Wednesday, November 11, 2009

In Search of a Metaphor for Money



At BunkerSofa, we believe in the following.
When you are not able to find a satisfying Metaphor to describe and encompass a phenomenon, then you haven't understood it yet.
For example, electric current is often seen through the metaphor of the flow of a river.
This metaphor is indeed correct because this is exactly what happens with it: instead of having a flow of molecules of water, you have a flow of moving electrons; but this is fundamentally identical.

Now, do you know an exact metaphor to describe "Money"?
I searched the web, I googled "metaphor money", I read papers and blog posts but literally, no metaphor was enough encompassing and at the same time simple enough in describing the nature of Money.
Between others, I encountered the following: Money as a
Growing Tree, Money as a Commodity, Money as a Renewable Energy, Money as a Growing Material etc...
The least wrong and the most comprehensive one was for me Money as a
time-to-deadline, that I discovered in ribbonfarm.com, the blog of Venkatesh Rao a researcher in Decisions Science at Xerox. But this is still not satisfying enough.

It's obviously crucial to possess a correct metaphor of Money, given its ubiquity, role, and preponderance in Society.
And it's amazing how many metaphors of Money there can be out there;
So I wonder: if Money has not got a single correct metaphor, maybe it's because "Money" is a given (i.e. a foundation, a pillar) of our developed societies and you cannot express Money by something more fundamental than Money.
Or Maybe it's because, as Robert Kiyosaki underlined, we are trained in our educational system not to think about what Money is, hence our pain and struggle to think about it correctly.
Or Maybe it's because there is nothing in our daily layman life that behaves exactly or very much like Money ; and I think this is the case.

Indeed, I believe the correct metaphor can be extracted from Computer Science and I think I've found it.
Economists like to say that Money allocates Resources. True, but that does not constitute a metaphor.

So, for the lucky ones that read this article, I expose it here for you a little bit. But hush... Keep it for you for now. Otherwise Ben Bernanke will bust you^^.

The metaphor I found is as follows. 
Our Society can be viewed as a big Computer; we live in a Computational World that has its Master and Slave Devices, Peripheral Devices, a Motherboard, a CPU etc... and an Operating System on it ... and Money must be Instruction; Money quantifies Computation.

Got it?:) Much more detailed to come in the next Post soon!

11 comments:

  1. Nice one, Julian.
    I think that post enables us (bunkersofa and the world) to start writing a comprehensive theory of money as a quantization of computation (especially the computation of an electrochemical computer, such as human brains).
    The more money you have, the more computation you will be able to get from other brains or people.
    But I think in money, there is a kind of sort of psychological aspect: there is still an aspect related to incentive. Money is also a kind of reinforcement a la Skinner. (for more information on reinforcement, you can have a look at that video:http://www.youtube.com/watch?v=AepqpTtKbwo)

    When you write "money must be instruction", you wanted to mean something like "money must be an incentive for instruction" or for you it s really that way?

    By the way, in the bunkersofigram (the pic you used), the processor is "Governum" which is owned by the Society.
    That's similar to what we can find in "Matrix"...:)

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  2. When I write "money must be Instruction", I mean the following;
    If you give $1M to someone for shining your shoes, he most probably do it, right?
    Isn't that funny that he did what you asked him to do just by exchanging bucks...
    Well, from a computational standpoint, you got 2 agents: you the master and him the slave and it is as if you ordered him to do the action (i.e. to shine your shoes) by sending him an instruction quantified in $.
    So I suspect the Buck is an approximation found by human civilization to approximate the Bit or the 1IPS (Instruction Per Second)

    That is what I intend to clarify in the next post;
    The present post was to intuit what's going on, to express my intuition.

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  3. Yes sure.

    Especially, there is no objectivity regarding the exact quantity of computation for a given object (and regarding the quantity of money either).

    As a matter of fact, as you said, I would not accept 10 bucks for cleaning the shoes of someone, but for 10,000 bucks I would do it.

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  4. I think most people have a pretty good understanding of what money is, that being a sort of points-like value system that society uses to ease the transfer of goods and services.

    I don't think that this definition is lacking in any way because we don't have a convenient metaphor for it. If anything, I think your original statement at the beginning should be called into question. Is that statement self-evident? Is there some reason why you believe it so strongly?

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  5. 1)Thanks Rick for your comment. I appreciate it;

    2)You mean this statement ?-> "When you are not able to find a satisfying Metaphor to describe and encompass a phenomenon, then you haven't understood it yet".
    Absolutely. It's just a strong belief. I did not prove it; maybe it is not provable (Godel's Theorem).
    But to give you an idea, when Einstein introduced his theory of gravitational fields, he could explain it completely without using Ricci tensors (mathematical objects) by using the following metaphor: " the universe is like a fabric and on it there are heavy objets that deform it. They can even tear it etc..." This metaphor is absolute and is still being used nowadays.
    Also, I remind you of Einstein's quote "You do not really understand something unless you can explain it to your grandmother."... think about it.


    3) For my new metaphor of Money. I did not intend here to give an exact definition. It is just an intuition. I am working on an exact modeling and definition right now. But I am pretty convinced that it's the right track.

    4) The very fact that there are many metaphors of Money used by People is an immediate contradiction to your statement, namely "most people have a pretty good understanding " for it it were the case, how come people have so many views on Money and way to deal with it? which btw determine their income, social rank and future financial situation .

    5)Also, if it were like you say " a sort of points-like value system", why on Earth would you be able to produce them by printing it? A teacher does not produce points for his class when he wants to evaluate his pupils, does he? He neither lends points with interest right^^.
    So "points" is not the right metaphor, I believe.

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  6. I agree with Rick on the fact that money is a system to ease the transfer of value within the society.
    But the fact of the matter is that there is an institution that prints the money, in other words, that produces it whenever it wants, the FED.
    And the problem is that the FED has control over it and controls its scarcity.
    That means that it s fine for the master but not for the slaves, in the sense that the FED compels people to use money, that unit of computation or value.

    But, money does not reflect totally the value or the computation associated with an action or a product or a service.

    Money and value are not equivalent. That's why there is a bunch of people that make a lot of money without being necessarily able to produce a lot of value or computation...

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  7. But you can't produce a Unit; I does not make sense.
    Do you produce "Kelvins" to measure temperature?

    It is certainly not a Unit, strictly speaking; t

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  8. usd is not a unit. well ok. so what do you propose to measure objectively the amount of computation? cps? calculations per second.

    That s actually a good remark. I think that usd is a kind of sort of a unit, but not an objective one, since you can put any price to something.

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  9. This has to be continued and I am working on that;

    FYI,

    Moreover, there have been attempts to use the mathematical theory of complexity and information theory, as developed by many scientists among whom are Murray Gell-Mann and Claude E. Shannon, respectively.

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  10. Interesting indeed.

    When I was reading the first part and was asking myself the question: "What could be a metaphor for Money" I also arrived at the 'computation' conclusion (but maybe I'm biased because of all the singularity literature ;p).

    I think it's important to realize that money is not a 'physical' phenomenon, like electric current. In a way, money is a metaphor itself, a metaphor for whatever is 'tradeable' from human to human.

    Also, money is very bound to human interpretation of what's valueable. A lot of today's value that's created (for example wikipedia) is not measured in monetary terms. (Alvin Toffler writes about this in his 'Revolutionary Wealth' book).

    So if money is a metaphor for human interpretated value, what is the essence of this 'value'? Computation/intelligence is definitely a candidate, but perhaps we can boil it down even further and call it 'movement'. Computation is in a way the movement of bits (the one atom transistor was born this week). And movement also describes simple monetary transactions like trade.

    (btw, there is something strange going on with this form on Firefox, I cannot seem to comment or copy/paste any text, Safari works)

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  11. Thanks for the substantial comment;
    We need guys like you to spread the idea of singularity and make information technology a sexier field:)
    Alvin Toffler, indeed an interesting futurologist that I didn't know: "Cognitarian"->nice one.

    Below my comments inline:

    "In a way, money is a metaphor itself, a metaphor for whatever is 'tradeable' from human to human."

    >> I agree. I suspect that too.

    "Also, money is very bound to human interpretation of what's valueable. A lot of today's value that's created (for example wikipedia) is not measured in monetary terms."

    >> Sure. That's because Money is not comprehensive. It's only a clumsy attempt to approximate Computation.
    Also, Money can reflect True Computation (TR) and Perceived Computation (PC); that's how I think businesses are able to make money; Profit=sales-cost= PC - TR

    "but perhaps we can boil it down even further and call it 'movement'. Computation is in a way the movement of bits (the one atom transistor was born this week). And movement also describes simple monetary transactions like trade."

    >>Correct;
    and it comes down to how Kurzweil sees Computation: "There is Computation whenever there is a transfer of 1 bit from one register to another one."
    I also think we can see Money as an approximating attempt of Society to record its State at each incrementation of the Computational Universe;
    But that's precisely what Computation is about: To Record the transfers of information


    (btw, there is something strange going on with this form on Firefox, I cannot seem to comment or copy/paste any text, Safari works)

    >> yes, correct;
    You have to click "Post Comment" first and then it gets normal...

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