One of the more controversial figures of Ancient Athens was a man named Protagoras. A contemporary of Socrates, he taught aspiring young men the arts of argumentation and oratory so that they could advance in Athenian politics. We discussed last week how he and his colleagues would teach their student to win debates with the weaker case through sophistic arts, but there was more to Protagoras than just a teacher of rhetoric. He was a first class philosopher who insightfully perceived and articulated the foundation of a school of thought that would eventually underpin Keynsian economics and the practice of money debasement. Understanding that thought can do much to give us perspective today on economic debate. Indeed, every significant debate in history has been a clash of worldviews inspired by this fragment from Protagoras’ teaching
“Man is the measure of all things.
Of things that are, that they are,
of things that are not, that they are not.”
Scholars recognize that Protagoras intended the statement to be applied to matters of human endeavors and interpretations. His notable example of the concept is the question of how warm or cold it feels. This author grew up in Phoenix Arizona—a city with temperatures that regularly hover over 110 degrees. So I rarely felt “hot” during the years I lived in Ohio while others were complaining about the heat.
The philosophy (worldview) embedded in this classic statement has become known by a plethora of names, the most widely used is Constructionism , or social constructionism. (I’ll use the term “worldview instead of philosophy for clarity hereafter.) Nobody should be confused by this term. Simply put, all of us create or construct meaning about the nature of everything. In the United States, dogs are our pets, friends, companions and co-workers. But in China, Old Yeller is on the menu and considered a delicacy. An enterprising young Chinese man breeds them and takes a load to market, while a young woman in Kansas breeds and sells “goldendoodles” as upper class pets. Who is “right?”
Another “thing,” and one dear to our hearts, is money. Various societies have constructed money from any number of things, sea shells, livestock, split sticks, precious metals, paper notes.
Mike Maloney and Niall Ferguson have produced some excellent documentaries on the history and function of money, showing what makes one currency stable and another unstable. No need to review that here. Crypto currency comes to mind as a modern example. Here is 4 hours of history to watch, if you have an interest in such things
Sometimes it is helpful to recognize the philosophies behind the things we rant about each day. Let us look closer at this underlying worldview of Constructionism. It has been distorted and misapplied to venues where it has no business and is currently being used to undermine much of our society.
The Constructionist holds that all human values and beliefs are arbitrary, that good & evil, right & wrong are simply “rules” agreed upon by individual societies, that things we value have evolved as useful, not that there is any inherent value in anything. Religion and god have been “constructed” by elites to control the population. They do not take this view to absurd extremes, but apply it strategically in regions where human will and interpretation have high definitional utility.
The Essentialist holds that there are “measures” that are concrete, set in stone. Truth is established outside the whims and motives, and tastes of people, established by nature, aesthetics, laws of science, human nature, and God, to name a few. Religion was handed down by God to ensure stable societies. Things and people have a basic “essence” that allows us a predictable society. Scientists generally fall in this camp, seeking universal laws that govern the natural and social worlds.
These two competing worldviews go by many names
- Post structuralism
- Post-Modern condition
- Moral relativism
- Arminianism (don’t get mad at me)
- Logical Positivism
- Calvinism (yes, theology too)
These two worldviews have been struggling for ascendancy for two millennia. They find expression in every field of human endeavor from the humanities, the sciences, to religion. It is always the same struggle. One view believes that humans construct meaning and rules, while the other view believes that truth is fixed and we must discover it.
Keynesian theory is a constructionist worldview applied to money. Austrian economics takes much more of an essentialist view. We gold bugs are essentialists when it comes to money, stubbornly clinging to the surety and scarcity of our barbarous relics. Keynes, Krugman & Bernanke teach that money is created—created by human will through their wise and benevolent leadership. But are they consciously duping us?
The wild card in all our human efforts to build societies and stable media of exchange has been “power.” Long ago, those who gained power learned they could apply their constructionist views to currency creation and fool the essentialist general population for a while. The debasement of money into a fluctuating currency works, for a while, until essentialist laws of economics conquer the propaganda required to maintain belief in debased currency. And make no mistake, without the controlling power of the mainstream media, paper money wouldn’t have had a chance.
Now, I am not totally dissing the constructionist worldview. Many aspects of human life are indeed agreements between people, like whether bunnies are pets or a food source. And such decisions are often driven by need.
You recall that Ben Franklin desired to have the turkey be the symbol for the fledgling United States. There is some wisdom in that symbol—the turkey represents prosperity and bounty. Instead the US adopted the bald eagle—a raptor that feeds on carrion, not unlike the US war machine and Halliburton led corporations that feed on the carcasses of nations we have conquered. Ironic, isn’t it?
While the debate over bunnies has merit on both sides, the dangers of a socially constructed currency should be obvious to all.
What I see in play in the world today, from a philosophical perspective, are a group of powerful sociopaths and their sycophantic minions who seek world domination. They use the worldview of the constructionist to justify their plans & schemes, but at heart I do not believe these people are human enough to recognize the greater rules--that whate we believe about "things" ought to preserve society, rather than enslave it. Perhaps sociopaths have remnants of alien DNA in their genes that pushes them toward hubris, and self-centered goals. Now there is an essentialist perspective for you! Well, we all have our cross to bear.
Currency is what those in power say it is. These people have the power to confiscate, to imprison or kill. They manipulate the value of currency to their advantage and place themselves in the position to benefit from its inevitable inflation effect.
At heart, these world “leaders” may actually be essentialists, valuing commodities like gold, land, energy, and control over necessary resources. Yet, they believe they are fundamentally superior to other humans and thus have the right to rule over us (essentialism if I ever saw it!). Meanwhile, to the rest of us, these world leaders promote the ownership of paper and cheap plastic goods, purchased with their bank loans. They promote constructionism as the dominant worldview in most academic disciplines—all of the humanities, many social sciences, and certainly business ethics, economics, political science (he said political science, ha!).
Perhaps moral relativism (both feet firmly planted in mid-air) stands as the most dangerous version of Constructionism. Right and wrong are determined by society (or the political influence of sociopaths)—they are flexible categories that shift from generation to generation. Often political pressure actually changes science, with essentialist research being rejected by journal editors and the latest politically correct research getting published and promoted.
Moral relativity pervades business ethics. There is no right and wrong—only legal and illegal. So the sociopaths simply influence the lawmakers, change the law, or have their corporation take a slap on the wrist as their personal punishment when the fruits of greed are too tempting. Whatever you can get away with! Might makes right! Political donations to sociopathic minions are legal, so donate and buy the influence.
I cannot think of a more foolish combination—to allow sociopaths to socially construct money, then corrupt our ethics and justice system with moral relativism so they get away with anything they like.
Every society that has embraced this path has failed.
My point is this: socially constructed money, created by sociopaths with no accountability to any ethical system, was a bad idea. They will destroy modern society as we know it. I’d keep stacking if I were you, regardless of the paper price set by these sociopaths.
Protagoras might be proud of Keynes. But this dangerous philosophy of constructionism was thoughtfully and consistently attacked by Plato, inspiring the Athenians to burn most of the scrolls that espoused and taught this philosophy. I’d bring the matches to a burning of Keynes’ and Krugman’s writings today.