A few days ago, my friend Liam Sharp sent me this video from the British Television program Charlie Brooker’s Wipe.
The gist is this: there are profound powers of control out there that have enormous influence over the Narrative — the stories that we tell in order to make sense out of the world. As a result, we can’t make sense of what is going on. Who are the bad guys? Who are the good guys? Who did what to whom and why? What is important and what is a distraction? It has become nearly impossible to have any real confidence in the answers to any of these questions.
If you’ve looked at my foundational assumptions, you will remember that I believe the only viable path forward for humanity is a “hard reboot” of our total social architecture. As a consequence, this video does not strike me as odd or even challenging. In fact, I find it a bit refreshing. So — we can no longer trust any of our institutions of authority? Our organs of political, journalistic and even scientific truth-formation are fatally suspect. What are we to do? Clearly — reinvent new ones.
This will, of course, be difficult. And if you believe that it is possible to simply muddle along under our current architecture, perhaps with some modifications or reforms, my approach will feel (far) too risky and you might want to stop reading here.
But if, like me, you’ve come to the conclusion that the current game that we are playing — all the way down to its most fundamental code — is no longer viable, then you can join Mr. Holmes in the highest form of pragmatism: “. . . when you have eliminated the impossible, whatever remains, however improbable, must be the truth.”
Our challenge, as usual, will be fear. And, in particular, it will be fear of two very different flavors.
Historically, those who are ostensibly in charge of (or most benefit from) a current institutional order will fear and resist forces of change, particularly forces of profound change. We can expect this to be the case in our Great Transition in spite of the objective dangers that a society of scarcity poses to all of us.
Indeed, we can expect current elites to fear and resist change in spite of the fact that a society of abundance will raise even the highest contemporary boats. Perhaps not immediately, but in as little as a single generation even the oligarchs would be better off supporting a Transition.
Presumably some, perhaps many, of our contemporary power elites and oligarchs will understand this and assist us. But others will not and it is entirely likely that they will use their access to the various organs of control developed over the past century to keep us stuck. Many paths run aground on those rocks — nipped in the bud, disoriented, or crushed with violence.
The second flavor of fear is more universal: the whirlpool of chaos. A Great Transition of necessity involves a breakdown of structure and many, perhaps all of the zones of safety that we have come to rely on. This is necessary because in general those “zones of safety” are obsolete structures that are holding us back. Nonetheless, to the degree that it opens us into the unknown or the untried, that opening leaves us feeling unsafe, unsure and captured by fear. Historically, this has been a most potent recipe for a people willfully choosing tyranny.
In order to thread this needle it is needful, then, that we design a disruption that simultaneously brings decisive power to bear (enough to unwind and overwhelm the forces of control) while at the same time providing a minimally-threatening “safety net” that gives our suddenly liberated energies a sense of orientation and a pathway to safety.
So, lets take a look. I don’t have the answers, but I do have some suggestions that I hope will be helpful to those who are aware of the situation and are (collectively and individually) trying to make this work. I have identified four “components” that I believe are necessary, though not quite sufficient to our task. In this essay, the view must of necessity be at a high level. Future posts will address each component in some deeper detail.
A New Sensemaking Apparatus
I addressed this component briefly in my previous essay, Reinvent Everything. Appropriately so, as it might be said that this function, the “sense making apparatus”, is the single most important component of any collective endeavour. Simply: how do we go about taking advantage of our many different experiences and capacities to do a much better job making sense of our world and making both individual and collective decisions.
Science, for example, has been a powerful sense making apparatus for the past 500 years. Using a combination of repeatable experiments, provable mathematics and a communal (nee “peer reviewed”) approach to both critique and knowledge sharing, it has been able to coordinate the distributed efforts of tens of millions of people around the globe to “make sense” of an extraordinary amount of our collective experience.
More prosaically, we can see the totality of journalism and much of our organizational (e.g., corporate) structure as different approaches to getting the most “sensemaking” out of different groups of people.
In every case, the most fundamental breakdown of sensemaking is a breakdown of trust. If I can trust you to be acting with integrity and good faith, then I can trust the perspective and information that you bring to me to at least be as clear and truthful as you can make it. The “oh dear” expressed in the video at the top of this essay is responding to the deep breakdown of trust that has come to characterize most and perhaps all of our current sensemaking apparatus.
I was recently introduced to Dave Snowden, a rare practitioner of “applied complexity science” who has done some groundbreaking work in crafting new tools for collaborative sensemaking. The bottom line: there is good reason to believe that a deep reinvention of every single mechanism of sense making that we currently use is ripe. This is cause for great optimism. Can’t make sense of the world through what you read or hear in newspapers, television and radio? Stop using them altogether and start helping to construct the new tools.
It appears to be entirely plausible to completely replace our entire suite of sense making techniques within the decade — and in making critical progress in just a few years. This will, of course, be the consequence of a large number of different initiatives. The foundation of all of which will be “scaling trust”.
A New Monetary System
At first blush, this sounds absurd. Am I really proposing that we develop a new monetary system and replace much (or perhaps all) of the infrastructure currently occupied by dollars, euros, yens? Yes.
Money is not magic. It is a technology. It is a set of signals that we can use to structure a “decentralized resource allocation mechanism” (aka “the market”). When it works, it helps us know what is a useful and valuable way to direct our personal energies, and it empowers and rewards those people who create value.
The fine point is that our current global monetary system no longer works. It was designed (by ordinary people likely with the best of intentions) in the years following World War II. And it is now hopelessly obsolete — broken in many different ways. Perhaps most importantly, it (and the various political and legal institutions that coordinate with it) has been so vigorously gamed that pretty much anything we do these days has only one result: a headlong dive into unsustainable income/wealth concentration.
A new monetary system is badly needed, and if it is well designed, it will do much to cure what ails us. Astoundingly, it is also perhaps the easiset “component” for us to imagine. In fact, in an important sense, it is already underway.
Bitcoin is what people in the software world might call an “alpha release” of a new monetary system. It has a number of important flaws — but its core teaching is inescapably profound: we no longer have to ask anyone’s permission to design our own money. If you don’t feel the power of this, think about it for a while.
He who has the gold makes the rules. If we are suddenly empowered to simply decide that dollars, euros and yen are artifacts of an ancien regime and decide to use some new currency of our own design, a lot of the power (and a lot of the rules) change quite quickly. Of course, this wouldn’t necessarily mean that dollars (and taxes paid in dollars) would go away all at once. But decentering dollars in favor of a money (and monetary system) of our own design is a crucial, powerful and achievable move.
In the late 60's and early 1970's there emerged a political object variously called things like a “basic income” or a “social dividend.” It was a notion that serious people treated seriously. The idea was elegant and simple: replace the morass of “means tested welfare” with a periodic grant of direct deposit cash to every citizen. This would eliminate both the massive and inefficient welfare state bureaucracy and the most painful edge of poverty. Nobel Prize winning economists came out in support. Martin Luther King, jr. wrote a book. Presidential candidates and politicians from all over the political spectrum supported it.
Then it dropped profoundly off of the political radar, joining things like gay marriage and marijuana legalization as fanciful thinking. I don’t know, maybe the Reagan Revolution had something to do with it? In any event, in the past few years, the notion has seen a renaissance. It has its own subreddit with 22,000 subscribers. It is the subject of more and more press. It is the darling of the techno-illuminati who correctly see it as a way to remove the fear of innovation and enable everyone to benefit from our movement into Abundance.
The idea is still far from mainstream, but it will be part of the zeitgeist before too long. And I believe that it is a key design element of a new monetary system.
One of the biggest challenges to a basic income is practical: how do we implement one in the current political and economic environment? There has been a lot of effort put into modeling different ways to structure taxes or rearchitect the welfare state to provide a basic income. But if we take seriously the power of creating and living within our own monetary system, then this problem resolves itself nicely.
In the Bitcoin system, money is created through an esoteric (and increasingly power intensive) algorithmic “mining” process. Run mining software and you “discover” new coins. In our current US dollar system, money is created through “bank issued debt”. Run a bank and you have the magic power to create new money in the form of loans. In an older system based on gold, money was created by digging it out of the dirt.
In our proposed new monetary system, money will be created by depositing it into the account of every citizen. This is simple and elegant. In fact, there already exists at least one cryptocurrency system that does it. It is a very powerful move. By anchoring basic income in the fundamental mechanics of how money is created, you simultaneously make a more robust and healthy monetary system and anchor a principal mechanism of Abundance deep in the bedrock of your social architecture.
Why would a monetary system based on basic income be more robust than our current approach (or older approaches based on something like gold)? Because money is a kind of sensemaking appratus that is effective (smart) precisely because (and largely to the degree that) it is decentralized.
Economies will always orient themselves around the centers of money creation and money will always benefit from concentration. If money is created by banks, then those kinds of economic entities that are most able to “get close” to banks and get access to their loans (e.g., finance, real estate, insurance and large corporations) will tend to hypertrophy and the money will concentrate into those channels. But if you structure your monetary system so that money is created at each and every individual in the economy, then you will have a system that is getting enough signal from everyone to really make the best sense of the world and, therefore, the best decisions.
I have heard two common critiques of the basic income that I would like to quickly address here:
“A basic income would be inflationary. If you give money to people, this will simply cause prices to rise in response to the increase in the money supply and, therefore, ameliorate the intent of the income.”
This could be true, but only if the new money created by the basic income resulted in an increase in the quantity (and/or velocity) of the money supply faster than the growth of the actual economy. If the economy grows faster than the new money creation (and velocity), you could actually have deflation. The real challenge, then is a standard challenge in any monetary system: how to elegantly balance the money supply with the growth of wealth in the economy so as to maintain stable and predictable prices?
There are many ways to elegantly avoid inflation that I won’t discuss here (but I do have a personal favorite). My suggestion would be to examine combining a differential geometric index number-based inflation algorithm with demurrage. This would allow you to precisely measure realtime price inflation and then to elegantly exit an appropriate amount of money out of the system on a pro-rata basis. If prices start to rise, the demurrage rate ticks up and some fraction of the overall money supply evaporates. Quite similar really to a steam release valve in a steam engine. An approach like this could provide a completely transparent and highly efficient path to long term price stability that requires little to no human intervention.
“If you give people enough money to survive without having to work, then they won’t work.”
This is my favorite objection because it is so easily addressed: precisely! Lets take a look back at The Coming Great Transition: we are all going to be unemployed; we don’t need everyone anymore; the obsolescence of the carrot and the stick.
Taking the opportunity of setting people free from having to work is the fundamental challenge and opportunity of the society of Abundance. The reality of 50, 60, 70% unemployment is coming round the mountain one way or another — a basic income can help make that a happy event rather than a tragedy. Of course, it doesn’t answer the question of what will people do when they are free? But that is a much deeper and more interesting question.
Now, of course, “dirty jobs” won’t go away all at once — but in an economy where everyone can choose not to do them, we might expect two wonderful results:
a) They will start being priced efficiently. Who really creates more value in the world, the jokers at JP Morgan who manipulate high finance, or the lady who comes in at night to clean all of the bathrooms and hallways? Well, we currently live in an economy where the bankers get paid millions while the hard-working cleaning lady gets to work two jobs in order to barely scrape by. In an economy where she gets a basic income, JP Morgan has a choice: either pay her enough to make it worth her while, or clean their own damn toilets.
b) And precisely because these dirty jobs will be priced efficiently, there will suddenly be a significant profit incentive for entrepreneurs to replace them. Lets say cleaning ladies go from making $20k a year to making $50k a year. This is a 2.5X increase in the size of the potential “cleaning robot” market. The whole point of a money system is to identify where people can contribute value to a society. Efficient pricing means a smarter economy.
Finally, I have run against two problems with a basic income that I would love to see be resolved:
1. What is the right amount for a basic income to be? It seems like there are two boundary conditions. On the one hand, an effective basic income needs to provide enough resource to remove people from fear. On the other hand, it cannot be so high that it fundamentally distort market functions.
2. How do we deal with national income inequality? A basic income of $3000 per year would be an incredibly empowering grant — even a windfall — throughout most of the developing world. But it would be nearly useless in the developed world. On the other hand, a basic income of $20,000 a year might be sustainable (efficient, effective) in the United States, but would clearly destroy the market signal on a global basis.
There is much to discuss about the details of a basic income, the new monetary system and new sensemaking architectures. I greatly look forward to dialing in on these components. But now it comes time to address a question of “how?” How will we do this? It’s nice to talk about creating a new sensemaking architecture. It’s nice to imagine a new monetary system and to play with basic income, but, really, how could we possibly pull all of this off? Particularly in the face of entrenched interests who control our political and economic institutions?
So now comes time to consider what I’m certain will be the most challenging and controversial, yet at the same time the most powerful and important component.
David Graeber has lucidly discussed the many times throughout history that recourse has been made to a fundamental reset of social obligations: a jubilee. He suggests that what the world needs now is a big dose of that ancient medicine. I agree. But I go both deeper and broader in my prescription.
First we have to be clear — this isn’t just a matter of social justice. We must recognize that the existing global financial/economic order is deeply unstable. The West is broke and there is every reason to expect a major financial crisis in the next decade that will be both deeper and more intense than 2007–2009. Its impossible to say just when the other shoe will drop, but there is a good chance (lets say >20%) that it might happen in any given year from now on. The point is this — for both bad reasons (greed, exploitation, bad management) and good reasons (the obselesence of scarcity and the move to abundance) the current financial system is not long for the world. The question we have to answer is not if, but how.
So far, I’ve seen a handful of approaches to this realization. Some (lets call them the “Goldman Sachs approach”) are positioning themselves to do even better than they did in the last financial crisis. They are buying hard assets like farmland and water, minerals and energy. Others (the “alienated survivalists”) are doing the best they can to protect themselves ranging from financial hedges in precious metals to basements full of guns and canned goods. Pretty much everyone else is just trying to ignore it and quell their anxiety by trusting to hope that “everything will be OK”. In other words, fear is leading the way. I believe that there is a better way — and it starts with a true global jubilee.
If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem. — J. Paul Getty
Let’s start with debt. Remember that our entire monetary system is based on debt. As a consequence, any contraction in debt is also a contraction in the money supply. This is a big reason why our current monetary system is so unstable. When things look good, debt flows and money is created — making prices and profits rise. But when things look bad and debt contracts, money also contracts. Doubling down on the misery.
The current global debt is somewhere north of $100 Trillion dollars (representing over 128% of global GDP). Imagine for a moment what would happen if some critical mass of that debt entered into default? In fact, imagine what would happen if some critical mass of that debt seemed likely to default? Or was even at plausible risk to default? Debt is interesting in that way: it is highly probabilistic. Past some minimal threshold of plausibility, any chance of default would have to be factored into interest rates. The more significant the threat of default, the more pressure on interest rates.
Normally, this wouldn’t be that big a deal. A few points of interest here or there is the sort of thing that could be absorbed by any number of political interventions. But in the context of the contemporary geo-financial system — where (almost) every bullet has been shot and the system is extremely fragile, even a modest global jubilee movement could easily push the system into real crisis.
Of course, on its own, this sort of crisis could be a disaster of epic proportions. There is every reason to believe that we could push the system past a tipping point where many sovereign debts would have to be defaulted on or monetized, which in turn would lead to massive inflation of the major currencies and perhaps the collapse of some of the major economies (Japan? Southern Europe?). Without a safety net who knows what would come to pass?
But what if we did have a safety net? What if we already had a well functioning and stable currency? What if that currency was the sort of thing that people could opt into and quickly feel safe and part of a functional, honest, trustworthy, effective, just community? Well then?
But this, in my opinion, would take more than just a “debt jubilee”. It would require us to reach into deep myth and recall the notion of a moral jubilee. A true wiping clean of the entire slate. A lot of nastiness has gone down over the past few thousand years and a lot of pain, bitterness and enmity burdens our collective soul. Imagine if our jubilee were a commitment — person by person — to put the past in the past and act henceforth in peace and good faith and in the highest of personal integrity with everyone else who also made a similar commitment?
At first, this might seem ridiculous and asking for a lot, but I think that it is both necessary and achievable. Not everyone, of course, will be able to get to a point of forgiveness and responsibility during the jubilee year, but time and again we have seen individual human beings able to make peace with each other even after brutal conflict. The power of forgiveness to set all parties free should never be underestimated. And we don’t need everyone to join this commitment — we just need enough to turn the tide.
Moreover, as I mentioned in Introducing Generation Omega, we humans are rapidly accelerating our technical ability to impact the world. Including our ability to wage war on each-other. We are entering the age of the “super-empowered individual” (see also here) where, to put a fine point on it, we are going to have to get incredibly good at peace if we are going to have any chance of surviving the century at all. “Once you have eliminated the impossible . . . “
How might we go about pulling something of this magnitude off? As a thought experiment, we might think of a massive, global-scale kickstarter for a new civilization ;)
Kickstarter is an elegant solution to a classic collective action problem: we would all benefit if only we all could act together; but since we can’t coordinate enough people to make it happen (for a variety of reasons) we suffer without it. In the case of Kickstarter the object is usually some sort of product. Lets say a musician proposes that if her fans will front her $15,000 she will create a new album. She puts the project up on Kickstarter along with some minimum commitments and a time limit and starts trying to get to critical mass.
Everyone can make a commitment (say $25), but without risk. If the project doesn’t hit its targets, everyone’s commitments are returned as if nothing happened. If the target is hit, then all of the commitments are unlocked and the project moves forward. Collective action problem solved.
In this case, we might imagine something like this:
- You make a commitment to the jubilee and to its terms (e.g, a basic income).
- You agree that, if and only if the project hits its critical mass target (say 200 million people representing $2 Trillion in gross income) you will commit to personally absolving all debts (moral and fiscal) owed to you by anyone who has also made the commitment; to acting in peace, good faith and personal integrity with all such people; to personally refusing to pay any debts owed to those outside the community (and taking responsibility for the legal consequences thereof) and to working diligently to enact a political debt jubilee within all legal jurisdictions that you have a vote in.
- This commitment is encrypted and sealed. You are now an anonymous (but cryptographically unique) “member” of the new monetary system and entitled to receive a basic income and any other rights associated with this membership.
- When the critical mass targets are hit all of the commitments are unlocked and the jubilee begins.
In concept, this is deceivingly simple. By bundling a tremendous upside with a collective action, and by insulating everyone from risk until enough people are committed, this kind of approach cuts through much of the Gordian Knot we presently face.
In practice, of course, it would be extremely complex — particularly when you consider the various machinations that recalcitrant legacy elites will use to try and short-circuit the transition! But it is an excellent thought experiment to prove the deep point: the integrity of the current game we are playing (the one we often call “real life”) is entirely based upon our willingness to keep playing. If and when enough of us decide to stop playing this game and to play a new game instead, on that day the world will change.
Whew! Will the Transition look like this? Probably not. But it might very well resemble it. Certainly it is plausible and certainly there are far worse scenarios lurking on our horizon. But I think that is enough vision for a while. It’s time to do something. For the next few posts I’d like to come down to the ground level and talk about steps we can take in the immediate term that actionably move us in the right direction, testing theories, building value and discovering the right questions to ask. I think the right place to start is with Sensemaking.