(This article is part of a two-article series from Karo Zagorus. The previous article in the series can be found on Citadel21.com in Volume 10 under the name “Trust, The Lack Of.”)
Fiat money has evolved into a disease which created an environment that seeped into the foundations of society. Last time, we looked at the direct effects of money, what it can create that self reinforces our environment into evil cycles that indirectly affect human trust. It is not the institutions’ and individuals’ goals to abuse our trust, their behavior is indirectly enabled and reinforced by the environment it is present in.
This problem directly affects cognition — we turn more selective with who we trust and how we form our connections. Social capital is required for a properly functioning society, and it is what is depleting today. Imagine social capital like energy in a mobile game that forces you to wait until it gets refilled over time. Now, imagine if people would operate the same way. It works exactly the same way, if you are out of it, you at least need some money to raise your time preference in order to refill your energy meter to continue doing activities. But it’s a bit too simplified that way, truth to be told, because it can create way too many consequences if it depletes.
Robert D. Putman, in his book titled “Bowling Alone: The Collapse And Revival Of American Community,” successfully shed light on why we have fewer friends. Although, it falls short of understanding the main cause: Paper money.
As society loses stored value, time preference rises, which then creates reinforcing cycles that deplete social capital and, by that, creates the perfect environment to dissolve trust. This simple process is what is going down right now in society, but it is not just trust that it is dissolving. It’s the very social fabric also.
In Japan, where the national debt-to-GDP ratio is over 260 percent, we can best observe the negative effects of societal loss of stored value playing out in full force. Although Japan is a more conservative society resistant to widespread change, we can see that it is not necessary to be socially liberal in order to be directly affected by it.
Japan is seeing record low levels of births and marriages and more individuals suffering from depression and suicides. It is a fact that, within Japan, there are over 1.1 million individuals who are suffering long term from acute social withdrawal (In Japanese this is known as “hikikomori”). Where sources claim that young and old individuals suffering from hikikomori are affected by numerous problems, the underlying cause can be easily reduced down to the fact that Japanese cultural phenomena have devolved to the point that its high time preference phenomena causes societal destruction.
It is possible to conclude that two factors can create high time preference with extremely similar effects (although they completely differ based on environmental factors), which are debt and…
Read more:Trust, That We Need More Of