Every child gets born into a world where the wealth and rules are controlled by elders. In addition to the fiscal gap, there exists a perpetual generation gap, income gap, and power gap. A child learns about money, and then discovers that he has none. These divides are why revolutionaries tend to be young. They have nothing, and nothing to lose; whereas conservative elders have everything, and everything to lose. The elders only recently have wrestled control from the previous generation, and suddenly the young spring upon them trying to wrestle their control away. Democracy makes all adults politically equal, in theory. It does nothing to make the next generation financially equal. People fight to retain their inheritance, even though they did nothing to earn it. Monarchy was an inheritance of political power, but the conflict was always financial.
The young will steal what the elders refuse to share. As we have seen with the music industry, the law makes sharing illegal. The children must pay. Definitions of adulthood pivot on the concept of financial independence: to be able to sell ones own labor so as to buy the labor of others. The criminal impulse circumvents trade and substitutes force.
Every revolution is based on the criminal activity of the young against the old. The first lawmakers of every nation were originally lawbreakers. Once in power, their perspective changes. The disobedient expect to be obeyed.
Most elders are not thinking long-term about the next generation. They are too busy battling the Fiscal Gap, and focus on one another for control and ownership. Greed is a personality trait, a legally protected behavior, and often mandated as a fiduciary responsibility. Even people who are not greedy behave greedily. Moral reasoning is considered to be disruptive of the marketplace. The needs of others are never to be considered of greater importance than the immediate desires of ones own group. These attitudes are the seed of revolution between the powerful and powerless. Crimes are committed by both the high and low. Only the scale of the theft differs.
Competitive conflicts between groups and individuals are often accepted as the "invisible hand' of a free market. In fact, people are competing as equals in a corrupted marketplace. The Fiscal Gap is not caused by personal corruption, it is caused by the rules of the game. The math is corrupt. If the economy were a computer program, then it should be described as buggy or malware.
Truth may be the first casualty of war, but dissonance arrives first. The belief that good things can come from bad choices is a characteristic of blind ambition. Radicals follow the example set by previous radicals, and conservatives follow the example set by previous conservatives. Honesty, contentment, and compassion are for the losers. Revolutions are a battle between two groups that are dishonest, discontent, and merciless.
The circumstances of boom and bust and inheritances ensure that our individual finances are as unique as a fingerprint. Volatility is the most common experience because the system is riddled with contradictions. The economy breeds the fear that makes solving issues more difficult.
This book seeks to explain the problems of inflation and debt, and offers possible solutions. An understanding of the system is necessary before attempting a repair. We need to do a better job for ourselves and for the next generation. The symptoms of the current money system are worse than the problems it was intended to solve.
Thoughts, Feelings and Actions
Money is ubiquitous. Like any habit, it is something we do without thinking. We lack self-awareness. Many economic philosophers have described economic behavior as a state of unconscious reasoning or animalistic instinct. This is contradictory since the use of money itself is based upon abstract reasoning. Theories of economics like "survival of the fittest,' champion self-interest and self-reliance. They are a result of the application of observations in nature to the behaviors of men. These claims suggest that money decisions lack personal objective capacity and moral reasoning. Problems in the economy are regarded as "natural' mathematical events, like an autumn harvest, rather than as an addiction, which is the harming of oneself through bad habits.
Far from being unconscious, money decisions are some of the most conscious actions we make. We are responding to many different stimuli, which makes it seem confusing. The natural law and invisible hand claims of a self-regulating marketplace are dead wrong. Inflation is best explained with a mathematical model, since it is a mathematical event. A valid economic theory should encompass abstract reasoning, recognize the role of emotions, and be based on math, not invisible forces.
Economic history is a story of cause and effect, the same as any other phenomenon. Cause and effect are the basic components of all scientific inquiry. The hands at the end of our arms are visible. The actions we take determine the consequences. Ideas determine how we act, not instinct or habit. By following the math, we can understand the problems and the successes. We make choices with unintended mathematical consequences, and those consequences should not be dismissed easily. Our trouble stems from false economic theories. We do not understand the connection between our actions and the consequences.
Our feelings about money arise from our beliefs about money. Money is primarily an intellectual agreement. As a result, it has many facets: cultural, mathematical, personal, traditional and national. Economic philosophy has the same characteristics as people. It can be fraught with schizophrenic tendencies. Money is both commonsense and utter nonsense. Money can be its own form of a mental illness.
The dictionary definition of schizophrenia is "a long-term mental disorder of a type involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation. A mentality or approach characterized by inconsistent or contradictory elements." This conflict between what we think, feel and do will be discussed in depth later.
Thoughts, feelings and actions are distinct groupings. There is a condition called cognitive dissonance, too, which is probably a precursor to schizophrenia. Cognitive dissonance is the uncomfortable feeling of holding two contradictory ideas simultaneously. Contradictory ideas will lead to contradictory emotions and contradictory behavior. In other words, there can be contradictions both between groups and within the groups.
People who are clinically schizophrenic are often in the headlines for a crime they have committed, but the dissonance that money represents is a broad cultural event. Men think, and think they need money. In trying to convince children of the importance of money, we create a self-fulfilling prophesy. We teach them to be both greedy and generous. Our dissonance becomes their dissonance. We should recognize dissonance as a form of mental illness. Money is a traumatic stress.
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