Reality, Conventions and the Market

My wife is fond of telling me that reality doesn't exist, and I always reply "... until it hits you in your face." We aren't really disagreeing on anything. The reality my wife is referring to is the idea of firm and unchanging absolutes. To the extent that such absolutes exist, they're specific to logic, maths and confined experiments. We don't live in a world in which all can be objectively know. The reality I'm referring to, on the other hand, is the continuous calculation in which we all take part, where reality unfolds with time. We can never fully know this reality because we're but a tiny part of it ourselves. However, that doesn't make it any less real. It merely makes it unknowable as a total. Bits of it can be known and understood in detail, but the totality of it is an ever-changing calculation.

Part of this ever-changing reality are the conventions of social interaction. Language is one such convention. Words have meaning that we can relate to. That's how communication is possible. Yet no single person invented language. It evolved organically into what it is today, and it continues to evolve. New words are invented. Old ones are forgotten, and many words change their meaning over time, sometimes by accident, and sometimes as a deliberate effort to subvert the meaning of words.

Street slang is spontaneous, while comities dedicated to the management of dictionaries are structured. The two are often at odds with each other, as was seen with the Blue Anon joke that was scrubbed from the Urban Dictionary because it was the wrong kind of funny.

Money is another important convention. This too evolves partly through spontaneous market action and partially through comity. The Dollar is the world reserve currency for this combination of factors. It has also evolved to become something different than it was. A dollar used to be a measure of gold. Now, it's an abstraction, limited in number by various factors, all determined by a hierarchy of bank comities, with the Federal Reserve at the top.

The evolution of money from something tangible to an abstraction has inspired the creation of alternative abstractions, namely crypto-currencies. While the origin of this idea is uncertain, we know that a large number of such currencies have evolved spontaneously over the past decade. Every one of these promise to be an asset and a potential future money. However, there is as of yet no convention. None of these currencies have been adopted as money, and there are good reasons to believe that this will never happen.

Conventions are not something that anyone can decide on. Not even a government comity can do this. At most, comities can control and direct an established convention. But the final decision is made in the market. If there is no spontaneous adoption of a proposed convention. The convention fails, and something more in tune with the wishes of market participants takes its place.

The idea that one or more crypto-currency will replace the dollar at some point is based on the false belief that "we" can define money to be whatever "we" want it to be. This sounds true. But who exactly are "we"? If this means that Paul and Peter can sit down and write a contract based on DOGE coin, then the answer is yes. Paul and Peter can use DOGE coin as money in their private contract. However, that doesn't mean that anyone outside this circle will start doing this as well. Paul and Peter using DOGE coin as money doesn't make DOGE coin money in the wider world. To become money in the real sense of the word, DOGE coin must become the convention of choice, and that's not going to happen.

It's disingenuous to claim that money is whatever "we" decide it to be. When this claim is made deliberately and publically by someone with a vested interest in the scheme, it goes beyond disingenuous and becomes fraud. When the claim is made by others its merely ignorant and silly.

Similarly, we can privately decide to be something that we're not. However, no amount of force will make our decision true. I can claim to be a young black lesbian woman trapped in the body of a 57 year old white guy, and I can force others to go along with this, provided I live in a jurisdiction where this is law. But a law made by a comity is not the same as truth. Those who think that truth can be created through law got things backwards. Law is the product of truth, and since truth isn't whatever "we" decide it to be, law isn't either. Nor is money. All of these things are decided by convention, and convention comes about in the great continuous calculation that is reality. If we ignore this fact, reality will come back, and it will hit us in our faces. Justly so, because Karma is as much a part of reality as are language, money, law and gender.

Creation of Adam

By Michelangelo - See below., Public Domain, Link