Superphysics
Resource Mechanisms: Stores of Value
4 minutes • 754 words
Table of contents
In order to facilitate exchanges of goods and services, humans need a tool.
Historically, the tools for exchange were commodities:
Homer says that the armour of Diomede cost only 9 oxen, and that of Glaucus cost 100 oxen.
The following were the common instrument of commerce:
- salt in Abyssinia
- shells in some parts of the coast of India
- dried cod at Newfoundland- tobacco in Virginia
- sugar in some of our West India colonies
I am told that to this day, workers in a village in Scotland can carry nails instead of money to the baker’s shop or the ale-house.
These were exchanged based on volume or weight:
The following people trade by exchange:
- savages who have few merchandise
- civilized nations who have only two or three species.
The caravans of Moors who go to Timbuktu, in the heart of Africa, do not need money. They exchange their salt for gold. The Moor puts his salt in a heap. The Negro puts his gold dust in another. If there is not gold enough, the Moor takes away some of his salt, or the Negro adds more gold, until both parties are agreed..
Gradually, as humans became more civilized, they chose precious coins as their tool. This was to standardize the value and prevent fraud:
Mints are institutions exactly of the same nature as the aulnagers and stampmasters of woollen and linen cloth. Through a public stamp, they ascertain the amount and uniform goodness of those commodities when brought to market.
The first public stamps affixed to precious metals were intended to ascertain the goodness or fineness of the metal.
This money system was essential for the spread of the commercial system and mercantilism which disrupted native modes of valuation and exchange.
Coinage was augmented by paper bank notes and paper stock certificates which allowed rapid economic growth. However, these created many problems:
- hyperinflation and financial crisis during the Mississippi Scheme
- stock bubbles like the South Sea Bubble
- poverty and inequality during the industrial revolution
These problems persist even today.
The Problem with Money
The dominance of money as a resource mechanism in society leads to problems because it is the crudest mechanism possible.
If we plug it into our 5 Strata model, we find that it occupies the lowest stratum. This is because, as a represntative number, it is purely quantitative and not qualitative. This makes it very precise, but at the expense of other information.
For example, we can think of 3 tomatoes as 3 real, red, wet, juicy, shiny tomatoes in our hands. Or we can think of 3 tomatoes as merely the number 3 and the word “tomato”. The former has a lot more information that is expressed during our perception of them. The latter only has 2 pieces of infromation:
- 3
- tomatoes
And so quantitative resource mechanisms drastically reduce the amount of information in every transaction. This is done so that decision makers can make quick decisions through aggregated data, instead of granularly making decisions for each item.
For example, assume you were a manager who had to fire 10% of your 100 staff who you did not personally know. To make a quick decision you would refer to some quantitative data like productivity or contribution to revenue.
However, you might not be aware that some of your staff are contributing in non quantative means to the success of your company. Relying on quantitative information would therefore lead to bad decisions.
Stores of Value
We can classify resource mechanisms into two:
| Basis | Examples |
|---|---|
| Faith-based | Fiat Money, Cryptocurrency |
| Commodity-based | Gold Standard, Use of salt, shells, nails, oxen, etc |
- Faith-based
These rely on some common interest that may or may not be moral. For example, the US Dollar bill has the words “In God We Trust”. This implies a common interest in trusting the system.
The same is true for cryptocurrencies wherein you have blind faith in the crypto issuer.
- Commodity-based
These are the native means of exchange. Examples, as meniotned earlier, are the use of salt, gold dust, precious metals, shells, etc. This relies on tangible objects and is natural for all humans.
Supereconomics is based on sustainability and so we will discuss this extensively, specifically as a points-based system similar to the Incan.
