*And by wrong I mean biased. Which is ok because everyone is biased. But we need to fix it anyway.
There are a lot of hurdles to getting a functioning version of hypercapitalism working in the wild. One of the first of these is very, very human. Cognitive biases are scientifically proven error in the way that we human beings think. We’ve developed a number of these biases through evolution to help us survive, but when we try to think really critically about something and solve hard problems, they tend to get in the way.
When I say any of the following:
Our money will be very different in 50 years.
Money should decay.
A new form of money can make us more productive by a couple orders of magnitude.
...alarm bells start going off in your brain and you tend to dismiss me and not listen to anything else I say. Most of you all are courteous, and I especially have to commend my love ones for not making me feel crazy, but I can see the disbelief in your faces as soon as the conversation starts.
This article is an attempt to try to convince you to ignore your biases and at least consider that 1. Money can work differently, 2. Money will work differently in the future, and 3. Together we can actually make it happen.
The first bias is the Availability Bias or Availability heuristic. This says that you use mental shortcuts to think about things and the short cuts you take are the things that are around you and that you know.
You know money. You know cash, you know banking, you know how loans work, and you know credit cards. On top of this you probably spend a lot of time thinking about money and feel that you understand it. Since money is so available you are highly biased to think that it is going to work the way it has always worked. Or further, that it is supposed to work the way it currently does work.
How can we overcome this bias? Simply look at history. To make this more real, lets think in units of yous. Most people have in the back of their head that they’ll live to near 100. Some of you will. I hope most of you do. So when we look at history, lets think in terms of how many yous ago did x happen.
The reality is that our money was radically different 0.44 yous ago. In 1971, Nixon took the US off of the gold standard. Before this day you could buy an ounce of gold for $35. After this date you could not. Things were supposed to get ‘fixed’ once things settled down, but they never were. Now our money is 100% based on trust. Money fundamentally changed 44 years ago.
To add even more volatility, in 1944, 0.71 yous ago, this system that Nixon abolished was founded at Bretton Woods. Before that money was even less defined and this helped lead to 2 World Wars and massive depressions.
So in the last 100 years, or one yous, Money has fundamentally changed twice. Does this change your biases at all about whether money will change fundamentally sometime in the next yous (100 years)?
The US has been around in some form for 2.4 yous. Kind of crazy to think about isn’t it? That isn’t much time. In that time we’ve had:
Bank of North America System
First Bank of the US System
No Bank of the US
Second Bank of the US System
Federal Reserve System
That is 9 changes in 2.4 yous. Or 1 change almost every 27 years. It has been 44 years since we went off the Gold standard. One could make an argument that the era of QE that the Fed is currently in is another fundamental change in our money.
If we go even further back we find hundreds of different monetary systems from seashells, to large stones, to grain, to gold coins, to other metal coins, to pig skins, to cattle, and on and on.
So I’ll ask, what do you think is more likely now? That we will be on the same monetary system in 2065 or a very different one? Can you put your bias aside? There is a almost 100% probability that our current monetary system is breaking and a near 100% probability that we will replace it with something. I don’t know if hypercapitalism is the answer, but I think it is asking a very important question that we all need to consider.
The next bias is the absurdity bias. This is similar to the availability bias, but has a few differences. In this one we discount the probability that something will happen because we’ve never seen it happen. One of the best examples is living in a flood plane and being surprised when the 500 year flood happens twice in a decade.
In hindsight a number of things that we have today would have seemed absurd hundreds of years ago. Having access to the entire corpus of human knowledge in our pockets. Absurd. Someone voluntarily swiping a plastic card and signing up for 25% interest rates to buy a coke. Absurd. Flying. In the Air? At 500 mph? Ha HA!
You get the picture. When I tell you that people are going to be compelled to sign up for a system where their money decays, it seems absurd to you. When I tell you that corporations are going to love the risk reduction that this new money brings them, it makes no sense. Whether you understand how it works, why it works, or if it works really isn’t the issue for you. You haven’t even looked at the math underneath or the computer models. It is just so absurd that you dismiss it. Don’t dismiss it. Hypercapitalism isn’t trying to violate the rules of thermodynamics. It is trying to leverage built in biases and human motivations to optimise our economy and help us find a higher velocity growth rate. These things will likely happen whether it is hypercapitalism that solves them or not.
The third bias is the conjunction fallacy. This is a stupid thing our brains do when we think that the probability of one thing happening is less than the probability of that thing plus something else happening. That is impossible. For example. Is it more probably that Hillary Clinton will win the presidency or that Hillary Clinton will win the presidency and raise taxes on the rich?
If you ask people this question you will get some odd answers from some smart people. It is impossible for the second conjecture to be more probable than the first. Our issue is that we have such strong ideas about how Hillary Clinton feels about taxes that we overvalue the probability that that will happen without considering if the first ever happened.
Hypercapitalism probably suffers most from this kind of bias. I’ll be the first to admit that I want the idea of an optimized and fair economy so much that it probably colors my perception of how correct and how likely some of the other conjunctions are. We must be committed and held accountable to take each conjunction separately and evaluate it on its own merits.
How does this affect your thinking when I present you with ideas of Hypercapitalism? If you are business owner you probably have very concrete feelings about costs, fees and taxes. So when I say, ‘Our money will decay and you will pay a carrying cost’, you have those feelings in the way. You don’t consider that business already pay a ton of fees and are already subject to inflation and that these ideas may replace some of those for the better. It is too easy to think, ‘I’d never take on another fee’.
I get it. If we don’t leave you in a better place you are not going to use the system. But do you even understand the idea of what a ‘better place’ is? Or what direction it can take in the future. If I had told a wealthy individual in 1970 that I was going to remove their right to exchange their dollars for gold and that this would leave them in a better position, how do you think they would feel. There are number of these folks around. Maybe we should ask them.
In 1971 the US GDP was $1.1 trillion. In 2013 it was over an order of magnitude higher at $16.3 trillion. Was this growth all due to the change in the kind of money we had available? Doubtful, but what is certain is that the new kind of money was involved in every single transaction that led to the growth.
What kind of money do we need to get to a $200 trillion GDP by 2057? We need one that flows faster, rewards value creation better, redistributes and refreshes potential more often and creates a more sustainable economic driver.
I understand that the statement ‘A new form of money will emerge that helps us get to a $200 trillion GDP by 2057’ is much higher than the statement ‘A new form of money will emerge that helps us get to a $200 trillion GDP by 2057 and that money system will be democratic hypercapitalism’. But if the first one is high, and you haven’t been asking the question of what will fulfill that potential, I’m here to poke you with a stick.
Fourth is the planning fallacy. This one says you are terrible at planning. And you are. You will chronically underestimate how long it will take you to finish a task. I’m guilty of this too. When I say we can implement hypercapitalism in the next decade, I’m probably underestimating it. The solution to this is taking the ‘outside view’ and observing how long this kind of thing took in the past. If I take my own data I should probably say that it can be done in the next 27 years.
Fifth is the hindsight bias. This is a fun one where we tend to rewire our brains after we know the answers. If I told you in 1965 that removing implicit gold value in our dollars would help grow the US economy 10x in 40 years, your estimation of that likelihood would be lower than if I asked you the same thing in 2016 after it had already happened. Probably much, much lower.
There are other biases that can be discussed, but these were on my mind. Much of this was pulled from ideas presented at lesswrong.com by Elizer Yudikowski. Much the content has been condensed into Rationality: From AI to Zombies. It is worth a look.
So now that we’ve worked through these biases, what do you anticipate? Will we be under the current Fed/QE monetary system for the next 100 years? Or do you think it will change? If it changes, are you prepared to have a conversation about what that should look like? That is what I’m proposing we do. I understand that even if a change in our monetary system is highly likely, that hypercapitalism being that new system is much, much less probable, but if we don’t have the conversations, do the experiments, and get the data we won’t be ready with the best answer when the opportunity presents itself.
Give our kickstarter a consideration. The worst that can happen is that you get a cool overpriced t-shirt. The best that could happen? That is the future and who knows?
Read more: http://hypercapital.info