Breaking The Fourth Monopoly – Part 1 of 2


“The evolution of this centralized society was as logical as every other work of nature. When force reached the stage where it expressed itself exclusively through money, the governing class ceased to be chosen because they were valiant or eloquent, artistic, learned, or devout, and were selected solely because they had the faculty of acquiring and keeping wealth.” – Brooks Adams

Something Runs In The Family

Brooks Adams was the grandson of a U.S. President, and the great grandson of another. Perhaps not surprisingly, he shared his ancestors’ distrust of excessive wealth and power in the hands of an elite.

His best known work, The Law of Civilization And Decay, discusses the predictable cycles by which civilizations rise and fall:

“At first, commercial activities flourish in large population centers. As competition for control of wealth intensifies, spiritual and creative values are discarded. When this culminates in distrust and infighting, the society begins to crumble.”

He describes this as an end result of the mechanics of political power – originating and evolving in major monopolies.

The Four Monopolies

1. Knowledge:

“In the land of the blind, the one-eyed man is king.” – Desiderius Erasmus

Ironically, entire societies were once ruled upon what would now be considered less than a high school education. Training in literacy, calendar cycles, medicine, and animal behavior was restricted to elite castes such as priests and elders.

Commoners were led to believe that such wisdom was indecipherable to mere mortals. To share in the benefits, they were compelled to make mandatory sacrifice, paid as tribute to the knowledge keepers. (See: Appeasing The Gods Of Yesterday)

Though it now exists in more sophisticated forms, the practice of keeping a secret so you can sell it hasn’t gone anywhere.

2. Violence:

Modern nations were born through conquest. William the Conqueror became the first Norman King of England by crossing the English Channel and defeating the locals with a superior military. His descendants and subordinates became land-lords, recorded in one of the earliest known national property records, The Domesday Book.

3. Land:

Formal land registries and titled nobles formed the feudal system, maintaining authority without the constant disruption and expense of violence.

The nobility kept their serfs occupied year-round with planting and harvest, extracting yearly taxes on all farm production. Those not working the fields, such as merchants and craftsmen, had their share passed along to them at each meal.

During this time, poaching laws originated to keep anyone from feeding themselves outside of the system. Killing his majesty’s deer was the original form of tax evasion. In most versions of The Legend of Robin Hood, this is why the heroes came to live as outlaws.

4. Currency:

“Give me control of a nation’s money and I care not who makes the laws.” – Mayer Amschel Rothschild

Sixteenth Century trade and colonization gave birth to something far more efficient. After small, private banks achieved success with their own currency and loans, nations followed suit with their own central banks. This system became so successful that virtually every country in the world still uses it.

The state’s income flows from the generation of new money loaned into existence (“increasing the national debt“), combined with the interest charged on every unit in circulation. The interest is collected yearly by a bureau such as the IRS; This acts as the security on the loan.

Just as the third monopoly was maintained by arresting poachers, so must the fourth be maintained by eliminating competing currencies – both domestically (See: The Liberty Dollar) and internationally (See: The Gold Dinar).

My Monopoly Is Better Than Yours!

Competition breeds progress, and most of history finds societies (and parts thereof) in rivalry with one another. Newly discovered optimal strategies often force a choice:

“Adapt or perish, now as ever, is nature’s inexorable imperative.” – H. G. Wells

So nations progress through each monopoly in turn, with the modern ones superceding their elders. The prior ones are rarely discarded, however, as a collapse of a dominant monopoly can easily spell the return of its predecessors.

Knowing this, it seems unsurprising that the collapse of the Reichsbank in Weimar Germany started that nation on a path towards violence and territorial aggression.

By contrast, the overwhelming prevalence of the fourth monopoly has modern nations continuously engaging one another in competitive trade and currency wars (See: Jim Rickards’ book – it’s well worth the read).

We only see shooting wars and territorial conquest when fourth monopoly weapons, commonly known as economic sanctions, fail to resolve the dispute.

Poaching The King’s Deer In The Digital Age

The 21st Century Game Changer of near-zero-cost collaboration has caused a wide ranging socioeconomic power shift from Pyramid Hierarchies to Emergent Networks.

One of the resulting technologies has the power to disrupt the fourth monopoly, worldwide, at extremely low cost:

CryptoCurrency – incorporation of principles of cryptography to implement a distributed, decentralized and secure information economy.

This technology promises to achieve for the fourth monopoly, what the Second Amendment achieved for the second – resolving a massive power differential between the state and its citizens.

The prospect of a decentralized, citizen controlled economy presents to central banks the same threat Kings once saw in private firearms ownership – a serious check against their use of power.

Not only is digital currency simpler and cheaper for most people to use, its effective range is virtually anywhere on earth; Its effects could potentially exceed other disruptive technologies of its kind.

Simple Inventions With Complex Results

“He who first shortened the labor of copyists by device of movable types was disbanding hired armies, and cashiering most Kings and Senates, and creating a whole new democratic world: he had invented the art of printing.” – Thomas Carlyle, Sartor Resartus

The Printing Press’s disruption of the first monopoly on printed works, lead to the Protestant Reformation against the Catholic Church, and accelerated the spread of ideas during the Renaissance.

Europe, and the Church’s power, would never be quite the same.

In a decentralized digital economy, the average person will be able to trade anywhere in the world without relying on government issued currency. If this doesn’t destroy central banking, it will leave it a shadow of its former self.

Nobel-Prize-Winning economist Paul Krugman recently claimed in a New York Times article, that Bitcoin Is Evil for precisely this reason. Though I hardly agree with his ideological position, I believe he’s absolutely right about its disruptive effects.

Private banking and payment systems should remain, though they will likely be forced to exist in a very different form. (See: Digital Currency: Money’s Future May Lie In Its Past.)

Twilight Of The Fourth

“The future is here. It’s just not evenly distributed.” – William Gibson

Like sharks in a piranha tank, centralized entities have shown serious limitations in battling their decentralized counterparts – and the front continues to widen. (See: Pyramids, Networks, And The Emergent Weapons Of Cyber War)

By leaving power and control in the hands of a few, the monopolies of the past have acted as societal stabilizers. Yet, like all institutions, the balance they provide comes at an ever increasing cost – one that cannot be paid forever.

The resulting socioeconomic pressure has predictable ways of releasing itself, a process that is already underway.

Except, something is radically different this time…

To Be Continued…

  1. multimarca 03/29/2014, 10:17 PM Reply

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