Although contested over several fiercely fought battles, New York City was lost that summer and became the center of operations for the British effort to retake its prized colonies. Throughout the rest of the year, the ragtag band of patriots were forced to retreat again and again until finally prevailing in a surprise attack on Christmas in Trenton. While a powerful force may be able to physically control territory and events, in the case of the Americans it was not able to stamp out its spirit. The rest, as they say, is history.

One important takeaway from the events of centuries ago is a dynamic we could call “Forged by Fire”. Wherever there exists an irrepressible human spirit, setbacks and suffering (short of death) only create strength. That strength allows underdogs to overcome against stacked odds and superior resources, to the extent we could say that initial failure is required for sustained success. Anyone out there building something new and different will have to confront failures and setbacks, and how they respond will determine whether it results in growth or decay.

It’s worth considering this story and lessons because we face power structures every bit as tyrannical and absolutist as King George back in those days. It has become cliché to observe we are in a new American Revolution, although what is meant by that tends to take on a partisan tilt, showcasing the deviousness of those leaders who would co-opt patriotic spirit. However, it is clear we are living through a revolutionary moment, with citizens becoming increasingly willing to depart from Establishment messaging. Even if it appears hopeless. Even at the risk of some personal sacrifice. Even if, as often happens, the only alternative is completely full of bullshit, batshit, or dogshit.

It’s notable how this past week events in NYC took a sudden turn against Establishment rule. On one side we had an aging, corrupt, dynastic, corporate avatar and on the other a youthful, pure-hearted, immigrant democratic socialist. On one side, millions of dollars and worn-out attacks. On the other, volunteers organized by word-of-mouth and crisp messaging focused on hardship faced by everyone outside the upper crust. Incredibly, the young upstart pulled off a resounding victory right in the Capital of Capitalism, as some observers put it. The first of many battles, perhaps. But regardless of what one thinks of the proposed policies, this narrative is undeniably a heroic one.

Turning back to the state of our beloved crypto, we see a very similar dynamic taking place. Big capital, sometimes the very same big name institutions in traditional finance, seem content to dominate the space for their own short term interests. This course would be tragic, for we hold in our grasp the opportunity to achieve the greatest advance in sovereignty and liberty since the Age of Revolutions so long ago. This time, the revolution in question would be in the realm of work, the promise of uniting labor and capital. Unlike the monolithic socialist movements of last century, this restructuring can happen on the terms of every individual, in any organization. Still, we see highly centralized and capitalized enterprises striving to carve out their own little corner of the same old marketplace with slightly different names and tech. While they’re ignoring the Big Prize, decentralized patriots fight on. Forging themselves in Fire.

Enter The Brooklyn Model

Brooklyn has many unique and monumental aspects that make it an ideal testing ground for a new revolution, providing a new base of support for radically different forms of organization; the hills where bullets flew just after the nation declared independence; where the first major political shots were fired in supporting Mamdani with huge margins; its status as a crypto hub; not to mention its reputation as a reputation-trend-setter; notwithstanding its role in the spread of hipsters. Therefore, we hereby denote the reputation-first approach as “The Brooklyn Model”. Brooklyn has the people, the energy, the ambition, and the social sense to make this happen. It won’t be the only place it happens, but it may very well be the first and biggest.

The current denizens of the crypto sphere have a choice and a chance to make confronting honor breakdown a main goal, and shape honor centrism to reflect their views. If they prefer instead to cling to outdated forms of money, then honor centrism will be picked up by those who have different views. If and when they do and show it can work, then everyone will be even more shocked than after a freak election. Honorism is that powerful: it can invert ideologies into more effective versions of their rivals, even while reflecting and channeling their members’ values. Such a powerful idea and movement is to be ignored at one’s peril.

One thing New Yorkers do produce is real estate. Lots of extremely pricey and extravagant apartments. And not enough of the rest, because building is expensive and land is hard to come by in a dense city. So housing becomes The Big Issue in these cities, since residents spend most of their income on a rather essential need: space.

Free marketers see a self-proclaimed socialist and instantly picture their financial holdings and feel revulsion at any suggestion they may have to part with some portion. Meanwhile the centrists are worried that construction will halt as the developers balk.

Before you shout “But mah abundance” let’s think a moment about why we don’t see mass multifamily construction projects. Because it is not in the big developers’ incentives, nor any existing landlords’, for more mid-tier supply to collectively enter the market. Therefore, it doesn’t happen, due to political influence. Simplest explanation, found.

Yet, the funny thing is that when you look at new housing units historically, more housing has been built in NYC since Bloomberg left office in 2013 than in his twelve years in the big seat. How’s that for anti-market? In fact, twice as many units were constructed last year than in the entire Bay Area. Brooklyn alone is almost as much. So I don’t think it’s fair to compare NYC to the left coast. The greatest city in the world does things differently.

City people do care about public goods a bit more than average. Double irony though: does anyone truly believe that Big Daddy Cuomo wouldn’t preside over an ever-accelerating disgorgement of public funds to his many connections? How could an outsider possibly be worse? On top of that, add insult to lack of integrity, where he threatened to continue running even after such a clear and unmistakable rejection of an expected coronation.

Hopefully this event serves as a wake-up call to the larger political sphere that BAU will no longer cut it. The wealthy need to support public goods. Public goods providers need to stop gouging the public. Even with ineffectiveness or inexperience or if every one of the proposals were completely impractical, that message alone would be worth it. This is OUR city.

The reason isn’t tough to figure out–what gives meaning to a musician’s life is capturing some essence of life through a song and delivering it to people in person through their own effort. What matters to other musicians is the quality of a tune and how well it is played on stage. That’s it.

So musicians have an innate sense of honor as expressed through their craft. Music lovers also take pride in their ability to distinguish the creative from the derivative. Plus, the beauty of the art form is that it can take an endless multitude of forms, yielding never-ending variety through the sheer act of channeling one’s muse.

It’s extremely challenging to produce a perfect movie, with everything that goes into such an undertaking. However, there are loads of perfect songs, because they are self-contained, finite works, while also providing a peek towards the infinite.

Musicians have a key role to play in uncovering the spirit of our times and how it develops in this moment. It’s rarely been more important, and the rise of generative AI puts even more pressure on humanity to continue offering our answer to what makes us special creatures.

So let’s salute artists of all stripes, especially musicians, for their devotion to spreading love through their passion, and creating mini oases of authentic humanity in our increasingly artificial world.

If so, we can expect that the goal should be to ramp up “exports” to the rest of the market. To get a sense of how this worked historically, we can look to recent cases of emerging markets thriving and see what lessons can be gleaned. What we come across is some combination of trade and capital barriers, that act as levers for industrial policy. Let’s focus on the past 50 years in East Asia.

In South Korea, the government took a strong hand in guiding its industrial growth, with strict capital controls in the 1960s-80s. The result speaks for itself: picture rice paddies changing into urban centers within 20 years. It liberalized gradually, once it was becoming a developed economy. Korean exports have been the envy of many a trade nationalist, sporting a 50% trade balance with the US.

Now take a look at Thailand in the following chart. We see mostly a negative trade balance until the mid 90s, when investment also began to take off. While exports were rising, the FDI inflow took off even faster even surpassing Korea at one point. It basically was liberalizing all at once, responding to global pressures to open up, buttercup. The result was a devastating debt and currency crisis in the late 90s, and Bangkok was patient zero for the financial contagion.

Still today, we see South Korea with higher exports, even with fewer people. Meanwhile,  Thailand remains volatile. Of course there are many differences between these two but clearly the controls served some purpose for their foresightful planners in those early years?

Plus, we’ve been ignoring the king of them all: China. The CCP’s legendary controls have kept FDI mostly in check, while simultaneously creating the conditions for the largest export engine the world has ever seen. So why are they so effective?

One effect of restricting removal of capital is that it ensures the investors want to be in it for the long term. If investment outpaces development of high value exports, we get rampant speculation in real estate, which can’t be sustained w/o more cash flows from somewhere. To this day, many countries have citizenship req’ts to own property.

This commitment makes it harder to pull out capital, which can lead to the currency getting crushed by the stampede. Most importantly, they can cause investment to be directed where the leaders think it will most benefit their country. Western capitalism argues that the markets can always do better, but one cannot dispute they tend to be somewhat shortsighted.

There are downsides as well, as where banks with good connections can get in easier. In general, the authorities can exert substantial influence, because national capital controls are by definition centralized.

In crypto, we believe in freedom and decentralization, so clearly we oppose blanket bans or obstacles. We can still ask about what makes sense on an organizational level, and evidence is mounting that coding restrictions into token contracts will be beneficial in many ways.

What we’ve seen so far is the pure unrestricted model, with freely trading tokens whether or not there’s an actual cash flow (ha!) or even product behind it. Every so often, this brilliant setup leads to bursts of speculation and brutal meltdowns, with digi-wealth evaporating as fast as memes fly around. This, shall we say, is not an ideal growth-centric scenario.

One (and we might soon start to say only) solution is to cultivate reputational tokens to take their place. For a token to be considered reputationally symbolic, it will by necessity be restricted to immediate buying and selling. Otherwise, it is to be considered money-like, and taking on the associated properties of money. In fact, we should call on-chain reputation by some non-token term, and this writer proposes emblem as the equivalent term.

Here then, we see how an organization can set up capital controls for itself, while still managing its own internal capital freely and openly. It does so by coding its own restrictions, like which internal contracts the reputational emblem is allowed to move between. In effect, it allows for pursuit of long term goals that create the most value for the rest of society, not just ourselves.

The time is long past due to take a look at the VC industry as representing central failures when it comes to an honor-focused approach. After all, VC investors represent a gate-keeping to access Big Honor, in the form of equity and its accompanying wealth, but also (hopefully) some reputational benefit that can be parlayed into greater benefits. Ideally, if our baby’s startup founders are the parents, VC is like the baby doctor, helping to deliver it into the world. If only!

We can look more broadly at VC another time, but for now let’s turn our attention to the dark realm of crypto VC. Of course, there are plenty of well-meaning and helpful investors, but let’s consider the industry as a whole for a moment. Is it playing its role effectively to help gestate the future of finance and organizations?

It all depends on what each investor sees their role as. Are they doctor and benefactor? Or vampire? Alternately: are they seeking long term or short term returns? Once more: are they committed to the Honor of the Venture? Or Quick Kill? Now we can clearly see the stakes that determine honor breakdown or restoration. Now, typically, the quickest way to spot the detrimental type is to  examine how aggressive their token launch target strategy is.

Which is why I’m coining the term Ventrilo-Capitalist: because the incentives of the lesser group are to set up a dummy company (DAO), with a dummy stock (token), dummy cash flow, you get the picture. So that retail can participate early! Previous posts have outlined in full the concerning link between dollar-market and the distortionary effect on cryptocurrency organizations.

That also brings us to the challenge of bringing our proposed solution, Semi-Transferable Reputation/Honor tokens, to market. It’s difficult to imagine a mid-size (or any size) VC shop accepting reputational tokens as representing a stake in their investment. Recall that semi-transferable tokens cannot be sold, and therefore present an obstacle to the desire for liquidity.

The double irony in this state of affairs is that premium Honor for the right orgs could become tremendously valuable, with claims on actual, count it all, real, cash flows. Reaching that state would require builders and founders to create first, and only then expect financial reward.

The more financialized (dollarized) the crypto industry becomes, the further we get from the actual outcome we’re looking for: Honor Restoration and Acceleration. We can therefore claim that most of the VC industry is an obstacle to this necessary development, because the crypto sphere should be leading the charge away from the abyss we’re all falling into.

Problem is, imposing a price differential between foreign and domestic sources of goods in most cases directly attacks the smooth functioning of honor (assuming there isn’t some other reason for doing so in specific instances). Therefore, disruption of free exchange should be avoided in the case of most consumer products. So then, what’s an aspiring surgeon to a global hegemon suffering from the Triffin Dilemma to do?

Put simply, the path that maximizes honor for all concerned would be for the beneficiary of a reserve currency to put its allowed largesse to good work, and provide expanding benefits to the rest of the world, in the form of valuable exports. Shocking, yes! Remember though, the primary reason the U.S. achieved such exalted status in the first place was not due to god-given right for being supremely awesome, but by a massive public goods injection in the form of WWII victory and subsequent aid for rebuilding efforts, backed by the industrial might that made both possible..

One could argue that America has provided certain services towards maintaining security on the international scene. True, and that has been one of the key rationales for dollar hegemony. However, military operations are expensive and we don’t necessarily want to be dragged into wars every couple decades. Besides, we’re supposed to be getting to the heart of financial and business leadership, as a main economic driver exporting valuable new innovations to the world. China, by point of comparison, has oriented its entire society towards providing excellent products in the most efficient possible way. What does America offer to confront such an onslaught of excellence? How can we possibly balance the scales, even a little bit?

To some extent, many have argued that the Internet services and other tech offerings have filled this role. If one takes the stock market as an indicator, that would seem to hold up. Upon closer inspection, one immediately discovers that the revenues extracted by our shining digital fiefdoms are no match for our colossal import needs. One cannot help but take this state of affairs to mean that our current capitalist innovation engine has failed to live up to its promise, and the proof of this is the steadfast refusal for megatech corporations to abide by any sort of reasonable taxation regime. Late-stage capitalism, in other words, is not doing its job to the extent that would merit a judgment that honor is maximized in terms of sheer economic success.

Once again, the conversation steers back to the simple truism that if we want to increase our honor, we need to value it directly. That means we stop the games, both financial and technological. Or more precisely, we switch the game towards honor, towards producing value for others, instead of letting material consumption drive the show. Doing so cannot help but start to tilt the scales, even financially, when the honor attained by our brightest lights starts to exceed today’s stilted levels. If you insist I get even more specific, one possibility to illustrate what I am speaking of, would be educational technology that will allow our society to grow in leaps and bounds. Any country, city, or organization that can achieve breakthroughs in this area,  will spill over to a hundred others.

Sadly, we are nowhere close to such a goal, and I must admit nowhere close to recognizing it as a worthy one.

And abundance seems to be on top of mind for many people, with some even going so far as to pitch a message around it as a winning political comeback strategy. Because after all, who doesn’t want more? The drive for more is connected to being human. We are programmed not to be content with survival but to seek more of what we have, to achieve maximum power. Our economic system is built around the idea of endless flourishing; in fact, it can’t exist without continuous growth.

On a related note, I’ve recently been asking myself about the roots of our honor deficiencies as well as why there is so little apparent interest in the subject. Even among the more enlightened sectors of crypto-land, we see an incessant return to the belief that money is the answer. This narrative keeps going on its merry way even as the pile of evidence disproving it keeps piling up. Why?

Well my friends, the answer to this question goes back to the very abundance present in our world today. Because while it might not feel like it due to elastic expectations, we very much live in a time of almost unimaginable plenty. It’s not a coincidence that true honor appears to be harder to find at the very moment where we face a glut in almost everything that can be cheaply produced: energy, food, money, comfort, information. Worse than that, we’ve constructed a system that provides such benefits to a large elite class of people who do very little to produce them. And into this situation we add a desire to make it all even more widely available. Again, who wouldn’t want that? However, if we ignore honor, and the resulting misdirection of what we consider wealth, there will be no motivation to further increase the pie.

It is actually quite simple to explain why true honor is not a main priority of the vast segment of the elite class. Because when the material benefits flow so profusely, why would anyone deeply question what’s behind it? Especially when that would require recognition that what’s behind it and makes it all possible is draining the earth of its admittedly plentiful (for now) resources. It’s so much easier to attempt to maneuver to secure perceived honor, along with status and paper wealth.

Our brains did not evolve to manage this kind of plenty. It has been obvious for some time how overflowing dopamine changes our behavior and outlook. And no (short-term) rational organism would decide to limit its own consumption, even if that’s what is necessary to ensure long-term survival, and indeed, abundance. (Although, it remains to be seen whether the commencing trade war will perform a similar function.) Unfortunately, I’m afraid that failure to do so will eventually lead to a ruin on a massive scale of the ages that mirrors our materialist hyper-abundance. The alternative path, the pursuit of honor and its deep inner abundance, remains our highest calling.

Whether or not DOGE is able to pick on (or pick off) low-level individual employees is besides the point. What we very much need to know is whether these reforms will succeed in overcoming vested interests. These are the contractors or other large stakeholders who are able to deploy legions of lobbyists to protect their revenue streams. Since this is an area where “the market” holds little sway, it is even more critical to the public interest that officials in charge of dispensing funds are able to achieve some amount of benefit towards some public purpose.

We’re not going to list off the myriad abuses of the military-industrial complex, which I’m sure would always find some backers claiming a need for boosting defense. Let’s instead focus on a public provision that everyone can agree is a total waste, universally considered a nuisance, even despised. I’m referring of course to that other shit-coin: the one-cent piece of the United States of America, colloquially known as the penny.

This is a unit of currency that costs over three times more to produce than its face value. For an amount of currency which will buy precisely nothing, other than items people want to get rid of more than tiny discs of zinc. These are coins more likely to end up in landfills than banks; if it’s more worthwhile to throw in the trash than convert to real cash, that is not an ideal state of affairs. Cash should not become a liability. And yet, the Mint loses hundreds of millions of dollars every year to perpetuate the memento to a time when they could at least buy some candy.

One can read all about these issues in the Tyranny of the Penny. In it we learn the biggest reason the government continues inconveniencing everyone: a single company who manufactures the zinc blanks called Artazn, making over $1 billion over 15 years. Of course, we cannot discount the role of political inertia with these types of arrangements.

And so we have a situation where coinage nobody wants or uses continues to be minted, due to tradition or said inertia. A rational approach to government would cease these activities; therefore if DOGE claims to be such an approach to cost-cutting we should see the least efficient or desirable activities to be at the top of the list. Of course, hardly anyone is pretending that’s what we have. However, there you go: a simple indicator to test how serious the effort actually is will be if there is an announcement to phase out the once beloved but no longer necessary penny coin.

However, anyone with the slightest awareness can see massive downsides to any centralized system that has unquestioned authority over this process of building reputation in the increasingly central digital space. This reputational structure—what we are calling the Honor Construct—is critically important to society and our own self essence. Yet, many of us have ceded control of our sacred honor to a few megatech corporations.

Consider these destructive aspects:

• Unaccountable black-box algorithms shape recommendations and steer impressions towards creators and users

• Most often, the algorithms will select what gets the most engagement and addictiveness for the most people, because that’s what the advertisers want

• No extra weight is added towards content that might actually help or inform users, based on quality or educational value (unless we actively seek it out)

• Social apps reduce attention spans and create unquenchable appetite for stimulation, altering our brains and abilities to focus on complex subjects, especially younger users

No citations required for the above on account of the obviousness of it all, but check out The Social Dilemma if you’re curious to hear what former insiders have to say about these firms, along with many more examples.

Enter crypto. Crypto networks have the potential to claw back the most essential features of our humanity. In fact, blockchains allow us to counter every one of the centralizing forces, by returning our sovereignty and allowing us to define an Honor Construct of our choosing. I’ll reiterate: on-chain reputation is crypto’s superpower, and the sooner we realize it the better we’ll all be.

People are starting to intuit this future, but it still seems to take a back seat to financial games in terms of products. While DevCon this year was a great experience, many have noticed that the application ecosystem is somewhat lacking. This insufficiency directly connects to the missing reputational piece. Once on-chain reputation falls into place, there will be absolutely no stopping this industry.

While along with honor notoriously hard to pin down, we can consider justice to fall into three main categories or pillars:

1. Integrity, when it comes to claiming facts or property of oneself or events that transpired. Clearly, justice needs to be built on a foundation of truth and integrity is one’s commitment to truth and one’s promised course of action.

2. Dignity and essential rights of all persons, equally. The idea that every human has a right to exist and certain basic liberty could be considered one of the founding issues of the Enlightenment, but actually goes back farther than that within religious traditions. One can argue about the extent treatment should be considered dignified, but there is fairly broad consensus in Western societies that at minimum these should be protected.

3. Beyond what we consider basic human dignity, people should get what they deserve, as a result of their actions towards others. We shall come back to this one.

After an admittedly cursory read of the Western tradition, it seems that there is broad agreement and few objections to the first two elements as they have been laid out since the Enlightenment. These are both necessary for justice, and both together are sufficient for a minimal form of justice. If we simply consider dignity untouchable (up to some point) and integrity to be basic or foundational honor, then we have arrived at basic or foundational justice. That is certainly not to say it is the end of the story or even enough for society to function. However, governments the world over try their best to guarantee these core elements through their authority, whether through police actions or legal systems and courts, to varying degrees of success.

We can also mention the awkward reality that integrity of our institutions and media have been failing for a while now, as covered ad infinitum. Information overload has allowed misinformation to take over with few social repercussions. While this failure is serious in its own right, most people do at least like to pretend they have integrity, and would gladly accept reality as it suits them. We can in part recognize that a failure of accountability in our institutions allows for integrity to degrade, as prescribed by the third pillar.

The third pillar of justice presents more of a categorical problem. While converging on clear definitions of dignities and rights is fairly natural, anything more than that becomes murky. Right away, what it even means to “get” or “deserve” is unclear. Because these are tied to an individual’s or culture’s values, and these can vary wildly from place to place and time to time. And so we see that whereas very little contention arises regarding foundational justice, philosophers, the humanities, and many other social scientists have been engaged in furious debate about more advanced forms. What ends up happening is that the intellectual in question ends up arguing for a system of values, which can then be subjected to deconstruction in a way basic justice cannot. Therefore, because any value system can be assaultable in this way, worldviews with higher ideals are at a disadvantage, even intellectually, because they appeal to fewer people.

We seem to have reached a dead end, a dilemma, the ultimate destination. How can we achieve escape velocity from the black hole of deconstructability? Ah, but there is a way out; and it has been staring us in the face all along. We need some structure that is formless yet effective. An unattackable, yet incredibly powerful organizing principle. What we need, and indeed already have, is the value framework itself, and how it translates into reputational bonds within and between us. This framework is the Honor Construct, and it is both universal, and endlessly diverse.

Why is the Honor Construct immune from deconstruction? In general, it operates on whichever value system it is given, according to one’s own personal values and judgments and in concert with the community’s values. We can therefore define what one gives or receives from the construct as honor, as determined by what is deemed worthy of honor, denoted by such a community. As a result, one can always say that it is not honor that fails to achieve justice, but the values it is given. It’s your values and your culture’s values to blame, not somehow those of honor itself. It can be applied equally to the most benevolent entity one can imagine as well as the most hideous group we can imagine. It is morally empty until honor is distributed as we direct it.

The few daring souls who have tried to attack the honor construct head on have had very little practical effect on it, except to redirect or undermine a few value systems. Nobody apparently tried to defend it directly, but nobody had to. The Honor Construct barely noticed, and even those with academic objections fall into its clutches in their own circles. See, people will always have reputations in line with each community’s standards of how its members relate to it. That’s what it does. In addition, honor’s effect can also be tailored to each community. It can yield status, influence, money, or only just the good feeling of praise for one's accomplishments.

What did happen, perhaps as a long-term consequence of the world wars, was that we stopped talking about honor directly, perhaps because it became so associated with nationalistic fervor. So the philosophers did cause our language to change, which made establishing solid value systems more challenging. When social scaffolding for maintaining one’s unique values erodes, it becomes very easy for people to seek the easiest default. For our society, that default has become money. Since honor simply takes what it’s given, it’s happy to operate within the confines of material wealth, if that’s what people decide to do. For its own part, the market is just as happy to accept the motivational energy that comes with the pursuit of honor. Unfortunately, most people are not happy with this arrangement, because outside some material needs, the market does a terrible job of actually matching its prices and flows to what people would value given freedom and support to choose themselves. The market doesn’t even give much concern towards deconstructive critiques or the issue of justice at all: it’s too busy making money to care!

On the bright side, the honor construct is alive and thriving within our societies. The problem is that the value system it supports has become warped and ossified. Also in our favor is that if we can clearly evaluate the ways that the market fails to achieve honor, it is in our collective power to shift the construct towards more beneficial and meaningful ends. The difficulty comes in stepping outside of what one could call the Money Matrix. If we consider a  “Matrix” as a system of control that enlists our mental models to manipulate our selves, then the financial system we are embedded in certainly applies. Many crypto folks believe they’ve already broken out of it–and it is a step towards freedom to cast a skeptical eye at fiat currency offered by corrupt governments. However, by replacing it with one’s preferred crytpocurrency, has the Money Matrix has merely been translated into a slightly higher-quality substrate? On a more decentralized network but with the same organizational hierarchies as before? While it may have been different in the early days, as the markets developed and liquidity has entered the picture, there is less and less distinction to be made between crypto and fiat, as assets.

And so it is natural to ask if we can take this process a leap further. It has always been in our power to assign honor to whomever or however suits us. What is missing is a digital format that is flexible enough and maintains properties of sovereignty and neutrality. In this case, true sovereignty requires a firmer boundary between currencies and symbolic honor. A semipermeable membrane instead of chasing and replicating fiat culture. This radical orientation needs to be explicitly chosen by an organization’s members, because otherwise the market simply dominates.

Accepting this mission is the essence of taking the goldenpill—the act of separating our personal honor construct into a new, orthogonal dimension from money. When one takes this pill, we realize that doing so allows for not just one new dimension, but many. The good news here is that the tech infrastructure is within reach and progressing quickly. All we need now is to build the social consensus around emplacing our deepest values within an honor construct that is available and open to all.

For some, it has become encased in a liberal establishment that nonetheless supports the corporate status quo. In response to a degradation of honor at the national level, many feel no other option but to put their hopes in a total shakeup and one man who appears to stand in opposition to all of it. To others, that man showcases a deep integrity shortfall incapable or uninterested in correcting our institutions in whatever positive direction they need to go. Both “sides” therefore see the honor breakdown through a separate partial lens, where their side needs to prevail in order to set things right.

An authentic honor-centric perspective must then view the inability to stem an honor collapse as a joint failure between warring political factions. To review the political establishment’s role in various facets of the metacrisis, consider a sampling of issues:

• A worsening, out-of-control budget deficit that neither party seems capable or interested in dealing with;

• A decades-long shortfall in the effort taken to prepare our people for the challenges of a 21st century workforce;

• An environmental vise between long-term fossil resource depletion and the effect of fossil burning on climate;

• And a corporate financial economy that has enriched a tiny cohort of ultrarich, which depends on all of these problems above remaining unchanged.

Most of the issues that people note as very important for their daily lives, such as inflation, lack of good jobs, or immigration, are in fact offshoots of one or more of these megatrends. Once we accept that both parties have both propagated and been co-opted by the forces preventing change in these areas, an honorist has no choice but to conclude that neither party will lead to anything resembling resolution. Therefore, both will have to be receded into history, starting with one of them.

The way any particular election plays out in anyone’s guess, but we can distill a few things. First, the Democrats have repeatedly staked a campaign first and foremost on defending democracy. While an adverse election result may or may not be a step in the wrong direction, we can be confident that this will not be the last election ever. On the other hand, if we take them at their word, and they still lose, that is horrendous news for a party taking such a position. If we then accept for a moment that democracy has in fact failed (temporarily), what that really means is that the party system in which we have all been steeped, has failed. The Democratic party will have been a core contributor to this failure, although we can debate whether the blame is 70/30 or 30/70 or whatever. Either way, history prescribes that they cannot and will not be the ones to restore it.

As for the GOP, the less said about them the better.

So if we are committed to the advent of forward thinking parties that are younger than 150 years old, what is an honorist to do today? How should we vote, today, if we want to look towards a future party system?

The dilemma is that alternative parties have been so utterly shut out of elections in a winner-take-all setup that there is no place for outsider votes to go. Such is the nature of a centralized, permissioned system of governance and that’s a main reason many people have high hopes for crypto. We’ll have more to say about strategies to circumvent this stranglehold at a later date. For now though, we have no real third choice. In many places, the marginal parties have not even been granted access on the ballot.

So, we’re in a state that almost any course of action could be justified, including abstaining or sending a blank ballot. We can live with that for the time being. However, when we’re faced with feelings of numbness or powerlessness, remember one thing: we do have control over our emotional reaction to events. We do not have to panic because our preferred dinosaur tribe didn’t get its way. We do not have to be intimidated by any tribe when we have the way of honor in our sights. Because the future will depend on us being ready to step forward when those tribes are no longer functional.

The first thing we need to address is the landscape of political viewpoints. Mappings such as the Nolan chart plot economic vs. personal freedom, so that everyone can pick a spot on each dimension and that determines the label that best fits their views. And if someone doesn’t feel too strongly in either direction they’ll end up as a reasonable-moderate-centrist.

The problem here, as you might have noticed, is that this type of chart has no place for honor, or even basic integrity. So if someone claims to have a strongly held political outlook, then someone nearby will be seen as an ally, regardless of their character. Meanwhile, those on “the other side” will be seen as enemies. Instead of actually evaluating the honor of others, we bias ourselves to view political opponents as inherently lacking integrity. This is tribalism in action, and it’s fairly widespread today. As a result, there is no counterforce to uphold integrity at all!

In order to rectify this oversight, let’s instead simplify by removing one of these axes, and replacing it with honor/dishonor as up/down. Ideally we would take this to mean honor in all its forms, but for this exercise we can simplify further to mean integrity with regard to a single issue. We can go with the economic axis, which avoids some of the thorny spiritual or race issues that arise from the “personal/social” sphere. So the left-right spectrum in our case would mean how much to focus on public versus private endeavors.

The honor dimension is more subtle. Of course, everyone wants to believe they are on the side of honor, in order to occupy that hallowed moral high ground. So to illustrate how to pinpoint someone’s position nonetheless, we need an anchoring point which we can all agree represents a dishonorable course of action. For this we need an active, significant, yet disputed issue that orients other issues in relation to it.

We need look no further than the National Debt & Debasement Strategy for our issue, which is an ideal test case for several reasons. (See here for an overview.) First, it relates directly to integrity. Any somewhat educated observer must conclude that ongoing deficits above a certain threshold are mathematically unsustainable without printing money to fill the gap. Either an explicit default or soft default through debasement is occurring or will occur at some point in the future. Both are major integrity violations due to the principle that a person or group maintains integrity by keeping one’s promises.

Second, the idea of deliberately passing problems along to future generations is grotesquely dishonorable, and quite possibly tyrannical. Not much more to say about that one for this discussion.

Third, the consequences of a debt explosion are severe and far-reaching, whatever one’s partisan leaning. Not only that, the current consequences are at least distasteful to anyone who cares to pay attention. The interest alone is a burden upon us today; and only those with a financial interest in seeing it continue would accept the situation wholeheartedly. Libertarians object to these interest payments on the grounds that it restricts our freedom, today. Progressives object to them on the grounds they are going straight to the pockets of mostly wealthy investors and institutions, today. Other objections are possible too including the generational one mentioned.

Finally, the root of this issue transcends left versus right. Both parties, or coalitions if you live in that kind of country, have chosen this course of action, and have enacted policies that have exacerbated the problem. And before you can say “but it’s the other side that is mostly to blame” we need to examine how our preferred policy choice interacts with the deficit dynamics.

Therefore, we can stake out an honorist position simply by stating that any policy contributing to excessive sovereign debts combined with or leading to an inflation-based remedy is on the dishonorable end of that axis. It’s always an option for someone to dispute this issue as an anchoring point, but all that does is to make it more clear where that person stands on the political landscape we’ve staked out. See how that works?

People can always point to wars or necessary long-term investment in public goods as worthy of debt spending. While true in some cases, we cannot take such emergencies as an excuse when those expenditures are not behind what’s driving the shortfall. Furthermore, we are talking about mature and advanced economies, not rapidly developing ones. So we can fairly leave aside that argument in favor of unrestrained debts.

The test of how high or low someone ends up on this political honor dimension can come down to how many policies one would prefer to cutting the deficit. To our so-called conservative free marketer, we can ask: is there any tax you would raise in order to limit the deficit? If not, congratulations, you’re so “right-of-center” that your position is officially dishonorable according to this yardstick. We can do the same for someone who desires more social spending, for the same reason. Anyone taking such an inflexible stance makes the problem worse and entrenches it further. Ultimately, what this framing does for us is to elevate the importance of a gaping hole in how our government functions, but that no party or actor has the will to face head on.

We can phrase the questions in this way not because those specific policy changes should be made to reduce deficits, but that’s a false choice. When we’re looking at entries in a budget, nothing is standalone. Everything is a ranking, and that prioritization certainly does come down to political left/right tendencies. However, the debt in aggregate does not and should not.

There is no shortage of existential threats we could use to orient the honor dimension, but this approach allows us to also use their solution as a positive anchor rather than a mark of dishonor. Whether it’s environmental sustainability, educational transformation, or the shoring up of Enlightenment ideals, we can evaluate many left-right divides from a new lens to detect whether tribalism or enlightened rationalism prevails.

In the end, elites can attempt to deny the connection between honor and debt escalation. However, for many citizens, it is a genuine relationship that must be addressed. One could make the point that this moral split at the highest levels has done much to foster the forces of political disgruntlement that currently are rending civil society across the West. And until it is rectified, we will be caught in the vise of increasing disorder and autocracy.

In the next post, we will take a look at the current decisions before us and try to navigate how this approach can illuminate the paths open to us which will enable our society to confront its ongoing honor breakdown.

The actions taken by OPEC in October 1973 were no small blip. Production in oil-exporting countries dropped by 25% and exports fell by up to 70%. This interruption in supplies triggered widespread shortages and a 400% price increase overnight.

At the time, dependence on this critical resource was immediately apparent in the economic and behavioral effects of these shortages. The resulting inflationary spike combined with severe recession is often cited as marking the end of a 25-year post-war period of prosperity.

Even after the embargo officially ended, these effects lingered for years. One often overlooked factor is that the USA, then the largest oil producer, had peaked in its conventional production a few years earlier. Steady increases in cheap energy had reached an inflection point.

Over time, higher prices allowed exploration into new oil provinces offshore and in the Arctic. Combined with shifts in efficiency, the market found a new equilibrium and prices stabilized at more reasonable levels. Capitalism had, eventually, worked as advertised!

Current day, there has been a flood of chatter about peaking oil demand, transitioning to electric vehicles, and all-around greening of our economy, leading casual observers to conclude we must be much less dependent today. Oil intensity is half what it was in the 1970s, right?

While it’s true an info/services economy creates more value per barrel than one based on manufacturing, these numbers can be misleading. Oil production value in 1973 was half its 2019 value, and it was extremely vulnerable at the time, so we can’t simply compare 1-to-1.

The awkward implication of stacking more value atop each energy input is that the sensitivity can be greater than with a less efficient arrangement. If ten people use what one person previously did, then removing the same amount affects ten times more people!

Assuming that what is actually consumed is every bit as critical, this creates a delicate situation where relatively small shocks can propagate much more strongly and unpredictably than before. It means also that demand is much less elastic to pricing.

We can look to Russia’s invasion of Ukraine for a hint about how a similar disruption would play out today. What turned out to be mostly a redirection of who buys from whom with negligible and temporary production cuts caused a great deal of chaos and fueled inflation fears throughout 2022.

With this history in mind, consider the economic impact of an immediate oil production or shipping cut of 10% spanning globally and lasting indefinitely. Effects would not be spread evenly despite the global market, but on average would be devastating.

Oil consumption and hence demand would be forced to adjust to available supply almost overnight. The price would be unknowable, except to be at least what’s required to reduce that demand, and certainly highly volatile as well as extra premium for uncertainty.

These price spikes would not be limited to direct usage like filling a gas tank. The cost of transporting nearly anything would also spike, and as everyone realizes their own costs have risen, there would be strong pressure for wages to also go up.

At that point, a race begins between the twin spectres of inflation and recession. The balance of each depends on many decisions and gov’t policies. However, the choice is unavoidable–whatever oil demand isn’t limited by reduced activity would have to be covered, or auctioned, by higher prices.

The truth that business and political leaders prefer to ignore is that our economic system is designed to maximize production and consumption from usable energy. If there is less energy available for a feasible price, there is simply less production and consumption, short term.

This simple relationship also means that adding more renewables doesn’t reduce fossil dependence. The system incorporates any new energy source, thank you very much, but continues to require more energy inputs from all sources, because that is what it does.

In fact, setting up renewable projects, themselves made possible by fossil inputs, may lessen oil intensity overall but even this amplifies sensitivity due to the same dynamic described above. The same applies to efficiency gains due to Jevon’s paradox.

Meanwhile it’s disheartening that people ignore links between US oil production and boom times. We’re at new high points, which temporarily masks problems with financial largesse and misallocation. Look at periods like 70s or late 00s for what happens when it reverses.

Awareness of the centrality of energy to our material lives leads certain deep thinkers to suggest a more direct backing of money to energy. This proposal sounds ideal, but how would it work? When energy is burned forever, what happens to its backed money? Who pays?

Closer inspection reveals that while currencies are heavily backed by fossil energy flows from a material standpoint, it’s not quite the way we think when we say $X = Y barrels. Yes, they are exchangeable in a sense. In reality, the flow of money runs exactly opposite to energy.

So it’s more accurate to claim that currency in its current form is closer to anti-energy. A cache of cash awaits energy to be spent towards. It “demands” energy flows to arise that it can burn and neutralize. And its material value stems from this potential energy.

Awkwardly, dollars continue to exist after oil is burned. Luckily, the existing pool of outstanding currency still has more potential energy to seek out, but can that continue without interruption? Will it survive contact with energy/environmental constraints?

Historians who study ancient civilizations point to the energy requirements to run complex societies and how they go away when their thermodynamic balance goes in the wrong direction. To believe ourselves immune to this reality is the height of hubris.

To reiterate, we are talking about existential threats to the survival of 21st century civilization. Ignorance of the criticality of energy to our society is one of the most serious causes of weakening integrity and honor breakdown at all levels. Until we face this challenge head-on, I fear we’ll be driving in circles until the gas tank finally and dramatically empties out.

The truth is, we intuitively rely on reputation to guide our social experiences and always have since the dawn of humanity. The difference is that our digitalized society exposes us to way more people than our primitive brains were ever meant to handle. Let’s leave aside social media for another day and look at how reputation governs behavior in small groups in order to contrast how digital communities succeed and fail.

Quite simply, reputation accrues between individuals and groups as they interact with each other, and the more meaningful and consequential the interaction, the more strongly reputational bonds are reinforced. For instance, consider a startup or a DAO with five or fewer committed team members. They meet every day and discuss progress. If one person is stuck they can ask for help and because every person needs to go full throttle, someone will need to step up. Indeed, helping someone else can be very high impact due to cumulative multiplier effects over time. When a colleague helps make a difference for us, they rise in our estimation. When we complete a substantial project, the group celebrates us. Everyone knows everyone, or at least their neighbors, until an organization reaches a certain scale and then other processes take over (but reputation is still ever present). The reputational dynamic is fairly straightforward in this situation, whether we look at a classroom, sports team, or even family. In short, honor is in our heads, and it’s everywhere.

However…what happens in digital communities where people interact asynchronously, often anonymously, and only at a surface level? What happens is honor starts to dissipate, and the richness of our social environment bleeds into a mass. This effect is most obvious when a community’s ties are primarily financial, as a short term investment. Membership becomes less about being a part of something bigger, and more about spreading positive vibes. The notion of honor diminishes here because all that’s asked is parting with our money. It may exist somewhere in the org, usually with the inside team. Unless some serious thought and effort is given to onboarding members and users and giving them some options to do, division starts to reign. The underlying reason is as obvious as the motivation for having the community in the first place: chasing gains via volatile financial instruments default to an adversarial game, not a cooperative one. Transitioning small projects to a sustainable enterprise requires consistent and continuous honor from the core team, and it is not always clear what they’re up to. The FriendTech fiasco over the past year follows this script to the letter.

All of which is to say that we should not be surprised when vibes turn sour and sentiment shifts the other way, when a project’s reputation is not fully focused and developed. In the absence of strong legal controls, it is the responsibility of the industry and its investors to ensure adequate transparency and adherence to upholding integrity and honor.

It doesn’t take long to notice that both parties depend critically on financial support from wealthy elites. The role of money in politics has been fully documented for generations, and despite efforts to reform the practice, only appears to become further entrenched each cycle. Congresspeople spend hours each day raising money on the phone, leading to much of their communication getting colored by those donors. At a state and local level, these funding sources can be even more influential. We also see the outcomes when it comes to policies, where laws and priorities correlate better with the views of the donors than what the public wants.

Naturally, when the corporate elites who run things come into contact with a political figure who aims to take steps to correct the scales, there is a well-worn tactic to tie that troublemaker to communism, that ever-present boogeyman. So now we have to untangle a reasoned take on practical economic strategy from what often turns out to be pure elite-produced or elite-favoring propaganda. From an honor-based perspective, Communism failed because it weakened the link between honor and status, not because it had more planning than the market seems to prefer.

When we peel back the heightened rhetoric, what do we find? Basically, what we’ve always had: mainstream parties who are fully in the employ of the large corporations and wealthy elites. Comparing either one of these to actual communism is laughable, as is any attempt by one’s own side to claim that they’re the ones who could hold these elites to account (which the people do actually want). Even a 1% wealth tax could not remotely be considered communism. Maybe it’s 1% closer, but still not close, and claiming as such is a sign that someone has subverted their own integrity to their partisan tribe. It’s intellectually dishonest to ascribe the Communist label to those who have always wholeheartedly embraced capitalism.

What looks to be happening is that Western elites are somewhat concerned about the rise of China, and rightfully so. It probably does represent a serious threat to their standing in the world. But are they Communist? It’s been clear for quite some time that the CCP operates more as business managers than a state-run economy. However, they are much better at building public goods with speed and efficiency that Western states can only dream of, from high speed rail to new hospitals. Unfortunately, this muscular state activity only seems to associate our own public goods needs with Communism in the eyes of many, and that is one of the saddest casualties of our political convulsions and fear of the other.

Part of the answer lies in why it’s necessary for government to do these things in the first place: it’s in nobody’s interest to pay for it if anyone can receive the benefit without paying. Markets fail in many situations. In the days of private firefighters, I might accept the risk of my house burning down without buying the proper insurance, but that could cause my neighbor’s house to burn down also. Most of the time, however, my house isn’t burning down. The benefit is abstract, the cost very real.

So the game theory plays out politically as well, whether we’re talking about priorities as universal as climate change or as local as our neighborhood school board. Recognizing the benefits, the very reason for undertaking a public endeavor, requires something of us. We need to both see and understand mentally that a common cause will benefit our society/environment overall, and to care emotionally about our fellow citizens who we may never meet.

It is not always easy to do either of these. Unlike a business calculating its revenues, the merit is often incalculable even if it’s undeniable. It may be far away in space or time. It’s always easier to fold in on ourselves, hold our private domain tight and denounce taxes in any form. We cannot, by definition, own public goods for ourselves. We cannot exclude others from using them. We do not own them. So instead of expanding our own boundaries, we prefer to close down and keep everyone else out. Or at least, the median voter tends to think this way, which means the public discourse veers away from the rightful course.

One shouldn’t mistake these words as disapproving of property or market incentives or advocating for self-sacrifice for its own sake. But we all know deep down that what we provide for future generations is what defines us, and determines how we will be remembered. Ultimately, high honor is about greatness. The extent that we decline to participate in building great things is the extent to which we refuse our own ability to be great.

The last entry compared the costs of the NYC 2nd Avenue subway line extension ($2.5 billion per mile, completed in 2016) with the first phase of the U.S. Interstate Highway system ($1 million per mile, commencing in 1956). One might say, hold on, we cannot possibly compare laying down asphalt in Kansas with underground train construction in the densest city in the country. While much of those highways did in fact occur in and around cities (people needed to get to downtown offices and plants from their fancy new suburbs, after all) it’s a fair point. So what if we go back to when most of the subways were built in the first part of the 20th century?

We find that 100 years ago, it cost a mere “$2.5 million per track-mile in a very congested part of lower Manhattan.” That provides us with the neat math of 1000:1 cost ratio over less than 100 year span. It’s a good thing it wasn’t close to the billion-dollar range, because building the entire 250 miles of subway would have amounted to three times the entire U.S. GDP in 1921. Kidding aside, we know dollars were worth much more then, but we’re supposed to believe the dollar has lost “only” 95% of its value since those days. That would mean we should be looking at cost ratios in the 20-50X range, even allowing for improved safety measures and other costs. What’s going on here?

There are extra costs, self-evidently. However, there are other advancements that should make the work go faster with less effort. We have giant drilling machines the laborers with pick axes and shovels could only dream of. Not to mention the computerized designs and tools that should help with complex tasks. And yet…1000X.

Put simply, we can boil down the causes to two main categories: external factors, outside the government/contractors, and factors internal to those players. So most causes we can think of would fall under these:

1. Explosion in private debt which drives up real estate development costs

2. Corrosion of Honor

The first cause is primarily driven by banks and corporations, although government sometimes provides a helping hand. Anything above and beyond the bidding war with private money must be due to honor corrosion, compared to prior eras. It’s not enough to say that government is inefficient by nature and so we should limit any and all public spending. The government did achieve ambitious goals in the past, and the changes leading to the 1000X rise in construction costs therefore must spring from dishonor somewhere along the way. The specific regulations and conditions are almost irrelevant next to this realization.

At this point, anyone who is semi-aware of inflation statistics might start feeling a bit perturbed. How exactly do these capital cost comparisons find their way into the price adjustments we use to measure our economy from one year to the next? The answer is…they don’t! CPI is for consumer prices: easy to measure, relatively standard. If the government bean counters had to look at every standalone project and compute the hypothetical cost increase, that would create some messy headaches.

And so a substantial portion of economic activity is simply left out of the calculations, swept under the rug and assumed to be adequately tracked by proxy with CPI. Not just large visible developments, but anything considered business investment or remotely government related, roughly 30% of GDP. One can sense a problematic source of bias creeping in here. If those cost increases average higher than consumer goods, it stands to reason we have been artificially goosing GDP numbers for decades, by throttling inflation numbers.

Let’s be fair: there are some bespoke missions that actually have no comparables. Not too many Mars landers or Webb telescopes are built each year. But these are rounding errors; the vast majority of expenditures are repeated or have plenty of similar jobs completed nearby in time and space. Once in a while, we’re lucky enough to get numbers on the exact same piece of infrastructure! Here are just a couple bridges that come to mind:

San Francisco-Oakland Bay Bridge

1936 cost: $77 million

2016 cost (to replace the eastern half): $6.5 billion

Tappan Zee Bridge

1955 cost: $81 million

2018 cost: $3.98 billion

Both of these are off by an order of magnitude if we compare using constant dollars. Any society valuing honor of collective accomplishments would see these trends as seriously troubling, and we would demand they actually show up in economic accounting. Maybe showing up in the official statistics would force some accountability, somewhere along the line. Sadly for the foreseeable future it is not to be.

While stock markets are more of an indicator of achievement honor of corporations, debt is more tied to foundational honor, as a promise to repay in kind. Which is why we say we honor our debts. When there is a mathematical/financial impossibility that the current situation can continue to worsen indefinitely, and a political infeasibility of addressing it head on, those circumstances erode honor throughout every level of our culture. It has become a cliche to say politicians spend like drunken sailors, and they do love to shower largesse on supporters. But are undisciplined appropriators the real underlying cause, or were we put on this track long ago? And is austerity really the answer? Or is it all fear-mongering about nothing?

The fact of the matter is that there are good debts and bad debts. Almost always the problem is not how large an outstanding amount but whether it was put towards a worthy end. Gambling debts, bad. Open a profitable business, good. If any entity or individual, governments included, stand to gain more over time than the future payment cost, then the risk and extra payments are worth it. Measuring the value of public goods in terms of benefits to citizens or higher tax payments can be a challenge. Although, it is often crystal clear when payments to some beneficiaries will not produce a lasting benefit for anyone else.

It is a head-scratcher for anyone to hold to the position that government doesn’t create wealth. Most of the time, that’s probably correct. However, there are situations where governments are the only game in town who are willing and able to fund large projects that are needed or spin out massive benefits. The U.S. Interstate Highway System, for instance, is used by millions of drivers and truckers each day to freely and cheaply travel between any city they like. In the last 5 years of Eisenhower’s term, the U.S. Government built over 10,000 miles of roadway, mostly from scratch, for a cost of $10 billion, reaching 25% completion of the final goal. The economic benefits alone have been many times that which means that even high interest bonds would have been paid for in spades by additional tax dollars resulting from the project. Of course, they didn’t, and ran a budget surplus during several of those years. Ike even had the guts to raise the gas tax! Because at that time leaders were more fiscally honorable, and conservatives were truly conservative.

(If that $10 billion figure appears laughably small when it costs that much to build four miles of NYC subway 60 years later, you’re not alone. We’re talking 1956 dollars, yes, but we’re supposed to believe that it’s the same as $100 billion in 2023. Still seems like a good deal? We’ll come back to the escalating cost of public goods at a later date.)

The closest comparison most make to today’s fiscal trainwreck is the 1940s. Aha, you say, that was spending on a destructive war, but still we grew our way out of that money hole. Which is relevant except for one thing: Winning World War II was the single greatest public good ever created in history. Its positive effects are literally incalculable, possibly infinite. Even if we ignore the impact on human suffering and well-being, the economic gains continue to be reaped. First, the saved cost of not having another war between powerful states. Two, the eventual increase in international trade alone dwarfs the costs incurred by all parties. All in all, the government can cause wealth to be created.

Which leads us to today. The budget shortfalls across nations, all the way to struggling households, can be traced back to decisions made by leaders over generations, not just the past few years. The size of that deficit is a direct result of malinvestment, wrong investment, no investment, in a country’s people. We knew for at least that long pensions would inevitably grow with older populations, which necessitates a more skilled and enterprising workforce. Public pensions should be, would be, in a safe position today had those leaders done so. Some countries understand the importance of public goods better than America. Very few countries have done what’s necessary to forestall these calamities. It therefore falls to us, to anyone reading this, to do the job. Whatever the cost, it must be borne, for the price of failure is far too steep and the potential reward far too great to ignore.

Astute observers from the Austrians to present day hard money enthusiasts have observed that monetary policy is not simply a technocratic procedure, but has major moral effects. Indeed, when the mechanism by which new currency is introduced requires no effort or economic value to be produced, it is almost the end of the story right there. Add in the countless ways official CPI stats have been manipulated and it’s clear that the whole enterprise cares not for foundational honor, that is to say, integrity. As long as it can appear to maintain a semblance of credibility.

So that’s that? All we need is to adopt hard money which operates without human interference and we can stop worrying about these pernicious moral effects? While it’s true that cryptocurrencies like Bitcoin check the soundness boxes, basic integrity is not exactly all there is to this story. Crypto platforms are neutral, and so they cannot comment on high achievement honor, relating to value contributed. The assumption is that the market will sort this out for us.

When we peel back one more layer, we can ask what exactly does inflation do to the high honor/money relationship: its moral contours playing out in reality. First off, when more dollars are created and prices are going up, is a worker justified in asking for a raise? Clearly yes, because their labor should exchange for an equivalent basket of goods after the inflation hits, all else equal. So then if all prices and wages went up by an equal amount as the money supply (which of course never happens) in honor terms everything should also remain balanced right?

Absolutely not, and the reason is debt. It is no coincidence that the most salient effect of quantitative easing has been asset price inflation. When you make it easier and cheaper to borrow money, the price of assets that money can buy will substantially increase, according to the same logic as run-of-the-mill consumer inflation. So now we can ask a different question: when someone’s stock or house goes up in value faster than inflation as a result of government intervention, are those gains the result of an honorable contribution? Whether or not the money earned to buy the assets was, the answer is clearly no. All the owner had to do was to keep owning the asset in question. Even more perniciously, the more leveraged or overextended the financial position, the more it is rewarded, since debts are not commensurately inflated. It’s the Rich Dad way.

Therefore we arrive at the conundrum at the heart of the crypto movement. The higher prices go, the more successful these blockchains are, the bigger the honor deficit. We can engage in all the navel-gazing we like, that we deserve to be rewarded for taking those risks in order to ensure the platforms survive. There is some truth to that, especially in the early days. However, if we care about restoring the honor balance to civilization, and we all should, then those who are actually creating the value for society deserve to reap most of the gains. Striving for anything less is a sign of inflated ego.

The claim here is that honor underlies each of these. So let’s examine what happens as it is removed or begins to decay. The three main reasons today’s currency is not interchangeable with honor correspond to the three bases:

Arbitrary monetary policy with overreliance on unserviceable debt -> Financially unsustainable

Overdependence on non-renewable resources -> Environmentally unsustainable

Fracturing of value systems into radically divergent directions from how the system operates -> Psychologically unsustainable

Both the freehandedness of central banks for artificially inflating their currency through debt creation, and the willingness of the government’s fiscal managers to allow the public debts to balloon to unpayable levels that shovel trillions of interest payments into the banks, reek of deep dishonor.

The fossil energy basis component of the currency is often a more distasteful topic, not because people disagree, or even because they believe expanding renewables by itself makes it the issue go away, but because it implicates everybody. And nobody wants the guilt of their behaviors on some future calamity. However, ignoring it is still a source for dishonor, since we make future assumptions based on resources that may not be nearly as cheap, and there is no consensus how to correct for distant externalities. Now, one could downplay the strong link between energy and money altogether, saying as it’s a small portion of what we buy. True, but the key link in the chain is that you could always buy a gallon of gas if you need it, and so could anyone you pay money to. Lots more we could say about that.

The tragedy happening on the social side of the street is apparent in our politics today. Unfortunately, our system-in-place can never align completely with any individual’s values, except certain elite priorities. As the gap grows, people dig in with resistance to a system they increasingly despise, that makes decisions with very little input from them. So they trust the government less, and the currency eventually goes with it. Or at least it would, if we weren’t all so in hoc to our materialist market machine, while it lasts. Because we are all stuck in the Money Matrix.

Another unfortunate implication is that financial assets that are convertible with the dominant currency end up taking on more of its properties as it grows larger. In fact, many securities have the same relationship with dollars that dollars do with oil, in that they can always be cashed out. (Not a coincidence we use the word liquidity to describe market conditions.) What this means is that even if gold or Bitcoin or Ethereum have better monetary properties than dollars, the dollar system is so supreme that they will still act like vassals, as they are mere neutral vessels. As a result, none of them can be honor-equivalent either, much as we like to see them that way. We would need an entirely new approach to achieve this wild goal, perhaps with our preferred hard money to bridge back to material reality with. And yet, able to escape the money matrix for a more honorable world.