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The ascent of humanity Sorry, but Eisenstein's (the author of that book) ideas are bunk. He is just a guy on the net with opinions, which in itself is inoffen

The ascent of humanity Sorry, but Eisenstein's (the author of that book) ideas are bunk. He is just a guy on the net with opinions, which in itself is inoffensive. But they are terribly researched, economically laughable opinions, which he claims to back up with economic theories - and which therefore duly require debunking. His main thesis is that "we should make interest negative" - as though the time value of money were some sort of law by fiat! We set interest rates, yes - but that's like putting a dam on a river. Making interest negative is like making laws that water must henceforth flow uphill. He's also in cahoots with the Law of Attraction people (a slightly creepy new-age religious group), who use all sorts of pseudoscientific garbage to justify their existence. Quotes on Eisenstein's website by Bruce Lipton (among others) seriously call his credibility into question. (Bruce Lipton was a genuine biologist who fell off the rails in the early 90s and started writing a bunch of nonscientific mumbo jumbo about quantum theories of consciousness and evolution - published by Mountain of Love (!) publications). Eisenstein uses similar techniques - pseudoeconomics instead of pseudoscience. I don't know if you're quoting him, but "money and property as proxies for efficiency" is absolute codswallop. (The phrase "proxy for efficiency" is, so far as I can tell, completely devoid of meaning. ) We use money because it is _more efficient_ than e.g. goats as a unit of economic value. Before money was called money, it was called gold (and the ancient Japanese used rare seashells, and prisoners use cigarettes). Your final point is also incorrect - the possibility of monetizing the efficiencies gained through improved communication has driven the current wave of technology, not been replaced by it. Finally, technology absolutely does not give power to all individuals - at best, it confers advantages to those (often small) groups who adopt it. Please help debunk people like Eisenstein. Let's be honest: economics is hairy enough as it is without people spreading that sort of twaddle.

3- 17y ago
OK, to be honest I've been looking for someone to actually debate this with. First of all, "proxy for efficiency" is my own terminology and seems quite sensible to me. We talk about productivity in terms of GDP per capita. Implicit in that is the assumption that money is its own value, which it isn't - money is at best a marker of value. But we reward people with the marker, not the value. Second, your point of money being more efficient than other goods as a unit of value doesn't go anywhere. It does not get at the point Eisenstein presents, which is that the concept of trade exists because of ownership of scarce resources. If nobody owns anything, trade is nonsense. Third, the Eisenstein thesis doesn't mention interest. Negative interest is mentioned in the form of demurrage in one of his closing chapters, as another way to define money. But his overall thesis is non-economic: that we have set ourselves up, in a variety of ways, to battle against nature and against each other. "Separation of self" is the term he uses, along with a variety of colorful New-Agey terms. I'm focused on the economic points in part because I hold a B.A. in economics myself, and there are some solid points made about economic systems outside our mainstream viewpoint - particularly with respect to prehistoric gift economies. Your claim that the current wave of technology - by which you presumably mean online communications - was driven by monetizing efficiencies....that one seems a bit faulty. The Internet started as a military/academic project, not as an attempt to build a consumer market. As well, most open source software isn't built with a monetization in mind, but rather is a way for others to reduce their costs. In general the market doesn't build the technology, the market commercializes the technology after it becomes self-evident. The reason we have zillions of web startups is that the web still has so many new concepts to explore that everyone can be a do-gooder and monetize at the same time. The fact that a lot of people aren't monetizing the things they do online(for example, HN being free and user-driven) is the interesting part. That's a huge reversal of so much of history. Your statement of technology not giving power to individuals seems incredibly wrong. The Industrial Revolution was organization-driven, but our current revolution, whatever you might call it, is acting to take apart organizations. Blogs vs. newspapers. Social media vs. mass media. Central office vs. virtual office.
- caffeine 17y ago
  I agree that money is a proxy for value. That still does not justify the unsupported claim that it "encourages all negative externalities", and causes "deep rifts and strife." I agree that economic activity can have negative consequences - but how is this caused by the mere existence of money? Being rewarded with the value is not more helpful than being rewarded with the marker - most people appreciate using their paycheck at their choice of restaurants, rather than simply trading code for hogs at the local bazaar. If nobody owns anything, trade is nonsense. Barring slavery, nearly everyone owns their time. Thus people own something. Until a startup solves death, that remains a scarce resource. The existence of scarce resources with ownership is thus fundamental to the human condition. Much (most?) trade involves the exchange of labor for "markers." Any time you do a favor for anyone, it's trade. Sometimes, they do you a return favor by giving markers. We can rename money to markers and trade to favors, but that's what it is. As for physical resources - their "ownership" is basically just a way of prioritizing access. So - you might prefer other ways, like waiting in line, or lotteries. When people have tried those ways, they've found that letting the guy with the most markers have the resource works out for the best. Obviously, you know this - so what do you think works better as a means of resource allocation? Third, the Eisenstein thesis doesn't mention interest He mentions several times (I'm referring primarily to his videos) an enthusiasm for instituting money that "decays," like bread, so that we are tempted to spend it more quickly rather than attempting to save it. I can't describe this idea as anything other than crazy, so I'm glad that you reject it as well. Monetizing efficiencies....that one seems a bit faulty It's true - I expressed myself poorly, and indeed the idea was unclear in my mind at the time. I think neither of us was right in our characterization of this so far. Technology and markets are, to me, each the seed of the other. Yes, technology creates new markets - but markets capitalize new (usable) technologies. You don't have to call them markets - you can call them patrons, such as those that financed da Vinci. Once again, however, markets appear to do a better job than feudal patrons. Increasingly, groups of patrons acting with good information can do a good job as well - but it remains a market, just a better-informed one. Our current revolution (/me degrades into general rant:) ... is not a revolution at all. The "Web2.0" line of innovation seems quite trivial - office online instead of offline, social voting - these are simply efficiency improvements on existing organizational memes. It's probably impolite to post such a comment on a YC board, but nonetheless - does anybody seriously think that this stuff is earth-shaking? Culturally, it might be; but technologically, it's just variations on a theme. Go check out the stem cell labs in Singapore; they're innovating.

3- 17y ago

OK, to be honest I've been looking for someone to actually debate this with. First of all, "proxy for efficiency" is my own terminology and seems quite sensible to me. We talk about productivity in terms of GDP per capita. Implicit in that is the assumption that money is its own value, which it isn't - money is at best a marker of value. But we reward people with the marker, not the value. Second, your point of money being more efficient than other goods as a unit of value doesn't go anywhere. It does not get at the point Eisenstein presents, which is that the concept of trade exists because of ownership of scarce resources. If nobody owns anything, trade is nonsense. Third, the Eisenstein thesis doesn't mention interest. Negative interest is mentioned in the form of demurrage in one of his closing chapters, as another way to define money. But his overall thesis is non-economic: that we have set ourselves up, in a variety of ways, to battle against nature and against each other. "Separation of self" is the term he uses, along with a variety of colorful New-Agey terms. I'm focused on the economic points in part because I hold a B.A. in economics myself, and there are some solid points made about economic systems outside our mainstream viewpoint - particularly with respect to prehistoric gift economies. Your claim that the current wave of technology - by which you presumably mean online communications - was driven by monetizing efficiencies....that one seems a bit faulty. The Internet started as a military/academic project, not as an attempt to build a consumer market. As well, most open source software isn't built with a monetization in mind, but rather is a way for others to reduce their costs. In general the market doesn't build the technology, the market commercializes the technology after it becomes self-evident. The reason we have zillions of web startups is that the web still has so many new concepts to explore that everyone can be a do-gooder and monetize at the same time. The fact that a lot of people aren't monetizing the things they do online(for example, HN being free and user-driven) is the interesting part. That's a huge reversal of so much of history. Your statement of technology not giving power to individuals seems incredibly wrong. The Industrial Revolution was organization-driven, but our current revolution, whatever you might call it, is acting to take apart organizations. Blogs vs. newspapers. Social media vs. mass media. Central office vs. virtual office.

caffeine 17y ago
I agree that money is a proxy for value. That still does not justify the unsupported claim that it "encourages all negative externalities", and causes "deep rifts and strife." I agree that economic activity can have negative consequences - but how is this caused by the mere existence of money? Being rewarded with the value is not more helpful than being rewarded with the marker - most people appreciate using their paycheck at their choice of restaurants, rather than simply trading code for hogs at the local bazaar. If nobody owns anything, trade is nonsense. Barring slavery, nearly everyone owns their time. Thus people own something. Until a startup solves death, that remains a scarce resource. The existence of scarce resources with ownership is thus fundamental to the human condition. Much (most?) trade involves the exchange of labor for "markers." Any time you do a favor for anyone, it's trade. Sometimes, they do you a return favor by giving markers. We can rename money to markers and trade to favors, but that's what it is. As for physical resources - their "ownership" is basically just a way of prioritizing access. So - you might prefer other ways, like waiting in line, or lotteries. When people have tried those ways, they've found that letting the guy with the most markers have the resource works out for the best. Obviously, you know this - so what do you think works better as a means of resource allocation? Third, the Eisenstein thesis doesn't mention interest He mentions several times (I'm referring primarily to his videos) an enthusiasm for instituting money that "decays," like bread, so that we are tempted to spend it more quickly rather than attempting to save it. I can't describe this idea as anything other than crazy, so I'm glad that you reject it as well. Monetizing efficiencies....that one seems a bit faulty It's true - I expressed myself poorly, and indeed the idea was unclear in my mind at the time. I think neither of us was right in our characterization of this so far. Technology and markets are, to me, each the seed of the other. Yes, technology creates new markets - but markets capitalize new (usable) technologies. You don't have to call them markets - you can call them patrons, such as those that financed da Vinci. Once again, however, markets appear to do a better job than feudal patrons. Increasingly, groups of patrons acting with good information can do a good job as well - but it remains a market, just a better-informed one. Our current revolution (/me degrades into general rant:) ... is not a revolution at all. The "Web2.0" line of innovation seems quite trivial - office online instead of offline, social voting - these are simply efficiency improvements on existing organizational memes. It's probably impolite to post such a comment on a YC board, but nonetheless - does anybody seriously think that this stuff is earth-shaking? Culturally, it might be; but technologically, it's just variations on a theme. Go check out the stem cell labs in Singapore; they're innovating.