Good morning!
Disclaimer: All unsourced graphics are made by me using a canva.com account
Hope you're all doing well and staying safe.
Today I offer my observations on Sir Thomas Gresham's economic law, commonly referred to as: Gresham's Law and how it relates to ideas, or forms depending on how platonic you want to be about it.
In order to properly discuss my obversations it will help to keep a few definitions in mind.
Definitions as according to Merriam Webster.
Gresham's Law:
- An observation in economics: when two coins are equal in debt-paying value but unequal in intrinsic value, the one having the lesser intrinsic value tends to remain in circulation and the other to be hoarded or exported as bullion
- broadly : any process by which inferior products or practices drive out superior ones
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Entity:
- BEING, EXISTENCE
especially : independent, separate, or self-contained existence
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Idea:
- An entity (such as a thought, concept, sensation, or image) actually or potentially present to consciousness.
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Currency:
- Circulation as a medium of exchange
- general use, acceptance, or prevalence
a story gaining currency- a common article for bartering
d: a medium of verbal or intellectual expression
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With that established, let's begin!
Ideas as currencies
If we concede the existence of something like Intellectual Property as a valid and pragmatic concept, then we acknowledge that an idea can be a thing-in-itself. As in, we see ideas as self contained metaphysical objects in the same manner that physical objects, like a brick, are seen as self contained physical objects.
We as a society acknowledge this to the point where we assign property rights to ideas. For instance, if I were to release a song called 'Rolling In The Deep' and attempt to claim ownership of it, and it was a complete carbon copy of Adele's song, we have strict laws to prevent me from doing that.
That imaginary box containing her song is as 'real' as the physical cd case it comes in when ownership is concerned. We protect the property rights we apply to things. It is one of the fundamental understandings that helps us to function and co-exist. I can't take yours, and you can't take mine.
But I can want yours, and I can trade for yours.
I can be jealous of yours.
If you sought an idea then you swapped another idea in order to get it.
I can trade the idea of value contained within two $1 bills at the same time as I actually trade the physical bills. With this I can transfer the property rights of another idea to me. Even if I never receive the physical loaf of bread I just bought I still own the metaphysical box that contains its concept.
That is... until I get a refund and that imaginary box gets tossed in the trash.
In the same way that I can be jealous of a man who has more money than me, I can be jealous of someone who understands more than I do. I am bad at math. My wife (
What I would trade to be able to know it.
Unfortunately the only trade pair that exists for that is $TIME/$MATH, and trust me, my exchange rate there is TERRIBLE.
When considered this way, it's pretty easy to visualize the dominant ideas that circulate and permeate society as forms of currency. Popular ideas are sold and bought, they are hoarded and banked, they are leveraged to support other ideas. They are vehicles for exchange, and are traded on a big worldwide decentralized exchange called 'The Marketplace of Ideas'.
Ideas which through good faith have earned adoption and are circulating are referred to as 'good ideas'. This is used in the same way as 'good money' is used when referring to Gresham's Law. The thing of higher intrinsic value.
Debasing the currency
Breaking news: August 11th, 2020 + 5
(we decided to stop the calendar at 2020)
- Bitcoin trillionaires have bought the planet.
- 'Lambos' is declared a national holiday.
- Craig Wright retreats to his outback fortress: Rumors of active paramilitary presence circulating.
- Adele defies her fans: re-releases Rolling In The Deep with 5 extra verses of high pitched warbling.
If she really did that what do you think the reaction would be?
For people who value the original song, this could be seen as a serious debasement of its intrinsic value. Because of this debasement, they will be cautious before investing their emotions in the new product. They know it wont be worthy of the same investment as the original, even if the artist 'authority' is advertising it as if it is its equal.
The marketplace for Rolling In The Deep will flush out those who object because they will recognize the debasing and see through any attempt to normalize it, and powerless to resist the authority of Adele, they will leave.
This application of Gresham's Law is applicable whenever a 'bad idea', or a debased version of an idea is asserted by an authority to be the 'legal tender' of the market in which it presides.
Even though the original song and the new song could exist in the same marketplace, they are unable to be trade freely if only one is accepted tender. Bad Money drives out Good Money if there is authority to back it, or prop it up. In the lack of this authority the Good Money drives out the bad.
Authoritarianism is an aspect of Gresham's Law that is rarely considered.
Communities of people who value the original form together to recreate the marketplace that they so enjoyed before their currency became debased.
The best real world example I can think of for this is:
World of Warcraft
On January 7th 2007, the first expansion Burning Crusade was released. According to MMO Champion that year WoW was able to attain over 7 million concurrent users, and went on to have over 12 million at their zenith.
After that the game went on to do extraordinarily well, that was, until it started releasing more and more expansion packs.
As you can see the population started to flatten out during Wrath of the Lich King, and after a small hype bump at the release of Cataclysm in 2011 it has been on a decent slide.
Over this time the existence of a group of die-hard of WoW fans loyal to the original pre Burning Crusade version became known to the internet.
People were so bent on gaining access and playing the 'Vanilla' version of WoW, or the pure form of the idea of WoW, they were willing to hack Blizzard's servers in order to get it.
Check out this timeless thread that goes through the timeline of WoW emulation, including their plans to hack Blizzard.
It wasn't until 2015 that the 'Vanilla WoW' community was seen in all of its strength and glory.
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The Nostralrius server was one of the most successful WoW vanilla servers, according to Wikipedia. They also claim that it had over 800,000 registered players at one point.
That's 800,000 people registered to one server, all for the promise of being able to play the original un-diluted, unadulterated version of World of Warcraft.
It's not too hard to imagine that while these private servers were experiencing a boom of players flocking to them, the 'tender currency', or retail version of WoW was actually losing players. Expansion after expansion, the progressive streamlining of the game over time caused more and more people to 'hoard' their emotional investments away from the continually debasing idea.
It was only when the private servers went up and the currency of vanilla WoW was circulating could we see the full scope of this exodus. They were like a group of people with a collection of valuable assets and were dying to trade them on a marketplace.
Many people had been dumping their emotional investment in the debased WoW and buying up the highly valuable vanilla WoW.
In a sense, the good money was driving out the bad money.
That was, until the authority propping up the bad money stepped in.
In 2016 Blizzard sent the developing teams behind the server a cease and desist letter. Their response a change.org campaign. An incredibly heart felt plea to allow them to preserve the original game that they love so much.
We are the team of Nostalrius Begins, a community dedicated to World of Warcraft's first version, also known as “Vanilla”. We were a team of about thirty volunteers, and used to host an international legacy server for this version of WoW. For roughly one year, it was an amazing journey for all of us, and for the 800,000 players who registered an account, including the 150,000 players who were active. We passionately reproduced the original progression you created throughout patches and content releases. The mighty Ahn Qiraj raid was to be released next month.
We never saw our community as a threat for Blizzard. It sounds more like a transverse place where players can continue to enjoy old World of Warcraft's games no longer available, maybe until a new expansion appears; a huge and powerful community of fans that remains attached to future Blizzard games, as we have in no other gaming company.
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Unfortunately this story doesn't end with the good money running out the bad money, though that's not to say it wont do that eventually.
Blizzard effectively seized control of the vanilla WoW market.
However if they repeat the same mistakes and debase Classic WoW, then the exact same servers could pop up, and Blizzard would be stuck fighting the flight to good money, or the good idea of vanilla WoW.
This isn't to say that everyone will influenced by these laws. Just like there are people who prefer dollars over gold, people will prefer retail WoW over classic.
However it is difficult to ignore that these laws are at play with things like this.
You could truly apply this with any idea that has been around long enough and circulated enough to be subverted, even if it is subverted by itself.
I suppose that is the definition of debasement. Subverting yourself.
When good ideas drive out bad ideas
There is an often unspoken part of Gresham's Law that is sometimes referred to as 'Thier's Law' which states that these properties never actually leave circulation, instead they are merely driven to extreme premiums.
Like the cost of hacking Blizzard in order to gain a copy of Vanilla WoW.
What that essentially means is that these 'good ideas' are effectively locked up, not gone. It is the duty of bad money to keep the good money imprisoned, in a sense.
As I mentioned this is only possible with the aid of an external authority which imbues the debased entity with false value.
Eventually this process will erode the fundamentals of that entity so far that it will no longer be able to serve its function.
The Papiermark of Weimar Germany suffered a death of debasement as it was inflated into oblivion. It was dumped entirely for a currency of greater integrity, the Rentenmark
It was only when the authority that controlled the Papiermark was no longer tenable, and it was no longer fit for purpose did this good money enter the scene.
Conclusion
The struggle between good ideas and bad ideas, good money and bad money, is a cyclical phenomenon. It is the ebb and flow of the prevailing sentiments that exist within a marketplace. They rise with the creation of the pure idea, they fall when the idea is debased, they rise when debasement renders it redundant and the pure idea returns, if indeed it can return at all. Of course that would be contingent.
We have seen this played out with Steem and Hive.
Are we not on Hive because we are hoarding our emotional investments away from the now debased Steem, in favor of the pure Hive?
Has Steem not been debased in our eyes, and because of that, we are now on the Vanilla WoW version of Steem?
Here's another question.
Since there is no authority to protect Steem from Hive, will the Good Money of Hive drive out the Bad Money of Steem from the marketplace?
I think that question is already answering itself.
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Thank you for reading. I hope you enjoyed and were able to make sense of my thoughts.
Please upvote, comment or re-blog if you enjoyed!
Gresham's Law and other economic laws are incredibly fascinating to me.
I find that ideas behave almost identically to money, probably because they are one in the same.
