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Great comments in the last thread! I wrote the following as a comment replying to a few questions that
had come up relating to how the act of saving or net production contributes
to the Superorganism's drive toward sustainable
growth. But I really wanted as many people as possible to watch the video
below, so I thought it would be more prominent in a post. So here you go!
The term "Superorganism
" refers first and
foremost to "distributed intelligence" or "market
intelligence" as opposed to "centralized planning". If ever
you feel the urge to make life better by changing some rule or adding a new
one in order to control, cause or stop someone else's actions, you fall under
the category of central planners. If, however, you are driven to personal
actions to better your life (rather than the all too common obsession with
changing the actions of others you deem to be wrong) you are part of the Superorganism. Central planners are, of course, also part
of the Superoganism, but they are a retarding
influence on that which would be far more intelligent without them.
Both distributed intelligence and central planning are capable of organizing
the means of production. It's just that one does it infinitely better than
the other so there's really no comparison. Somewhere along the way, probably
in the 20s and 30s, governments switched from assisting the Superorganism to central planning, or retarding the Superorganism. I believe the singular factor that enabled
this switch—made it even possible—was that the savers began
entrusting their surplus production to the government as a fundamental
function of changes to the monetary system that occurred in 1922.
Not everyone is capable of being a world-changing entrepreneur. But everyone is
capable of consuming less than they produce and, therefore, saving. And it is
the choices made by billions of average people that leads
to the Superorganism's superior intelligence. As
the video below explains, markets are processes of learning and mutual
discovery through individual choices like entrepreneurship (individuals
taking a creative stab at the future in the face of uncertainty) and the
spread of knowledge (individuals building upon—expanding upon—the
past contributions of others).
The chain of settlement amongst savers which I described in this comment is like a battery system for the storage of
economic power. It gains its power and its storage ability from its perpetual
nature. Economic power can be deployed or discharged at any time by any saver
because there are always new net producers working to join the chain. Without
this system of reserves, the surplus production of savers simply gets
distributed and used up by whatever activity the debtors are up to at that
time, or wherever the central planners want to allocate it. With the Freegold system, the allocation of stored purchasing
power becomes a matter of the individual decisions of billions of savers with
no reason to hurry.
I do realize that most scholarly Austrian economists probably ignore this blog
because it seems somehow not up to their standards. Likewise, my readers tend to look down on
modern Austrians because they are, for the most part, "Hard Money
Socialists" as Ari and FOA dubbed them more than a decade ago. The
Socialist part is because, even while they talk about limited government,
they want the government to control the production of money "by locking
gold into any official currency system to act as a gauge and controlling
factor against socialist tendencies in government" (to quote FOA).
Socialism is about non-market prices and any official gold standard is a
Socialist standard.
But I want to caution you against dismissing the Austrian School simply
because most modern practitioners are misguided with respect to their
monetary prescriptions. The Austrian School is primarily a school of
Economics (focused on subjectivism and a deductive approach to economics
called praxeology), not money, and this is where it is truly great. From my
limited time spent in the Austrian space, I am probably most impressed with
Israel Kirzner among the living Austrians. His focus is more on the period of
Austrian Economics before 1974 than it is on the activities of modern practitioners.
And I think you'll find that this video below, a lecture given by Kirzner
this past summer, is so spot-on with regard to the discussion in the
last thread that I want to say it is a must-watch for anyone following the
discussion. Even if you've seen it before, or the older, longer and more complete version, you may want to watch it again:
http://www.youtube.com/watch?feature=player_e...p;v=kJKaOFmGKxk
http://www.youtube.com/watch?feature=player_e...p;v=YkAWdJn3tDg
And just for fun, here's the story of
an intelligent super-sized organism named Nellie who finally had enough of
the circus telling her what to do:
http://www.youtube.com/watch?feature=player_e...p;v=w9jqMkvplBg
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