Predictability and Civilisation — The Economics of Security

Don’t be too quick on that trigger! Have you ever considered trying to play it for the long run? Planing necessitates predicting, and planning is a magical superpower. So drop your barbaric demeanors and join me for a civilized waltz dance. Raise the violins!

Christoph Fleischer

Published in

Coinmonks

27 min readJun 17, 2024

People act.

And people need predictability to act.

Thank god we find ourselves in a world that at least adheres to some reliability!

Just as Forrest Gump learned from his mother, stupid is as stupid does, analogically, successful is as successful does. Therefore, each of us decides their fate through our actions.

When we anticipate action, we start thinking things through.

Like in a chess game, the outcome correlates to the depth of our reasoning.

Besides maybe some headaches, thinking a couple of moves ahead can neither hurt in chess nor in life.

Unfortunately, no matter how hard we might try, the future does not necessarily adhere to our anticipations, and predicting the future is always a speculative business.

While our judgment may not be completely arbitrary, our contemplations about the implications of our actions must, at some point, necessarily fail, as the future is essentially contaminated by uncertainty.

Therefore, we have a cute little dilemma on our hands:

Planning increases the chances of our actions being successful, and to plan meaningfully, we need predictability. At the same time, planning is involved in the business of future-directed actions, and the future is essentially contaminated by uncertainty.

This dilemma is the key to understanding how predictability and civilization are intensively intertwined and is the foundation for any serious economic analysis of security.

So, let’s unravel!

Buckle Up, It’s For Your Own Safety!

Imagine yourself without everything you hold dear about the blessings of today’s functional aspects of culture, civilization, and technology.

You will have to perform certain actions under such circumstances simply not to die.

But not dying may not be enough for you.

And who would blame you?

You may want to improve your situation.

So, how would you go about that?

It’s probably working, right?

Ah, horrible, anyway:

The whole endeavor of working and improving can be subsumed under the notion of prosperity or the aim of increasing one’s prosperity.

You want to prosper, and ideally, you want to see your prosperity improve over time.

Unfortunately, every day has only a limited amount of time, and most of your time will have to be invested in mitigating immediate threats to your very existence. You will need something to eat every day, as well as something to drink and ideally some place to find shelter.

So, you fight on and increasingly become more proficient in gathering all the necessary resources you need. It is still hard work, and the threat of failure lurks everywhere, but you manage to get some leeway every day. You have a couple of resources or hours every day that you could employ in something else.

You could make yourself a more pleasant time and consume the additional resources or partake in free-time activities with the extra hours you worked so hard for.

Or!

You save the additional resources as a form of delayed consumption and gratification.

But why should you consider doing this?

Because you want to become more efficient. You can use the excess time to ponder how to go about that and the saved-up resources to invest in acquiring additional capital in the form of crafted tools as you conclude that this would make your time more worthwhile.

As you craft away and finish different tools, you quickly realize that you get more done in the same amount of time every day.

This grants you additional resources as a surplus, which enables you to spend more time and resources creating additional tools.

It looks like we found ourselves a nice beneficial loop.

You will inevitably find yourself in a loop like this (let’s call it the Sisyphus loop). It arises naturally from the fact that you must work almost permanently not to die while you employ all surplus time and resources to figure out how to improve your lot.

At first glance, this loop seems symmetrical, but as you increase your efficiency through additional capital investments, an element of asymmetry joins the equation.

Therefore, you don’t simply repeat the loop day after day, going through the motions without any change arising, because, over time, you become more prosperous.

Looking at our illustration of the loop, you see the stages labeled “maybe” (Saving and Investing). Everything “maybe” indicates the need to plan to unlock them.

But planning is not something that can be done in a vacuum. You can try, but you will probably not be able to look far ahead as your circumstances are predominantly uncertain.

Planning necessitates stability.

The more stable and predictable the circumstances of your workings, the easier it becomes to plan, and the more benefits can be expected from a practice of planning and investing in capital.

Unfortunately, the world is complicated and will have more than enough aces up its sleeve to make life, especially the practice of planning, miserable for you.

All those unpredictabilities can be summarized in the fact that uncertainty contaminates the future. Of course, this depends on your specific circumstances, as the degree of uncertainty may change over time and space.

We can clearly see what uncertainty does to our loop.

They attack our ability to save and invest. Therefore, they work towards making it more difficult to increase prosperity over time.

The German literature critic Marcel Reich Ranicski once told a story of how he and his wife changed their reading habits during their imprisonment in the Warschauer Ghetto, switching from mainly prose to lyric. Both were avid readers, so his reasoning is quite straightforward:

He pointed out that living under the Nazi regime in the Ghetto meant potentially being killed every second. Therefore, the medium of novels and prose was unsatisfying as you could have been killed before finishing the book. With poems, this problem was mitigated to a certain degree, as you could quickly finish poem after poem, adjusting your time investment strategy to the threatening grasp of uncertainty.

Thankfully, he and his wife were among the too few fortunate ones to flee and tell their stories. Still, the anecdote illustrates the interplay between capital investment strategies and uncertainty and, therefore, the interplay of predictability, uncertainty, and prosperity.

To profit from the prosperity-increasing potential of the Sisyphus loop, there must be enough predictability to plan, save, and invest.

The ratio between predictability and uncertainty dictates the constraint on the amplitude of the most significant investment possible: With great predictability, great investments become feasible, and vice versa.

Ok, predictability might be something neat, so can we increase it?

Actually, you can!

It is precisely to raise the predictability that the concept of security will enter the stage.

Further, the demand for security is nothing but the demand for more predictability or, therefore, less uncertainty. The demand for security is the demand for a hedge against future uncertainties.

Security institutes predictability, which enables long-term thinking, planning, and strategizing. Therefore, it lays the groundwork for every possible increase in prosperity.

While we may have started our Gedankenexperiment as bona fide savages, this doesn’t sound so savage anymore, does it?

The All-Seeing Eye

The civilizational process has been underway for quite some time, and our circumstances change over time as kingdoms come and go. Meanwhile, the logical structure of our Sisyphus loop stays the same.

People today and throughout history have had to work, plan, save, and invest. The demand for security and safety is a constant in human nature.

As economic values are subjective, your demand for security might differ from mine. It doesn’t matter if it is higher or lower, and it doesn’t matter where this difference originated. Such differences could be motivated by culture, genetics, or differences in our psychological profiles. Either way, you and I, and everyone else, have a demand for security that needs to be satisfied.

There is a direct connection between long-term strategizing and the increment of our prosperity, as saving and capital investment are prerequisites of raising prosperity and are both future-directed and necessitate behavior informed by a long-term strategy.

Therefore, satisfying our demand for security regulates our preference for long-term or short-term oriented behavior.

Long-term strategizing is, objectively speaking, not superior to its short-term counterpart. They are two different modes of strategizing, and the preference for one over the other depends on an actor’s motivations and circumstances.

Long-term strategizing is the way to go if your action is supposed to increase prosperity.

Therefore, there is some merit to the notion of employing as much attention and as many resources as possible toward action informed by long-term strategizing.

How do we evaluate the resources for the different strategies? After all, resources saved for long-term strategizing are a source of future increments of our prosperity. Therefore, shouldn’t saved-up resources be more valuable than those for immediate consumption?

Fair point!

But while fair, it also misses something.

When we act, we make our subjective value hierarchy explicit.

Choosing one path of action over another explicates our preferences.

Consuming resources, therefore, explicates our preference for consuming instead of saving.

As we act in accordance with our subjective evaluations, consumed resources are always valued higher than those saved.

This makes intuitive sense when considering the uncertainty of the future.

In general, there is a preference for consuming resources in the short run, as they are potentially lost for future consumption.

This can be for different reasons: Maybe your stock goes bad, a war breaks out, the stock is stolen, the stock becomes coerced by corrupt actors, or you die and cannot profit anymore from the fruits of your labor.

The only redeeming quality of saving is its promise of compensation in the future in the form of additional yield, which originates from increased efficiency through capital investments.

Financially speaking, this corresponds to a rate of interest that we are requiring for having an incentive to forego consumption in the first place.

The higher we evaluate the risk of losing our saved resources, the higher interest we require to consider saving them.

Therefore, we consider resources in the present always more valuable than the same resources in the future, as the present is certain while the future is not.

The outlook towards the future may change over time and be different for everyone. Some people are very risk-aversive, while others are not. Also, different societal, cultural, and historical circumstances influence an individual’s outlook toward the future.

You can easily see this when comparing the future outlook of someone living through golden times of cultural prosperity and stable circumstances, like during the Renaissance or 19th-century central Europe, with someone living in areas of current warfare, like eastern Ukraine.

Why should someone living through permanent bombing runs conclude that saving up to buy a house or start building a company would be worthwhile?

While I am not ruling out that someone arrives at such a conclusion and might have good reasons for their decision-making, we should be able to see that it is less likely under such dire circumstances.

Generally, planning for the future when circumstances are messy is less beneficial.

The notion of time preference describes an individual’s preference for future- or present-oriented decision-making.

Time preference can be applied to all levels of analysis and, therefore, not only describes an individual’s preference but is equally fittable to describe a population’s preference by averaging.

Time preference describes how much more an individual expects or requires in the form of a future return for delayed consumption, considering all particular, idiosyncratic, and individual circumstances.

Time preference converges to the notion of a general level of interest on the scale of a market economy. It indicates an actor’s willingness to subsidize present consumption in terms of future consumption.

German philosopher Hans-Hermann Hoppe identifies the process of lowering the general level of time preference with the process of civilization itself, and we can start to see why.

Time preference is usually referred to as high or low. High time preference indicates an individual’s strong preference for short-term strategizing, while low time preference indicates a preference for long-term strategizing.

The furthest projections in terms of planning toward the future constitute a hard limit for the highest complexity of plans and endeavors we can pursue.

If I could plan for the next five minutes, the most complex endeavors I could successfully finish must be feasible within five minutes. While the classic picture, Groundhog Day, shows us the potential realizable within only one day, it still needs to be clarified how anyone was supposed to come up with quantum mechanics and the construction of nuclear power plants if the time horizon barely spans a couple of hours or days.

Increasing our time horizon for planning will not guarantee the success of complex projects, but it will make them possible in the first place.

Look around yourself!

Look at the society you are part of and consider what you value about it!

What would you miss the most if it were to go?

Electricity is not that bad, is it? Think of the power grid as well as the power plants that have been constructed to support it.

What about the Internet and telecommunications in general? Think of the amount of wire that had to be rolled out, the data centers, the antennas, and all the computers and smartphones.

What about the infrastructure for health concerns? What about streets, roads, and highways? What about education in the form of schools and universities?

Think about all the technological and logistical hardships that had to be overcome by the cooperation of tens and hundreds of thousands of people over decades and maybe even longer to create the infrastructure that functions as the backbone for contemporary societies and civilizations.

All this is hard and necessitates long-term planning and everything you truly value about contemporary civilization results from such long-term strategizing. This is equally true for every civilization so far: Ancient Rome, Hellenistic Athens, and Ancient Egypt were all hubs of long-term strategizing and, therefore, comparatively successful in raising prosperity.

Ancient Egypt’s obsession with pyramids and the symbolism of the eye work as a blueprint for our line of reasoning here.

Architecturally speaking, a pyramid mimics a mountain. Several mountains play prominent parts in many cultures and their religious narratives (e.g., Noah’s Ark came to rest after the floodwaters receded on Mount Arat, Moses received the Ten Commandments from God on Mount Sinai, Greek Gods lived on Mount Olymp, etc.).

As civilizations are hierarchically ordered, it becomes apparent why the first civilizations were obsessed with mountains and imitating them in their architecture. A mountain or a pyramid manifests the core elements of every functional hierarchy in terms of a strong base that supports further higher ascensions. For this reason, the image of the mountain is psychologically and cross-culturally important and intuitive.

Hierarchies are coordination machines that enable cooperation and long-term strategizing. Therefore, it is no surprise that the first civilizations that managed to thrive did so, accompanied by an obsession with pyramids and mountains.

Equally, there is a close connection between the symbolism of the eye and hierarchies, and it is for a good reason that Egyptians put it on top of their pyramids (and so did the Americans on their One-Dollar Bills) as the hierarchy that lies at the foundation of every civilization is a hierarchy of attention.

Today, the idea of an attention economy enters our discourse, but this is nothing new. There has always been a negotiation about properly paying attention to the core of every culture and civilization. Every hierarchy has a highest value, and this highest value is god. Now think, for example, of the Romanic languages and where their respective words for god derive from:

The Spanish Dios, the French Dieu, the Italian Dio, the Portuguese Deus, and the Romanian Dumneszeu derive from the Latin Deus, which comes from the Ancient Greek theos. Theos originates in the verb theorein (to observe, to speculate, to contemplate, etc.), which also informs the meaning of the word theoreia (e.g., a theory is something written or told about something that has been observed and contemplated).

The idea underlying the notion of civilization seems accordingly to go something like this:

Orient your attention in a way that starts from a solid base of all the tiny little things that must be done daily to lay the foundation for increasingly more complex and attention-intensive long-term strategizing.

That is what civilization at its core is: a machine that organizes attention and, therefore, works towards optimizing the amount of attention and resources that are pulled into the different amplitudes of long-term and short-term strategizing to find a proper balance according to one’s circumstances and ideally work towards increasing everyone’s prosperity.

Therefore, a civilization can achieve deeds that necessitate a future-directed and planned-out long-term strategy that becomes practically impossible in its absence.

Civilization is nothing less than a machine that lowers time preference. Therefore, the process of civilizing and lowering time preferences are as closely intertwined as Hoppe claimed and identified.

Through civilization, the Sisyphus loop becomes embedded in a larger frame, enabling it to become continuously more rewarding and fruitful. The macroscopic structure microscopically informs the loop of the hierarchy.

For a functional pyramid, every posterior layer has to be grounded in a broader supporting anterior layer, just as every increment in efficiency through additional capital acquisition necessitates a broad supporting foundation in the form of prior savings that protects against uncertainties.

As every additional gain in efficiency siphons away security resources in the form of savings, there has to be some optimization to find the proper balance between efficiency and redundancy. Every network (also an economy, society, or civilization) is positioning itself somewhere on the spectrum between perfect efficiency and perfect redundancy, and prioritizing the former always comes at the expense of the latter. A network cannot be equally efficient and redundant.

Considering some intuitive examples of networks, like the railway system, it becomes evident that efficiency and redundancy are incompatible. Most railway systems are optimized for efficiency. That means that as few resources as possible are invested to enable people or goods to travel from one place to another. The system will be disrupted if there is a problem with the tracks or the train. If you were to operate a redundant railway system, this would be different. You could build multiple tracks and let several trains travel parallel on the same route. While all passengers will only sit in one, all the other trains work as backup trains if something is disrupted with the main tracks or the main train. While this might sound ridiculously elaborate and unnecessary, this is exactly how the Internet operates: sending data packages multiple times to ensure data is transferred uncorrupted. We can easily recognize how additional redundancy would make the train network less efficient (e.g., increase travel and maintenance costs).

Every network (e.g., the human brain with its neurons, the train and road network with its tracks or streets, mushrooms with their mycelium, the financial system with its banks, the Internet with its clients and servers, etc.) has to place itself as a specific solution to the problem at hand somewhere on the redundancy-efficiency spectrum.

Nothing has unlimited resources or time, so it is crucial to understand that investing resources in redundancy or efficiency becomes an optimization problem.

Redundancy and efficiency are not equally necessary or beneficial on all levels of a hierarchy to maintain the functional integrity of the whole structure. For something essential (e.g., something that, if it were to fail, threatens the functional integrity of the whole), redundancy is more valuable than for something that is, although very nice when it works, not necessary to work. For the essentials, the investment in redundancy will and should be higher, while for the non-essentials, efficiency is key, at least if you try to come up with a hierarchy that is as stable as possible while still productive at the same time.

When we consider our Sisyphus loop, saving can be thought of as filling up a bar-o-meter over time.

Saving is just another form of economic decision-making, and it adheres to an analysis of marginal utility (e.g., we value the next unit of something always higher than succeeding ones).

For savings, this means that the first unit of resources will yield the greatest return in terms of satisfying the subjectively valued demand for security. Every additional unit will still increase the satisfaction of the demand for savings, but each one to a lesser degree than the ones before.

With every additional resource saved, our barometer starts filling up, and with increasingly more savings at hand, the incentive to forego resource consumption decreases.

Let’s label the scale of our bar-o-meter to understand what this is about.

The total demand for savings by an individual to be willing to invest in capital must be thought of as the sum of resources that are necessary to satisfy that individual’s demand for safety (e.g., one’s rainy day fund) plus the demand for resources that are actually necessary for the investment itself.

Of course, the heights of the markings on our bar-o-meter are different for each individual and each investment opportunity.

An individual’s ratio between the amount of demand for safety and the amount of demand for investment shows the individual’s preferred position on the redundancy-efficiency spectrum, where redundancy corresponds to the demand for safety and efficiency to the demand for investment.

When individuals have the freedom to cooperate and trade, they form network structures. This bottom-up process optimizes the redundancy-efficiency ratio for the entire hierarchy. This process stabilizes the hierarchy and paves the way for further escalation and progress on the civilizational trajectory, demonstrating the power of the collective decision-making process in a hierarchy.

As money is the most liquid of all goods for trading and works as a storage of value, its marginal utility is the sum of the marginal utility of all other goods combined. Security is an economic good like any other, as it is scarce, and there is a demand for it. So security can be parameterized as money.

This is entirely in accordance with the lines of reasoning put forward by numerous representatives of the Austrian economic analysis, but especially by Hans-Hermann Hoppe and popularly by Saifadean Ammous when they emphasize that saving up money is the foundation for every future capital investment, every potential increment in living quality and prosperity, every tendency towards long-term planning and thinking, and the civilizational process itself.

Money plays a crucial role in the economic logic behind security. While not specifically designed for it, money is the most important security technology, as it is thoroughly involved in the dichotomy between redundancy and efficiency.

But in today’s world, money is no longer a bottom-up favoring technology but is employed as a top-bottom coordinated central planned effort.

And this has great implications for the hierarchy of civilization as well as the integrity of our security architecture.

The Emperor’s New Mind

Throughout mankind’s history, many technological implementations of money have been attempted. While some worked out quite well (e.g., ancient Rome’s Aureus, Renaissance Florence’s Florin), others felt miserable (e.g., 18th-century France’s money as real estate in the form of assignats, medieval Russia’s fur money in the form of the Yasak).

Throughout history, the rise and fall of numerous great civilizations have been accompanied by the same mechanism in terms of money technology. Kingdoms and civilizations flourished under sound money regimes, while they crumbled and collapsed under fraudulent money.

Unfortunately, we find ourselves at the brink of the ladder, as our money technology of today is fiat (money without any underlying exchangeable good that is only money due to legal authoritative decree) since approx. WW1.

Before the fin of the siècle, European Aristocrats and Kings established gold money that was made more potent through the addition of secondary technological implementations like money derivates (e.g., paper money, cheques, and wire transfers in the form of credit). Historically, this time is called the belle epoche, not for no reason, as most tourists visiting Europe would agree.

During WW1, central banks were founded under false pretenses to finance continual and endless brutal and slaughtering warfare by inflating the now centrally controlled currency by more than 99 percent.

There has been nothing as barbaric and uncivilized in the Old World since the 30-year war in the 17th century (1618–1648), which compares to WW1 and WW2. The moment money broke, civilization broke, and barbaric demeanors started reigning supreme.

Although quite some time has passed since those two horrific wars, money has been centrally governed by central authority since 1944, under the banner of the (in)famous Bretton Woods conference, in the form of a US-dollar-based international money system.

The original justification for the central banks’ confiscation of privately owned and stored gold during WW1 was already bogus beyond comprehension. It was purportedly for safety concerns, prevention of hoarding, and ensuring fair distribution during the dire war times. However, the real reason was to confiscate a significant portion of the population’s wealth and savings to fund the brutal war effort.

Despite the war being over, the control and implementation of money remain in the hands of a central authority. This has necessitated a shift in argumentation and the need for adjusted narratives.

Today, the criminal activities of central banks are justified mainly by disguised rationality in terms of economic pseudo-reasoning. The argument goes something like this:

Investments must be made to foster prosperity. These investments can be facilitated by incurring debt, which can be offset by printing more money. This, in theory, maintains the nominal value of the debt while gradually devaluing the currency, effectively ‘inflating away’ the debt over time. The result is a debt-free acquisition of capital that boosts productive output and prosperity.

Quite an alchemical deed.

Anyhow, this argumentation is, of course, no less ridiculous than the concerns for the safety and fair distribution of the corrupt war-mongering governments in the past.

From a perspective of sound economic analysis, this argumentation is wrong on many levels. Still, for our particular concern, we shall limit our inquiry to only one issue closely intertwined with the demand for safety and the proper adjustment of economic activity on the redundancy-efficiency spectrum.

The civilizational process is the process of lowering time preference. Time preference is lowered by people saving money to satisfy their demand for safety, gradually shifting their strategizing from short- to long-term. Savings build the redundancy necessary to ascend in the civilizational process, leading to the acquisition of more capital.

Capital acquisition only occurs when there is enough, or to be precise, too much safety and, therefore, redundancy in the system. A capital market is basically nothing else than a place where savers (with demand for risk, offering redundancy) and entrepreneurs (with demand for safety, offering efficiency) meet and adjust for proper balance by finding the appropriate price in the form of an interest rate for capital lending (I wrote about the function of the capital market as a place where chaos and order are traded here).

As excess redundancy is a prerequisite for capital investments, anything that corrupts the attempt to build sufficient redundancy tends to corrupt the process of future capital acquisition equally.

Money is important in this process as it is the most liquid storage of value available. This is analytically true because it is part of what it means for something to be money.

As inflation by states and their central banking apparatus dilutes the currency’s value, building up proper savings becomes more difficult. Funnily enough, for the same line of reasoning that I introduced before as a pro-inflation argument:

The nominal amount of money saved doesn’t change as money is inflated. But relatively speaking, you have less in store.

Of course, while this is beneficial for every debtor (e.g., someone who borrows from someone else), it is detrimental for every creditor (e.g., someone who lends to someone else).

In economic decision-making, the scalar number of an amount of money is entirely meaningless and carries only a declaratory function for price comparison and bookkeeping. There is no numerical incentive for someone to prefer to have one Million of some virtually worthless fantasy currency in contrast to only ten in some sound money currency because you can buy more with the ten than with the million.

As nominally nothing changes in the savings account, the amount of security it represents melts away as the currency is continuously inflated.

At the same time, inflation is used at some other location in the economy for someone without prior savings to have access to freshly printed money and invest it in the capital market.

It is true that with inflation, short-term gains in capital increase can be stipulated. The additional demand for capital goods incentivizes the production of additional capital resources, as more potential buyers can access credit money. This can lead to some improvement in terms of efficiency.

At the same time, the gained efficiency was not demanded by the collective decision-making of the free market. Therefore, there is too much resource investment in efficiency and too little in security. Or, put in other words:

An inflationary money system siphons away resources from security and redundancy and redistributes them to investments and efficiency.

While higher efficiency might sound alluring, you have to keep two things in mind: First, the gained efficiency is not in domains demanded by the market. Therefore, it is an empty efficiency gain, or at least partially so. Secondly, the efficiency gained does not come from a surplus in redundancy. Thus, the gained efficiency is built on unstable ground, making the whole economy and society more fragile and prone to catastrophic outcomes when disrupted significantly.

This is why inflation historically always accompanied, if not led to, the fall of civilizations. It is only a matter of time until a disruption enters the fray (e.g., in the form of an environmental catastrophe like a flood or a volcano eruption, in the form of war, in the form of a health emergency like an epidemy or a pandemic, etc.) A sufficient supply of redundancy would keep the system afloat and conserve civilization. For systems with too little redundancy, disruptions can endanger their functional integrity.

Moving from enough to too little redundancy is like turning the pyramid, the hierarchy of every civilization, on its top. At least it shapeshifts it that way.

While this is neither essential for my argument nor an economical line of thinking, the inversions in society that are culturally observable right now may also be connected to the described mechanism.

A healthy civilization is based on redundancy and peaks in efficiency. When this is inverted, maybe everything is, but this is a topic for another day.

Either way, inflating the money does not result in additional wealth creation and a general increase in everyone’s property. It leads to a less stable society and culture in which individuals increasingly struggle to satisfy their demand for security. When money is inflated, people’s time preference rises, and individual decision-making shifts slowly but surely from long-term to short-term, resulting in less civilized behavior in all domains of society and culture.

Widespread speculations among historians concern the potential danger of a tyrant emerging in times of dire cultural struggle and reigning uncertainty on an individual scale. When a central authority destroys the mechanism by which people can satisfy their demand for safety and siphons increasingly more resources from this domain away, the demand for security will rise until someone satisfies said demand. It is understandable that with fewer and fewer resources available to satisfy the demand for security, people will be willing to make great concessions only to improve their security infrastructure.

Authoritarians often do this. They may be harsh, but they are agents of almost pathological order, increasing security and decreasing uncertainty in favor of more predictability.

Similarly, results from the neuroscientific disciplines suggest similar lines of reasoning in an explanation of the logic of addictions. As there seems to be a sense that our brains can be thought of as prediction machines, too much uncertainty stresses us out. Apparently, the mechanism behind the neurotransmitters of dopamine and octopamine (e.g., feeling good and feeling sad, important for fight-flight decision-making) indicates a decreasing or increasing amount of entropy in an individual’s pathfinding. Entropy, colloquially speaking, indicates something like disorder or uncertainty. An addiction may be detrimental in many aspects of life, but it acts as a beacon of predictability that instantiates ritualistic structures that deliver predictability.

Your brain makes you feel good about making decisions and performing actions that lead to more predictable circumstances, but it also makes you feel bad about making decisions and performing actions that lead to more uncertain circumstances.

As the different lines of thinking are all congruent in their logic, maybe there is a close relationship between the inflation of the money base and the decreasing status of mental health in Western countries.

As you can see, the implications of implementing money technology can have monumental consequences in all different domains of society, culture, and personal life.

Thankfully, not all is dark and gloomy!

Counterstrike with Agent Orange

If you are like me, you consider the forces of decivilizing quality to be a threat and unpleasant: Something that should be avoided.

Therefore, we are confronted with a problem that needs addressing:

How can we turn the trend to ever higher time preferences around?

As Bitcoin icon Saifadean Ammous likes to put it:

“If it’s a problem, Bitcoin fixes it!”

And we have a problem!

So, how might Bitcoin be helpful?

So far, we are confronted with two semantic fields opposed to one another.

First, we have the complex of concepts like predictability, civilizing process, saving, and investing, which present the preferable side of the dynamic. Second, there is the complex around concepts like uncertainity, decivilizing process, unsatisfied demand for securities, and inflation.

Money is the base technology of every security architecture, on an individual scale as well as in society as a whole.

Therefore, corruption and manipulation are dubious, to say the least.

So, how do we fix it?

Guess what, with the implementation of a money technology that a central authority can’t manipulate!

And this is how Bitcoin enters the fray for us.

As Bitcoin is strictly restricted to 21 million coins without the possibility of increasing that amount, it promises an alternative to fiat money central banking.

Every hierarchy is supported by its base.

Bitcoin enables individuals to save the results of their work in a new type of storage of value that is resistant to inflation. This enables the individual to satisfy their demand for safety, and if not completely, still better than all the possibilities offered by the different fiat currencies around the world.

Bitcoin has the potential to reenable the satisfaction of security demands and turn around the current process of decivilizing, as the necessary redundancy missing can be rebuilt from scratch.

The aspects of a hierarchy that are foundational for its structural and functional integrity are redundant. In contrast, those aspects and functions that are not essential can be optimized for efficiency to increase prosperity as much as possible.

Money is the fundamental technology that satisfies one’s demand for security, and security represents a civilization’s redundancy. Therefore, money itself is the foundational technology of civilization’s redundancy. And so, it seems appropriate to maximize the redundancy of your money technology.

Current fiat financial systems are based on central banks that operate as single points of failure for the whole system. Efficient systems are centralized, as central coordination outcompetes decentralization in terms of production any day of the week. You can see this with the resulting changes in people’s prosperity after the advent of industrialization when big factories centralizing production made smaller decentralized manufacturing hubs obsolete. Therefore, the current implementation of money technology is optimized for efficiency rather than redundancy.

Funny enough, Bitcoin is often criticized for its lack of properties in the technological domain from a perspective of performance and efficiency. Critics claim that Bitcoin consumes heaps of energy that wouldn’t be necessary to coordinate payment transactions, as well as its limitation to only 400,000 transactions per 24 hours.

Although those observations may be misleading and originate from rather ignorant commentators, intuitively speaking, something resonates with them.

This is because, in some quirky sense, the critic is actually true.

Bitcoin is not only inefficient compared to centrally planned fiat money systems. It is actually designed to be perfectly inefficient. This inefficiency does not arise from its bad design but from its different design purpose. Bitcoin’s perfect inefficiency is a necessary implication of being perfectly optimized for being redundant.

If worse comes to worse, every single Bitcoin node can hop in and do the job the whole network is doing. For this reason, every single node has to stay autonomous, and consensus is not achieved by actively finding a consensus with one another but by parallely following the same rules and, therefore, arriving at the same conclusions. Consequently, you can think of every Bitcoin node as something comparable to a central bank in the fiat system.

As money plays a crucial role in building up redundancy in a civilization, employing a redundant money technology is the way to go.

Based on a Bitcoin Standard, it again becomes conceivable how to stop the current trend of permanent deterioration. It presents a silver lining, a potential to return to the civilizational upward trajectory that made the 19th century a belle epoche. Let’s go for another round!

Key Insights

People need predictability to act.
- The more predictability, the better planning can inform action.
- Planned action yields more efficient results than unplanned.
- Action is always future-oriented action.
- The future is necessarily contaminated by uncertainty.
- The problem: You need predictability to meaningfully plan, but planning is only needed for future-directed action, and the future is essentially contaminated by uncertainty.
- Demand for security arises as a service to mitigate the threat of unforeseen consequences of one’s action.
- Attaining security incurs costs in terms of efficiency.
- Efficiency always costs redundancy, and redundancy always efficiency.
- For that reason, the question of how much security will be purchased becomes an optimization problem.
- As with every optimization problem, a penalty is associated with doing too much or too little.
- All savings can be parameterized as money.
- Therefore, money is the most important security technology.
- Savings are redundancy, while acquired capital is efficiency.
- States inflate their money base to coerce resources from their constituents.
- Therefore, the individual’s security architecture is perpetually siphoned away by the dilution of the money base.
- Too many resources are therefore invested in efficiency, while redundancy increasingly needs more resources.
- Systems with too little redundancy become increasingly unstable.
- Bitcoin presents a money technology outside the inflationary reach of state-run money monopolies.
- Therefore, Bitcoin enables people to reestablish the integrity of their security infrastructure, laying the ground for proper long-term planning and, consequently, civilization.