12 Rules For Life Series, Essay One
This article was previously published on Medium.
Ive been an avid reader and student of philosophy, psychology and other related topics since my early teens.
My uncle first influenced and introduced me to thinkers like Aristotle, Alexander the Great, Plato and Socrates, and as I grew older, I discovered many others.
Some helped me understand the world and human beings better (Robbins, Taleb, Bruce Lee, Watts, Clare Graves, Frankl, Sowell, Rand, Hoppe, Rothbard, etc.), while others helped reinforce the formers ideas by either consistently contradicting themselves, introducing ridiculous ideas of their own or just regurgitating things others have said but completely out of context, thus exhibiting no understanding at all. Some examples include the likes of Marx, Sam Harris, Derrida, Harari, Piketty, Kelton and Keynes.
Either way, they all helped me sharpen and hone my own viewpoints, so for that, Im thankful even for the dumb texts Ive read.
In the last five years, Ive come to really enjoy and align with the philosophies of a particular individual, whom by now youve surely guessed is Jordan Peterson.
While I believe the most profound modern philosopher is likely Murray Rothbard, I believe Peterson is the most articulate and, for me, (personally) one of the most authentic and courageous people alive today.
So today as an homage to Jordans work, and as an attempt to introduce him and his audience to Bitcoin, Ive decided to write a series of articles that examine Bitcoin through a Jordan B. Peterson lens.
Im going to use his most popular book, 12 Rules For Life as the framework. While Ill follow the structure of the book because each of the chapters is quite dense, I will look to glean a number of lessons along the way with my interpretation of the essence of each.
I hope you find value in this series of essays, and if youre a Bitcoiner who has friends that youve not yet been able to orange pill, but are aligned with Jordans ideas and philosophy, I hope this becomes a useful resource.
Jordans first rule in the book is stand up straight, with your shoulders back.
He explores how the individuals position in the social hierarchy impacts their hormonal (serotonin) and dopaminergic systems, and vice versa, hence making it a feedback loop.
More importantly, though, the essence of the lesson is how by owning oneself and taking responsibility (standing up straight), you can influence these systems to either cease a downward spiral or commence an upward journey in life.
The part of our brain that keeps track of our position in the dominance hierarchy is therefore exceptionally ancient and fundamental.
It is a master control system, modulating our perceptions, values, emotions, thoughts and actions. It powerfully affects every aspect of our Being, conscious and unconscious alike.
- Peterson, 12 Rules For Life
This chapter is extraordinarily dense, with so much to unpack and relate to Bitcoin. It was hard for me to choose a single angle, so Ive explored multiple sections and how they each relate; socially, evolutionarily, economically and psychologically.
Note: I will use the words territory and private property interchangeably.
We live in a world with finite territory, and much like any other species, including the now-famous lobsters, our ability to subsist relies on how well we select, protect and handle our territory (aka; private property in a more anthropomorphic sense).
Territory matters. A few truths we must come to terms with are:
Humanity has, over the millennia, developed methods of protecting territory because it is fundamental to our survival as a species. We are collaborative by nature, and the means through which we collaborate is the exchange of private property. This private property (or territory) starts with you and extends to anything you mix your time and energy with on a voluntary basis without having taken it by force from another, although the latter does (and has) happened throughout history, hence the critical need for defence.
Examples of mechanisms for defence include anything from:
Whats important to note here is that without a mechanism for the protection of private property, society collapses. We are all individuals, who are inherently diverse and value everything subjectively. We cannot all own a portion of each other, nor own a part of everything. Its a physical and social impossibility.
Territory is not a social construct. Its a biological imperative.
Its the mechanism thats evolved through which nature achieves balance and equilibrium. Its an emergent, bottom-up phenomenon, not a top-down decree like pseudo scientists would have you believe.
Petersons overview on territory is brilliant, but I would recommend the incredible work by Robert Ardrey (The Territorial Imperative), or you can wait for a piece Ill be writing in the future entitled: Private Property As A Biological Imperative, in which Ill dig deeper into the above.
So if territory and private property are central to existence, then how do we value, order and select it, knowing that we are all subjective beings and that all property is scarce?
Pecking orders are natural phenomena, and found across all living systems. Hierarchies have to develop because life cannot exist without some form of selection, and this cannot exist without prioritization.
This is not to say that there is one right way. Life is not so simplistic. We exist in a complex world where hierarchies and methods for prioritization emerge across multiple dimensions (remember the subjective nature of humans and what they value).
In other words, hierarchies will always form, so the question is not whether they should exist or not (thats like arguing about the existence of gravity), but in what form are hierarchies most conducive to life?
As with most things, its a spectrum.
On one side, we have hierarchies by fiat. These are unnatural and abhorrent. They exist by decree and because there is little to no skin in the game for some, they form at the expense and the exclusion of many.
On the other hand, we have those which are natural and emergent. These are best classified as hierarchies of competence. They are ergodic and dynamic by nature because participants have skin in the game.
Then, of course, we have everything in between. Reality is such that things are messy, and the extremes are rare.
If modernity has shown us anything, its that institutions that may have initially arisen due to competence and a desire for order, but cemented themselves by fiat and thus have become monopolies, will not only begin to decay, but as described by the cobra effect, they will pose a greater danger to existence than the original chaos they set out to manage.
The most prone to such degeneration (enhanced and accelerated by the moral hazard of having no skin in the game) are state monopolies on money, violence, morality and ethics (i.e., law). Why?
Because they are the levers of society. Theyre the glue which binds us. And because of this, they seem to incentivize two key reactions:
This edifice becomes more dangerous and fragile the larger it grows, and like the proverbial beast that must continually be fed, it continues to consume all in its path until it starves and collapses.
All hierarchies are dynamic, and even natural hierarchies tend to adjust, evolve, deconstruct and re-emerge, but fiat hierarchies, in particular, are prone to catastrophic collapse because, through monopolization and the incessant need to control and manage, they deviate further from natural order and become increasingly fragile.
I wrote about fiat versus natural authority at greater length here:
Resistance Is NOT Futile (1/2)
Inequality is one of the most pushed subjects today and one which is deeply misunderstood.
Many who know my work will know my position on inequality. I believe there is nothing more natural than inequality, and in fact, it is the basis of all diversity, nuance and life itself.
Nature is perfect in its imperfection and the result is a naturally unequal distribution of everything from skills, to values, to likes, dislikes, shapes, sizes, interests, resources, effort and everything else one can perceive.
The only thing that should be equal in the world is equality in probability. This means the game were all playing remains dynamic, because we all have skin in the game.
This is by and large how hierarchies naturally emerge, grow, correct and persist, unless of course there is a mechanism via which those at the top can remove their skin from the game, and thus remove the natural equality in probability inherent to stable, emergent systems (after which they decay and collapse).
People are not really angry about inequality, but unfairness. When the opportunity to move up exists and the risk to fall remains, the game is fair and the results are dynamic. If not, the game is rigged.
Read more here:
Utopian Dystopias
And here.
The Pareto principle is a perfectly natural power law distribution most commonly known as the 80/20 rule and best documented by Italian economist Vilfredo Pareto.
The Pareto principle states that for many outcomes roughly 80% of consequences come from 20% of the causes.
You know this not only in your own life (i.e., a smaller number of the things you do produce most of the results), but can see it all around the world and can even deduce it using some simple logic.
You know full well that a few of the songs by a band are their best. That a few players in any sport are disproportionately more impactful than the rest. That a few actors produce most of the hits. That a few hard and smart employees at work produce most of the output.
At a macro level, this manifests itself as uneven Pareto-type wealth distribution.
Think of the following example:
Two people start out working. One does the average nine to five, while the other decides to work two jobs, and save every penny of the second.
As they progress, the saver builds up a small capital base which he decides to use as his investment capital. The other person just continues working the nine to five and hangs out with friends afterwards.
Fast forward a few years, and the saver managed to grow his total wealth through some intelligent investments. He now has a greater capital base from which to invest and further compound that wealth, i.e., earning 5% a few years ago on a $1,000 investment may have yielded $50, but now that same 5% yields $500 per month because hes got $10,000 invested (for example).
Their proportionate wealth will start to look very much like an 80/20 distribution.
Now heres the beautiful part.
The saver, turned investor, gets addicted to his strategy and gets super greedy in the process, so he decides to take some silly risks to yield 50% on investment. He puts up a large chunk of his capital for it and then loses it because he was wrong about his investment.
Hes now back to square one and needs to practically start all over again.
This is the dynamic nature of life and how excessive risk can (and does) lead to natural rebalancing in any system.
Now lets look at the situation in an alternate universe. Saver never gets greedy but gets extremely risk averse. Instead of investing any more of his capital, he just decides to put it all where its safe and he no longer cares about growth.
In this scenario, the original spender who has seen his friend get ahead decides that he wants to catch up. Well, he begins to work harder, save and put those savings toward investments or activities that can yield a higher return. Hes got less to lose, hes younger and, as such, is willing to take more risk.
Over time, he begins to catch up because the original saver is content where he is.
Once again, the system rebalances. All distribution is dynamic and can either compound or erode. It does not standstill. There is no such thing as a static system. Thats exactly why equality can never exist. Its a static, imaginary, utopian (dystopian) dead state.
Inequality, Prices law and the Pareto distribution are all perfectly normal.
Unfairness is the real problem. When the game is rigged, people get pissed off.
Unfortunately, via the monopolization of violence, ethics, morality and most importantly, the production of the most important human technology (money), the state has managed to rig the game.
On a short enough timescale (which is long by individual standards), they are no longer subject to the downside. Neither are any of the organizations, institutions and representatives that can get close to any of the key monopolies of the state.
The result is unnatural distributions, and instead of the system re-balancing via natural correction, we get these 99/1 or even 99.9/01 type distributions of wealth.
Why?
Because: heads they win, tails you lose.
Its like playing a game of monopoly with one person keeping their hand in the box of money, so they cant lose. Or better yet, playing a game of poker where the initial leader of the game knows the dealer, makes a deal, and as such, any time he loses on the river, he gets bailed out from the chips that are in every other players stack.
If thats how the game is played, the rest of the players will soon leave. And thats exactly whats happening now, with Bitcoin.
Poker is actually a great analogy because it incorporates not only skill but luck. Prudent early play can get you ahead. You have to take risks sometimes, you have to bluff, sometimes youll have to fold. If you play well, you can amass enough chips to begin to play harder and more rough, but, the chance to lose it all always exists, and thus, keeps the game fair.
Modernity is a rigged poker game and Bitcoin fixes it by tearing money out of the hands of any one player and thus reintroducing skin in the game for all.
Changing tack a little here is the evolutionary idea of fitness and selection.
As Jordan writes:
The idea of selects contains implicitly nested within it the idea of fitness.
It is fitness that is selected.
The fit in fitness is the matching of organismal attributes to environmental demand.
Fitness is that which is ever more accurately approximated across time, and its important to note that its neither a linear process nor one that is always trending toward more fitness.
Its like a dance. There is a direction across time, but much like two dancers, it moves, sways and swings as it hones and adapts toward ever more fitness.
Bitcoins proof-of-work network is much the same. The difficulty adjustment, incentive mechanism and the work required to participate make Bitcoin an organism that one can argue are alive.
Brilliant minds like Gigis have done this topic far more justice than I can here, so I suggest a review of the following:
Proof Of Life
Furthermore, there is the natural selection process we as individuals make in our pursuit of economic survival. Ive called it Economic Darwinism and its related to Greshams law (i.e., good money pushes out bad money).
We select the money that best performs the three key functions of money:
Making the wrong selection relegates us to poverty and diminishes our capacity to cooperate, collaborate and interact with the rest of society.
As such, we are incentivized to converge and select the fittest mechanism via which the product of our labor can be stored, exchanged and measured.
This fittest medium is unequivocally Bitcoin, and the self-reinforcing, convergent nature of the network effect of money will only continue to accelerate this realization as it spreads globally.
This then brings me to the idea of:
Status is the metaphysical relationship between us and the rest of the world.
Its our relationship to not only the dynamic distribution of all the resources, wealth, skills, shapes, sizes, etc., in the world, but our position in the multitude of hierarchies across every dimension and category one comes into contact with.
This is where the rubber meets the road and why our systems are hormonally, neurologically and biologically wired the way they are.
Read more here:
Bitcoin, Hierarchy And Territory - Bitcoin Magazine