What Has Value?
Economics, Ecosystems, and the Manipulation of Nature
BY DAVID S. LEWIS
An economy is much like an ecosystem. Check that, an economy is an ecosystem. The laws and principles governing both are identical, and things equal to the same thing are equal to themselves. In an ecosystem, a natural self-regulating organism, you can’t alter one part without effecting other parts, or the whole itself, because of the interdependence of all things involved. Suppress fire, for example, to any significant degree and over time too much fuel will build up and small fires that once kept forests healthy burn them down. Good intentions aside, the law of unintended consequences prevails. Remove a species, like, say, the honey bee, a mere insect, and the absence of pollination will sabotage plant life, which in turn sabotages those who depend upon that plant life.
Ecosystems evolve over long periods of time in the adaptive world of nature, and the same thing happens within the system called free enterprise. It seems inappropriate to call these systems when they are not created artificially but simply evolve on their own, but we do. In life, as with nature, people adapt to circumstances and do what they do naturally in the same manner as players in an ecosystem. One of the things they do, going back through pre-recorded history, is barter and trade. We find in the archeological record of North America that ancient free peoples did this transcon-tinentally, with Yellowstone obsidian turning up among the Mound Builders in what is now Ohio. Much later, pemmican was traded (along with other goods) and became something of a medium of exchange among native peoples and trappers, as did furs, things with inherent value that could be readily exchan-ged. In other societies the currency was (and still is) pigs, yams, goats, or cattle, and of course gold is still stored and traded not only by investors but quietly (often secretly) by the world’s central banks.
And so economics is not so much about money, or academics, but the fulfillment of needs through natural behavior (self-interest), whether the behavior be that of honey bees seeking raw materials to make honey, hunter gatherers seeking obsidian for spear points, you when you pull into a McDonalds, or economic forces (markets) acting out of self-interest on a larger scale.
Multiply this process exponentially through the innumerable aspects of life, by means of millions of individuals, and you have an economy, an interdependent ecosystem. It’s not something you can create and manage (tell that to Bernanke, Castro, and Chavez) because it moves like the tides and wind as a force of nature, and those who try sooner or later experience the consequences of their actions, in the same way that a jetty controls erosion in the near term, but increases erosion farther down the beach in the long term.
It’s easy to see how economics is not about money, but how money has come to dominate economics. Basic economics, like ecology, is about life adapting in order to survive, and in the case of human beings pursuing dreams and desires too, and how free people acting naturally (short of harming others or the environment) are the best system in the long run. Call it life, liberty and the pursuit of happiness, the natural order, the basis for free enterprise and ecosystems alike.
And so America, or any free society, contrary to what Marxist influences espouse (using the term capitalism as Marx did to define western life), is not inherently capitalist (dedicated to the accumulation of wealth, though many take that route) but in its essential nature (constitutionally, in our founding documents, our revolutionary and cultural ideals, and in the day-to-day actions of most people) about liberty, letting people come and go as they please, letting them interact with others to acquire what they need, value, or desire, which over time refines individual and collec-tive values while supplying basic needs—the great experiment.
Capitalism, on the other hand, is a man-made system in which accu-mulation of wealth is the goal, that being accomplished through acquir-ing capital assets by means of a manipulated currency created by a central bank as a contrived medium of exchange and store of value. Trouble is, it’s an inherently worthless medium of exchange, printed at will, and now simply released an electronic credit (recently to the tune of $800 billion), which massively intrudes upon and disrupts the natural economic ecosystem.
Credit money, as the Federal Reserve likes to call the stuff, is the basis for all that we seek and use as a store of value in modern life, as are the many derivatives and schemes that result from its use. Keynesian capitalism, then, like socialism, is an enormous artificial intrusion upon an otherwise natural system, the spontaneous mix of free people doing what they naturally do—free enterprise. Dependence upon credit money, more over, has led to the present economic crises, due to all of the other artificial instruments and scams that derive from its creation—derivatives, unsecured loans, and instruments in the context of the current crisis that had assets leveraged 40 to 1 in ponzi schemes that by necessity collapsed due to their inherent nonsustainability as well as the greed and irresponsibility of those promoting them.
Credit money, more over, and the paper dollars that form only a fraction of its totality, is backed—by what…obsidian, pemmican, gold? No, it is backed by the full faith and credit of the United States government. In other words, it is, like religion, backed by belief and flourishes as long as everyone agrees to the belief system and tenets of the creed, and as long as the American economy supports that belief. Recently, belief in the U.S. Dollar has been affirmed, as worldwide fear and anxiety has ratcheted up demand for the greenback. Without belief though, the system collapses and people look elsewhere for something worthy of their faith, which China (the greatest foreign owner of U.S. Treasury debt) is doing at this moment, as it sizes up the trillions of dollars of guarantees to which the American taxpayer is now obligated, the inevitable decline or devaluation of the Dollar, and as it considers purchasing 3,400 tons of gold (according to state media), a seven fold increase to its current 600 ton supply, in order hedge against its massive partnership with the U.S. Treasury, the Federal Reserve, and the Dollar’s dilution.
(Gold and silver, of course, once backed the Dollar, metals that when held in hand telegraph that they are not only scarce and durable (economic regulators) but something of the earth, not mere electronic blips created by powerful politicians and central bankers who in turn indebt generations of taxpayers to foreign countries.)
So how did economics become metaphysics? The truth is, it always had that potential, if you understand metaphysics and the dynamics of consciousness—for value is often a product of belief, and high-powered manipulators throughout history (in church and state) have taken advantage of that to acquire and maintain power. As with any organized belief system, salvation is available as long as the people subscribe to their doctrine. In this case, that of credit money and the Federal Reserve, belief relates to our physical needs. We see money as that which sustains our families and society, and yet we are beholden (it seems) to a system based on an artificial measure of value.
There’s a moral to this long and challenging story, a liberating imperative to draw from this experience in the context of life and its meaning, taking us beyond the maze of greed, power, and wealth for wealth’s sake. Find that which has true value, the underlying currency of life. As a wise, patient investor, put faith in that, pursue it above all else, seeing impostors for what they are. And know that when you leave this ecosystem, there will be nothing else you can leave behind or take along that has enduring worth.