Morality and Fiat Currency

Morality and Fiat Currency

On the
latest episode
of The Non-Prophets, the guys got into an extended discussion about
morality. That discussion should be required listening for anyone with
any questions about how you can be moral without absolute rules
imposed from without, or whether situational ethics automatically
means it’s okay to commit genocide.

But what interested me more was a connection I noticed to fiat

Quick recap: it used to be that a dollar bill was a promissory note:
you could present it at a bank and they’d give you an ounce of silver
(or whatever). A bill wasn’t actual money, it was just a portable
guarantee that you did have the money somewhere.

At some point, which I can’t be bothered to look up right now, the US
declared that the dollar would no longer be backed by gold or silver
or, well, anything. A dollar is just a dollar, and is worth whatever
you can get for it. This is fiat currency: a dollar bill is worth the
same as a fun-size bag of Doritos simply because we say it is.

This may seem kind of scary: how can this dollar bill possibly be
worth anything unless there’s something of value to back it up? What
if the clerk won’t accept paper money? I want to go to the bank and
get an ounce of silver, and surely that can be exchanged for
a fun-sized bag of Doritos.

But why would silver make a difference? The only reason silver has
value at all is that we say it does. Same as a dollar bill, or bits in
a bank’s computer. So we might as well go with the dollar bills and
the bits, because they’re more portable.

Another reason fiat currency works in practice is that it’s
constrained by real-life considerations. There’s no a priori
reason why a dollar bill will buy a fun-sized bag of Doritos but not
an iPod or an SUV. But in practice, it takes more metal to make an iPod
than the silvery part of the Doritos bag; building an SUV or an iPod
takes more person-hours per unit, and so on. So it makes sense that if
a dollar can be exchanged for a bag of Doritos, you need to exchange
several dollars for an iPod, and even more for an SUV.

So an SUV is worth more than a dollar bill simply because you won’t
find a car dealer who’ll sell you an SUV at that price. Through ten
million such negotiations, eventually a consensus emerges as to how
much something is worth.

This consensus can change over time. That’s how we get inflation, and
the falling price of electronics, and so on.

Now, what about morality? How can we say that one action is good and
another bad, if there isn’t a bedrock set of rules?

Same deal as fiat currency: by mutual agreement. Is it okay to turn
right at a red light, or not? Some societies say yes, others no. Is it
rude to belch after a meal, or is it rude not to? Again, different
societies disagree.

But just as with fiat currency, morality is not completely divorced
from reality. Some sets of rules simply work better than others: a
society that doesn’t condemn murder will fall apart. I don’t like
being punched in the face, so I’m not going to agree to a set of rules
that say it’s okay to punch me in the face. Or take my stuff, or lie
to me, and so on.

And as we grow up, we learn that other people usually tend to like the
same things as we do (affection, chocolate, honesty) and dislike the
same things that we do (lies, hunger, crotchpunches). So over time, as
people interact, we come up with rules for acceptable and unacceptable
ways to interact.

Just as fiat currency is tied to implacable reality, so morality is
tied to shared biology: we all dislike being hungry or afraid because
we’re all human beings with roughly identical brains and bodies. And
it’s not just the primal stuff that we share, like fear: reports keep
coming in about experiments that our close evolutionary cousins like
chimps and monkeys share feelings of fairness, trade, cooperation, and
so forth.

So why was the Holocaust a Bad Thing? Because the Jews who were
affected by it didn’t agree to it. Why should it matter whether they
agreed to it? Because it’s only fair. Why does fairness matter?
Because we’re wired to care about fairness.

Of course, at the edges, this leads to interesting conversations where
the answers aren’t clear. If a man wants to castrate himself, should
he be allowed to do so? Is it okay to interfere with someone who wants
to castrate himself (perhaps with the possibility that if the man
can give a good reason to do so, he will be allowed to proceed)? Is it
ever okay to tell a person, “your moral code is completely wrong, and
I’m going to stop you from carrying out what you consider to be a
completely moral action that will harm you and no one else”?

We’re still working things out. It took a while, but we finally
figured out that slavery is wrong. And that denying people rights
because of their skin color is wrong. And that discriminating against
women in non-uterus-related situations is wrong. We’ll always have
stuff to work on. The important thing is to keep trying to improve.

One thought on “Morality and Fiat Currency

  1. I’ve always found it interesting to hear somebody say on one hand, “Oh, those old rules don’t apply now because of Jesus and the new covenant” decry “moral relativism” wherever they see it in modern society. Either morality is absolute and unchanging or it isn’t.

    No matter how many times I’ve debated the absolute morality question with somebody who believes that God gave them a perfect moral code, they’ve never answered a simple question: What is it? What set of morals do they have that always work and have no edge cases? Isn’t it obvious, simply from the fact that we don’t (and can’t!) enumerate our morals that morality is situational and driven by a combination of instinct, intellect, and experience?

  2. Awesome article!

    Fiat currency and morality are both socio-emergent properties – no single individual alone can dictate their value without social consensus or borrowing power from an existing power structure, such as governments or religious institutions.

    Once established, both money and ethical systems are sustained not only by their utility, but also massive social momentum. Historically, the vast majority of human beings are extremely attracted to simplistic black and white rules and would fight to preserve long entrenched conventions, even if they are meaningless or actually are injurious to society.

  3. Troublesome Frog:

    I suppose an absolute morality isn’t actually inconsistent with the real world, just very messy. “Do not kill” is a nice simple black-and-white rule, but any sane person who defends Biblical morality will have to add a ton of exceptions and other clauses: don’t kill, unless it’s in self-defense (and killing the attacker is the only way to defend yourself), or if it’s a heinous criminal, or God has ordered it, yadda yadda.

    So the way I imagine an absolute morality, every action in every situation is either absolutely right or absolutely wrong. But that’s like saying that every point is either 100% inside the Mandelbrot set or 100% outside it. Unless you’re God himself, it’s hard to tell which is which.

    Since we can’t just memorize Leviticus and Deuteronomy and mechanically the rules therein, we need guiding principles and rules of thumb. And that leads to shades of gray.

    (I hope some of that made sense.)

  4. LH:

    Thanks. In retrospect, I probably should have used the phrase “emergent phenomenon” somewhere in the article, so thanks for supplying it.

    It seems to me that there’s a similar phenomenon in science: if you have ten measurements, nine of which fit with your pet theory and the general consensus in the field, and one that doesn’t, it’s easy to discard the tenth number as measurement error or noise or something.

    Sometimes the “measurement error” just won’t go away, like the orbit of Mercury that didn’t quite fit Newton’s predictions, and that’s very exciting. And fortunately, science is a way of looking for these sorts of things. But on the whole, if you have one result that fits in with established theory and one that contradicts it, it’s more likely that you’re wrong than that everyone else is. So there is a certain tendency for scientists to be pulled away from their results and toward consensus.

    (Again, I hope that made some kind of sense.)

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