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What Few Understand About Money February 12, 2026
This leaves out the purpose of money, which is facilitating social organization.
I've thought a lot about "money" and wrote two books that explore what few understand about money: that it's fundamentally a social construct with a social purpose and structure. The books are Money and Work Unchained and A Radically Beneficial World. The conventional understanding of money is that it's a financial unit with economic functions--store of value, means of exchange and unit of accounting-- defined by its intrinsic nature as a material that's valuable or convenient. So gold is "real money" because it's physically permanent, convenient in size and scarce, and fiat currency--paper money and its digital versions--are intrinsically worthless as paper is fragile and digital currency is conjured out of thin air. This leaves out the purpose of money, which is facilitating social organization. Money's social function and structure is the water we swim in, unseen because we take it for granted. Many have embraced the view that all our problems would be solved if we returned to the gold standard or adopted Bitcoin. The simplicity of this is appealing, but when examined under the lens of social purpose and function, the simple solutions turn out to have limits: being a store of value isn't enough, as the wealthy hoard stores of value and remove them from circulation. Hoarded stores of value don't enable social mobility, they limit it. When the social waters we swim in become turbulent, money reveals its fluid, adaptive nature. In a severe famine, for example, the most valuable store of value and most sought-after means of exchange are non-perishable food items and train tickets that take the holder far away from the famine. Gold will have potential value on the periphery, but the most valuable "money" are flimsy train tickets and things we can consume to stave off starvation. Let's shed light on the social nature of money with a thought experiment. Let's say there is a geographically defined region with scattered gold deposits. that can be panned in streams or collected with simple hand tools. Gold is the store of value and means of exchange, but its exchange value fluctuates depending on the scarcity of what people want to buy: eggs, shelter, tools, etc. Two townships arise in this region. The first is conventional: mining gold is a "winner takes all" activity: as long as a miner has a legitimate claim, whatever gold is found is theirs to keep. So when a lucky miner stumbles on a big rock that turns out to be almost solid gold, he quietly uses this windfall to buy up the town's mining claims, land and businesses as a silent partner. Once he controls the town, he raises prices to milk the residents, exploiting his gold hoard in an extractive fiefdom. The fact that gold is money worked well for the wealthy owner hoarding the gold but not for everyone else. Social mobility--a key social purpose of money--is limited in this neofeudal economy. The other township establishes by vote of the residents a much different social construct for the gold. Rather than "winner takes all," every miner agrees to put 20% of whatever gold they collect into a common fund that has two purposes: to provide a small stake for those miners who have worked diligently but come up empty due to bad luck or illness, and a town "rainy day fund" for periods where the work stops due to severe weather or other events. Those tasked with collecting and protecting the town's gold fund are duly elected and scrutinized to insure their conduct is above-board and they're doing their job correctly. This system works well until an extended period of declining yields of gold begins pressuring the service population--the laundries, restaurants, etc. that the town needs to survive. Those managing the gold fund explain the situation and obtain permission from the miners to extend the modest hard-luck stipend to service workers should they otherwise be forced to abandon the town, leaving the residents without key services. Even when yields stabilize, it's now obvious that the easy gold has been recovered, and yields will continue declining. The town residents face abandoning the town or starting some other industries to compensate for the decline in gold mining. The leadership comes up with an idea: why not issue paper currency for use in the town, based on the gold still held in reserve, and save whatever new gold is added to the town's fund for trading for essentials from elsewhere? The paper currency will be "backed by gold": as the town's gold won't be spent, this paper money will have something valuable behind it. The paper money is a representation of value rather than a valuable object in itself. After some skepticism, the miners agree because the other option--abandoning the town--is even less appealing. After all, the decline in gold yields isn't limited to the township; it's happening everywhere. Pulling up stakes and trying to find an as-yet unexploited area is a gamble with poor odds. After some hesitation, the paper money is distributed to residents as their stipend and used to pay for services and materials. Those accepting the paper find they can buy goods from other merchants with the paper money, and so trust in the new money is established. Miners who abandoned their claims are paid to dig deeper mines with the paper money, and a small lumber harvesting operation is also funded by the paper money. Merchants still need gold to buy products from afar, but the paper money encourages residents to start producing more food locally. Though gold production is way down, the paper money has funded the labor needed to continue producing enough gold for outside trade. The town actually expands as new residents take advantage of the opportunities--social mobility is broadening--and while the leaders maintain the town's stash of gold, the paper money that's needed to grease commerce and pay wages now far exceeds the value of the gold in the town vault. In effect, the town is issuing a fiat currency, a paper money with no intrinsic value, based on the trust that there is gold backing it up. But this paper money isn't actually valueless. It's backed by the social structure and purpose of the town's economy--the residents' trust in the institutions, their fellow residents, and in the valuable work being enabled by the paper currency. As long as the worker issued $1 in paper money can buy $1 of goods with that piece of paper, and the merchant who accepts the $1 can buy labor, goods and services with it, the system functions smoothly. The key to the system's trust is the leadership's discipline in only gradually expanding the issuance of the paper currency in line with the expansion of the workforce and town's economy. For if the currency doesn't expand enough, the town's economy is starved of both means of exchange and "small money" store of value. If the leaders issue too much paper money, this excess eventually reduces the value of the paper money and residents will lose trust in the system. The ideal they must seek is scarcity of paper money, but not so severe that it begins limiting hiring and commerce. They must resist the natural demands for more money entering circulation, as the entire structure is trustworthy precisely because there is resistance to issuing any more than the absolute minimum needed to keep the wheels of commerce turning. But consider what happened: a gold standard--gold was the only money--was dooming the township as the supply of new gold was no longer enough to turn the wheels of commerce. The social purpose of money--maintaining a viable economy, social mobility and a vibrant social order--demanded the introduction of fiat currency, which could be prudently expanded as needed. The town thrived by doing what many consider is the opposite of financial wisdom: they abandoned a gold standard in favor of fiat currency as the only means of not just surviving, but of thriving by enabling an expansion of work and initiative. (if this seems farfetched, study the history of paper money in dynastic China.) This is why I have suggested a labor-backed currency: rather than return to a system in which the wealthy hoard the majority of gold or Bitcoin, or give the power to issue currency to central banks and private banks who enrich those already at the top of the wealth-power pyramid, money is only issued when useful work has been performed. This money is created at the bottom of the pyramid to pay those doing useful work, which is the ultimate foundation of a productive social order and economy. Money is a social construct with an implicit structure and purpose which we swim in but don't even see. Money is fluid and must adapt to fulfill social purposes. If it fails to do so, it's not just money that fails, the entire society fails. 
My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free) Check out my updated Books and Films. Become a $3/month patron of my work via patreon.com Subscribe to my Substack for free My recent books: Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site. THE REVOLUTION TRILOGY: Investing In Revolution Ultra-Processed Life The Mythology of Progress Systemic Problems/Solutions Investing In Revolution (2025) Introduction (free) The Mythology of Progress (2024) Introduction (free) Global Crisis, National Renewal (2021) Introduction (free) Money and Work Unchained (2017) Introduction (free) A Radically Beneficial World (2015) Introduction (free) What You Can Do Yourself Ultra-Processed Life (2025) Introduction (free) Self-Reliance in the 21st Century (2022) Introduction (free) When You Can't Go On: Burnout, Reckoning and Renewal (2022) Introduction (free) Get a Job, Build a Real Career and Defy a Bewildering Economy (2014) Intro (free) Novels The Adventures of the Consulting Philosopher Intro (free) The Secret Life of an Asian Heroine First chapters (free) Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free Investing In Revolution print $18, (Kindle $8.95, Hardcover $24 (145 pages, 2025) 
Only now do we see that we've been investing in revolution for decades--not the revolutions we thought we were investing in, revolutions in technology and finance, but in the social revolution made inevitable by the extremes that we've reached in our single-minded pursuit of private gains.
The pendulum that we've pushed to an extreme will swing to the opposite extreme, and the artifices that have propped up a facade a stability for decades will accelerate the disorder rather than reverse it. We now stand at the point of decision, and this book offers a path to a reformation and renewal that serves the shared interests of us all, not just the few. Introduction (free) Ultra-Processed Life print $16, (Kindle $7.95, audiobook, Hardcover $20 (129 pages, 2025) 
Ultra-Processed Life: the substitution of a synthetic, commoditized, very profitable facsimile for what was once authentic.
Ultra-Processed Life is my term for everything that is analogous to ultra-processed snacks: attractively marketed, instantly alluring, easy to consume, addictive by design, tasty in the moment but harmful over time, its origins a black box of unknown processes, the brightly colored product bearing no resemblance to the real-world ingredients, an idealized form of what is inherently imperfect, untethered from the natural world. As with many others, the catalyst for my exploration was a life-threatening medical crisis that did not have a specific cause. This led me to wonder if our entire way of life is like an ultra-processed snack: tasty but not healthy, edible but stripped of the nutrients we need to be healthy, addictive by design. Introduction (free) The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $20, (Kindle $9.95, Hardcover $24 (215 pages, 2024) audiobook, Read the Introduction and first chapter for free (PDF) 
What if the policies to accelerate growth are no longer working because our fix for every problem--growth at any cost--is failing? We're told Progress is inevitable as a result of technology, but everyday life is getting harder, not easier--the opposite of Progress, what I call Anti-Progress.
What if the real source of the unraveling is far deeper than economics or politics? What if the problem is what we see as the inevitable destiny of humanity--Progress--is actually a modern mythology, disconnected from the real-world consequences of growth for growth's sake? We indignantly reject that Progress is a mythology, but our need for mythology hasn't gone away because we've mastered technology; we've created a modern mythology of technology that is heedless of its own consequences. To truly progress, we need a new mythology aligned to 21st century realities. Read the Introduction and first chapter for free
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Why Is Everything Such a Hot Mess?
January 12, 2026
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"There is no security on this earth; there is only opportunity." (Douglas MacArthur) "We are what we repeatedly do." (Aristotle) "Do the thing and you shall have the power." (Ralph Waldo Emerson) "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius and a lot of courage to move in the opposite direction." (E.F. Schumacher, via Tom R.) "He who will not risk cannot win." (John Paul Jones) "When we drink coffee, ideas march in like the army." (Honore de Balzac) "Progress is not possible without deviation." (Frank Zappa, via Richard Metzger) "Victory favors those who take pains." (amat victoria curam) "The man who has a garden and a library has everything." (Cicero, via Lee Bentley) "A healthy homecooked family meal and a home garden are revolutionary acts." (CHS) "Do you know what amazes me more than anything else? The impotence of force to organize anything." (Napoleon Bonaparte) "The way of the Tao is reversal" Or "Reversal is the movement of Tao." (Lao Tzu) "Chance favours the prepared mind." (Louis Pasteur) "Success consists of going from failure to failure without loss of enthusiasm." (Winston Churchill) "Where there is ruin, there is hope for treasures." (Rumi) "The realm of gratitude is boundless." (CHS, 11/25/15) "History doesn't have a reverse gear." (CHS, 12/22/15) Smith's Law of Conservation of Risk: Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some consequences will be intended, some will not. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences. (July 8, 2014)(thanks to Lew G. for retitling the idea.) Smith's Neofeudalism Principle #1: If the citizenry cannot replace a kleptocratic authoritarian government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only. The Smith Corollary to Metcalfe's Law (The Network Effect): the value of the network is created not just by the number of connected devices/users but by the value of the information and knowledge shared by users in sub-networks and in the entire network. (CHS, 4/6/16) My Credo of Liberation: I no longer care if the power centers of our society--the distant, fortified castles of our financial feudal system--are changed by my actions, for I am liberated by the act of resistance. I am no longer complicit in perpetuating fraudulent feudalism and the pathology of concentrated power. I no longer covet signifiers of membership in the Upper Caste that serves the plutocracy. I am liberated from self-destructive consumerist-State financialization and the delusion that debt servitude and obedience to sociopathological Elites serve my self-interests. (Thank you, Klaus-Peter L., for reminding me) "We've become a culture of excuses rather than solutions: solutions always require sustained effort and discipline." (CHS 4/9/16) "Fraud as a way of life caters an extravagant banquet of consequences." (CHS 4/14/16) "Creativity = problem solving = value creation." (CHS 6/4/16) "Truth is powerful because it is the core dynamic of solving problems." (CHS 7/21/17) "We live in a system of human emotions that masquerades as a science (economics)." (CHS 1/1/18) "Always remember, your focus determines your reality." (George Lucas) "Diversity is for poor people. Sameness is for the successful." (GFB) "When power dissipates suddenly, it dissipates completely." (CHS 7/14/19) "Disobedience is the true foundation of liberty. The obedient must be slaves." (Henry David Thoreau) "Markets cannot price in the value of non-monetized natural assets such as diverse ecosystems." (CHS 7/14/19) "Magical thinking isn't optimism, it is folly." CHS 1/3/22) "Tune in (to self-reliance), drop out (of hyper-consumerism and debt-serfdom) and turn on (to relocalizing capital and agency)." (CHS 1/5/22) "The path to everything you desire starts here: like yourself as you are right now." (CHS 11/20/22) "There are only two signals: how many essentials you produce and share and if you're consuming less with better results. Everything else is noise." (CHS 12/17/22) "Liberation is no longer needing any confirmation or feedback from others or the world for one's sense of self. Wealth, fame, recognition, admiration, praise, prestige, approval, sainthood, martyrdom, success: none are needed, none are desired." (CHS 12/26/22) "When fame, wealth, prestige, status and glory are out of reach, you're free to pursue other more valuable things." (CHS 2/6/22) "It is the sacred duty of every activist who seeks to better their community to grow and share as much life-giving food as is humanly possible." (CHS 6/15/23) "Being anonymous, gray and unknown is the ideal state of freedom." (CHS 3/15/24) "We seem to have entered a world of anti-leisure and anti-productivity in which the unpaid shadow work demanded to keep all the complicated digital bits in motion obliterate our leisure and productivity." CHS (5/22/24) "It is axiomatic that failing systems work the best just before they fail catastrophically." Ray W. "Looking younger is mere technique; thinking younger demands creativity." CHS (10/16/24) "Tell me what's taboo and I'll tell you the truths that threaten the status quo." CHS (12/15/24) "This is the core of the Attention Economy: the ultimate addiction is the addiction to ourselves." CHS (1/28/25) "If You Seek the Truth, Look for What's Taboo." CHS (7/18/25) "My definition of self-reliance: the less you need, the easier it is to get what you need." CHS (7/26/25) "Mastery requires reading and doing." CHS (7/28/25) "The replacement of authentic value, quality, agency, choice, trust, legitimacy and experience with self-serving facsimiles is the key dynamic of Ultra-Processed Life, my term for the present-day human condition." CHS (8/12/25) "Ultra-Processed Life replaces an authentic experience with a synthetic, simulated, commoditized, highly profitable version that's superficially attractive but destructive over the long term." CHS (8/12/25) "What we see everywhere is the replacement of authentic things--including democracy--with synthetic facsimiles designed to maintain the illusion of choice and value." CHS (8/12/25) "Sometimes certainty is the enemy we don't even see and uncertainty is our most faithful ally." CHS (9/20/25) |
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