Factual and social reality
The link between money and gender
Our senses detect many physical reactions: Light, sound, touch, smell, taste and so on. That is factual reality.
But there is also non-factual reality, like money. Small pieces of paper whose value is just defined by a group agreeing on it, making it a social reality. Money is not a physical law – it is entirely constructed without a factual counterpart and the pieces of paper are just an expression of that. Non-physical money is no different than coins and paper: Neither is a value.
Social reality is not a mental model built from observations of the reality, but reality built from a mental model. Once real, it can be observed to some extent, leading to refined models and as such, refined reality. But overall, it is based on belief. Clearly, the social reality money and the factual reality value are a tangled mix.
At this time, there is a hot discussion in many western societies about another tangled mix of factual and social reality you certainly heard about: Sex and gender. Let me show how that discussion is related. Many of us aging people were greeted in school by “Good morning boys and girls”, which matched the known binary model of biological sex we grew up with, and gender was considered to be synonymous to sex.
Science changed that binary model e.g. with the publication “Sex redefined” in 2015 describing the discovery that biological sex, when looking at the genetic level, is in fact a spectrum, although with two majorities that could be mistaken for a binary model by the superficial observer who can live with occasional anomalies. Accepting anomalies contradicts scientific work, where one counter proof kills a theory. If a physicist would occasionally observe electrons with half an electron charge, they would not be labelled anomaly and discarded as in need for a recharge.
Replacing the long standing binary model is so tough for the majority of the western society that ignoring science is preferred, which shows how powerful constructivism is: Revising the mental model of binary sex seriously stresses people, because it raises many questions they can no longer answer, including if the questions may be the issue.
There are various old cultures that looked closer, that observed in detail far before the logic of science was formalized. Their diverse sex and gender model is a natural part of their culture and modern science just provides the underlying of what was already common knowledge for them.
Biological sex is factual reality. Gender identity is social reality. Both are a tangled mix, but really different things.
Too much gender discussion? Alright. Except all of that actually applies to money as well, except you are not asked to accept people as they are, but that your wealth is at risk. Hopefully that does not calm you.
We are taught that money represents value. Yet, there are various contradicting theories how money works and how it should work. Talking about money soon ends up with philosophy – or heavy arguments, because it is based on belief. Politicians tell you 2% inflation is healthy and you believe that losing 2% of it per year is a good thing. Central banks tell you the economy needs to be slowed down to fight the running inflation (which they created), which may mean rising unemployment – yes, people losing their single source of income – and you believe that is fine for the sake of a stable financial system even though it may endanger your economic survival.
As of now, money is mostly regional tokens like chips in a casino: They have no meaning outside, with the US dollar being a notable exception. Whatever currency else you hold, only major ones are salable, and even those often only for substantial fees. Money is a means of power. States have the monopoly on creating sovereign debt, collecting taxes and fiscal spending to control their citizens. As an investor, if you are afraid of the company management ruining the business, making your stock worthless, then be aware that politicians often have a lower education compared to those managers, or even none, yet they manage the country that controls your entire wealth, and they are not even liable.
If money represented value, none of that would matter.
Money is debt, but instead of getting a risk premium to hold that debt you lose money through inflation, that is you get a negative risk premium. Bad deal.
The conclusion, if you are interested in value, is to best avoid money by holding assets that are actual values, that is moving from social to factual reality. Active assets hopefully also increase their value.
The amount of money you need to hold should be held in more than one major currency for diversification. Further multiple accounts, preferably at least one outside your jurisdiction, should be used for protection. That's how bad money is.
Fiction? Remember what happened in Cyprus and then think about what turning cash into a gouvernment controlled crypto currency would allow. Study the history of currencies and you will find gouvernments have a very poor track record in managing currencies.
Although unlikely for most people in total, there have been enough times where many had to flee unplanned. Those that can open a new local bank account and fill it with some money from their international account are lucky. Those that have nothing but what they wear and could grab are suddenly poor, no matter how much they worked and saved before.
Many people are a victim to money, but stay silent on that. Instead they prefer to be the culprit when it comes to gender discrimination. Why?
Both gender and money are old enough that their mental models are deeply rooted and people do not react well to changing such models. The binary model of both sex and gender is changing, like it or not, and people hate that, despite reduced discrimination by a better model. The model of money is not changing, so everybody is fine with it, but shouldn't be.
The majority of people would like money to be a salable unit of value, not a state controlled debt token. If we live in a democracy, we absolutely could vote for moving towards technological money, because money is a social reality.
As an engineer, who likes to work with data and laws of nature, it is important to recognize social and factual realities as such. Factual realities are hard limits and change rarely. Social realities are a degree of freedom.