Sacred Cash

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Pre­vi­ously: Cat­e­gories of Sa­cred­ness, Eter­nal, and Hearth­stone Econ­omy ver­sus Magic Econ­omy, Slack

Re­lated (Com­pass Rose): Kid­neys, Trade, Sa­cred­ness and Space Travel

Re­mem­ber when money was sa­cred?

Thanks to The Great Trans­for­ma­tion, there is an in­creas­ingly free mar­ket in money. We spend money con­tin­u­ously, and get paid con­tin­u­ously.

This is rel­a­tively new. Or at least, its uni­ver­sal­ity is rel­a­tively new.

It wasn’t so long ago that money was sa­cred at the bank. They had to give you a toaster in­stead.

My par­ents grew up in a differ­ent world. They taught me money was sa­cred. You had a job for a fixed num­ber of hours, pay­ing a fixed amount. That was all the money you got. Earn­ing more was very difficult. Side jobs were lousy and rare. You’d spend lots of time to sell un­wanted items at yard or side­walk sales, at se­vere dis­counts. Every­one kept a strict bud­get. The edge was never far away.

Money spent other than on ne­ces­si­ties was a spe­cial treat, a grand honor or dire emer­gency.

This cul­tural at­ti­tude is hard to learn. It is also hard to un­learn. It is quite jar­ring when you first see it vi­o­lated.

The Profane

When I moved out to Den­ver to work at So­cial Games on the Cyper­punk TCG, I met a group that nei­ther had enough money, had ways to earn more money nor treated money as sa­cred.

They’d think noth­ing of pay­ing a dol­lar for a Slurpee. On pay­day, they’d all get take­out. Far from pay­day, they’d (liter­ally in one case) search their seat cush­ions to find change with which to gas up their mo­tor­cy­cle, to get to work.

Any­thing they had, that could have been rea­son­ably sold, would even­tu­ally have been.

I did not un­der­stand.

In a start-up with one an­gel in­vestor who lacked the abil­ity to rein­vest, and lit­tle hope of rais­ing ad­di­tional funds, they did not pre­pare for the in­evitable cash crunch while try­ing to sell enough to stem the bleed­ing. I don’t know if we could have sta­bi­lized if given a few more months, but we had a shot only with those months. We likely fail any­way, but to see it all thrown away in­furi­ated me.

Me­taMed’s fi­nal blow was similar. My re­place­ment as CEO in­creased our spend, leav­ing in­suffi­cient run­way to do the things nec­es­sary to raise ad­di­tional funds, and failed to re­al­ize (de­spite my re­peated warn­ings) that this meant 0% chance of suc­cess. The plan’s timeline didn’t work. It was in­co­her­ent. Again, we prob­a­bly fail any­way, but to do that which in­evitably fails? In­furi­at­ing.

I did not un­der­stand.

What was wrong with these peo­ple? Money was sa­cred.

Sure, it wasn’t au­to­mat­i­cally sa­cred, but it was sa­cred in con­text. Sup­ply was limited. Be­ing flush to­day doesn’t change that.

On The Wire, a char­ac­ter who not a day ago was about to be kil­led for lack of funds burns hun­dred dol­lar bills in a bar. His ex­pla­na­tion? “When I’m flush, I’m flush.”

In Den­ver I had some sav­ings, but fully un­der­stood I had a ter­rible salary and acted ac­cord­ingly. I rented a $400 apart­ment, lived on $1,000 a month, ag­o­nized over buy­ing an oc­ca­sional lux­u­ri­ous Quiznos sand­wich or a pizza, and worked to solve the lo­cal In­dian cas­ino poker game (it had a strange unique struc­ture for le­gal rea­sons) to pay the rent while get­ting paid in equity to help the com­pany.

Later, I had to train my­self out of that. I taught my­self that in­creas­ingly large amounts of money weren’t sa­cred to me. It is still a sin (in my code) to waste money or make a bad trade, even for triv­ial size. I’ve kept some amount of sa­cred­ness. I think this is im­por­tant in a makes-my-12-rules-for-life kind of way. Don’t lose that cringe! But ‘throw money at the prob­lem’ is an op­tion, and ‘buy it even if it’s ex­pen­sive be­cause you’ll en­joy it’ has its place.

Slack Tax

Money mov­ing from sa­cred to non-sa­cred is a huge change.

When money is sa­cred, so are things one can buy. All worth­while pos­ses­sions are prized pos­ses­sions.

When money isn’t sa­cred, nei­ther are things one can sell. Only things you can­not effi­ciently sell can still be prized. Po­ten­tial trade be­comes an en­emy.

When one is flush, one buys ex­pe­riences, mem­o­ries and hard-to-sell as­sets.

If one does not, one falls vic­tim to the wealth tax.

The slack tax takes many forms.

In Den­ver, it took the rel­a­tively be­nign form of oblivi­ous­ness and hy­per­bolic dis­count­ing. Peo­ple spent money on them­selves, vol­un­tar­ily, act­ing as if they were more wealthy than they were, leav­ing them poorer still.

It has less be­nign forms. Govern­ments and other ban­dits look for wealth and take it. Some­times those ban­dits are your friends, fam­ily and neigh­bors. A lit­tle giv­ing back is a good thing, but in many cul­tures de­mands for help and re­dis­tri­bu­tion rapidly ap­proach 100% – life is tough, and your fel­low tribe mem­bers, or at least fam­ily mem­bers, are end­less pits of need, so any wealth that can be given away must be hid­den if you want to re­main in good stand­ing. Sav­ings, se­cu­rity and in­vest­ment in any­thing but sta­tus are all but im­pos­si­ble. There is no hope for pros­per­ity.

In be­tween is com­mer­cial pres­sure, price dis­crim­i­na­tion and hold-up prob­lems. Agents see free en­ergy and work to ex­tract it by charg­ing for ac­cess to com­ple­men­tary goods, hold­ing out promises, cre­at­ing per­cep­tion of needs and man­u­fac­tur­ing ex­pen­sive sta­tus com­pe­ti­tions. The man­u­fac­turer of a key com­po­nent, or the head of the union, de­mands al­most all of your profit mar­gins. Prod­ucts ad­ver­tise mir­a­cle effects that might solve your prob­lems; you know they’re ly­ing, but what else is there to do? And what would you do with­out the hot sneak­ers, the lat­est hand­bag, the hip new phone or the most pres­ti­gious col­lege de­gree?

The most in­sidious traps are ex­plicit slack traps. You must send the sig­nal that you have spent all your re­sources. Any di­a­mond (or col­lege, or house..) is fine, so long as it cost you ev­ery­thing you had, so I know you love me. You can raise more cap­i­tal for your start-up, but first you must be broke, or it would be ir­re­spon­si­ble to give you more yet. Also would mean I wouldn’t have as much lev­er­age.

The Slack Tax’s most pop­u­lar form is the Wealth Tax. But it works on any re­source. Thus, for ex­am­ple, the need to cre­ate so­cially ac­cept­able, leg­ibly sa­cred time.

Without strong defenses, those forces out to get us will find a way. All slack, and thus hope, will be lost.