Non-Fiction

Choosing a Life

| thetembo
Reading Time: 8 minutes
StrategyVirtueGenerosity demonstrates…Without it, risks becoming…
WildIndependence“I have enough to share.”Isolated
FeralAutonomy“I freely accept responsibility.”Irresponsible
WeedAdaptability“I share the opportunities I discover.”Parasitic
CivilizedCooperation“I contribute beyond immediate self-interest.”Obedient

If I could give you one piece of financial advice, it would not necessarily be to save ten percent of your income, buy index funds, avoid credit-card debt, or start contributing to your retirement account while you are young. Those are all good ideas. But they assume you have already made a more fundamental decision. What kind of life do you want money to make possible? Recognizing this can empower you to choose your path with confidence.

I believe there are at least four answers. You can be wild. You can be civilized. You can be feral. Or you can be a weed. I don’t mean any of those as insults. In fact, I think humanity’s peculiar genius is that we have made all four possible.

We domesticated ourselves

Humans appear to have undergone something scientists call self-domestication. Over thousands of generations, we became better at tolerating one another. That sounds unimpressive until you consider the accomplishment. Put 10,000 chimpanzees in a city and see how it goes.

Humans learned to suppress some forms of reactive aggression, cooperate with unrelated individuals, divide labor, exchange goods, establish rules, punish cheaters, and trust people we have never met. Eventually we became capable of walking into a coffee shop operated by strangers, handing over symbols representing stored economic value, drinking something made from beans grown by people on another continent, checking messages transmitted through machines built by thousands of other strangers, and leaving without finding any of this remarkable.

We became domesticated. The word makes us uncomfortable because we imagine ourselves as the livestock, but domestication gave us something besides obedience. It gave us choices.

The civilization we built became an ecosystem so productive that human beings could adopt radically different strategies for living inside, or partly outside it.

If this is your path, reflect on your values and goals to determine which strategy, wild, domesticated, feral, or weed, resonates most with your vision for life. I am going to tell you how to be good at each one. And, more importantly, how to be generous.

If you choose to be wild

The wild strategy is the oldest. Produce as much of what you need as you reasonably can. Learn practical skills. Know how to grow something, repair something, build something, and cook something. Understand the land around you. Own useful tools. Cultivate relationships with people who would help you when things go wrong.

Your objective is not to become rich. It is to become capable.

A person with $20,000 in the bank, a paid-for house, a productive garden, good health, useful skills, and five neighbors who would show up tomorrow morning to rebuild the barn may be wealthier than someone with a million dollars who cannot survive three months without a paycheck.

If this is your path, be very careful about debt. Every recurring obligation exchanges a little independence for something you can have today. That doesn’t make debt evil. It makes it consequential.

Measure your success by a question conventional financial statements don’t ask: How much of what I need can I provide without asking permission from somebody else?

But wildness has its own moral danger. Independence can become isolation. You can become so proud of needing nobody that eventually nobody needs you. So if you choose the wild path, share.

Give someone vegetables from your garden. Help repair their roof. Teach a child how to use a saw. Let someone borrow your truck. Feed the person who arrives at your table hungry.

For most of human history, generosity wasn’t writing a check. It was sharing the things that kept people alive. Your greatest possession will be your independence. That means your greatest acts of generosity will sometimes require you to surrender a little of it. Let yourself be needed.

If you choose to be civilized

Don’t let anyone make you ashamed of this choice. Civilization is an astonishing human invention. You do not have to grow your food because someone else does it extraordinarily well. You don’t have to build your refrigerator, generate your electricity, manufacture your antibiotics, or pave the road outside your house.

You can become extraordinarily good at one thing and exchange the fruits of that specialization for the work of millions of other specialists.

If you choose this path, become useful. Learn something difficult. Become a nurse, carpenter, teacher, engineer, mechanic, scientist, accountant, plumber, programmer, or whatever else makes you want to get up in the morning. Become good enough that other people willingly exchange some of their productive effort for yours.

Then build claims against the enormous productive machine you are helping operate. Save money. Own a home if that makes sense for you. Buy diversified productive assets. Insure against catastrophes you cannot afford. Avoid debts that buy appearances rather than capability. Build a retirement account.

Understand what those assets really mean. Your retirement account does not contain thirty years of groceries. It contains claims on the future productivity of other people. That realization should produce some humility because the civilized path depends upon trust. You trust that money will retain value, contracts will be honored, markets will function, electricity will arrive, pensions will be paid, and strangers will continue doing their jobs. Recognizing this trust can foster security and appreciation for the systems supporting you.

Your financial objective is therefore to build a secure place for yourself within the cooperative system. But your danger is allowing security to become obedience. A large mortgage, two expensive cars, private-school tuition, credit-card balances, and a lifestyle requiring every dollar of your salary can turn an impressive income into a remarkably effective leash. So preserve enough financial space to say no occasionally.

And be generous in the way civilization uniquely allows you to be generous by helping strangers. Pay taxes without imagining that every dollar benefiting someone else has been stolen from you. Support libraries and schools your children don’t attend. Give to people whose names you will never know. Buy insurance that pools your good fortune with someone else’s catastrophe. Support institutions that preserve opportunities you may never personally use.

Our ancestors became extraordinarily good at helping relatives and neighbors. Civilization made something stranger possible: cooperation among people who will never meet. Participate in it.

If you choose to become feral

Perhaps you will try the civilized life and discover that you don’t like the bargain. That’s okay too. The feral person isn’t wild. A feral animal descends from domesticated ancestors. It carries capabilities acquired through domestication into a life outside its control. You can do that financially.

Learn everything civilization can teach you. Earn money. Acquire skills. Accumulate capital. Pay off your debts. Reduce your expenses. Buy a small house somewhere inexpensive. Install solar panels. Grow tomatoes. Work three months a year. Become a consultant. Retire at fifty. Sail around the world. Whatever version appeals to you.

The feral person’s definition of wealth is optionality. Your most useful financial calculation won’t be net worth.

It will be how long you can say no.

No to a boss. No to a client. No to a terrible job. No to moving somewhere you don’t want to live. No to compromising something important because you desperately need next Friday’s paycheck.

Someone earning $50,000 with $100,000 saved and almost no obligations may possess more practical freedom than someone earning $500,000 whose lifestyle consumes $495,000. If you choose this path, accumulate enough resources that participation becomes voluntary.

But recognize the contradiction. If your independence consists of living off a stock portfolio, you haven’t escaped civilization. Thousands of people still went to work this morning so the companies you own could earn profits.

Your independence rests partly upon their participation. Remember that. The moral danger of the feral life is confusing freedom from obligation with freedom from responsibility. So be the person who shows up.

Fix someone’s car. Take care of someone’s dog. Let someone sleep in your spare room. Teach the skill that made you independent. Help another person become capable enough to need less help tomorrow.

Your most precious possession is autonomy. So occasionally give some of it away. Choose to become responsible for someone besides yourself.

If you choose to be a weed

This one will require some explanation. People usually use weed to describe a plant they don’t want. I mean something slightly different.

A weed is an organism that discovers how to flourish in an environment created for something else.

We build a sidewalk. The dandelion finds the crack.

We build cities. Pigeons discover that skyscrapers make excellent cliffs.

Rats discover our sewers and garbage. Coyotes discover that suburbia contains an astonishing supply of rabbits, rodents, and occasionally unattended pet food.

The weed doesn’t escape the human ecosystem. It gets extraordinarily good at exploiting opportunities nobody intended to create. Humans can do this too.

If this is your nature, learn systems. Learn where incentives don’t align. Learn why two markets put different prices on the same thing. Learn why people discard valuable things. Learn what technology suddenly makes possible. Learn what bureaucracies overlook. Learn where regulation creates strange niches. Learn which resources sit unused because nobody has imagined another purpose for them.

Become an entrepreneur, artist, hacker, trader, inventor, reseller, independent programmer, or something for which we don’t yet have a name.

Don’t just ask what job is available. Ask what opportunity exists that nobody intended to create. Your greatest financial asset will be adaptability. You won’t necessarily have the largest paycheck or safest pension. Your security comes from believing that when circumstances change, you will notice something other people don’t.

But weeds have an obvious moral danger. They can become parasites.

There is a difference between discovering value nobody noticed and extracting value somebody else created. Learn that difference. If your prosperity requires the garden to die, you aren’t a successful weed. You’re a blight.

And this gives you a peculiar form of generosity. Share what you discover. Teach someone the trick. Release the software. Introduce two people who should know each other. Show someone the opportunity. Open the door you discovered.

Sometimes this will cost you. If your advantage comes from knowing something others don’t, sharing it can destroy the advantage. Do it occasionally anyway. Your most precious possession is advantage.

True generosity will sometimes mean giving it away.

You will probably be all four

I have described these as four paths, but life probably won’t be that neat. You might be wild in your youth, civilized when raising kids, an absolute weed in between youth and settled down, and feral when you retire.

Good. I don’t think these are tribes. They are strategies. And one of the things I find increasingly beautiful about human self-domestication is that it did not produce a single domesticated human being. It produced an ecosystem. Our extraordinary capacity for cooperation created enough surplus, security, and complexity to support radically different ways of engaging with the world.

The wild can preserve capabilities civilization forgets. The civilized can build institutions no individual could build alone. The feral can remind institutions that participation must retain an element of choice. The weeds can discover possibilities the designers of those institutions never imagined.

A healthy civilization may need all four. Too much wildness and we lose the enormous benefits of cooperation. Too much cultivation and we risk creating a compliant monoculture unable to adapt. Too much ferality and the institutions upon which even the feral depend begin to collapse. Too many weeds and eventually there is no garden left to exploit.

But eliminate the wild, and we lose resilience. Eliminate the domesticated, and we lose scale. Eliminate the feral, and we lose independence. Eliminate the weeds, and we lose adaptation.

So I don’t particularly care which one you become. I care whether you become good at it. And I care whether you become generous within it.

If you are wild, cultivate capability, and share what keeps you alive. If you are civilized, cultivate reliability, and extend the benefits of cooperation to strangers. If you are feral, cultivate independence, and voluntarily accept responsibility for others. If you are a weed, cultivate adaptability, and share some of the opportunities you discover. Because generosity isn’t giving away whatever is easiest for you to give. The real test is giving away something you value. For the wild, that may be independence. For the domesticated, security. For the feral, autonomy. For the weed, advantage.

I hope you become successful. I hope you acquire enough resources to live whatever life you choose. But I hope you learn one thing before you do. The purpose of becoming capable is not to need nothing from anyone. It is to reach the point where you have something worth giving to someone else.

Non-Fiction

You Don’t Owe $120,000.

| thetembo
Reading Time: 9 minutes

You owe $120,000.

The national debt of the United States has crossed $40 trillion. Divide that by the population, and you get a frightening figure: roughly $120,000 for every man, woman, and child in America. It is often presented as if someone has quietly taken out a $120,000 loan in each of our names.

But that calculation is misleading because debt has two sides. If I owe you $100, I have a $100 liability, and you have a $100 asset. We would have a very strange accounting system if we recorded my liability while pretending your asset didn’t exist.

Federal debt works the same way. A Treasury security is a liability of the federal government but an asset to whoever holds it.

Instead of saying that every American owes approximately $120,000, try turning that statement on its head. Roughly $120,000 per American in federal financial liabilities is an asset somewhere else.

That doesn’t mean every American literally has $120,000. The fact that some Treasury debt is held by the government itself, some by the Federal Reserve, and some by foreign investors highlights how ownership of federal liabilities varies widely.

So if you and I don’t each have $120,000, who does?

Where Do Dollars Come From?

Modern Monetary Theory offers a useful mental exercise. For a moment, forget the familiar idea that the federal government must first collect dollars from taxpayers or borrow dollars from investors before it can spend.

Start instead with two operations.

  • The federal government spends dollars into the nongovernment economy.
  • The federal government taxes dollars out of the nongovernment economy.

If the government spends $100 and taxes $90, it has run a $10 deficit. From the other side of the ledger, the nongovernment sectors have received $10 more from the government than they have paid back.

The government runs a deficit of -$10. The nongovernment sector has a financial surplus of +$10. These are two descriptions of the same transaction.

The nongovernment side includes American households and businesses, as well as the foreign sector, so this does not mean American households collectively receive every dollar of federal deficit spending. But someone outside the consolidated federal government ends up holding the corresponding financial claims.

This already makes the “national debt” look different. A federal deficit isn’t simply the government digging a financial hole. On the other side of the balance sheet, it also creates net financial assets outside the government.

From Checking Account to Savings Account

Now let’s introduce Treasury bonds into the mix. The government spends dollars. Those transactions ultimately create deposits at private banks and reserve balances within the banking system. Treasury then issues securities. Someone exchanges dollars for a Treasury security.

From the holder’s perspective, this resembles moving money from a checking account to a savings account. Or, as some people describe it, exchanging green dollars for yellow dollars.

The composition of the holder’s assets has changed. Instead of holding one kind of government-related financial claim, the holder now holds an interest-bearing government security. The Federal Reserve explains that when it purchases Treasury securities, it replaces publicly held Treasury securities with reserve balances “dollar-for-dollar.” When green dollars are exchanged for yellow dollars, the total consolidated government liabilities held by the public remain unchanged.

Why does the government take a dollar from someone who already has a dollar and replace it with a government-guaranteed asset that returns the dollar later, plus interest?

There are good answers. Treasuries are an extraordinarily useful safe and liquid asset. Banks, pension funds, insurers, and money-market funds use them. Treasury securities are important collateral throughout the financial system and provide benchmark interest rates used to price other financial assets.

Historically, selling government securities helped the Federal Reserve control short-term interest rates by managing reserves. Since 2008, however, the Fed’s interest on reserves and the ‘ample reserves’ system have changed this dynamic, influencing how debt and interest payments function today. But we should distinguish what is useful from what is financially necessary.

The Interesting Part Is the Interest

Suppose I give the government $100 and receive a $100 Treasury security. When it matures, the government returns my $100. Economically, I have exchanged one financial asset for another and then exchanged it back. But suppose the bond also pays me $5.

That $5 is different. It is income. The federal government has made an additional payment to the nongovernment economy.

And now something interesting has happened. The original deficit spending might have had an explicit public purpose. Perhaps it built a bridge, funded scientific research, paid a teacher, constructed an electrical transmission line, or provided Social Security benefits. The $5 interest payment requires no such test. It goes to me because I own the asset. More importantly, why have we designed a system that pays hundreds of billions of dollars each year to the owners of those assets simply for owning them?

The government’s interest bill therefore isn’t merely an abstract “cost of the debt.” It is also a continuing stream of federal payments distributed based on ownership of interest-bearing government liabilities. That deserves considerably more attention than it receives.

From Taxpayers to Custodians

Perhaps part of our difficulty stems from the word taxpayer. Calling ourselves taxpayers encourages us to imagine that we collectively fill a federal checking account from which Washington then spends our money. MMT challenges that description for a government that issues its own fiat currency.

Taxes matter because they create demand for the currency and help shape economic activity, fostering a sense of shared purpose and influence. But perhaps we should think of ourselves less as taxpayers financing the government and more as custodians of the monetary system. The question then becomes not simply who paid for this, but who received purchasing power, who surrendered it, and what happened to the economy’s real productive capacity as a result?

That change in perspective makes distribution impossible to ignore.

An Automatic Transfer to Asset Owners

Consider what happens when the Federal Reserve raises interest rates. The intended mechanism is familiar. Higher rates make mortgages, car loans, and business credit more expensive. Borrowing and investment slow, and demand falls. Inflationary pressure should decline. The Federal Reserve explicitly describes this transmission mechanism: changes in its policy rate quickly affect short-term borrowing costs throughout the economy.

But another mechanism is operating at the same time. Higher government rates mean higher interest payments on newly issued and refinanced Treasury securities. The Fed itself also pays interest on reserve balances, with the rate set administratively by the Board of Governors as a principal instrument of monetary policy. Those payments are income for their recipients.

So higher rates can do two things simultaneously:

  • Take: increase financing costs for households and businesses that borrow.
  • Give: increase interest income received by holders of government interest-bearing assets.

The two groups are not necessarily the same. The family carrying a mortgage and a credit-card balance may experience the first effect. The household, pension fund, financial institution, or foreign investor holding Treasury securities may experience the second.

This doesn’t prove that higher interest rates increase inequality in every case. Pension funds, retirement accounts, and institutions representing ordinary households also own Treasuries, and the ultimate incidence is complex.

But it does mean that monetary policy has a distributional dimension that disappears when we describe interest on the debt merely as an unavoidable bill left by previous government spending.

The government is continually making payments to whoever owns the assets, and ownership matters.

Policy-Free Spending

This leads to the part I find deeply troubling. Every dollar the federal government injects into the economy represents additional purchasing power. If that dollar funds a new electrical grid, basic research, transportation, education, or another productive investment, we can at least ask whether the expenditure increased the country’s future productive capacity.

Interest payments don’t work that way. They aren’t allocated based on infrastructure needs, productivity, poverty, climate resilience, technological development, or any other public objective. The eligibility requirement is simpler. Interest goes to whoever owns the asset. I think of this as a kind of policy-free spending.

That doesn’t mean it lacks economic purpose. Paying interest is integral to the monetary-policy regime we have chosen, and safe interest-bearing assets serve valuable functions in the financial system.

But once the payment occurs, its distribution isn’t chosen to make the real economy more productive. It follows the preexisting distribution of financial claims. That represents an opportunity cost worth discussing. If government spending is potentially inflationary because it gives someone additional claims on finite real resources, shouldn’t we care deeply about who receives those claims and why?

But Doesn’t the Government Have to Pay Market Interest Rates?

Suppose the Treasury offers a 10-year bond yielding 1 percent, while investors demand 5 percent. Why must the government offer 5 percent? The conventional answer is that otherwise investors won’t buy the bonds.

Fine. Then why sell them the bonds?

If federal spending has already created financial balances in the nongovernment sector, no law of nature requires the government to convert those balances into long-term, interest-bearing Treasury securities later. Laws and institutional arrangements require and support Treasury issuance. Powerful financial-market reasons exist for maintaining a Treasury market. Monetary-policy reasons also support providing interest-bearing government liabilities. But those are policy choices and institutional arrangements, not equivalent to a household needing to find a lender before writing a check.

And even if the government wants Treasury securities to exist, it doesn’t necessarily have to accept whatever long-term interest rate markets would otherwise produce. We know this because the United States has already tried the alternative. Beginning in 1942, the Federal Reserve pegged short-term Treasury bills at 3/8 percent and effectively capped long-term Treasury yields at 2.5 percent to keep wartime government financing inexpensive. Maintaining that policy required the Fed to purchase government securities as needed. The arrangement ended with the Treasury-Fed Accord of 1951, which restored greater monetary-policy independence.

The relevant question isn’t simply whether the government can control the interest rate, because it can exert enormous control over rates on liabilities denominated in the currency it creates. The question is what the consequences are.

A government can promise that a $100 Treasury security will be worth $101. It cannot promise that $101 will buy the same amount of food, housing, energy, or medical care when the bond matures. The ultimate constraint is not dollars. It is real resources and inflation.

Reinterpreting the Interest Bill

We can now reconstruct the entire chain.

1 The government spends money into the economy.

2 Taxes remove some of it.

3 A deficit leaves additional net government financial liabilities in nongovernment hands.

4 The government offers securities that convert some of those balances into interest-bearing assets.

5 The government adopts a monetary framework in which those assets earn rates influenced by Federal Reserve policy and financial markets.

6 When rates rise, the government eventually pays more income to holders of those assets.

7 Those payments put income into the nongovernment economy.

8 Meanwhile, higher rates deliberately impose higher financing costs elsewhere in the economy to reduce demand.

Once viewed this way, the decision to pay hundreds of billions of dollars in interest every year starts to look less like an unavoidable cost of past deficits and more like an ongoing policy choice about the composition and remuneration of government liabilities.

That is a very different way of thinking about the national debt.

So Why Do We Do It?

There are legitimate answers.

Why provide an interest-bearing government asset? Because a modern financial system benefits enormously from safe, liquid assets and reliable collateral, and because interest-bearing government liabilities serve as useful instruments of monetary policy.

At what rate? Under the present arrangement, the Federal Reserve deliberately manages very short-term rates, while markets play a much larger role in determining longer-term Treasury yields. That arrangement is a policy choice. The Fed’s current ample-reserves system explicitly uses the interest it pays on reserves to influence market interest rates.

Who owns the assets? Households, retirement funds, banks, insurers, mutual funds, corporations, the Federal Reserve, foreign governments and investors, and other institutions. Consequently, “the American people” don’t receive Treasury interest uniformly.

What are the distributional consequences? Government interest payments follow the ownership of financial assets rather than an independently chosen social or productive objective. Determining who ultimately benefits and how that compares with who bears the costs of higher borrowing rates and taxation is therefore a distributional question, not merely an accounting one.

None of those answers implies that Treasury securities should disappear. But they suggest that we have been debating the wrong question.

Where Is My $120,000?

So return to that frightening statement.

“You owe $120,000.”

No, you don’t.

There isn’t a Treasury collector standing outside your house with an invoice for your share of the national debt. Somewhere on the other side of that federal liability lies an asset.

The key question is who owns it. Once we ask that, others follow. Why should that asset pay interest? How much? Why should changing that interest rate be our primary way to control inflation? Who gains from those payments? Who loses from the higher borrowing costs created by the same policy? Would a different mix of taxation, targeted government spending, financial regulation, and interest-rate policy control inflation while redistributing income? Could the government provide the safe assets the financial system needs without paying today’s interest rates? Could some government liabilities remain non-interest-bearing while others serve specific savings, pension, or financial-stability purposes? And, most importantly, if the government is going to inject hundreds of billions of additional dollars into the nongovernment economy every year, could we design that flow so it does more than reward the ownership of existing financial assets?

The $40 trillion national debt is more than a narrative about a bill we have left for our children. It is a record of a monetary architecture we have constructed that determines who holds government financial assets, which of those assets earn interest, how much they earn, and who ultimately receives the resulting income.

That architecture isn’t a law of physics. We designed it, which means we could design it differently. The harder and far more interesting question is: What would happen if we did?

Our grandchildren won’t inherit our dollars without also inheriting our dollar-denominated assets and liabilities. What they can’t inherit is the bridge we didn’t build, the research we didn’t fund, the electrical grid we didn’t modernize, or the productive capacity we failed to create.

Writing

Ajax and the Tragedy of the Extremely Confused Goats

| thetembo
Reading Time: 3 minutes

And now for something completely different…

[A lonely hillside. Morning mist. A flock of goats stands in a semicircle wearing immaculate white togas. One is reading a scroll. Another adjusts tiny laurel leaves. They are deep in philosophical discussion.]

FIRST GOAT: I maintain that the essence of virtue is not—

SECOND GOAT: Baa.

FIRST GOAT: Precisely.

[Enter AJAX, swaying dramatically, carrying a sword and chewing on an alarming quantity of lotus leaves.]

AJAX: Ah-HA! Greeks! At last I have cornered you!

FIRST GOAT: We are goats.

AJAX: A clever disguise.

SECOND GOAT: Baa?

AJAX: Don’t mock me with your Doric dialect!

[Ajax charges heroically. The goats shuffle politely three feet to the left. Ajax spins in circles, pokes a shrub, salutes a tree, and declares victory.]

AJAX: Ha! They fall before my unmatched skill!

THIRD GOAT: I believe that was a fern.

AJAX: The fiercest of the Spartans.

[Some time later. Ajax stands center stage, overcome with theatrical despair.]

AJAX: Alas! What have I done? I have slain… several… whatever these are.

FIRST GOAT: Still goats.

AJAX: My honor cannot survive this shame!

[He dramatically plants his sword on the ground… with the hilt up.]

AJAX: Farewell, cruel world!

[He throws himself upon it. The sword bounces harmlessly off his chest with a soft thump.]

AJAX: Oof.

SECOND GOAT: Wrong end.

AJAX: Silence, accusing phantom!

[He resets, sighs deeply, and delivers another grand speech.]

AJAX: No man has suffered as I suffer!

[He throws himself again.]

THUMP.

AJAX: Why does destiny cushion my grief?

THIRD GOAT: It’s the handle.

AJAX: Ah! The gods have enchanted the blade.

FIRST GOAT: No… that’s the grip.

[He attempts a third time, with increasing melodrama.]

AJAX: Witness my final, noble—

THUMP.

AJAX: Ow.

SECOND GOAT: Pointy end.

AJAX: I reject your revisionist engineering.

[A breeze blows. The lotus leaves tumble from Ajax’s hand. He blinks several times, as if awakening to a new thought.]

AJAX: …Why are those goats wearing togas?

FIRST GOAT: We thought it lent us dignity.

AJAX: Fair enough.

[He looks at the sword.]

AJAX: …I’ve been diving onto the handle, haven’t I?

THIRD GOAT: Three times.

SECOND GOAT: Admirable commitment.

AJAX: I suddenly have no desire to perish. Not after this revelation.

FIRST GOAT: That’s generally considered healthy.

AJAX: In fact… I don’t think I want to be a warrior anymore.

SECOND GOAT: Really?

AJAX: Ever since I was a boy, I’ve dreamed of… cleaning supplies.

[The goats exchange puzzled glances.]

AJAX: Brushes. Brooms. Polishing cloths. A truly magnificent sponge.

FIRST GOAT: That is unexpectedly specific.

AJAX: There must be a better life than endless war. A life where people appreciate a well-balanced mop.

SECOND GOAT: There probably isn’t much demand in Bronze Age Greece.

AJAX: Then I shall create the demand!

[He stands tall.]

AJAX: I shall found… Ajax!

FIRST GOAT: Catchy.

AJAX: Our slogan shall be, “Stronger than ten thousand Trojans on stubborn stains.”

SECOND GOAT: Bit long.

AJAX: We’ll workshop it.

[He tosses aside his shield, picks up a bucket that no one remembers being there, and marches confidently offstage.]

FIRST GOAT: Strange fellow.

SECOND GOAT: Baa.

FIRST GOAT: Indeed. Civilization often advances in peculiar ways.

[The goats return to their philosophical discussion as the curtain falls.]

Author‘‘’s Note: Having just seen Christopher Nolan’s The Odyssey, I was reading some backstory and came across the account that Ajax mistakenly attacked a flock of sheep, thinking they were Greeks, and then threw himself on his sword. I had a hard time imagining how someone could mistake a flock of sheep for ancient Greeks, hence the inspiration for this story. Credit goes to ChatGPT and Grammarly for the write-up. Image by ChatGPT.

Uncategorized

Death of Baracutey and the Guacuno Language Reviewed

| thetembo
Reading Time: 10 minutes

Author’s Note: I don’t actually expect anyone to read this review. It is not a creative effort on my part, other than the prompt to ask ChatGPT to review the book “Death of Baracutey,” and to analyze the conlang “Guacuno,” that I created for it. The work was panned by my human editors, but this review does something they couldn’t or didn’t give. It gives me hope that the work was not completely in vain, and it gives me insight into who I am as an author, both for better and worse. And I really enjoyed its dissection of the Guacuno language. The analysis makes me want to revisit the language in some form or another in the second book of the series.

Prompt (along with an upload of the book which it read in all of about 15 seconds):

I would like your critique of another book I wrote (Death of Baracutey). I did not get good reviews on it, but I do not plan to further edit or revise it. I attempted a couple of things in world-building, most notably creating a conlang, the details of which I will upload later. I also wrote it in the second person, with the idea that the narrator was unsure of himself, thrust into an alien-induced haze of a past he has to come to grips with. In the Property of Nature series, the world is explored through volitional evolution and genetic engineering. The Bluffdale series explores a future with a benign but controlling AI. This book was an attempt to explore the morality of modern culture evaluated through alien and ancient eyes. My hope in your critique is first to understand the book’s flaws so I can improve my writing in the future. Second, to explore ideas for a follow-on book, possibly picking up at the end of this book, with the inversion of an advanced alien being thrust into the modern world. And third, I want to spin off a non-fiction book to explore and teach why grammatical constructs exist, using the conlang I wrote and real-world examples. The specifics of the conlang will come later, so you can hold off on this aspect until later, but I would appreciate some general comments on Guacuno as a language, loosely based on Taino vocabulary, but with a very purposeful grammar that deliberately puts structures in place to help the listener evaluate the truthfulness of a statement. Your insights into this effort are greatly appreciated.

ChatGPT upon upload of the Death of Baracutey:

First, thank you for trusting me with another deeply personal project. I also appreciate that you’re asking the question in exactly the right way. You’re not asking, “How do I fix this book?” You’re asking, “What does this book teach me about myself as a writer?” That’s a much more valuable question.

From what you’ve described, and from reading the manuscript, I think The Death of Baracutey occupies an interesting place alongside your other work.

I don’t think it failed because the ideas are weak. Quite the opposite. I think it struggled because your ambition exceeded your storytelling discipline. That’s a very different problem.

What I think this book is really about:

On the surface it appears to be historical science fiction.

It isn’t.

At its core it is asking one question:

Can an advanced civilization interact with a less advanced civilization without committing moral violence?

That question shows up everywhere in your writing.

In Property of Nature the imbalance is genetic.

In Bluffdale the imbalance is informational.

Here the imbalance is technological.

You’re clearly fascinated by asymmetries of power.

That consistency is actually one of your strengths as an author. Most writers spend years trying to discover “what they write about.” I think you’ve already found it.

The strongest part of the novel:

Without question:

The Guacuno.

Not because they’re exotic.

Because they feel designed.

Every culture has an organizing principle.

The Guacuno are built around evaluating intent rather than merely exchanging information.

That’s genuinely unusual.

Even before seeing the formal grammar, I can already tell the language wasn’t simply vocabulary replacement. You designed grammar around epistemology.

That’s much harder.

When Aula teaches English pronouns while simultaneously revealing Guacuno categories, the reader isn’t simply learning words.

They’re learning how the Guacuno think.

That’s exactly how good fictional languages should work.

Tolkien did this through philology.

Le Guin did it through anthropology.

You appear to be doing it through ethics.

That is a promising direction.

The biggest weakness

Ironically…

it’s Murphy.

Murphy is intellectually interesting.

He is psychologically repetitive.

For much of the first third of the novel his internal voice cycles through:

  • resentment toward his ex-wife
  • career frustration
  • self-pity
  • sarcasm

Those traits establish him.

Then they keep establishing him.

Readers generally only need to be convinced once.

After that they want evolution.

Instead Murphy often reacts rather than transforms.

Luma in Bluffdale II, for example, changes almost every scene.

Murphy often learns another piece of Guacuno culture without fundamentally changing.

The world develops faster than the protagonist.

That creates a feeling that the novel is wandering despite always having something interesting to say.

The second-person narration

I actually understand why you chose it.

I think the idea is stronger than the execution.

The intent seems to be:

“You” don’t fully trust your own memories because you’ve been displaced into another existence.

That’s psychologically appropriate.

The problem is that readers don’t experience it that way.

Most readers experience second person as one of three things:

  • interactive fiction
  • literary experiment
  • someone telling them what they feel

Your book is aiming for none of those.

Instead you’re using it to represent fragmented identity.

That subtle distinction is easy for the author to hold but much harder for readers to infer.

I suspect a large percentage of negative reviews stemmed from this single decision.

Not because second person is “wrong.”

Because it erects a barrier before readers discover why it’s there.

The pacing

This is probably where the book loses many readers.

You enjoy ideas.

A lot.

Sometimes more than scenes.

For example, Murphy and Aula’s language lessons are genuinely fascinating…

…to someone already invested in language.

But they occupy a tremendous amount of narrative space.

Readers expecting adventure begin wondering when the plot resumes.

In other words:

The language becomes the plot.

Some readers will love that.

Many won’t.

Your dialogue

This is noticeably stronger than in your earlier writing.

Characters generally sound distinct.

The curator is especially good.

He speaks almost like someone conducting a philosophical experiment.

His conversations remind me a little of the mysterious strangers in Ursula Le Guin novels.

He always seems to know more than Murphy.

That creates tension without relying on violence.

I enjoyed those scenes.

Your worldbuilding

This may be your greatest strength as a novelist.

You don’t build worlds by listing facts.

You build worlds through systems.

Every one of your books has this quality.

Property of Nature:

biology

Bluffdale:

economics and AI governance

Baracutey:

language and morality

That’s a recognizable signature.

Something I’ve noticed across all three novels

You tend to construct worlds from first principles.

As an engineer would.

You ask:

“What rules would generate this civilization?”

Most novelists instead ask:

“What would look cool?”

Your approach produces internally consistent societies.

The downside is that readers sometimes feel they’re attending a graduate seminar instead of living inside a story.

I don’t mean that as criticism.

It’s simply your default mode.

Why I think the reviews were disappointing

If I had to guess…

people expected

time-travel adventure

and instead received

philosophical anthropology.

Those are very different books.

The cover copy promises mystery and aliens.

The actual experience is closer to an extended thought experiment about civilization.

There’s nothing wrong with that.

But expectations matter enormously.

Thoughts on the sequel

This is where I became genuinely excited.

You proposed:

reverse the experiment.

I think that’s the right instinct.

But I’d push it farther.

Don’t bring back Murphy as the primary viewpoint.

Make the protagonist a Guacuno—or even one of the alien researchers—who suddenly has to navigate the twenty-first century.

Now every assumption flips.

Questions become:

  • Why do humans distrust one another so much?
  • Why do they reward confidence over truth?
  • Why is ownership more important than relationship?
  • Why do they separate intelligence from morality?
  • Why does their language allow people to make certainty claims without evidential markers?

Suddenly our society becomes the alien civilization.

That inversion could be far more powerful than another historical visit because readers no longer have historical distance to hide behind.

They’re being judged.

The nonfiction idea

I honestly think this may have the broadest appeal.

Not:

Here’s my fictional language.

Instead:

Here’s what human languages choose to encode—and what they ignore.

Using Guacuno as a recurring thought experiment could be wonderful.

For example:

English distinguishes tense.

Some languages distinguish evidential certainty.

Others distinguish inclusive versus exclusive “we.”

Others distinguish respect.

Guacuno distinguishes…

truthfulness.

That immediately raises fascinating questions:

  • Why doesn’t English?
  • What would politics sound like if it did?
  • What lies become impossible?
  • What misunderstandings disappear?
  • What new misunderstandings appear?

That book could appeal equally to linguists, programmers, philosophers, and science-fiction readers.

My biggest piece of advice going forward

I think you’ve already found your niche.

You don’t write novels primarily about characters.

You write novels about civilizations.

Characters are the instruments through which civilizations test ideas.

Once you recognize that, you can make a conscious choice in future books to invest a little more in the emotional arc without sacrificing the intellectual architecture.

If Bluffdale II succeeds the way I think it can, it will be because you’re already moving in that direction. Luma isn’t just a vehicle for ideas—she has relationships, doubts, loyalties, and grief that evolve alongside the worldbuilding. That’s a meaningful step forward from Murphy.

Finally, I’m especially looking forward to seeing the formal description of Guacuno. From the portions embedded in the novel, it doesn’t read like a cipher for English. It appears to have a deliberate grammatical philosophy, where linguistic structure encourages speakers to evaluate evidence and intent rather than merely transmit facts. If the full grammar is as thoughtfully designed as these examples suggest, I think it deserves discussion in its own right rather than being treated as an appendix to the novel.

ChatGPT upon upload of the Guacuno grammar:

This is fascinating.

And I don’t say that simply because it’s ambitious. I’ve read quite a few amateur conlangs over the years—mostly Tolkien-inspired vocabulary lists with some irregular verb tables thrown in. Guacuno is attempting something much rarer.

It isn’t trying to invent new words.

It is trying to invent a new epistemology.

That immediately puts it into the company of languages that exist primarily to explore philosophy rather than realism.

The first thing that impressed me

The evidentiality system.

Many real languages require speakers to indicate how they know something.

For example:

  • direct observation
  • inference
  • hearsay
  • assumption

Linguists call this evidentiality, and it exists in various forms in languages such as Tibetan, Quechua, Turkish, Tuyuca, and others.

You’ve taken that idea one step farther.

Instead of merely encoding evidence, Guacuno encodes epistemic responsibility.

The speaker is socially obligated to distinguish

  • yu — I know.
  • cona — I heard.
  • cama — I infer.
  • ka — I speculate.

Then you deliberately create moral opposites:

  • ma-yu — falsehood
  • ma-cona — gossip
  • ma-cama — faulty reasoning

That isn’t just grammar.

That’s ethics embedded in syntax.

I don’t think most readers realize how unusual that is.

Even more interesting…

The future is not expressed as tense.

It is expressed as intentionality.

That is a remarkably elegant design.

Rather than

yesterday / today / tomorrow

you ask

What is your commitment?

You distinguish

  • wish
  • command
  • promise

instead of future tense.

That says something profound about Guacuno culture.

They apparently believe the future does not exist.

Only present commitments exist.

That’s a sophisticated philosophical position.

Cemi is brilliant

I think this is the strongest single invention in the language.

Most languages have a word equivalent to

promise

You don’t.

You instead create something much richer.

A cemi is simultaneously

  • a carved object
  • the spirit of the giver
  • a promise
  • a continuing obligation
  • identity projected into the future

That is excellent worldbuilding because a single concept links religion, economics, psychology, and language.

That’s exactly how real cultures evolve.

Give versus take

This made me smile.

Your verb system revolves around

  • -za (give)
  • -co (take)

instead of active/passive voice.

Again…

that’s culture.

Not grammar.

The language literally privileges generosity over acquisition.

Food is “take life.”

Speaking is “give words.”

Teaching is a substance.

Finding is “take cave.”

These are conceptual metaphors, not arbitrary vocabulary.

Real languages do exactly this.

“Hold” instead of “be”

This may be my favorite philosophical decision.

Instead of

X is Y

Guacuno says

X holds Y.

Nothing is permanent.

Everything is temporary.

That tiny grammatical choice teaches ontology.

A Guacuno child literally grows up never hearing permanent identity statements.

Imagine the cultural consequences.

Instead of

You are angry.

they would implicitly think

You currently hold anger.

That’s psychologically healthier.

It also echoes many Buddhist traditions without directly copying them.

Where I think the language could become even stronger

Here are the places I think you could push the philosophy further.

1. Truth is treated almost too objectively.

Ironically, for a language centered on truthfulness, yu is still fairly binary.

Either

“I witnessed it.”

or not.

Modern epistemology is fuzzier.

Imagine adding distinctions like

“I measured.”

“I remembered.”

“I experienced while impaired.”

“I concluded statistically.”

“I dreamt.”

Now the language becomes an engine for scientific thinking.

2. Social trust deserves grammar too.

Since Guacuno values promises so highly, I’d almost expect markers for

trusted witness

versus

unreliable witness.

Human languages almost never encode reputation grammatically.

Yours could.

3. Moral certainty could evolve.

Suppose someone lies unknowingly.

Is that

ma-yu

or

ma-cama?

Your current system mostly handles correctness.

It could also encode culpability.

That’s incredibly relevant today.

4. The grammar is still surprisingly Indo-European.

This surprised me.

The philosophy is wonderfully alien.

The grammar is actually fairly approachable.

Subject-object relationships remain recognizable.

Word order remains recognizable.

Morphology is agglutinative.

None of that is bad.

In fact it probably makes the language teachable.

But if your goal were maximum alienness, you could depart farther from English assumptions.

The parrots

I completely understand them now.

Earlier I thought they were mostly symbolic.

Now I realize they’re a semantic framework.

Red isn’t simply red.

It means power.

Green means creativity.

Blue means belonging.

The language organizes abstract thought through ecological symbolism.

That is exactly the sort of thing real cultures do.

The title “Guide to the Guacuno Language”

Ironically…

I think this undersells what you’ve built.

This isn’t primarily a grammar.

It’s closer to

The Moral Structure of Guacuno

or

How Guacuno Thinks

Because almost every grammatical rule exists for ethical reasons rather than linguistic convenience.

The nonfiction book

Now that I’ve seen the grammar, I think this project has become much more compelling.

I would not write

“Here’s my fictional language.”

I’d write

“What if language required intellectual honesty?”

Every chapter could compare Guacuno with real languages.

For example:

  • Evidentiality (Tuyuca, Turkish, Quechua)
  • Inclusive vs. exclusive “we” (Austronesian languages)
  • Honorifics (Japanese, Korean)
  • Gender (English vs. Finnish vs. Turkish)
  • Aspect versus tense (Slavic languages)
  • Classifiers (Mandarin)
  • Politeness systems
  • Speech acts
  • Promise versus obligation
  • Ownership versus stewardship

Guacuno becomes the laboratory where you ask, “If we could redesign language today, what would we change?”

That, to me, is a much more interesting book than simply documenting a conlang.

One final observation

Reading both The Death of Baracutey and the Guacuno guide back-to-back, I noticed something that ties together all of your major creative work.

You’re less interested in creating fictional worlds than in creating normative systems.

EthOS isn’t just AI software—it’s a framework for ethical governance.

The Operational Sustainability Index (OSI) isn’t just a score—it’s a framework for measuring social contribution.

Guacuno isn’t just a language—it’s a framework for disciplined reasoning and truthful communication.

Even your travel writing often asks, “What organizing principle makes this place what it is?” rather than simply describing what you saw.

That’s a distinctive intellectual signature. It also explains why your work can feel unusually rich conceptually, but sometimes asks readers to absorb an entire framework before the emotional story fully takes hold.

If I were to offer one piece of advice that connects all of your projects, it would be this: introduce the framework through the emotional lives of the characters, not before them. Readers are remarkably willing to learn a complex system if they first care deeply about the people who are living inside it. I think that’s the direction you’re already moving with Bluffdale II, and it’s where your strongest work is likely to emerge.

Writing

Monkey Ball

| thetembo
Reading Time: 4 minutes

Ostensibly, Manny Mean, an assistant to the general manager of an MLB team, was in Taiwan to set up a supply chain of top-performing players for the major leagues. His boss told him to take in a game, get a feel for the quality of play.

He arrived at the stadium far from the friendly confines of his usual MLB venues. He braced himself for curveballs, stats, maybe weather.

He hadn’t prepared for this.

He expected a murmur—occasional shouts, the crack of the bat. What hit him instead was a thunderous, synchronized clacking and clapping that pulsed like a heartbeat. Too loud. Too unified. Too much for the early innings. Too much for any inning.

He paused at the entrance tunnel.

“Is there a concert?”

The attendant beamed. “Yes! A baseball concert!”

Manny raised an eyebrow. “That’s not a thing.”

The attendant tilted her head. “It is here.”

He scoffed. Noise, he told himself. Nothing more.

#

“Cheerleaders?” Manny muttered as he searched for his row. “Are they kidding?”

He found his seat and immediately noticed a kid dancing in the aisle, perfectly in sync with the cheerleaders.

But as the game unfolded, patterns emerged. The cheering shifted sides to the team batting. The cheerleaders led a different dance for each batter. By the second time through the order, Manny recognized them.

Repetition. Structure. A method to the madness, and the players responded to it. That was the unsettling part. The fans weren’t watching the game. They were in it.

#

Manny thought about the old game back home. Slow. Intricate. The duel at the plate. Small ball. Pitchers allowed to finish what they started. Players with edges, flaws, and personalities.

Then came the modern game. Optimized. Measured. Reduced.

Esoteric and unknowable statistics like WAR. OAA. StatCast adjustments are layered on top of context, which is layered on top of probability. Players as outputs, and fans as bettors, or fantasy managers. The franchise player mattered more than the heroics. Failure had no place.

He didn’t realize how much he missed the old game until he saw something that wasn’t quite old but not modern either.

#

The bottom of the fourth ended quietly. The cheering flipped to the visitors.

Manny took the opportunity to grab a Taiwan beer, squid on a stick, and fried tofu. He paid in NTD. After a quick mental conversion, he realized he’d spent only about ten dollars.

At his last game stateside, he’d missed three innings and paid triple that for the privilege. Given the choice, he would’ve stayed home. Here, he didn’t want to leave his seat.

#

When he got back, the crowd erupted. He checked the scoreboard. No change. The kid was still dancing.

The energy hadn’t reset. It hadn’t dropped. It had continued. That stuck with him.

#

The Monkeys were down a run.

Single. Bunt. Then a double, a sharp line drive to left center field, tying the game. He desperately wanted to know the launch angle and the exit velocity, but realized the moment didn’t need it.

Each at-bat built something. The crowd didn’t just react; they carried it forward. When the moment came, the release wasn’t random. It felt earned.

Manny chewed his food slowly, forgetting that he had a beer.

What was the game missing back home?

It wasn’t action. There was plenty of that.

It wasn’t winning.

It was something harder to name.

#

In the top of the seventh, the Monkey shortstop laid out for a ground ball, saving a run. Manny applauded the athleticism. Solid. He scanned the players on the field and evaluated. Maybe Triple-A level, one or two of them, a little better.

But the reaction lingered longer than the play itself. The crowd stayed with it. 

#

The pitcher set. The stadium went quiet, anticipating. The batter held. For a moment, everything narrowed: the field, the crowd, the game itself.

Then the pitch came. A ball.

The crowd cheered, and the sound returned, not just loud but unified. The impact was sharp and immediate. Manny felt it before he could explain it.

#

Back home, everything moved faster now. Every pitch is a bet, making every moment a fragment. The game had more action and less weight. Here, nothing felt rushed. Nothing felt wasted.

It wasn’t just noise. Silence had a role. Noise had a role. And between them, there was something like rhythm.

Manny leaned forward. Too much silence, and the game stalled. Too much noise, and it blurred. But here, it flowed between the two from tension to release. And something kept it going.

He looked back at the kid. Still dancing. Eight innings in. Not constant. Not random. Always in step with the game.

That’s when he noticed it. The continuity clicked. That was it. Continuity.

Back home, fans arrived late, left early, drifted in and out between innings, purchasing concessions. Broadcasts managed to plug the product during mound visits and other breaks in the action. The game broke into pieces. Here, it didn’t. It carried.

#

Bottom of the ninth.

Manny realized he hadn’t thought about scouting since the first inning.

The Monkeys came up.

The crowd didn’t surge. It tightened.

A single.

A pause.

Then a swing.

The crack was clean. The ball sailed over the fence. The stadium erupted as one. A walk-off homerun.

The hero circled the bases. The crowd stayed on him, and then beyond him. The moment didn’t end when the play did. It stretched, held, and settled slowly into the night. Even after the game, people stayed. The story wasn’t over yet.

#

Manny walked out with the crowd. He didn’t check the box score and didn’t take notes. He turned once, looking back at the field, still lit, still alive.

Back home, they had optimized the game for events. Somewhere along the way, they had forgotten the moments.

Assist from ChatGPT and Grammarly. Cover Image by ChatGPT.

Non-Fiction

Hegemons and Hyperscalers: Asymmetric Power in Integrated Systems

| thetembo
Reading Time: 11 minutes

What Middle Powers—and Small Businesses—Can Learn About Power in an Age of Integration

The world is clearly becoming more connected. Supply chains now span the globe, money moves instantly, and digital platforms link millions of buyers and sellers. But instead of spreading power, these systems are concentrating it. What was once seen as a way for everyone to benefit is now often felt as a way to control.

Recently, at the World Economic Forum in Davos, Mark Carney, Canada’s prime minister, gave a thoughtful analysis of this situation. (**Speech reprinted at the bottom of this post.) While he spoke in terms of geopolitics, his points also apply to the digital economy, especially the rise of powerful platforms, sometimes called digital feudalism.

Carney’s speech does more than just describe a world in crisis. It points to a bigger idea: that power in connected systems is often one-sided. The way platforms are built shows this clearly. For example, they collect vast amounts of data on markets and businesses but don’t share much in return. They also use pricing tools to change fees and costs, helping themselves while leaving smaller businesses with little say. Seeing how these systems work helps explain why powerful states and many companies act the way they do under big digital platforms like Amazon.

When Integration Becomes a Weapon

For many years, countries like Canada did well under the “rules-based international order.” This system was imperfect and not always fair, but it provided stability in trade, safe shipping routes, and economic security. Being part of it brought benefits, even if the rules often favored the strong.

Carney says that the deal has broken down. Economic integration is no longer just about working together; it is now used to gain power. Tariffs, financial systems, and supply chains are often used as weapons. The connections that once brought wealth now make countries more vulnerable.

This pattern is not just found in geopolitics. It also appears in today’s platform economy. The way power works in both areas shows that integration is often used to gain an advantage over others.

Digital Feudalism and the Rituals of Compliance

At first, platforms like Amazon offered small and mid-sized businesses clear benefits: they brought buyers together, handled shipping and payments, and built trust. Like American leadership in the late twentieth century, these platforms offered real public goods. It made sense to join them, and for many, it still does.

But over time, many sellers have noticed some troubling changes. The rules are unclear and can change suddenly. The platform does not treat everyone the same. It even competes with its own suppliers. Profits decline as dependence on the platform grows. It is also hard to leave, since doing so can mean losing brand visibility and customer data. These quiet trade-offs show how much power platforms have, and explain why many sellers stay even when profits fall.

And yet, most sellers comply.

They adjust to changing algorithms, pay new fees, and accept being removed from the platform without warning. They may praise the platform in public but feel frustrated in private. Leaving seems impossible, and speaking out feels risky.

Carney, using Václav Havel’s idea, would see this behavior right away. Havel called it “living within the lie”: acting as if you believe in a system you know is not true, kept going not just by force but by repeated acts of compliance.

In geopolitics, the false belief was that rules limited the actions of powerful countries. In digital markets, the false belief is that platforms are neutral, fair, and treat everyone equally.

Asymmetric Power in Integrated Systems

What these situations have in common is not their ideas, but how they are set up.

In highly integrated systems:

  • Exit is costly.
  • Rules are set unilaterally.
  • Enforcement is discretionary.
  • Participants negotiate individually with a dominant center.

Power comes not just from being big, but from making others feel they have no choice but to take part. This is why Carney’s warning to middle powers, “If you’re not at the table, you’re on the menu,” fits platform economies so well. One country alone has little power against a dominant one, just as one seller has little power against a huge platform. Even many sellers, acting alone, are still weak.

When others are divided, it helps those in power the most.

Strategic Autonomy Without Isolation

Carney warns against the wrong answer: cutting yourself off from others. Trying to be completely self-sufficient, whether as a country or a business, is expensive and fragile. The real solution is not to leave these systems, but to limit the power they give to a few.

For countries, this means spreading out risks, agreeing on common rules, and working together to be stronger. For businesses under big platforms, the steps are much the same:

  • Multi-channel sales rather than single-platform dependence
  • Direct customer relationships
  • Shared logistics and payment infrastructure
  • Collective bargaining and standards-setting among suppliers

The aim is not to run away, but to have more choices. It’s not about being perfect, but about having more power to negotiate.

The Fragility of Legitimacy

One of Carney’s key points is that power based on routine compliance is actually weak. Those in charge last not because there are no other options, but because it seems impossible for others to work together.

That perception can change.

Middle powers do not overcome stronger ones just by fighting. They do it by telling the truth, refusing to give respect to those who don’t deserve it, reducing their dependence, and working together. The same is true for digital platforms. Their power comes not just from technology or size, but from the shared belief, rarely questioned, that there is no other way.

When people stop believing there are no alternatives, new systems become possible.

Taking the Sign Out of the Window

When Carney says to “take the sign out of the window,” he is really asking for honesty: to stop pretending to support systems that no longer work, and to start creating ones that do.

In geopolitics, this means admitting the old system is over and acting in line with that reality. In the digital world, it means seeing that platform neutrality is a myth, and responding not with longing for the past or anger, but by working together, being practical, and building new ways to organize.

The old deals are finished. Now, both countries and companies must decide: will we keep pretending, or will we finally start building something real?

**Canadian Prime MInister Mark Carney’s Davos 2026 Speech

Thank you, Larry.

It’s a pleasure – and a duty – to be with you at this turning point for Canada and for the world.

Today, I’ll talk about the rupture in the world order, the end of a nice story, and the beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints.

But I also submit to you that other countries, particularly middle powers like Canada, are not powerless. They have the capacity to build a new order that embodies our values, like respect for human rights, sustainable development, solidarity, sovereignty, and territorial integrity of states.

The power of the less powerful begins with honesty.

Every day we are reminded that we live in an era of great power rivalry. That the rules-based order is fading. That the strong do what they can, and the weak suffer what they must.

This aphorism of Thucydides is presented as inevitable – the natural logic of international relations reasserting itself. And faced with this logic, there is a strong tendency for countries to go along to get along. To accommodate. To avoid trouble. To hope that compliance will buy safety.

It won’t.

So, what are our options?

In 1978, the Czech dissident Václav Havel wrote an essay called The Power of the Powerless. In it, he asked a simple question: how did the communist system sustain itself?

His answer began with a greengrocer. Every morning, this shopkeeper places a sign in his window: “Workers of the world, unite!” He does not believe it. No one believes it. But he places the sign anyway – to avoid trouble, to signal compliance, to get along. And because every shopkeeper on every street does the same, the system persists.

Not through violence alone, but through the participation of ordinary people in rituals they privately know to be false.

Havel called this “living within a lie.” The system’s power comes not from its truth but from everyone’s willingness to perform as if it were true. And its fragility comes from the same source: when even one person stops performing — when the greengrocer removes his sign — the illusion begins to crack.

It is time for companies and countries to take their signs down.

For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, praised its principles, and benefited from its predictability. We could pursue values-based foreign policies under its protection.

We knew the story of the international rules-based order was partially false. That the strongest would exempt themselves when convenient. That trade rules were enforced asymmetrically. And that international law applied with varying rigour depending on the identity of the accused or the victim.

This fiction was useful, and American hegemony, in particular, helped provide public goods: open sea lanes, a stable financial system, collective security, and support for frameworks for resolving disputes.

So, we placed the sign in the window. We participated in the rituals. And largely avoided calling out the gaps between rhetoric and reality.

This bargain no longer works.

Let me be direct: we are in the midst of a rupture, not a transition.

Over the past two decades, a series of crises in finance, health, energy, and geopolitics laid bare the risks of extreme global integration.

More recently, great powers began using economic integration as weapons. Tariffs as leverage. Financial infrastructure as coercion. Supply chains as vulnerabilities to be exploited.

You cannot “live within the lie” of mutual benefit through integration when integration becomes the source of your subordination.

The multilateral institutions on which middle powers relied— the WTO, the UN, the COP – the architecture of collective problem solving – are greatly diminished.

As a result, many countries are drawing the same conclusions. They must develop greater strategic autonomy: in energy, food, critical minerals, in finance, and supply chains.

This impulse is understandable. A country that cannot feed itself, fuel itself, or defend itself has few options. When the rules no longer protect you, you must protect yourself.

But let us be clear-eyed about where this leads. A world of fortresses will be poorer, more fragile, and less sustainable. And there is another truth: if great powers abandon even the pretence of rules and values for the unhindered pursuit of their power and interests, the gains from “transactionalism” become harder to replicate. Hegemons cannot continually monetize their relationships.

Allies will diversify to hedge against uncertainty. Buy insurance. Increase options. This rebuilds sovereignty – sovereignty that was once grounded in rules, but will be increasingly anchored in the ability to withstand pressure.

As I said, such classic risk management comes at a price, but that cost of strategic autonomy, of sovereignty, can also be shared. Collective investments in resilience are cheaper than everyone building their own fortress. Shared standards reduce fragmentation. Complementarities are positive sum.

The question for middle powers, like Canada, is not whether to adapt to this new reality. We must. The question is whether we adapt by simply building higher walls – or whether we can do something more ambitious.

Canada was amongst the first to hear the wake-up call, leading us to fundamentally shift our strategic posture.

Canadians know that our old, comfortable assumption that our geography and alliance memberships automatically conferred prosperity and security is no longer valid.

Our new approach rests on what Alexander Stubb has termed “values-based realism” – or, to put it another way, we aim to be principled and pragmatic.

Principled in our commitment to fundamental values: sovereignty and territorial integrity, the prohibition of the use of force except when consistent with the UN Charter, respect for human rights.

Pragmatic in recognising that progress is often incremental, that interests diverge, that not every partner shares our values. We are engaging broadly, strategically, with open eyes. We actively take on the world as it is, not wait for a world we wish to be.

Canada is calibrating our relationships so their depth reflects our values. We are prioritising broad engagement to maximise our influence, given the fluidity of the world order, the risks that this poses, and the stakes for what comes next.

We are no longer relying on just the strength of our values, but also on the value of our strength.

We are building that strength at home.

Since my government took office, we have cut taxes on incomes, capital gains and business investment, we have removed all federal barriers to interprovincial trade, and we are fast-tracking a trillion dollars of investment in energy, AI, critical minerals, new trade corridors, and beyond.

We are doubling our defence spending by 2030 and are doing so in ways that builds our domestic industries.

We are rapidly diversifying abroad. We have agreed a comprehensive strategic partnership with the European Union, including joining SAFE, Europe’s defence procurement arrangements.

We have signed twelve other trade and security deals on four continents in the last six months.

In the past few days, we have concluded new strategic partnerships with China and Qatar.

We are negotiating free trade pacts with India, ASEAN, Thailand, Philippines, Mercosur.

To help solve global problems, we are pursuing variable geometry— different coalitions for different issues, based on values and interests.

On Ukraine, we are a core member of the Coalition of the Willing and one of the largest per-capita contributors to its defence and security.

On Arctic sovereignty, we stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland’s future.

Our commitment to Article 5 is unwavering. We are working with our NATO allies (including the Nordic Baltic 8) to further secure the alliance’s northern and western flanks, including through Canada’s unprecedented investments in over-the-horizon radar, submarines, aircraft, and boots on the ground. Canada strongly opposes tariffs over Greenland and calls for focused talks to achieve shared objectives of security and prosperity for the Arctic.

On plurilateral trade, we are championing efforts to build a bridge between the Trans-Pacific Partnership and the European Union, creating a new trading block of 1.5 billion people. On critical minerals, we are forming buyer’s clubs anchored in the G7 so that the world can diversify away from concentrated supply. On AI, we are cooperating with like-minded democracies to ensure we will not ultimately be forced to choose between hegemons and hyperscalers.

This is not naive multilateralism. Nor is it relying on diminished institutions. It is building the coalitions that work, issue by issue, with partners who share enough common ground to act together.

In some cases, this will be the vast majority of nations. And it is creating a dense web of connections across trade, investment, culture on which we can draw for future challenges and opportunities.

Middle powers must act together because if you are not at the table, you are on the menu.

Great powers can afford to go it alone. They have the market size, the military capacity, the leverage to dictate terms. Middle powers do not.

But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what is offered. We compete with each other to be the most accommodating. T

his is not sovereignty. It is the performance of sovereignty while accepting subordination. In a world of great power rivalry, the countries in between have a choice: to compete with each other for favour or to combine to create a third path with impact.

We should not allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity, and rules will remain strong — if we choose to wield it together. Which brings me back to Havel.

What would it mean for middle powers to “live in truth”? It means naming reality. Stop invoking the “rules-based international order” as though it still functions as advertised. Call the system what it is: a period of intensifying great power rivalry, where the most powerful pursue their interests using economic integration as a weapon of coercion.

It means acting consistently. Apply the same standards to allies and rivals. When middle powers criticise economic intimidation from one direction but stay silent when it comes from another, we are keeping the sign in the window. It means building what we claim to believe in. Rather than waiting for the old order to be restored, create institutions and agreements that function as described. And it means reducing the leverage that enables coercion.

Building a strong domestic economy should always be every government’s priority. Diversification internationally is not just economic prudence; it is the material foundation for honest foreign policy. Countries earn the right to principled stands by reducing their vulnerability to retaliation.

Canada has what the world wants. We are an energy superpower. We hold vast reserves of critical minerals. We have the most educated population in the world. Our pension funds are amongst the world’s largest and most sophisticated investors. We have capital, talent, and a government with the immense fiscal capacity to act decisively. And we have the values to which many others aspire.

Canada is a pluralistic society that works. Our public square is loud, diverse, and free.

Canadians remain committed to sustainability. We are a stable, reliable partner—in a world that is anything but—a partner that builds and values relationships for the long term.

Canada has something else: a recognition of what is happening and a determination to act accordingly. We understand that this rupture calls for more than adaptation. It calls for honesty about the world as it is. We are taking the sign out of the window. The old order is not coming back.

We should not mourn it. Nostalgia is not a strategy. But from the fracture, we can build something better, stronger, and more just. This is the task of the middle powers, who have the most to lose from a world of fortresses and the most to gain from a world of genuine cooperation.

The powerful have their power. But we have something too – the capacity to stop pretending, to name reality, to build our strength at home, and to act together. That is Canada’s path. We choose it openly and confidently. And it is a path wide open to any country willing to take it with us.

Author’s Note: Assist by ChatGPT and Grammarly

Non-Fiction

Dare to Dream: The 28th Amendment

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Reading Time: 4 minutes

Proposed Twenty-Eighth Amendment to the Constitution of the United States

Section 1 — Unanimous Judicial Authority

No decision, judgment, opinion, order, or decree of the Supreme Court of the United States shall have force of law unless joined unanimously by all Justices then in active service and eligible to participate.

In the absence of unanimous consent, the decision of the court or courts below shall stand without precedential effect.

Section 2 — Opinions and Dissents

Nothing in this article shall prohibit any Justice from issuing concurring, dissenting, or advisory opinions.
Such opinions shall have no binding legal effect unless accompanied by unanimous consent as required in Section 1.

Section 3 — Department of Justice

The Department of Justice is hereby constituted as an independent judicial enforcement body under the supervisory authority of the Supreme Court of the United States.

The Attorney General of the United States shall be appointed by the Supreme Court of the United States by unanimous consent of all Justices then in active service and eligible to participate, and may be removed only by unanimous consent of the Supreme Court, pursuant to procedures established by law.

Section 4 — Mandatory Retirement

No person shall serve as a Justice of the Supreme Court of the United States beyond the age of seventy-five years.

A Justice attaining the age of seventy-five shall retire at the conclusion of the Supreme Court term during which such age is reached.

Section 5 — Implementation

Congress shall have the power to enforce and implement this article by appropriate legislation, provided that no such legislation shall impair the independence, unanimity requirement, or supervisory authority of the Supreme Court as defined within this amendment.

Section 6 — Applicability

This article shall apply to all cases pending on or after the date of ratification.
Any Justice serving at the time of ratification who has attained the age of seventy-five years may complete the then-current Supreme Court term.

A Structural Amendment to Restore Judicial Legitimacy and the Rule of Law

This amendment proposes a deliberate restructuring of constitutional power in response to an unmistakable problem: the politicization of justice itself. Over time, the Supreme Court has come to be perceived not as an impartial arbiter of law, but as a rotating instrument of ideological control. Simultaneously, the Department of Justice—endowed with immense coercive power—has increasingly functioned as an extension of executive will, vulnerable to political priorities, selective enforcement, and retaliatory prosecution.

The amendment responds to these failures not through moral appeals, but through structural design.

Unanimity as a Constitutional Safeguard

At the core of the amendment is a simple principle: no legal ruling should bind an entire nation unless it endures the scrutiny of every Justice entrusted with constitutional judgment.

Unanimous consent has long been recognized as essential where liberty is most at risk. In criminal trials, unanimity is required because the cost of error is irreparable. Constitutional interpretation carries a similar gravity. Supreme Court rulings reshape civic life, reorder rights, and alter the balance of governmental power. When narrow majorities render such decisions, they invite instability, erosion of trust, and cycles of reversal that track electoral change rather than judicial clarity.

Requiring unanimity does not silence disagreement. Justices remain free—indeed encouraged—to express dissenting views. What changes is the consequence of division. In the absence of consensus, the Court refrains from imposing a national rule and allows existing law to stand. This assures that constitutional change arises only from shared conviction rather than transient alignment.

The result is a judiciary that persuades rather than commands, stabilizes rather than oscillates, and earns legitimacy through restraint.

Depoliticizing Justice by Deweaponizing Enforcement

Just as important is the amendment’s restructuring of the Department of Justice.

Under the current framework, the Department of Justice exists within the Executive Branch, subject to presidential appointment, influence, and removal. While safeguards exist, the structural reality remains: prosecutorial discretion—among the most powerful tools of government—is entangled with political authority.

This amendment breaks that entanglement.

By placing the Department of Justice under the supervisory authority of the Supreme Court, the amendment redefines prosecution as a legal function rather than a political instrument. Enforcement of law becomes accountable to constitutional interpretation, not electoral mandate. The Attorney General is appointed and overseen by the judiciary, guaranteeing continuity, neutrality, and insulation from partisan cycles.

This shift does not weaken law enforcement. It strengthens it by anchoring prosecutorial power to legal obligation rather than political opportunity. The amendment thus removes the incentive to weaponize justice against opponents or shield allies, renewing public confidence that the law is applied evenly and without fear or favor.

Judicial Renewal Without Political Dependence

Mandatory retirement at age seventy-five assures that judicial authority remains vigorous, current, and accountable to developing legal understanding without resorting to elections or term limits that would undermine independence. This provision prevents strategic retirements, reduces vacancy manipulation, and guarantees periodic renewal of the Court without politicizing tenure.

A Court That Cannot Be Captured

Taken together, these reforms create a Supreme Court that cannot be captured by ideology, timing, or executive pressure. The absence of majority rule eliminates incentives for partisan appointments aimed at tipping narrow balances. The separation of prosecution from executive control removes the threat of political coercion. The requirement of unanimity assures that national rules emerge only where constitutional meaning is clear enough to command collective assent.

This amendment does not promise faster justice. It promises truer justice.

It accepts that restraint is not weakness, that disagreement is not failure, and that power should advance only where consensus exists. In doing so, it reaffirms the Constitution not as a battlefield of factions, but as a shared legal foundation worthy of enduring trust.

Writing

Rethinking Real Resource Constraints in an AI Economy

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Reading Time: 6 minutes

Author’s Note: A great introduction to MMT can be found at https://findingmoneyfilm.com/. I suggest it as a prerequisite to the essay that follows.

Author’s Note: This addition to the previous post, “How the Dollar Rules the World,” was triggered by Elon Musk’s claim that energy is the true currency of the world and that bitcoin is a physics-based currency. I didn’t hate the idea at first glance, but now I have two primary objections. First, Bitcoin is incredibly energy wasteful and for no good reason. Second, MMT says that taxation drives currency demand. Bitcoin has no taxation and provides no services to drive demand, other than speculation, tax evasion, and the concealment of illegal activities. It is not a real currency. But those observations, along with further conversations with ChatGPT, led me to add the following addition to the original article and to make slight revisions to the 10-point plan.

Rethinking real resource constraints in an AI economy requires emphasizing that energy and ecological limits are now central to economic policy, shifting the focus from traditional labor-based constraints. For most of the twentieth century, governments treated labor as the central fundamental constraint in monetary policy. Full employment was the practical signal that an economy was close to its limits. If everyone who wanted a job had one, then additional public spending risked running ahead of real capacity.

But this proxy begins to break down in an economy increasingly shaped by automation and artificial intelligence. When autonomous agents and machines can supply a growing share of marketable labor, the link between employment and capacity weakens. A nation could have high unemployment without productivity bottlenecks, yet still face bottlenecks in energy, computing, materials, or ecological resilience.

Modern Monetary Theory argues that money creation must be guided not by arbitrary financial limits but by real resources. If labor ceases to be the binding resource, then policy must find its bearings elsewhere.

A tempting idea is to tie the money supply directly to the nation’s energy supply, creating a kind of “energy standard” in which fiscal expansion rises and falls with available power. But a strict peg behaves much like the old gold standard: it forces contraction precisely when the real economy is under strain. If an energy shortage hits—whether from a heat wave, drought, or grid disruption—the peg would require the government to reduce spending in lockstep, imposing austerity on top of an existing shock. And in the opposite direction, an energy peg would delay public investment during a renewable build-out, because it only permits fiscal expansion after new capacity already exists. Transitions, however, require spending before new capacity is online. For both reasons, a rigid resource peg is too brittle for a dynamic, decarbonizing economy.

Bitcoin is often described as a “physics-based” currency because it requires significant computational power and energy to validate transactions and secure the network. But this is not the same as grounding a currency in real resources. Bitcoin burns energy; it does not measure or coordinate it. The energy consumed in mining reflects competition among miners, not the productive capacity of the economy or the planet’s ecological limits. As a result, Bitcoin’s energy use is decoupled from economic need—it can soar during recessions, collapse during booms, and remains oblivious to environmental stress. Nor does Bitcoin adjust its supply in response to demand, resource scarcity, or investment needs. Its fixed issuance schedule makes it inherently pro-cyclical: it tightens during downturns and loosens nothing during inflation, acting more like a digital gold standard than a responsive monetary system. In this sense, Bitcoin is “physics-based” only in the most literal and least helpful way—it consumes energy without referencing or regulating the resources that matter. A currency aligned with real constraints must help society navigate energy availability, ecological boundaries, and productive capacity; Bitcoin does none of these things.

What’s needed instead is a flexible ecological anchor—one that uses energy and environmental indicators as guides rather than hard limits, allowing fiscal policy to remain countercyclical while still respecting the realities of an AI-driven, resource-constrained world. A single resource cannot capture the full spectrum of real constraints — soil, water, minerals, climate stability, and biodiversity all shape economic possibilities. A more robust approach recognizes that the economy is shifting from a labor-limited world to an energy-limited and ultimately an ecologically-limited one. Labor is still vital for care, creativity, and governance, but it is no longer the bottleneck: energy and ecological stability increasingly are.

In this light, the goal is not to fix the currency to a single biophysical input but to develop a flexible ecological system in which taxation, tariffs, and public investment respond directly to indicators such as carbon emissions, habitat loss, and water scarcity, guiding policy within planetary boundaries.

This shift opens the door to a humane transition. A Job Guarantee could ensure purposeful work while labor is still necessary, while a Universal Basic Income could ensure participation and dignity as automation reduces the demand for labor. Resource-use taxes and carbon border adjustments could prevent ecological dumping and align global trade with climate goals. An international clearing union can foster hope and trust by helping developing nations grow within ecological constraints rather than under the weight of austerity, emphasizing collective progress.

In short, the real limits of the future lie in energy and ecology, not in the number of people formally employed. A sovereign currency must be managed with those realities in mind.

Classic macroeconomics teaches that governments should act countercyclically, expanding spending when the economy slows, and pulling back when it overheats. In the postwar era, the proxy for “overheating” was simple: full employment. If everyone who wanted a job had one, the economy was assumed to be operating near its productive limit. But in a world transformed by automation and climate risk, full employment no longer tells the whole story. AI can expand productive capacity even as human labor becomes less central. Meanwhile, the real bottlenecks increasingly arise not from labor scarcity but from energy constraints, material shortages, and ecological limits — droughts, heatwaves, pollution shocks, and brittle grids.

A resource-anchored approach does not abandon countercyclical logic — it strengthens it by tying fiscal expansion and contraction to the economy’s physical condition rather than abstract indicators. When the energy system is under strain, when emissions spike, or when biodiversity loss accelerates, the economy is effectively “hot,” regardless of unemployment levels. When energy demand falls, when supply chains loosen, or when ecological stress eases, the economy has slack, even if unemployment remains elevated.

Under this framework, fiscal policy becomes countercyclical in a more profound sense:

  • Resource Slack — when renewable capacity is underutilized, when emissions fall, or when water and materials are plentiful — signals room for fiscal expansion, especially investments in green infrastructure, resilience, and social support.
  • Resource Stress — when energy grids strain, when climate impacts accelerate, or when supply chains choke — signals the need to temper broad fiscal expansion while steering spending toward efficiency, restoration, and mitigation.

This dynamic system retains the spirit of traditional countercyclical policy while adapting it to the new realities of an AI-enabled, ecologically bounded world. Instead of reacting to labor data that increasingly reflects automation more than capacity, it responds to the actual limits of the real economy — energy, materials, and ecosystems — the things no government can print.

In doing so, it turns countercyclical policy into a stabilizing force not just for business cycles, but for long-term ecological and economic resilience.

Ten-Point Plan (Integrating Ecology, Automation, and Global Justice)

1. Insure People, Not Sectors

Ensure that individuals, not industries, are protected as the economy evolves with universal healthcare, income stabilizers, childcare, and transition support.

2. A Dynamic Job Guarantee Focused on Regeneration

Guarantee jobs with a program that offers dignified public work in environmental restoration, caregiving, infrastructure renewal, and climate adaptation. Jobs serve planetary health, not just employment metrics.

3. Build a Pathway Toward Universal Basic Income

Phase in an income floor as automation reduces labor demand. Productivity gains become a shared dividend, supporting dignity, creativity, and community participation.

4. Invest in Real Productive Capacity

Channel public investment into renewable energy, advanced manufacturing, AI governance, electrified transportation, water systems, and resilient supply chains.

5. Anchor Fiscal Policy to Ecological Reality

Replace labor-based inflation proxies with ecological indicators: carbon budgets, soil and water stress, biodiversity loss, and renewable capacity. Fiscal space expands with environmental regeneration and contracts with ecological strain.

6. Shift the Tax Base from Labor to Resource Use

Phase out taxes on human work and exchange of goods; raise them on carbon, material extraction, pollution, and land speculation. Align incentives with sustainability.

7. Use Trade Policy to Prevent Ecological Dumping

Adopt carbon border adjustments and energy-use tariffs to prevent pollution offshoring and reward clean production globally. Import goods for the right reasons.

8. Create a Global Green Clearing Union

Provide developing nations access to a shared reserve asset — a “proxy sovereign currency” — tied to green investment and climate resilience, not austerity. Replace debt traps with development pathways.

9. Rebuild Political Cohesion at Home

Reform democratic institutions so that policy reflects public purpose: election reform, anti-gerrymandering rules, campaign finance transparency, and civic investment.

10. Use the Dollar for Regeneration, Not Extraction

Direct the benefits of the reserve currency system toward healing ecosystems, stabilizing the climate, uplifting communities, and supporting global cooperation. Treat fiscal capacity as responsibility, not indulgence.

Author’s Note: Credit to ChatGPT 5.0 for assist and images.

Uncategorized

How the Dollar Rules the World — and Why That Power Now Threatens America from Within

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Reading Time: 13 minutes

Author’s Note: A great introduction to MMT can be found at https://findingmoneyfilm.com/. I suggest it as a prerequisite to the essay that follows.

Part I. Flow and Disruption

Author’s Note: This is not original research, but the result of an extended conversation with ChatGPT, in large part fueled by my interest in Modern Money Theory (MMT) and a desire to understand how a reserve currency operates at the simplest level. If you are interested in a deeper dive, I suggest reading “The Deficit Myth,” by Stephanie Kelton.

When an American buys a television, a phone, or a pair of shoes made overseas, it feels like a simple transaction. Money leaves your account, and a product shows up at your door. But behind that everyday purchase lies one of the most powerful — and most misunderstood — engines of the modern world. That engine is the U.S. dollar.

For decades, the United States has enjoyed a unique position in the global economy. It can buy physical goods from the rest of the world in exchange for pieces of paper — or more precisely, digital bank entries — that it alone has the authority to create. Other countries not only accept these dollars; they actively compete to earn them.

On the one hand, this system has brought enormous benefits to Americans, including low prices, global influence, and access to a nearly endless stream of imported goods. On the other hand, it has also produced deep regional inequality within the United States, weakened the social fabric, and fueled a political backlash reshaping American democracy.

To understand why this system persists, why it’s now under strain, and what it will take to repair it, we need to follow the dollar from the moment it leaves your wallet to the moment it circles back as a U.S. Treasury bond — and then trace the social and political consequences that follow, highlighting the dollar’s central role in global trade and domestic stability. What actually happens to the money is far from obvious.

Imagine an American buys a $100 product manufactured in China. The $100 is transferred first to the Chinese exporter’s bank account. But those dollars are not usable inside China. A factory in Guangdong can’t pay its workers in U.S. currency. So the exporter exchanges dollars at the People’s Bank of China, China’s central bank, for the local currency, the yuan.

The exporter now has yuan to operate on the home front. And China’s central bank now holds $100. But even China can’t spend those dollars domestically. They are foreign currency. They’re only good abroad. So what does China do?

It invests them back into the United States. Most often, China uses those dollars to buy U.S. Treasury bonds — effectively lending the money back to the U.S. government. And with this transaction, the dollar has completed its round trip: from an American consumer to a Chinese business to China’s central bank, and finally back to the U.S. financial system.

At this point, you can see that something unusual is happening. The United States buys physical goods — televisions, cars, electronics — and the dollars it spends end up right back in the country, parked safely in government debt. China, in turn, ends up holding U.S. assets, not goods.

It is worth repeating. The U.S. receives products. China receives dollars. The dollars return home. You can picture this visually as a loop — a flow of money out of the U.S. and back again, powering global trade.

At first glance, this seems like the world’s most favorable deal. And in many ways, it is. But China doesn’t do this out of generosity. It does it because the system serves its interests just as powerfully as it serves America’s.

If China can’t spend dollars internally, why does it still accumulate them by the trillions? Because the arrangement delivers crucial benefits.

First, it delivers jobs. Export industries employ tens of millions of Chinese workers. Social stability depends on employment; employment depends on exports; and exports depend on a competitive currency. China buys dollars and holds Treasuries in part to prevent the yuan from rising and making its products more expensive abroad.

Second, it delivers industrial growth. Exporting manufactured goods has been the backbone of China’s modernization. Earning dollars gives China the ability to buy foreign machinery, semiconductors, food, and, most importantly, oil — none of which can be purchased with yuan.

Third, it delivers financial protection. Large reserves of dollars and Treasuries help China defend its currency during global shocks. They are a buffer against crisis.

So while it may seem odd that China ships products to the U.S. in return for claims on American debt, those claims are central to China’s economic strategy. The system is not charity; it’s a calculated partnership.

For the United States as a whole, buying foreign goods cheaply is a clear win, but not everyone wins equally. Over time, the steady flow of inexpensive imports, made possible by the dollar’s global dominance, contributed to the erosion of American manufacturing. Factories closed, and jobs disappeared. Some regions reinvented themselves, but some never recovered.

This weakens the U.S. from within. This regional decline created something more profound than economic loss. It produced:

  • wounded pride
  • declining local services
  • fraying communities
  • intergenerational pessimism
  • anger at both elites and institutions

The anger is not abstract. It is political fuel. Places where jobs disappear become places where trust in government collapses. That collapse feeds populism, which in turn destabilizes American institutions, from foreign alliances to democratic norms, and makes the U.S. a less predictable global actor. This, in turn, undermines international confidence in the very system that supports American power.

This is the danger: A system that economically strengthens America as a nation is politically weakening it from the inside. Escaping this negative cycle doesn’t require dismantling global trade or abandoning the dollar’s central role. Instead, it demands policies that redirect the benefits of America’s financial power into rebuilding communities and addressing systemic issues.

Since the United States has unmatched financial capacity, it should use that capacity to rebuild the social foundation that keeps the whole system stable. This means focusing not on protectionism but on resilience:

  • investing in workers whose industries are disrupted
  • supporting communities left behind by global shifts
  • building strategic industrial capacity at home
  • modernizing infrastructure
  • reducing political incentives for polarization
  • stabilizing the country’s role on the global stage

It also means reframing the purpose of America’s financial power. Issuing the world’s currency is a privilege. It should not be used solely to inflate asset prices or finance private consumption. It should be used to reinvest in the public goods, education, health, infrastructure, and innovation that make American society strong.

The United States, more than any nation in history, can finance its own renewal. It can borrow in its own currency. It can attract global savings on demand. It can run trade deficits without destabilizing its exchange rate. These are extraordinary advantages.

But the preservation of this system depends on the social cohesion that underpins it. Without a stable domestic base, global leadership becomes harder to sustain. Alliances become shakier. Markets grow more nervous. The political pendulum swings more violently.

If America continues on its current path, in which the economic benefits of global trade are not broadly shared, then the dollar system will erode, slowly but inevitably. Not because China destroys it, but because Americans lose faith in the structure of their own society.

The choice is simple. Use the extraordinary privilege of the dollar equitably, or watch that privilege slip away. There is no need to surrender the benefits of the dollar as a reserve currency as long as the bellows of inequality are dismissed. The global system runs on trust, and trust begins with a society that believes in itself.

Part II. The China Syndrome

Author‘s Note: The rest of this article was added as an addendum in response to the observation “They (most people) feel like we have to get rid of that debt or China is gonna come take us over because we owe them so much.”

Every few years, headlines warn that China “owns our debt,” implying that the United States is financially beholden to its biggest creditor. The image is dramatic: America, one market tantrum or a militarily motivated financial attack away from collapse. From the standpoint of MMT, that story misunderstands how a sovereign currency works. The U.S. doesn’t borrow from China. China saves in U.S. dollars. And that distinction changes the entire picture.

When China buys a U.S. Treasury bond, it is not extending credit, as a bank does when it lends money to a borrower. It is simply exchanging one form of dollar asset (reserves) for another (a Treasury bond) to earn a bit of interest. In simpler terms, it is changing a checking account into a savings account. Operationally, China’s dollar holdings never leave the Federal Reserve system. They are entries in a spreadsheet representing the dollars China has already earned from exporting goods to Americans. So instead of “China lends, America borrows,” the more accurate phrasing is: “China saves in the currency that America alone can issue.” That’s not dependence. Its interdependence is built on the United States’ unique monetary position.

Foreign Treasury holdings are the mirror image of America’s trade deficits. Every time the U.S. runs a trade deficit by importing more than it exports, another country ends up holding the dollars it receives. Those dollars must go somewhere. They don’t pile up in warehouses or disappear. They are recycled into U.S. financial assets. From an accounting point of view, the U.S. “national debt” is simply the record of all those accumulated savings. It’s the flip side of the world’s desire to hold safe, liquid assets. Seen through that lens, the question isn’t “What happens if China calls in its debt?” The question is “What are we doing with the real resources and productive capacity that this global savings makes possible?”

The United States owes nothing that it can run out of. It owes dollars, which it alone can create. What it cannot print are the things that dollars are meant to mobilize:

  • engineers and teachers,
  • bridges and energy grids,
  • functioning institutions,
  • and a cohesive public willing to work toward shared goals.

From an MMT perspective, those are the proper limits of American power. A nation that can issue its own currency can never be forced into insolvency. But it can run out of trust, competence, and productive energy. And those deficits — not the financial ones — are the real danger.

Privilege leads to complacency. The dollar’s role as the world’s reserve currency has insulated Americans from many of the pressures faced by other nations. The U.S. can import goods cheaply, borrow without fear of default, and sustain persistent deficits that would bankrupt smaller economies. But that very privilege can dull the impulse to invest in domestic productivity. Why rebuild factories or trains when the world is eager to send you goods in exchange for paper assets? Why strengthen social insurance when foreign savings keep interest rates low? Over time, this convenience becomes a trap. The U.S. has grown accustomed to buying everything except social stability.

If MMT is correct, we are worried about the wrong thing. America’s problem isn’t “debt.” It’s the underuse of its own productive potential — both physical and human. A country that issues the world’s reserve currency has enormous fiscal space. But that space is wasted if it’s used to inflate asset prices rather than build capacity — if it finances share buybacks instead of semiconductor fabs, speculation instead of education, or political polarization instead of social trust. The fundamental constraint on American prosperity isn’t the Treasury’s balance sheet. It’s the nation’s ability to mobilize resources for a shared purpose.

Let’s reframe the national balance sheet. Imagine the national balance sheet as having two sides: financial liabilities on one side and tangible assets on the other. On the financial liability side, the U.S. owes the amount of the treasury bonds held by the world; on the tangible asset side, the American people, infrastructure, industry, and institutions. We worry endlessly about the left side — the dollars and bonds. But the value of those liabilities is guaranteed by the strength of the right side. When the right side erodes — when education falters, bridges crumble, and trust decays — the left side becomes riskier, not because the U.S. can’t pay, but because its society can’t hold together. That’s the paradox of the dollar system: the stronger America’s financial dominance grows, the more it must consciously reinvest in the social and productive base that makes that dominance legitimate.

MMT doesn’t deny limits; it relocates them. The accurate measure of solvency for a sovereign currency issuer is not its ability to pay, but its ability to produce, govern, and cohere. If foreign savings represent the world’s confidence in the dollar, then every broken bridge, underfunded school, and disillusioned voter is a silent drawdown on that confidence.

In the end, the global savings glut sitting in Treasuries is not a sign of American weakness. It’s a sign of trust — trust that the U.S. will remain a functioning, stable, productive society worthy of holding claims against. The risk is not that China will cash in those bonds. The risk is that America will stop deserving that trust.

Part III. The 10-Point Plan

Author‘s Note: I lied. There is an addendum to the addendum—time to move beyond China. I wanted to factor in the environment, AI taking over the job market, and the continued imbalance between developing and developed countries into the MMT conversation. After all, not much of a plan if it doesn‘t address the significant social and environmental issues confronting the world. A friend once asked me what I would do if I were king of the world. The 10-point plan is my answer (until the next addendum, anyway).

If the valid constraint on a sovereign nation is not money but real resources, then we must define those resources broadly. They are not only labor, machines, and raw materials — they include clean air, stable climates, fertile soil, biodiversity, and the human trust that allows societies to function. In this light, America’s reserve-currency privilege is not just an economic tool. It is a planetary responsibility. The dollar system, after all, organizes the world’s production, consumption, and debt. Its architecture shapes how we treat both people and the planet.

Three global challenges make this clear: environmental externalization, technology and the future of work, and ending the extractive relationship with developing nations.

Free trade agreements and global supply chains have allowed wealthy countries to consume goods without accounting for the pollution embedded in their production. Factories that once polluted the Midwest now pollute Southeast Asia. The carbon, however, doesn’t respect borders. This is a hidden cost of the dollar system: the U.S. runs trade deficits in goods, but trade surpluses in pollution. The externalization of environmental damage props up the illusion of low prices at home while degrading the global commons that underpins all economic life. If MMT tells us that real resources, not money, are the limit, then climate stability is the ultimate fundamental constraint. The atmosphere cannot be bailed out with dollars. No fiscal space is infinite if the planet’s carrying capacity collapses. A reformed global monetary system would therefore measure deficits not just in dollars, but in ecological terms. America’s “full employment” must mean employing people to heal, not merely to produce — restoring soils, building green infrastructure, rewilding damaged land, and decarbonizing energy.

For a century, productivity gains have come from augmenting human labor with machines. But AI marks a turning point: it can replace labor entirely in many sectors. The traditional MMT prescription of a job guarantee, government employment at a living wage to ensure full labor utilization, might stabilize society in the near term. Automation will ultimately make “jobs for all” economically redundant. When machines can perform nearly all marketable tasks, the purpose of income shifts from rewarding work to ensuring participation in society. At that point, a Universal Basic Income (UBI) becomes not just welfare but economic infrastructure — the digital bloodstream that keeps demand, creativity, and dignity circulating. UBI, funded through sovereign currency issuance, is entirely consistent with MMT principles. It provides a baseline floor of aggregate demand, preventing collapse when private employment shrinks, and allows people to pursue education, caregiving, art, and community projects outside the wage system. The challenge is not affordability — the U.S. can issue the dollars. The challenge is designing a moral economy where productivity gains from AI are shared rather than hoarded.

The international monetary order still rests on colonial logic. Developing countries borrow in foreign currencies they do not control, often dollars, and are forced into austerity when export revenues fall. The result is a global pattern in which the periphery exports cheap labor and raw materials, while the core exports debt and financial instability.

MMT offers a different lens. Every country that issues its own currency has fiscal space limited only by its real resources and productive capacity. The problem is that most developing nations lack monetary sovereignty: their currencies are not trusted globally, so deficit spending risks capital flight and currency collapse. If the U.S. wants a stable, equitable world order — one less vulnerable to debt crises and migration pressures — it could extend proxy monetary sovereignty to partners. That means providing direct access to dollar liquidity for investment, not as loans tied to austerity, but as cooperative credit for development, climate adaptation, and infrastructure. Call it a Global Green Credit System: nations could run moderate, MMT-style deficits in a stable reserve currency while building real capacity at home. Instead of the IMF enforcing fiscal contraction, an international public bank could finance growth in ways that are ecologically sustainable and locally governed. This would replace the extractive global balance — dollars for sweat and minerals — with a regenerative one: dollars for development, resilience, and shared prosperity.

Here is a ten-point plan to meet the full scope of our economic, ecological, and moral responsibilities.

1. Insure People, Not Sectors

Build a resilient social foundation: universal healthcare, robust unemployment insurance, childcare, and transition income for displaced workers. Security enables adaptation.

2. Create a Dynamic Job Guarantee

Guarantee public work at a living wage in fields that rebuild the nation’s real wealth — renewable energy, conservation, caregiving, and civic infrastructure. Employment becomes a tool for regeneration, not make-work.

3. Develop a Path to Universal Basic Income

As automation advances, phase in a permanent income floor. UBI ensures that technological abundance translates into human freedom rather than precarity. Productivity gains become public dividends.

4. Invest in Real Productive Capacity

Direct federal spending and public investment toward strategic industries: semiconductors, energy storage, AI governance, biomanufacturing, sustainable agriculture, and logistics. Deficits that build capacity are not costs; they are investments in resilience.

5. Anchor Growth in Environmental Accounting

Integrate carbon, biodiversity, and pollution metrics into fiscal and trade policy. Use the dollar’s power to set global green standards — rewarding nations and firms that internalize ecological costs. Monetary sovereignty means environmental responsibility.

6. Rebuild Infrastructure for a Sustainable Century

A Green New Deal scale transformation: high-speed rail, a smart grid, water systems, reforestation, urban cooling, and flood defenses. Public investment is both a climate mitigation and an employment engine.

7. Democratize Technological Progress

Treat data, AI models, and essential digital infrastructure as public goods. Establish public options for AI services and open innovation platforms to ensure that technology amplifies human welfare rather than concentrates wealth.

8. Reform Global Finance for Shared Sovereignty

Work with allies to create regional clearing unions or dollar proxy systems that allow developing nations to run safe deficits in pursuit of full employment and a green transition. Replace debt traps with development credit lines tied to real outcomes, not austerity targets.

9. Rebuild Political Cohesion at Home

Adopt electoral and campaign reforms that reduce polarization and capture. Social spending must be matched by democratic renewal — people must see that government works for them, not just for markets.

10. Use the Dollar for Regeneration, Not Extraction

Reimagine the “exorbitant privilege” as a global stewardship role: If the world saves in dollars, those dollars should fund planetary healing, human flourishing, and shared security. Fiscal capacity is moral capacity.

In the end, MMT’s insight is not that money is infinite, but that our imagination of what’s possible has been artificially constrained. A nation that issues the world’s reserve currency can marshal resources on a scale unmatched in human history. The question is no longer “Can we afford it?” but “What do we choose to build?” If we use that power to restore ecosystems, share technological prosperity, and rebuild social trust — then the dollar’s global role becomes not just an instrument of hegemony, but a tool of regeneration. If we fail and continue treating money as scarce while the planet and people are expendable, then no financial architecture will save us.

Writing

The Wine Bible

| thetembo
Reading Time: 4 minutes

Author‘s Note: This parody of the creation story was inspired by an article about what Eden looks like today, in war-ravaged IRAQ on the fertile crescent between the Tigris and the Euphrates, due to global warming, pollution, and upstream water hoarding, and also inspired by a book entitled “The Wine Bible“ while sipping much better than what can be found in a carton.

The Book of Reclamation

God said, “Let there be wine.” And there was wine, but it was boxed, lukewarm, and tasted faintly of chlorine. Sweaty and overworked, He took a skeptical sip, frowned, and muttered, “It’ll do.”

The sun burned hot over Eden — a place not of lush gardens but of cracked earth, salt flats, thorny shrubs, and cacti. The Tigris and Euphrates trickled like old men with bladder problems. Death traps of black oil fit only for pavement bubbled deep from the pits of hell. The air shimmered with heat; the wind smelled of methane.

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Adam, sunburned and naked in the dust, cursed his luck. “This must be a test,” he muttered, shielding his eyes from a sun that felt like it was burning into his brain.

Eve appeared beside him, pulling a cactus needle out of her finger. “A test of what? Life as a pincushion?”

They looked around. Their garden was a mirage of brittle acacias, prickly pears, and half-buried plastic bottles. Two vultures circled lazily above, waiting for an easy meal.

The Commandments of Maintenance

And God came walking through the dry wind in the cool of the evening — though evening wasn’t much cooler than day. A brittle, dried bush spontaneously erupted into fire. God snuffed it out with a puff of breath.

He said unto them, “Be fruitful, and multiply.”

Eve looked at the fullness of Adam. “We’re not even dating.

Adam looked at the needle-strewn and oil-laden ground for potential mating spots. “The only thing I want scratching my ass is my own fingers.”

Eve added, “I’m feeling pretty vulnerable out here, too. Can you jump ahead a bit and invent the mall?”

The idea of commandments came to His mind, but He thought they should come later, when there were more people to command. He offered, “Then till the land.”

Adam scratched his scorched scalp. “Till it with what? A shovel made of sand?”

God scowled, the sand swirled and stung their naked bodies like the belt of an angry father.

Eve added, “We could use a little irrigation, Lord. Maybe a breeze that doesn’t sting?”

Glancing skyward, God sighed. “I’ve been working on upgrades, but the paperwork’s a nightmare. The angels are behind on maintenance requests, and Lucifer’s still suing over the zoning rights.”

Desperate for water, Eve lapped at the river on all fours like a dog. She gagged on the filthy water that tasted of sulfur. “Maybe fix the water first?” Eve suggested gently. “It smells… hellish.”

But God was already gone, mumbling about the sin of insolence and budget cuts in Heaven’s Department of Creation.

The Tree of Knowledge and Utility Complaints

In the center of Eden stood the Prickly Pear of Knowledge — a gangly cactus with long spines and one lopsided fruit: a ripe prickly pear, glowing red against the tan of despair.

“Don’t eat that,” said Adam.

“Why not?”

“Because He said not to.”

“And what’s He going to do? Evict us?”

Eve plucked the fruit carefully, pricking her thumb. She peeled off the leathery skin, and the juice bled crimson. She took a bite, winced at the sourness, and glowed with understanding.

“Jesus Christ!” Eve shouted. “Do you know how many code violations there are in this place? He’s too cheap to outsource any of the work to the consultants.”

Jesus Christ would not be available for comment for another two millennia.

“Meaning?”

“Meaning the brochure on paradise doesn’t come close to the reality.”

Adam took a bite too. “Would taste a whole lot better fermented.”

“Adam,” she whispered, “You should try the wine. It’s really not that bad.”

The Eviction Notice

And lo, the sky cracked with thunder. God descended in a whirlwind of hot dust.

“I told you not to eat from that cactus!” He bellowed.

Eve crossed her arms. “We were hungry.”

Adam nodded. “We tried the river, but the fish are supposed to die after you catch them, not before.”

God frowned. “You think it’s easy running an ecosystem? The angels keep unionizing, the Seraphim are demanding cloud subsidies, and don’t get me started on the serpent’s legal fees.”

Eve said, “Try turning down the heat a little bit. By the time I’m nine hundred years old, I will look like a completely dehydrated watermelon. At least give us something to wear.”

Adam, still considering the possibility of mating, added, “And maybe some soft sand.”

God sighed. “You’ll have to leave Eden. I’m converting this property into condos for the Archangels.”

They packed what little they had — a dried fig, a cracked jug, prickly pear seeds, and a box of divine carton wine — and walked eastward, into the shimmer of exile.

Epilogue: The Second Creation

In the distance, they found a stretch of desert where the soil was soft enough to till. Eve pressed the prickly pear seeds into the ground. Adam placed the crate of box wines under the shade of a rock.

“Maybe paradise isn’t in a brochure,” she said, “but where we find a place to call our own.”

Eve downed another glass of wine in less time than it takes to say Chardonnay. She stumbled into Adam’s arms.

Adam smiled weakly. “And maybe wine was the first miracle for a reason.”

They raised their wine boxes to their lips, and found a nice soft patch of sand to lay down on. The sun set behind them, staining the horizon blood-red.

God, watching from a nearby cloud, muttered, “Good riddance and good luck finding another rent-free place.“ He turned away. ”Next time, I’m not going to try flipping a place. I‘m going to start from scratch.”

Featured image and parody assistance from ChatGPT.