A great mystic once lived among the great sages of antiquity, whom the ancients announced as the master of the masters, the great among the great, or the three times large Hermes Trismegistus. This man, if he was one, was the author of the Corpus Hermeticum, the discoverer of alchemy, the founder of astrology and the ancestor of hidden wisdom.
The Egyptians idolized the Great Triple as the god of wisdom, Thoth, while the Greeks equated Thoth and Hermes with the equality interpretatio graeca and worshiped them as the same deity.
Hermes’ influence on philosophy, dogma, science, mathematics and above all on our collective map of meaning extends over two millennia and more cultures and religions than is likely today.
Hermes is important to this story, not because his arcane teachings have anything to do with cryptographic or decentralized systems and protocols (he was a prophet but has nothing to do with Satoshi), but because one of his basic principles of reality – the beginning of the rhythm – – It is a very good rule of thumb to record the colossal change in today’s social phase.
It’s time to think, Allen Farrington writes in his counter-argument – and we’ll think. It was perhaps unfortunate that it was difficult for us to remain stranded in our homes, besieged by an invisible and lifeless enemy. to finally question how we managed to mess this up so much, but at least we do.
The rhythm balances
The hermetic law of rhythm is the embodiment of the truth that all things rise and fall. That the pendulum movement manifests itself in everything and that the measure of the movement to the right is the measure of the movement to the left. This principle cannot be invisible once you have seen it. It applies to all things at all levels of analysis. It is almost fractal in nature and very reminiscent of human stupidity.
With regard to each dimension axis on which the current culture pendulum swings, one thing is obvious even for forgetting – the pendulum has reached its maximum amplitude. *
Economically speaking, we were very late in the long-term debt cycle before the corona virus arrived. By adding fuel to the flames, the World Reserve Central Bank or the FED seem to have confused West Ham United’s anthem (“I’m Forever Blowing Bubbles”) with a viable macroprudential policy guide.
Let’s leave that behind – we have hardly ever been more polarized culturally; The gap between those who have and those who do not is at its highest point (and worsens every day). Bolshevik leader Vladimir Lenin was quoted as saying that “every society is three meals out of chaos”. If that’s true, we’re dangerously close to figuring it out for sure.
We are systemically unstable; we are institutionally corrupt; we are psychologically confused; and royal – we seem doomed to fail.
In other words, we are long overdue for a correction and feel in our guts. The Compensation Act is always in force. It is deeply embedded in our individual and collective subconscious. The average person does not have to understand all the complexities of the Keynesian economy to realize that “the money printer brrrr” cannot be the solution to our predicament. The meme went viral for one reason: everyone knows that something like this doesn’t work in life.
Now we have to face reality. We can’t keep pushing the can down the street. It is 1986 for capitalism and we have nothing ready to replace it.
Centralization as a characteristic
The celebrated journalist H. L. Mencken was spot on when he said:
“There is always a simple, clean, plausible and wrong solution to every problem.”
And that’s what we’re dealing with here, let’s not pretend otherwise.
Today’s financial crisis is not a univariate topic. It is impossible to summarize the whole multitude of events that led us to this mess in one text. We will therefore focus on a single piece of the puzzle that is very important to the understanding of crypto: the centralization of power and our continued struggle to resist.
In Moral and Dogma, the 33rd-degree Freemason teacher, Albert Pike, wrote: “If the free states advance in power, there is a strong tendency towards centralization, not through willful misconduct, but through the course of events and the sluggishness of human nature.”
Pike is right, but laziness is only half the battle. The other half is our tendency to do things to the utmost. For example, consider the two predominant economic ideologies of the 20th century: communism and capitalism. We both pushed it to the top and, above all, achieved greater centralization in both cases.
Communism concentrated economic power in the government, which led to corruption, cronyism and ultimately tyranny. Historians may discuss and disagree on exactly what went wrong, but it is certainly no accident that the term “central” occurs repeatedly in virtually every text on the subject.
Central Prisons, Central Criminal Police Department, Central Executive Committee, Central People’s Commissariat, Central Correction Department, Central Union of Consumer Cooperatives, Central Fingerprint Registration Office and listen to it – Central Dog Breeding and Tracking Service.
And our version of capitalism is no better in this regard. Okay, ok, it’s a little lengthy – it’s much better, but in many ways it’s a delusion. Today’s markets are free as long as they don’t fall off a cliff. However, as soon as they fall, we suddenly no longer need them and ask the central banks and central governments to intervene and save us from the confusion they created in the first place. God forbid that we are facing true price discovery – or the reality that we could never have had one.
By pretending to let nature take its course, we have come to companies and corporate cartels with godless amounts of political and financial power (assuming there is a difference). And this centralization of money and power in fewer and fewer hands is so common that it almost gives the impression of a natural law. At some point on our path to centralization, we came up with the idea that this is nature; That’s how things work.
But that’s not how things work, and strangely not in nature. There are hierarchies of power and competition, of course, but much of nature is decentralized. Animals striving for status form collusion-resistant consensus protocols / institutions or, like us, end up with unprecedented wealth and power differences. Centralization is primarily a human invention – an emerging trait of our insatiable thirst for control and power.
And it’s not really a surprise to anyone. Humans have been aware of the powerful attraction of power for thousands of years. Scientists have examined it in detail and found that it is present in almost all dimensions of human interaction.
In 1968, sociologist Robert K. Merton examined how the achievements of scientists were recognized and discovered that – almost as a rule – the highest and most important scientists did all the work (quotes, rewards, grants, etc.) through similar work. He called this the “Matthew Effect” according to the following Bible verse:
“For from the one who has, more will be given, and he will have abundance; but from the one who does not, what he has will also be taken away.”
For economists and mathematicians, these types of power law probability distributions are also known as Pareto distributions, named after the economist Vilfredo Pareto, who was the first to find that 80% of the country in Italy belonged to approximately 20% of the population (the 80/20 Principle).
The point is that whatever we call it, the underlying principle is the same. The rich get richer, the poor get poorer. The relationship between centralization and distribution of Pareto wealth and the Matthew effect is a causal loop: the former nourishes and breeds the other and vice versa.
We have to break this loop. The Matthew effect and the Pareto distribution are not immutable natural laws, but only observations. Very important observations – no doubt – but still just observations. Centralization therefore does not have to be our goal. Sure, we may not know from experience what a truly decentralized society looks like, but if we have learned something from history since 1917, we know how centralization is developing.
Lean against the tower of Babel
Blockchain technology may make decentralization seem innovative, but the concept is not new. Evidence of the problem of centralization can be found in works as old as the Bible. Indeed, it can be argued that the fascinating history of the Tower of Babel is a story of decentralization rather than a story about the origins of many languages.
After the great flood when Noah came down from the ark, God commanded him to be “fertile, to multiply and to fill the earth”. A few generations later, Noah’s family had settled in one place and started to make a name for himself by building all of the buildings: the Tower of Babel. God was of course not a fan of it; He had instructed humanity to decentralize and “fill the earth” while humanity disobeyed him and did the opposite. Determined to teach them a lesson, God scattered them around the world and confused their language so that they could not understand each other.
The Catholic politician and theologian Wilhelm Emmanuel von Ketteler postulated in the 19th century, inspired by biblical teachings, a very influential principle of social organization, the principle of subsidiarity. It is argued that all social and political issues must be dealt with at the most immediate or least centralized level that is compatible with their solution. This principle is the essence of decentralization, if not synonymous with it.
In Democracy in America, Alexis de Tocqueville wrote:
“Decentralization has not only an administrative value, but also a civic dimension, because it increases the likelihood that citizens will be interested in public affairs. They get used to using freedom.”
In practice, centralization tarnishes all instincts of responsibility and independence and pushes boredom and indolence to its limits. It robs the individual of the vital need to feel responsible for his actions. It turns the individual into commodities – the means to efficiency for technological and economic “progress” at the expense of civil liability.
On the other hand, decentralization is a deliberate social deconstruction of institutions in order to meet the needs of people and not the needs of institutional controllers. In a more decentralized environment, we control the basic products that improve our existence.
In the crypto universe, this is elegantly revealed by the principle “not your keys, not your coins”. Having the keys to your own cryptocurrency wallet is the bottom line of subsidiarity. Capture everything that represents decentralization in a pure act of defiance.
If we can learn from our underutilization of the two 20th century economic ideologies, we must learn to design more decentralized, collusion-resistant and fraud-resistant national and social institutions and do it peacefully. In order to fight the iron law of the oligarchy, we have to build institutions that are resistant to it. This is where cryptocurrencies come into play. From a design perspective, Bitcoin is everything we could want from a money-lending institution.
Bitcoin questions the iron law of the oligarchy because it has low entry barriers and requires a significant stake in its own flesh. If a single entity gained control of 51% of the network (majority dictatorship), existing incentive structures would encourage the entity to promote the institution’s real goals rather than sabotaging them (resistance to collusion).
As a democratic currency institution, Bitcoin values the same values that our society should now adopt more than anything else: security, stability, and predictability through rapid gains and “efficiency”; Transparency about confidentiality; personal responsibility over indolence and complacency; financial caution (stacking sats) towards financial irresponsibility; and finally subsidiarity and responsibility about trust in the central authority.
The Bitcoin Protocol is almost a project to build institutions that are against collusion and anti-fraud. It was not easy to do it with money and we still have a long way to go, but now is the time to apply the same principles to the rest of our national and social institutions.
What we are looking for is a focus
Decentralization is not a ready-made replacement and can only solve some of our problems. We must also be aware that decentralization creates pathologies in the same way as all other principles of social organization when they are pushed to the extreme. Therefore, it is no cure for our inherent tendency to do things to the extreme. It is simply a control of the attraction of energy and hopefully what is needed to block the causal loop it creates.
What we are looking for is a middle ground: the optimal size for hierarchy modules. If we go through the perestroika of capitalism, this will be our main point of discussion.
Postmodernists will organize this struggle as a struggle between the plebs and the elites – between the oppressors and the oppressed – but what we’re really going to see is a struggle between centrists and decentralized. Among people who, as Röpke noted, are attracted to ideas for dealing with people as a whole vs. those who deal with the fate of the individual, his needs and concerns.
Between freedom, autonomy and responsibility and against dependence on convenience; between solid economy and anti-fragility and against the senseless expansion fueled by debt.
Capitalism and communism have more in common than their -isms. Both brought us to a point at which centralized economic power, along with cronyism and corruption, rob most of their self-sovereignty.
In 1986 communism fell in Russia.
Capitalism fell in America in 2020.
This is a translation of an original article from Cointelegraph Magazine.