I heard an analogy on a podcast (frustratingly I can’t find it now) about how Trump appeared to be a clown, and people laughed at him. But when the people looked at him again, he held up a mirror, and they saw that they too were clowns.
That is, after all, the traditional purpose of a clown.
Clowns, of course, are very serious and important people. At their simplest, they remind us of the silliness of things: that the world we have created is ridiculous. They reassure us in this observation by appealing to our innate understanding of the absurd.https://www.theguardian.com/news/2021/mar/18/all-hail-the-clown-king-how-boris-johnson-made-it-by-playing-the-fool
This idea that we often see our own reflection in something else intrigues me. I started to think about it in terms of cryptocurrencies. Many people hold up Bitcoin or other cryptocurrencies as clowns. They look at them and laugh (or certainly they used to.)
But one thing that Bitcoin does is to hold up the mirror to fiat currencies and the legacy financial system. It shows us that they are all clowns too.
At a deeper level, the clown is the mirror image of the priest. Both represent two ancient sides of our nature. Both elucidate what it means to be human. The priest summons, celebrates and interrogates the sacred; the clown does the same with the profane. The one is concerned with the eschatological, the other with the scatological. The priest propounds abstinence and fasting; the clown gluttony and indulgence. The one solemnifies sex, the other carnalises. As David Bridel, founder of the Clown School in Los Angeles, says, clowns are often roundly welcomed because they “remind us that we are as practised in falling over, shitting and humping, as we are in prayer and purification”.https://www.theguardian.com/news/2021/mar/18/all-hail-the-clown-king-how-boris-johnson-made-it-by-playing-the-fool
If we take this to be true, what does this mean for the world in terms of money and financial equality?
Something I hear a lot is that every generation rejects the Ponzi of the generation before and creates its own. So the world of finance has gone from ancestral food swapping, through collectibles, precious metals, paper money, the gold standard, and fiat currency. Then there was Bitcoin and now there’s the whole ecosystem of crypto including coins which are self-professed ponzis, others which are pretending not to be but clearly are.
With that comes the ability for everything to be financialised or economised – i.e. everything can have a price and digital representation. Reddit gold, Twitter followers, houses, BTC, USD, land, cars, everything you can think of can now be represented by an NFT, connected to the wider economy and become part of it. The world becomes hyperfinancialised or hyper-economised. Interconnected and interdependent. Tradeable.
This could be a forcing factor for equality
If a particular currency’s distribution becomes unreasonably weighted, then the disgruntled part of the community can create a different coin where those holdings or rules are adjusted for things to be fairer. So there’s this automatic optimization for things to be just fair enough, where there’s insufficient incentive for the community to go and create a new coin/currency/Ponzi because everyone has enough. There is an inbuilt check and balance that protects against inequality.
More specifically, the infinity-billion dollars in risk-seeking capital are not entirely dedicated to buying the bags of crypto OGs.cobie
This is also not to say that I believe that complete equality is fair or desirable. I find it very frustrating that some people grind their whole lives and others coast and parasitise. A completely homogenous economy isn’t likely to spark the creativity that drives innovation.
But likewise, excessive inequality leads to undesirable outcomes including increased crime, extra burden on health services and poorer contributions to society.
Even if equality was desirable and crypto enabled it, I can’t help but think that actually achieving equality is a utopian fantasy.
Winners keep winning
My skeptical view is that it will just create even greater economic disparity. This post is a lot about me trying to think through that why that might be the case.
I guess if you are already wealthy from one project and you’re working with others who are also well-connected then you have automatically a club which is better capitalised and going to be respected by all those people who didn’t make it into that project in time. That’s just human nature – everyone is looking up the hierarchical ladder, at the rat in front.
It therefore becomes easier to win again because because you’ve got the connections, capital and influence to coordinate and create or back new projects. It’s simply harder for people outside of that community to self-organise.
It’s also obviously true that not all assets are equal. One piece of land is objectively better (for farming/defense/etc) than another. One currency is backed by a more powerful armed force. One crypto is more decentralised and secure than another.
Community and coordination is key
There’s also some protection against the ‘winners keep winning.’ The internet has shown us that everyone has interests and that people will find others with shared interests and create vibrant networks and communities – just look at Reddit!
If we believe that every network/community will become an economy then it also stands to reason that all the assets that those communities value will become hyper connected too. So people might not necessarily be able to collaborate, communicate and coordinate around a particular crypto project, but they might well be able to do so around a project that is specific to their interests. That could be Lego. It could be Nike. It could be a geography. It could be anything else. I guess there are as many potential projects / communities as there are human interests and that these will grow and evolve as a natural part of human culture. Culture changes fast.
In that light, it seems unlikely that the financial system will become as polarised as it has with the fiat system where people who have money and are in that club are advantaged significantly. The internet is showing that people can coordinate and organise outside of the central control that is an implicit part of fiat currencies. Crypto adds a financial/economic layer to those communities and allows them both to self-organise and to effect economic change in line with their interests.
The Lucifer Effect
I studied Zoology at university and one of the readings was The Lucifer Effect.
One of its messages is that hierarchy is inherent to human nature. That implies that we will continue to see this inequality until or unless we find ways to hack our own nature. This is one of my great hopes for AI and DAOs, that they will combine to help us be better than we can on our own.
“The way to win the final war is to make peace with ourselves”Aza Raskin, Center for Humane Technology
Of Sneetches and Men
And it’s important to remember that inequality and status are relative. So even if in absolute terms everyone is doing great, people will always find a point of difference around which to build differentiation and try to imbue hierarchy.
It seems to me that crypto gives us the tools we’d need to achieve a tighter spread of equality. From where we are today, that seems desirable. Perhaps with the help of DAOs and AI we’ll find a more sustainable balance for society.
Perhaps like the Sneetches, we will one day find contentment in just being people together. A man has to dream.
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