In your brain, neurotransmitters are constantly being exchanged by individual neurons in order to produce your overall experience and behavior. Dopamine in particular is involved with pleasure/reward functions, but it has many important roles in cognition, movement, attention, motivation and learning. Between the 100 billion neurons you emerge from flows this medium of exchange, a microscopic currency for nerve cells. They trade with each other thereby exchanging information, and through this economic system produce all of your thoughts and behavior.
The connectome (graph of neural connections) of C. elegans, a microscopic worm with 302 neurons and a little over 7000 connections
Our human economy is remarkably similar to the networks of our brains. We could even call them ‘isomorphic‘. Like the billions of neural exchanges it takes to do something as simple as typing a word, any product of human economic activity can trace its roots through a vast network of individuals exchanging currency. Just as a single neuron couldn’t form a word by itself, no single human could make even a humble pencil on their own. We are nodes in a worldwide network. We use a variety of mediums to transfer information between individuals, and through this communication network arises the knowledge, technology, and prosperity of our modern society.
A small sub-network of our social connectome.
Just as many different neurotransmitters are used to transfer information between brain cells, we humans use a variety of mediums to exchange information. Our earliest forms of communication were symbolic gestures and sounds. While imprecise and temporary, these mediums gave rise to an immense increase in human productivity. We were able to coordinate hunts and harvests, and specialization lead to an overall increase in efficiency. More communication between nodes improved the system as a whole by allowing sub-networks to focus on certain tasks.
Our next communication medium paved the way for the technological advances that grant us the unbelievable living standards we enjoy today: money. It was as if a brain evolved a new neurotransmitter that allowed the system to self-optimize. Where before information was fragile and only lasted a few hops between nodes, money was durable and capable of traveling the world unchanged. Humans recognized certain metals as functional mediums for trade very long ago, and for most of human history gold and silver were the dopamine of the masses. These metals have many qualities that are useful for a medium of exchange: they don’t corrode, they’re easy to shape, and there’s a finite supply in the Earth’s crust. The limited deposits create a natural restraint on the growth of the money supply. To increase the number of gold or silver coins in circulation requires substantial energy and effort, so the amount available in an economy reflects the productive capacity of the society that uses it.
The flow of currency enabled our network to specialize to an immense degree, since the communication of desires was now possible between far more nodes in the network. Like a brain evolving into functional regions each responsible for a certain task, humans learned to take on a single trade and become experts in their field. Suddenly the entire system was better off. Humanity was smarter, more productive and more resilient than ever. The currency we exchange transfers information at the system-level that allows our societies to fulfill desires, move, learn, plan, focus attention and make decisions. Money fulfills almost the exact same role in an economy as dopamine in the brain; these systems are so analogous they even share common diseases.
Our modern economy is a brain that figured out how to manipulate its own dopamine levels. It discovered how to shoot heroin. Where physical metals like gold have previously limited currency levels in a distributed manner, paper money, debt and fractional reserve lending allow certain sub-networks to manipulate our collective money supply. The semi-conscious networks (governments and central banks) of our collective brain are injecting drugs into our system. Like the conscious networks of our brains, governments and banks try to model their system within the environment and coordinate overall behavior. Unfortunately our government and banks are working from a flawed model of reality. Even worse, they’ve become such fervent believers of their own lies that they can’t tell their actions are unsustainable. We’re neurons in the brain of a heroin addict who’s convinced shooting up will cure him.
When the money supply increases, we all feel happier for a while and the economy as a whole looks better. But then it begins to wear off, the money doesn’t feel as valuable and trade slows down. Less communication between nodes makes the system as a whole worse. Like neurons becoming more resistant to dopamine, after each hit it takes a bigger injection for the economy to feel as good. We’re printing more and more money, taking on more and more debt, leveraging further and further and we’re barely able to increase our gross production. This path is unsustainable. You cannot inject heroin to overcome your heroin addiction. You cannot take on more debt and print more money to overcome systemic imbalances due to debt and inflation.
The future is bleak. We have the same two choices a heroin addict faces: more drugs or withdrawal. While more painful in the short term, stopping drug use is obviously the only sustainable choice. Withdrawal isn’t fun, but an economy that deleverages and stops printing money has the potential to recover. No doubt things will look bad if the government was to stop “stimulating” the economy, but that’s the only way we’ll ever find and correct imbalances in the system. So far the powers that be have decided to inject more drugs (Quantitative Easing), and it’s unlikely they’ll stop now. That means we get to look forward to the crash of overdose: hyperinflation.
Like a brain with problems due to drug use, an economy that artificially increases its money supply creates disruptions in sustainable patterns of specialization and trade. Wherever the cheap new money flows a tumor emerges, sucking the life out of the system. Governments and banks get a straight shot of dopamine whenever they fire up the printing presses or take on debt, so these sub-networks have grown far beyond their natural limits. The unproductive nodes in these networks drain resources from the host just like cancer in the brain. As these entities inject more and more money into the system, the imbalances stretch the network to its breaking point. More people take jobs in government, finance, law or their derivatives, which don’t add any value to the economy. Fewer people make economic contributions and more make withdrawals. Silly things like paying people to destroy working cars (cash for clunkers) and wasting energy turning corn into ethanol (corn subsidies/ethanol requirements) take place. The system locks productive people into cages where they turn into parasites, for transgressions as inane as possessing the wrong kind of plant material. Where the free market would instantly feel these economic losses, a government doped up with cheap money can’t feel the pain. Soon the system goes into debt and starts making risky bets just to afford the next injection.
As the economy is flooded with more and more money, the medium begins to lose its value. Prices rise as it takes more units to fulfill an equal amount of desire, and people begin to lose faith in the currency. It’s like neurons becoming unresponsive to dopamine, and now the flow of information that keeps the system alive is failing. The brain cells that control the lungs and heart don’t trust dopamine anymore, so they stop forwarding signals when they receive the neurotransmitter. It only takes one small network to fail, like the nerve cells that control the diaphragm, for the entire system to collapse. The oxygenated bloods stops flowing and the brain cells die.
Fortunately for us, economic collapse doesn’t necessarily mean our deaths. Unlike neurons, humans can survive on their own or in small groups. We can quickly reconnect broken networks into more sustainable patterns and become stronger than ever. But the transition will be rough. If our rulers continue down this path, we face rising prices and falling real incomes. As people lose faith in the dollar life savings could be lost. Trade disruptions could cause massive shortages and rolling blackouts. Most of what we take for granted is in jeopardy.
But it’s also an opportunity to start over. Hyperinflation would make former debts meaningless and force a lot of people to question their relationship to authority. As we rebuild from the bottom-up, we can influence the values of future societies. We can decide whether we will indirectly threaten each other through government in order to get our way, or whether we’ll resolve disputes like adults. We can choose whether we’ll force a one-size-fits-all teaching solution on our kids, or whether we will help guide them on their personal learning voyage. We can decide how energy is produced and what we’re willing to work for. We can start believing in our communities instead of our countries and stop submitting to threats from aggressors. As the system falls apart we can build a new one: a free, distributed network of human beings.