Capitalism is the engine of our world; more than anything else, it is what has made us rich over the last few centuries. It is not just that we are free to trade stuff at market prices. It is also that we have teams who bet huge chunks of capital on risky ventures that attempt big changes to key methods and distributions of production.
I think a possible issue here is that a taboo tradeoff does not become less taboo if you're trading one sacred thing for another; the taboo-ness doesn't cancel out, but if anything adds together. E.g. trading sex for your child's cancer medicine is regarded as doubly tragic, not *less* tragic, because you're trading one priceless good for another.
If a person sells their liver to a sacred hospital for sacred money, and buys medicine they desperately need from another sacred hospital using that sacred money; this seems like exactly the sort of market efficient outcome this system is intended to free up (I think?) But also, people will absolutely hate the idea of poor people being *forced to sell their body parts to afford medical treatment* and will definitely try to ban such trades.
In fact, it's not clear to me there are *any* trades that people would accept under this system they will not accept currently. Could you give some concrete examples?
I wasn't trying to get people to be okay with others selling their kidneys; not sure if that is possible. But I'm pretty sure people will be MORE okay with selling kidney's to achieve a sacred end, relative to a profane one.
"Money is profane and contaminates the sacred" is not true. It is a good heuristic, but the underlying issue is different.
Some interactions require a level of commitment that cannot be captured by contracts. You want your provider to be motivated by something other than keeping an agreement and getting paid.
The only way to bring these areas into the scope of capital is to be able to define the behaviour that consumers want, well enough to be able to contract them to it.
I wrote in 2007, "we need emotional commitment where we can’t achieve commitment via public enforcement (contracts) because the considerations required can’t be specified precisely enough (perhaps because flexibility is itself a key consideration)."
A person who is being paid to help you is more likely to help you than a person who is not being paid, even if the link between the help and the payment is not 100% reliable. Agreed.
However, people who don't have emotional reasons to help you, *and* aren't being paid to help you, are not in the pool. Given a number of people who might help you, some of whom are being paid to help you, the ones who are not being paid are more likely to help you even when the contract cannot be assessed or enforced, than the ones who are being paid.
From the post I linked:
"It is possible to fake an emotional bond. The central question of much human interaction is whether, and how strongly, such bonds have genuinely formed. The literature on this subject is vast, and includes a large portion of all fiction ever written. We are continually on watch to check that the bonds others have to us are still strong.
"This is the reason for what Zelizer calls the 'Hostile Worlds' of the intimate and the commercial — the deliberate and socially expected attempt to separate, as far as is practical, intimate relationships from commercial relationships. If those who we believe are with us for emotional reasons are actually with us for commercial reasons, we can no longer rely on their emotional bond to enforce their commitments beyond what we can achieve in the courts."
I don't want to overstate my case: I'm not claiming that the non-profit provision of "sacred" services is necessarily optimal, or to insist that introducing capitalism into some of these areas cannot make things better. But neither is the inclination to explicitly exclude capitalism from areas where the power of contract is weak mere superstition.
I suspect that increasing the power of contract may in some cases be more beneficial than trying to work around the sacredness instinct.
In my mind the dividing line between the sacred and profane has to do with incentives. If you give someone money with the expectation of a quid pro quo benefit – that is profane if it's in an area where we expect some other allocation or decision mechanism to prevail, because that represents a corruption of those norms. For example it's profane to pay a hospital $1M to jump to the front of the line for a heart transplant, because our expectation is that there is a more ethical allocation process. Likewise, buying off a politician rankles us because we expect (right or wrong) elected officials to serve all constituents, not just the wealthy ones.
One way to turn "profane" money into sacred money is pooling, which breaks those lines of direct (mis)incentives. McKinsey for example used to take payment in equity from companies in a certain way, to alleviate a concern that this ownership share might bias their interactions with other clients (potential competitors). They did this by pooling all of this equity into a blind fund, the contents of which were never known to the individual partners. We see similar pooling on donations: It's "sacred" to donate to a hospital's general fund, but profane to expect an explicit ROI.
Hospitals do take money in payment for services. I'm not proposing to let people pay to jump a queue. I'm proposing to have sacred capitalists fund creation and change of ventures like hospitals. Our current process for doing that isn't at all known to be good.
In the US when I give my sacred money to a non-profit, the government returns a portion of that as real cash in the form of tax deductions/offsets. My marginal tax rate is the exchange rate between sacred money and regular ("profane"?) money.
We could extend this logic to investing. Imagine a "for-profit charity", which would take your sacred dollars and use them toward some (regulated) capitalistic aim, generating profit. Any dividends that accrued to your investment wouldn't be directly given to you as money, but would be considered as further tax-deductible charitable donations that you could deduct from taxes. For-profit charities would compete to give you the largest possible tax deduction.
What can be measured, can be managed. Consecrated capital would be a tremendous improvement on the current system. What are we subsidizing with the money churches enjoy from tax exemption? Scientology's endowment is at least 2 billion dollars. The Church of Latter-day Saints at least 100 billion. Would it feel the same if the Satanic Temple had 100 billion endowment?
This is a valuable piece that speaks to religious people in religious terms. I'm delighted that the idea that values can be coded into money is part of the zeitgeist. Rather than green or rainbow capitalism, in this case it's sacred consecrated.
-scared assets are committed toward sacred ends.
How do we overcome bias to discover the sacred? Save the Planet, Kill Yourself is a slogan from the Church of Euthanasia. For this to work the metrics need to be simple. The pitfall here is that determining and measuring 'sacredness' is left to humans. Westboro Baptist Church will have different ideas than the Church of Euthanasia. These metrics will always be generated by humans and subject to heated debates. However these debates can have great value and help reveal truth if they are about simple verifiable metrics. The amount of CO2 in the atmosphere is not different measurements to different people. Should CO2 be a sacred metric? Biodiversity is the most sacred metric I can think of (One of the ways to calculate for the biodiversity index is to divide the number of species in the ecosystem by the total number of individual organisms in the ecosystem)
My proposal is just to measure the resourced devoted to the sacred, not the value itself beyond those resources. Yes we'd have to agree which ends count as sacred, but we already do that in tax policy.
When financial incentives become intertwined with sacred values, the risk of corruption and misuse of resources increases. Without robust oversight and regulations, sacred capitalists may exploit the system for personal gain or to further their own agendas, ultimately compromising the sanctity of the consecrated capital. This flaw is particularly significant, as it could undermine the core objective of the proposal, which is to elevate and protect sacred values and endeavors.
I think it would be a difficult branding challenge to sell regulators and the public on the idea of 'sacred' capital.
But there are B Corp businesses, where businesses are certified as 'ethical' (~sacred) but they're still for-profit enterprises.
The UK also has Community Interest Companies which are supposed to benefit the community rather than shareholders. There are *limits* to how much profit can be extracted, but in practice the people who set them up pay themselves a good wage even though they're doing 'sacred' activities like providing sports facilities for kids, social care, arts etc. Obviously that is not what you're proposing but it's a step towards it - I don't know what the evidence is on whether allowing CICs actually improves services; my anecdotal impression is that what happens is that instead of a government-run kids' community centre, you get a CIC that is superficially nicer and shinier but charges for what it provides, which seems like extracting a rent from people who need a way to entertain their kids.
And of course there are enterprises like OnlyFans, which has made a lot of money by enabling the distribution of, uh, sacred content. The problem there is that the finance system doesn't like to do payment processing for legal sex work, even in the absence of actual regulations... This seems like the 'profane' system rejecting the sacred - maybe the solution there is to require the finance system to deal with any legal business.
I'm also sceptical about whether free markets, even with 'sacred' money, would actually improve some sacred areas. For example, health care in the US is largely for-profit, and costs a lot more overall than in other developed countries, for the same or worse outcomes.
As I'm sure you know (and probably disagree with), the economic argument is that demand for healthcare is less elastic so a market system isn't a good fit. Maybe at least some of the areas that we have decided are 'sacred' are areas where allowing markets would actually lead to worse outcomes? Would a free market in healthcare with sacred money actually be better than a socialised system?
US health care is very heavily regulated; its nothing like a free market. Yes non-profits can often pay their managers handsomely, but that isn't a substitute for capitalists.
It seems that any ability to exchange sacred money for ordinary money kills the idea. I can only see this working similarly to points on Reddit or Manifold Markets - maybe you can buy them for ordinary money, but not the other way around. I understand you can get some of your Manifold Markets points to go towards charities, so maybe this is already a step in the direction you propose? :)
I'm usually the last in a comment section to quote christian scripture, but this one has me backed into a corner. "No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon." And again, "For the love of money is the root of all evil."
There are senses in which it is possible to say that money is not inherently profane in a way that would make it the natural enemy of the sacred, but generally that's what the words mean: money is profane, money is not sacred. While I get what this attempt is intending, it reads like "Toward Bluer Orange" or "Toward Lower Up."
There was a whole bit about the former, called the Protestant Reformation. As for the latter, I suspect most people would rate hospitals as perhaps the least sacred places outside of the actual financial district.
There’s certainly truth to the “sacred” angle you present which restricts capitalism to specific social areas, but I think this is only the surface level issue. There are a LOT of people who are absolutely adamant that even in the areas you cite capitalism as having done good, they think it’s done bad:
- The automobile? It destroyed communities via highways and made cities hostile to pedestrians.
- Injection molding? Now all my appliances are made of cheap plastic and have to be replaced 3x as often. All those local steel-working jobs are gone, shipped overseas.
- Electronics/Miniaturization? Great, I bought this EV but it turns out I have to pay out the rear for maintenance because it’s too complex for me to do in my garage, and if I don’t pay $10k/year they’ll shut off the self-driving features.
Yes, capitalism does create products customers *want* to buy. But capitalists are even more happy to sell you something you *need* to buy, and their dream would be if it were impossible for you to satisfy that need in any way *except* for paying them for it. That’s a scary thing. To make yourself (explicitly) beholden to people you don’t know and will never meet for your base needs of food and shelter: that’s *risky*. We’ve perhaps passed that point long ago for all but the most extreme of home-steaders, but I understand the fear, and I think it’s worth at least admitting the risks of allowing more capital into more areas of life that have managed to remain less beholden to it so far.
I really like what you’re trying to do here! Maybe allow sacred capitalists to redeem some fraction of their sacred profit as an incentive. Maybe have that fraction adjust dynamically based on stats showing whether the sacred economy is receiving enough investment
Oh come on! You know what public goods are! They don't exist due to some irrational views about "sacred" and "profane" goods, they exist due to the market failures that every Econ 101 student is taught about in week 5.
A great many sacred things that we regulate and limit capitalism regarding are not public goods. Like education, medicine, parks, churches, art, and much more.
Most people do regard all those things as public goods. (Although in some cases their arguments for why are somewhat dubious, admittedly.)
Edit: is capitalism actually limited from offering most of those? Education and medicine, sure, but for-profit art is very common, and I'm not aware of any special laws limiting parks.
Sacred money and capital - love it! Of course, it is an absurd solution to our absurd behavioral biases. Better for rational people to secede from coercive nation states to form crypto powered free economies and societies (variations on the theme by Balaji Srinivasan’s “Network State”).
I think a possible issue here is that a taboo tradeoff does not become less taboo if you're trading one sacred thing for another; the taboo-ness doesn't cancel out, but if anything adds together. E.g. trading sex for your child's cancer medicine is regarded as doubly tragic, not *less* tragic, because you're trading one priceless good for another.
If a person sells their liver to a sacred hospital for sacred money, and buys medicine they desperately need from another sacred hospital using that sacred money; this seems like exactly the sort of market efficient outcome this system is intended to free up (I think?) But also, people will absolutely hate the idea of poor people being *forced to sell their body parts to afford medical treatment* and will definitely try to ban such trades.
In fact, it's not clear to me there are *any* trades that people would accept under this system they will not accept currently. Could you give some concrete examples?
I wasn't trying to get people to be okay with others selling their kidneys; not sure if that is possible. But I'm pretty sure people will be MORE okay with selling kidney's to achieve a sacred end, relative to a profane one.
"Money is profane and contaminates the sacred" is not true. It is a good heuristic, but the underlying issue is different.
Some interactions require a level of commitment that cannot be captured by contracts. You want your provider to be motivated by something other than keeping an agreement and getting paid.
The only way to bring these areas into the scope of capital is to be able to define the behaviour that consumers want, well enough to be able to contract them to it.
I wrote in 2007, "we need emotional commitment where we can’t achieve commitment via public enforcement (contracts) because the considerations required can’t be specified precisely enough (perhaps because flexibility is itself a key consideration)."
You might want MORE commitment than a mere contract can bring, but the contract can only help add to that commitment.
Berkson's paradox.
A person who is being paid to help you is more likely to help you than a person who is not being paid, even if the link between the help and the payment is not 100% reliable. Agreed.
However, people who don't have emotional reasons to help you, *and* aren't being paid to help you, are not in the pool. Given a number of people who might help you, some of whom are being paid to help you, the ones who are not being paid are more likely to help you even when the contract cannot be assessed or enforced, than the ones who are being paid.
From the post I linked:
"It is possible to fake an emotional bond. The central question of much human interaction is whether, and how strongly, such bonds have genuinely formed. The literature on this subject is vast, and includes a large portion of all fiction ever written. We are continually on watch to check that the bonds others have to us are still strong.
"This is the reason for what Zelizer calls the 'Hostile Worlds' of the intimate and the commercial — the deliberate and socially expected attempt to separate, as far as is practical, intimate relationships from commercial relationships. If those who we believe are with us for emotional reasons are actually with us for commercial reasons, we can no longer rely on their emotional bond to enforce their commitments beyond what we can achieve in the courts."
I don't want to overstate my case: I'm not claiming that the non-profit provision of "sacred" services is necessarily optimal, or to insist that introducing capitalism into some of these areas cannot make things better. But neither is the inclination to explicitly exclude capitalism from areas where the power of contract is weak mere superstition.
I suspect that increasing the power of contract may in some cases be more beneficial than trying to work around the sacredness instinct.
I don't see a link.
In my mind the dividing line between the sacred and profane has to do with incentives. If you give someone money with the expectation of a quid pro quo benefit – that is profane if it's in an area where we expect some other allocation or decision mechanism to prevail, because that represents a corruption of those norms. For example it's profane to pay a hospital $1M to jump to the front of the line for a heart transplant, because our expectation is that there is a more ethical allocation process. Likewise, buying off a politician rankles us because we expect (right or wrong) elected officials to serve all constituents, not just the wealthy ones.
One way to turn "profane" money into sacred money is pooling, which breaks those lines of direct (mis)incentives. McKinsey for example used to take payment in equity from companies in a certain way, to alleviate a concern that this ownership share might bias their interactions with other clients (potential competitors). They did this by pooling all of this equity into a blind fund, the contents of which were never known to the individual partners. We see similar pooling on donations: It's "sacred" to donate to a hospital's general fund, but profane to expect an explicit ROI.
Hospitals do take money in payment for services. I'm not proposing to let people pay to jump a queue. I'm proposing to have sacred capitalists fund creation and change of ventures like hospitals. Our current process for doing that isn't at all known to be good.
In the US when I give my sacred money to a non-profit, the government returns a portion of that as real cash in the form of tax deductions/offsets. My marginal tax rate is the exchange rate between sacred money and regular ("profane"?) money.
We could extend this logic to investing. Imagine a "for-profit charity", which would take your sacred dollars and use them toward some (regulated) capitalistic aim, generating profit. Any dividends that accrued to your investment wouldn't be directly given to you as money, but would be considered as further tax-deductible charitable donations that you could deduct from taxes. For-profit charities would compete to give you the largest possible tax deduction.
What can be measured, can be managed. Consecrated capital would be a tremendous improvement on the current system. What are we subsidizing with the money churches enjoy from tax exemption? Scientology's endowment is at least 2 billion dollars. The Church of Latter-day Saints at least 100 billion. Would it feel the same if the Satanic Temple had 100 billion endowment?
This is a valuable piece that speaks to religious people in religious terms. I'm delighted that the idea that values can be coded into money is part of the zeitgeist. Rather than green or rainbow capitalism, in this case it's sacred consecrated.
-scared assets are committed toward sacred ends.
How do we overcome bias to discover the sacred? Save the Planet, Kill Yourself is a slogan from the Church of Euthanasia. For this to work the metrics need to be simple. The pitfall here is that determining and measuring 'sacredness' is left to humans. Westboro Baptist Church will have different ideas than the Church of Euthanasia. These metrics will always be generated by humans and subject to heated debates. However these debates can have great value and help reveal truth if they are about simple verifiable metrics. The amount of CO2 in the atmosphere is not different measurements to different people. Should CO2 be a sacred metric? Biodiversity is the most sacred metric I can think of (One of the ways to calculate for the biodiversity index is to divide the number of species in the ecosystem by the total number of individual organisms in the ecosystem)
My proposal is just to measure the resourced devoted to the sacred, not the value itself beyond those resources. Yes we'd have to agree which ends count as sacred, but we already do that in tax policy.
When financial incentives become intertwined with sacred values, the risk of corruption and misuse of resources increases. Without robust oversight and regulations, sacred capitalists may exploit the system for personal gain or to further their own agendas, ultimately compromising the sanctity of the consecrated capital. This flaw is particularly significant, as it could undermine the core objective of the proposal, which is to elevate and protect sacred values and endeavors.
But how exactly could sacred capitalists benefit themselves under my proposal more than could a hospital administrator today?
I think it would be a difficult branding challenge to sell regulators and the public on the idea of 'sacred' capital.
But there are B Corp businesses, where businesses are certified as 'ethical' (~sacred) but they're still for-profit enterprises.
The UK also has Community Interest Companies which are supposed to benefit the community rather than shareholders. There are *limits* to how much profit can be extracted, but in practice the people who set them up pay themselves a good wage even though they're doing 'sacred' activities like providing sports facilities for kids, social care, arts etc. Obviously that is not what you're proposing but it's a step towards it - I don't know what the evidence is on whether allowing CICs actually improves services; my anecdotal impression is that what happens is that instead of a government-run kids' community centre, you get a CIC that is superficially nicer and shinier but charges for what it provides, which seems like extracting a rent from people who need a way to entertain their kids.
And of course there are enterprises like OnlyFans, which has made a lot of money by enabling the distribution of, uh, sacred content. The problem there is that the finance system doesn't like to do payment processing for legal sex work, even in the absence of actual regulations... This seems like the 'profane' system rejecting the sacred - maybe the solution there is to require the finance system to deal with any legal business.
I'm also sceptical about whether free markets, even with 'sacred' money, would actually improve some sacred areas. For example, health care in the US is largely for-profit, and costs a lot more overall than in other developed countries, for the same or worse outcomes.
As I'm sure you know (and probably disagree with), the economic argument is that demand for healthcare is less elastic so a market system isn't a good fit. Maybe at least some of the areas that we have decided are 'sacred' are areas where allowing markets would actually lead to worse outcomes? Would a free market in healthcare with sacred money actually be better than a socialised system?
US health care is very heavily regulated; its nothing like a free market. Yes non-profits can often pay their managers handsomely, but that isn't a substitute for capitalists.
ESG investing seems aspiring to achieve something similar
ESG rates investments on their sacredness, which isn't the same.
It seems that any ability to exchange sacred money for ordinary money kills the idea. I can only see this working similarly to points on Reddit or Manifold Markets - maybe you can buy them for ordinary money, but not the other way around. I understand you can get some of your Manifold Markets points to go towards charities, so maybe this is already a step in the direction you propose? :)
I'm usually the last in a comment section to quote christian scripture, but this one has me backed into a corner. "No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon." And again, "For the love of money is the root of all evil."
There are senses in which it is possible to say that money is not inherently profane in a way that would make it the natural enemy of the sacred, but generally that's what the words mean: money is profane, money is not sacred. While I get what this attempt is intending, it reads like "Toward Bluer Orange" or "Toward Lower Up."
Churches and hospitals do take in money, and pay out money. Do really think that implies they cannot serve the sacred?
There was a whole bit about the former, called the Protestant Reformation. As for the latter, I suspect most people would rate hospitals as perhaps the least sacred places outside of the actual financial district.
Related: Al Roth on "Repugnant Markets and Forbidden Transactions" https://www.youtube.com/watch?v=GbQ1a4OhqNU&ab_channel=WZBlive
There’s certainly truth to the “sacred” angle you present which restricts capitalism to specific social areas, but I think this is only the surface level issue. There are a LOT of people who are absolutely adamant that even in the areas you cite capitalism as having done good, they think it’s done bad:
- The automobile? It destroyed communities via highways and made cities hostile to pedestrians.
- Injection molding? Now all my appliances are made of cheap plastic and have to be replaced 3x as often. All those local steel-working jobs are gone, shipped overseas.
- Electronics/Miniaturization? Great, I bought this EV but it turns out I have to pay out the rear for maintenance because it’s too complex for me to do in my garage, and if I don’t pay $10k/year they’ll shut off the self-driving features.
Yes, capitalism does create products customers *want* to buy. But capitalists are even more happy to sell you something you *need* to buy, and their dream would be if it were impossible for you to satisfy that need in any way *except* for paying them for it. That’s a scary thing. To make yourself (explicitly) beholden to people you don’t know and will never meet for your base needs of food and shelter: that’s *risky*. We’ve perhaps passed that point long ago for all but the most extreme of home-steaders, but I understand the fear, and I think it’s worth at least admitting the risks of allowing more capital into more areas of life that have managed to remain less beholden to it so far.
Sure some people complain about capitalism in mundane areas. But the key point is that we mostly allow it there, with our without the complaints.
👌👌👌
I really like what you’re trying to do here! Maybe allow sacred capitalists to redeem some fraction of their sacred profit as an incentive. Maybe have that fraction adjust dynamically based on stats showing whether the sacred economy is receiving enough investment
A percentage management fee seems likely to be approved as a fair compensation for sacred capital fund managers.
Oh come on! You know what public goods are! They don't exist due to some irrational views about "sacred" and "profane" goods, they exist due to the market failures that every Econ 101 student is taught about in week 5.
A great many sacred things that we regulate and limit capitalism regarding are not public goods. Like education, medicine, parks, churches, art, and much more.
Most people do regard all those things as public goods. (Although in some cases their arguments for why are somewhat dubious, admittedly.)
Edit: is capitalism actually limited from offering most of those? Education and medicine, sure, but for-profit art is very common, and I'm not aware of any special laws limiting parks.
Sacred money and capital - love it! Of course, it is an absurd solution to our absurd behavioral biases. Better for rational people to secede from coercive nation states to form crypto powered free economies and societies (variations on the theme by Balaji Srinivasan’s “Network State”).