Wired Magazine has a great article on the future of money. Its basic premise is that, like with the media industries, the internet and the global communication infrastructure will allow the market to cut out the middlemen that lubricated the market in its absence. In the media industries these were the record labels, the movie studios, and the book publishers. In the financial world, they are the banks and the credit card companies.

A far more fascinating implication that Wired failed to mention, however, is the fact that the banks and credit card companies aren’t the only ones made irrelevant by the lubrication of the financial market: The very idea of a central bank could become obsolete.

Wired celebrates the Paypals and the virtual worlds of social networks. Paypal deals in transferring existing currencies. At the bottom of the first page, there is a graphic listing the exchange rate between a series of virtual currencies (such as Facebook credits or WOW gold). Some, such as the Facebook credits, are one-way convertible, and are trifling enough to be pegged to a dollar amount. Others, such as WOW gold, are big enough to have spawned an exchange market of its own, much to the ire of Blizzard, which wants to keep Soviet-style commands on their currency (and like the Soviet attempts, they’ve simply created a black market). Hub Culture’s Ven (pegged at 10 to the dollar) in 2008 even became “the first global digital currency to move from an online social network into the real world“.

The capability is here. Companies create virtual currencies in the first place in order to avoid credit card and bank fees. Paypal already has the stateless transnational internet-based currency infrastructure. Hub Culture already has its own international dollar-backed currency. The next logical step is for a company with a large monetary reserve to completely declare independence from the Dollar – to create its own independent commodity-pegged currency.

Once several companies or banks start to enter the market of supernational currencies, and as the volume of trade becomes more significant, the benefits of commodity backings will become obvious: a safe haven from the capricious monetary policies of central banks. One company will exchange its dollars for gold reserves at a dip in the price of gold. Another company will choose silver to compete without buying gold at the higher price. Without the benefit of being able to coercively tax, commodity backing is the only option independent of a government fiat currency.

And so we get a variety of commodity currency options, all automatically compatible with the instantaneous modern-era benefits of the credit card swipe, because it will be built on that system – or built to supplant that system with something better. In the absence of active government intervention to prevent it, technology could make freebanking inevitable.

From the sound of the article, the future of the international monetary system looks extremely bright. But then again, governments have expressed their wild distaste for private commodity reserves in the past, and the current wave of regulatory sentiment might be just the wrong time for this market to mature.

In the late 1780s, a debate raged between the Federalists and the Antifederalists on whether a bill of rights in a constitution would be sufficient, or even harmful, to individual rights. Ultimately the Federalists won and we got a bill of rights, on the condition that there be a general liberty amendment:

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
-The Ninth Amendment to the United States Constitution

Fast forward to today, and the most prevalent debate among Constitutional scholarship is between Originalism and “Living Constitution” – whether we are to look at the intent of the framers in deciding policy, or to extrapolate to modern society. But these, like meta-ideologies of “conservative” or “liberal”, do not say anything in themselves: they require an anchor. Where the latter set derives its meaning by looking at where we are and saying either “Stay here” or “Go forward”, respectively, the particular prescriptions of Originalism or Living Constitution approaches depend on the particular constitutions they are looking at. Originalism is not obviously preferable to Living Constitution when interpreting a Communist constitution, for example.

Accordingly, just as actual anchored policy beliefs (i.e., Capitalism vs. Socialism, gay marriage policy, etc.) are orthogonal to meta-policy approaches (“Do it now” vs. “Ease into it” – Conservatism and Liberalism as such are usually better described as Gradualism versus Shock Therapy, a terminology which has been unfortunately limited to post-Soviet reconstruction so far), the ideas of the relation of the constitution to modern society are less relevant than the question: what does the constitution allow? Instead of asking “what policy do we pursue” along with so many overbloated governments, a better question is “what kinds of policies are we allowed to pursue?”.

Approach 1: A Negative Meta-Policy. This is the dominant approach in almost all Western states. It says to a legislature, “if the constitution doesn’t say you can’t do it, you can”. The ninth amendment is more or less meaningless in this interpretive context: the space of action which the legislature can restrict is constrained only by the specific amendments: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…, and the rest of the bill of rights. Though there are fuzzy areas of interpretation (for example the campaign laws that Citizens United v. Federal Election Commission recently overturned), the legislature has more or less stayed clear of egregious Bill of Rights violations.

However, this has not stopped them from expanding into a whole host of regulatory and redistributionary activity since the New Deal era. There is no general presumption of individual liberty except so far as explicitly protected by the Bill of Rights. Independent regulatory agencies have proliferated, each infringing upon the liberty of some and the welfare of all. In this way, the Living Constitution approach can be roughly translated into a negative meta-policy interpretive approach: because the founders could not predict the necessity of the FCC or FAA, the argument goes, Congress may by default assume authority to regulate it.

Approach 2: A Positive Meta-Policy, by contrast, says “unless the constitution says you can do it, you can’t”. The strongest positive meta-policy is, of course, the total abolition of the legislature. By actively preventing the encroachment of legislatures on the individual, positive meta-policy would be associated with far stronger individual liberties.

There is a strong case to be made that the United States Constitution was written as a document of positive meta-policy. A number of sufficient powers are enumerated to Congress, the Presidency, and the Courts. And as if the inference were not enough, the tenth amendment even makes explicit the constitution of the Constitution:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
-The Tenth Amendment to the United States Constitution

Though the wording allows the individual states to set up regulatory and redistributionary apparatuses themselves, even this would be preferable to the nationalized system that has been accruing authority to itself by the ostensible authority of the Supremacy Clause, for the pressures of interstate competition would restrain the whimsy of the state governments in a way that the federal government is not restrained.

The failure of the United States Constitution to secure for the citizens of the United States unforeseen encroachments by its legislature should serve as an example to constitution writers: even if a document of positive meta-policy, with a severely restrained legislature, would be preferable to no legislature at all, there is the ever-present danger that the blanket restrictions will be simply ignored.

Socialists, Syndicalists, and other collectivist groups will often posture their system as one of worker supremacy. They will also characterize Capitalism as a system of employer supremacy. This is not the truth, as if a system had to favor either employers or employees. Capitalism is rather a system of consumer supremacy – for both employee and employer are alike in their office as consumers. Both employer and employee are ultimately subject to the demands of the consumer.

Democracy, on the other hand, is thought of as a system of voter supremacy. Yet it is not the supremacy of the individual voter, but the supremacy of a collective of voters: the tyranny of the majority. The voters are homogenized, and the preferences of the collective are forced upon the individuals of the group with all manner of regulations and prohibitions, restrained (usually) only by provisions of particular sacred rights. It is not only a static system but a coercive one, forcing that stasis upon the electorate through myriad public programs.

And as if this were insufficiently worrying, the reins of the collective are even indirect: though they may vote for or against representatives, once a representative is in, he has more or less free reign until the next election. And given that representatives are a package deal of issues, they may not even sufficiently represent the majority in all their decisions (for example, a politician elected on the basis of one issue who then thwarts the electorate on other issues). The incumbent representative has much leeway for caprice on all but the most inflammatory issues.

Democracy is often characterized as being compatible with (and sometimes even necessary for) Capitalism: one a political system and the other an economic system. This is, however, a false dichotomy – for what is politics now but economics? Both now act as systems of distribution; the difference is that one is also a system of production. Democracy is not necessary for Capitalism; Capitalism is necessary for Democracy.

The history of the past 80 years has been the Democratic system of distribution and redistribution gradually encroaching upon and displacing the Capitalist system of distribution. People are ceding their individual supremacy as consumers to the collective as voters. No longer is mutual agreement sufficient justification for an exchange; now mob rule has crystallized into a monstrous and ever-expanding regulatory and welfare state. The default of freedom has been replaced with obsequiousness to the collective – or at least those institutions which claim to represent it.

I believe in the supremacy of the individual realized through his office as a consumer. This is incompatible with any form of collective supremacy, including Democracy. It is for this reason that we are better off without a legislature – without an avenue for mob rule to encroach directly or indirectly upon the agency of the individual.

Somewhere along the way, American Christianity became affected of the idea of family friendliness. Perhaps the rise of the Family Research Council in the 1980s and James Dobson’s Focus on the Family radio programs were influential in this regard; perhaps they were merely symptomatic. Perhaps Christians were en masse enchanted by the idea; perhaps there was a flood of people brought up in or converted under these pretenses. Either way, as far as consumer culture goes, “Christian” is now a practical synonym for “family friendly”.

But this does not necessarily follow. In fact, it makes almost no sense at all. The Bible, for example, does not at all conform to Christian standards of “family friendly”. Judges is awfully gory. Psalms is full of laments about people who don’t get what’s coming to them in life. Genesis has more than a few accounts of incest, even after Adam & Eve’s kids. A conception of Christianity molded into a family friendly model leaves the individual unprepared not only to deal with the realities of God as revealed in the scriptures, but unprepared to deal with life in general as an ambassador of Christ.

Family Friendly Culture

The ideas represented by Dr. Dobson and his organization represent an astoundingly faithless view of Christianity. Rather than being taught of bad influences, how to deal with them, and why they are bad, children are sheltered from all possible exposure these influences. This sort of attitude presents a dilemma to parents. One the one hand, kids will be kids, and the parent either does not want to or is not able to totally shelter the child. On the other hand, they don’t believe kids can handle the ideas out there. Rock music isn’t itself objectionable; it’s just the lyrics and themes. Reading is good; the kid just doesn’t need to be exposed to opposing worldviews.

And so a market niche is created to solve this problem: duplicate and sanitize. The people who fill this demand in any medium don’t need much wiggle room: the product needs to seem similar enough to mainstream fads to be cool – just with a “positive message”.

Incidentally, this is one of the reasons why The Passion of the Christ was so controversial in Christian circles: it shined a violent and bloody yet sadly brief spotlight on the fact that Christianity is not necessarily synonymous with family friendly.

It’s easy to see then how the Dobson mentality has stilted Christian creativity. This is why we have Christian pop and rock which most often comes off as mediocre clones of mainstream bands. This is why Christian fiction never breaks out of its niche market. This is why Christian film is seen from the outside as laughable. This is why Christian fashion (especially t-shirts) is more often than not painfully kitschy. Mainstream “family friendly” Christian culture offers nothing new, because its niche is “sanitize”, not “innovate”. The former imperative has totally superseded the latter.

Family Friendly Politics

The rise of the Christian Right as a political force can also be directly attributed to this mindset. In fact, this is more likely the direct result of the Dobson mentality and the culture the byproduct, for the Family Research Council is first and foremost a lobbying organization.

When pressed, almost anyone who advocates the Christianization of American culture (read: family friendlization) will eventually appeal to a form of the “think of the children” argument. It is the same sort of faithless idea of parenting applied to the government: if kids are screwed up more or less automatically by exposure to bad influences, why leave those decisions in the hands of the parent? Let the state prohibit gay marriage, lest the culture come to accept that lifestyle as normal and a child not know any better. Let the state regulate the sale and advertisement of alcohol and cigarettes lest a child become spoiled by the desire to indulge.

Obviously these fears are nonsensical to any Christian with a semblance of an understanding of the doctrine of election. But as this mindset prevails, Christianity becomes less about any particular doctrine than the sort of lifestyle one lives. Even as it becomes more blatantly counterproductive to the gospel, it also suppresses the ideas by which people from the inside can see that fact.

This idea of a family friendly faith has turned American Christianity into a lifestyle without religion; action without belief; and like the Pharisees, an external semblance without internal reality. Dobson-style sheltering from bad influences is both wasteful of strength, spiritually counterproductive, and empirically idiotic if the goal of parenting is to keep the child in the faith. Christianity is a doctrine: it is not a culture, as if there were one canon expression of faith. It is not a lifestyle except as far as one’s life is lived by this doctrine. Let God be again glorified in creativity and innovation, and in the faith that his sovereign grace is strong enough to shine over even the worst of influences.

One of the main functions which the modern state has arrogated to itself in recent times, one which is almost universally viewed as legitimate now that it has become fully ingrained, is the setting of product standards. The FCC, FDA, USDA, CPSC, EPA, and other agencies constantly prevent countless products from ever even entering the market, and so-called “consumer advocates” nevertheless call for more. These obviously cause much loss to consumers with a higher risk preference – especially poor people for whom the extra costs of regulatory compliance may be burdensome. Yet though market theorists may like the idea that these can be totally replaced with private ratings agencies (such as Moody’s and S&P for bonds), such agencies are limited by information problems: people have assumptions about the meanings of words which a huckster may deliberately distort. In such cases, the information disseminated by ratings agencies may not get out or be heeded quickly enough for the market to force him out of business.

The regulatory arm of the state may be entirely replaced, however, with the idea of implicit contracts. In short, these are things which consumers will expect of a service by virtue of the definition of its label. For example:

• Consumers deposit money in a bank with the expectation that it will be available on-demand for withdrawal.
• Consumers eat food with the expectation that it will not make them immediately ill (Salmonella infected meat, for example – due exception for allergy, etc.)
• Consumers have a reasonable expectation of privacy from online applications (email, etc.), except if otherwise specified in the terms of service. For example, I expect Gmail will not reveal my emails to anyone except by subpoena.
• Consumers expect that the things they buy will not cause damage to their property in ways unrelated to their function (for example a toy painted with thermite, or a malicious piece of software).

The idea of implicit contracts may resemble in principle the sorts of things which the regulatory state takes upon itself. However, it differs in several key ways:

• They are settled exclusively by the courts. There may be no independent agency with any authority except perhaps to define such contracts, if allowed by constitutional amendment.
• They are only retroactively, not proactively, enforceable. A government agency has no right to inspect a factory until a complaint comes before the courts.
• They do not apply to durable goods for which (1) one may try before he buys, or (2) a warranty option exists. These automatically disclaim any liability except in case of demonstrable fraud or deliberate malice.
• Implicit contracts are discovered from prevailing cultural norms, not created, as regulations are. Thus, they may only demarcate qualitatively: there may be no quantitative thresholds such as the EPA is fond of.
• They are always overridden by explicit contracts (except in cases where the court might rule that there is an implicit metacontract in which explicit contracts are expected to be reasonably comprehensible).

And though private rating agencies may be insufficient, they are not unnecessary. Several of the aforementioned agencies engage in rating as well (for example, the USDA grades eggs and beef). If people value information like grades of eggs and beef or restaurant sanitation grades, then the market will not fail to provide should the USDA and other rating agencies be privatized.

Yet even so, though the modern regulatory state is far beyond useful scope, consumers should not bear the burden of near-universally held assumptions about the meanings of words with regard to their purchases. Indeed, these contracts ought to be construed narrowly enough that their violation constitutes a kind of fraud. This will go a long way to reduce information-gathering costs, and to engender the sort of consumptive confidence that good institutions are expected to provide for a well-functioning market, while at the same time barring from no consumer or honest producer the pursuit of happiness.