Crypto-Current (048)

§5.2 — To entertain money as an explicit object of philosophy is immediately to question the conceptual interconnections between its essential qualities. A threshold of controversy has already been crossed, therefore. From the perspective of a certain mode of empiricism, the neglect of this topic expresses a positive intellectual virtue (with the presupposition of systematic order as its corresponding vice). As a matter of objective irony, or something that effectively masks itself as such, those cultures most conducive to the reign of money have been those most instinctively dismissive of its transcendental dimension. Money does not seem to favor philosophical attention. In this, one might suspect the crypto-current at work. Empiricism casts subtle shadows, whose darkness is deepened by a secondary occultation.[1] Quite imaginably, philosophy enters this terrain as a disruptive intruder, whose gaze is damage. Yet, in the end, whatever is denied access will simply not pass the gates. The secret secures itself.

§5.21 — Any modern philosophy of money proceeds as a transcendental deduction, guided by the question: How is economic calculation possible?[2] The foundation for an answer is comparatively solid. Money is the condition of possibility for the existence of prices, and therefore for the commercial object (in general), by definition. Insofar as objects of economic intelligence exist, money is presupposed as a calculative principle, an ideal, or virtual machine-function, irrespective of its more-or-less adequate concrete incarnation. When talking of ‘ideal money’ in this context, reference is not being made to a superior – still less a perfected – type of money, yet to be actualized, but rather to the abstract money emulated to a greater or lesser degree by any actual currency system (in the way any actual computer emulates a Universal Turing Machine). Any concrete monetary system necessarily draws upon an abstract idea of money, which is operationalized in advance of its explicit theorization. This relation has effectively foreshadowed – and even predetermined – the fundamental problems of philosophy.

§5.22 — As Whitehead famously noted, philosophy subsides back into its characterization as “footnotes to Plato” as into a sucking equilibrium. However it advances, the primordial captivation is unbroken. The temptation, always, is to refer sensible actualities to their ideas. What is the truth of things? Such a problem exists, compellingly, from the moment there is an economy of prices, and perhaps not before. The priced – or commercial – object models the elementary provocation to philosophy, because any such entity has been converted into an accident of its own value. It thus, intrinsically, suggests an Idea, of which it is a mere instance. Concretely – and ‘sub-philosophically’ – every priced object implies a virtual relation to ideal money (which acquires definition to a greater or lesser extent in the unit of account). While ideal money is scarcely less elusive than the Platonic Forms, it is nevertheless able to support realistic teleological expectations. It exercises effective selective pressure upon any actual monetary system, under the guidance of inevitable, distributed preference for those that incarnate the tokenization of value at a superior level of ideality (as exhibited, prismatically shattered, in the six qualities). In comparison to money, the Platonic εἶδος is no less durable (eternal), scarce (singular), divisible (or, at least, distributable among particulars), communicable (teachable), fungible (self-same across all instantiations), and verifiable (or philosophically demonstrable). It is tempting, therefore – regardless of the irony involved[3] – to understand money as the model of idealization. By practically defining that which remains equivalent across a transaction, money cannot avoid making abstraction a cultural topic.

§5.23 — Money is the sign that names, or denominates, price. Unlike a signification, or designation, this semiotic function is allocative, which is to say that it is executed in the process of payment. Money ‘speaks’ in being spent. When saved, or reserved, its meaning is virtualized, and is even constituted in being virtualized. Abstraction – from the concrete item of expenditure – is expressed as a definite potentiality, or set of quantitatively-delimited economic options. Money’s spontaneous logical medium is modality. Within it, the potential conversion of property finds distinct expression (‘as such’). Whatever finds itself priced is marked by commercial contingency (or formal exchangeability). Extracted automatically from the dull domain of the merely given, any such priced-object now manifests an Idea, peculiarly, and precariously. Its concrete reality is now reduced to a mode. Thus, factuality is spontaneously subverted by commercialization, in becoming a more-or-less liquid instance of a general abstract substance. Being acquires its philosophical dimension.[4] At the extreme, therefore, an identity is ventured between the ‘invention’ of money and the origin of pure thought. The concept belongs to commercialism.

§5.24 — Broad consensus concerning the essential properties of any monetary medium has been consolidated over the course of millennia. The initial enumeration of these properties is best represented among the ancients by Aristotle, who recognized durability, divisibility, convenience, uniformity, and ‘intrinsic value’ as qualities of money. By the time Adam Smith wrote his The Wealth of Nations the distracting metaphysical error of intrinsic value had been discarded, while the essential properties of money were simultaneously abstracted (into ideal qualities) and concretized (through their exemplification in historical monetary media). He writes:

In all countries, however, men seem at last to have been determined by irresistible reasons to give the preference, for this employment, to metals above every other commodity. Metals can not only be kept with as little loss as any other commodity, scarce any thing being less perishable than they are, but they can likewise, without any loss, be divided into any number of parts, as by fusion those parts can easily be reunited again; a quality which no other equally durable commodities possess, and which more than any other quality renders them fit to be the instruments of commerce and circulation.[5]

§5.25 — For Smith, as for Aristotle – and indeed, later, for Marx as for the Austrians – the abstract conception of ideal money was scarcely to be distinguished from the concrete virtues of precious metals (and of gold and silver in particular). Money, insofar as history had certified it, was metallic coinage, only subsequently – and trivially – supplemented by its paper representations, or contractual appendages. Between the questions ‘what are the qualities needed by a monetary medium?’ and ‘why have precious metals been selected to serve as money?’ there was only the most insubstantial of differences. To understand why gold made good money was to understand what good money is.[6]

§5.251 — Why, then, do precious metals make good money? The entire list of qualitative monetary virtues can be mined from this question. Due to their chemical characteristics as pure metallic elements, they are durable, divisible, and fungible, since they are stable across time, and homogeneous in space (down to the atomic scale). This substantial consistency also makes them conveniently verifiable, as simple, measurable objects of chemical science, and of practical metallurgical assaying. Finally, but no less importantly, their comparative rarity makes them economically scarce, hence potentially valuable, and – in close proportion to their ratio of value-to-mass – also portable.

§5.252 — Yet, despite its close approximation to the ideal type of a monetary medium, precious metal is not – in itself – money.[7] To become money it has to be minted, or converted into a sign. A concrete example is provided by the silver penny, the most widely-accepted monetary unit of the European pre-modern period.[8] The direct descendant of the Roman denarius, dating from 211 BC, the English penny (containing 1.3-1.5 grams of silver) was introduced in AD 785, during the reign of the Mercian King Offa, and persisted with only superficial changes for over nine centuries. It is of particular importance to note that the penny was – to modern eyes – an extraordinarily self-referential sign. What it signified was at the same time what it incarnated. This was captured in the perfect – and to pre-moderns simply tautological – equivalence between the expressions ‘one pound is worth 240 silver pennies’ and ‘240 silver pennies weigh one pound’. Silver did not back money, but was rather directly minted into money. The subsequent dissociation of monetary value and precious substance was essentially alien to the pre-modern world. It was only through the debasement of the currency – the archaic monetary manifestation of the DSP – that the difference gained episodic purchase, and then only as a blatant corruption of the currency in question. Coinage is primordially a medium for conveying precious metals into commercial circulation. It shares the economic principle of packaging. In both cases value creation is non-negligible, but also incidental. To see in coining an anticipation of money production of a modern type and scale is thus to entirely misconstrue it. Despite its extreme abstraction, the return of coinage in the mode of crypto-currency is the carrier of a deep conceptual revision, and even a reversion. In its new sense, no less than its old one, a coin is a regular sub-section of an asset-reservoir, sized for commercial convenience, which is to say that it is an actual part of a qualitatively-consistent resource. In neither case does the coin acquire this character simply by saying what it is. Allocation is its irreducible, and non-derivative, semiotic function.

§5.253 — Questions concerning the essential nature of money find themselves slipping backwards, unconsciously and automatically, into a description of the historical instantiation of money, which is a topic dominated – massively – by the function of precious metals within complex societies. It is only through appeal to paleo-anthropology, exotic ethnography, or the history of established modernity, that such questions can refer themselves concretely to anything else. Money has been gold, silver, and copper coinage,[9] with only primitive, anomalous, and sophisticated exceptions. 


[1] This is the sphere of the unseen unseen, or Donald Rumsfeld’s “unknown unknowns”. It consists of shadows which themselves escape observation, even as zones of obscurity. The topic of things that elude objectivity essentially impels extreme abstraction, since it determines concrete instantiations as inadequate in principle. Whatever you can see isn’t it. ‘Clearly’ the discovery of things-in-themselves within transcendental philosophy is inextricable from a problematic of this kind. We can only suspect that money-in-itself is our topic, pursued on an undercurrent.

[2] A transcendental deduction of money is nothing but a modern philosophy of money pursued with systematic method. It is not the object of possible experience that primarily concerns such a theoretical exercise, but rather the object of potential exchange, i.e. the commercial entity, or – in its most general sense – the economic commodity. If a formula is required to support this philosophical displacement, or analogy, it is that commerce counts as experience for the market. This is not to propose strong priority for the phenomenological register, as a basic or final reference, but only actual precedence within philosophical history. An alternative order of priorities is in fact more compelling. Money makes minds. It does so, already, with nothing beyond an abacus, and far more so in the epoch of industrializing artificial intelligence. Money is the ontological correlate of commercial calculation. Without it, there could not be pricing. It is a thing that supports or even actually induces thought, within a domain whose limits are not readily fixed. The edge of commercialism is less a boundary than a frontier. It is the primary practical task of enterprise to push it ever further outwards. It betrays imperfection in a money system when it intrudes upon the calculation of whatever it prices. Hence there is an intrinsic tendency to the transcendental, i.e. to the frame of objectification which is itself withdrawn from objectivity. Money, like a shop window or commercial display case, is not meant to get in the way. It is hidden in the way of the open secret. The cryptographic affinity is intrinsic. The homogeneity or pure quantity of the commodity as it approaches the commercial ideal is thus concretized as a type of transparency. The perceptual hooks of friction are eliminated. Empirical stimulation is minimized. It is essential to the neutral medium that it flees sensibility. The monetary analog of an aesthetic establishes commercial continuity in space and time. Durability and communicability translate into an indifference to locality (in time and space). Perishable money could be ‘good’ only now, or for a while, just as immobile money could only be usable here. The radical imperfection of either characteristic is self-evident. The monetary ideal conforms rather to the aesthetic frame as such. It is no less available now as time itself, and it is no less available here than space. Only thus does it ubiquitously frame commercial calculation. (“Your money is no good here” or “any longer” is its negative.) Within its own dimension, this consistency has another aspect. As a fungible and divisible abstract substance, it is characterized by qualitative continuity. Money is everywhere, and always, realized as a finite quantity (an amount). By convention, and for general convenience, monetary value is therefore represented as a (one-dimensional) extensive quantity.

Critical subjectivism requires the identification of definite objectification procedures. Objects are not given, but have to be made. When Marx explores this topic, it is from the side of industrial production, with labor-power as the explanatory term, and money as a dependent fetish. The work immanent to money that is formalized by cryptographic hashing still lay beyond the conceptual horizon. In Deleuze & Guattari’s Capitalism and Schizophrenia we see the subsumption of the Marxian theoretical apparatus into a transcendental industrialism, through an experimental commitment to the integrity of physical and social constitution in the multi-level action of machines. The procedure is near-frictionless. To retreat from the question of production is to withdraw from the process of transcendental inquiry.

For an explanation of the market process as the indispensable locus of price discovery, the predictable reference is Mises’ classic discussion of ‘Economic Calculation in the Socialist Commonwealth’, see: https://mises.org/library/economic-calculation-socialist-commonwealth/html

[3] The irony, of course, being that money is traditionally – at first aristocratically, and subsequently socialistically – despised as the epitome of base value, morally positioned at the antipodes of all idealistic conceptions.  

[4] Standard narrativizations of western philosophy propose an archaic – perhaps primordial – metaphysical option between being and becoming, beneath the theoretical banners of Parmenides or Heraclitus. The dilemma can be formulated in various ways, but its stubborn persistence is an indication of transcendental dialectic (that is, of metaphysical confusion). Heidegger’s formulation of critique has direct pertinence here. Attribution of time-characteristics to being is essentially metaphysical. Neither permanence nor impermanence can have application to the transcendental. The reciprocal critical-skeptical question runs: Is time to be found among things? To answer in the affirmative is to sponsor an ontological reduction of time, identified, and taxonomically comprehended, as something that is. (Max Tegmark is among the most important recent thinkers to articulate and defend such a position explicitly.) When cast in the language of commercial practicality, the fissure splits stocks from flows. A decisive option between the two seems in this case unlikely. Complementary duality (of the Chinese philosophical type) is instead suggested.

[5] See The Wealth of Nations, Chapter IV: Of the Origin and Use of Money.

[6] As Edwin Cannan remarks in his introduction to the 1904 edition of The Wealth of Nations, “Values must be measured by some common standard, and this standard must be something generally desired, so that men may be generally willing to take it in exchange. To secure this it should be something portable, divisible without loss, and durable. Gold and silver best fulfill these requirements.”

[7] While in particular circumstances, exemplified historically by pioneer societies in frontier gold fields, unminted precious metal can be substituted for money, such employment is most convincingly understood as an atavism. Functionally, it is indistinguishable from the usage of such quasi-monetary ‘special commodities’ as cigarettes in prisons. As Carl Menger notes in his essay ‘On the Origin of Money’ (1892), “The peculiar adaptability of the precious metals for purposes of currency and coining was noticed by Aristotle, Xenophon, and Pliny, and to a far greater extent by John Law, Adam Smith and his disciples, who all seek a further explanation of the choice made of them as media of exchange, in their special qualifications. Nevertheless it is clear that the choice of the precious metals by law and convention, even if made in consequence of their peculiar adaptability for monetary purposes, presupposes the pragmatic origin of money, and selection of those metals, and that presupposition is unhistorical. Nor do even the theorists above mentioned honestly face the problem that is to be solved, to wit, the explaining how it has come to pass that certain commodities (the precious metals at certain stages of culture) should be promoted amongst the mass of all other commodities, and accepted as the generally acknowledged media of exchange. It is a question concerning not only the origin but also the nature of money and its position in relation to all other commodities.”

http://www.monadnock.net/menger/money.html

[8] “By far the most common coin throughout the Middle Ages was the silver penny, known in Latin as the denarius. The word was preserved in the Romance languages as the denier in French, the dinero in Spanish, denari in Italian, and denar in Hungarian. The Germanic languages had their own term: pfennige in German, penningen in Dutch, and pence or penny in English. The coin was typically quite small. Now that you know the term and the coin, you understand why pence in English is abbreviated with a lower-case d, as in: £5 3s 5d.” See: http://europeanhistory.boisestate.edu/latemiddleages/econ/banking.shtml

[9] The hierarchical triad of gold, silver, and copper coinage, while comparatively stable in Europe, has not exhibited a wider consistency across time and space. In China, for instance, gold was not monetized until modern times. Nevertheless, geochemical factors – determining the relative abundance of these metals, among other neatly ordered relevant properties – accounts for its attractiveness as an ideal type (based primarily upon European economic experience). It is conceptually convenient insofar as it places the functions of money as a store of value and a medium of exchange upon a spectrum, corresponding to the metallic order, or scale of value density. Braudel’s empirical description elucidates this clearly: “A metal currency consists of a set of related coins: one is worth a tenth, a sixteenth, a twentieth of another, and so on. Usually several metals, precious or otherwise, are employed simultaneously. The West retained three metals: gold, silver and copper, with the inconveniences and advantages of such a mixture. The advantages were that it answered the varied requirements of exchange. Each metal with its coins dealt with a series of transactions. In a system exclusively of gold coins it would be difficult to settle small-scale everyday purchases. On the other hand large-scale payments would present difficulties in a system confined to copper. In fact every metal played its part: gold, reserved for princes, large merchants (even the Church); silver for ordinary transactions; copper naturally for the smallest. Copper was the ‘black’ money of people of small means and the poor. Mixed with a little silver it blackened quickly and deserved its name.” (Vol. I, 458)

1 thought on “Crypto-Current (048)

Leave a Reply