“Zero Money”: First Principles Thinking About Monetary Value
Change the Money, Change the World (5)
Introduction (1) About: “Zero Money” and “First Principles Thinking”
As presented in the preamble, “Zero Money” alludes to a metaphor. However, I assert it illustrates truth, truth defined as being logically consistent with empirical evidence. When I refer to “First Principles” as a basis for reasoning about what is true, what is consistent with objective evidence, my understanding is this engages a special category of empirical experience. This kind of reasoning discards deduction of evidence from observations of what was previously known. Instead it asks what is immediately known as timelessly true in the natural world itself. I think this indicates we are to engage in ongoing discovery of novel ways of understanding natural law. The topic of money approached this way is an exploration of what natural law tells us about money.
I believe discussion needs to go deep into the subjective mental aspect of our relationship with money to better understand the objective empirical evidence of what money is. We already know from everyday experience that money is a medium of exchange of things of value to us. Also, we already understand that money needs to have physical qualities of portability and durability and be immediately recognizable. We also know that money is something we hold and do not use immediately for exchange, so it is a store of value for future use. We count how much money we have and evaluate its purchasing power; that is, it is a unit of account of current value. The base unit of the medium is also divisible into countable fractions of total value. What, however, is the natural law that tells us the medium has value?
In the preamble, I began introducing discussion of the subjective idea of money and the objective substantiation of the idea in the empirical world. Only in objective reality can we look for logically consistent evidence of what is true about money, and what is not true about money. It was proposed that the idea of the value of money is coupled to what extent it is sound or unsound. The natural law on which this idea is based is that true monetary value is an epiphenomenon of natural phenomenal intuition about the scarcity of the medium of money employed. That being true, it followed that money remains sound only to the extent scarcity of the medium is maintained. Gold was discussed as the prime example of a sound medium of money. A very significant first principle was only briefly introduced in looking at why gold remains sound money. This principle is the timeless truth of nature as an infinitely decentralized determinant of value. Centralizing that determination is very detrimental to the soundness of money. Furthermore, that centralization always amounts to usurping control of the medium from the natural equilibrium of value in the free operation of decentralized market forces. At the point the idea of money is manifested in the objective world, individual subjectivity assumes governance, first in the selection of the medium of money and then to the degree scarcity of the medium is maintained.
My ontological position is that nature is the absolute subjectivity experiencing the objective world, Consciousness. As to money, infinite subjectivity determines through the natural law of scarcity what is of timeless value. That subjective experience is also reflected in nature as individual subjectivity. However, the thesis abstracted in the preamble is that individual subjectivity, or parties of individuals, have inevitably led to devaluation of a chosen medium of money over time, debasing its timeless value in scarcity by increasing the supply of units of the medium. This is an act of governance amounting to hubris of individuals violating natural law. Expanding on that thesis in the next section of this introduction, it will be helpful if I anticipate the description of that unfolding. In the next part of the introduction, I will be clarifying the methodology I am employing, but I will abstract that methodology now:
The concepts of registers and recursion are operative in this methodology. Registers are hierarchical and distinct aspects of a structure with the higher registers distinct but containing the lower: for examples, as in the primary distinction of subjectivity experiencing objectivity, and in the distinction between the absolute subjectivity of nature and that subjectivity reflected in the multiplicity of individuals; then finally, within the objective world, as in the functions of money discussed. Notice, however, how in the case of subjectivity there is distinction of register, but also reflection in individual subjectivity of absolute subjectivity. This a recursion of absolute subjectivity in the multiplicity of individuals. There is only unitary Consciousness, not Consciousness emerging as a new register in Objective reality. Likewise, there is recursion in the case of money as a unit of account. There is a distinction of register, but the unit of account is a function of evaluation of allegiance to scarcity in each of the two other registers of money: for money as a store of value, as well as for money being used in the market place. Money as a medium of exchange involves a ratio of price and wage value, a ratio in the context of value evaluated by the medium as a unit of account. It is not that prices and/or wages generate value.
Some logical methods of set theory in mathematics are most useful for maintaining a consistent discussion about first principles thinking about value. As we shall see, set theory precisely illuminates the structure of what money truly is with its range of registers and recursive relationships. There are sets and subsets of propositions of first principles reasoning about money. These propositions in this essay are about the set of elements composing the phenomenon of scarcity and the epiphenomenon of value for money. Most importantly, I propose, is the set of subjectivity that is the decentralized Consciousness of nature that is nobody, but contains the elements of centralized governance by reflected Consciousness in individuals, parties, governments and private central banks - often nefariously engaged in supposedly controlling the value of money in objective reality. Inquiry into first principles of money coming to questions of ontology: who would have thunk it?