Yuri Tarnopolsky ESSAYS
7. On the Smell of Money
money.
ATP. evolution. Gibbs free energy.Use Firefox browser or see essays-complete.pdf |
Essay 7. On the Smell of Money
Most
certainly there is no life on Mars. What about life in
the universe? We are not
aware of any intelligent beings in the universe except
ourselves. We know, however, until proven otherwise,
that the laws of nature are the same whether on Earth or
on Mars. The concepts of time, space, matter, energy,
temperature, and entropy are equally applicable at least
at any point of the near universe our space probes can
reach. We have good reasons to believe that life exists
somewhere on other planets and it may look different
from our own. On our own
planet we are not so much concerned about entropy and
even energy as about money. Many can buy energy and
matter, maintain comfortable temperature, save time,
bring in order what has fallen into disarray, and
prolong life. Our literature pays as much
attention to money as to love, sex, and power. It seems
to be the true focal point of our part of the universe
populated by humans. Money is the
simplest thing: it is just a number. It is a very simple
number: an integer. We can safely round the useless
pennies. Money is the easiest human goal to imagine and
to check if it has been achieved: it is just a number.
This is why money is so old: it is easy to count it. We could
expect some plain cold simplicity from a number. Not so
with money. What else,
what issue, what thing can be more burning, restless
like a young dog, tugging the hem of your dress, asking
for attention, omnipresent, noisy, playful, deceitful,
waking you up in the middle of the night, prone to
illness, gratifying, magnetic, mysterious, rewarding,
evasive, mercurial, treacherous, dependent, and
exhausting? There is one: sex, but money is
eternal, universal, and everlasting. Money is a second
sex, a reproductive device that not only multiplies
itself but rewards you with a whole assortment of
heavenly phases of investment, possession, spending, and
withdrawal. Money's
childhood and adolescence bring worries typical for
these stages, money go astray and end up badly, but what
can be compared with the sweet peaceful joy of the
proven, muscular, mature money with a host of fresh
rosy-cheeked monetary grandchildren on its patriarchal
lap? I read
somewhere that in Ancient Babylon money was regarded a
form of life growing on its own, but I cannot find the
reference. The Babylonians had banks where they accepted
grain and cattle, the multiplying forms of property, and
this is, probably, where the idea came from. A quiet
clean bank lobby is a good place to whisper financial
confessions to a clerk, but some of us visit such places
less and less often in person, as we might shun a
temple, and we touch the greenish paper less and less,
delegating the talk, touch, and ink to the electrons. Money is
getting more and more spiritual, literally. Or, at
least, less material. Money has become a truly
ecumenical religion: people with either money or want of
it find each other and talk same language. They can talk
for hours. One dollar is a line and a hundred is a verse
of some sacred book. The temples and shrines are
the same everywhere. In its American
pantheon-pandemonium, the IRS is the hell, the CPI is
its Virgil, FED is Zeus, and Nasdaq tells you what
prayer to say tonight. But make no mistake: despite its
pagan looks, it is a monotheism. It is the substance of
civilization, its blood and breath. It is a form of
life. It is life. Money is not
just an object of worship, which it has always been. The
old money divided people and made them fight each other.
The modern money is a new universal faith carrying
the hard to believe promise of uniting the world forever
and bringing everlasting peace and true brotherhood. What money
is not is DNA. It carries no information and no hint of
what can materialize out of it. It is not a force,
either: it meets no resistance. There is no anti-money
and no counter-money. It is not matter: the laws of
conservation used to apply to it when it was in the form
of golden coins, but not anymore. Money has no
shape, no order, no individuality, and, as the cynics
say, no smell. In its transformations it passes through
a multitude of forms, like energy, but we get the same
energy whether we burn a dollar or a hundred dollar
bill. Karl Marx
was right when he saw money as an embodiment of work:
money is work because work is energy. Nothing can be
created without energy. But today the cycle of causality
seems closed: not only money is produced by human
work, but work itself is produced by money, its
power, and lure. Apparently, only because the
governments and individuals have money in very much
different quantities, other people can make them, too. What a
strange thing: a cocktail of energy, religion, chaos,
and work. Money has generated two fundamentally opposite
ideas: “inequality of wealth is sacred” and “inequality
of wealth is a curse.” The fact is that
money, like mercury, tends to fuse into large
globules and absorb the small ones. This has been known
since Biblical times. Why not to
divide all the money equally? Because the effect
of money is not additive. Million dollars divided among
million men cannot produce the same effect as million
dollars owned by one person: it is the concentration of
money and the inequality of its distribution that
brings the social wheel into motion. Money is like the
Niagara river contained by narrow banks and split into
two levels by the waterfall. It produces energy,
apparently, out of nothing, but, in fact, out of
inequality. One cannot make energy from the greatest of
the Great Lakes alone. Energy can be produced from the
ocean because of the difference between the low and the
high tide. Everything
has its price. The price tags on love, loyalty,
betrayal, and life are not always publicly displayed.
Human life has its own price tag. The cost of birth,
food, clothing, education, transportation, court
litigation for damages, and burial are all calculated.
To buy and sell human beings is illegal, but to buy eggs
and pay fee for adoption and reproductive function is
not. The object
that comes to mind first in connection with price is
product for sale, merchandise, a Thing. The Thing
is not money: it creates money when it falls (or climbs)
from the state of made
to the state of sold,
although not a slightest change can be noticed in it
during this short process. Only after the first night of
possession, the look of the bought Thing changes. Money
creates not only goods for human needs, so that humans
could exist, interact, and procreate. Money
creates Things for their own sake, as well as Things
satisfying the needs of Things, Things to protect,
manage, and move other Things, Things to make more
Things, and Things to ensure interaction and
communication between Things and humans. We can talk
about money ad infinitum and even get emotional.
Even the
professionals talk about money so much and give so many
definitions, properties, and functions of money that
each statement looks suspiciously shallow. There must be
some simple idea behind money, as it is behind any
fundamental concept. I am tempted to try to look at
money from a big distance and from the outside of
economics. Money as
tool of exchanging goods and services appeared millennia
ago. To hunt and to grow food is a tedious and insecure
business; to buy is a fast alternative, the first form
of immediate gratification after sex. If humans
biologically are as old as their tools, human society is
as old as its money. Any evolution starts from a
point and then branches out into a tree. Looking for
the genesis of money, I would assume that the first
money could be the tools and hand-made objects
themselves: they were their own money. We have an
oblique confirmation that money could have actually
diverged from tools. The ancient Chinese used
bronze tool money in the form of little spades and
knives around 300 B.C. Some historians of money
regard cattle as its oldest form. Since I am
not a specialist in money, whatever I write is just
fantasies. We find a cluster of fascinating Web sites
about money with the real
stuff, including its early history. The exchange
of good and services played a role similar to
sexual reproduction involving the exchange of genetic
materials. The exchange presumes a physical contact.
Various things created at different places could evolve,
improve, and combine much faster when put side by side
and compared. The coins could be carried to the
marketplace much faster and easier than cattle. Humans of
all kinds make a single species because they could mate
and trade with each other. They could do both even
without common language. There is an animal simplicity
in trade. If the
material Things were the proteins of civilization, money
played the role of the carrier of genetic information.
The carrier, for example, radio signal, is not
information. It is never written on amino acids and
nucleotides what can be built from them, the fly or the
elephant. It is never written on coins and bills what
can be bought for them. For that matter, it is not
written on a kilowatt of electricity whether you can use
it for cooking or for cooling. Wherever
there is life, at least on Earth, there are amino acids
and nucleic acids. Wherever there are conductors
crossing a magnetic field, there is electricity.
Wherever there is—what?—in the universe, there is money.
The “what” seems to be society. The question is what all
three have in common. What are the cosmic analogies of
money? Is it energy? temperature? entropy? mass?
What is society from the point of view of physics?
I am on the hunt for metaphors and parallels. I cannot
buy them. In biology,
most biochemical functions are performed by enzymes,
usually pretty similar for different species. To
reproduce, the cell needs energy, matter, and code. The
forth component is the enzymes that the cell carries
over for the start and then synthesizes on the spot. The Thing
needs same four components to reproduce. Money can buy
all that: physical energy of food and electricity,
brick and mortar, blueprint, and skilled labor.
And—sorry for being cynical—even the mate. If money can
do all that, then we come to the most universal function
of money: reproduction. Money takes part in the
replication of the social organism. Of course, not as a
code, but as some other component. Humans mate
and so procreate biologically. Humans trade and invest
and so reproduce what remains in the civilization if we
subtract the humans. If all humans in an instant
go to heaven, what remains is Things, the material
civilization. All the books would turn into
useless Things because knowledge is dead without humans.
If there are intelligent and autonomous Things, they
would still rely on their codes and files. Would they
need money? This
imaginary situation is a good opportunity to explore the
extra-human function of money. We know what
humans are. What is a machine? From what mental distance
the difference between both is blurred? The meaning
of the term machine has evolved like the machines
themselves. The oldest
view of the machine is mechanical. It is a combination
or one of the following simple machines: the lever, the
pulley, the inclined plane, and the wheel and axle. Of
course, we cannot expect from it either a brain scan or
solving differential equations. Machine is
defined in Webster II as “a system, usually, of rigid
bodies, constructed and connected to change, transmit,
and direct applied forces in a predetermined way to
accomplish a particular objective, as performance of
useful work. “ This
definition formally fits even the computer, although
neither the input forces nor the output work are
essential for its objective. It also fits an enslaved
human being used by another human being, although it is
not constructed by any other human being. I believe
that there is an aspect of machine performance, omitted
in the definition, that is essential for a much larger
class of objects: the machine is capable of repeating
its functions several times. In other words, the machine
replicates performance in time, not in space. This
is what is expected from CAT scanner, computer,
telescope, airplane, and what not. There are
disposable one-time machines, but only as an exception
or when disposability is an objective, for example, the
detonator for an explosive or a rocket booster. The
space shuttle is a typical machine. I would
define a very abstract machine as a system that
repeatedly goes through a similar sequence of states.
Even the solar system fits this definition and, who
knows, maybe even the universe. The machine does not
need to be of any particular material or physical
nature. The very
abstract machine is a class of abstract machines that
can be controlled: mostly started and stopped, but
possibly also accelerated, slowed down, and switched to
a different function. Considering
the oldest man-made machines, a pot, a knife, an ax, a
needle are not machines because they do not change. They
are attended by humans, the typical machines. The first
machine that I can think of is the wheel. It repeatedly
goes through a cycle of states and it can be started and
stopped. Some ancient machines for taking water from the
stream, like the Egyptian shadoof, used the
principle of lever and did not have a wheel. In my youth
I saw such devices called cranes in the Ukrainian
countryside. Computer is
definitely a machine because it can be used repeatedly
and for a wide range of purposes. It is a very
sophisticated machine, like humans, because, while the
wheel can only roll, the result of the computer's
activity is not predetermined. The particular inputs and
outputs could be one-time, like a birthday greeting to a
friend, but the cycles of performance are similar. The
states of the system do not need to be repeated in the
exact sequence. The mathematical phenomenon of strange
attractor illustrates a
mathematical machine that is not material at all. There are
also complicated molecular machines called biochemical
cycles. They do not have any rigid bodies. The Krebs
cycle, for example, repeatedly spins through a circular
sequence of chemical states and provides living cells
with energy through aerobic respiration or
breathing, to put it simply. If you step far back from
the diagram, all you see is a wheel. In fact, the
Krebs cycle is more like a circular assembly line
supplied with parts at every station and with ready
product coming off at one of them, something like the
baggage conveyer belt at the airports. The difference is
that the Krebs cycle is, actually, a disassembly line:
it takes a molecule of already partially disassembled
glucose coming from food and at every stage takes a
piece of it and processes. The output is energy packed
in a form of tiny molecular batteries called NADH
and FADH2. The batteries are transported to a
place where they are discharged in the presence of
oxygen and the energy is repackaged into ATP , another form
of molecular battery, the universal currency of energy
accepted everywhere in the body from brain to muscles to
kidneys. The discharged batteries of all kinds (NADH,
FADN2, and ATP) go back to their charging stations. The
discharged ATP is called ADP. A single molecule of
glucose is capable of charging 36 ADP batteries while it
quietly burns to carbon dioxide and water A parallel with
battery on the Web
sounds like the poetry of Lucretius:
How
does it work, this marvelous battery The
wonderful molecular machine, of which the Krebs cycle is
only a part, can be compared also with a watermill
producing work from the energy of the falling water. In
the absence of water, alias, food, the machine stops. In
the organism, the machine cannot be stopped or started
from the inside, but it can be regulated. The glucose
that we need to keep the body and mind going comes from
edible plants. The plants have their own assembly line
that really, literally, visibly assembles. The molecule
of glucose is gradually built using carbon dioxide,
water, and the energy of light. The plants
“exhale” the oxygen that we, the animals, breathe. The idea of
environmentalism, in short, is that all life on Earth is
a single system. In a sense, it is a single organism
that those of us who are humans, conspired with Things,
are starting to wreck. I cannot
find any flaw in this idea, but it implies that this
single organism has
no competition, no spare copy, but whatever can
happen to it is perfectly natural and neither good nor
bad. If we are so dumb, the hell with us, and let other
forms of life push us out. The function of any organism
is to adapt, and life will adapt to anything. As an
organ of the organism, we might adapt, too, although, to
put it politely, in an evolved form, like the remnants
of our former tail in our spine. But back to our
beloved money. It seems that
the evolutionary roots of money could be found deep in
the very basement of life. ATP is the money of
animal organisms. It has to be paid for running a
treadmill, solving a mathematical problem, watching TV
(it requires energy, too), building up the skeleton,
healing a wound, digesting food (here is a form of
investment!), and removing the refuse from the organism.
Moreover, ATP
provides energy for the light emitting by the firefly
and electricity generated by electric fish. The parallel
between ATP and money seems complete. It buys
everything, but all ATP bills are alike. All this is
possible because of the wide array of abstract machines
and the availability of energy to bring them into
action. It is the repeatable function that is essential
for an abstract machine, and the cycle is only one form
of it. There are non-cyclical biochemical pathways, too.
At a higher
level, we are, probably (but, hopefully, not
exclusively) machines for spreading our genes, or
"gene survival machines." This idea belongs to Richard
Dawkins, who believes that our body is a disposable,
throw-away machine to preserve and pass our genes. We are born,
eat, grow, study, eat, work, mature, eat, work, seek a
mate, eat, work, procreate, eat, work, suffer, and die.
It looks like we are disposable machines as individuals,
but on a shorter time scale we are capable of the
greatest quantity and variety of repeatable actions any
machine can do, and no wonder we get finally worn out.
For that matter, no molecular, biological, mechanical
machine, or even computer are any better. We can
boast a great longevity in the animal world. Anyway, the
social machine that reproduces the species still works
fine. But due to some basic laws of nature, no machine
is forever, all of them are disposable in the long run.
If money is
energy, what kind of energy is that? This question can
be answered simply: free energy. To explain what free
energy is would take a separate essay: the concepts of
heat, work, free energy, entropy, and temperature are
the primary and elementary building blocks of our
understanding of everything in the world. As all really
fundamental blocks, they cannot be explained by
reduction to simpler blocks. The best way to
understanding is to play with them, like a child
learning about the world through vision, hearing, touch,
and Lego. The term free energy
is misleading in our times of the free gift madness. It
is not the free of charge
energy. There are a lot
of sites on the Web about "free" energy from natural
sources, like wind, ocean currents, etc., but they are
not of immediate interest for us. What I have in mind is
the so called Gibbs free energy, one of the
basic concepts of thermodynamics. If somebody wants to
learn more about it, search "free energy" +
thermodynamics. In short,
“free energy,” or Gibbs free energy, is the part
of total energy that brings order into chaos by
performing work. It is called free because it is not
tied to heat. It is really like free money that could be
used for purchase. Heat, on the contrary, is chaos and
it turns everything into chaos. Hot money can be
compared with an account with irregular deposits and
unpredictable bills. You never know whether your check
will bounce. If this comparison appeals more, it is the
stolen money and you, nervously looking for a police car
coming to your driveway. Free energy
is like an account of completely disposable money, in
the best case filled up with the salary from a life
tenure job. This is something that is never guaranteed
to any particular species, all the more, individual. Since order
and chaos are concepts applicable to all systems,
social, mental, animate, and inanimate, thermodynamics
is in a way related to anything in the world and not
just to physical systems. The symbol
of free energy is G, to honor the
genius of Josiah Willard
Gibbs whom chemists,
mathematicians, and physicists recognize as one of their
kin. Our
civilization works like an imperfect and capricious
clockwork made of billions of parts. Nevertheless, the
absolute majority of us get up in the morning and go to
work, although we can easily imagine millions of other
alternatives: sleeping until noon and go fishing after
that. Somehow, this is possible only during a small part
of the year. The energy of fuel, wind, and water goes to
keep this system in order, and no wonder the gigantic
construct sways and trembles in the torrent of energy
that keeps it standing in a precarious steady state,
like the Great Pyramid of Khufu set on its apex. Similarly,
if our body and mind work with an acceptable accuracy,
it is because our cells and organs are supplied with
freshly charged ATP batteries. Stop the supply, and in
45 days or much earlier you are dead. Without water it
would take about five days because the batteries are
transported by water, the main component of our body. Money,
therefore (it is not the logical therefore), is the ATP
of social organism, it is the free energy equivalent of
making a Thing for sale, never accurate, but socially
acceptable. Gibbs' free
energy is a tricky thing, however. Its ability to
perform work and tame chaos depends on the temperature
of the system. The higher the temperature, the more free
energy is needed to do the same job. This is why
inflation jumps in times of turmoil. This is why Alan
Greenspan throws a bucket of cold water at an overheated
economy. But temperature is a separate subject. My point is
that the modern and, especially, future function of
money is to represent the free energy necessary to
maintain a species of a dynamic competitive system. It
can be a cell, an individual, a custom, an idea, a
Thing, a species, or a genus of any of the above. I see money
in the process of evolution from its primary form of
ATP. Only economists and historians who find this idea
appealing (it might have been already expressed; it is
hard to be original on the Web) could, theoretically,
restore all the intermediate steps from the beginning to
the current electronic form. I have to stop here and
leave the logical gap to possible enthusiasts. The new
direction of econophysics, ridiculed by most classical
economists, tries to bridge money with both physics and
biology. I have some uncommon reservations about
computer models, and, probably, talk about them
elsewhere. Anyway, the thermodynamic connotations
of money are widely accepted. "In human society money
serves to measure and mediate local markets for
decreasing entropy, whether it measures the refinement
of an ounce of gold, the energy available in a ton of
coal, the price of a share in a multinational
organization, or the value of information accumulated in
a book." (George B. Dyson, Darwin Among the Machines,
Addison-Wesley Publishing Company, 1997: Reding, MA,
Menlo Parc, CA, etc., p. 170; there is much more about
money and information). Nebulous and wonderful!
But I cannot offer anything more coherent except a note.
Two states of a system can have the same entropy and
energy. Nevertheless, to transform the system from one
state to another might require free energy because the
intermediate state has a higher energy than the initial
and the final one. Example: you are moving to a new
house on the same street just couple blocks up. You have
to do quite a work or pay for it. The
coherence, like moving, should be left to professionals.
What is
easier for me is to fantasize about the future of money.
I see it based on the energy standard because I believe
that the energy crisis is highly probable. Gold was
popular as money because one could not grow gold in the
garden. Paper money is in use because to make a perfect
counterfeit money is more difficult than to strike a
gold mine. Electronic money is in use because it is
still difficult to crack the passwords (but, I suppose,
less difficult than to make a perfect hundred dollar
bill). When energy is scarce and everything depends on
it, it becomes the currency. To make free energy is more
difficult than to grow money in the garden: it is
impossible. We can look
at the future coins even today. Just go to the battery
stand in a pharmacy. You can see there the bills of
various denomination, like B, AA, AAA, etc., as well as
small, flat and round coins, pretty much like the coins
in your pockets, that can make your watch running for a
year or two. With coins like that, one can buy his or
her hearing for a month and others can even buy a
stretch of life by feeding the coins into their heart
pacers. I suspect,
however, that it is impossible to fully understand the
nature of the evolution of money if we do not take to
account a particular aspect of evolution (see Essay
6). The energy
of food and the fluidity of water are necessary for the
survival of all life forms. But what is life? The notion
of life has been expanding since the times of Aristotle.
Biological life is only one category of the formerly
exclusive club of life. Does
anybody really think that $10,000 watch is necessary for
human survival? Of course, not. A $5 watch would do. The
$9,995 difference goes to the survival machine
of the watch. Biologists
see evolution limited to life forms. Sociologists see it
as evolution of social forms. The historians of
technology (technobiologists?) would see it as evolution
of the Things, and the historians of culture look at the
evolution of ideas and art. In fact, the substrate of
evolution, at least today, comprises all of the above.
Anything that lives and evolves, however, can exist only
on the constant supply of G, Gibbs' free
energy. The larger life, meta-life, includes the forest,
the whale, the human, the watch, the car, the city, the
government, and the Internet. From the
evolutionary point of view, the really free free
energy comes from the amazing very abstract
machine of the solar system that, working as a flywheel,
supplies light, changes the tide, the seasons, raises
the wind and drives the currents. That machine, full of
energy and complexity, once gave birth to life. Its own
evolution is the subject for astrophysicists. The
enthusiasts of free energy are, therefore, right. The
problem is that the utilization of the free free energy is
not free. This essay
is not about dollars, however, it is about their smell.
|
Page created:
2001
Revised:
2016 Essays 1 to 56 : http://spirospero.net/essays-complete.pdf Essays 57 to 60: http://spirospero.net/LAST_ESSAYS.pdf Essay 60: http://spirospero.net/artandnexistence.pdf |