it is important to note that social, economic and political relationships were not typically separated from each other in tribal cultures–all were interwoven. This characteristic of early economies was referred to by economic historian Karl Polanyi as embeddedness. Embeddedness refers to the degree that “economic” behavior (for individual pecuniary gain) is constrained by non-economic factors, whether political, religious, or social. Status in most Native American societies, for example, was not conferred by wealth, and the hoarding of wealth would have been impossible due to social pressures. In some Native American cultures (notably the Pacific Northwest), social status was conferred by giving away acquired wealth in elaborate ceremonies (potlatch). Would-be chiefs would compete to see who could give away the most, and hence gain the most prestige.

The Iroquois longhouses previously mentioned were home to several matrilineal clans–people related to each other on their mother’s side. Because of their matrilineal nature, the longhouses were collectively managed by the matriarchs (eldest women) of each clan (the Clan Mothers), who formed a Clan Mothers Council. No one went without shelter.

Iroquois villages had a system of communal land distribution–all land was owned in common by the entire village and parceled out to various clans and families to cultivate. Clans had usufructary rights, meaning they had rights to the produce generated from land that they farmed collectively, but they had no permanent ownership claims over the land itself. So long as produce was being cultivated on it, an individual or clan had rights to the plot. Once a plot was no longer cultivated, it reverted to the collective ownership of the tribe, to be redistributed as needed by the Clan Mothers Council. Thus, when land was “sold” to Europeans, the Iroquois had no understanding that they had given up rights to it permanently (hence the pejorative term, “Indian givers”). Land was considered sacred, and thus could not “belong” to any single person or family.

Agriculture was based around the “three sisters”–corn, beans and squash. Plows were not used; agriculture was slash-and burn (swidden), meaning that new plots were cleared each growing season, and worked with hoes. If useful farmland around the village became depleted, the village had to move to another location (another reason social relations could not be based around land).

Work was performed cooperatively. There was a typical gendered division of labor, with women responsible for child-rearing, planting, cultivating and harvesting crops; while men did hunting fishing, trading, building and forest management. The majority of the tribe’s goods were produced by the women. No money was used–economic exchange was conducted as a gift-based economy.

The produce of the village was stored in collective granaries in the longhouse, which each clan had access to as needed. Everyone had as much as they needed, and no one starved or went hungry.

As for political leadership, Iroquois tribes were not completely egalitarian, but were led by a sachem, what we might crudely refer to as a chief. But, critically, the office of sachem was conferred to an individual by members of the tribe via collective deliberation, and could be rescinded at any time if the sachem failed to perform adequately. And—most critically of all—the office of sachem was not hereditary. A sachem’s family did not have any special claim on the office, and it was not passed down from father to offspring, as was monarchy in Europe. Nor did the sachem have special claim to excessive wealth far greater than that of other members of his tribe.

Sachems could not issue orders or command other people to do things. They could not exert control over other members of the tribe, like a European king or dictator, or a capitalist boss or executive. There was no permanent, standing army or police force among the Iroquois, so there was no way of enforcing any orders by the sachem or anybody else. Every member of the tribe was free to do as he or she pleased, bound only by the requirements of kinship and social convention.

Among the Iroquois league, decisions were made collectively by the various representatives of the tribes, with no one tribe being able to strongarm the other ones. Here is a good description from testimony before the bureau of Indian Affairs given by one Cephas A. Watt (2):

The CHAIRMAN. Mr. Watt, you stated that you weren’t one of the regular chiefs. How are the regular chiefs selected here among the Indians?
Mr. WATT. They are elected by the clan.
The CHAIRMAN. Elected by the clan. Explain what you mean by that.
Mr. WATT. They have the clan system. There are eight clans.
The CHARIMAN. Among the Senecas?
Mr. WATT. Among the Senecas; and there are four on each side of the house, you see. The four clans here do not intermarry, which is their general rule, ad they have to go over to the other four clans to select their mates; and those clans, or clan mothers appoint the chiefs, that is, the oldest woman in the clan appoints him. Of course, these clans all follow their mother’s side, it doesn’t make any difference what the father might be–he might be a Japanese, but so long as he has an Indian mother the children are legitimate Senecas, and they share in all the usual privileges. So they select some of the clan whom you might say is “a good Indian” of the clan, as their chief. There might be 25 in that clan, and they select on of them as chief.
The CHAIRMAN. By whom is he selected; by the clan itself, or by the clan mother, you say?
Mr. WATT. Yes; by the clan mother. Of course, they all have to agree.
The CHAIRMAN. But the selection is made by the clan mother?
Mr. WATT. Yes. And then they are confirmed by the Six Nations chief, and the head chief of the Six Nations.
Mr. HARRISON. But you have to have a condolence meeting of your clan, don’t you?
Mr, WATT. Yes, they have a condolence ceremony, where they are lectures by the chiefs; admonished to be good.
Senator WHEELER. Do they always follow the admonition that they get?
Mr. WATT. Well. some of them do, but when they see that the chief himself is not living up to the requirements as to his character it is different.
The CHAIRMAN. What is the term of office of these regular chiefs?
Mr. WATT. It is supposed to be for life. That is, it is for as long as he is of–
Senator WHEELER interposing. Good behavior.
Mr. WATT. Yes.
The CHAIRMAN. And if the chief dies or resigns, a new meeting is held and a new chief is selected?
Mr. WATT. A new meeting is held an a new chief is selected.
The CHAIRMAN. I understood you to say that you were a chief of come kind here. How did you get your title of “chief”?
Mr. WATT. I haven’t been through the condolence ceremony yet, but I have been appointed by my clan mother and I have been elected, and it holds good until a condolence ceremony is held.
The CHAIRMAN. What clan do you belong to?
Mr. WATT. I don’t just understand, but I think I belong to the Heron clan.
Senator WHEELER. That is a fish clan?
Mr. WATT. Long-legged bird.

Ancient Law and Primitive Property

Now, the obvious objection to this is: sure, that’s fine for bunch of “primitive” savages running around the forests of North America, but what’s all that got to do with Europe?

It’s here where a few other scholars come into the mix. One of them based his experiences not on the natives of North America, but on India (the actual Indians).

Sir Henry Sumner Maine was a judge, legislator and legal scholar who had spent many years in British India. There he noted that Indian law was profoundly different than that of England. In India, the laws were based around something he called the “Joint Undivided Village” or the “Joint Undivided Family” which was headed by the eldest male clansman, who exercised “despotic” control over the whole family. Laws had little to do with individual behavior, contracts, or inheritance, because these were not relevant to village society.

From his studies of the legal codes of the ancient Romans, the ancient Germanic laws which had been transcribed (such as the Salic Law), and the laws of ancient Ireland (the Brehon Laws), Maine concluded that these ancient law codes could only be properly understood by the realization that these societies had all been constituted along the same basic lines as the Indian villages he had witnessed! From this he concluded that the basic unit of ancient societies was not the individual, but the extended family (ie. House or Clan):

The Family then is the type of an archaic society in all the modifications which it was capable of assuming; but the family here spoken of is not exactly the family as understood by a modern. In order to reach the ancient conception we must give to our modern ideas an important extension and an important limitation. We must look on the family as constantly enlarged by the absorption of strangers within its circle, and we must try to regard the fiction of adoption as so closely simulating the reality of kinship that neither law nor opinion makes the slightest difference between a real and an adoptive connection.

On the other hand, the persons theoretically amalgamated into a family by their common descent are practically held together by common obedience to their highest living ascendant, the father, grandfather, or great-grandfather. The patriarchal authority of a chieftain is as necessary an ingredient in the notion of the family group as the fact (or assumed fact) of its having sprung from his loins; and hence we must understand that if there be any persons who, however truly included in the brotherhood by virtue of their blood-relationship, have nevertheless de facto withdrawn themselves from the empire of its ruler, they are always, in the beginnings of law, considered as lost to the family.

It is this patriarchal aggregate—the modern family thus cut down on one side and extended on the other—which meets us on the threshold of primitive jurisprudence. Older probably than the State, the Tribe, and the House, it left traces of itself on private law long after the House and the Tribe had been forgotten, and long after consanguinity had ceased to be associated with the composition of States. It will be found to have stamped itself on all the great departments of jurisprudence, and may be detected, I think, as the true source of many of their most important and most durable characteristics. At the outset, the peculiarities of law in its most ancient state lead us irresistibly to the conclusion that it took precisely the same view of the family group which is taken of individual men by the systems of rights and duties now prevalent throughout Europe.

The Ancient Greeks and Romans, the Celts, the Germans, the Slavs—each and every one had begun as a collection of village communities where kinship defined the overall social structure and all major resources—except for minor chattels—had been owned and held in common.

In other words, very similar to what Morgan described of the Iroquois.

Maine describes a progression from the Joint Undivided Family, to the House Community, to the Village Community (his terms). At each stage, property becomes less communal and more alienable:

…The group which I have placed at the head, the Hindu Joint Family, is really a body of kinsmen, the natural and adoptive descendants of a known ancestor…so long as it lasts, it has a legal corporate existence, and exhibits, in the most perfect state, that community of proprietary enjoyment which has been so often observed…in cultivating societies of archaic type…

The House-Community, which comes next in the order of development, has been examined by M. de Laveleye, and by Mr. Patterson, in Croatia, Dalmatia, and Illyria…These House-Communities seem to me to be simply the Joint Family of the Hindus, allowed to expand itself without hindrance and settled for ages on the land. All the chief characteristics of the Hindu institution are here—the common home and common table, which are always in theory the centre of Hindu family life; the collective enjoyment of property and its administration by an elected manager.

Nevertheless, many instructive changes have begun which show how such a group modifies itself in time. The community is a community of kinsmen; but, though the common ancestry is probably to a great extent real, the tradition has become weak enough to admit of considerable artificiality being introduced into the association, as it is found at any given moment, through the absorption of strangers from outside. Meantime, the land tends to become the true basis of the group; it is recognised as of preeminent importance to its vitality, and it remains common property, while private ownership is allowed to show itself in moveables and cattle.

In the true Village-Community, the common dwelling and common table which belong alike to the Joint Family and to the House-Community, are no longer to be found. The village itself is an assemblage of houses, contained indeed within narrow limits, but composed of separate dwellings, each jealously guarded from the intrusion of a neighbour. The village lands are no longer the collective property of the community; the arable lands have been divided between the various households; the pasture lands have been partially divided; only the waste remains in common.

Thus, Maine came to the conclusion that, “We have the strongest reason for thinking that property once belonged not to individuals nor even to isolated families, but to larger societies composed on the patriarchal model;” and that “by far the most important passage in the history of Private Property is its gradual elimination from the co-ownership of kinsmen.” In addition, transfers of land were never between individuals, but between groups, and so it was far more ceremonious than the mere signing of a contract: “As the contracts and conveyances known to ancient law are contracts and conveyances to which not single individuals, but organised companies of men, are parties, they are in the highest degree ceremonious…” He found evidence of this all over Europe:

…the mode of transition from ancient to modern ownerships, obscure at best, would have been infinitely obscurer if several distinguishable forms of Village Communities had not been discovered and examined…

The chiefs of the ruder Highland clans used, it is said, to dole out food to the heads of the households under their jurisdiction at the very shortest intervals, and sometimes day by day. A periodical distribution is also made to the Sclavonian villagers of the Austrian and Turkish provinces by the elders of their body, but then it is a distribution once for all of the total produce of the year. In the Russian villages, however, the substance of the property ceases to be looked upon as indivisible, and separate proprietary claims are allowed freely to grow up, but then the progress of separation is peremptorily arrested after it has continued a certain time. In India, not only is there no indivisibility of the common fund, but separate proprietorship in parts of it may be indefinitely prolonged and may branch out into any number of derivative ownerships, the de facto partition of the stock being, however, checked by inveterate usage, and by the rule against the admission of strangers without the consent of the brotherhood.

It is not of course intended to insist that these different forms of the Village Community represent distinct stages in a process of transmutation which has been everywhere accomplished in the same manner. But, though the evidence does not warrant our going so far as this, it renders less presumptuous the conjecture that private property, in the shape in which we know it, was chiefly formed by the gradual disentanglement of the separate rights of individuals from the blended rights of a community.

Our studies in the Law of Persons seemed to show us the Family expanding into the Agnatic group of kinsmen, then the Agnatic group dissolving into separate households; lastly the household supplanted by the individual; and it is now suggested that each step in the change corresponds to an analogous alteration in the nature of Ownership.

Many remnants of this arrangement remained even in Maine’s own time. It could be seen even in Western Europe, particularly in a region called Ditmarsh, and also in Switzerland where all land was communally owned by the canton, and the cantons were united in a larger Swiss federation (similar in many ways to the Iroquois league), with no one canton being in charge of all the others. And the Swiss, like the Iroquois, had no standing army.

But the most pervasive examples came from outside Western Europe. Eastern Europe preserved such communities in something closer to their original form. Maine refers to such villages in Sclavonia and Dalmatia (what is today Croatia) and in Russia. He also refers to communities farther afield in India, the Middle East, and Java (modern day Indonesia).

The naturally organised, self-existing, Village-Community can no longer be claimed as an institution specially characteristic of the Aryan races. M. de Laveleye, following Dutch authorities, has described these communities as they are found in Java; and M. Renan has discovered them among the obscurer Semitic tribes in Northern Africa. But, wherever they have been examined, the extant examples of the group suggest the same theory of its origin [as] the Germanic village-community or Mark; ‘This lowest political unit was at first, here (i. e. in England) as elsewhere, formed of men bound together by a tie of kindred, in its first estate natural, in a later stage either of kindred natural or artificial.’

In the end, such village communities were supplanted by the feudal system in Europe. Capitalism developed out of this feudal system:

The Manor or Fief was a social group wholly based upon the possession of land…At this point the notion of common kinship has been entirely lost. The link between Lord and Vassal produced by Commendation is of quite a different kind from that produced by Consanguinity…there would have been no deadlier insult to the lord than to attribute to him a common origin with the great bulk of his tenants. Language still retains a tinge of the hatred and contempt with which the higher members of the feudal groups regarded the lower…There is, in fact, little to choose between villain, churl, miscreant, and boor.

The break-up of the feudal group, far advanced in most European countries, and complete in France and England, has brought us to the state of society in which we live. To write its course and causes would be to re-write most of modern history, economical as well as political…

Maine’s investigations were taken up by others, most notably the Belgian political economist Émile de Laveleye, who wrote a book about the subject called Primitive Property (De la Proprieté et de ses Formes Primitives). In it, he documented copious examples from every corner of the globe confirming that property was at first held in common, and only gradually did it fall under the exclusive ownership of individual families. Then, only much later does it proceed to belong to single, solitary individuals, who then claim “absolute” rights over it in perpetuity, and this process progressed the furthest in the Anglo-Saxon countries. From the introduction to Laveleye’s work by T. E. C. Leslie:

Sir Henry Maine in his lectures at the Middle Temple was, I believe, the first to lay down with respect to landed property the general proposition, afterwards repeated in his Ancient Law, that “property once belonged not to individuals, nor even to isolated families, but to larger societies.”…Sir Henry Maine’s residence for several years in India, had enabled him to collect fresh evidence from existing forms of [Hindu] property and social organization, in support of his original doctrine, that the collective ownership of the soil by communities larger than families, but held together by ties of blood or adoption, was in eastern as well as in western countries the primitive form of the ownership of the soil…To the evidence previously collected by Sir H. Maine and the Danish and German scholars already referred to, [Lavaleye] has added proofs gathered from almost every part of the globe. Ancient Greece and Rome, Medieval France, Switzerland, the Netherlands, Russia, the southern Slav countries, Java, China, part of Africa, Central America, and Peru, are among the regions laid under contribution…

The preponderance of evidence was that, in every corner of the globe, it was not private property, but collective property, that was the primordial form of resource ownership. This has been further confirmed by studies of foraging groups, among whom private property is virtually unknown.

Marx and Engels believed from such evidence that primitive societies were universally matrilineal and matriarchal (a state they called, following an earlier scholar called Bachofen, the Mutterecht, or Mother-right). It was only after societies switched to a patriarchal model, they asserted, that the communal ownership of property became overthrown by individual patriarchal families:

…this revolution – one of the most decisive ever experienced by humanity – could take place without disturbing a single one of the living members of a gens. All could remain as they were. A simple decree sufficed that in the future the offspring of the male members should remain within the gens, but that of the female should be excluded by being transferred to the gens of her father. The reckoning of descent on the female line and the matriarchal law of inheritance were thereby overthrown, and the male line of descent and the paternal law of inheritance were substituted for them.

As to how and when this revolution took place among civilized peoples, we have no knowledge. It falls entirely within prehistoric times. But that it did take place is more than sufficiently proved by the abundant traces of mother-right which have been collected, particularly by Bachofen. How easily it can be accomplished can be seen in a whole series of American Indian tribes, where it has only recently taken place and is still taking place under the influence, partly of increasing wealth and a changed mode of life (transference from forest to prairie), and partly of the moral pressure of civilization and missionaries…

Today, anthropologists tend to regard this as far too simplistic. Not all societies passed through these stages, and looking for universal stages common to all societies is futile. Each case is unique. However, there is a good argument to be made that this is a reasonable description of the progression of societies now broadly classified as Indo-European, which includes much of Europe and India, as well as those of Semitic origin—including most of the ancient Near East.

Subsequent scholarship, by Michael Hudson especially, has shown that rather than surplus-generating activities originating with individual self-starting “entrepreneurs”, such activities began in the public (temple) sector for the benefit of the community. Furthermore, non-commercial debts owed to the public sector were periodically annulled in “debt jubilees” and forfeited land was frequently returned and redistributed.

Hudson counters that [Greece and Rome]…are not actually where our financial system began, and that capitalism did not evolve from bartering, as its ideologues assert. Rather, it devolved from a more functional, sophisticated, egalitarian credit system that was sustained for two millennia in ancient Mesopotamia (now parts of Iraq, Turkey, Kuwait and Iran). Money, banking, accounting and modern business enterprise originated not with gold and private trade, but in the public sector of Sumer’s palaces and temples in the third century B.C. Because it involved credit issued by the local government rather than private loans of gold, bad debts could be periodically forgiven rather than compounding until they took the whole system down, a critical feature that allowed for its remarkable longevity.

The Key to a Sustainable Economy Is 5,000 Years Old (Truthdig)

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I think you can understand from the above why Marx was so intrigued by the accounts of the Iroquois League in Morgan’s work. The Iroquois nation was a living, breathing example of “primitive communism” in action. Marx took extensive notes on Morgan’s work. After his death, Friedrich Engels organized the notes and published them as The Origin of the Family, Private Property, and the State.

Subsequent scholarship in the late nineteenth century had confirmed that arrangements like those of the Iroquois were not the exception, but seemingly the norm all over the entire world, including Western Europe, which had begun as numerous tribal societies during the fall of the Western Roman Empire.

Thus, the idea that money and absolute private property were permanent, universal, and necessary features of the human condition was clearly contradicted by such accounts. If someone asked for an actual example of communism in action, here was something Marx and his followers could point to as an example of something very much like they were advocating to replace capitalism: collective ownership of the means of production, with economic and political decisions being made by collective deliberation among equals, cooperative labor, and everyone having access to the collective store of what was produced by the whole society. Inheritance was not bequeathed to individual offspring; rather essential resources were redistributed as needed. And leaders were elected and served for as long as they were seen to be able to perform their duties ethically. They could not pass down wealth and titles to their offspring in perpetuity (but their offspring could occupy the same office if the public so desired).

Unless one were to argue that the Iroquois and their culture were somehow unnatural, it would be impossible to deny such a thing was at least, in theory, possible. And if it was possible, the question became how best to make it happen, not whether such a thing could even exist, or whether it was somehow against human nature. As Marx and Engels concluded in Origin:

…once the gens is given as the social unit, we also see how the whole constitution of gentes, phratries, and tribes is almost necessarily bound to develop from this unit, because the development is natural. Gens, phratry, and tribe are all groups of different degrees of consanguinity, each self-contained and ordering it own affairs, but each supplementing the other. And the affairs which fall within their sphere comprise all the public affairs of barbarians of the lower stage.

When we find a people with the gens as their social unit, we may therefore also look for an organization of the tribe similar to that here described; and when there are adequate sources, as in the case of the Greeks and the Romans, we shall not only find it, but we shall also be able to convince ourselves that where the sources fail us, comparison with the American social constitution helps us over the most difficult doubts and riddles.

And a wonderful constitution it is, this gentile constitution, in all its childlike simplicity! No soldiers, no gendarmes or police, no nobles, kings, regents prefects, or judges, no prisons, no lawsuits – and everything takes its orderly course. All quarrels and disputes are settled by the whole of the community affected, by the gens or the tribe, or by the gentes among themselves; only as an extreme and exceptional measure is blood revenge threatened-and our capital punishment is nothing but blood revenge in a civilized form, with all the advantages and drawbacks of civilization.

Although there were many more matters to be settled in common than today – the household is maintained by a number of families in common, and is communistic, the land belongs to the tribe, only the small gardens are allotted provisionally to the households – yet there is not need for even a trace of our complicated administrative apparatus with all its ramifications. The decisions are taken by those concerned, and in most cases everything has been already settled by the custom of centuries. There cannot be any poor or needy – the communal household and the gens know their responsibilities toward the old, the sick, and those disabled in war. All are equal and free – the women included. There is no place yet for slaves, nor, as a rule, for the subjugation of other tribes…And what men and women such a society breeds is proved by the administration inspired in all white people who have come into contact with unspoiled Indians, by the personal dignity, uprightness, strength of character, and courage of these barbarians. p. 52

It’s also worth noting that humans have a capacity for sharing and cooperation as well as well as self-aggrandizing greed, as Burgis notes:

The usual socialist response to what I will call the Human Nature Argument is to question the truth of the premise. Where anti-socialists play up our capacity for selfishness, our cruelty, and our tendency to arrange ourselves into dominance hierarchies, socialists usually emphasize our capacity for cooperation, compassion, and solidarity. So, for example, in G. A. Cohen’s Why Not Socialism? we’re asked to wonder why society shouldn’t be able to function like a camping trip, where families share equipment and resources and whatever else they individually brought, rather than assert their exclusive use over those goods.

Socialism and Human Nature (Arc Magazine)

As we’ve seen, that’s pretty much how humans functioned for most of history. Most transactions are—by their very nature—communistic, as anthropologist David Graeber has often pointed out: When we are working on a project and ask our coworker to hand us a hammer from the toolbox, he doesn’t immediately turn around and ask ‘and what are you going to pay me for it?’.

In fact, as he also points out, corporations themselves are islands of communism floating in a sea of capitalism. I’ve worked for many corporations, and when I ask for a pen from the collective storeroom, I usually I get one. I don’t have to pay to put my food in the refrigerator. I don’t pay the electric bill for my individual computer or telephone. And when I ask a coworker to help me out with something, I don’t have to give him or her money over and above whatever he or she is being paid to be there. Thus, a corporation functions much like the “joint family” or household Maine described.

Similarly, while people do often have a tendency to be greedy and selfish, the degree to which we let them indulge in those impulses is entirely socially determined. Capitalism argues that the rich “deserve” their spoils, and that their hoarding behavior and lust for power will make us all better off in the long run due to the Invisible Hand. That view is getting harder and harder to justify with each passing year, especially as growth slows due to planetary (and other) limits. As Christopher Boehm argues in Hierarchy in the Forest, foragers practice a kind of “reverse dominance hierarchy” designed to keep the arrogant and greedy in check. As he put it, “In short…an apparent absence of hierarchy was the result of followers’ dominating their leaders rather than vice versa…an egalitarian relation between followers and their leader is deliberately made to happen by collectively assertive followers.” (3)

To bring up yet another nineteenth century scholar who hasn’t been mentioned yet, Piotr Kropotkin was a Russian writer of minor nobility who is associated with anarchism. Trained as a biologist, he expected to find a brutal “struggle for survival” everywhere in nature, as he had been taught by the followers of Darwin. Instead, everywhere he looked, he found cooperation to far more pervasive than competition in the realm of biological life:

Kropotkin expected to see the brutal dog-eat-dog world of Darwinian competition. He searched high and low—but nothing. “I failed to find, although I was eagerly looking for it,” Kropotkin wrote, “that bitter struggle for the means of existence, among animals belonging to the same species, which was considered by most Darwinists (though not always by Darwin himself) as the dominant characteristic of the struggle for life, and the main factor of evolution.”

Instead he saw mutual aid—everywhere. “In all these scenes of animal life which passed before my eyes,” Kropotkin wrote, “I saw Mutual Aid and Mutual Support carried on to an extent which made me suspect in it a feature of the greatest importance for the maintenance of life, the preservation of each species and its further evolution.”

And it wasn’t just in animals. The peasants in the villages he visited were constantly helping one another in their fight against the brutal environment of Siberia. What’s more, he noted a correlation between the extent of mutual aid displayed in a peasant village and the distance of that village from the hand of government. It was just as the anarchists had suggested. “I lost in Siberia,” he wrote, “whatever faith in state discipline I had cherished before. I was prepared to become an anarchist.”

The Russian Anarchist Prince Who Challenged Evolution (Slate)

Another example of humans voluntarily cooperating in extreme circumstances is given by Rececca Solnit’s book, A Paradise Built in Hell.

And so, it is very strange indeed that evolutionary biology and psychology have come to be associated with the reactionary right and wielded as weapons in their favor. That human’s evolved tendencies favor Right-wing ideals is a topsy-turvy inversion of what has historically been the nature of the arguments about what is closest to human nature.

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So the idea that communism is somehow uniquely “unnatural” is a very recent one, and not really consistent with the findings of anthropology. The people most closely studying primitive societies in the nineteenth century were the socialists, anarchists, Marxists, and similar philosophies, not the “Classical Liberals” or capitalists. It’s pretty clear from Adam Smith’s writing that, although he did an outstanding job describing the English mercantile economy of his own day, his historical knowledge was nonexistent. Even what little was known about primitive economies (for example, from accounts of Native Americans) was ignored by Smith, who instead used inductive reasoning to arrive as his incorrect account of primitive barter economies (which anthropologists universally acknowledge never existed). Even today, evolutionary biologists who promote the virtues of Neoliberalism (such as Steven Pinker) deride their intellectual opponents as “Marxists” (or, in the case of Jordan Peterson, as “Post-modern Neo-Marxists”).

When it comes to studying human nature, it was the socialist/anarchist Left, not the laissez-faire Classical Liberals, who were diving into the anthropological literature and grappling with it. In those days, the “human nature” argument was far more associated with the socialist Left than the apostles of capitalist Progress. Far from being unnatural, Marxists would have seen their ideas as conforming to a more natural, egalitarian social order that had been usurped, first by kings and priests, and then by greedy capitalist bosses.

The opponents of socialism and communism, by contrast, had to argue against earlier and more “natural” forms of human social organization being superior to the commercial capitalism of their day. In these cases, primitive societies—presumably comporting far more closely with evolved human nature—were considered to be inferior and poor examples to emulate—commercial Capitalism and markets were simply a “higher” and “more evolved” form of social organization, they asserted.

Really, according to all the evidence, it is capitalism that is unnatural.

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Now, the real argument against the information above isn’t that it is unnatural. It is this: ideas about how our ancestors lived in small, horticultural communities surrounded by kith and kin centuries or millennia ago are not applicable to modern industrial societies with global trade networks and millions of unrelated strangers interacting on a daily basis.

That’s true, but notice that the argument has been completely flipped on its head! It’s not that socialism is unnatural, it’s that it is incompatible with the unnatural environment we find ourselves in today.

And that’s a very different argument. By this standard, everything about our current way of life is unnatural, and appeals to evolutionary biology and psychology to justify the status quo are deeply flawed from the start.

Not only that, as Burgis points out, proponents of socialism are more concerned with ideas surrounding such mundane issues as ownership, legal rights, wealth and property distribution, and so forth, and it would be preposterous to claim that there is some “natural” form of any of these things that we can discern from a study of evolutionary biology. All of those things are, to one degree or another, recent artifices necessary for modern society to function. Being artifices, we can arrange them as we wish. Evolution—whatever it supposedly decrees—is no impediment.

Even if Pinker and Uygur did have a reasonable objection to a specific vision of socialism put forward by Marx, how is this is supposed to generalize into what Pinker breezily lumps together as “socialism and communism” in general? If “from each…to each” is unrealistic, it hardly follows that public ownership of the means of production is intrinsically unrealistic.

Let’s assume for the sake of argument that Marx was wrong to think that the combination of automation and collective ownership of machines would one day make it unnecessary for human butchers, brewers, and bakers to continue to be given material incentives to produce our dinners. I would argue that we can have socialism and incentives. It’s unlikely that workers in a democratic economy would feel the need to incentivize anyone by paying them 287 times what others were paid — the average pay differential between workers and CEOs last year in the United States — but this doesn’t mean they’d settle on completely flat pay scales either. If anything, they might reverse some of the inequalities we’re accustomed to under capitalism.

Socialism and Human Nature (Arc Magazine)

Perhaps the most basic argument against the fact that the kind of capitalism we’re living under now is somehow compatible with basic human nature is that fact that we’re so disturbed by the current levels of hyper-inequality. When we see the excesses of the super-rich, or how poor people are being taken advantage of, we get angry (those of us who aren’t Libertarians or Neoliberals, anyway). The current levels of anger and frustration at the grotesque levels of inequality present in modern societies should serve as proof that there is nothing “natural” about our current arrangement from an evolutionary standpoint.

Add to that the fact that high levels of inequality are correlated with social instability and pathologies like depression and suicide. Whatever its statistical flaws, the book The Spirit Level does make a good case that high inequality isn’t healthy for societies. And Marx was hardly the first to point this out. From the Gracchi brothers, to Wat Tyler and John Ball, to the Diggers, there has always been resistance to extreme wealth inequality. After all, no one gets disturbed about too much generosity or too much sharing, or a dearth of depression and suicide. Even Thomas Jefferson was disturbed by inequality:

The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God. These are grounds of hope for others…

Ultimately, one could argue that our modern way of life, whatever our political beliefs—capitalism, libertarianism, communism, socialism, anarchism, or whatever—is contrary to human nature, no matter who owns the means of production or how we organize work and leadership. But that’s a whole other can of worms…

(1) The Psychology of Patriotism, The Shepherd Express, July 02, 2019.
(2) Source (Google Books)
(3) Christopher Boehm, et. al., Egalitarian Behavior and Reverse Dominance Hierarchy (PDF)

The Origin of Paper Money 8

US one dollar bill, obverse, series 2009.jpgThis is sort an afterward or corollary to our story of paper money. This describes how we here in the United States ended up with the “Almighty Dollar.” Believe it or not, this was not present after the Revolution, but took a very long time to materialize.

The history of central banking in the U.S. is too much to get into here, but this post from the Minneapolis Fed sums it up probably better than I could: A History of Central Banking in the United States. It’s actually a good summary and a quick read. The WEA Pedagogy blog cited earlier has come out with a second post on the development of central banking in Europe in the nineteenth century: Central Bank History (2/5) 1814-1914 Hundred Years Peace

Believe it or not, at this time, aside from minted coins, there was no national paper currency in the United States. Not only that, but state governments were actually prohibited from issuing their own currency! Instead, as in other Western nations, the government permitted people to use whatever they wanted as currency. Only private banks issued banknotes:

Before the Civil War, the United States was on a bimetallic system with both gold and silver serving as the basis for money. Practically, however, gold was the de facto standard since very little silver coin was in circulation. American currency consisted of bank notes and coin, with the bank notes convertible on demand into specie: paper money was thus “backed” by gold.

The federal government issued no paper currency of its own and there were no federally chartered banks; state banks issued thier own bank notes. Thus in the 1850s the domestic monetary system was comprised of may hundreds of different state banks, each issuing its own paper currency.

This was problematic since the value of a bank note (as opposed to its face value) depended on the financial status of the issuing bank, and, with so many different banks, it was hard to know what money was worth.

Furthermore, there were no deposit insurance programs and no central bank. In contrast to the state banking system, the international gold standard served the United States well since its biggest trading partner and creditor, Great Britain, was also on the gold standard.

The Color of Money and the Nature of Value: Greenbacks and Gold in Postbellum America (American Journal of Sociology) p. 10 (PDF)

In this era, banking was regulated by the states. Despite their importance to the financial system, pretty much anyone could start a bank and issue their own banknotes; all they needed was sufficient startup capital. This was called “free” banking by its proponents, but it acquired another less complimentary nickname: wildcat banking

By action of the state legislatures a bank was held to be not a corporation, which then and for many more years required a charter from the state, but a voluntary association of individuals and thus, like blacksmithing or rope-making, open to anyone. There were rules, most notably as to the hard-money reserves to be held against notes and deposits…But frequently failure to abide by regulations was discovered only after the failure of the bank made the question academic… (Galbraith, p. 88)

Although banks were required to held enough gold reserves to be able to redeem their banknotes in specie on demand, often that could be circumvented just by moving a set amount of gold around the state ahead of the regulators, as in Michigan:

…[I]n Michigan…commissioners were put in circulation to inspect the banks and enforce the requirement [of 30 per cent reserve of gold and silver against note circulation]…Also put in circulation just in advance of the commissioners, was the gold and silver that served as the reserve. This was moved in boxes from bank to bank; when required, the amount was extended by putting a ballast of lead, broken glass and (appropriately) ten-penny nails in the box under a thinner covering of gold coins. p. 88

The results, as one might expect, were not good:

by the time of the Civil War, the American monetary system was, without rival, the most confusing in the long history of commerce and associated cupidity. The coins coming to the Amsterdam bourse were simplicity itself by comparison.

An estimated 7000 different banks notes were, in greater or lesser degree of circulation, the issue of some 1600 different or defunct state banks.

Also, since paper and printing were cheap and the right of note issue was defended as a human right, individuals had gone into the business on their own behalf. An estimated 5000 counterfeit issues were currently in circulation.

No one could do any considerable business without an up-to-date guide that distinguished the wholesome notes from the less good, the orphaned and the bad. A Bank Note Reporter or Counterfeit Detector was essential literature in any significant business enterprise. (Galbraith, p. 90)

It was not a recipe for financial stability, to put it mildly. NPR’s Planet Money describes the situation on the ground during the pre-war era of wildcat banking:

So I’m looking at the Howard Banking Company’s $5 bank note. It’s…a Santa Claus note…You get a picture, I think, of the bank president up in the left-hand corner. And then right in the middle, you get a picture of Santa Claus on a sleigh.

So what basically this note will do is that if you have this note, Santa Claus and all, you’ll go to the Howard Banking Company. And they are obligated to pay you $5 in gold and silver coins if you demand it at their bank.

If you demand it at their bank, but nobody else outside that bank is required to give you gold or silver for the note or, for that matter, even to accept it at all. Sometimes people might choose to take the bill at full face value. Sometimes they might not want it. Sometimes they’ll say, yeah, I’ll accept it but it’s a $5 bill. I’ll give you $4 for it. A dollar bill was not always worth a dollar in this world.

Now, you could argue – and some people do – that this universe of 8,000 different kinds of currency is the free market at work and that this market for bank notes helped keep banks honest. But this world, it did create huge problems for people…

The Birth Of The Dollar Bill (NPR)

What kind of problems did it create?

What if you run a store? What if you run that bar in New York and some guy walks in and gives you some bill that you’ve never seen before? What do you do? Well, that’s when you take out your trusty bank note reporter, this huge book the size of a phone book. This thing, it tells you what bills are in circulation, what they’re supposed to look like and how much they might be worth.

You would take out this big…encyclopedia-looking thing…You’d look in this. You’d find the Howard Banking Company list. It would then tell you where the bank was. And then it would tell you at what discount the note was to be accepted at.

So, for instance, if this was a particularly good bank, $5 note would trade at $5. You, as a bartender, would accept it at that. If it was trading at a discount, it would also say that. If the bank had defaulted, you’d know that. And you’d know that it’s worthless and not to accept it.

And these books, new ones come out every month to keep up with the news. And you have a different book for every city. This is because a bill from, say, a Boston bank might be worth $5 in Boston but only $4 in New York. Usually, the further you get from a bank, the less its money is worth. People’s money loses value just because they’re traveling.

The Birth Of The Dollar Bill (NPR)

In fact, it could be argued that entire monetary history of the United States after the 1830’s was one long clusterfuck. Although the United States would accidentally create, for the first time, a true national paper currency due to the financing needs of the Civil War, it would undermine those innovations after the war by trying to go back on the gold standard. The use of a bimetallic (gold & silver) standard was a sort of compromise  position between gold and fiat. But back then endless debates about the true nature of money (much like today) had no clear resolution:

In the accepted, and it must be added, far from the inspired view of the monetary history of the United States, the years after 1832 were deplorable. Free banking, the resulting bank failures, then greenbacks, agitation for more greenbacks and the pressure, partly successful, for the coinage of cheap silver combined with the recurrent panics to make the financial system of the United States, as Andrew Carnegie held, ‘the worst in the civilized world.’ (Galbraith p. 85)

Greenbacks and National Banks

What brought this madness to an end was, once again, war–this time the United States Civil War. The northern and southern United States split into two separate nations who immediately went to war with each other for control of the North American continent, especially its western expansion.

The industrialized Union needed to raise funds to prosecute its war against the predominantly agrarian Confederacy. because the Confederacy was the source of nearly all the cotton for a massive sector of England’s economy, the South believed that England would intervene on their behalf to put an end to the “cotton famine.” England did not, instead finding other sources of cotton in Egypt and India.

The escalating cost of the war forced the Union government to go off of the international gold standard and–much like in the Revolutionary war—issue fiat money. And the ultimate in fiat money were the greenbacks. They were called this because they were printed in green ink (as is U.S. money today, which is often informally referred to as ‘greenbacks’, but this is something different). The U.S. government issued slips of paper and used them to pay its contractors and suppliers. It declared them to be good for payment of all domestic debts, by law (fiat). And, crucially for MMT concepts, they could be used to settle all debts with the federal government—i.e. taxes, fees and fines. Greenbacks were not good for international debts, customs duties and interest payments on the national debt. Greenbacks were not convertible into gold, and no one claimed that they were. But they were the first true national paper currency, and were useful all across the country (outside of Dixie), unlike the state bank notes. Thus, they began to circulate more broadly throughout the economy.

With the outbreak of the [Civil War], the U.S. economy was severely disrupted, and U.S. government revenues plunged as Union military expenditures soared. The fiscal crisis of the Northern state meant that it could not pay its suppliers and contractors. Moreover, speculators hoarded gold and there was a general liquidity crisis.

By the end of 1861, Northern banks had to suspend convertibility and cease to exchange specie for their bank notes. Thus, the United States went off the gold standard.

The daunting problem facing Salmon Chase, then secretary of the treasury, was a daunting one: how to fund public spending with a huge deficit and an inconvertible currency?

The first step toward a solution began in early 1862 when the government issued greenbacks, inconvertible paper money that by law was legal tender…The government also raised new taxes (including tariffs and an income tax) and borrowed to cover the deficit…By the end of the war, issuance of $450 million of greenbacks had been authorized, and the total currency more than doubled between 1861 and 1866…

Greenbacks were never thought to be a permanent solution, much less a new type of currency for the United States; rather, they were seen as a stopgap measure. It was thought that after the war, they would be replaced by “real” money, that is, money backed by gold:

…this was basically the first dollar bill issued by the U.S. government, though during the war, these dollars, they were not always worth a dollar in gold…So this was not a plan to establish a single national currency. It was a plan to fund war…

[T]he greenbacks…were seen as an emergency thing, something a government would only do in time of war. The underlying belief was that these greenbacks were temporary in the sense that we would issue them, the war would end and that…within 10 years, they’d be gone. The problem was that the consumers kind of liked them. Would you rather use a bill issued by a bank you’re not sure exists or would you want to use a bill that everyone recognizes?

Despite increased taxes and the issuance of greenbacks, the government’s costs continued to soar as the war raged on:

Thus, federal revenues grew thirteenfold…but…the national debt grew from $65 million to 2.7 billion…

To cover this national debt, the government needed to borrow. How would it do that? The usual way for governments to borrow was to sell war bonds. But the Union came up with an ingenious idea to encourage loans to the government: If one bought U.S. government bonds (which is loaning money to the government, remember), then they could use those bonds as backing to open a national bank, as opposed to a state bank. Thus, a system of national banks was created for the first time.

The national banks were different from the state banks in several crucial ways. Most notably, if you had bonds held by the U.S. government, you could issue “official” U.S. government banknotes against them. What was backing these banknotes was, of course, the government’s debt (i.e. the loans to the government). Thus, once gain we see that paper money represents the government’s liabilities. The more government debt, the more money that could be issued. This is basically the MMT conclusion: the government’s debt represents the savings surplus of the private sector.

To encourage loans to the government, a new system of nationally chartered banks replaced the old one of state-chartered banks … national banks … are regulated not by states but by the federal government. These banks are created during the Civil War and they also help raise money for the Union because in order to be a national bank, you had to buy government bonds. In other words, you had to lend money to the government.

The Birth Of The Dollar Bill (NPR)

The National Banking Act of 1863 mandated the creation of national banks whose notes were backed by government bonds. Upon deposit of federal bonds with the comptroller of the currency, investors could establish a private bank and issue national bank notes up to 90% of the value of the bonds….this made it profitable to organize national banks and thus to loan money to the government by purchasing its bonds.

The government also placed a tax on the state bank notes:

Though predictably the state banks opposed the National Bank Act, initially they did not suffer. The suspension of specie payments in 1861 relieved them of the always unwelcome need to redeem their notes in hard cash. The greenbacks … were made legal tender and served instead.

But on 3 March 1865, a mere month before Appomattox, the financial power again asserted itself. Congress was persuaded to pass additional legislation sweeping all state notes away.

A tax of 10 per cent per annum was levied on all state bank issues with effect from 1 July 1866. It was perhaps the most directly impressive evidence in the nation’s history that the power to tax is, indeed, the power to destroy.

Bank failures continued after the banning of the notes and on some years were epidemic – 140 suspensions in 1878; 496 in 1893; 155 in 1908. Most of the casualties were small state banks. For another sixty-five years these continued to be created. and the resulting loans and deposits continued to put or sustain marginal but aspiring farmers and deserving and undeserving entrepreneurs in business. (Galbraith, pp. 91-92)

Between the failures of state banks and the increasing desire to use national banks, the dollars issued by the national banks gradually took over–another manifestation of Gresham’s Law. This proves another point – that the credit that is most favored is that of the sovereign rather than that of other individuals.

Of course, you could say the the government put their thumb on the scale by taxing the state banknotes.This is often depicted by the usual suspects as a diabolical statist plan by the “evil” government to take over the money supply and crush “freedom”. While I couldn’t find the rationale for doing this, one could make the point that since the state banks were not providing funds for the war effort, the tax was an entirely justifiable way to force them to contribute to the war effort in another way.

The net effect was a decline in state banks and an increase in the importance of the national banks:

From 1860 to 1870 the number of state banks declined from 1,579 to 261, while the number of national banks went from zero to 1,612. National bank notes were legal tender in the same way that greenbacks were: payable for all public and private debts, except for import duties and the interest on the national debt. The new national banking system also helped standardize the currency, although that was not its primary intent.

For all its problems, the national banking system fulfilled its original purpose of selling government bonds and funding the war. In addition to would-be bankers, government bonds were sold directly to the public, an innovation promoted by the financier Jay Cooke. By enlisting a large sales force, advertising in the newspapers, and appealing to patriotism, Cooke was able to sell hundreds of millions of dollars worth of bonds.

The Color of Money and the Nature of Value: Greenbacks and Gold in Postbellum America (American Journal of Sociology) p. 10 (PDF)

The United States had established—totally by accident—a consistent national currency for the first time after the Civil War:

So after the Civil War, the only paper money that’s circulating is the greenbacks and the bank notes issued by the national banks. And those bank notes issued by the national banks, they all start to look alike. So in the post-war years, there’s this convergence. Bills are looking more and more uniform. And for the first time, they’re all worth what they say they’re worth…So the United States at this point has kind of accidentally stumbled on an economic innovation – a $10 bill that is worth $10 in New York and in Connecticut and in New Jersey. You can take it all the way to Wyoming and it is still worth $10. And now, finally, if you’re a bartender – life is much easier…

So this really is how we got from a world of 8,000 kinds of money and of monthly guides that tell you if a $5 bill is actually worth $4 to the world basically that we know today, where if somebody gives you a $5 bill, you know it’s worth $5. This makes travel and trade much, much more efficient.

After the war, the debate was, once again, whether or not to go back on the gold standard. But there was a problem: thanks to the war, there was simply too much money floating around. Some way had to be found of reducing the amount of greenbacks in circulation. One enthusiastic goldbug even advocated a weekly bonfire of greenbacks! The problem was that such a policy would be deflationary at at time when farmers and small businessmen were hurting:

Wartime inflation had depreciated greenbacks in relation to gold, and so, for example, the value in gold of $100 of greenbacks averaged $97.00 during February 1862 but was down to $35.00 by January 1864. (I have rounded these numbers to the dollar-CH)

If greenbacks were convertible to gold, enterprising persons could buy them cheaply on the market and “sell” them at face value to the Treasury and thus make a profit. Hundreds of millions of dollars of greenbacks were in circulation, and had the government declared these paper notes convertible into specie, the Treasury would soon have exhausted its entire gold supply.

And so, if there was any hope of making money convertible into gold once again, the first step would have to be a drastic reduction of the amount of greenbacks in circulation. The government attempted to retire the greenbacks, but their timing was terrible as the nation was slipping into another recession. The contraction of the money supply especially hit debtors like small farmers. As a result of popular pressure, the power to retire greenbacks by the treasury Secretary was rescinded; only about $48 million were retired.

Resistance to…hard money policy raised the larger question or whether a return to gold was desirable and whether resumption was a suitable goal for monetary policy. Related to this was the issue of how to repay the national debt, for although the law required that interest be paid in coin (and not in greenbacks), it was unclear whether the principal also had to be repaid in coin.

To do so seemed particularly unfair to some since in the darkest days of the war the government sold its bonds for greenbacks. As a result, speculators could buy, for example, $100 in greenbacks on the market with only $35.00 in gold, and with those greenbacks purchase $100 in government bonds, hoping that both the interest and principal would be repaid in gold.

The Color of Money and the Nature of Value: Greenbacks and Gold in Postbellum America (American Journal of Sociology) p. 10 (PDF)

But why retire the greenbacks at all? As Benjamin Franklin had pointed out long ago, an increase in the money supply increases economic activity. And constraining money creation with something like the gold standard severely limited the amount of money that could be issued by government, much as the hated British had done to the colonies back before the Revolution.

The debate over the gold standard shaped up along economic lines:

Farmers and other agrarian groups were heavily reliant on credit and so were hurt when money became tight. Thus, the ideas of the greenbackers found a receptive audience in American farmers who would later support the Populist movement. Greenbackism also enjoyed a brief popularity among mercantile traders, insurance brokers, capitalists of the Pennsylvania steel industry, and certain sectors of the labor movement.

Bullionism, on the other had, found support among bankers, financiers, bondholders and importers, all of whom stood to lose from inflation and gain from an appreciation of the currency.

The Color of Money and the Nature of Value: Greenbacks and Gold in Postbellum America (American Journal of Sociology) p. 10 (PDF)

In the 1870’s, the “hard money” position won out and the United States went back on the gold standard. The result was a general deflation and a series of painful crashes and depressions, including the “Long Depression” (which was called the “Great Depression” prior to 1929). Between the end of the Civil War and the Panic of 1907, there were a large number of financial panics, crises, depressions, etc. You can go visit Crisis Chronicles on the Liberty Street (NY Fed) blog to read about them in more detail. In brief, here are some of the major ones:

– Panic of 1873, a US recession with bank failures, followed by a four-year depression
– Panic of 1884
– Panic of 1890
– Panic of 1893, a US recession with bank failures
– Panic of 1896
– Panic of 1901, a U.S. economic recession that started a fight for financial control of the Northern Pacific Railway
– Panic of 1907, a U.S. economic recession with bank failures.

List of economic crises (Wikipedia)

The banking panic of 1907 eventually led to the creation of the Federal Reserve System, but that’s a story for another time.

The Greenback Legacy

By allowing the government to increase the money supply without worrying about convertibility to gold or increasing debt, the economy improved. After the war, many believed that the government should continue to do this: they even formed a Greenback Party to advocate for this.

Even today, some have made an argument for such a policy to be revived. Ellen Brown has written about this on her Web of Debt blog:

Helicopter money is a new and rather pejorative term for an old and venerable solution. The American colonies asserted their independence from the Motherland by issuing their own money; and Abraham Lincoln, our first Republican president, boldly revived that system during the Civil War. To avoid locking the government into debt with exorbitant interest rates, he instructed the Treasury to print $450 million in US Notes or “greenbacks.” In 2016 dollars, that sum would be equivalent to about $10 billion, yet runaway inflation did not result. Lincoln’s greenbacks were the key to funding not only the North’s victory in the war but an array of pivotal infrastructure projects, including a transcontinental railway system; and GDP reached heights never before seen, jumping from $1 billion in 1830 to about $10 billion in 1865.

Indeed, this “radical” solution is what the Founding Fathers evidently intended for their new government. The Constitution provides, “Congress shall have the power to coin money [and] regulate the value thereof.” The Constitution was written at a time when coins were the only recognized legal tender; so the Constitutional Congress effectively gave Congress the power to create the national money supply, taking that role over from the colonies (now the states).

Outside the Civil War period, however, Congress failed to exercise its dominion over paper money, and private banks stepped in to fill the breach. First the banks printed their own banknotes, multiplied on the “fractional reserve” system. When those notes were heavily taxed, they resorted to creating money simply by writing it into deposit accounts. As the Bank of England acknowledged in its spring 2014 quarterly report, banks create deposits whenever they make loans; and this is the source of 97% of the UK money supply today. Contrary to popular belief, money is not a commodity like gold that is in fixed supply and must be borrowed before it can be lent. Money is being created and destroyed all day every day by banks across the country. By reclaiming the power to issue money, the federal government would simply be returning to the publicly-issued money of our forebears, a system they fought the British to preserve.

Trump’s $1 Trillion Infrastructure Plan: Lincoln Had a Bolder Solution (Web of Debt)

And just like back in the late 1800’s, such ideas are opposed by a radical conservative movement that wishes to go back to free (wildcat) banking, abolish the central bank altogethet (just like Andrew Jackson), and go back on the gold standard. One prominent example is Gary North:

Ellen Brown is the latest in a long line of pro-fiat money, anti-gold currency, monetary statists who have infiltrated the conservative movement. They have accomplished this for over 50 years by the tactic of wrapping themselves in a flag of opposition to the Federal Reserve System. I call them false-flag infiltrators.

False-flag infiltrators are remnants of a left-wing American political movement of the late 19th century: the Greenbackers, named after the green currency issued by the North during the Civil War. These paper bills were unbacked by gold. Consumer prices rose by 75%, 1861-65.

The Greenbackers were opposed to the gold standard because it kept prices low. They wanted the government to inflate the currency, so that debtors could pay off their debts with cheap money. They had a small political party for almost two decades, the Greenback Party. It 1878, it merged with a labor Party to become the Greenback Labor Party. It went out of existence after 1888. Its main leader, James Weaver, co-founded the Populist (People’s) Party in 1891. It was a farm-bloc party that promoted fiat money in order to let farmers pay their debts with cheap money and also because they thought inflation would raise farm products’ prices more than the prices of other goods.

There was never any question of the Greenbackers’ politics. They were leftists, and openly sided with government controls on the economy…

https://www.garynorth.com/public/department141.cfm

Of course, today paper isn’t used very much anymore, and neither are coins. I’m sure most of us have used plastic debit cards and credit cards (hopefully paying it off immediately) to buy things. Money is now primarily electronic transfers between computer spreadsheets maintained by banks. Virtual money.

Conclusions

So what (if anything) have we learned about paper money?

Well, the first lesson, to me, is that paper money was inevitable. There was simply no amount of gold and silver anywhere in the entire world to run the kind of economy we were entering after 1700, much less today. All of the gold ever mined in human history would fit into a cube 20 meters on a side. Such a cube could easily fit on one of those giant supertankers bringing our goods over from China many times over.

When gold and silver was not enough, the quest was on for another thing to back paper money. Land was the first idea, as we’ve seen. Eventually paper money money became backed by the sovereign’s debt. Paper money became circulating government liabilities. It still is today.

Paper money was invented independently in many places, indicating to me that it must have been an inevitability. The Chinese were the first to do it, and used it on and off for about 500 years (c. 950 to 1455). Ironically, they stopped using it just at the time when the New World was being colonized by Europeans, which sent massive amounts of silver their way. But soon it was invented independently in the North Atlantic trading economies, which went on to dominate the rest of the world.

Long before “official” paper money was issued by central governments, there were things like bills of exchange, municipal bonds and annuities, and shares in joint-stock corporations. That is, much of the value transfer in the European economy was already done via paper instruments and ledgers long before paper money came on the scene, and so it’s inevitable that people made the leap. They just had to get over the cultural baggage of “money” being simply a substitute for precious metals—baggage that even today many people hold on to. Money creation was done by private banks via the stroke of a pen long before governments began issuing it. Even today, banks create most of the money in the world via keystrokes.

The first paper money were simply IOUs. Such IOU’s were issued by private individuals before governments. Eventually the government took over and issued their own IOUs, which soon changed hands as money. This is because the government’s credit is usually the most reliable. This feeds into ideas that there is a “pyramid” of what constitutes money, with the government’s money as the ultimate means of settlement at the apex.

The faith in paper money is based on the stability of the government issuing it. Just like the credit of an individual determines how much faith people have in an IOU, so too with governments. The IOUs of Zimbabwe or Venezuela are very different than those of Japan or Switzerland. Throughout history, problems with money are almost always related to political crises, and not simply to “debasement”. Debasement of currency is usually more of a signal of decline than a cause.

Another point is one I’ve made repeatedly: every major financial innovation has been created in order help states fund wars. That is, financial innovations were ways for states to aggregate and control the resources necessary to wage war. They were then later pressed into the service of trade and technological development. Paper money is a prime example of this. No country in history has decided to simply lose a war or surrender to a foreign power in order to limit their money supply or adhere faithfully to a precious metal standard.

Paper money was an instrument of revolution. How much has the modern world been affected by its creation? Would there even be a modern world without it? Without the ability to issue money in excess of the gold and silver floating around, neither the American nor French Revolutions would have succeeded. These paved the way for everything that came after—both socially and politically.

Is there a danger of uncontrollable inflation with paper money? Sure. But incomprehensibly more damage is done to the average citizen by locking your financial system into artificial handcuffs. Such systems are designed exclusively for the benefit of international merchants (who wish to have the money they make in one country’s market have the same value in their home country), while at the same time causing terrible harm to domestic populations who suffer from the resulting depressions.

As Tim Harford puts it, “While we may not always be able to trust central bankers to print just the right amount of new money, it probably makes more sense than trusting miners to dig up just the right amount of new gold.” He adds, “mainstream economists generally now believe that pegging the money supply to gold is a terrible idea. Most regard low and predictable inflation as no problem at all – perhaps even a useful lubricant to economic activity.”

In fact, it is a lack of inflation which makes debts harder to pay off. Hard-money policy has always been advocated by bankers and other big creditors, and yet the reactionary Right has somehow made this into a populist cause. Incredible!

This Reddit comment succinctly sums up the problems with tying money to gold, or anything else (I have combined two comments here):

1. Gold is scarce, and not enough of it is being found to match the increasing GDP of the world. Therefore it’s deflationary, and tends to entice people to hoard it, because simply owning the wealth makes you even wealthier as demand for it increases dramatically over supply. This chokes your economy as the poor fight over scraps and the rich do nothing. Leads to severe deflationary recessions every 5-10 years.

2. Finding a large cache of gold can royally fuck up an economy as wealth plummets overnight. There is literally nothing but luck controlling this. There’s an instance in history, of an African warlord who made a great trek to the middle east, giving out vast supplies of his wealth … during the trip, because he had so much of it, it was useless to him. He ended up crashing nearly every economy he passed through. (Mansa Musa)

3. Gold is actually very abundant on earth, but not easily accessible. There’s trillions of tons in our core, for example. And billions of tons dissolved in our oceans. Right now, gold isn’t worth the effort to extract it; but make it the driver of the worlds largest economy and people will start working on technology to get the gold out of the ocean. Pretty soon the economy will crash again.

4. In the distant future, all materials will be able to be produced in fusion furnaces. All elements were created from fusion of hydrogen during supernovas, and once fusion technology gets to the right place, we’ll be able to make any stable element we want. Gold, at that point, will become infinite. It is for this reason that we’d better figure out how to perfect fiat currencies, because we’re at the precipice of a demand-less society. One could make the argument that energy then becomes the chief currency of the world (as if it already isn’t!), but our sun provides more than enough for our civilization a billion times over.

Bottom line; basing currency on physical items is dumb and constrains us too much. It leads to crashes and gives us absolutely no ability to prevent them from happening. It’s dumb.

People … forget the single most obvious answer, which also happens to be a major reason we ditched it in the first place: it would allow any other country of sufficient size (read: China, Japan, Britain, the EU, and possibly Russia, Saudi Arabia, Australia due to their hard asset base(s)) to manipulate our currency by flooding/hoarding gold on the open markets.

Does anyone, who seriously understands international finance, think that if we handed the keys to our economy to China, that they wouldn’t use it to their ends? People that are pro-gold are a special breed of stupid.

It’s also worth noting that persistently high inflation is almost always due to other boneheaded things that governments do above and beyond simply “money printing.” In the Unites States in the sixties and seventies, we decided to ramp up a war on the other side of the world because of the “domino effect.” And we didn’t raise taxes to pay for it. We also built our entire economy around a substance whose supply ended up being controlled by countries who hated us (i.e. oil). Boneheaded!

All of this goes to say that given the history of paper money, the description of how our money system works by MMT seems basically correct. And, as MMT advocates point out, it is descriptive more than prescriptive. However, a proper understanding of what money is and how it works in modern industrial economies does lead to some policy recommendations. Perhaps the simplest one is this: any politician who claims that “we can’t afford it” should be voted out of office immediately. Another is that the low-information voters who claim to be “socially liberal but economically conservative” are just middle-of-the-road dimwits who haven’t a clue about how money and government finance work and should have their voting rights revoked.

Sources

I’ve mentioned some of the sources I’ve used throughout this series of posts, but I thought I’d list them here for convenience.

The major sources were Money: Whence it Came, Where it Went by John Kenneth Galbraith, originally published in 1975, with a revised version released in 1995 which is the the one I used. The other is The History of Money by Jack Weatherford, which came out in 1998. This one is a bit outdated, and ignores the insights of more in-depth and recent works in monetary theory.

One particularly notable one is this one: Money: 5,000 years of Debt and Power by Michel Aglietta. This is from Verso and was originally published in French.

Another major source is this article from The New Yorker: The Invention of Money

Crisis Chronicles is a series of posts by the New York Federal Reserve on its blog Liberty Street Economics: https://libertystreeteconomics.newyorkfed.org/crisis-chronicles/

There is a good summary of the various chapters of Glyn Davies’ History of Money on this site: http://projects.exeter.ac.uk/RDavies/arian/llyfr.html

The WEA Pedagogy Blog is doing a 5-part series on the history of central banking (also accessible on the Real World Economic Review blog). Part one is available here: https://weapedagogy.wordpress.com/2019/03/31/origins-of-central-banking/

The Minneapolis Fed has good history of central banking in the United States as noted above, and is available here: A History of Central Banking in the United States.

I’ve also used the following PDFs: Benjamin Franklin and the Birth of a Paper Money Economy by Owen F. Humpage

Paper Money and Inflation in Colonial America by Owen F. Humpage

The Color of Money and the Nature of Value: Greenbacks and Gold in Postbellum America by Bruce G. Carruthers and Sarah Babb

Land Bank Proposals 1650-1705 by Charlie Landale

If podcast are your preferred medium, these two are good. The first is Tim Harford’s recounting of the birth of paper money in China in his podcast 50 things that made the modern economy: https://www.bbc.co.uk/programmes/p059c7g1

And NPR’s Planet Money podcast did a podcast on the birth of the dollar bill after the Civil War: Episode 421: The Birth Of The Dollar Bill

The Origin of Paper Money 7

It’s here that we finally get to what’s really the heart of this entire series of posts, which is this: in the West, paper money has been an instrument of revolution.

Both the American and French Revolutions were funded via paper money, and it’s very likely they could not have succeeded without it. It allowed new and fledgling regimes to command necessary resources and fund their armies, which allowed them to take on established states. While such states have mints, a tax base, ownership of natural resources, the ability to write laws, etc.; a rebellion against an established order has none of these things. So, to raise funds, the ability to issue IOUs as payment makes being able to start a revolution far more likely. As we’ve already seen, just about every financial innovation throughout history came about due to the costs of waging wars. Paper money was no exception.

One might even go so far as to say that the American, French and Russian Revolutions would never have been able to happen at all without the invention of paper money!

Washington Crossing the Delaware by Emanuel Leutze, MMA-NYC, 1851.jpg

1. The United States

Earlier we looked at the financial innovations that the colonies undertook to deal with the lack of precious metals in circulation. Wherever paper money and banks had been created, commerce and prosperity increased.

Then it all came to a screeching halt.

The British government passed laws which forbade the issuing and circulation of paper money in the colonies. The monetary experiments came to an end. As you might expect, the domestic economy shrank, and commerce was severely constricted. Of course, the colonists became quite angry at this turn of events.

British authorities initially viewed colonial paper currency favorably because it supported trade with England, but following New England’s “great inflation” in the 1740s, this view changed. Parliament passed the Currency Act of 1751 to strictly limit the quantity of paper currency that could be issued in New England and to strengthen its fiscal backing.

The Act required the colonies to retire all existing bills of credit on schedule. In the future, the colonies could, at most, issue fiat currencies equal to one year’s worth of government expenditures provided that they retired the bills within two years. During wars, colonies could issue larger amounts, provided that they backed all such issuances with taxes and compensated note holders for any losses in the real value of the notes, presumably by paying interest on them.

As a further important constraint on the colonies’ monetary policies, Parliament prohibited New England from making any fiat currency legal tender for private transactions. In 1764, Parliament extended the Currency Act to all of the American colonies.

Paper Money and Inflation in Colonial America (Owen F. Humpage, Economic Commentary, May 13, 2015)

To get around the prohibition on governments issuing paper notes as IOUs, banking may have filled the void. But that option was also cut off by the British government. Last time we saw that the South Sea Bubble, along with a panoply of related schemes, had nearly taken down the entire British economy (as it had done in France). In response, Parliament passed the Bubble Act, which forbade any chartered corporations except those expressly authorized by a Royal Charter. This effectively put the kibosh on banking as an alternative source of paper money in the American colonies.

Given their instinct for experiment in monetary matters, it would have been surprising if the colonists had not discovered or invented banks. They did, and their enthusiasm for this innovation would have been great had it not also been systematically curbed.

In the first half of the eighteenth century the New England colonies, along with Virginia and South Carolina, authorized banking institutions. The most famous, as also the most controversial of these, was the magnificently named Land Bank Manufactory Scheme of Massachusetts which, very possibly, owed something to the ideas of John Law.

The Manufactory authorized the issue of bank notes at nominal interest to subscribers to its capital stock – the notes to be secured, more or less, by the real property of the stockholders. The same notes could be used to pay back the loan that their issue had incurred. This debt could also be repaid in manufactured goods or produce, including that brought into existence by the credit so granted.

The Manufactory precipitated a bitter dispute in the colony. The General Court was favorable, a predisposition that was unquestionably enhanced by the award of stock to numerous of the legislators. Merchants were opposed. In the end, the dispute was carried to London.

In 1741, the Bubble Acts – the British response, as noted, to the South Sea Company and associated promotions and which outlawed joint-stock companies not specifically authorized by law – were declared to apply to the colonies. It was an outrageous exercise in post-facto legestlation, one that helped inspire the Constitutional prohibition against such laws. However, it effectively ended the colonial banks. (Galbraith, pp. 56-57)

Benjamin Franklin, as we have seen, was a longstanding advocate of paper money. He wrote treatises on the subject, and even printed some of it on behalf of the government of Pennsylvania. It was this paper money, he argued, that was the cause of the colonies’ general prosperity in contrast to the widespread poverty and discontent he witnessed everywhere in England:

Before the war, the colonies sent Benjamin Franklin to England to represent their interests. Franklin was greatly surprised by the amount of poverty and high unemployment. It just didn’t make sense, England was the richest country in the world but the working class was impoverished, he wrote “The streets are covered with beggars and tramps.”

It is said that he asked his friends in England how this could be so, they replied that they had too many workers. Many believed, along with Malthus, that wars and plague were necessary to rid the country from man-power surpluses.

“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.” – Benjamin Franklin

He was asked why the working class in the colonies were so prosperous.

“That is simple. In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.” – Benjamin Franklin

Soon afterward, the English bankers demanded that the King and Parliament pass a law that prohibited the colonies from using their scrip money. Only gold and silver could be used which would be provided by the English bankers. This began the plague of debt based money in the colonies that had cursed the English working class.

The first law was passed in 1751, and then a harsher law was passed in 1763. Franklin claimed that within one year, the colonies were filled with unemployment and beggars, just like in England, because there was not enough money to pay for the goods and work. The money supply had been cut in half.

Hidden History: According to Benjamin Franklin, the real reason for the Revolutionary War has been hid from you (Peak Prosperity)

A good comment to the above article notes other factors which were also at work:

The timing of the shift in British policy toward colonial scrip (1763) also encompasses…the end of the Seven Years’ War, better known in the United States as the French and Indian War.

William Pitt’s prosecution of the war was conducted by running up government debt, and the settlement of this debt after the war’s conclusion required the raising of taxes by Parliament. Since, from Britain’s view, the war had been fought in order to protect its colonies, it felt that it was only fair that the colonies bore some of the financial burden. Colonial scrip was useless to Parliament in this regard, as was barter. The repayment of British lenders to the Crown could only be done in specie.

The colonies, as you correctly pointed out, did not have this in any significant quantity, although in the view of British authorities this was the colonies’ problem and not theirs. This policy also came on the heels of the approach of benign neglect conducted by Robert Walpole as Prime Minister, under which the colonies were allowed to do pretty much as they pleased so long as their activities generally benefited the British Crown. It should also be noted here that demands of payment of taxes in hard currency is a common tactic for colonial powers to undermine local economies and customs. It played that role in fomenting the American Revolution as well as the Whiskey Rebellion of the new Constitutional republic, not to mention how it was used in South Africa to compel natives participating in a traditional economy to abandon their lands and take up work as laborers in the gold mines.

Hidden History: According to Benjamin Franklin, the real reason for the Revolutionary War has been hid from you (Peak Prosperity)

Now, it would be unreasonable to say that this was THE cause of the American Revolution. In school, we’re taught that that taxes were the main cause: “No taxation without representation” went the slogan (and precipitated the Boston Tea Party). We’re also told that the colonists were much aggrieved by high customs duties, such as those of the unpopular Stamp Act.

But the suppression of paper money and local currency issuance by the British government appears to have been just as much of a cause, although it is probably unknown by the vast majority of Americans. The reason for this strange omission is unexplained. Galbraith thinks that that more conservative attitudes towards money creation in modern times have caused even American historians to argue that the British authorities were largely correct in their actions!

English historian, John Twells, wrote about the money of the colonies, the colonial Scrip:

“It was the monetary system under which America’s Colonies flourished to such an extent that Edmund Burke was able to write about them: ‘Nothing in the history of the world resembles their progress. It was a sound and beneficial system, and its effects led to the happiness of the people.

In a bad hour, the British Parliament took away from America its representative money, forbade any further issue of bills of credit, these bills ceasing to be legal tender, and ordered that all taxes should be paid in coins. Consider now the consequences: this restriction of the medium of exchange paralyzed all the industrial energies of the people. Ruin took place in these once flourishing Colonies; most rigorous distress visited every family and every business, discontent became desperation, and reached a point, to use the words of Dr. Johnson, when human nature rises up and assets its rights.”

Peter Cooper, industrialist and statesman wrote:

“After Franklin gave explanations on the true cause of the prosperity of the Colonies, the Parliament exacted laws forbidding the use of this money in the payment of taxes. This decision brought so many drawbacks and so much poverty to the people that it was the main cause of the Revolution. The suppression of the Colonial money was a much more important reason for the general uprising than the Tea and Stamp Act.”

Our Founding Fathers knew that without financial independence and sovereignty there could be no other lasting freedoms. Our freedoms and national sovereignty are being lost because most people do not understand our money system…

Hidden History: According to Benjamin Franklin, the real reason for the Revolutionary War has been hid from you (Peak Prosperity)

If paper money was the cause of the American Revolution, it was also the solution. The Continental Congress issued IOUs to pay for the war – called ‘Continental notes’ or ‘Continental scrip’:

With independence the ban by Parliament on paper money became, in a notable modern phrase, inoperative. And however the colonies might have been moving towards more reliable money, there was now no alternative to government paper…

Before the first Continental Congress assembled, some of the colonies (including Massachusetts) had authorized note issues to pay for military operations. The Congress was without direct powers of taxation; one of its first acts was to authorize a note issue. More states now authorized more notes.

It was by these notes that the American Revolution was financed….

Robert Morris, to whom the historians have awarded the less than impeccable title of ‘Financier of the Revolution’, obtained some six-and-a-half million dollars in loans from France, a few hundred thousand from Spain, and later, after victory was in prospect, a little over a million from the Dutch. These amounts, too, were more symbolic than real. Overwhelmingly the Revolution was paid for with paper money.

Since the issues, Continental and state, were far in excess of any corresponding increase in trade, prices rose – at first slowly and that, after 1777, at a rapidly accelerating rate…Eventually, in the common saying, ‘a wagon-load of money would scarcely purchase a wagon-load of provisions’. Shoes in Virginia were $5000 a pair in the local notes, a full outfit of clothing upwards of a million. Creditors sheltered from their debtors like hunted things lest they be paid off in worthless notes. The phrase ‘not worth a Continental’ won its enduring place in American language. (Galbraith, pp. 58-59)

Despite this painful bout of hyperinflation, as Galbraith notes, there was simply no other viable alternative to fund the Revolutionary War at the time:

Thus the United States came into existence on a full tide not of inflation but of hyperinflation – the kind of inflation that ends only in the money becoming worthless. What is certain, however, is the absence of any alternative.

Taxes, had they been authorized by willing legislators on willing people, would have been had, perhaps impossible to collect in a country of scattered population, no central government, not the slightest experience in fiscal matters, no tax-collection machinery and with its coasts and numerous of its ports and customs houses under enemy control.

And people were far from willing. Taxes were disliked for their own sake and also identified with foreign oppression. A rigorous pay-as-you-go policy on the part of the Continental Congress and the states might well have caused the summer patriots (like the monetary conservatives) to have second thoughts about the advantages of independence.

Nor was borrowing an alternative. Men of property, then the only domestic source, had no reason to think the country a good risk. The loans from France and Spain were motivated not by hope of return but by malice towards an ancient enemy.

So only the notes remained. By any rational calculation, it was the paper money that saved the day. Beside the Liberty Bell there might well be a tasteful replica of a Continental note. (Galbraith, p. 60)

While this is often used as yet another cautionary tale of “government money printing” by libertarians and goldbugs, a couple of things need to be noted. The first, and most obvious is the fact that: without government money printing there would be no United States. That seems like an important point to me.

The second is a take from Ben Franklin himself. He argued that inflation is really just a sort of tax by another name. And, as opposed to “conventional” government taxation, the inflationary tax falls more broadly across the population, meaning that it was actually a more even-handed and fair method of taxation!

And you can kind of see his point. With legislative taxes, government always has to decide who and what to tax—and how much. This inevitably means that the government picks winners and losers by necessity. Sometimes this can be done wisely, but in practice it often is not. But an inflationary tax cannot be easily controlled by government legislation to favor privileged insiders, unlike more conventional methods of direct taxation, where the rich and well-connected are often spared much of the burden thanks to undue influence over legislators:

From 1776 to 1785 Franklin serves as the U.S. representative to the French court. He has the occasion to write on one important monetary topic in this period, namely, the massive depreciation of Congress’ paper money — the Continental dollar — during the revolution. In a letter to Joseph Quincy in 1783, Franklin claims that he predicted this outcome and had proposed a better paper money plan, but that Congress had rejected it.

In addition, around 1781 Franklin writes a tract called “Of the Paper Money of America.” In it he argues that the depreciation of the Continental dollar operated as an inflation tax or a tax on money itself. As such, this tax fell more equally across the citizenry than most other taxes. In effect, every man paid his share of the tax according to how long he retained a Continental dollar between the time he received it in payment and when he spent it again, the intervening depreciation of the money (inflation in prices) being the tax paid.

Benjamin Franklin and the Birth of a Paper Money Economy (PDF; Philidelphia Fed)

I’m not sure that many people would agree with that sentiment today, but it is an interesting take on the matter.

Once the war was won, and with the Continental notes inflating to zero, the new fledgling government could now issue money for real. The first government building constructed by the new government was the mint. The power to tax was authorized by Congress.

Although the war ended in 1783, the finances of the United States remained somewhat chaotic through the 1780s. In 1781, successful merchant Robert Morris was appointed superintendent of finance and personally issued “Morris notes”—commonly called Short and Long Bobs based on their tenure or time to maturity—and thus began the long process to reestablish the government’s credit.

In 1785, the dollar became the official monetary unit of the United States, the first American mint was established in Philadelphia in 1786, and the Continental Congress was finally given the power of taxation to pay off the debt in 1787, thus bringing together a more united fiscal, currency, and monetary policy.

Crisis Chronicles: Not Worth a Continental—The Currency Crisis of 1779 and Today’s European Debt Crisis (Liberty Street)
One of the more common silver coins used all over the world at this time was the Maria Theresa thaler (or taler), issued by the Holy Roman Empire from its silver mines in Joachimsthal, hence the name (today the town of Joachimsthal is known as Jáchymov and is located in the Czech Republic).

“Taler” became a common name for currency because so many German states and municipalities picked it up. During the sixteenth century, approximately 1,500 different types of taler were issued in the German-speaking countries, and numismatic scholars have estimated that between the minting of the first talers in Jáchymov and the year 1900, about 10,000 different talers were issued for daily use and to commemorate special occasions.

The most famous and widely circulated of all talers became known as the Maria Theresa taler, struck in honor of the Austrian empress at the Gunzberg mint in 1773…The coin…became so popular, particularly in North Africa and the Middle East that, even after she died, the government continued to mint it with the date 1780, the year of her death.

The coin not only survived its namesake but outlived the empire that had created it. In 1805 when Napoleon abolished the Holy Roman Empire, the mine at Gunzberg closed, but the mint in Vienna continued to produce the coins exactly as they had been with the same date, 1780, and even with the mintmark of the closed mint. The Austro-Hungarian government continued to mint the taler throughout the nineteenth century until that empire collapsed at the end of World War I.

Other countries began copying the design of the Maria Theresa taler shortly after it went into circulation. They minted coins of a similar size and put on them a bust of a middle-aged woman who resembled Maria Theresa. Of they did not have a queen of their own who fit the description, they used an allegorical female such as the bust of Liberty that appeared on many U.S. coins of the nineteenth century.

The name dollar penetrated the English language via Scotland. Between 1567 and 1571, King James VI issued a thirty-shilling piece that the Scots called the sword dollar because of the design on the back of it. A two-mark coin followed in 1578 and was called the thistle dollar.

The Scots used the name dollar to distinguish their currency, and thereby their country and themselves, more clearly from their domineering English neighbors to the south. Thus, from very early usage, the word dollar carried with it a certain anti-English or antiauthoritarian bias that many Scottish settlers took with them to their new homes in the Americas and other British colonies. The emigration of Scots accounts for much of the subsequent popularity of the word dollar in British colonies around the world… (Weatherford, History of Money, pp. 115-116)

In 1782, Thomas Jefferson wrote in his Notes on a Money Unit of the U.S. that “The unit or dolar is a known coin and most familiar of all to the mind of the people. It is already adopted from south to north.”

The American colonists became so accustomed to using the dollar as their primary monetary unit that, after independence, they adopted it as their official currency. On July 6, 1785, the Congress declared that “the money unit of the United States of America be one dollar.” Not until April 2, 1792, however, did Congress pass a law to create an American mint, and only in 1794 did the United States begin minting silver dollars. The mint building, which was started soon after passage of the law and well before the Capitol or White House, became the first public building constructed by the new government of the United States. (Weatherford, History of Money, p. 118)

In the nineteenth century, there were strong arguments around the establishment of a central bank in the United States. One was, in fact, chartered, and then its charter was later revoked. We’ll talk a little about this in the final entry of this series next time, but for now, it is beyond the scope of this post.

Scene from the French Revolution

2. France

In the late eighteenth century, France’s financial circumstances were still very dire. It constantly needed to raise money for its perennial wars with England who, as we saw earlier, successfully funded its own wars with paper money and state borrowing via the Bank of England an—option not available to France in the wake of the Mississippi Bubble’s collapse and the failure of John Law’s Banque Royale. France’s generous loan to the United States’ revolutionaries may have been well appreciated by us Americans, but in retrospect, it was probably not the best move considering France’s fiscal situation (plus the fact that Revolution would soon engulf it; something the French aristocracy obviously had no way of knowing at the time).

In the aftermath of the Revolution, the National Assembly repudiated the King’s debts. It also suspended taxation. But it still badly needed money, especially since many of the countries surrounding France (e.g. Austria, Prussia, Great Britain, Spain and several other monarchies) declared war on it soon after the King met the guillotine. The answer they came up with was, once again, monetizing land. In this case, it was the land seized from the Catholic Church by the Revolutionary government. “[T]he National Assembly agreed that newly nationalised properties in the form of old church land could be purchased through the use of high-denomination assignats, akin to interest-bearing government bonds, mortgaged (assignée) on the property.”

The Estates-General had been summoned in consequence of the terrible fiscal straits of the realm. No more could be borrowed. There was no central bank which could be commanded to take up loans. All still depended on the existence of willing lenders or those who could be apprehended and impressed with their duty.

The Third Estate could scarcely be expected to vote new or heavier levies when its members were principally concerned with the regressive harshness of those then being collected. In fact, on 17 June 1789 the National Assembly declared all taxes illegal, a breathtaking step softened by the provision that they might be collected on a temporary basis.

Meanwhile memories of John Law kept Frenchmen acutely suspicious of ordinary paper money; during 1788, a proposal for an interest-bearing note issue provoked so much opposition that it had to be withdrawn. But a note issue that could be redeemed in actual land was something different. The clerical lands were an endowment by Heaven of the Revolution.

The decisive step was taken on 19 December 1789. An issue of 400 million livres was authorized; it would, it was promised, ‘pay off the public debt, animate agriculture and industry and have the lands better administered’. These notes, the assignats, were to be redeemed within five years from the sale of an equivalent value of the lands of the Church and the Crown.

The first assignats bore interest at 5 per cent; anyone with an appropriate amount could use them directly in exchange for land. In the following summer when a new large issue was authorized, the interest was eliminated. Later still, small denominations were issued.

There were misgivings. The memory of Law continued to be invoked. An anonymous American intervened with Advice on the Assignats by a Citizen of the United States. He warned the Assembly against the assignats out of the rich recent experience of his own country with the Continental notes. However, the initial response to the land-based currency was generally favourable.

Had it been possible to stop with the original issue or with that of 1790, the assignats would be celebrated as a remarkably interesting innovation. Here was not a gold, silver or tobacco standard but one based solidly and logically on the good soil of France.

Purchasing power in the first years had stood up well. There was admiring talk of how the assignats had put land into circulation. And business had improved, employment had increased and sales of the Church and other public lands had been facilitated. On occasion, sales had been too good. In relation to annual income, the prices set were comparatively modest; speculators clutching large packages of the assignats had arrived to take advantage of the bargains.

However, in France, as earlier in America, the demands of revolution were insistent. Although the land was limited, the claims upon it could be increased.

The large issue of 1790 was followed by others – especially after war broke out in 1792. Prices denominated in assignats now rose; their rate of exchange for gold and silver, dealing in which had been authorized by the Assembly, declined sharply. In 1793 and 1794, under the Convention and the management of Cambon, there was a period of stability. Prices were fixed with some success. What could have been more important, the supply of assignats was curtailed by the righteous device of repudiating those that had been issued under the king. In those years they retained a value of around 50 per cent of their face amount when exchanged for gold and silver.

Soon, however, need again asserted itself. More and more were printed. In an innovative step in economic warfare, Pitt, after 1793, allowed the royalist emigres to manufacture assignats for export to France. This, it was hoped, would hasten the decay.

In the end, the French presses were printing one day to supply the needs of the next. Soon the Directory halted the exchange of good real estate for the now nearly worthless paper – France went off the land standard. Creditors were also protected from having their debts paid in assignats. This saved them from the ignominy of having (as earlier in America) to hide out from their debtors. (Galbraith, pp. 64-66)

The lands of aristocrats who had fled France was confiscated as well and used to back further issuances of paper currency. Despite this, as with the Continentals, the value of the assignats soon inflated away to very little. France then issued a new paper money, the mandats territoriaux, also carrying an entitlement to land, in an attempt to stabilize the currency. But distrust in the paper currency (and in the government) was so endemic that the mandats began to depreciate even before they were issued:

With the sale of the confiscated property, a great debtor class emerged, which was interested in further depreciation to make it cheaper to pay back debts. Faith in the new currency faded by mid-year 1792. Wealth was hidden abroad and specie flowed to surrounding countries with the British Royal Mint heavily purchasing gold, particularly in 1793 and 1794.

But deficits persisted and the French government still needed to raise money, so in 1792, it seized the land of emigrants and those who had fled France, adding another 2 billion livres or more to French assets. War with Belgium that year was largely self-funded as France extracted some rents, but not so for the war with England in 1793. Assignats no longer circulated as a medium of payment, but were an object of speculation. Specie was scarce, but sufficient, and farmers refused to accept assignats, which were practically demonetized. In February 1793, citizens of Paris looted shops for bread they could no longer afford, if they could find it at all.

In order to maintain its circulation, France turned to stiff penalties and the Reign of Terror extended into monetary affairs. During the course of 1793, the Assembly prohibited buying gold or silver at a premium, imposed a forced loan on a portion of the population, made it an offense to sell coin or differentiate the price between assignats and coin, and under the Law of the Maximum fixed prices on some commodities and mandated that produce be sold, with the death penalty imposed for infractions.

France realized that to restore order, the volume of paper money in circulation must decrease. In December 1794, it repealed the Law of the Maximum. In January 1795, the government permitted the export of specie in exchange for imports of staple goods. Prices fluctuated wildly and the resulting hyperinflation became a windfall for those who purchased national land with little money down. Inflation peaked in October 1795. In February 1796, in front of a large crowd, the assignat printing plates were destroyed.

By 1796, assignats gave way to specie and by February 1796, the experiment ended. The French tried to replace the assignat with the mandat, which was backed by gold, but so deep was the mistrust of paper money that the mandat began to depreciate before it was even issued and lasted only until February 1797…

Crisis Chronicles: The Collapse of the French Assignat and Its Link to Virtual Currencies Today (Liberty Street)

…In February 1797 (16 Pluvoise year V), the Directory returned to gold and silver. But by then the Revolution was an accomplished fact. It had been financed, and this the assignats had accomplished. They have at least as good a claim on memory as the guillotine. (Galbraith, p. 66)

FRA-A73-République Française-400 livres (1792) 2.jpgEventually, France’s money system stabilized once its political situation more-or-less stabilized, but entire books have been written about that subject. The military dictatorship of Napoleon Bonaparte sold off the French lands in North America to the United States to raise money for its wars of conquest on the European continent. Napoleon also finally established a central bank in France based on the British model.

In 1800, the lingering suspicion of the French of such institutions had yielded to the financial needs of Napoleon. There had emerged the Banque de France which, in the ensuing century, developed in rough parallel with the Bank of England. In 1875, the former Bank of Prussia became the Reichsbank. Other countries had acquired similar institutions or soon did…(Galbraith, p. 41)

It might to be going too far to say that without paper money, neither the American or French revolutions would have ever happened. But nor is entirely absurd to say that this may well be the case. It’s certainly doubtful that they would have succeeded. It’s difficult to imagine how much history would be different today had it not been for paper money and its role in revolution.

Paper money would continue to play that role throughout the Age of Revolutions well into the Twentieth Century, as Galbraith notes:

Paper was similarly to serve the Soviets in and after the Russian Revolution. By 1920, around 85 per cent of the state budget was being met by the manufacture of paper money…

In the aftermath of the Revolution the Soviet Union, like the other Communist states, became a stern defender of stable prices and hard money. But the Russians, no less than the Americans or the French, owe their revolution to paper.

Not that the use of paper money is a guarantee of revolutionary success. In 1913, in the old Spanish town of Chihuahua City, Pancho Villa was carrying out his engaging combination of banditry and social reform. Soldiers were cleaning the streets, land was being given to the peons, children were being put in schools and Villa was printing paper money by the square yard.

This money could not be exchanged for any better asset. It promised nothing. It was sustained by no residue of prestige or esteem. It was abundant. Its only claim to worth was Pancho Villa’s signature. He gave this money to whosoever seemed to be in need or anyone else who struck his fancy. It did not bring him success, although he did, without question, enjoy a measure of popularity while it lasted. But the United States army pursued him; more orderly men intervened to persuade him to retire to a hacienda in Durango. There, a decade later, when he was suspected by some to be contemplating another foray into banditry, social reform, and monetary policy, he was assassinated. (Galbraith, pp. 66-67)

3. Conclusions

Given that both the Continentals and the assignats both suffered from hyperinflation towards the end, they have been often held up as a cautionary tale: governments are inherently profligate and can not be trusted with money creation; only by strictly pegging paper money issuance to a cache of gold stashed away in vault somewhere can hyperinflation be avoided.

As Galbraith notes, this is highly selective. Sure, if you look just for instances of paper money overissuance and inflation you will find them. But this is also deliberately ignoring instances–often lasting for decades if not for centuries–that paper money functioned exactly as intended all across the globe; from ancient China, to colonial America, to modern times. It emphasizes the inflationary scare stories, but intentionally ignores the very real stimulus to commercial activity that paper money has provided, as opposed to the extreme constraints of a precious metal standard. It also totally ignores any extenuating circumstances in hyperinflations, such as Germany’s repayment of war debt in the twentieth century, or persistent economic warfare in the case of Venezuela today.

So the attitude that “government simply can’t be trusted” is more of a political opinion than something based on historical facts.

…in the minds of some conservatives…there must have been a lingering sense of the singular service that paper money had, in the recent past, rendered to revolution. Not only was the American Revolution so financed. So also was the socially far more therapeutic eruption in France. If the French citizens had been required to act within the canons of conventional finance, they could not, any more than the Americans, acted at all. (Galbraith, pp. 61-62)

The desire for a gold standard comes from a desire to anchor the value of money in something outside of the control of governments. But, of course, pegging the value of currency to a certain arbitrary amount of gold is a political choice. Nor does it guarantee price stability–the value of gold fluctuates. A gold standard is more of a guarantee of the stability of the price of gold than the stability of the value of money. Also, in almost every case of war and economic depression in modern history, the gold standard is immediately chucked into the trashbin.

The other thing worth noting is that the worth of paper money is related to both issues of supply AND demand. Often, it’s not just that there is too much supply of currency. It’s that people refuse to accept the currency, leading just as assuredly to a loss in value.

And the lack of acceptance is usually driven by a lack of faith in the issuing government. You can see why this might be the case for assignats and Continentals. Both were revolutionary governments whose very stability and legitimacy was in question, particularly in France. If the government issuing the currency (which are IOU’s, remember) may not be around a year from now, then how willing are you to accept that currency? James Madison pointed out that the value of any currency was mostly determined by faith in the credit of the government issuing the currency. That’s why he and other Founding Fathers worked so hard to reestablish the credit of the United States following the Continental note debacle.

As Rebecca Spang—the author of “Stuff and Money in the Time of the French Revolution”—notes, many people in revolutionary France were vigorously opposed to the seizing of Church property. Thus, they would not accept the validity of notes based on their value. This led to a lack of acceptance which contributed just as much to hypernflation as did any profligacy on the part of the government:

Revolutionary France became a paradigm case for the quantity theory of money, the view that prices are directly and proportionately correlated with the amount of money in circulation, and for the deleterious consequences of letting the latter run out of control.

Yet Spang shows that such neat economic interpretations are inadequate. At times, for example, prices rose first and politicians boosted the money supply in response.

Spang reiterates that the first assignats were neither a revolutionary policy nor a form of paper money. But as her stylishly crafted narrative makes clear, this soon changed. Politicians made the cardinal error of thinking that the state could be stabilised by in effect destabilising its money.

Popular distrust of the “real” worth of assignats prompted a contagion of fraud, suspicion and uncertainty. How could one tell a fake assignat, when technology couldn’t replicate them precisely? How could they even be used, when there was no compulsion beyond patriotic duty for sellers to accept them as payment? Small wonder that so many artists made trompe l’oeil images out of them — what looked solid and real was anything but…

‘Stuff and Money in the Time of the French Revolution’, by Rebecca Spang (Financial Times)

Note that the situation of a stable government is totally different. Britain’s government was eminently stable compared to the United States and France at that time, hence its money retained most of its value, even when convertibility was temporarily suspended. This also underlies the value of Switzerland’s currency today, since they have a legendarily stable, neutral government (and really not that much in the way of actual  resources).

So those who argue that America’s “fiat” money is no good would somehow have to make the case that the United States government is somehow more illegitimate or more unstable than the governments of other wealthy, industrialized nations. To my mind, this is tangential to treason. Yet no one ever calls them out on this point. From that standpoint, the biggest threat to the money supply comes not from overissuance (hyperinflation is nowhere to be seen), but from undermining the faith in, and credit of, the United States government. That’s been done exclusively by Republicans in recent years by grandstanding over the debt ceiling—an artificial borrowing constraint imposed during the United States’ entry into World War One. Really, this should be considered an unpatriotic and treasonous act. It almost certainly would have been perceived as such by the Founding Fathers.

I always have the same response to libertarians who sneer at the “worthlessness” of government fiat money. My response is this: if you truly believe it is worthless, then I will gladly take it off your hands for you. Please hand over all the paper money you have in your wallet right now at this very moment, as well as all the paper money you may have lying around your house. If you want, you can even take out some “worthless” paper money from the nearest ATM and hand it over to me too; I’ll gladly take that off your hands as well. You can give me as much as you like.

To date, I have yet to have a libertarian take me up on that offer. I wonder why?

Next: The Civil War finally establishes a national paper currency for the U.S.

The Origin of Paper Money 5

As noted last time, the issuance of printed money by Pennsylvania was highly successful. It increased trade and greatly expanded the economy.

One person who noticed this was a young printer by the name of Benjamin Franklin. At the age of only 23, he wrote a treatise strongly advocating the benefits of printing paper money to increase the domestic money supply.

Franklin arrived in Philadelphia the year paper money was first issued by Pennsylvania (1723), and he soon became a keen observer of and commentator on colonial money…Franklin noted that after the legislature issued this paper money, internal trade, employment, new construction, and the number of inhabitants in the province all in-creased. This feet-on-the-ground observation, this scientific empiricism in Franklin’s nature, would have a profound effect on Franklin’s views on money throughout his life. He will repeat this youthful observation many times in his future writings on money.

Benjamin Franklin and the Birth of a Paper Money Economy

Franklin had noted the effects that the chronic shortage of precious metal coins had on the local economy. Something needed to be done, he thought. Franklin, of course, being a printer by trade, felt that his printing presses might be the solution to this problem.

Franklin’s proposal–and this was key–was that paper money could not be backed by silver and gold; because the lack of silver and gold was what the paper money was designed to rectify in the first place!

Franklin also noted a point that critics of the gold standard have made ever since: the value of gold and silver is not stable, but fluctuates over time with supply and demand, just like everything else! Backing one’s currency by specie was no guarantee of stable prices or a stable money supply. As was seen in Europe, a sudden influx could send prices soaring, and a dearth would send prices crashing. As we’ll see, this was a major problem with precious metal standards throughout the nineteenth century—a point conspicuously ignored by goldbugs. Instead, he proposed a land bank, which, as we saw earlier, was a very popular idea at this time. Even though the colonies didn’t have sources of previous metals—and couldn’t mint them even if they did—they did have an abundant supply of real estate, far more than Europe, in fact. Land could be mortgaged, and the mortgages would act as backing for the new government-issued currency.

Economist (and Harry Potter character) Farley Grubb has written a definitive account of Franklin’s proposal:

Franklin begins his pamphlet by noting that a lack of money to transact trade within the province carries a heavy cost because the alternative to paper money is not gold and silver coins, which through trade have all been shipped off to England, but barter. Barter, in turn, increases the cost of local exchange and so lowers wages, employment, and immigration. Money scarcity also causes high local interest rates, which reduces investment and slows development. Paper money will solve these problems.

But what gives paper money its value? Here Franklin is clear throughout his career: It is not legal tender laws or fixed exchange rates between paper money and gold and silver coins but the quantity of paper money relative to the volume of internal trade within the colony that governs the value of paper money. An excess of paper money relative to the volume of internal trade causes it to lose value (depreciate). The early paper monies of New England and South Carolina had depreciated because the quantities were not properly controlled.

So will the quantity of paper money in Pennsylvania be properly controlled relative to the demands of internal trade within the province?

First, Franklin points out that gold and silver are of no permanent value and so paper monies linked to or backed by gold and silver, as with bank paper money in Europe, are of no permanent value. Everyone knew that over the previous 100 years the labor value of gold and silver had fallen because new discoveries had expanded supplies faster than demand. The spot value of gold and silver could fluctuate just like that of any other commodity and could be acutely affected by unexpected trade disruptions. Franklin observes in 1729 that “we [Pennsylvanians] have already parted with our silver and gold” in trade with England, and the difference between the value of paper money and that of silver is due to “the scarcity of the latter.”

Second, Franklin notes that land is a more certain and steady asset with which to back paper money. For a given colony, its supply will not fluctuate with trade as much as gold and silver do, nor will its supply be subject to long-run expansion as New World gold and silver had been. Finally, and most important, land cannot be exported from the province as gold and silver can. He then points out that Pennsylvania’s paper money will be backed by land; that is, it will be issued by the legislature through a loan office, and subjects will pledge their lands as collateral for loans of paper money.

Benjamin Franklin and the Birth of a Paper Money Economy

Franklin argued that the amount of money circulating would be self-correcting. If too little was issued, he said, falling prices would motivate people to mortgage their land to get their hands on more bills. If too much money was circulating, its value would fall, and mortgagees would use the cheaper notes to buy back their land, thus retiring the notes from circulation and alleviating the oversupply.

Finally, Franklin argues that “coined land” or a properly run land bank will automatically stabilize the quantity of paper money issued — never too much and never too little to carry on the province’s internal trade. If there is too little paper money, the barter cost of trade will be high, and people will borrow more money on their landed security to reap the gains of the lowered costs that result when money is used to make transactions. A properly run land bank will never loan more paper money than the landed security available to back it, and so the value of paper money, through this limit on its quantity, will never fall below that of land.

If, by chance, too much paper money were issued relative to what was necessary to carry on internal trade such that the paper money started to lose its value, people would snap up this depreciated paper money to pay off their mortgaged lands in order to clear away the mort-gage lender’s legal claims to the land. So people could potentially sell the land to capture its real value. This process of paying paper money back into the government would reduce the quantity of paper money in circulation and so return paper money ’s value to its former level.

Automatic stabilization or a natural equilibrium of the amount of paper money within the province results from decentralized market competition within this monetary institutional setting. Fluctuations in the demand for money for internal trade are accommodated by a flexible internal money supply directly tuned to that demand. This in turn controls and stabilizes the value of money and the price level within the province.

Benjamin Franklin and the Birth of a Paper Money Economy

Given that the United States was the major pioneer in the Western world for a successful paper fiat currency, it is ironic that we have become one of the centers for resistance to the very idea today. This in large part due to the bottomless funding by billionaire libertarian cranks to promote shaky economic ideas in the United States, such as Austrian Economics, whereas in the rest of the world common-sense prevails. Wild, paranoid conspiracy theories about money (and just about everything else) also circulate widely in the United States, much more widely than the rest of the developed world which has far better educational systems.

Returning to the gold standard is—bizarrely—appropriated by people LARPing the American Revolution today in tri-corner hats, proclaiming themselves as the only true “patriots”. Yet, as we’ve seen, the young United States was the world’s leading innovator in issuing paper money not backed by gold–i.e. fiat currency. And this led to its prosperity. Founding Father Benjamin Franklin was a major advocate of paper money not backed by gold. This is rather inconvenient for libertarians (as is most of actual history).

The young have always learned that Benjamin Franklin was the prophet of thrift and the exponent of scientific experiment. They have but rarely been told that he was the advocate of the use of the printing press for anything except the diffusion of knowledge. (Galbraith, p. 55)

That’s right, Ben Franklin was an advocate of “printing money.” Something to remember the next time a Libertarian glibly sneers at the concept. Later advocates of “hard money”, i.e. goldbugs like Andrew Jackson, would send the U.S. economy crashing to its knees in the early nineteenth century by returning to a gold standard.

Here’s Galbraith describing the theory behind paper money:

There is very little in economics that invokes the supernatural. But by one phenomenon many have been tempted. In looking at a rectangular piece of paper, on frequent occasion of indifferent quality, featuring a national hero or monument or carrying a classical design with overtones of Peter Paul Rubens, Jacques Louis David or a particularly well-stocked vegetable market and printed in green or brown ink, they have been assailed by the question: Why is anything intrinsically so valueless so obviously desirable? What, in contrast to a similar mass of fibres clipped from yesterday’s newspaper, gives it the power to command goods, enlist service, induce cupidity, promote avarice, invite to crime? Surely some magic is involved; certainly some metaphysical or extraterrestrial explanation of its value is required. The priestly reputation and tendency of people who make a profession of knowing about money have been noted. Partly it is because such people are thought to know why valueless paper has value.

The explanation is wholly secular; nor is magic involved.

Writers on money have regularly distinguished between three types of currency:

(1) that which owes its value, as do gold and silver, to an inherent desirability derived from well-established service to pride of possession, prestige of ownership, personal adornment, dinner service or dentistry;

(2) that which can be readily exchanged for something of such inherent desirability or which carries the promise, like the early Massachusetts Bay notes, of eventual exchange; and

(3) currency which is intrinsically worthless, carries no promise that it will be redeemed in anything useful or desirable and which is sustained, at most, by the fiat of the state that it be accepted.

In fact, all three versions are variations on a single theme.

John Stuart Mill…made the value of paper money dependent on its supply in relation to the supply of things available for purchase.
Were the money gold or silver, there was little chance, the plethora of San Luis Potosí or Sutter’s Mill apart, for the amount to increase unduly. This inherent limit on supply was the security that, as money, it would be limited in amount and so retain its value.

And the same assurance of limited supply held for paper money that was fully convertible into gold and silver. As it held for paper that could not be converted into anything for so long as the supply of such paper was limited. It was the fact of scarcity, not the fact of intrinsic worthlessness, that was important. The problem of paper was that, in the absence of convertibility, there was nothing to restrict its supply. Thus it was vulnerable to the unlimited increase that would diminish or destroy its value.

The worthlessness of paper is a detail. Rock quarried at random from the earth’s surface and divided into units of a pound and upward would not serve very happily as currency. So great would be the potential supply that the weight of rock for even a minor transaction would be a burden. But rock quarried on the moon and moved to the earth, divided and with the chunks duly certified as to the weight and source, though geologically indistinguishable from the earthbound substance, would be a distinct possibility, at least for so long as the trips were few and the moon rock retained the requisite scarcity. pp. 62-64

NEXT: England and France get on the paper money train. England succeeds; France fails.

The Origin of Paper Money 4

What’s often considered to be the first recorded issuance of government-backed paper money in the Western world was in Colonial America, and it was quite by accident.

There had been precedents, but they were very limited, and we only know about them through historical records. Paper money tends to disappear in the archaeological record, while coins survive, which means that earlier experiments in paper money may simply be lost to history.

Repeatedly in the European records we find mention of money made from leather during times of warfare and siege. Reports indicate that European monarchs occasionally used paper money during periods of crisis, usually war, and they do maintain that in Catalonia and Aragon, James I issued paper money in 1250, but no known examples have survived. Then, when the Spanish laid siege to the city of Leyden in the Lowlands in 1574, Burgomeister Pieter Andriaanszoon collected all metal, including coins, for use in the manufacture of arms. To replace the coins, he issued small scraps of paper.

On July 1661, Sweden’s Stockholm Bank issued the first bank note in Europe to compensate for a shortage of silver coins. Although Sweden lacked silver, it possessed bountiful copper resources, and the government of Queen Christina (1634-1654) issued large copper sheets called platmynt (plate money), which weighed approximately 4 pounds each. In 1644 the government offered the largest coins ever issued: ten-daler copper plates, each of which weighed 43 pounds, 7 1/4 ounces. To avoid having to carry such heavy coins, merchants willingly accepted the paper bills in denominations of one hundred dalers. one such bill could be submitted for 500 pounds of copper plates. (Weatherford, p. 130)

For an example of platmynt, see this link: Swedish “plate money” (TYWKIIDBI)

The issuance was by Massachusetts in 1690. It was in the form of government IOU’s issued to pay for a failed raid on Quebec which was successfully repelled. Due to the failure of the raid, the expected booty to pay for the cost of the expedition did not materialize. The government, reluctant to raise taxes to pay for an expedition that was a failure, issued IOU’s instead. Due to the shortage of metal coins, these IOU’s began circulating at their face value as a substitute for coins. And thus, by accident, paper money was created in the Western world:

The first issue of paper money was was by the Massachusetts bay Colony in 1690; it has been described as ‘not only the origin of paper money in America, but also in the British empire, and almost in the Christian world’. It was occasioned, as noted, by war.

In 1690, Sir William Phips – a man whose own fortune and position had been founded on the gold and silver retrieved from a wrecked Spanish galleon near the shores of what is now Haiti and the Dominican Republic – led an expedition of Massachusetts irregulars against Quebec. The loot from the fall of the fortress was intended to pay for the expedition. The fortress did not fall.

The American colonies were operating on negligible budgets…and there was no enthusiasm for levying taxes to pay the defeated heroes. So notes were issued to the soldiers promising eventual payment in hard coin. Redemption in gold or silver, as these were returned in taxes, was promised, although presently the notes were also made legal tender for taxes. (Galbraith, pp. 51-52)

The colonial government intended to quickly redeem the certificates with tax revenues, but the need for money was so great that the certificates began changing hands, like money…[1]…For the next twenty years the notes circulated side by side with gold and silver of equivalent denomination. Notes and metal being interchangeable, there was pro tanto, no depreciation. (p. 52)…

The practice quickly caught on among the colonies as a means of supplying a circulating currency. The issuances were to be temporary, in fixed amounts, and accompanied by taxes and custom duties to redeem them. [1]

To retire these bills on credit, the colonial governments accepted them—along with specie—in payment of taxes, fines and fees. As with “bills on loan” the governments used any specie that they received in tax payments to retire and then burn the notes. Also like “bills on loan,” the notes circulated freely within the colonies that issued them and sometimes in adjacent colonies. [1]

[1] Paper Money and Inflation in Colonial America

This circulation of these paper IOUs gave cash-strapped governments an idea. Governments could issue IOUs (hypothetically redeemable in gold and silver coins) in lieu of levying taxes to enable the government to pay for stuff. Such IOUs could then circulate as cash money—valuable because they would theoretically be redeemed by governments for gold and silver, or be used to discharge debt obligations to the state like taxes, fines and fees. As noted above, when gold and silver did come into the state’s coffers, they could buy back the notes.

Unlike modern paper money, these IOUs typically had an expiration date. By redeeming the issued notes, the government could remove paper from circulation, lowering its debt obligations, while at the same time preventing paper money from losing too much of its value. (Note similarities with the Chinese system).

And so, as the 1700’s dawned, colonial governments started commonly issuing paper money—colonial scrip—in lieu of taxes to goose the domestic economy by increasing the amount of money in circulation. Since precious metals were in short supply, most of these schemes were based on the land banking concept (i.e. monetizing land):

The Pennsylvania legislature issued its first paper money in 1723 — a modest amount of £15,000 (the equivalent of just over 48,000 Spanish silver dollars), with another £30,000 issued in 1724. This paper money was not linked to or backed by gold and silver money. It was backed by the land assets of subjects who borrowed paper money from the government and by the future taxes owed to the government that could be paid in this paper money…after the legislature issued this paper money, internal trade, employment, new construction, and the number of inhabitants in the province all increased…The initial paper money issued in 1723 was due to expire in 1731. (Typically, paper money was issued with a time limit within which it could be used to pay taxes owed to the issuing government — the money paid in being removed from circulation.)

Benjamin Franklin and the Birth of a Paper Money Economy (PDF)

In addition to funding military spending, one major driver behind colonial governments issuing IOUs as currency came from the extreme recalcitrance of the colonists in paying their allotted taxes, which means that this unfortunate tendency was present in America from the very beginning, as Galbraith notes:

A number of circumstances explain the pioneering role of the American colonies in the use of paper money. War, as always, forced financial innovation. Also, paper money…was a substitute for taxation, and, where taxes were concerned, the colonists were exceptionally obdurate; they were opposed to taxation without representation, as greatly remarked, and the were also, a less celebrated quality, opposed to taxation with representation. ‘That a great reluctance to pay taxes existed in all the colonies, there can be no doubt. it was one of the marked characteristics of the American people long after their separation from England.’ (Galbraith, pp. 46-47)

In subsequent years, the various colonial governments would rely on more and more on issuing paper money. And when they did, it was noted, the volume of trade increased, and local economies expanded. There was always, however, the looming threat of too much colonial scrip being issued by governments, leading to depreciation:

Inevitably, however, it occurred to the colonists that the notes were not a temporary, one-time expedient but a general purpose alternative to taxation. More were issued as occasion seemed to require, and the promised redemption was repeatedly postponed.

Prices specified in the notes now rose; so, therewith did the price of gold and silver. By the middle of the eighteenth century the amount of silver or gold for which the note could be exchanged was only about a tenth of what it had been fifty years before. Ultimately the notes were redeemed at a few shillings to the pound from gold sent over to pay for the colonial contribution to Queen Anne’s War.

Samuel Eliot Morison has said of the notes issued by Massachusetts to pay off the soldiers back from Quebec that they were ‘a new device in the English-speaking world which undermined credit and increased poverty’. Other and less judicious historians have reflected the same view. But it is also known that rising prices stimulate the spirits of entrepreneurs and encourage economic activity just as falling prices depress both.

Were only so much paper money issued by a government as to keep prices from falling or, at most, cause a moderate increase, its use could be beneficial. Not impoverishment, but an increased affluence would be the result.

The question, obviously, is whether there could be restraint, whether the ultimate and impoverishing collapse could be avoided. The Law syllogism comes ominously to mind: If some is good, more must be better. (Galbraith, pp. 52–53)

The use of paper money as an alternative to government borrowing began to spread. More and more colonial governments (there obviously was no national government back then) would issue IOUs as a way to get around chronic shortages of gold and silver coins, and to avoid raising taxes. Meanwhile, although Europe had begun to experiment with paper money, it was still tied to amounts of gold and silver, limiting its application.

The results in the colonies were highly mixed. Some experiments were highly successful; other less so:

…the other New England colonies and South Carolina had also discovered paper money…Restraint was clearly not available in Rhode Island of South Carolina or even in Massachusetts. Elsewhere, however, it was present to a surprising extent. The Middle Colonies handled paper money with what must now be regarded as astonishing skill and prudence…The first issue of paper money there was by Pennsylvania in 1723. Prices were falling at the time, and trade was depressed. Both recovered, and the issue was stopped.

There appear to have been similar benefits from a second issue in 1729; the course of business and prices in England in the same years suggests that, in the absence of such action, prices would have continued down. Similar issues produced similarly satisfactory results in New York, New Jersey, Delaware and Maryland. As in Pennsylvania, all knew the virtue of moderation. (Galbraith, pp. 52-53)

Perhaps the most intriguing experiment was done by the state of Maryland. It had a combination of what looks like a UBI scheme, coupled with a public banking system (à la North Dakota):

The most engaging experiment was in Maryland. Elsewhere the notes were put into circulation by the simple device of using them to pay public expenses. Maryland, in contrast, declared a dividend of thirty shillings to each taxable citizen and, in addition, established a loan office where worthy farmers and businessmen could obtain an added supply which they were required to repay.

Remarkably, this dividend was a one-time thing; as in the other Middle Colonies the notes so issued were ultimately redeemed in hard money. A near contemporary historian with a near-gift for metaphor credited the experiment with ‘feeding the flame of industry that began to kindle’. A much later student has concluded that ‘this was the most successful paper money issued by any of the colonies’.

Two centuries later during the Great Depression a British soldier turned economic prophet, Major C.H. Douglas, made very nearly the same proposal. This was Social Credit. Save in much distant precincts as the Canadian Prairies, he acquired general disesteem as a monetary crank. He was two hundred years too late. (Galbraith, pp. 53-54)

Interestingly, we see some of those ideas once again being floated once again today.

As Galbraith notes, later economic historians would focus exclusively on the failures of such early experiments, and deliberately ignore the places were it was successful. Much of this was based on the “gold is real money” ideology, along with the ideas around the “inherent profligacy of governments” which would invariably cause inflation. In other words, the groupthink of the economics priesthood:

Towards the end of the nineteenth century expanding university facilities, an increased interest in the past and a pressing need for subjects on which to do doctoral theses and other scholarly research all led to a greatly expanded exploration of colonial economic history. By then, among historians and economists, the gold standard had become an article of the highest faith. Their research did not subordinate faith to fact.

By what amounted to a tacit understanding between right-thinking men the abandoned tendencies of Rhode Island, Massachusetts and South Carolina were taken to epitomize the colonial monetary experience. The different experience of the Middle Colonies was simply ignored.

A leading modern student of colonial monetary experience has noted that: ‘One looks in vain for any discussion of these satisfactory currency experiments in the standard works on American monetary and financial history.’ Another has concluded that ‘…generations of historical scholarship have fostered a mistaken impression of the monetary practices of the colonies’. (Galbraith, pp. 54-55)

History repeats itself: today we once again have an economics caste wedded to orthodoxy and unwilling to consider alternative points of view. The MMT school of economics is fighting a lonely battle against this tendency today.

Next: Ben Franklin discovers money printing

Revenge of the Luddites

Posted on Reddit is this this excellent criticism of the attitude that “technology will save us”:

Not to shit on your comment or idea but it’s very typical that an absolutely avoidable situation presents itself (burning down the Amazon) and Redditors seem to shift the conversation to some pie in the sky idea that may or may not work.

Yeah, lab grown meat is a cool idea, but cattle farming is not going anywhere anytime soon. All that needs to happen is to crack down on the dickheads burning down our rainforests. Brazilians need to stand up to their president and the international stage needs to apply pressure.

Before we get lab grown meat, nuclear fusion, mcboatyface saving the ocean, Mars colonies, CRISPR editing out cancer in the embryo, bacteria eating carbon, cops with cameras on their pistols, bitcoin-esque online ledger based voting systems, et fucking cetera, can we PLEASE just make the easy simple legislative changes that have worked in the past and don’t require educating and convincing huge swaths of people on something they never heard of?

The way you get to futuristic ideas is not by waiting until the world is almost destroyed and hoping for a bandwagon. It’s always been little steps. Brazil is burning down rainforests. Unions in the US barely exist. China is running god damn concentration camps. There is value in pragmatism and I wish more people were passionate about things that might not seem as exciting as biofuel made from protozoa or whatever.

Outstanding comment, and you can think of much of the Hipcrime Vocab (especially the old site) as an extended argument of exactly that point. It’s nice to see I’m not totally alone on this. And there’s another good comment from a user called neoliberalaltright(!!!):

That aside, the point is that discussing lab grown meat is a distraction from a real solution that exists right now, and distractions of this form are often meant to avoid confronting the idea of any sociological responsibility that you might have.

Smoking was massively reduced in the United States through collective action and education, which has reduced preventable deaths. Suppose it were the 80s, and every time someone told me “smoking causes lung cancer” I said “well researchers are working on curing lung cancer”. Would that be a reasonable response? Sure, researchers are curing lung cancer, but people can stop smoking right now. Us talking about curing lung cancer doesn’t speed up curing lung cancer, while us talking about abstaining from smoking might get people to abstain from smoking. So why focus our discussions on the former?

And on a related note: Waymo CEO says true autonomous cars will never exist. Waymo is the self-driving car development arm of Alphabet (formerly known as Google). The headline is a little deceptive, because what he’s really saying is not that self-driving cars can’t be built (they already exist), but that there are always going to be inherent limitations in the technology that will prevent the extreme utopian visions of everyone having a 100% self-driving car from ever coming to fruition:

…the industry leader in self-driving cars last year announced that truly autonomous Level 5 vehicles – those that can operate in all conditions with no human input – “will never exist”...Speaking at the Wall Street Journal’s D.Live Conference on 13 Novemeber, 2018, [Waymo’s] CEO, John Krafcik, told the audience “autonomy will always have constraints”.

In the short and medium-term, it seems likely that cars will adopt smarter versions of the technology that’s already incorporated in current cars: lane assist, emergency braking, active cruise control. Beyond that, the next step will be small sections of highway that may allow hands-off driving for suitably connected cars. However, for those that dream of having a snooze or watching a movie while the car handles the stress of the daily commute, don’t hold your breath.

And, exactly as I predicted years ago: The world’s first solar road has turned out to be a colossal failure that’s falling apart and doesn’t generate enough energy, according to a report (Business Insider)

Before I quote from that article, I just thought I would post a comment I received in the original post about “SOLAR FREAKIN’ ROADWAYS!!!” all the way back in 2014. I’ve omitted where he quotes from my original post and kindly cleaned up all the typos and misspellings (guess they don’t teach composition anymore in engineering school). I’ve also highlighted some of the most delicious parts:

You don’t have any clue what you are talking about. None whatsoever.

A. Solar panel roadways already exist, water pipes are run under roads and they are used to heat up water.

B. No one is saying redoing all the roads that way. That is what is called a strawman argument.

C. The electrical grid is old, it is old because it fucking works. A transformer properly designed can have a +100 year lifespan. almost no moving parts, few chemical reactions, low physical stresses, simple design with few parts to fail. Of course you didn’t know this because in liberal arts school they didn’t teach it.

D. Electrical lines hung above ground suffer from less loses then those underground. Putting wires underground is due to space concerns and because the cost of maintaining them exceeds the expected cost of power losses. In most new communities they are buried underground.

E. Putting panels on people’s roofs means multiple owners vs a road which involves one owner. It also means economies of scale.

F. I am not going to even respond at your crap on self-driving cars you are not in any way qualified to talk about. Go out and get a degree in EE or CS and then we shall chat.

People like you are always standing in the way of progress. Your intellectual ancestor was probably busy rambling about how fire doesn’t work and eating raw meats huddling for warmth was better. Damn Luddites

The world isn’t falling apart you just cant stand the fact that random brats aren’t consultant on important decisions so you project your own failures on the world. You walk around with a prophet complex screaming how the sky is falling instead of accepting the cold truth “the world is fine, it is my life that has failed”

But no worries you will read this and get mad but within an hour you will have forgotten and will resume your posts explaining to the world how you are right about everything and it is the world that is wrong.

And now, onto our story:

Solar roads were promised to be one of the biggest unprecedented revolutions of our time, not just in the field of renewable energy but in the energy sector generally. Covering 2,800 square meters, Normandy’s solar road was the first in the world, inaugurated in 2016, in Tourouvre-au-Perche, France.

Despite the hype surrounding solar roads, two years after this one was introduced as a trial, the project has turned out to be a colossal failure — it’s neither efficient nor profitable, according to a report by Le Monde.

The unfortunate truth is that this road is in such a poor state, it isn’t even worth repairing. Last May, a 100-meter stretch had deteriorated to such a state that it had to be demolished. According to Le Monde’s report, various components of the road don’t fit properly — panels have come loose and some of the solar panels have broken into fragments.

On top of the damage and poor wear of the road, the Normandy solar track also failed to fulfill its energy-production goals. The original aim was to produce 790 kWh each day, a quantity that could illuminate a population of between 3,000 and 5,000 inhabitants. But the rate produced stands at only about 50% of the original predicted estimates. In its second year, the energy production level of the road further dwindled and the same downward trend has been observed at the beginning of 2019, indicating serious issues with efficiency.

Even rotting leaves and thunderstorms appear to pose a risk in terms of damage to the surface of the road. What’s more, the road is very noisy, which is why the traffic limit had to be lowered to 70 kmh.

What about the solar roadways in the United States?

Another solar road suffered a similar fate in the US. There were concerns, according to Daily Caller, that as the panels wouldn’t be tilted to follow the sun and would often be covered by cars during periods when the sun was out, the whole project would be completely inefficient.

Despite costing up to roughly $6.1 million, the solar road became operational in 2016 — 75% of the panels were broken before being installed, it doesn’t generate any energy, it can’t be driven on, and 83% of its panels are broken, according to Daily Caller. One electrical engineer even went as far as describing it as a “total and epic failure” in an interview with KXLY news. Even if it had been functional, the panels would have been able to power only a small water fountain and the lights in a restroom, according to Daily Caller.

Wanna chat now, anonymous? Who doesn’t know what they’re talking about now, bitch? I guess I don’t need to get that engineering degree after all. (sorry, I just couldn’t resist!). Score one for the “damn Luddites.”

Too bad that anonymous commenter will probably never read this.

UPDATE: Here’s Lloyd Alter’s coverage on Treehugger saying pretty much the same things.

Against Against Against Billionaire Philanthrocapitalism

Slate Star Codex has recently published a full-throated defense of modern Neofeudalism.

This whole essay is ridiculous, so insipid, so misleading, so pedantic, and so maddeningly idiotic, that I just can’t help but respond to it point-by-point. It’s also so chock full of false arguments, irrelevancies, red-herrings, and straw-man arguments, that one would think that the self-proclaimed masters of “logic and reason” over there would be ashamed to publish it.

Now, if you don’t know, Slate Star Codex is big part of the whole Neoliberal online thought collective that masquerades as “officially nonpartisan enlightened centrismTM. But in this rather poorly thought-out post, the mask is ripped off for all to see. And it’s not pretty.

It’s a classic example of a prolific genre I like to call “Neoliberal contrarianism.” One of the most prodigious practitioners of this genre is Megan McArdle, who has built an entire career on it (sponsored by the usual suspects). Other notable practitioners of the genre include David Brooks, Thomas Friedman, Matt Yglesias, Kevin Drum, Tyler Cowen, Sam Harris, and many others. All of Stephen Pinker’s recent books can be considered an exercise in this genre.

So, for example, this genre will tell you why the middle class is better off today than ever before, and is, in fact, getting richer every day! Why wages are actually going up. Why it’s just a silly myth that all of the gains in the economy are going to the top ten percent of households. Why housing is actually more affordable than ever. Why high health care costs, expensive drugs and copays are actually good for us. Why student debt isn’t a big problem. Why massive transnational corporations and monopolies are the greatest thing ever! In short, why everything you see happening around you every day isn’t really happening. And they’ve got the graphs and charts to prove it!

And they’ll usually tell you all this from some exotic destination where they’ve traveled to to on holiday, because they’re citizens of the world, after all, and national borders are anachronisms for poor losers who can’t handle change. How can they afford that, you ask? Well, being a shill for Neoliberalism has it’s perks, and it beats having to work for a living.

Anyway, the post references some articles mildly critical of billionaire philanthrocapitalism. But after reading the whole article, it doesn’t really seem to address the central arguments at all. And those arguments I get primarily from Anand Giridharadas’ excellent book on the subject entitled, Winners Take All: The Elite Charade of Saving the World. The post doesn’t reference that book—nor any of the the fundamental arguments it makes—anywhere in the article, as far as I can tell.

Giridharadas characterizes the benevolence of the transnational plutocratic class as instances of “extreme taking followed by extreme giving.” What does he mean by that?

He means that the people who have anointed themselves as the “saviors” of the human race are ultimately also the same ones who are responsible for bringing the world to the brink of disaster in the first place. Here’s Giridharadas speaking about being invited to canape-filled “ideas” conferences in Aspen where the plutocrats got together to hobnob and make connections:

“They would meet these four times [a year in Aspen]. They would read Plato and Aristotle; they would also read Gandhi, and they would also read—and this was a bit of a clue—Jack Welch. And having read them, they would discuss this, and talk about how they could make more of a difference, give back, not just run their companies, but do something more.”

“I was invited into this thing—I’m obviously not a businessperson—but I was invited because they figured out that twenty businesspeople in a room is a recipe for human Ambien, so they decided [that in] every class, they would put a TV person, a writer an artist, some activist…so I was the Indian spice in my class…”

“It was a really interesting experience to have access to people that I don’t normally have access to, or talk to, or know. People who run an aviation repair business in Oklahoma—things like that. There are not people I meet in my life. And it was very interesting, and it was all about ‘We’re going to change the world’. ‘We’re going to get together and we’re going to solve the biggest problems of our time.’ ‘We’re going to fight inequality; we’re going to advance injustice [sic]’….”

“And as I got deeper and deeper into that world, it started to dawn on me…that the same people who gathered in Aspen, when you actually dug a little bit into what they did in their day jobs, were the people causing the problems they were trying to solve. They were the bankers who had caused the 2008 meltdown around the world, now talking about how to increase housing justice. They were the people who sell soft drinks to kids that foreshorten their lives and give them diabetes and all these other conditions, talking about health equity. They were the very people in Silicon Valley [who were] starting to compromise all of our privacy…[and] starting to frankly let their platforms be used as vessels for cyberwar on our electoral processes. That was happening, and they were letting it happen, because they didn’t want anything to get in the way of their growth—basically selling out democracy itself—and then they were coming to Aspen to talk about freedom.”

“And it just began to grate on me. I have to say, I was not alone. There were a bunch of people who started sitting in the back row, kind of complaining. It was all the people they shouldn’t have let in: the artists, the writers, the journalists—the mistakes. I don’t know if they do that anymore…”

Meaning Spotlight on Anand Giridharadas (YouTube)

Another point he takes aim at is the idea of “doing well by doing good.” This refers to the idea that the best way to change to world is to get rich and make a fortune. Not only that, but that the richer they get, the better off the world will be. In other words, a “win-win” situation as they like to call it. For the plutocrats change is good—so long as it doesn’t threaten their obscene wealth and profits in the slightest. This means that, no matter how much they supposedly “help”, they make damn sure that many options are off the table from the start (like paying higher tax rates or closing offshore tax loopholes, for instance). After all, since the more money they make means that the world is a better place, by the same rationale, if they make even slightly less money, then the world must therefore become a worse place for everyone! Here’s Giridharadas again, describing the “Summit at Sea”—a networking event with 3,000 entrepreneurs on a cruise ship to the Bahamas:

“They were—almost to the person—all entrepreneurs. Like, none of them worked (some worked for big companies, but that was not the majority. More of the speakers maybe worked for Apple, or things like that). Entrepreneurs, but entrepreneurs convinced that every dollar they make is making the world better by ten dollars. That they are almost these sort of Christ-like business figures, who are sacrificing by making money, and helping others on this scale. ‘It’s my cupcake company that’s going to help girls in Afghanistan.’ ‘You buy these shoes, and we will put a shoe on some other foot in some other country that you’ll never be able to verify’…and everybody on that boat shared that ideology…”

“What was so fascinating was the way in which all these things come together in this religion: making money, promoting yourself, making the world a better place. Win-win. One way to think about Winners Take All is an attempt to fire a lot of ammunition at the fraudulent idea of win-win. Of doing well by doing good. Of this idea of making the world a better place that tells rich people and corporations that nothing has to change for them to improve the state of the world. That you can somehow, in a town like this, [you can] empower workers—give them more money, whatever—without that ever coming at the expense of the people who own the companies.”

And another point he makes is, “Why do we expect that the people best equipped to solve the world’s problems are the ones who are disproportionately causing the world’s problems in the first place?” How did they cause those problems, you ask? Offshoring labor, profiting off the global race to the bottom (wage arbitrage), financialization and asset stripping, reckless speculation, hiding money in offshore accounts, dodging taxes with fancy accounting schemes, running brutal sweatshops in the Third World (or the First World if you’re Amazon), union-busting, working your employees half to death, fighting minimum wage increases, gouging consumers with usurious interest rates and bogus charges, spying on us and selling our online personal information to the highest bidder, deceitful advertising, peddling foods laden with salt, fat, sugar, and other addictive chemicals, lobbying politicians all over the globe for lax regulations and low taxes, bankrolling sock-puppet politicians, shaking down hard-up local governments for corporate welfare, lobbying, driving locally-owned business into bankruptcy, polluting the environment, overharvesting endangered natural resources, enclosing the commons—the list is almost endless, and could fill an entire book by itself. All in a day’s work.

Or, as a shorthand, we could say, Neoliberalism.

CEO compensation has grown 940% since 1978. Typical worker compensation has risen only 12% during that time (Economic Policy Institute)

So, without further ado, let’s get to it.

Points 1 & 2 fall into the “hurt billionaire feelings” category. How dare you be so “uncivil” to these lovely, benevolent plutocrats! This is sort of like the common argument, ‘We can’t expect billionaires to respect the law or pay taxes, because then they’ll just move somewhere else!’ This neglects the unfortunate fact that by allowing billionaire plutocrats to wield such disproportionate power and influence in the first place, they can hold essential functions of state hostage to their very whim. And that’s a good thing?

Here’s an example of how desperate, weak and ridiculous the arguments are right off the bat:

#1 Which got more criticism? Mark Zuckerberg giving $100 million to help low-income students? Or Mark Zuckerberg buying a $59 million dollar mansion in Lake Tahoe?

Well, presumably the former, because it’s an example of a rich plutocrat seizing power normally attributed to state and municipal governments, and coming with significant strings attached. That is, the former is an effect of billionaires deliberately inserting themselves into public policymaking and trying to shape it to their own ends and preferences. It also raises very important questions, such as why schools are so desperately revenue-starved that they need to accept handouts from “benevolent” plutocrats in the first place. It also affects the lives of thousands of American citizens.

The latter was just, well, buying stuff. People do that every day. Why would that even be newsworthy, since it doesn’t affect anyone else? (except, I assume, his immediate neighbors)

Some teachers’ unions have made corporate taxation a part of the debate over school cuts: the Saint Paul Federation of Teachers talks about the decline in taxation of Minnesota’s largest corporations (“Thirty years ago, Bancorp, EcoLab, Travelers Insurance, 3M and Target were taxed at 13.6 percent. That rate has been cut to 9.8 percent. Wells Fargo paid $15 million less in 2014 than they paid in 1990, when the tax rate was 12 percent. In 2014, 10 corporations paid $31 million less than they did in earlier periods”) and explicitly connects those tax giveaways to the budgetary shortfalls that harm the city’s kids.

It’s not enough that corporations give back some of that money in the form of charitable donations: those donations always come with strings attached, shaping curriculum and activities to the priorities of corporate benefactors, and the funding can be withdrawn any time our public schools do work that cuts against the corporate agenda.

US tax shortfalls have our public schools begging for donations (BoingBoing)

So the question is utterly nonsensical on its face. We’re getting really desperate here and we’re only on point #1.

#2 If attacks on billionaire philanthropy decrease billionaires’ donations, is that acceptable collateral damage in the fight against inequality?

In other words, how dare you criticize our benevolent plutocratic overlords—they might take their money and go home! In other words, bald-faced extortion.

Suppose Jeff Bezos is watching how people treat Bill Gates, and changes his own behavior accordingly. Maybe in the best possible world, when people attack Gates’ donations, Bezos learns that people don’t like ruthless billionaires, decides not to be ruthless like Gates was, and agrees to Bernie Sanders’ demand that he increase his employees’ pay by $4/hour. But Bezos also learns people criticize billionaires’ philanthropy especially intensely, decides not to be charitable like Gates was, and so ten million people die. You’ve just bought an extra $4/hour for warehouse workers, at the cost of ten million lives.

Wow. Just…wow.

So, if Bezos has to pay his workers a reasonable wage, then people will die???!!  How about we make them give away this money? If only society had some sort of mechanism **cough, taxes, cough** to do that. Oh well.

Doesn’t this logic just reinforce the dangers of allowing private government by whim?

So, really, it’s kind of like the following argument: if we dare criticize droit de seigneur, what happens if the lords lay down their arms and refuse to defend our kingdom? We might get raided, and someone might get get hurt. We have no choice to comply with their every dictate. Please, sire, take my betrothed’s maidenhead, with my full blessing. And let me bend the knee and kiss your ring, besides, Milord. (yes, I’m aware this rite was a myth, but the example still holds).

And by the way, you can criticize the government’s policies and priorities without the fear that the government will just up and decide to stop paying for essential services one day in a huff like Achilles quitting the battlefield to sulk in his tent. In fact, such criticism and debate is an essential part of the process. Not so, apparently, with billionaire benevolence, which is dependent on appeasing their fragile egos and a sufficient amount of grovelling. Which flows directly into the next point:

#3 How much gratitude vs. scrutiny do billionaire donors get?

This is a weird one. Here, he does some kind of Twitter search, and finds that public opinion is sometimes disproportionately hostile to these trickle-down “gifts” that come with strings attached. Rather than take that as a sign of some sort of “wisdom of the crowd”, he just sort of handwaves it off.

[As a side note, this whole notion of the so-called “wisdom of crowds” is very selectively applied by Neoliberals. When it confirms what they want it to, it clearly demonstrates the “wisdom” of the crowd, as opposed to fallible individuals. But when popular opinion goes against their Neoliberal belief system, or for socialistic ideas, then it suddenly becomes just the ignorant rabble acting “irrationally” and desperately in need of enlightenment by the “rational” Neoliberals (typically in the form of copious charts and graphs – after all, who are you going to believe, us or your own lying eyes?)]

Although some donors like Bill Gates are generally liked, others, like Zuckerberg and Bezos, are met with widespread distrust.

Besides, well, who cares? How is any of this relevant at all? I mean, at all? Again, pretty weak tea from the self-appointed supreme masters of “logic and rationality.”

Now we get to the good stuff. Here, he lists a very common argument by critics:

#4 Since billionaires have complete control over their own money, they are helping society the way they want, not the way the voters and democratically-elected-officials want. This threatens democracy. We can solve this by increasing taxes on philanthropy, so that the money billionaires might have spent on charity flows back to the public purse instead.

Well, that’s a little distorted: we’re not taxing philanthropy, we’re taxing wealth. Not sure why the misstatement here. Is it deliberate? But, anyway, all that sounds pretty reasonable. How are you going to argue against that?

Now, here’s where things really start getting pretty fucking ridiculous. As you knew would happen, he lists chapter and verse of all the good and worthy causes that benevolent billionaires have showered their (totally 100% fairly gotten) fortunes on:

Two of the billionaires whose philanthropy I most respect, Dustin Moskovitz and Cari Tuna, have done a lot of work on the criminal justice reform. The organizations they fund determined that many innocent people are languishing in jail for months because they don’t have enough money to pay bail; others are pleading guilty to crimes they didn’t commit because they have to get out of jail in time to get to work or care for their children, even if it gives them a criminal record. They funded a short-term effort to help these people afford bail, and a long-term effort to reform the bail system.

If Moskovitz and Tuna’s money instead flowed to the government, would it accomplish the same goal in some kind of more democratic, more publically-guided way? No. It would go to locking these people up, paying for more prosecutors to trick them into pleading guilty, more prison guards to abuse and harass them. The government already spends $100 billion – seven times Tuna and Moskovitz’s combined fortunes – on maintaining the carceral state each year

And where, exactly does that carceral state come from, after all? Why do we have it in the first place? Oh yeah, that’s right, to defend the property of the rich and powerful. But, aside from that, certainly the good works of these two individuals must more than  make up for the unapologetic ratfuckery perpetrated by the rest of the plutocratic billionaire class against the rest of us, no?

“Corporations that run prisons continue to protect their profit margins in less illegal and more insidious ways. These corporations stand to make more money when more people are sentenced to prison, so they work hard to influence policy and push for harsher sentencing laws.

A report from the Justice Policy Institute details how prison corporations use lobbyists, campaign contributions, and relationships with policymakers to further their own political agenda. For instance, the Corrections Corporation of America (CCA), the largest private prison company in the US, has spent $17.4 million on lobbying expenditures in the last 10 years and $1.9 million on political contributions between 2003 and 2012.

In 2013, the CCA and another major prison company, the GEO Group, also funded lobbying efforts to stop immigration reform, killing the path to legal status for over 11 million undocumented people in order to keep undocumented immigrants flowing into their facilities, as well as securing increased congressional funding to incarcerate those same people in for-profit prisons.”

Private prisons need to be made illegal. (Reddit)

But wait, there’s more!

Or take one of M&T’s other major causes, animal welfare. Until last year, California factory farms kept animals in cages so small that they could not lie down or stretch their limbs, for their entire lives. Moskovitz and Tuna funded a ballot measure which successfully banned this kind of confinement. It reduced the suffering of hundreds of millions of farm animals and is one of the biggest victories against animal cruelty in history.

If their money had gone to the government instead, would it have led to some even better democratic stakeholder-involving animal welfare victory? No. It would have joined the $20 billion – again, more than T&M’s combined fortunes – that the government spends to subsidize factory farming each year. Or it might have gone to the enforcement of ag-gag laws – laws that jail anyone who publicly reports on the conditions in factory farms (in flagrant violation of the First Amendment) because factory farms don’t want people to realize how they treat their animals, and have good enough lobbyists that they can just make the government imprison anyone who talks about it.

Highlighting opposition to ag-gag laws by a couple of Silicon Valley oligarchs is rich indeed, given that that the whole reason such laws exist in the first place is because of lobbying and corruption by wealthy agribusinesses and their socipathic billionaire allies! Somehow, I don’t think the average person is pushing for laws to prevent them from finding out how their own food is produced, do you?

How ALEC Has Undermined Food Safety By Pushing ‘Ag Gag’ Laws Across The Country (ThinkProgress)

“Ag-gag” laws — which ban the collection of evidence of wrongdoing on farms, from animal cruelty to food-safety violations — are a sterling example of how monopolism perpetuates itself by taking over the political process.

As American agribusiness has grown ever-more concentrated — while antitrust regulators looked the other way, embracing the Reagan-era doctrine of only punishing monopolies for raising prices and permitting every other kind of monopolistic abuse — it has been able to collude, joining industry groups like ALEC, the American Legislative Exchange Council, which drafts industry-favoring “model legislation” and then lobbies state legislatures to adopt it.

Court strikes down Iowa’s unconstitutional ag-gag law (BoingBoing)

And, of course, the underlying reason why monopoly laws have been abandoned, and why businesses all across industries have become increasingly concentrated, has a lot to do with the plutocrats’ wholesale purchase of the economics profession which has led to the pushing of Neoliberal and “Chicago School” policies via an unfathomably large constellation of universities, think-tanks, journals, publishing houses, magazines, online resources, etc., etc.

Kind of overwhelms all that philanthropy, doesn’t it?

Forgive me if I’m less than persuaded by this example of a couple of Facebook billionaires (and let’s not even get into how fucking sinister Facebook is). Help with one hand, hurt with the other. Or, as Giridharadas put it, extreme taking followed by extreme giving.

Here’s another howler:

George Soros donated/invested $500 million to help migrants and refugees. If he had given it to the government instead, would it have gone to some more grassroots migrant-helping effort?

No. It would have gone to building a border wall, building more camps to lock up migrants, more cages to separate refugee children from their families. Maybe some tiny trickle, a fraction of a percent, would have gone to a publicly-funded pro-refugee effort, but not nearly as much as would have gone to hurting refugees.

And how exactly did Trump come to power in the first place? Could it be millions and millions of dollars of Dark Money spent by plutocrats—the Mercer family in particular—as exhaustively documented in Jane Mayer’s indispensable and important book, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right? Are these the policies of government, or rather the policies of one particularly heinous administration, one that has been installed and consistently backed by sociopathic members of the billionaire elite class since day one (such as FOX News, Sinclair broadcasting, Cambridge Analytica, et. al.)?

The Reclusive Hedge-Fund Tycoon Behind the Trump Presidency (Jane Mayer, The New Yorker)

It’s the oldest trick in the book: elect horrible Republicans who do horrible things and then use it as proof as to just how horrible the government is. The solution? Private charity, of course!

So, the best system of government, according to SSC, is one in which the few “good” billionaires spend their money on defeating the laws written by, and for the benefit of, the other set of “evil” billionaires” who manipulate and control our government? So the “good” billionaires make up for the “evil” ones? It that seriously the argument here? Are you f*#king kidding me???

And this is supposed to be the ultra-rational “reason and logic” crowd. Apparently not when it comes to defending Neoliberalism. The causes these “good” billionaires are dedicated to fighting are all the ruinous consequences of the policies favored by the rest of the billionaire class who control the damn government in the first place! But let’s move on.

#5…but the US government is not a charity. Even when it’s doing good things, it’s not efficiently allocating its money according to some concept of what does the most good.

No, the U.S. government is not a charity, because it has to, you know, actually govern the fucking country! That’s kind of important, after all. It has a lot of things it must allocate money to (what’s called non-discretionary spending). That’s simply the nature of government—every government in the world.

Nevertheless, allocating more money to health and education would certainly do a lot of good, wouldn’t it? And what’s stopping that, I wonder? Hmmmm…

Oh yeah, I remember now: HOWYAGUNNAPAYFORIT? The one, single, magical word, the all-powerful incantation perennially invoked by the plutocrats and their media lackeys that assures that the government cannot, and will never, ever, be able to adequately address the pressing problems facing the American people today. And where, I wonder, does this ubiquitous phrase originate? Outer space? The American people themselves? After all, no one seems to be asking that of the private charities we’ve been discussing. No, government alone seems to be under that restriction (and only in areas that don’t directly benefit the plutocrats’ bottom line).

No, I have a sneaking suspicion that it ultimately originated from those same “benevolent” Neoliberal billionaire overlords who are getting their dicks sucked by this SSC essay.

Bill Gates saved ten million lives by asking a lot of smart people what causes were most important. They said it was global health and development causes like treating malaria and tuberculosis. So Gates allocated most of his fortune to those causes. Gates and people like him are such a large fraction of philanthropic billionaires that by my calculations these causes get about 25% of billionaire philanthropic spending.

The US government also does some great work in those areas. But it spends about 0.9% of its budget on them. As a result, one dollar given to a billionaire foundation is more likely to go to a very poor person than the same dollar given to the US government, and much more likely to help that person in some transformative way like saving their life or lifting them out of poverty. But this is still too kind to the US government. It’s understandable that they may want to focus on highways in Iowa instead of epidemics in Sudan

Yes it is understandable, because the people of the United States presumably elect representatives to the government of the United States to solve problems faced by the citizens of the United States, and not those faced by Sudan. Presumably, the people who live in Sudan elect representatives to deal the problems faced by Sudan. But, remember, in Neoliberal world, nation-states are so passé.

I mean, can you get more stupid than this? Here’s what really stopped that spending: extreme taking:

We had a once-in-a-generation opportunity to advance universal health care, benefitting many millions of uninsured Americans, saving lives, staving off bankruptcies, and indeed saving public dollars that would otherwise be devoted to emergency-room care. We had a means of helping to pay for it by a slight alteration in a tax break used by the most well-off—and, undoubtedly, the most generously insured—members of society. Yet the collective leadership of American philanthropy—a leadership, by the way, that had been with few exceptions silent about the redistribution of wealth upward through the Bush tax cuts, silent about cuts in social programs, silent about the billions of dollars spent on the wars of the last decade—found its voice only when its tax exemption was threatened, and preferred to let the government go begging for revenue elsewhere, jeopardizing the prospects for health-care reform, in order to let rich, well-insured people go on shielding as much of their money as possible from taxation.

… What that situation made plain to me was not just that philanthropy is quite capable of acting like agribusiness, oil, banks, or any other special-interest pleader when it thinks its interests are jeopardized. It helped me to see that however many well-intentioned and high-minded impulses animate philanthropy, the favorable tax treatment that supports it is a form of privatization. Money that would otherwise be available for tax revenue that could be democratically directed is shielded from public control for private use.

Democracy and the Donor Class (Democracy Journal)

…Yet even on issues vital for the safety of the American people, the government tends to fail in surprising ways. How much money does the US government spend fighting climate change?

Well, presumably not as much as it could be spending, given that large numbers of corporations are spending staggering amounts of cash to prevent the Green New Deal sponsored by Democrats from ever becoming law. But never mind that salient fact, since SSC is a Neoliberal site, this just gives it some more ammunition to bash the “incompetent” government. And why is government spending so low?

The Green New Deal is a loose set of ambitious goals outlined in a nonbinding resolution that calls for a global goal of achieving net zero carbon emissions by 2050 — but no policy specifics on how to get there. It is also an economic plan, which calls for massive federal investment, enhancing the social safety net, and millions of new jobs to overhaul the energy and infrastructure industries in the U.S

Senate Majority Leader Mitch McConnell, R-Ky., announced last month that he would put the resolution authored by New York Democratic freshman Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey, D-Mass., up for a vote. Republicans are trying to elevate the freshman lawmaker, who has described herself as a democratic socialist, and her ideas as emblematic of the Democratic Party going into 2020.

“In recent months our nation has watched the Democratic Party take a sharp and abrupt left turn toward socialism,” McConnell said earlier this month. “A flawed ideology that has been rejected time and again across the world is now driving the marquee policy proposals of the new House Democratic majority, and nothing encapsulates this as clearly as the huge, self-inflicted, national wound the Democrats are agitating for called the Green New Deal.”

The National Republican Senatorial Committee has also started using Ocasio-Cortez in attack ads similar to the way the party campaigns have run against House Speaker Nancy Pelosi, D-Calif., for years. In a recent tweet attacking Rep. Joaquin Castro, D-Texas, who is considering a run against Republican Sen. John Cornyn, the NRSC said Castro “votes with AOC 94% of the time.” Castro is a co-sponsor of the Green New Deal. House Republican candidates are also using Ocasio-Cortez and the Green New Deal in attack ads, like this one released Monday by former Rep. Karen Handel, R-Ga., who lost in 2018 and is seeking a rematch for a suburban Atlanta district.

https://www.npr.org/2019/03/26/705897344/green-new-deal-vote-sets-up-climate-change-as-key-2020-issue

But it’s “government” (and NOT Republicans, mind you) that is bad. Riiight….As SSC points out:

In 2017, the foundation of billionaire William Hewlett (think Hewlett-Packard) pledged $600 million to fight climate change. One gift by one guy was almost twice the entire US federal government’s yearly spending on climate issues.

Gee, I wonder why that might be? SSC is gnomically silent. I guess government is just “bad”, amirite? It can’t possibly have anything to do with the bottomless pits of money fighting against any kind of environmental regulations, could it? And where, pray tell, might all that money be coming from? China? The moon? Martians?

I wish I could give a more detailed breakdown of how philanthropists vs. the government spend their money, but I can’t find the data. Considerations like the above make me think that philanthropists in general are better at focusing on the most important causes.

Of course they make you think that, because that’s the foregone conclusion you were heading to all along.

How government spends its (discretionary) money is theoretically decided by the American people themselves. But we’ve seen time and time again that the preferences of the average voter don’t matter one whit; only those of the donor class do. The very same donor class giving away all this wonderful charity money to poor people in Sudan, or helping animals, or whatever.

And, by the way, I’m sure SSC is taking into account how many people are saved from poverty by Social Security, and how many seniors are alive today because of Medicare, and so forth when it does it’s accounting of “ineffective” government versus “effective”private charities (that’s sarcasm by the way, folks).

#6 I realize there’s some very weak sense in which the US government represents me. But it’s really weak. Really, really weak. When I turn on the news and see the latest from the US government, I rarely find myself thinking “Ah, yes, I see they’re representing me very well today.”

Yet more Neoliberal government-bashing. Are you sensing a pattern here?

Well, he’s not alone—a lot of people think that, after all. But, once again, I’m left wondering, why on earth might that be??? Once again, SSC is mysteriously silent on this issue. Government must just inherently be “bad” and “ineffective” like the Neoliberals have been constantly telling us all along, right? Right???

New Data Shows Donor Class Does Not Accurately Represent Diversity and Policy Views of American Voters (Demos)

Political donors in the US are whiter, wealthier, and more conservative than voters (Vox)

Who really matters in our democracy — the general public, or wealthy elites? That’s the topic of a new study by political scientists Martin Gilens of Princeton and Benjamin Page of Northwestern. The study’s been getting lots of attention, because the authors conclude, basically, that the US is a corrupt oligarchy where ordinary voters barely matter…

Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.

America functions as an oligarchy, not as a democracy (TYWKIWDBI)

“Economic elites and organized groups representing business,” eh? You mean, those same folks that SSC is busy bootlicking because of all the oats that are coming out of their asses to feed the hungry sparrows? Those guys?

Bill Gates has an approval rating of 76%, literally higher than God. Even Mark Zuckerberg has an approval rating of 24%, below God but still well above Congress. In a Georgetown university survey, the US public stated they had more confidence in philanthropy than in Congress, the court system, state governments, or local governments; Democrats (though not Republicans) also preferred philanthropy to the executive branch.

Okay, so earlier we dismissed popular opinion on Twitter; now we’re using popular polls to boost our case. Facts and logic!

Besides, what does the popularity of billionaire plutocrats, who have massive PR organizations at their disposal, matter at all? And how much can such polls be trusted? After all, who owns the media? Oh, yeah, that’s right, the plutocrats themselves!! (BTW that Bill Gates is more popular than God ought to scare the shit out of anyone, even Neoliberals).

These 15 Billionaires Own America’s News Media Companies (Forbes)

Also, given that Big Business and sociopathic plutocrats have been waging an unremitting, fifty-year+ total war on “Big Government” using every resource available to them, I wonder if that might influence those poll numbers. But, in SSC’s world, that doesn’t exist, apparently.

When I see philanthropists try to save lives and cure diseases, I feel like there’s someone powerful out there who shares my values and represents me. Even when Elon Musk spends his money on awesome rockets, I feel that way, because there’s a part of me that would totally fritter away any fortune I got on awesome rockets. I’ve never gotten that feeling when I watch Congress. When I watch Congress, I feel a scary unbridgeable gulf between me and anybody who matters. And the polls suggest a lot of people agree with me.

It speaks volumes about Slate Star Codex (and the whole essay in general) that he sees people like Elon Musk and Jeff Bezos “representing him” when they “fritter away” billions of dollars on rocketships to Mars for themselves and their 1% pals. I could practically end the essay right here and now. As for me, I don’t feel that way; I feel exactly the same as Gil Scott-Heron in Whitey on the Moon. And while I’m guessing the average SSC reader is firmly ensconced in the former camp, seeing themselves as being on the winning side of the billionaries’ velvet rope, I’m willing to bet statistically that the majority of people feel more like I do (as indeed they should).

And, as a matter of fact, I do feel that politicians like Bernie Sanders, Elizabeth Warren, and AOC represent me (even if they don’t literally represent me since I don’t reside in their states), moreso than Bill Gates, Elon Musk, Jeff Bezos or Mark Zuckerberg (whom I can’t vote for, either). I wish we had more politicians  like them. Note, also, that none of those politicians above are billionaires, or are funded by billionaire sugar daddies.

#7 Shouldn’t people who disagree with the government’s priorities fight to change the government, not go off and do their own thing?

Well, the plutocrats have already spent countless billions of dollars changing the government—they just changed it for their own advantage, and to the detriment of everybody else. They’re also spending billions of dollars to make sure it stays that way.

The money spent on lobbying is conspicuously absent from this article. Extreme taking followed by extreme giving. But the taking part is never mentioned. It’s like it doesn’t exist.

Then, SSC launches into some bizarre analogy between the democratically-elected U.S. government and the Church of Scientology (?) that makes absolutely no fucking sense whatsoever. They’re really grasping at straws here. I guess “facts and logic” don’t matter so much after all when you’re slinging the shit for Neoliberalism. Seriously, go there and read for yourself just how bizarre this is.

Also, do you realize how monumental a task “reform the government” is? There are thousands of well-funded organizations full of highly-talented people trying to reform the government at any given moment, and they’re all locked in a tug-of-war death match reminiscent of that one church in Jerusalem where nobody has been able to remove a ladder for three hundred years

“Do I realize how monumental a task ‘reforming the government’ is?”

Well, no I don’t, but I know some folks who do. Their names are Charles and David Koch, and they know exactly what it takes to “reform” the government, since they’ve doing exactly that over the last forty-odd years, and they’ve largely succeeded in their task. And there are many more like them: the Cato Institute, the Heritage Foundation, ALEC, The Federalist Society, etc.—far too many to name or count. We’ve encountered quite a few of them already.

And if you don’t think that the government has been “reformed”—exclusively for the benefit of the Chamber of Commerce and the investor/ownership class, mind you—then you are clearly a simpering idiot, and no one should pay any attention to anything you have to say ever again.  The “ladder” has indeed moved, just for the benefit of certain people, exclusively.

Incidentally, another guy who has some idea of what it takes is named Bernie Sanders. Why, I wonder, have these benevolent billionaires not donated one solitary cent to him (but have donated to more status-quo-favoring Democratic candidates and Republicans – mostly to Republicans). In fact, not only have they not donated anything to him, they are almost unanimous in their opposition to his very candidacy, as Bernie himself has proudly acknowledged.

9. Does billionaire philanthropy threaten pluralism?

I really don’t understand this one. This isn’t really a common argument against depriving the government of revenue in favor of private charity with strings attached; SSC just seems to include it for no other reason that to include an argument which can be easily dismissed. Sort of “Washington Generals” argument, I guess. It does give us this gem, however:

The Multidisciplinary Association for Psychedelic Studies (MAPS) sponsors research into mental health uses of psychedelic drugs. You might have heard of them in the context of their study of MDMA (Ecstasy) for PTSD being “astoundingly” successful. They’re on track to get MDMA FDA-approved and potentially inaugurate a new era in psychiatry. This is one of those 1000x opportunities that effective altruists dream of. The government hasn’t given this a drop of funding, because its official position is that Drugs Are Bad.

Wow, using psychedelic research to justify private charity? That’s some next-level chutzpah right there! That’s killing your parents and begging the court for clemency because you’re an orphan.

Again, why, exactly, does the government (in the U.S.) believe that “Drugs are Bad?” SSC doesn’t say. Certainly the American people themselves don’t believe that, especially not with efforts towards decriminalization and legalization taking place all over the country (not to mention the enthusiastic drug use by citizens themselves!). So who exactly does believe that?

Well, we know that psychedelics were legal at one point. We also know that Nixon administration officials have since freely admitted that they were criminalized expressly to go after and eviscerate the anti-war movement and civil rights campaigns. And the Nixon administration was hardly an enemy of the plutocratic class; rather, he was following the dictates of the Powell Memorandum almost to a tee.

And now that bald, naked attempt at smashing the Left in this country is being used as a rationale for starving the government of funds and relying on the charity of unaccountable billionaire plutocrats? As I said, next-level chutzpah!

Or: in 2001, under pressure from Christian conservatives, President Bush banned federal funding for stem cell research. Stem cell scientists began leaving the US or going into other area of work. The field survived thanks to billionaires stepping up to provide the support the government wouldn’t…

This one is even more outrageous. Unlike the Drug War, where the blame can be spread around between both parties, this one is exclusively a product of one single branch of one single party: the radical Fundamentalist Evangelical Republicans. Ironically the same ones who reliably run on a platform of how “ineffective” the government is, how taxes are “theft,” how we need to “cut spending”, how poor people are “lazy,” etc., etc.

Or: despite controversy over “government funding of Planned Parenthood”, political considerations have seriously limited the amount of funding the US government can give contraceptive research. It was multimillionaire heiress Katharine McCormick who funded the research into what would become the first combined oral contraceptive pill.

Ummm, are you seeing a pattern here, folks? Because SSC sure doesn’t.

Aren’t these really just arguments for the Republican Party being banished from ever holding the levers of power at any time in this country?

This point is partly addressed by the next bullet point:

9. Aren’t the failures of government just due to Donald Trump or people like him? Won’t they hopefully get better soon?

Sounds like a good argument. What could be wrong with this one?

My whole point is that if you force everyone to centralize all money and power into one giant organization with a single point of failure, then when that single point of failure fails, you’re really screwed.

Remember that when people say decisions should be made through democratic institutions, in practice that often means the decisions get made by Donald Trump, who was democratically elected…

“Democratically elected?” Er, no he wasn’t. He won because of the Electoral College. Only in the most pettifogging sense could he be considered “democratically elected.” And, thanks to gerrymandering and the concentration of the population into urban areas, less and less of our representatives are being “democratically elected” with every passing year. And let’s not even get into the fact of how much the election was influenced by foreign interference.

Also, the government isn’t a “single point of failure.” There are fifty state governments, plus D.C., plus United States territories. Every single one of them is being bled dry of necessary revenue because of the actions of venal billionaire plutocrats and legalized bribery. How many cities have built brand-new sparkling sports venues for privately-owned sports teams, even while cutting budgets for university systems, as was done here in Wisconsin? How much money has been shilled out as corporate welfare to private corporations, such as Foxconn (also here in Wisconsin). And how can we forget Jeff Bezos infamously playing cities against each other in order to get the biggest taxpayer-funded bonanza to secure his shiny new headquarters.

Shit like that is exactly what we’re taking about when we talk about the “extreme taking” part of the equation.

In fact, the actions of politically-active plutocrats like the Koch Brothers are concentrated even more intensely at the state level than at the Federal level. And they’re hardly absent from municipal politics either, fighting against widely-supported initiatives like minimum wage increases and mandatory sick leave which would benefit literally tens of thousands of struggling American citizens all over the country (sorry Sudan—you’re on your own).

But, hey, I’m sure that donation to the symphony will make up for it, eh?

Besides, even if the Federal government were a so-called “single point of failure” (which disproportionately tends to fail when Republicans are in charge), it also has vastly more resources to alleviate poverty and solve big problems than any private charity. And that includes a license to print money, if only we would let it. Er, I mean, if only they would let us.

In fact, we can do whatever we want. Money doesn’t grow on rich people.

This point is even made by SSC in the essay itself:

8. The yearly federal budget is $4 trillion. The yearly billionaire philanthropy budget is about $10 billion, 400 times smaller.

For context, the California government recently admitted that its high-speed rail project was going to be $40 billion over budget (it may also never get built). The cost overruns alone on a single state government project equal four years of all the charity spending by all the billionaires in the country.

Compared to government spending, Big Philanthropy is a rounding error. If the whole field were taxed completely out of existence, all its money wouldn’t serve to cover the cost overruns on a single train line.

So, charity spending by plutocrats is both more effective than taxes, and also insignificant. Which is it? (also, notice the subtle Neoliberal swipe at “wasteful” government spending on infrastructure. Classy!).

To a large extent, I would be far less hostile to efforts of private charity if they didn’t occur simultaneously with the constant, unremitting message pouring out from the billionaire class and their bought-and-paid-for corporate media shills that the United States is “broke” and cannot afford to pay for basic things like universal single-payer healthcare, free higher education, decarbonizing our energy infrastructure, or about a million other essential things that we’re told are “utopian” and simply “unaffordable” in a country that has more millionaires and billionaires than any other country on earth. But I don’t see that stopping anytime soon—in fact, it’s intensifying. Again, it bears repeating that the politicians who support these things (Sanders, AOC, et. al.) are vigorously opposed by this supposedly “benevolent” plutocrat class:

We could start with the 16 negative stories the [Washington] Post ran in 16 hours, and follow that up with the four different Sanders-bashing pieces the paper put out in seven hours based on a single think tank study.

Or you could take the many occasions on which the Post‘s factchecking team performed impressive contortions to interpret Sander’s fact-based statements as meriting multiple “Pinocchios”. In particular, we might observe the time the Post “factchecked” Sanders’ claim that the world’s six wealthiest people are worth as much as half the global population. It just so happens that one of those six multi-billionaires is [Jeff] Bezos, which would make an ethical journalist extra careful not to show favoritism.

Instead, after acknowledging that Sanders was, in fact, correct, the paper’s Nicole Lewis awarded him “three Pinocchios”—a rating that indicates “significant factual error and/or obvious contradictions.” This is because, the paper explained, even though the number comes from a reputable nonpartisan source, Oxfam, which got its data from Credit Suisse, “It’s hard to make heads or tails of what wealth actually means, with respect to people’s daily lives around the globe.”

Here’s the Evidence Corporate Media Say Is Missing of WaPo Bias Against Sanders (FAIR)

Now, for the big conclusion, which is just as insipid as the rest of the post.

So you’re saying these considerations about pluralism and representation and so on justify billionaire philanthropy?

Is he saying that? After all that, I still can’t tell.

The Gates Foundation plausibly saved ten million lives. Moskovitz and Tuna saved a hundred million animals from excruciatingly painful conditions. Norman Borlaug’s agricultural research (supported by the Ford Foundation and the Rockefeller Foundation) plausibly saved one billion people.

That’s nice, but totally irrelevant to the point: extreme taking followed by extreme giving. It only looks at half of that equation, and totally ignores the other half, thus becoming a straw man argument.

How many people have died over the past half-century because of draconian debt repayments demanded by banks from indebted third-world countries? And who is responsible for that?

Does one cancel out the other? Do two wrongs make a right?

Besides, we could sling around factoids all day and sill not prove anything. How many lives have improved building codes (aka “evil” regulations) saved? Fifty? A hundred? A thousand? How about efficient municipal sanitation? Last time I checked, Flint still has lead in its drinking water. How about legally-required seat belts, which were fought against for years by big business (along with smoking prevention)?

Billionaire charity is filling a vacuum that should not be there in the first place.

I always have mixed feelings about the idea that news of the type “[Billionaire] donates to solve [horrific problem that should have been solved eons ago by officials]” because people should not be dependent on the generosity of the ultra-rich for basic human needs to be met. It reminds me of the time a local news program did a story on a girl who was selling ribbons and baked goods to raise money for cancer treatment that she needed and framed it as uplifting – “Look at this girl go!” That’s not uplifting, it’s a national disgrace that that girl receiving life saving medical treatment was dependent on how much she could fundraise.

Billionaire CEO makes $480,000 donation to Flint Community Schools for new water filtration systems (Reddit)

These accomplishments – and other similar victories over famine, disease, and misery – are plausibly the best things that have happened in the past century. All the hot-button issues we usually care about pale before them. Think of how valuable one person’s life is – a friend, a family member, yourself – then try multiplying that by ten million or a billion or whatever, it doesn’t matter, our minds can’t represent those kinds of quantities anyway. Anything that makes these kinds of victories even a little less likely would be a disaster for human welfare.

Agreed. Oh, and by the way, depriving governments of the necessary resources to save lives and improve the welfare of its citizens, and blocking desperately-needed social reforms that might slightly threaten profits, also makes these kinds of victories (more than) just a little less likely as well. And I also happen to believe that donating modest (for them) sums to the charities of their choice does not make up for the unrepentant  ratfuckery and skullduggery perpetrated by the one-percent billionaire elite class all over the world against the rest of us since the rise of Neoliberalism.

The researchers found that states that expanded Medicaid saw higher rates of enrollment and lower rates of uninsurance. Among the 55- to 64-year-olds studied, researchers found, receiving Medicaid “reduced the probability of mortality over a 16 month period by about 1.6 percentage points, or a decline of 70 percent.” Based on their findings, they estimate that states’ refusal to expand the program led to 15,600 additional deaths.

This is in line with a growing body of research that shows Medicaid expansion has not only vastly increased access to health insurance, but also improved health outcomes. About 13.6 million adults gained Medicaid coverage under Obamacare.

Study: the US could have averted about 15,600 deaths if every state expanded Medicaid (Vox)

In 2017, the Royal Society of Medicine said that government austerity decisions in health and social care were likely to have resulted in 30,000 deaths in England and Wales in 2015The rate of increase in life expectancy in England nearly halved between 2010 and 2017, according to research by epidemiology professor Michael Marmot. He commented that it was “entirely possible” that austerity was the cause and said: “If we don’t spend appropriately on social care, if we don’t spend appropriately on health care, the quality of life will get worse for older people and maybe the length of life, too.”

A paper released by the British Medical Journal in November 2017 estimated that the government austerity programme caused around 120,000 excess deaths since 2010. By 2018 figures from the Office for National Statistics (ONS) were showing a fall in life expectancy for those in poorer socioeconomic groups and those living in deprived areas, while average UK life expectancy had stopped improving. Public Health England was asked to carry out a review of life expectancy trends but government ministers said that the arguments put forward by some academics, that austerity had contributed to the change, could not be proved. ONS figures published in 2018 indicated that the slowdown in general life expectancy increase was one of the highest among a group of 20 of the world’s leading economies.

United Kingdom government austerity programme (Wikipedia)

Neoliberalism kills. Extreme taking followed by extreme giving, indeed. I wonder if SSC has an equal space in their heart for the people collapsing on the floors of Amazon warehouses from heat stroke and urinating in trash cans.

Probably not. Might reduce Bezos’ donations.

The main argument against against billionaire philanthropy is that the lives and welfare of millions of the neediest people matter more than whatever point you can make by risking them. Criticize the existence of billionaires in general, criticize billionaires’ spending on yachts or mansions. But if you only criticize billionaires when they’re trying to save lives, you risk collateral damage to everything we care about.

Well, I’m criticizing the billionaires for a hell of a lot more than that.

Here’s the thing: The argument is not—repeat NOT—that the wealthy shouldn’t donate some of their money to worthy causes. It never has been. That’s a straw man.

It’s criticizing the culture of extreme taking followed by extreme giving.

The argument is that they do this whilst at the same time as bending governments their will, dictating policy, blocking any kind of social reform, abusing and treating their own workers like human garbage, and spending unlimited funds blocking badly needed social reforms that would slightly inconvenience them or reduce their ungodly profits by even negligible amounts.

It’s also asserting that the cost of billionaires assuming the power to alter our world does, indeed, come at the expense of other equally pressing social needs.

It reminds me of the whole discussion surrounding golden rice. If you opposed handing poor farmers this genetically-modified rice produced by agribusiness corporations, you were a sociopathic monster who wanted children to go blind. But if you wanted to alter the economic system so that farmers could actually afford to purchase a variety of foods to ensure adequate nutrition—or even grow their own vitamin rich foods—well, then, you were a pie-in-the-sky utopian who didn’t understand economics.

To which I replied, if that’s the case well, then, fuck economics. Who is the real monster here???

The way I see it, the argument that private charity is “superior” than government at solving pressing social problems rests entirely on the fact that Big Business has gutted and undermined democratic governments around the world for at least the past fifty years.

They then turn around and use the subsequent failures of government as a justification for seizing ever-more of the commons for themselves and their corrupt, sheltered offspring.

And that, my friends, is the primrose path to Neofeudalism in a nutshell. It’s the Road to Serfdom, except this one is real and it’s happening right now, in front of our very eyes, not due to too much democracy, but too little.

I guess I have to repeat this over and over again until it sinks in: The plutocrats fund Trojan Horse candidates who undermine the viability of democratic governments at every opportunity, and have done for at least the last half-century. They then use the resulting “failures” and “ineffectiveness” of government as an argument and an excuse to hand them ever more power and control over society and its limited resources. Power which is accountable to no one. Resources which are theirs, and theirs alone. And this puerile, blatantly-biased, pathetically-reasoned joke of an essay by SSC is entirely in that vein. And it should put to rest any doubts that SSC isn’t an expressly political project designed to benefit the One Percent elites and catapult pure Neoliberal propaganda under the guise of “reason” and “enlightened centrismTM.”

SSC’s whole argument here basically boils down to this: better be kind to the billionaires, because it sure would be shame if anything happened to deprive those poor, suffering recipients of their largesse. I mean, you wouldn’t actually want to make this political, would you?

Basically a Mob shakedown. “Nice place you got here. Sure would be shame if anything happened to it. I and my associates can make sure that such an unfortunate thing doesn’t happen. Oh, and be sure to kiss my ring when you hand over the cash.”

And this is the best the vaunted “enlightened centrist” Neoliberal “fact and logic” crowd can do? The Neoliberals are seeing a global rebellion against their failed ideas everywhere they turn, and are getting increasingly scared and desperate. This is clearly a sign of that.

But, hey, at least their book reviews are good. Check out the latest on one of my personal favorites, Secular Cycles. The one of The Secret of Our Success is good too.

The Origin of Religion – Part 3

[Blogger note: I have apparently lost my USB drive, which contained all of my subsequent blog posts, thus, I’ll have to cut this short. I’ll try and finish this up using my recollection and some snippets lift on my hard drive]

In addition to what we spoke of before, there are several other “alternative” psychological ideas behind the origin and development of religion that the BBC article does not mention. Nonetheless, I feel these ideas are too important to be left out of the discussion. What follows is my summary below.

Terror Management Theory

Terror Management Theory (TMT) stems from a book written by psychotherapist Ernest Becker in 1973 called The Denial of Death. In it, he asserted that we invest in what are, in essence, “immortality projects” in order to stave off the subconscious fear of our own inevitable demise.This tendency is not exclusive to religions, but is also applicable to all sorts of other secular philosophies and behaviors.

The introduction to Becker’s book online provides a good summary:

Becker’s philosophy as it emerges in Denial of Death and Escape from Evil is a braid woven from four strands.

The first strand. The world is terrifying…Mother Nature is a brutal bitch, red in tooth and claw, who destroys what she creates. We live, he says, in a creation in which the routine activity for organisms is “tearing others apart with teeth of all types — biting, grinding flesh, plant stalks, bones between molars, pushing the pulp greedily down the gullet with delight, incorporating its essence into one’s own organization, and then excreting with foul stench and gasses the residue.”

The second strand. The basic motivation for human behavior is our biological need to control our basic anxiety, to deny the terror of death. Human beings are naturally anxious because we are ultimately helpless and abandoned in a world where we are fated to die. “This is the terror: to have emerged from nothing, to have a name, consciousness of self, deep inner feelings, an excruciating inner yearning for life and self-expression — and with all this yet to die.”

The third strand. Since the terror of death is so overwhelming we conspire to keep it unconscious. “The vital lie of character” is the first line of defense that protects us from the painful awareness of our helplessness. Every child borrows power from adults and creates a personality by introjecting the qualities of the godlike being. If I am like my all-powerful father I will not die. So long as we stay obediently within the defense mechanisms of our personality…we feel safe and are able to pretend that the world is manageable. But the price we pay is high. We repress our bodies to purchase a soul that time cannot destroy; we sacrifice pleasure to buy immortality; we encapsulate ourselves to avoid death. And life escapes us while we huddle within the defended fortress of character.

Society provides the second line of defense against our natural impotence by creating a hero system that allows us to believe that we transcend death by participating in something of lasting worth. We achieve ersatz immortality by sacrificing ourselves to conquer an empire, to build a temple, to write a book, to establish a family, to accumulate a fortune, to further progress and prosperity, to create an information-society and global free market. Since the main task of human life is to become heroic and transcend death, every culture must provide its members with an intricate symbolic system that is covertly religious. This means that ideological conflicts between cultures are essentially battles between immortality projects, holy wars.

Here’s Becker himself:

…of course, religion solves the problem of death, which no living individuals can solve, no matter how they would support us. Religion, then, gives the possibility of heroic victory in freedom and solves the problem of human dignity at its highest level. The two ontological motives of the human condition are both met: the need to surrender oneself in full to the rest of nature, to become a part of it by laying down one’s whole existence to some higher meaning; and the need to expand oneself as an individual heroic personality.

Finally, religion alone gives hope, because it holds open the dimension of the unknown and the unknowable, the fantastic mystery of creation that the human mind cannot even begin to approach, the possibility of a multidimensionality of spheres of existence, of heavens and possible embodiments that make a mockery of earthly logic — and in doing so, it relieves the absurdity of earthly life, all the impossible limitations and frustrations of living matter. In religious terms, to “see God” is to die, because the creature is too small and finite to be able to bear the higher meanings of creation. Religion takes one’s very creatureliness, one’s insignificance, and makes it a condition of hope. Full transcendence of the human condition means limitless possibility unimaginable to us. [1]

Becker’s ideas are thoroughly grounded in the Freudian school, and Freud’s essential insight was that human actions, beliefs, desires and intentions are often motivated by hidden, subconscious forces which we are not fully aware of. In this case, the subconscious fear of death motivates us to embrace belief systems that allow us to symbolically transcend our own mortality.

One common trope I often hear about religion is that we simply came up with a bunch of fairy tales to cope with our existential fear of death, and that this explains religion.

But, as we’ve already seen, this is far from adequate in explaining the persistence and diversity of religious beliefs. As we saw, most ancient religions did not believe in a comfortable, cushy afterlife, and the tales of wandering spirits of the dead requiring constant appeasement do not provide much reassurance about what comes after death. If we just wanted to reassure ourselves in the face of our mortality, why didn’t we invent the “happy ending,” country-club afterlife straightaway? Why did such beliefs have to wait until after the Axial Age to emerge? And what about religions that believed in metempsychosis (transference of consciousness to a new body, i.e. reincarnation), rather than a comfortable afterlife?

Plus, this does not explain our beliefs in ghosts, spirits, and other invisible beings. Nor does it explain the extreme wastefulness and costliness of religion. The book itself says little about the origin and development of actual religion, and where it does, it deals exclusively with Western Judeo-Christian religions (the Christian existentialist Kierkegaard is especially cited).

Nevertheless, Terror Management Theory’s ideas have been empirically shown to have an effect on our belief systems and behavior. When knowledge of one’s own death has been subconsciously induced in test subjects (a technique called “priming”), people have been shown to be more clannish, more hostile to outsiders, more harsh to deviants, more likely to accept and dole out harsh punishments, and so forth (in short, more conservative). And, certainly the motivations for many strange behaviors—from the lust for power, to obsessive work and entrepreneurship, to desperate attempts to achieve lasting fame and stardom, to trying to create a “godlike” artificial intelligence, to beliefs about “uploading” one’s personal consciousness into computers, to scientific attempts to genetically “cure” aging and disease—can be seen as immortality projects motivated by a subconscious fear of death.

I would argue that a case can be made that the reason almost every culture known to man has believed that some sort of “life essence” survives the body after death stems from an existential fear of death similar to what Becker described. But the reason it took the forms that it did has more to do with some of the things we looked at last time–Theory of Mind, Hyperactive Agency Detection, the Intentional Stance, and so forth.

The noted anthropologist Bronislav Malinowski wrote an essay on the purpose of religion which in many ways echoes the ideas of Becker:

…in not a single one of its manifestations can religion be found without its firm roots in human emotion, which…grows out of desires and vicissitudes connected with life. Two affirmations, therefore, preside over every ritual act, every rule of conduct, and every belief. There is the affirmation of the existence of powers sympathetic to man, ready to help him on condition that he conforms to the traditional lore which teaches how to serve them, conjure them, and propitiate them. This is the belief in Providence, and this belief assists man in so far as it enhances his capacity to act and his readiness to organize for action, under conditions where he must face and with not only the ordinary forces of nature, but also chance, ill luck, and the mysterious, even inculculable designs of destiny.

The second belief is that beyond the brief span of natural life there is compensation in another existence. Through this belief man can act and calculate far beyond his own forces and limitations, looking forward to his work being continued by his successors in the conviction that, from the next world, he will still be able to watch and assist them. The sufferings and efforts, the injustices and inequalities of this life are thus made up for. Here again we find that the spiritual force of this belief not only integrated man’s own personality, but is indispensable for the cohesion of the social fabric. Especially in the form which this belief assumes in ancestor-worship and the communion with the dead do we perceive its moral and social influence.

In their deepest foundations, as well as in their final consequences, the two beliefs in Providence and Immortality are not independent of one another. In the higher religions man lives in order to be united to God. In simpler forms, the ancestors worshiped are often mystically identified with environmental forces, as in Totemism. At times, they are both ancestors and carriers of fertility, as the Kachina of the Pueblos. Or again the ancestor is worshiped as the divinity, or at last as a culture hero.

The unity of religion in substance, form and function is to be found everywhere. Religious development consists probably in the growing predominance of the ethical principle and in the increasing fusion of the two main factors of all belief, the sense of Providence and the faith in Immortality.

As we climb Maslow’s hierarchy of needs, we look for different things from our religions. Due to the “vicissitudes of life” ancient peoples often sought after more basic things related to material security: adequate rainfall, bountiful harvests, growing herds, protection form diseases, protection from raids, and so forth. They consulted spirits for decisions—whom to marry, when to go to war, how to bring back the rains, and so on. Today, with most of us living in societies where our basic material needs are met, we look for things like fulfillment, purpose, belonging and meaning using the same religious framework.

Religion as a Memeplex

The idea of memetics was first proposed by biologist Richard Dawkins in his 1976 book, The Selfish Gene. Dawkins made an explicit analogy between biological information (genes) which differentially reproduce and propagate themselves through time by using living organisms, and cultural information (memes), which live in human minds and reproduce via cultural imitation. A collection of related and reinforcing memes is called a memeplex (from the term, “coadapted meme complex”).

The underlying mechanisms behind genes (instructions for making proteins, stored in the cells of the body and passed on in reproduction), and memes (instructions for carrying out behavior, stored in brains, and passed on via imitation) were both very similar, Dawkins thought, and the ideas underlying Darwinism could apply to both. This is sometimes referred to as “Universal Darwinism”:

The creator of the concept and its denomination as a “meme” was Richard Dawkins. Other authors such as Edward O. Wilson and J. D. Lumsden previously proposed the concept of culturgen in order to designate something similar. At the present time the term of Dawkins has been imposed, although the theory of memes now includes contributions from many other authors. Therefore, talking of memes today is not simply the theories of memes of Dawkins.

Daniel Dennett, Memes and Religion: Reasons for the Historical Persistence of Religion. Guillermo Armengol (PDF)

The behavior of both memes and genes are based around three principle factors: variation, competition (or selection), and retention (or persistence):

For something to count as a replicator it must sustain the evolutionary algorithm based on variation, selection and retention (or heredity).

Memes certainly come with variation–stories are rarely told exactly the same way twice, no two buildings are absolutely identical, and every conversation is unique—and when memes are passed on, the copying is not always perfect….There is memetic selection – some memes grab the attention, are faithfully remembered and passed on to other people, while others fail to get copied at all. Then, when memes are passed on there is retention of some of the ideas of behaviours in that meme – something of the original meme must be retained for us to call it imitation or copying or learning by example. The meme therefore fits perfectly into Dawkins’ idea of a replicator and Dennett’s universal algorithm…

Where do new memes come from? They come about through variation and combination of old ones – either inside one person’s mind, or when memes are passed from person to person…The human mind is a rich source of variation. In our thinking we mix up ideas and turn them over to produce new combinations…Human creativity is a process of variation and recombination. [2]

Memetics is more of a theory about the evolution of religions that about their origins. Why do some ideas catch on while others die out? How and why do religions change over time? Memetics can provide an explanation.

One of my favorite definitions of “culture” is given by David Deutsch in his book The Beginnings of Infinity:

A culture is a set of ideas that cause their holders to behave alike in some ways. By ‘ideas’ I mean any information that can be stored in people’s brains and can affect their behavior. Thus the shared values of a nation, the ability to communicate in a particular language, the shared knowledge of an academic discipline and the appreciation of a given musical style are all, in this sense, ‘sets of ideas’ that define cultures…

The world’s major cultures – including nations, languages, philosophical and artistic movements, social traditions and religions – have been created incrementally over hundreds or even thousands of years. Most of the ideas that define them, including the inexplicit ones, have a long history of being passed from one person to another. That makes these ideas memes – ideas that are replicators. [3]

We see by this definition that it is difficult to distinguish religion from any other form of culture—they all cause their adopters to behave alike in certain ways, and adopt similar ideas. This has caused some scholars to question whether we can even define such a thing as “religion” apart from every other type of social behavior, or whether it’s simply an academic invention:

[Jonathan Zittell] Smith wanted to dislodge the assumption that the phenomenon of religion needs no definition. He showed that things appearing to us as religious says less about the ideas and practices themselves than it does about the framing concepts that we bring to their interpretation. Far from a universal phenomenon with a distinctive essence, the category of ‘religion’ emerges only through second-order acts of classification and comparison…

A vast number of traditions have existed over time that one could conceivably categorise as religions. But in order to decide one way or the other, an observer first has to formulate a definition according to which some traditions can be included and others excluded. As Smith wrote in the introduction to Imagining Religion: ‘while there is a staggering amount of data, of phenomena, of human experiences and expressions that might be characterised in one culture or another, by one criterion or another, as religious – there is no data for religion’. There might be evidence for various expressions of Hinduism, Judaism, Christianity, Islam and so forth. But these become ‘religions’ only through second-order, scholarly reflection. A scholar’s definition could even lead her to categorise some things as religions that are not conventionally thought of as such (Alcoholics Anonymous, for instance), while excluding others that are (certain strains of Buddhism).

Is religion a universal in human culture or an academic invention? (Aeon)

It used to be thought that ideas were passed down through the generations simply because they were beneficial to us as a species. But memetic theory challenges that. One important concept from memetics is that the memes that replicate most faithfully and most often are not necessarily beneficial—they are simply the ones most able to replicate themselves. For this reason, religion has often been called a “virus of the mind” by people attempting to apply the ideas of memetics to religion.

If a gene is in a genome at all, then, when suitable circumstances arise, it will definitely be expressed as an enzyme…and it will cause its characteristic effects. Nor can it be left behind if the rest of the genome is successfully replicated. But merely being present in the mind does not automatically get a meme expressed as behaviour: the meme has to compete for that privilege with other ideas – memes and non-memes, about all sorts of subjects – in the same mind. And merely being expressed as behavior does not automatically get the meme copied into a recipeient along with other memes: it has to compete for the reipients’ attention and acceptance with all sorts of behaviours by other people, and with the recipients’ own ideas. All that is in addition to the analogue of the type of selection that genes face, each meme competing with rival versions of itself across the population, perhaps by containing the knowledge for some useful function.

Memes are subject to all sorts of random and intentional variation in addition to all that selection, and so they evolve. So to this extent the same the same logic holds as for genes: memes are ‘selfish’. They do not necessarily evolve to benefit their holder, or their society – or, again, even themselves, except in the sense of replicating better than other memes. (Though now most other memes are their rivals, not just variants of themselves.) The successful meme variant is the one that changes the behaviour of its holders in such a way as to make itself best at displacing other memes from the population. This variant may well benefit its holders, or their culture, or the species as a whole. But if it harms them, it will spread anyway. Memes that harm society are a familiar phenomenon. You need only consider the harm done by adherents of political views, or religions, that you especially abhor. Societies have been destroyed because some of the memes that were best at spreading through the population were bad for a society. [4]

In this formulation, religions are seen as actually harmful, simply “using” us to replicate themselves for their own benefit, and to our own detriment, just like a virus. This is the stance taken by, for example, Dawkins and Dennett—both strident atheists. For them, it would be best if we could “disinfect” our minds and free ourselves from these pesky thought viruses.

Dawkins coined the term ‘viruses of the mind’ to apply to such memeplexes as religions and cults – which spread themselves through vast populations of people by using all kinds of clever copying tricks, and can have disastrous consequences for those infected…This theme has been taken up in popular books on memetics, such as Richard Brodie’s Viruses of the Mind and Aaron Lynch’s Thought Contagion, both of which provide many examples of how memes spread through society and both of which emphasize the more dangerous and pernicious kinds of memes. We can now see that the idea of a virus is applicable in all three worlds – of biology, of computer programs and of human minds. The reason is that all three systems involve replicators and we call particularly useless and self-serving replicators ‘viruses.’ [5]

Nevertheless, such “idea viruses” cannot inflict too much damage on their recipients, otherwise they will undermine their own viability:

The overarching selection pressure on memes is towards being faithfully replicated, But, within that, there is also pressure to do as little damage to the holder’s mind as possible, because that mind is what the human uses to be long-lived enough to be able to enact the meme’s behaviors as much as possible. This pushes memes in the direction of causing a finely tuned compulsion in the holder’s mind: ideally, this would be just the inability to refrain from enacting that particular meme (or memeplex). Thus, for example, long-lived religions typically cause fear of specific supernatural entities, but they do not cause general fearfulness or gullibility, because that would both harm the holders in general and make them more susceptible to rival memes. So the evolutionary pressure is for the psychological damage to be confined to a relatively narrow area of the recipients’ thinking, but to be deeply entrenched, so that the recipients find themselves facing a large emotional cost if they subsequently consider deviating from the meme’s prescribed behaviors. [6]

Blackmore herself, however, has retreated from this notion, citing all the apparently beneficial effects from adherence to various religions: more children, longer lifespans, a more positive outlook, and so on:

Are religions viruses of the mind? I would have replied with an unequivocal “yes” until a few days ago when some shocking data suggested I am wrong.

The idea is that religions, like viruses, are costly to those infected with them. They demand large amounts of money and time, impose health risks and make people believe things that are demonstrably false or contradictory. Like viruses, they contain instructions to “copy me”, and they succeed by using threats, promises and nasty meme tricks that not only make people accept them but also want to pass them on.

This was all in my mind when Michael Blume got up to speak on “The reproductive advantage of religion”. With graph after convincing graph he showed that all over the world and in many different ages, religious people have had far more children than nonreligious people…

All this suggests that religious memes are adaptive rather than viral from the point of view of human genes, but could they still be viral from our individual or societal point of view? Apparently not, given data suggesting that religious people are happier and possibly even healthier than secularists. And at the conference, Ryan McKay presented experimental data showing that religious people can be more generous, cheat less and co-operate more in games such as the prisoner’s dilemma, and that priming with religious concepts and belief in a “supernatural watcher” increase the effects.

So it seems I was wrong and the idea of religions as “viruses of the mind” may have had its day. Religions still provide a superb example of memeplexes at work, with different religions using their horrible threats, promises and tricks to out-compete other religions, and popular versions of religions outperforming the more subtle teachings of the mystical traditions. But unless we twist the concept of a “virus” to include something helpful and adaptive to its host as well as something harmful, it simply does not apply. Bacteria can be helpful as well as harmful; they can be symbiotic as well as parasitic, but somehow the phrase “bacterium of the mind” or “symbiont of the mind” doesn’t have quite the same ring.

Why I no longer believe religion is a virus of the mind (The Guardian)

I think memetics is a good way to describe cultural transmission, and I wish that it was used much more freely by sociologists, historians, anthropologists, economists, and other students of human behavior. Memes are a good way to describe how religions are transmitted, and why some religious ideas predominate over others. They provide a good description of how religious ideas evolve over time. But it does not provide much information about how and why religions got started in the first place.

Bicameral Mind Theory

Bicameral Mind Theory (BMT) was proposed by psychologist Julian Jaynes in his 1976 book, The Origin of Consciousness in the Breakdown of the Bicameral Mind (coincidentally, the same year as Dawkins and only three years after Becker).

Jaynes argued that what ancient peoples referred to as the “gods” were, in reality, aural hallucinations produced by their own mind. Such hallucinations stemmed from the partitioning of the human brain into two separate hemispheres (bicameral). Spoken language was produced primarily by the left hemisphere, while the right hemisphere was mostly silent. Jaynes noted from research on split-brain patients that if portions of the right hemisphere were electrically stimulated, subjects would tend to hallucinate voices.

This caused him to hypothesize that the thought patterns of ancient man were radically different than our own. In times of stress caused by decision-making, he argued, internal speech was perceived as something “alien” that was guiding and directing one’s actions from somewhere outside oneself.

One of his major pieces of evidence was a thorough study of ancient literature. Jaynes noted that ancient literature lacked a conception of the “self” or anything like a “soul” in living beings. Self-reflective and contemplative behavior simply did not exist. In addition, the gods are described as controlling people’s actions, and people frequently communicate directly with the gods. Most scholars simply took this communication as some sort of elaborate metaphor, but Jaynes was willing to take these descriptions seriously. Such depictions are very common in the Old Testament, for example. And he notes that in the Iliad—the oldest work of Western literature compiled from earlier oral traditions—the characters seem to have no volition whatsoever; they are merely “puppets” of the gods:

The gods are what we now call hallucinations. Usually they are only seen and heard by particular heroes they are speaking to. Sometimes they come in mists or out of the gray sea or a river, or from the sky, suggesting visual auras preceding them. But at other times, they simply occur. Usually they come as themselves, commonly as mere voices, but sometimes as other people closely related to the hero. [7]

The characters of the Iliad do not sit down and think out what to do. They have no conscious minds such as we have, and certainly no introspections. It is impossible for us with our subjectivity to appreciate what it was like…In fact, the gods take the place of consciousness. The beginnings of action are not in conscious plans, reasons, and motives; they are in the actions and speeches of gods. To another, a man seems to be the cause of his own behavior. But not to the man himself… [8]

In distinction to our own subjective conscious minds, we can call the mentality of the Myceneans a bicameral mind. Volition, planning, initiative is organized with no consciousness whatever and then ‘told’ to the individual in his familiar language, sometimes with the visual aura of a familiar friend or authority figure of ‘god’, or sometimes as a voice alone. The individual obeyed these hallucinated voices because he could not ‘see’ what to do by himself…[9]

The preposterous hypothesis we have come to…is that at one time human nature was split in two, an executive part called a god, and a follower part called a man. Neither part was conscious…[10]

The gods would reveal themselves to people in times of stress. We saw earlier that stress—even in modern people—often causes an eerie sense of a “felt presence” nearby:

If we are correct in assuming that schizophrenic hallucinations are similar to the guidances of gods in antiquity, then there should be some common physiological instigation in both instances. This, I suggest, is simply stress.

In normal people, as we have mentioned, the stress threshold for release is extremely high; most of us need to be over our heads in trouble before we would hear voices. But in psychosis-prone persons, the threshold is somewhat lower…This is caused, I think, by the buildup in the blood of breakdown products of stress-produced adrenalin which the individual is, for genetic reasons, unable to pass through the kidneys as fast as a normal person.

During the eras of the bicameral mind, we may suppose that the stress threshold for hallucinations was much, much lower than in either normal people or schizophrenics today. The only stress necessary was that which occurs when a change in behavior is necessary because of some novelty in a situation. Anything that could not be dealt with on the basis of habit, any conflict between work and fatigue, between attack and flight, any choice between whom to obey or what to do, anything that required any decision at all was sufficient to cause an auditory hallucination. [11]

Jaynes’ other line of evidence was physiological, and came from the structure of the human brain itself:

The evidence to support this hypothesis may be brought together as five observations: (1) that both hemispheres are able to understand language, while normally only the left can speak; (2) that there is some vestigial functioning of the right Wernicke’s area in a way similar to the voices of the gods; (3) that the two hemispheres under certain conditions are able to act almost as independent persons, their relationship corresponding to that of the man-god relationship of bicameral times; (4) that contemporary differences between the hemispheres in cognitive functions at least echo such differences of function between man and god as seen in the literature of bicameral man; and (5) that the brain is more capable of being organized by the environment than we have hitherto supposed, and therefore could have undergone such a change as from bicameral to conscious man mostly on the basis of learning and culture. [12]

It’s important to note that when Jaynes uses the term “consciousness”, he is using it in a very specific and deliberate way. He is not talking about the state of simply being awake, or being aware of one’s surroundings. Nor is he talking about reacting to stimulus, or having emotional reactions to events. Obviously, this applies to nearly all animals. Rather, he’s talking about something like “meta-consciousness”, or the ability to self-reflect when making decisions:

The background of Jaynes’ evolutionary account of the transition from bicamerality to the conscious mind is the claim that human consciousness arises from the power of language to make metaphors and analogies. Metaphors of “me” and analogous models of “I” allow consciousness to function through introspection and self-visualization. According to this view, consciousness is a conceptual, metaphor-generated inner world that parallels the actual world and is intimately bound with volition and decision. Homo sapiens, therefore, could not experience consciousness until he developed a language sophisticated enough to produce metaphors and analogical models.

Jaynes recognizes that consciousness itself is only a small part of mental activity and is not necessary for sensation or perception, for concept formation, for learning, thinking, or even reasoning. Thus, if major human actions and skills can function automatically and unconsciously, then it is conceivable that there were, at one time, human beings who did most of the things we do – speak, understand, perceive, solve problems – but who were without consciousness. [13]

Jaynes saw echoes of this bicameral mentality in psychological phenomena such as schizophrenia and hypnosis. Hypnosis, he argued, was a regression to a conscious state prior to that of the modern type which constantly narratizes our lived experience:

If one has a very definite biological notion of consciousness and that its origin is back in the evolution of mammalian nervous systems, I cannot see how the phenomenon of hypnosis can be understood at all, not one speck of it. But if we fully realize that consciousness is a culturally learned event, balanced over the suppressed vestiges of an earlier mentality, then we can see that consciousness, in part, can be culturally unlearned or arrested. Learned features, such as analog ‘I’, can under the proper cultural imperative be taken over by a different initiative works in conjunction with the other factors of the diminishing consciousness of the induction and trance is that in some way it engages a paradigm of an older mentality than subjective consciousness. [14]

…[W]hy is it that in our daily lives we cannot get above ourselves to authorize ourselves into being what we really wish to be? If under hypnosis we can be changed in identity and action, why not in and by ourselves so that behavior flows from decision with as absolute a connection, so that whatever in us it is that we refer to as will stands master and captain over action with as sovereign a hand as the operator over a subject?

The answer here is partly in the limitations of our learned consciousness in this present millennium. We need some vestige of the bicameral mind, our former method of control, to help us. With consciousness we have given up those simpler more absolute methods of control of behavior which characterized the bicameral mind. We live in a buzzing cloud of whys and wherefores, the purposes and reasonings of our narratizations, the many-routed adventures of our analog ‘I’s. And this constant spinning out of possibilities is precisely what is necessary to save us from behavior of too impulsive a sort. The analog ‘I’ and the metaphor ‘me’ are always resting at the confluence of many collective cognitive imperatives. We know too much to command ourselves very far. [15]

And schizophrenia, he argued, was a vestige of how the bicameral mind routinely worked, but was now only present in those with the genetic disposition for it, perhaps because of some quirk of neurotransmitter functioning or something similar:

Most of us spontaneously slip back into something approaching the actual bicameral mind at some part of our lives. For some of us, it is only a few episodes of thought deprivation or hearing voices. But for others of us, with overactive dopamine systems, or lacking an enzyme to easily break down the biochemical products of continued stress into excretable form, it is a much more harrowing experience – if it can be called an experience at all. We hear voices of impelling importance that criticize us and tell us what to do. At the same time, we seem to lose the boundaries of ourselves. Time crumbles. We behave without knowing it. Our mental space begins to vanish. We panic, and yet the panic is not happening to us. There is no us. It is not that we have nowhere to turn; we have nowhere. And in that nowhere, we are somehow automatons, unknowing what we do, being manipulated by others or by our voices in strange and frightening ways in a place we come to recognize as a hospital with a diagnosis we are told is schizophrenia. In reality, we have relapsed into the bicameral mind. [16]

It is the very central and unique place of these auditory hallucinations on the syndrome of many schizophrenics which it is important to consider. Why are they present? And why is “hearing voices” universal throughout all cultures, unless there is some usually suppressed structure of the brain which is activated in the stress of this illness? And why do these hallucinations of schizophrenics so often have a dramatic authority, particularly religious? I find that the only notion which provides even a working hypothesis about this matter is that of the bicameral mind, that the neurological structure responsible for these hallucinations is neurologically bound to substrates for religious feelings, and this is because the source of religion and of gods themselves is in the bicameral mind. [17]

Interestingly, modern research has revealed that anywhere from 5-15 of the population hears voices on occasion, and sometimes quite regularly. Most of these people are non-clinical—only about 1 percent of the population is considered to be schizophrenic. These percentages happen to approximate those in tribal societies who are considered to be able to perform as religious priests or shamans. In many tribal cultures, the ability to hear voices is considered to be a sign of being able to communicate with gods and spirits and move “between worlds” and thus highly desirable, rather than stigmatized. Indeed, many scholars of religion have seen clear links between symptoms of schizophrenia and so-called shamanic abilities.

Wither hallucinations?

Whether of not one fully accepts Jaynes’ hypothesis, I would argue that there’s one clear point he makes that has influenced beliefs in unseen spirits and survival of ancestors after death: the presence of hallucinations.

It turns out that hallucinating dead relatives is extremely common, even in rationalist Christian Western countries. If that’s the case, how much more common was this phenomenon in ancient times?

Up to six in ten grieving people have “seen” or “heard” their dead loved one, but many never mention it out of fear people will think they’re mentally ill. Among widowed people, 30 to 60 per cent have experienced things like seeing their dead spouse sitting in their old chair or hearing them call out their name, according to scientists.

The University of Milan researchers said there is a “very high prevalence” of these “post-bereavement hallucinatory experiences” (PBHEs) in those with no history of mental disorders. They came to their conclusions after looking at all previous peer-reviewed research carried out on the issue in the English language.

Jacqueline Hayes, an academic at the University of Roehampton, has studied the phenomenon, interviewing people from across the UK who have lost spouses, parents, children, siblings and friends. She told the Daily Mail: “People report visions, voices, tactile sensations, smells, and something that we call a sense of presence that is not necessarily related to any of the five senses.”

She added: “I found that these experiences could at times be healing and transformative, for example hearing your loved one apologise to you for something that happened – and at other times foreground the loss and grief in a painful way.”

Six in ten grieving people ‘see or hear dead loved ones’ (Telegraph)

Now, you might think that those are just hallucinations, and no one could seriously take this as a sign that their dead relatives were still alive. But, it’s important to remember that ancient peoples did not make the distinction between “real” and “not real” the way we do. To them, all phenomena which were experienced—whether in visions, trances, dreams, or “normal” waking consciousness—were treated as equally “real”. The stance we would take in modern times—that our subjective consciousness is not real, while at the same time there is an objective reality which is exclusively real—is not one which would have been operative in past pre-scientific cultures, especially pre-literate ones.

And, indeed, we can see that there are valid reasons for believing this to be so:

Let’s count the many ways that hallucinated voices are real:

– They are real neurological patterns that exist in real human brains.

– They are subjectively real. The listener actually hears them.

– They satisfy the criterion for reality put forward by David Deutsch in his book The Fabric of Reality: they kick back.

– They have metaphorical reality. We can reason about the voices the same way we talk about a movie with our friends (discussing the characters’ motivations, their moral worth, etc.).

– They have real intelligence — because (this is crucial) they’re the products of a bona fide intelligent process. They’re emanating from the same gray matter that we use to perceive the world, make plans, string words together into sentences, etc. The voices talk, say intelligent things, make observations that the hearer might not have noticed, and have personalities (stubborn, encouraging, nasty, etc.).

They are, above all, the kinds of things toward which we can take the intentional stance — treating them like agents with motivations, beliefs, and goals. They are things to be reasoned with, placated, ignored, or subverted, but not things whose existence is to be denied.

Accepting Deviant Minds (Melting Asphalt)

By this criteria, whether or not people really experienced gods as aural hallucinations at one point in time, it is quite likely that they did experience hallucinations which they would have regarded as legitimate and real. Thus, beliefs in disembodied souls would have been a product of actual, lived experience for the majority of people, rather than just an “irrational” belief.

[1] Ernest Becker, The Denial of Death, pp. 203-204

[2] Susan Blackmore, The Meme Machine, pp. 14-15

[3] David Deutsch, The Beginnings of Infinity, p. 369

[4] David Deutsch, The Beginnings of Infinity, pp. 378-379

[5] Susan Blackmore, The Meme Machine, p. 22

[6] David Deutsch, The Beginnings of Infinity, p. 384

[7] Julian Jaynes, The Origin of Consciousness in the Breakdown of the Bicameral Mind, p. 74

[8] ibid., p. 72

[9] ibid., p. 75

[10] ibid., p. 84

[11] ibid., p. 84, p. 93

[12] ibid., p. 84, p. 106

[13] The “bicameral mind” 30 years on: a critical reappraisal of Julian Jaynes’ hypothesis, A.E. Cavanna, et. al. Functional Neurology, January 2007

[14] Julian Jaynes, The Origin of Consciousness in the Breakdown of the Bicameral Mind, p. 84, p. 398

[15] ibid., p. 402

[16] ibid., p. 404

[17] ibid., p. 413

The Origin of Religion – Part 2

Let’s take a look at the major components of religious belief according to scientists working on this problem:

1. Hypersensitive Agency Detection (HAD or HADD)

This is one of the things that almost always gets mentioned in the evolutionary psychology of religious belief. Basically, it’s a “false positive”—a default assumption that some event is caused by a conscious entity rather than by random chance. It is thought that such “constructive paranoia” helped us avoid attacks from predators and other hostiles:

Scientists working in the cognitive science of religion have offered…explanations, including the hyperactive agency-detecting device (HADD). This tendency explains why a rustle in the bushes in the dark prompts the instinctive thought: ‘There’s someone there!’ We seem to have evolved to be extremely quick to ascribe agency – the capacity for intention and action – even to inanimate objects.

In our ancestral environment, this tendency is not particularly costly in terms of survival and reproduction, but a failure to detect agents that are there can be very costly. Fail to detect a sabre-toothed cat, and it’ll likely take you out of the gene pool. The evolution of a HADD can account for the human tendency to believe in the presence of agents even when none can actually be observed. Hence the human belief in invisible person-like beings, such as spirits or gods.

There are also forms of supernatural belief that don’t fit the ‘invisible person-like being’ mould, but merely posit occult forces – eg, feng shui, supernaturally understood – but the HADD doesn’t account for such beliefs…

Belief in supernatural beings is totally natural – and false (Aeon)

2. Theory of Mind (ToM) and Existential Theory of Mind. (EToM)

Theory of Mind (ToM), or Theory of Mind Mechanism (ToMM) is basically our intuitive ability to read other people’s minds. It’s “the understanding that others have beliefs, desires and goals, influencing their actions. ToM allows us to have sophisticated social relationships and to predict how others will behave. You couldn’t “put yourself in someone else’s shoes” without it…” [1]

…we can think of ToM as the cognitive system that humans typically use to engage in social interactions with other people. By engaging your ToM when you interact with someone else, you are able to attribute human mental states – such as thoughts, emotions, and intentions – to that person.

It’s adaptive to engage your ToM when interacting with another person, because your ‘theory’ will usually be correct: the other person usually will, in fact, have a normal human mind. So if you assume they do have such a mind, you’ll generally be able to have a more successful social interaction than you would if you assumed that they had no mind, or some kind of non-human mind.

What religion is really all about (Psychology Today)

The perils of an overactive Theory of Mind

Humans, due to their social nature, possess the most sophisticated Theory of Mind in the animal kingdom, and this gives rise not only to the ability to model other people’s inner states and intentions, but also our own, leading to reflective self-consciousness:

It therefore appears at present that human beings, although probably not unique in possessing Theory of Mind, are nonetheless unusual in the degree of its sophistication, specifically in the extent to which they can accurately model the minds of others. It seems highly likely that those who possessed an accurate Theory of Mind enjoyed an advantage when it came to modelling the intentions of others, an advantage that continues to this day, and was an active ingredient in the evolution of human consciousness.

The self-conscious animal: how human minds evolved (Aeon)

Furthermore, “Humans…show extreme ToM, ascribing minds to inanimate or imagined things…” [1] In real life, people apply ToM to forces of nature, ancestor spirits and invisible gods. And they seem to think about these supernatural actors the same way they conceive of fellow humans: “fMRI studies have found ToM-related regions of the brain activate when people hear statements about God’s emotions and involvement in worldly affairs.” [1]

Experiments have confirmed that we attribute human characteristics and intentions to objects that we know do not have them, such as balloons and abstract shapes. A famous experiment in the 1940s demonstrated that even abstract shapes moving around in a film were perceived as having intentions and could be used to tell a story that the researchers wished to tell.


For example, there are a large number of movies where an inanimate object becomes a “character” in the film, and we apply our theory of mind to it just as much as we do for the flesh-and-blood characters. If we couldn’t do so, such films would make no sense. Take the French movie The Red Balloon. It is all about attributing human characteristics to a rubber ball filled with helium. Or take the “Herbie” movies by Disney. Herbie was a Volkswagen beetle who got into all sort of adventures with his human friends.

Functional MRI scans have confirmed that, in contemplating religious ideas, the theory of mind mechanism of our brain is engaged:

…researchers gave 40 religious volunteers functional magnetic resonance imaging (fMRI) brain scans as they responded to statements reflecting three core elements of belief. …Overall, the parts of the brain activated by the belief statements were those used for much more mundane, everyday interpretation of the world and the intentions of other people. Significantly, however, they also correspond with the parts of the brain that have evolved most recently, and which appear to which give humans more insight than other animals.

“Our results are unique in demonstrating that specific components of religious belief are mediated by well-known brain networks, and support contemporary psychological theories that ground religious belief within evolutionary adaptive cognitive functions,” say the researchers.

“It’s not surprising that religious beliefs engage mainly the theory-of-mind areas, as they are about virtual beings who are treated as having essentially human mental traits, just as characters in a novel or play are,” comments Robin Dunbar, an anthropologist at the University of Oxford.

‘Theory of mind’ could help explain belief in God (New Scientist)

Existential Theory of Mind (EToM) is the related idea that our theory of mind is so complex that we engage it not just with people, animals, and inanimate objects, but even with existence itself!

The idea of EToM is that people tend to engage their ToM in interactions not just with other people, but with ‘existence’ in general.
That is, humans seem naturally inclined to perceive their lives as ongoing interactions with some kind of transcendent mind(s) that, at least in some respects, seem(s) human-like. Across cultures, this transcendent mind-like power may be conceptualized as an explicitly-specified god or gods, or in more abstract terms (such as a universal spirit, karma, or ‘the force’).

It appears that more complex “higher order” religions may be connected with more recursive modes of Theory of Mind:

According to Robin Dunbar, it is through Theory of Mind that people may have come to know God, as it were… Dunbar argues that several orders of intentionality may be required, since religion is a social activity, dependent on shared beliefs. The recursive loops that are necessary run something like this: I suppose that you think that I believe there are gods who intend to influence our futures because they understand our desires. This is fifth-order intentionality. Dunbar himself must have achieved sixth-order intentionality if he supposes all of this, and if you suppose that he does then you have reached seventh-order…[3]

Interestingly, both the concept of the “soul” and such “higher-order” religions, religions where the participants are united by mutual self-professed beliefs in some sort of transcendent doctrine –emerge at roughly the same time. This appears to reflect the dawn of something approaching self-consciousness. I’ve previously argued that this has to do with recursion—see my review of The Recursive Mind.

Another consequence of Theory of Mind is that under times of stress, people often perceive a kind of conscious “presence” around them, somewhat analogous to the feeling of being watched. For example, the some of the members of Shackleton’s expedition independently experienced an invisible “felt presence” watching over them:

On 20 May 1916, Ernest Shackleton, Frank Worsley, and Tom Crean reached Stromness, a whaling station on the north coast of South Georgia. They had been walking for 36 hours, in life-threatening conditions, in an attempt to reach help for the rest of their party: three of their crew were stuck on the south side of the island, with the remainder stranded on Elephant Island. To reach the whaling station, the three men had to cross the island’s mountainous interior with just a rope and an axe, in a journey that few had attempted before or since. By reaching Stromness they managed to save all the men left from the ill-fated Imperial Transantarctic Expedition.

They did not talk about it at the time, but weeks later all three men reported an uncanny experience during their trek: a feeling that “often there were four, not three” men on their journey. The “fourth” that accompanied them had the silent presence of a real person, someone walking with them by their side, as far as the whaling station but no further. Shackleton was apparently deeply affected by the experience, but would say little about it in subsequent years, considering it something “which can never be spoken of”.

Encounters such as these are common in extreme survival situations: guardian angels, guides, or even Christ-like figures have often been reported. We know them now as “third man” experiences…

The strange world of felt presences (The Guardian)

3. Minimally Counterintuitive (MCI) Concepts.

Minimally Counterintuitve Concepts (MCI) ultimately stem from what some researchers have called non-reflective beliefs. There are beliefs which are so ingrained in our psyche that we don’t even think twice about them. Of course, these intuitive beliefs are not always correct. For example, before Galileo, people assumed that heavier objects would fall to earth faster than lighter ones. It turns out that they were wrong.

HADD (see above) is what [Justin] Barrett calls a non-reflective belief, which are always operating in our brains even without our awareness of them. Reflective beliefs, on the other hand, are ones we actively think about. Non-reflective beliefs come from various mental tools, which he terms “intuitive inference systems”.

In addition to agency detection, these mental tools include naive biology, naive physics, and intuitive morality. Naive physics, for example, is the reason children intuitively know that solid objects can’t pass through other solid objects, and that objects fall if they’re not held up. As for intuitive morality, recent research suggests that three-month old “infants’ evaluations of others’ prosocial and antisocial behaviours are consistent with adults’ moral judgments”.

Barrett claims that non-reflective beliefs are crucial in forming reflective beliefs. “The more non-reflective beliefs that converge the more likely a belief becomes reflectively held.” If we want to evaluate humans’ reflective beliefs about God, then we need to start with figuring out whether and how those beliefs are anchored in non-reflective beliefs.

But how do we go from non-reflective beliefs like HADD and Naive Biology to reflective ones like a God who rewards good people and punishes bad ones? It’s here that Barrett invokes the idea of minimally counterintuitive (MCI) concepts…

A Minimally Counterintutive Concept is one that is congruent with our non-reflective belief systems. It’s something that’s very similar to the things we encounter in everyday life, but just different enough to be more memorable. “MCI concepts are basically intuitive concepts with one or two minor tweaks.”

Barrett gives the example of a flying carpet, which “behaves” like a regular carpet in every way except one. “Such ideas combine the processing ease and efficiency of intuitive ideas with just enough novelty to command attention, and hence receive deeper processing.”
It’s not surprising, then, that cross-cultural studies have shown that MCI concepts are easily recalled and shared. There are two reasons for this, says Barrett. First, MCI concepts maintain their conceptual structure. Second, MCI concepts tend to stand out from among an array of ordinary concepts. “What captures your attention more,” he writes, “a potato that is brown, a potato that weighs two pounds, or an invisible potato?”

Religious beliefs are shared – and they’re shared by human animals with a shared neural anatomy. Our mental toolkit contains built-in biases, such as HADD, which is responsible for a number of false positives. (Most of the time it is just the wind!) For brains that seem wired to find agency and intention everywhere, religion comes very naturally.

Do humans have a religion instinct? (BBC)

A Maximally Counterintutive Concept, by contrast, is one which we have a hard time relating to, so we tend to dismiss it as false, instinctively, regardless of its actual veracity.

I think this explains a lot of the stubborn resistance surrounding Darwinian evolution, as well as a lot of other scientific concepts. The idea that slow, incremental change over time gave rise to the teeming multitude of life around us (including ourselves) seems impossible to believe, as even evolution’s staunchest defenders acknowledge. This is because we think on time scales of years, or maybe decades, based on our lifespans. We simply cannot understand—except at the most abstract, intellectual level—a thousand years, let alone a million years. (1 million is a thousand thousands).

Thus, I would call biological evolution a Maximally Counterintutive Concept.

By contrast, the idea of a creator god is minimally counterintuitive, since we humans intentionally create things all the time. Often, in ancient mythology, God creates the world and man the same way we might create, say, a clay pot or a loaf of bread. That’s not hard for us to understand at all, hence it’s a minimally counterintutive concept. And the concept of a “loving, caring” God is really just a step removed from our own parents.

Another way of putting this is that MCI’s are “viral” from a memetic standpoint; they are especially good at becoming memes. Minimally counterintutive concepts make excellent memes, and so they spread more rapidly and easily than their maximally counterintutive rivals. We’ll take a look at memetic theories of religion a bit later.

In fact, it turns out that a great many scientific concepts are maximally counterintutive. The earth is billions of years old? The universe is expanding? Time slows down with your velocity, or moves faster the higher up you go? Solid matter is mostly empty space? Invisible particles in the atmosphere are changing the climate? Really??? Even simple concepts—like the fact that the earth revolves around the sun and is a sphere—are the opposite of how we actually experience them in daily life.

Richard Dawkins may well be right when he describes the theory of natural selection as one of our species’ finest accomplishments; it is an intellectually satisfying and empirically supported account of our own existence. But almost nobody believes it. One poll found that more than a third of college undergraduates believe that the Garden of Eden was where the first human beings appeared. And even among those who claim to endorse Darwinian evolution, many distort it in one way or another, often seeing it as a mysterious internal force driving species toward perfection. (Dawkins writes that it appears almost as if “the human brain is specifically designed to misunderstand Darwinism.”)…

What’s the problem with Darwin? His theory of evolution does clash with the religious beliefs that some people already hold. For Jews and Christians, God willed the world into being in six days, calling different things into existence. Other religions posit more physical processes on the part of the creator or creators, such as vomiting, procreation, masturbation, or the molding of clay. Not much room here for random variation and differential reproductive success.

But the real problem with natural selection is that it makes no intuitive sense. It is like quantum physics; we may intellectually grasp it, but it will never feel right to us. When we see a complex structure, we see it as the product of beliefs and goals and desires. Our social mode of understanding leaves it difficult for us to make sense of it any other way. Our gut feeling is that design requires a designer—a fact that is understandably exploited by those who argue against Darwin.

Is God an Accident? (The Atlantic)

It turns out that Dawkins is right, our brains are designed to misunderstand evolution. It’s much easier to attribute things like thunder and lightning to the “anger” of Zeus or Thor than to something like static electricity differentials, and so forth. It’s a lot easier for the average person to comprehend God’s wrath than plate tectonics. As Insane Clown Posse declared, “I don’t want to hear from no scientist; you fuckers are lyin’ and gettin’ me pissed!” For them, and many others like them, biological reproduction and magnets are simply “miracles”.

4. The Intentional Stance (IS):

This is similar to Theory of Mind: attributing deliberate intentions to other human beings and animals, but also to many things that do not have—and cannot have—intentions and beliefs of their own. This idea was developed by the philosopher Daniel Dennett.

According to Daniel Dennett, there are three different strategies that we might use when confronted with objects or systems: the physical stance, the design stance, and the intentional stance. Each of these strategies is predictive. We use them to predict and thereby to explain the behavior of the entity in question. (‘Behavior’ here is meant in a very broad sense, such that the movement of an inanimate object—e.g., the turning of a windmill—counts as behavior.)

The physical stance stems from the perspective of the physical sciences. To predict the behavior of a given entity according to the physical stance, we use information about its physical constitution in conjunction with information about the laws of physics…

When we make a prediction from the design stance, we assume that the entity in question has been designed in a certain way, and we predict that the entity will thus behave as designed…we often gain predictive power when moving from the physical stance to the design stance…

Often, we can improve our predictions yet further by adopting the intentional stance. When making predictions from this stance, we interpret the behavior of the entity in question by treating it as a rational agent whose behavior is governed by intentional states.

The intentional stance (Dictionary of Philosophy of Mind)

A good example might be crossing the street. You can predict from the physical stance how fast you can walk, or how quickly a car can stop taking inertia into account, and so on. You also know the basic mechanics of how a car operates by using the design stance—a car has an engine, brakes, a transmission, an ignition, rubber tires, and so forth. It was designed deliberately by human beings for their use. You know that stoplights are designed to change color to regulate traffic. But to really predict what’s going on, you need to understand what’s in the mind of the driver. For that, you adopt the intentional stance to ascribe beliefs, intentions, motivations, and limitations to the driver. This will ultimately tell you whether the car will stop or not, beyond just the physical and design considerations.

Dennett’s argument (as I understand it) is that the benefits of using the intentional stance cause us to apply it to all sort of things where it does not belong. For example, we tend to attribute intentions, characteristics, and deliberate behavior even to inanimate objects that we know are inanimate objects (like the geometric shapes in the movie, for example). Taken to its logical conclusion, you get things like animism and pantheism.

The sun wants us to have two scoops of raisins in the morning. No clue as to how the raisins feel about being eaten, though.

As Rupert Sheldrake points out, young children often draw the sun with a smiley face in it, like on the box of Raisin Bran. This indicates, according to Sheldrake, that children are “instinctive animists,” attributing human mental characteristics to all sorts of inanimate things in the world around them. Indeed, toddlers will often explain scenarios involving inanimate objects in terms of intentions—i.e. the box “wants” this, or the pencil “feels” that. Cloudy days are when the sun “doesn’t feel like” coming out, or “refuses to shine,” for example.

5. Full Access Agents (FAA):

We’ve previously talked about how we are “instinctive dualists,” dividing the world into one of bodies—subject to the laws of physics and physiology; and one of minds—subject to the laws of human psychology. But for some reason, we attribute superior knowledge to the invisible minds which surround us. These “invisible minds” can be in places we cannot, and can read the beliefs and intentions of others in a way we cannot.

These beings have been called “Full Access Agents”: “By full access agents I mean agents that have an unlimited access to other person’s minds: they are omniscient in the sense that they know all mental contents there are to be known.” [4] p. 31

Closely related to the idea of agency is what Dennett refers to as a cards-up phenomenon. Agency detection carries with it certain risks: do you know about that bad thing I did? How can I be sure you know, and how can I be sure about what you think about me because of it? These are complex questions and human beings aren’t good at managing all the options.

What’s needed for learning how to navigate these muddy waters is for everyone to be taught the rules of the game by placing all of our cards face up on the table. The teacher, then, is something of a full-access agent: they see everything and can instruct us accordingly.

The original full-access agents, says Dennett, were our dead ancestors. But eventually, the seeds of this idea became more formalised in various theologies…

Do humans have a religion instinct? (BBC)

Furthermore, such Full Access Agents have disproportionate access, in particular, to something called “socially strategic information.” Socially strategic information is “information that activates the mental systems used for social interaction. And, “Some theorists have argued that humans throughout history have committed themselves to “the gods” rather than countless other anthropomorphized and supernatural beings (e.g., dragons, trolls, and Mickey Mouse), precisely because the gods have access to socially strategic information.” [5]

Put another way, FAAs help resolve what are called “Multipolar Traps” where equilibrium depends on people not defecting from sort of collective social norm. A multipolar trap can be described as, “a situation where cooperating is in one’s interest only if doing so caused everyone (or almost everyone) else to cooperate.” However, there is always a risk of defection where the defector benefits at the cost of everyone else. Thus, to prevent the defector from winning, everyone needs to update their behavior, and the equilibrium falls apart: “If you cooperate in an environment where most people are defecting, you are only hurting yourself, both in the short-run and in the long-run. If you defect in an environment where most people are cooperating, you benefit yourself in the short and long runs, as well.” Full Access Agents, then, may have helped us escape from the consequences of this trap, allowing for greater cooperation:

“Humans are not very good at behaving just because you punish them for not behaving,” says evolutionary psychologist Robin Dunbar, “otherwise we would all be driving well under 70 on the motorway.” The real problem isn’t how bad the punishment is, but how risky it is to be caught.

If the risk is low, he says, we’re prepared for the punishment. This would have been a major issue in prehistory. As hunter-gatherer groups grow, they need to be able enforce a punishment mechanism – but the greater the size of the group, the less chance there is of being found out.

Enter full-access agents: “We don’t see what you do on Saturday night, but there is somebody who does, so beware,” as Dunbar puts it. This idea was consonant with the intuitive mental tools such as HADD and intuitive morality, so it was well-received by our ancestors’ evolved brains. Plus it had the added bonus of regulating behaviour from the bottom up. “You always get better behaviour from individual commitment,” says Dunbar, “not coercion.”

Do humans have a religion instinct? (BBC)

Full Access Agents (FAA), or later, the “Universal Mind” (see EToM, above) were the enforcers of proper behavior: they were the original “Big Brother” from George Orwell’s 1984 (and, in the case of ancestor worship at least, it might literally be your big brother!). While we are fully aware that flawed, flesh-and-blood human beings can be tricked, deceived, and possess false knowledge, for some reason these invisible spirits are not subject to the same deficits:

Across cultures, even children seem to think that gods know more than normal humans. This is borne out by experiments using what psychologists call the ‘false-belief task’, which tests whether individuals can detect that others have false beliefs.

In one version of the test, researchers put a bag of rocks into a box of crackers, showed children what’s inside, and then asked what various entities would think was in the box. If the children said: ‘Mom thinks rocks are in there’, then they haven’t passed the false-belief task. If they said: ‘Mom thinks crackers are in there, but there are really rocks’, they have a handle on the incorrect mental states of others.

What’s curious is that, with age, children come to know that Mom, dogs, and even trees will have incorrect thoughts, but they never extend that vulnerability to God. In fact, the quality of omniscience attributed to God appears to extend to any disembodied entity…Louisville Seminary researchers found that children think imaginary friends know more than flesh-and-blood humans. There appears to be a rule, then, deep in our mental programming that tells us: minds without bodies know more than those with bodies.

Furthermore, we also seem to instinctively believe that the Full Access Agents’ knowledge about moral intentions is superior to that of any other actor, and this belief is consistent across cultures:

Christian students from the University of Connecticut who claim that God knows everything will nonetheless rate His knowledge of moral information as better than His knowledge of non-moral information…As reported in a 2012 article in Cognitive Science, our lab at the University of Connecticut examined what might be called this ‘moralisation bias’ of omniscient beings…What these studies suggest is that we intuitively attach moral information to disembodied minds. And this subtle association can alter our behaviour in significant ways.

In one study, in the Journal of Experimental Child Psychology in 2011, the psychologist Jared Piazza of Lancaster University and colleagues told children a story about a ghostly princess living in their lab. Though these children never heard a peep from the ghost, they cheated less on a difficult game than a control group of children who were not told the story. This suggests that gods, ghosts and other incorporeal minds might just get us to behave – particularly if we assume that the gods know about our behaviour, and especially if we think they can interfere in our affairs.

From an evolutionary perspective, the gods facilitate social bonds required for survival by raising the stakes of misconduct. Having a cosmic Wyatt Earp on the beat aids survival and reproduction by curbing others’ banditry. If you’re tempted to steal from someone, but know that God cares and has the power to do something about it, you might think twice. If God knows your thoughts, perhaps you wouldn’t even think twice. The Abrahamic God appears to be a punitive, paranoia-inducing Big Brother always watching and concerned with our crimes…

Why God knows more about misbehavior than anything else (Aeon)

As the above essay points out, exactly what the full access agents are interested in tends to vary based on the cultural norms. Some are not particularly concerned with sexuality; others are quite judgemental. In either case, they are hitched to basic human feelings of guilt and shame to enforce pro-social norms. For example, in Tuva (a culturally Mongolian society in Russia), gods are tutelary deities rather than all-knowing patriarchal fathers. Nevertheless, they still enforce social norms concerned with environmental stewardship that cannot be enforced by any external living entity:

The [Tuvan] spirit-masters aren’t as vindictive or punishing as the God of Abraham. However, if you disrespect them or forget to make an offering, your luck can quickly change. They also aren’t omniscient. ‘Does the spirit-master of this area know what happens in another area?’ I would ask when in the field. Responses often consisted of: ‘No, but those spirits know what happens in that area.’

The local gods in Tuva aren’t concerned with morality in the Abrahamic or Western sense; instead, they care about rituals and protecting resources such as natural springs, lakes and hunted animals in their area of governance…through conversations, interviews and a variety of other questioning techniques, Tuvans communicated that their gods care about rituals and practices associated with resource conservation. But when asked, for example: ‘Does this God care about theft?’ they’re more inclined to give affirmative responses than to non‑moral questions ..

It looks as if gods can tap into our mental moral systems regardless of what our explicit beliefs tell us. Even though Tuvans might think that their spirit-masters are unconcerned with how they treat each other (or simply do not talk about their gods in this way), these gods might still contribute to co‑operation. If they trigger Tuvans’ moral cognition, the gods might curb ‘immoral’ behaviour especially when associated with territory.

Unlike the God-as-Big-Brother model of the Abrahamic faiths, spirit-masters follow more of a God-as-shy-but-watchful-landlord model…

Why God knows more about misbehavior than anything else (Aeon)

Once societies became to large for external enforcement agents, it is thought, these invisible spirits stepped in to enforce pro-social behavior: “representations of full-access agents have directly helped reciprocal altruism to evolve because they can help one view things from others’ point of view and can make systems of moralistic punishment possible.” [4] p. 32

…morality predates religion, which certainly makes sense given what we know about the very old origins of empathy and play. But the question remains as to why morality came to be explicitly connected with religion. [Pascal] Boyer grounds this connection in our intuitive morality and our belief that gods and our departed ancestors are interested parties in our moral choices.

“Moral intuitions suggest that if you could see the whole of a situation without any distortion you would immediately grasp whether it was right or wrong. Religious concepts are just concepts of persons with an immediate perspective on the whole of a situation.”
Say I do something that makes me feel guilty. That’s another way of saying that someone with strategic information about my act would consider it wrong. Religion tells me these Someones exist, and that goes a long way to explaining why I felt guilty in the first place. Boyer sums it up in this way: “Most of our moral intuitions are clear but their origin escapes us…Seeing these intuitions as someone’s viewpoint is a simpler way of understanding why we have these intuitions.” Thus, Boyer concludes, religious concepts are in some way “parasitic upon moral intuitions”.

Do humans have a religion instinct? (BBC)

Full access agents, thanks to their all-knowing nature, can also be consulted when big, important decisions need to be made and there is a large element of random chance:

Representation of full-access agents help in strategic decisions: as these are often difficult to make because people do not believe their strategic information is perfect or automatic, they consult full-access agents for advice. In addition, a decision is sometimes difficult to make because the issue at hand is relatively trivial or no alternative stands out as superior. Should I buy this or that gift from my wife? Your place or mine?
Finally, some decisions are difficult to make because too much is at stake. Should I go for the operation when the risk of paralysis is 50 percent? Should we try to bust the terrorists at the risk of losing the hostages lives? [4] p.32

The religion equation.

So, then, our “religion equation” ends up looking something like this: HADD + ToMM + FAA = Religion; or at least the basic form of it.

In Supernatural Agents: Why We Believe in Souls, Gods and Buddhas, Iikka Pyysiainen derives a slightly different, but similar, equation:

I distinguish three overlapping cognitive mechanisms that contribute to agentive reasoning. The first is hyperactive agent detection (HAD): the tendency to postulate animacy–this mechanism is triggered by cues that are so minimal that it often produced false positive, for example, we see faces in the clouds, mistake shadows for persons, and so forth. Second is hyperactive understanding of intentionality (HUI): the tendency to postulate mentality and to see events as intentionally caused even in the absence of a visible agent. Third is hyperactive teleofunctional reasoning (HTR): the tendency to see objects as existing for a purpose. [4] p. 13

When HADD, HUI, and/or HTR are triggered, giving a false positive, three alternative supernatural explanations are available: the triggering event was caused by (1) a natural agent acting from afar, (2) a present but invisible and intangible agent; or (3) some impersonal force or very abstract kind of agency. The first alternative is represented by beliefs in telepathy, psychokinesis, clairvoyance, and the like; as well as the example of a picture miraculously falling off from the wall. Examples of the second are beliefs about gods, spirits, and other supernatural agents. Third would be a “numinous” force or a very abstract agent such as “the ground of being”. [4] p. 30

These beliefs in noncorporeal beings (agentive reasoning), in whatever form they take—ancestors, nature spirits, or ‘the universal spirit’—who can see into our inner souls and car about our moral choices, is the scaffolding upon which all subsequent religion is erected. Of course, the forms that it takes will vary greatly across cultures and across time. But such universals which give us clues as to religion’s fundamental nature and origin, while looking past the myriad superficial forms it may take.

In the next part of this series, I would like to briefly discuss some other ideas that were not mentioned in the BBC article, but have also been posited as giving rise to religion. These are Terror Management Theory (TMT), Bicameral Mind Theory (BMT) and the Memetic theory of religion.

[1] The Human Brain Evolved to Believe in Gods (Discover Magazine)

[3] The Recursive Mind by Michael Corballis, pp. 137-138

[4] Supernatural Agents: Why We Believe in Souls, Gods, and Buddhas by Iikka Pyysiainen

[5] What Does God Know? Supernatural Agents’ Access to Socially Strategic and Non‐Strategic Information (Cognitive Science)

House Conundrum

Another personal update.

I thought I’d start out with this little fun fact, since I write so much about ancient and medieval history here. I spoke with my dad’s cousin this week. Her husband went on Ancestry.com doing some genealogical research, and she suggested he look up her last name (which we share).

According to her, he found a family tree ending with my great-grandfather and extending back to—and I don’t know if I’ll believe this until I actually see it—805 AD!!!

So, apparently my family, the H***e family can trace its ancestry back to around the time when Charlemagne was crowned Holy Roman Emperor by the Pope Leo (800 AD), and 40 years before the Vikings sacked Paris (845 AD). We apparently come from a line of counts—minor mobility. That in itself is interesting, since the European title count comes from the Roman title comes, meaning companion or delegate of the Roman emperor. Maybe I can convince some Alt-right types to make me their rightful ruler.

I also found some papers from my great-grandfather, Otto, on my mother’s side (mother’s father’s father). Not as exotic as finding out your distant relatives were counts during the Dark Ages, but I did find out he was born in 1878 in Altendorf, Prussia (seven years after Germany became a country). My German isn’t good enough to make out much more than that.

Pretty sure this is my grandfather (1908-1968). Not the count side of the family, but he does look the part in this photo!

Kinda makes the fact that I’m the very last H***e alive a bit more poignant, I guess. Sic Transit Gloria Mundi.

###

My current situation consists mainly of trying to unload my mother’s house. This is the house my grandparents built in 1941.

Brand new – 1941

The house has serious foundation problems. VERY serious, as in there are significant cracks (up to half an inch wide) on all four walls of the basement, plus significant bowing of up to an inch. My guess is that the original builders were just not very good, and simply backfilled with earth, without taking any sort of water-protection measures. The grading slope away form the house is nonexistent, meaning that drainage is poor, plus there are no eaves or rakes to give some distance between runoff and the foundation, as you can see. There are gutters, but lots can go wrong with gutters.


(As as side note, eaves and rakes exist for a reason!)

The frost line in Wisconsin is 4′-0″ below grade, so based on the cracks, I’m guessing the freeze/thaw cycle in the first four feet of earth simply pushed against the foundation for seventy-odd years, and this is the inevitable result.

Water damage in the basement.

I don’t know whether this was typical for building at the time. My neighbors mentioned that they have no problems with their house, which I can tell from old photographs must have been built at the same time. Was their house built better, or had some previous owner done the work?

There is also water in the basement. Without some sort of destructive examination method, I cannot verify the source, but I believe it is coming in from above, and not through the wall itself. It looks as if where the stoop meets the house, there is a gap allowing water in from above. Again, fixable but expensive.

It’s deferred maintenance. My mother was far too poor to do the type of maintenance needed on a house like this, as was my grandmother.

So, basically, it’s kind of a wreck. Not a tear-down, fortunately, but hardly a sound investment.

(As a side note, owning a house in a Siberian climate like Wisconsin is just a losing proposition. I know what moisture and freeze/thaw cycles do. It’s a never-ending cycle of repair costs that will never pencil out).

(As another aside, a crumbling foundation is a good metaphor for the county more generally these days.)

So, just another bad break in a life chock full of them, I guess 🙁

Sometime in the 1960’s

Which means I have a couple options. I can either sell it ‘as is,’ or invest the money to repair the foundations myself and hope-against-hope that I can find a buyer, however long that takes.

Last week, I had some gentlemen come out to look at the house. It was three young (very young, I’m guessing in their 20’s) Hispanic gentlemen who buy houses, renovate them, and sell them. I think they’re pretty local—one of them said he even grew up in the neighborhood.

I liked these guys. They were not some national firm; they were local. They were entrepreneurial in the good sense—making money by improving neighborhoods and making them a better place. This neighborhood is quite the hot neighborhood right now with Midwestern Hipster/Lumbersexual breeder-types for raising families.

They made an offer of $65,000. They obviously emphasized the fact that they would have to excavate and repair the foundation walls, which isn’t cheap. They said it was a fair offer, and I believe them. I don’t think anyone else in their line of work would offer more. In fact, I had another home buyer walk through a few weeks earlier and he never called me back (the fact that there was a dead mouse in the basement toilet probably didn’t help).

Mom and grandpa. 1950 or therabouts

I got a spit-ball estimate of basement repair. It would cost $35,000 just to repair the basement, which I would have to pay upfront, of course. And that’s just for starters. I would also have to remove a fir tree from alongside the house–another $1,000. Then there are minor issues, like damaged walls and cabinets from my mom’s chronic smoking habit; the lack of GFI outlets near the sinks; the old, ugly carpeting; outdated appliances, and so on and so on…

If all those repairs/upgrades were made, one realtor estimated I could get from $120,000-140,000 for it. I’m a little skeptical of those numbers, but I estimate perhaps $100,000-110,000 is more realistic. According to Zillow, the median home in Town of Lake is $143,500, with similar houses (albeit in better condition) selling for $150-180,000. The city evaluated the house as $149,000, which is far above what it’s worth.


If I chose to repair the house, I’m stuck paying a huge amount of costs upfront, with the hope that I will be able to sell it later, and who knows how long that will take? Who knows what the Market will be like? Selling a house is a long, painful, arduous process for anyone. I’d have to engage a realtor, and even the realtor I spoke to charges 3.99 percent (lower than the usual 6 percent, but still…).

Pro tip: don’t plant trees near the house or the underground sewer lines.

To add yet another minor wrinkle, the next-door neighbor asked if I would consider renting the place out. It turns out that they are putting their house up for sale next month (August). Apparently they are building a house (!!) and would need a place to stay in the meantime.

I suppose if I rented it out, I’d make some money on it. But the basement would still be crumbling. All the other problems would still be there, festering. I’d still have to pay all the costs, like insurance and utilities, and do maintenance. Of course, I would receive rent money to help cover that, but it’s still a lot of hassle. And I’d be stuck here in the meantime.

This whole thing has been going on almost two years now. I never thought it would still not be resolved this far after the fact. Personally, I’m ready just to be done with the whole business and move on with my life.

But what life?

###

I’m leaning towards accepting the offer of the home buyers. I’ve asked them to submit an offer in writing to my attorney for review.

There is still a $10,000 mortgage on the house, because as I explained in my last “personal” post, my uncle insisted on getting his share. He probably made more on the house back in 1993 than I will here in 2019, despite doing absolutely nothing. So it goes, I guess.

Back when children played outdoors.

So I have to pay that off. The major claim against the estate is my mother’s home equity loan (HELOC), which I’ve been paying out-of-pocket for the last year. That’s about $11,0000. Then there are the attorney fees, of course, and I have no idea how much that will be.

The other issue is that the probate proceedings were supposed to be wrapped up in August. I’m told by the attorney that we can file an extension to deal with that issue. But does it really benefit me for this to drag out even further?

###

Reader bleg: any advice here? What would you do if you were in my position?

###

As for my employment situation, I kind of fell into a job a few months ago. I thought I was finished, but the agency that had placed me with the architecture firm got me a few interviews. I explained to them what happened at the previous firm, and even the hiring fellow said, “Oh yeah, they can be kind of cliquey.” Um, yeah, now you tell me!

(As an aside, in my initial interview at unnamed architectural firm, my interviewer said that “We’re like a family here,” or words to that effect. My instinct told me–and I’m dead serious– to refuse the job on the spot right then and there and walk out of the interview. In hindsight, I should have listened to my instinct.)

Anyway, I got an interview at an MEP (mechanical, electrical, plumbing) firm in Oak Creek. I thought, I might as well go, because I didn’t think I would actually get the job. I mean, I’m an architect, not a mechanical engineer. As I said in the interview, we architects only thing about two things when it comes to mechanical: make it fit within my ceiling plenum, and make sure there are dampers at all fire penetrations. But they insisted that they actually wanted someone with an architectural background to work for them.

Well, I got the job. I think it really is true—the less you care, the better you do in interviews.

This video embedded below should give you some idea of the gist of my work. The gory details aren’t important.

I’ve been working there since then. The experience could not be more different. I constantly hear about what a good job I’m doing, how everyone says I’ve helped them out tremendously, how they hope I don’t leave, etc.

(Which brings up yet another aside: how much one’s fortunes are based on sheer luck. I mean, I’m the same person I was before. I didn’t just gain 20 IQ points overnight. I didn’t gain any new capabilities. It’s simply the environment, and not anything you do. It’s just luck, regardless of what anyone wrapped up in their bullshit self-attribution fantasies suggests.)

So, anyway, despite my best efforts, I do have a job again. Of course, since I never do anything (besides write this blog), go anywhere, or buy anything, I sock away every penny because, as I have learned, those may be the last pennies I may ever earn under American-style Neoliberal capitalism. And after that you’re on your own.

###

I’ve been wondering whether or not I have PTSD. I mean, I’ve never been in combat. I’ve never seen people killed in front of me. I’ve never had to pull the trigger on anyone. I don’t want to make light of those things. There are many people who have been asked to do those things, and their suffering should not be trivialized. And certainly, many people have had much worse breaks than me (I?).

But I still have nightmares. I have panic attacks. Yes, I occasionally still have suicidal thoughts. I think a lot about the fact that I am all alone—utterly, totally alone. It’s hard to go through the quotidian traumas and vicissitudes of life that way. It’s hard to have no safety net in country that thinks Socialism is a dirty word. But it’s not like I’m the only one in that situation, after all.

I don’t trust anyone. I don’t believe anyone, anymore. I’m constantly waiting for the hammer to fall, or the other shoe to drop, or whatever metaphor you want to use. I wish I could say I feel secure, but I don’t, and I don’t think I ever will.

Is it possible for an economic system to give one PTSD?

###

Anyway, at least I can pay the bills right now, and I guess that’s enough. But where do you go when you could go anywhere?

I admit to being delinquent with replying to all those who wrote to me last time. Since I’ve started working again, I’ve tended to devote my free time to writing new posts, and I have a bunch I’m currently working on. But, I assure you, I still have them all, and hope to get around to replying some day. Thanks!

Who would want to leave all this???

BONUS: Former homeless people, what did you need the most? What was the best thing someone did for you? (AskReddit)