What is money? I am coming to realize what a complicated question this is.
Somehow money is intertwined with debt. Through the magic (or black magic) of fractional-reserve banking, the act of making a loan creates money. Since I am an executive at a financial institution that makes loans, that is a sobering thought. I appear to be involved in the creation of money without fully understanding what I am doing. (I wonder if anyone fully understands it.) On my list of books to read someday is Debt: The First 5000 Years by David Graeber. Perhaps that will help me understand.
Somehow debt is intertwined with how countries govern themselves. Democracies issue debt which becomes money. That is a sobering thought, too. As citizens in a democracy, do we have any idea how our government's debt affects money, the economy, and the sustainability of our society? Also on my list of books to read someday is A Free Nation Deep in Debt: The Financial Roots of Democracy by James Mcdonald. Perhaps that will help me understand.
The subject of today's post, however, is money and religion, prompted by this column by Spengler (aka David P. Goldman):
Why Jews are good at money
His thesis is that the value of money depends on debt; that the value of debt depends on trust; that trust depends not only on a government that enforces contracts but also on something broader and deeper - an underlying faith; and that the Jews were the first to develop religious faith.
It's an interesting thesis. I recommend reading the whole column. It's not long.
So money and religion have something in common: they both depend on faith. That's an interesting thought. Douglas Adams said something similar. I'm not sure, however, that this is the lesson one gets out of Matthew 21:12-13. The story of the moneychangers in the temple does not seem to indicate that Jesus thought that money and religion had much in common.
Islam has some ideas about money, too. I need to learn more about that someday.
And what about bitcoin? The idea of the block chain seems to be a new concept in the world, made possible by the computing power of today's information networks. Perhaps the block chain will provide the faith that is needed to sustain the concept of money.
But returning to the ideas of money, religion, and faith - what about doubt? Can we live without doubt? It is a basic principle of science that we must always leave room for doubt. On my work blog, I once wrote about the tension between belief (another word for faith) and doubt: Two Greek Maxims.
Coincidentally, my favorite source on the essential role of doubt in science is Richard Feynman, who was born a Jew.
Oh, the world is so complicated! Someday I'll figure it all out.
Tip o' the hat to Maggie's Farm for the link to Spengler's column.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Sunday, February 22, 2015
Wednesday, July 4, 2012
Introduction to Slow Living
In this post I introduce the concept of Slow Living. But first I have to talk about Slow Food and Slow Money.
Everyone knows what fast food is. Slow Food is an international movement founded in opposition to fast food. Slow Food grew out of a protest against the opening of a McDonald's restaurant in Rome in 1986. Slow Food promotes food that is enjoyable, good for the consumer, good for the farmer, and good for the planet. "It opposes the standardization of taste and culture, and the unrestrained power of the food industry multinationals and industrial agriculture." The founder of Slow Food is Carlo Petrini of Italy. Today the Slow Food movement includes over 100,000 members in 150 countries.
The Slow Money movement was founded in 2008 by Woody Tasch of the United States with the publication of Inquiries Into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered. Carlo Petrini wrote the Foreword. The Slow Money movement seeks to "connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises." In 2010 there was a Slow Money National Gathering in Shelburne, Vermont, which I attended.
The Slow Living movement extends the philosophies of Slow Food and Slow Money:
Last month there was a Slow Living Summit in Brattleboro, Vermont, which I attended.
More info (all of the above quotes came from these links):
Slow Food: Wikipedia entry, http://www.slowfood.com/
Slow Money: Wikipedia entry, http://www.slowmoney.org/
Slow Living: Wikipedia entry, http://www.slowlivingsummit.org/
Well, this is all very interesting. Who doesn't think that modern life is sometimes too fast? But what I find really interesting is something that is missing.
What is the philosophy of "Slow" missing? See the next post.
Everyone knows what fast food is. Slow Food is an international movement founded in opposition to fast food. Slow Food grew out of a protest against the opening of a McDonald's restaurant in Rome in 1986. Slow Food promotes food that is enjoyable, good for the consumer, good for the farmer, and good for the planet. "It opposes the standardization of taste and culture, and the unrestrained power of the food industry multinationals and industrial agriculture." The founder of Slow Food is Carlo Petrini of Italy. Today the Slow Food movement includes over 100,000 members in 150 countries.
The Slow Money movement was founded in 2008 by Woody Tasch of the United States with the publication of Inquiries Into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered. Carlo Petrini wrote the Foreword. The Slow Money movement seeks to "connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises." In 2010 there was a Slow Money National Gathering in Shelburne, Vermont, which I attended.
The Slow Living movement extends the philosophies of Slow Food and Slow Money:
This simple phrase [Slow Living] expresses the fundamental paradigm shift that is underway in this age. “Slow” encodes the transformative change from faster and cheaper to slower and better—where quality, community and the future matter. It’s about slowing down and becoming more mindful of our basic connection with land, place and people, taking the long view that builds a just, healthy, fulfilling way of life for the generations to come. It is about common good taking precedence over private gain. It is about shifting not just consumption but investment to support the local and regional economy.
Last month there was a Slow Living Summit in Brattleboro, Vermont, which I attended.
More info (all of the above quotes came from these links):
Slow Food: Wikipedia entry, http://www.slowfood.com/
Slow Money: Wikipedia entry, http://www.slowmoney.org/
Slow Living: Wikipedia entry, http://www.slowlivingsummit.org/
Well, this is all very interesting. Who doesn't think that modern life is sometimes too fast? But what I find really interesting is something that is missing.
What is the philosophy of "Slow" missing? See the next post.
Sunday, February 6, 2011
Douglas Adams on Money
Douglas Adams was brilliant.
I have been rereading his 1998 talk "Is There an Artificial God?", published in The Salmon of Doubt. (See also my earlier posts on the book and the talk.)
Here's how the talk came about. Douglas Adams was invited to be a speaker at a conference titled: Digital Biota 2 - The Second Annual Conference on Cyberbiology at Magdalene College, University of Cambridge, England. He declined to give a speech, feeling that he was an amateur among luminaries. But he did attend the conference and he agreed to be put on the agenda for a "debate." When it came time for his "debate," he stood up with no prepared notes and talked extemporaneously for over an hour, basically proposing a debate over the question: "Is There an Artificial God?"
It was an amazing performance. Fortunately someone made an audio recording, so that his talk was preserved and later transcribed. At the first link in this post you can find a link to the audio recording where you can hear both Adams himself and the audience reaction.
This captivating talk wove together concepts from science, religion, economics, agriculture and feng shui, all wrapped up in a story about the Four Ages of Sand. He brought all of these disparate themes together into one simple principle:
You need to read the talk to understand what he meant by that, but he believed that this principle "is arguably therefore the prime cause of everything in the universe. Big claim, but I feel I'm talking to a sympathetic audience." His talk was a tour de force, all the more so because it was off the cuff.
In this post I want to focus on what Douglas Adams said about money:
In his view, the concept of religion is the same. Now you can see how he came to include the topic of economics in a talk titled "Is There an Artificial God?"
Adams does not argue that we should get rid of either religion or money. On the contrary, he acknowledges how incredibly useful they both are. The example he uses to support the usefulness of religion involves agriculture, which is how that topic got into his talk.
That's about all that Adams says about money, but I think he could have said something additional that is interesting.
Recall his Four Ages of Sand; that is, sand to make glass lenses, silicon chips and fiber optic cable:
1. Telescopes - We discover the outer universe.
2. Microscopes - We discover the inner universe.
3. Computers - We discover computation.
4. The Internet - We discover new ways of communication.
All of Adams' major points revolve around the first three ages, especially the Third Age where we learn that complexity can arise from simple processes repeated over and over. He actually forgot to talk about the Fourth Age until someone asked a question about it. In his response to that question he talked about four modes of communication:
1. One-to-one
2. One-to-many
3. Many-to-one
4. Many-to-many
One-to-one communication needs no explanation. One-to-many communication is mass media. I'll say more about many-to-one communication below. Adams' point was that many-to-many communication is new in the world, made possible by the Internet, the Fourth Age. We don't know what changes this will bring to our world, but they are likely to be profound, just as the introduction of one-to-many communication brought profound changes. Think about the effect on history of the printing press, radio, and television.
Adams gave only one example of many-to-one communication:
He did not elaborate on how he thought our democratic systems would improve dramatically, but the point I want to make is about something else. I think he overlooked something. I think he missed another important example of many-to-one communication: markets.
Think about the law of supply and demand. Prices adjust so that the amount supplied (at that price) equals the amount demanded (at that price). The price mechanism is what allows the efficient allocation of scarce resources. Prices serve to communicate information between buyers and sellers.
I suppose we could think of markets as many-to-many communication, since there are usually many buyers and many sellers. But I find it useful to think of markets as many-to-one communication. The many (buyers) are communicating useful information to the one (each seller). What kind of useful information? Producers are one example of sellers. The price they can obtain for the products they sell communicates useful information about how much to produce. If the price is high and the producer therefore realizes a profit, the producer will tend to produce more, and so on.
There are two important similarities between democratic systems and markets. In both systems, the many communicate to the one by voting. In democratic systems we vote with ballots. In markets we vote with our purchasing decisions.
Another similarity is that both systems operate well only with liberal quantities of freedom. It is not a coincidence that both democratic systems and markets increased in importance in the world as freedom became more prevalent. The year 1776 was a seminal year for both systems, with the adoption of the U.S. Declaration of Independence and publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith.
Douglas Adams said "there's not much of it about" meaning many-to-one communication. If democracy is one's only example, that is true. The amount of information transmitted from the many to the one in a democratic voting system is limited. Not everyone votes, ballots have limited choices, and votes are counted only once every few years. Much more information is transmitted from the many to the one in a market. Participation is broader, choices are more extensive, and votes are counted continuously.
Markets are a wonderful example of many-to-one communication. I would argue a better example even than democracy. And what is necessary to make markets work? Something that:
Money.
I have been rereading his 1998 talk "Is There an Artificial God?", published in The Salmon of Doubt. (See also my earlier posts on the book and the talk.)
Here's how the talk came about. Douglas Adams was invited to be a speaker at a conference titled: Digital Biota 2 - The Second Annual Conference on Cyberbiology at Magdalene College, University of Cambridge, England. He declined to give a speech, feeling that he was an amateur among luminaries. But he did attend the conference and he agreed to be put on the agenda for a "debate." When it came time for his "debate," he stood up with no prepared notes and talked extemporaneously for over an hour, basically proposing a debate over the question: "Is There an Artificial God?"
It was an amazing performance. Fortunately someone made an audio recording, so that his talk was preserved and later transcribed. At the first link in this post you can find a link to the audio recording where you can hear both Adams himself and the audience reaction.
This captivating talk wove together concepts from science, religion, economics, agriculture and feng shui, all wrapped up in a story about the Four Ages of Sand. He brought all of these disparate themes together into one simple principle:
Anything that happens happens.
You need to read the talk to understand what he meant by that, but he believed that this principle "is arguably therefore the prime cause of everything in the universe. Big claim, but I feel I'm talking to a sympathetic audience." His talk was a tour de force, all the more so because it was off the cuff.
In this post I want to focus on what Douglas Adams said about money:
Money has no meaning outside ourselves; it is something we have created that has a powerful shaping effect on our world, because it's something we all subscribe to.
In his view, the concept of religion is the same. Now you can see how he came to include the topic of economics in a talk titled "Is There an Artificial God?"
Adams does not argue that we should get rid of either religion or money. On the contrary, he acknowledges how incredibly useful they both are. The example he uses to support the usefulness of religion involves agriculture, which is how that topic got into his talk.
That's about all that Adams says about money, but I think he could have said something additional that is interesting.
Recall his Four Ages of Sand; that is, sand to make glass lenses, silicon chips and fiber optic cable:
1. Telescopes - We discover the outer universe.
2. Microscopes - We discover the inner universe.
3. Computers - We discover computation.
4. The Internet - We discover new ways of communication.
All of Adams' major points revolve around the first three ages, especially the Third Age where we learn that complexity can arise from simple processes repeated over and over. He actually forgot to talk about the Fourth Age until someone asked a question about it. In his response to that question he talked about four modes of communication:
1. One-to-one
2. One-to-many
3. Many-to-one
4. Many-to-many
One-to-one communication needs no explanation. One-to-many communication is mass media. I'll say more about many-to-one communication below. Adams' point was that many-to-many communication is new in the world, made possible by the Internet, the Fourth Age. We don't know what changes this will bring to our world, but they are likely to be profound, just as the introduction of one-to-many communication brought profound changes. Think about the effect on history of the printing press, radio, and television.
Adams gave only one example of many-to-one communication:
Then there's many-to-one; we have that, but not very well yet, and there's not much of it about. Essentially, our democratic systems are a model of that, and though they're not very good, they will improve dramatically.
He did not elaborate on how he thought our democratic systems would improve dramatically, but the point I want to make is about something else. I think he overlooked something. I think he missed another important example of many-to-one communication: markets.
Think about the law of supply and demand. Prices adjust so that the amount supplied (at that price) equals the amount demanded (at that price). The price mechanism is what allows the efficient allocation of scarce resources. Prices serve to communicate information between buyers and sellers.
I suppose we could think of markets as many-to-many communication, since there are usually many buyers and many sellers. But I find it useful to think of markets as many-to-one communication. The many (buyers) are communicating useful information to the one (each seller). What kind of useful information? Producers are one example of sellers. The price they can obtain for the products they sell communicates useful information about how much to produce. If the price is high and the producer therefore realizes a profit, the producer will tend to produce more, and so on.
There are two important similarities between democratic systems and markets. In both systems, the many communicate to the one by voting. In democratic systems we vote with ballots. In markets we vote with our purchasing decisions.
Another similarity is that both systems operate well only with liberal quantities of freedom. It is not a coincidence that both democratic systems and markets increased in importance in the world as freedom became more prevalent. The year 1776 was a seminal year for both systems, with the adoption of the U.S. Declaration of Independence and publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith.
Douglas Adams said "there's not much of it about" meaning many-to-one communication. If democracy is one's only example, that is true. The amount of information transmitted from the many to the one in a democratic voting system is limited. Not everyone votes, ballots have limited choices, and votes are counted only once every few years. Much more information is transmitted from the many to the one in a market. Participation is broader, choices are more extensive, and votes are counted continuously.
Markets are a wonderful example of many-to-one communication. I would argue a better example even than democracy. And what is necessary to make markets work? Something that:
has no meaning outside ourselves; it is something we have created that has a powerful shaping effect on our world, because it's something we all subscribe to.
Money.
Friday, December 24, 2010
Jon Stewart on Money
Jon Stewart has some fun with the topic of money:
Jon Stewart makes fun of Ben Bernanke of the Federal Reserve (Fed) for giving different answers at different times to the question: is the Fed printing money?
Jon Hilsenrath of the Wall Street Journal sorts it out: Is the Fed Printing Money?
Mr. Hilsenrath talks about reserves, which is money that banks have on deposit at the Fed. He mentions that reserves have increased from $33B to $1T, an increase of more than 30 times, in less than two years.
A graph makes his point even clearer (source):
Clearly something dramatic changed with the financial crisis of 2008.
It's good that commentators like Jon Stewart question the Fed's actions. If the Fed doesn't get this right, it could have significant adverse consequences for the economy.
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| The Big Bank Theory | ||||
| ||||
Jon Stewart makes fun of Ben Bernanke of the Federal Reserve (Fed) for giving different answers at different times to the question: is the Fed printing money?
Jon Hilsenrath of the Wall Street Journal sorts it out: Is the Fed Printing Money?
Mr. Hilsenrath talks about reserves, which is money that banks have on deposit at the Fed. He mentions that reserves have increased from $33B to $1T, an increase of more than 30 times, in less than two years.
A graph makes his point even clearer (source):
Clearly something dramatic changed with the financial crisis of 2008.It's good that commentators like Jon Stewart question the Fed's actions. If the Fed doesn't get this right, it could have significant adverse consequences for the economy.
Monday, October 11, 2010
What is money?
Over the past few years I have blogged about mathematical risk models (on my work blog) and the nature of reality (on my home blog). I'm becoming interested in a new question:
What is money?
Does that answer work??
Nope, it's not that kind of question.
So why am I interested in the nature of money?
A number of my posts have had connections to World War II. Examples: Herman Wouk, Albert Einstein, Richard Feynman (worked on the Manhattan Project), the play Copenhagen (about an event that took place during World War II).
I've blogged about two economists who famously debated the causes and cures of the Great Depression, which immediately preceded World War II and was at least a contributory cause of it. (here, here, here) I've written perhaps a dozen posts on my work blog about the recent financial crisis of our own time; let's hope it doesn't have the same ending as the Great Depression!
So that's why I'm interested in the nature of money. It seems that issues about our understanding of money can have big consequences.
A few places I plan to go with this question:
While blogging about the nature of reality, I wrote about some interesting ideas of Douglas Adams and Jaron Lanier. The works by Adams and Lanier that I cited in those posts also include interesting ideas about money. I intend to revisit those ideas.
I recently discovered that John Nash has some thoughts about money. You may recall John Nash from the movie A Beautiful Mind. I hope to explore his ideas.
Finally, I recently attended a Slow Money National Gathering. I'm not sure if all of their ideas are "sustainable" or not, but I did find parts of Woody Tasch's book interesting. I'll blog about it sometime.
In any event, this post is not about any new ideas. This post is a request for interesting links. In the past, when I was blogging about mathematical risk models or the nature of reality, some of the readers of my blogs sent me links to interesting articles, books and videos (and cartoons!) that I would not have found otherwise. So if you encounter any interesting links about the nature of money, please send them along. Thank you.
What is money?
Does that answer work??
Nope, it's not that kind of question.
So why am I interested in the nature of money?
A number of my posts have had connections to World War II. Examples: Herman Wouk, Albert Einstein, Richard Feynman (worked on the Manhattan Project), the play Copenhagen (about an event that took place during World War II).
I've blogged about two economists who famously debated the causes and cures of the Great Depression, which immediately preceded World War II and was at least a contributory cause of it. (here, here, here) I've written perhaps a dozen posts on my work blog about the recent financial crisis of our own time; let's hope it doesn't have the same ending as the Great Depression!
So that's why I'm interested in the nature of money. It seems that issues about our understanding of money can have big consequences.
A few places I plan to go with this question:
While blogging about the nature of reality, I wrote about some interesting ideas of Douglas Adams and Jaron Lanier. The works by Adams and Lanier that I cited in those posts also include interesting ideas about money. I intend to revisit those ideas.
I recently discovered that John Nash has some thoughts about money. You may recall John Nash from the movie A Beautiful Mind. I hope to explore his ideas.
Finally, I recently attended a Slow Money National Gathering. I'm not sure if all of their ideas are "sustainable" or not, but I did find parts of Woody Tasch's book interesting. I'll blog about it sometime.
In any event, this post is not about any new ideas. This post is a request for interesting links. In the past, when I was blogging about mathematical risk models or the nature of reality, some of the readers of my blogs sent me links to interesting articles, books and videos (and cartoons!) that I would not have found otherwise. So if you encounter any interesting links about the nature of money, please send them along. Thank you.
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