How deep is the relationship between monetary policy and the human personality? A proper examination might surprise us. Does a dissatisfied human personality lead to a toxic political culture? How then can we reconceptualize the world around us?
Time Stamps:
Opening Introduction (0:00)
A Calculation Problem Made Personal (2:22)
Bourgeois Personality as a Mode of Being (4:41)
Property as the Foundation of Human Personality (6:54)
Konrad Heiden on the German Hyperinflation of 1923 (8:51)
Never Accept a Central Bank Digital Currency (10:56)
The Personal is Political (13:02)
The Human Personality Replaced by Politics (15:43)
A Hint of Reimagination (19:00)
A Calculation Problem Made Personal
In The Misesian, professor and economist Joseph Salerno wrote a piece entitled Hyperinflation and the Destruction of the Human Personality, which explored the surprising links between monetary policy mismanagement and turmoil at the most personal level.
It begins:
"Economists and historians have clearly shown that the destruction of the value and function of money by hyperinflation makes economic calculation impossible and leads to economic and social disintegration and widespread poverty. What is not so clearly understood, even by many economists, is that during periods of rapid inflation, the inability to economically calculate undermines the very nature of property and causes a withering of the human personality, which is intimately connected with property ownership. By eliminating the means of appraising and rationally allocating one’s property, hyperinflation eliminates the very basis of independent human existence and personality under a system of social cooperation. The inevitable result is the dissolution of the society of voluntary contract and its replacement by a hegemonic order in which property and personality are collectivized.
Already, we see the bonds of social cooperation threatening to break away. The same social bonds that allow an individual to tend to his own property in a sufficient manner, and exercise his rational faculties in doing so.
We also see a Calculation Problem at the heart of this matter. Essentially the same problem that Ludwig von Mises examined that caused so much dysfunction in communism taking a different form. Instead of total abolition of the price system, the market is technically retained, but under a vast array of distorted market signals that incur upon one's ability to manage his resources wisely.
Bourgeois Personality as a Mode of Being
The central role of money and property in the formation of the individual human personality under the division of labor has yet to be investigated in any depth, and I will not attempt to do this here. However, I will note that in speaking of the human personality, I am referring to what has been called, usually derisively, the “bourgeois personality.” This is the common state of thinking and being that characterizes the modern individual operating in a private-property social order. The bourgeois person is goal oriented, self-interested (but not necessarily selfish), thrifty, and uses time as a scarce resource to improve his productivity and enhance his future well-being. In pursuing his own interests, this person must consciously and repeatedly act socially. That is, he must specialize in producing goods and services that are valued by people whom he most likely does not know. By producing for and exchanging with these unknown persons, he integrates himself into what Ludwig von Mises calls the social division of labor.
Although it is common for “thin libertarians” to assert there is no “Libertarian Man” in direct contrast to the archetype of the “New Soviet Man,” who respected public property as his own, possessed a strong sense of class consciousness, and other characteristics that modeled the will of a Marxist regime.
The Bourgeois Personality is one who is simply bound by the demands necessary to function rationally and socially in a market economy. He must participate in the division of labor, in accordance with his abilities and the need to satisfy a productive demand.
As Salerno put it:
Human personality, as the term is used here, therefore, does not refer to a cluster of psychological attributes and qualities; rather, it is a mode of being and becoming someone that is based on economic calculation and the ownership of property.
Property as the Foundation of Human Personality
As we explore the phenomenon of hyperinflation, we uncover its potential to damage this personality on a deeply concerning level:
Inflation does not just wipe out the savings of the productive classes and divert their energies into sterile and corrupt pursuits, however; it also deforms and attenuates their personalities. Whether we like it or not, men and women exist in a world where they cannot live and flourish physically or spiritually without property. As the founder of the Austrian School, Carl Menger, pointed out, “Property is not . . . an arbitrarily combined quantity of goods but a direct reflection of [a person’s] needs, an integrated whole, no essential part of which can be diminished or increased without affecting realization of the end it serves.” Thus property is the foundation of human personality—no meaningful motion, activity, or expression of thought is possible without it, for human personality is not the spontaneous projection into the external world of random inner urges that characterizes the unreflective behavior of a human infant. Personality is the external projection of a deliberately planned mode of individual being and becoming. As such, it involves a conscious arrangement of activities whose pursuit requires a carefully chosen structure of means; that is, property. Property therefore is not a haphazard collection of things that can be completely described in physical terms but rather the coherent, objective embodiment of the yearnings and aspirations of the human spirit.
When money and property are no longer on a sound footing, economic calculation is disrupted to the point where entrepreneurs cannot properly assess their next move. They can no longer enjoy the conditioning of a predictable environment to pursue a desired outcome.
Everyday workers who could otherwise support themselves and their families are then forced to consider second jobs. Their lives at home and their commitments to social relationships are deeply hindered. Their prospects for retirement seem grim.
Konrad Heiden on the German Hyperinflation of 1923
The concrete effects of the destruction of money and property on human personality are demonstrated most vividly in the historical episode of the German hyperinflation of 1923.
In the extreme case of hyperinflation, as the value of money hurtles toward zero, property loses its meaning, human personality withers, and society disintegrates. This all-important connection between money and property on the one hand and human personality on the other was dramatically expressed by the German historian and sociologist Konrad Heiden, a shrewd observer of the great German hyperinflation. Wrote Heiden: “The German people was one of the first to witness the decay of those material values which a whole century had taken as the highest of all values. The German nation was one of the first to experience the death of the unlimited free property which had lent such a royal pride to modern humanity; money had lost its value—what, then, could have any value? Of course, many were accustomed to having no money; but that even with money you had nothing—that was a twilight of the gods. . . . A cynical frivolity penetrated men’s souls; no one knew what he really possessed and some men wondered what they really were.”
Salerno continues on Heiden:
Heiden concisely summed it up: “The state wiped out property, livelihood, personality, squeezed and pared down the individual, destroyed his faith in himself by destroying his property—or worse, his faith and hope in property. Minds were ripe for the great destruction. The state broke the economic man beginning with the weakest.” Heiden is here not referring to the abstract “economic man” but to the flesh-and-blood bourgeois man, the social being whose existence is rooted in private property and the market economy.
Never Accept a Central Bank Digital Currency
While this cautionary tale is rather alarming, there are feasible measures that can be taken to mitigate the harm done, and tame the giant before he ultimately destroys us. Nebraska, for example, abolished income taxation on gold and silver, and explicitly refused to recognize a central bank digital currency as money.
Jp Cortez writes:
With Gov. Jim Pillen’s recent signature, Nebraska has become the 12th state to end capital gains taxes on sales of gold and silver.
LB 1317 is the fourth major sound money bill to become law this year, as state lawmakers across the nation scramble to protect the public from the ravages of inflation and runaway federal debt...
Meanwhile, LB 1317 revises the state’s formal definition of money by adding language that states: “Money does not include central bank digital currency.”
The Personal is Political
“The Personal Is Political” is a phrase commonly traced back to Carol Hanisch, a second-wave feminist who wrote an essay given the same title. In her 2006 introduction to the essay, originally published in 1969, Hanisch does not claim credit for the title. Also for clarity's sake, the word “political” is used in the broader form of addressing power relationships, as opposed to its narrow (and I'd argue, correct) form of calls for legal and electoral action. The intent remained to enact various solutions, as theory is “just words” until put into action.
Hanisch's essay is surprisingly mature as it is individualistic, casting various proposals as “personal solutionary,” as to stress the subjective nature of a fitting course of action. “There is no ‘more liberated’ way,” she suggests, “there are only bad alternatives.”
The terms “personal” and “political” enter the fray as the term “therapy” is discarded due to its connotation with being sick and in need of a cure.
Hanisch explains:
This is not to deny that these sessions have at least two aspects that are therapeutic. I prefer to call even this aspect “political therapy” as opposed to personal therapy. The most important is getting rid of self-blame.
I don't offer praise for certain elements to endorse the essay in its entirety, or second-wave feminism more generally, but to stress what certain voices within the older New Left counter-culture had gotten right. And that has been abandoned by the current wave of the “woke” social justice movement. As stated in her 2006 introduction, Hanisch observed, “these ideas have been revised or ripped off or even stood on their head and used against their original, radical intent.”
There seems to be a meeting of the minds with subjective value theory vis a vis relational value judgments and Thomas Sowell's observation that there are no “solutions,” but only tradeoffs. And what is sometimes dubbed the Penn Principle, that an outsider doesn't know what is ultimately best for you.
The Human Personality Replaced by Politics
A passage in Michael Rectenwald's landmark memoir, Springtime For Snowflakes, this consideration for individuals has been obliterated in the hyper-collectivist identity identitarian character that is the “woke” social justice movement today:
[T]he old New Left slogan - "the personal is political" does not adequately capture the change in politics represented by social justice ideology. The New Left's mantra meant that individual behaviors matter, but also that they reflect broader political and social trends, while contributing to them. As a New Leftist might have put it, being a jerk to one's wife is not only wrong in itself but also points to the strong possibility that one discriminates against women more broadly, and thus contributes to a generalized misogyny. Whatever one might think about its goals or actual outcomes, in New Left politics, individual change was believed to be both local and universal; the New Left sought personal and broader political change at one and the same time.
With social justice, on the other hand, politics is restricted to and distorted by the personal, while the personal is effectively effaced and replaced by politics. The personal is not political; it does not flow into and become part of a political movement. Instead, the political is made narrowly personal, while the personal becomes nothing but politics. The individual person is reduced to a mere emblem of political meaning, while politics is reduced to the political (moral) worthiness, or lack thereof, of individual persons. Politics becomes individual morality based on social justice standards.
Rectenwald links everything from status updates to kneel-downs during the national anthem - and every virtue signal in between - to the French deconstructionist philosopher Jacques Derrida, who proclaimed “there is nothing outside of text.”
We can also observe the tactics taught by Saul Alinsky from his treatise, Rules For Radicals, put into action. Here are some examples:
Rule 2: Never go outside the experience of your people.
Rule 3: Wherever possible go outside of the experience of the enemy.
Rule 13: Pick the target, freeze it, personalize it, and polarize it.
In reference to René Girard's contributions on Scapegoat Theory, there is a crowd that demands the sacrifice of a scapegoat, and an assumed authority figure performing the act as to avoid more violence and societal collapse.
A Hint of Reimagination
On the Friday evening of May 10th, author, former NYU professor, and current Libertarian Party Presidential Candidate Michael Rectenwald hosted an X Spaces event, Libertarian Poetry Salon, which featured some of his original poems, as well as contributions by John Milton and Allen Ginsberg (the latter whom he actually studied with), along with some original contributions by the audience participants. Among the participants was poet and podcaster David Lilley, who hosts the Pardon Will Podcast.
Rectenwald began the event by addressing the derision expressed towards poetry as sometimes “effete… or even… effeminate,” but as a counter, stresses that it allows us to reimagine and reconceptualize the world around us.
Material presented focused on the common themes of breaking away from the grip of institutions and finding purpose as an individual soul. It was nevertheless an escape from any ideological litmus test, while maintaining a thematic sense of tension between individuals and the ruling class.
See Also:
External Resources:
Hyperinflation and the Destruction of Human Personality by Joseph Salerno
Nebraska Ends Income Taxes on Gold and Silver, Declares CBDC’s Are Not Lawful Money by Jp Cortez
The Personal is Political by Carol Hanisch
Springtime for Snowflakes: "Social Justice" and Its Postmodern Parentage by Michael Rectenwald
Saul Alinsky, community organizing and rules for radicals by Mike Seal
René Girard on Sacrifice & Violence: Why Does Scapegoating Happen? by Klejton Cikaj
Libertarian Poetry Salon - X Space Hosted by Michael Rectenwald
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