Why is counterfeiting problematic? Most respondents to such a question would likely come up with the following answers: 1) it could undermine trust in the financial system, 2) counterfeit money could fund criminal activities, 3) counterfeit money could cause inflation. Historically, inflation referred to an increase in the money supply, unlike today when economists and lexicographers have re-defined it to mean rising prices). However, these answers may overlook the bigger picture.
##### The real problem of counterfeiting
Our money holds value because we can exchange it for tangible goods, either presently or in the future. Money thus represents claims on the real world. Successful counterfeiting allows for the creation of new claims without anything necessarily happening in the real world. Counterfeiters can use these fake claims to purchase actual goods (such as guns, ammunition or potatoes) with something essentially worthless. Those who receive such counterfeit money will believe they have gained something real. They will also believe their wealth has increased. However, the money will eventually not stretch as far as they expect, either because the fake bills will be discovered by some forensic expert or because they will not be able to buy as much as anticipated due to future inflation.
##### What happens to our conclusions if our assumptions are wrong?
In the philosophy of science, the concept of deduction plays a pivotal role. It involves deriving conclusions from premises, ensuring that if the premises are accurate, the conclusion necessarily follows. For example, if all birds have wings, and penguins are birds, then we can infer that penguins have wings.
However, if someone has sold something real - like a sack of potatoes - to a counterfeiter, the seller may assume that their wealth has increased and act accordingly. But that's not the case! Counterfeiting thus causes individuals to base decisions on false premises. Decisions made under such flawed assumptions are unlikely to lead to prosperity. Instead, they may result in economic stagnation or more severe adverse outcomes.
The Soviet Union had Trofim Lysenko. His theories claimed that traits acquired during an individual's lifetime could be inherited by offspring, contradicting the (more accurate) Mendelian genetics that emphasized the heritability of traits. Lysenko's ideas influenced Soviet biology and led to erroneous assumptions and failed experiments, hindering the Soviet Union's economic progress. During China's "Great Leap Forward" under Mao Zedong, one intention was to increase agricultural production. However, (incorrectly) advocating for the extermination of sparrows and other pests resulted in severe ecological consequences. False assumptions then led to mass famine and diseases, culminating in one of the deadliest periods in China's modern history.
##### Counterfeiting will lead to mistaken assumptions
Money acts as a technology facilitating human coordination and decision-making. Counterfeiting disrupts this by introducing false premises into decisions regarding consumption, investment, and other economic activities. Thus, it's critical to address counterfeiting not just for its immediate effects but also to consider its broader implications on economic coordination.
However, perhaps we should broaden our analysis even further. The central bank, as well as large corporations and billionaires ("cantillionaires") who receive favorable terms from commercial banks, will also be able to exchange newly created money for real goods (such as potatoes) in return for something that may not be worth anything. (The extent of the problem depends on how the newly created money is used.)
Karl Marx used the concept of "false consciousness" to describe how social classes can internalize beliefs that do not serve their own interests. While the term was never used by Marx, but by [Engels](https://www.marxists.org/archive/marx/works/1893/letters/93_07_14.htm), it may be applicable to our current monetary system. Marx argued that by maintaining such false consciousness, the ruling class could retain their power and control over society.
Most of us now swim happily - like fish in water - amid the fiat currencies effortlessly created by central banks and commercial banks. But doesn't this mean that we too risk drawing conclusions from erroneous assumptions, reminiscent of Marx's idea of "false consciousness"? And if so, what does this imply for our countries' economic prospects?
##### The end of the Bretton Woods system accelerated legal counterfeiting
Many, including Peter Thiel in ["Zero to One"](https://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296), have pondered what actually transpired [around the beginning of the 1970s](https://wtfhappenedin1971.com/). Asset prices began to soar, real wage growth stagnated, technological progress slowed down (at least compared to the hopes of that time). Simultaneously, a towering income and wealth inequality started to emerge.
Coincidentally, it was also around that time when the United States unilaterally and "temporarily" stopped tying the dollar to something real (i.e., gold). The end of [the Bretton Woods system](https://www.riksbank.se/en-gb/about-the-riksbank/history/historical-timeline/1900-1999/bretton-woods-goes-to-the-grave/) allowed this legal counterfeiting to take off in earnest, arguably leading to a plethora of decisions based on [invisible](http://bastiat.org/en/twisatwins.html) yet sometimes faulty premises. Without these mistaken assumptions, perhaps we could have witnessed an economic renaissance of unprecedented magnitude...
"We have been naive," is a common sentiment express in Sweden's public discourse when something has gone awfully wrong. Could this also apply to our money? Perhaps we should consider making money "real" again?
Another great article, thx for your thoughts.
There’s a lot of conversation around the #TwitterFiles. Here’s my take, and thoughts on how to fix the issues identified.
I’ll start with the principles I’ve come to believe…based on everything I’ve learned and experienced through my past actions as a Twitter co-founder and lead:
1. Social media must be resilient to corporate and government control.
2. Only the original author may remove content they produce.
3. Moderation is best implemented by algorithmic choice.
The Twitter when I led it and the Twitter of today do not meet any of these principles. This is my fault alone, as I completely gave up pushing for them when an activist entered our stock in 2020. I no longer had hope of achieving any of it as a public company with no defense mechanisms (lack of dual-class shares being a key one). I planned my exit at that moment knowing I was no longer right for the company.
The biggest mistake I made was continuing to invest in building tools for us to manage the public conversation, versus building tools for the people using Twitter to easily manage it for themselves. This burdened the company with too much power, and opened us to significant outside pressure (such as advertising budgets). I generally think companies have become far too powerful, and that became completely clear to me with our suspension of Trump’s account. As I’ve said before, we did the right thing for the public company business at the time, but the wrong thing for the internet and society. Much more about this here: https://twitter.com/jack/status/1349510769268850690
I continue to believe there was no ill intent or hidden agendas, and everyone acted according to the best information we had at the time. Of course mistakes were made. But if we had focused more on tools for the people using the service rather than tools for us, and moved much faster towards absolute transparency, we probably wouldn’t be in this situation of needing a fresh reset (which I am supportive of). Again, I own all of this and our actions, and all I can do is work to make it right.
Back to the principles. Of course governments want to shape and control the public conversation, and will use every method at their disposal to do so, including the media. And the power a corporation wields to do the same is only growing. It’s critical that the people have tools to resist this, and that those tools are ultimately owned by the people. Allowing a government or a few corporations to own the public conversation is a path towards centralized control.
I’m a strong believer that any content produced by someone for the internet should be permanent until the original author chooses to delete it. It should be always available and addressable. Content takedowns and suspensions should not be possible. Doing so complicates important context, learning, and enforcement of illegal activity. There are significant issues with this stance of course, but starting with this principle will allow for far better solutions than we have today. The internet is trending towards a world were storage is “free” and infinite, which places all the actual value on how to discover and see content.
Which brings me to the last principle: moderation. I don’t believe a centralized system can do content moderation globally. It can only be done through ranking and relevance algorithms, the more localized the better. But instead of a company or government building and controlling these solely, people should be able to build and choose from algorithms that best match their criteria, or not have to use any at all. A “follow” action should always deliver every bit of content from the corresponding account, and the algorithms should be able to comb through everything else through a relevance lens that an individual determines. There’s a default “G-rated” algorithm, and then there’s everything else one can imagine.
The only way I know of to truly live up to these 3 principles is a free and open protocol for social media, that is not owned by a single company or group of companies, and is resilient to corporate and government influence. The problem today is that we have companies who own both the protocol and discovery of content. Which ultimately puts one person in charge of what’s available and seen, or not. This is by definition a single point of failure, no matter how great the person, and over time will fracture the public conversation, and may lead to more control by governments and corporations around the world.
I believe many companies can build a phenomenal business off an open protocol. For proof, look at both the web and email. The biggest problem with these models however is that the discovery mechanisms are far too proprietary and fixed instead of open or extendable. Companies can build many profitable services that complement rather than lock down how we access this massive collection of conversation. There is no need to own or host it themselves.
Many of you won’t trust this solution just because it’s me stating it. I get it, but that’s exactly the point. Trusting any one individual with this comes with compromises, not to mention being way too heavy a burden for the individual. It has to be something akin to what bitcoin has shown to be possible. If you want proof of this, get out of the US and European bubble of the bitcoin price fluctuations and learn how real people are using it for censorship resistance in Africa and Central/South America.
I do still wish for Twitter, and every company, to become uncomfortably transparent in all their actions, and I wish I forced more of that years ago. I do believe absolute transparency builds trust. As for the files, I wish they were released Wikileaks-style, with many more eyes and interpretations to consider. And along with that, commitments of transparency for present and future actions. I’m hopeful all of this will happen. There’s nothing to hide…only a lot to learn from. The current attacks on my former colleagues could be dangerous and doesn’t solve anything. If you want to blame, direct it at me and my actions, or lack thereof.
As far as the free and open social media protocol goes, there are many competing projects: @bluesky is one with the AT Protocol, nostr another, Mastodon yet another, Matrix yet another…and there will be many more. One will have a chance at becoming a standard like HTTP or SMTP. This isn’t about a “decentralized Twitter.” This is a focused and urgent push for a foundational core technology standard to make social media a native part of the internet. I believe this is critical both to Twitter’s future, and the public conversation’s ability to truly serve the people, which helps hold governments and corporations accountable. And hopefully makes it all a lot more fun and informative again.
💸🛠️🌐
To accelerate open internet and protocol work, I’m going to open a new category of #startsmall grants: “open internet development.” It will start with a focus of giving cash and equity grants to engineering teams working on social media and private communication protocols, bitcoin, and a web-only mobile OS. I’ll make some grants next week, starting with $1mm/yr to Signal. Please let me know other great candidates for this money.
It is true human greatness when someone develops a successful company but leaves it when it abandons its principles.
Great article, as always. — This is a comment on: https://yakihonne.com/flash-news/
To my german #Bitcoin friends: Heute stelle ich #Cashu ecash vor.
Privatsphäre ist essentiell für eine gesunde Gesellschaft. Danke nostr:npub12rv5lskctqxxs2c8rf2zlzc7xx3qpvzs3w4etgemauy9thegr43sf485vg nostr:npub1mhcr4j594hsrnen594d7700n2t03n8gdx83zhxzculk6sh9nhwlq7uc226 nostr:npub1cj6ndx5akfazux7f0vjl4fyx9k0ulf682p437fe03a9ndwqjm0tqj886t6 und weitere! Sie leisten einen wichtigen Dienst für uns alle und insb. jeden Menschen in einem autokratischen System.
Sehr gutes Video, Kompliment.
Also LINUX-Dateien auf Proton Cloud syncen, korrekt?
Harsh words
More presentations or proposals for our agenda are welcome.
Martin announced to make a short presentation regarding CBDC's.
Pls. make your reservation for our planning.
Cool
Willkommen bei Nostr
Welcome at Nostr!
Good article.
