@ drvanguard

Originally written in: November 2024

"Show me the incentives, and I'll show you the outcome"[^mungerquote].

"Even bacteria respond to motivation." ~[^dufrene2020][^amoedo2024].

Introduction

In Austrian economics, time preference refers to the value individuals place on present consumption versus future consumption [^rothbard1993man]. A society with a lower time preference is more inclined to save, invest, and plan for the long term, thereby fostering progress and stability [^ammous2018]. In contrast, a society with a higher time preference tends toward immediate consumption rather than investment — or invests without a true understanding of its purpose — leading to short-term planning and a gradual drift from foundational societal values, traditions, and culture [^hoppe2001].

The definition of investment is the process of allocating resources to productive activities, prioritizing future gains over immediate consumption. It involves capital accumulation and is key to economic growth, as individuals delay gratification to increase future value. This approach underlies capital formation and enhances an economy's production capacity, aligning with lower time preference and fostering long-term prosperity [^mises1998].

With a foundational understanding of time preference and investment, we can begin to examine what motivates people today. Given the prevalence of high time preference in modern society, the government can capitalize on this tendency by offering immediate handouts and benefits, satisfying the population's desire for instant gratification, often at the expense of long-term prosperity and future gains. This tendency is also mirrored in mainstream media, where a focus on sensational, attention-grabbing stories diverts focus from deeper, structural issues. By amplifying polarizing narratives [^gentzkow2006media], often tied to social identity or lifestyle differences, the government and media create a cycle of constant engagement and distraction, steering public attention towards short-term controversies and away from underlying economic or social policy issues [^caplan2001rational].

Debt & Fractional-Reserve Banking

A common denominator that repeatedly emerges in such destructive behavior promoted by governments is the issue of money. As money drives the world, understanding and following its flow not only reveals how it operates but also uncovers those who wield control over it, and how human behavior is driven by it.

Money is a broad term encircling all assets that can be used for exchange, storage, and valuation, covering both physical and digital forms [^ammous2023]. Cash is a subset of money, referring specifically to physical currency, such as coins and notes.

The process of money creation, typically managed by governments and central banks, is the foundation of economic dependency within the financial system. In most economies, central banks control currency creation through mechanisms like open market operations and debt. For instance, when a central bank, such as the Federal Reserve, issues new currency, it does so by purchasing government securities from commercial banks, thus adding currency to the economy. However, this transaction is not debt-free; it obliges the government to repay the borrowed amount with interest.

In common words, the process of creating money is as follows: the government request to the central bank a certain amount of money to be printed in borrowing form. The central bank then creates that money, out of thin air, on the promise that the government will repay the central bank down the road. Since the government does not produce anything, in order to repay the central bank, the government then sells the debt via bonds to anyone who would like to buy the government debt. In even more simple words: the government and central bank creates money out of thin air based on debt [^ammous2021].

The issue with money creation is not only by the fact that it was created out of thin air, but because money creation has other issues tied to it: the debt, the creation of fractional-reserve monetary system, inflation, and interest.

This foundational reliance on debt, since it is present in the very beginning of money creation, renders the entire monetary system debt-dependent. Therefore, saving and investing within such a system becomes questionable, as the system's nature opposes the principles of sustainable wealth accumulation, thus leading human behavior not to save but to spend.

A fractional-reserve monetary system is a banking structure in which banks retain only a small fraction of their depositors' funds — historically around 10%, but today often as low as 1% [^bundesbank2024] — while lending out or investing the remainder. This setup allows banks to expand the money supply and stimulate economic activity through a process known as deposit expansion [^federalreserve1975modern]. Deposit expansion occurs when banks effectively treat a portion of deposited funds as new money, multiplying the original deposit base. For example, if a bank holds deposits totaling 1 million euros, it can lend out up to 1.9 million euros, as long as it maintains 10% of the initial deposit in reserve. This cycle can repeat, enabling banks to increase the total money supply to infinity, but the "Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion" and government applying it recommends not doing it above 9 times the original deposit value [^federalreserve1975modern].

To make matters worse, inflation and interest exacerbate the problems inherent in this monetary system. Interest is a foundational element of the system, initially intended to address the original debt incurred by the government. In economic terms, interest represents the "price" of time preference, a premium placed on present goods over future goods. To illustrate the impact of interest, consider the cost of a house in today's system: a house priced at 500,000 euros with a 4% variable interest rate ends up costing around 860,000 euros over 30 years, with 360,000 euros paid in interest alone.

Inflation, on the other hand, is the increase in the money supply — money printing — and can only be truly calculated by M2[^1] money supply metric. Inflation erodes the value of both assets and earned income, as each new unit of currency devalues existing money. This devaluation impacts not only the purchasing power of savings but also the real cost of goods and services over time, reducing the long-term value of assets people believe they own.

The government

Operating within a monetary system stretched beyond its limitations, the government faces the dual challenges of controlling inflation and satisfying its growing spending demands. To fund its expenditures, the government often provides public benefits — subsidies, "free" healthcare, public transport, security, military, and welfare in general — to justify continual spending and cultivate public support - via voting, in most democratic countries.

Welfare and most government programs redistribute wealth from producers to non-producers, fostering dependency on the state. Over time, this erodes individual sovereignty and expands government control, restricting freedom, and reducing people to slaves or cash cows.

The government justifies taxes as payment for welfare and public services, but also claims they curb inflation by reducing the need to print money. The logic is that by reclaiming taxpayer money, the money supply is controlled. However, this is misleading, especially when the government can print money at will, making taxation on such currency inherently flawed.

Taxes are extracted via coercion - violence - by the government onto the population. The government then decides where to allocate this money, based on their guess of what the population needs, excluding private preferences. Therefore, taxes are not an incentive to accumulate, not even to work more. Taxes are an incentive to do right the opposite: do not save and do not work more.

Another tactic the government employs is to create crises that it alone can "solve", thus requiring more taxes or funding. Recent examples include crises like COVID-19, the "green" agenda, and initiatives to combat climate change[^2]. In each case, the government presents itself as the sole solution, yet solving these crises inevitably demands additional resources — in the form of increased taxation.

Even minimal critical thinking would prompt one to question the true necessity of taxes in a government that owns and controls the money printer. Given what we now understand, if you were in the government's position, would you willingly relinquish control of money creation by tying it to something like gold, empowering people to become smarter, independent, and wealthy?

The government, through various channels — media, education, propaganda, welfare, and government subsidies — ensures that people remain obedient and uninformed. It keeps them financially constrained by increasing taxes and imposing extensive regulations, while fostering dependency through handouts, welfare, and other social programs. The government is the only entity that, by law, can use violence and coercion without prosecution [^rothbard2009].

"Anyone who, although human, is by nature not yours but someone else's"[^ambler1987].

It is therefore unsurprising that many live in a state akin to enslavement, reflecting a mindset shaped by constant dependency. It is no wonder that people are discouraged from having children, as they can barely support themselves. Nor is it surprising that individuals might question the need to continue their bloodline, believing in the illusory value of "fake money" [^kiyosaki2019] and trusting present "investments" and the government to provide a pension in old age. And it's certainly not surprising to see people asking the government for solutions to every problem, when the government leaves them no viable alternatives.

"Show me the incentives, and I'll show you the outcome"[^mungerquote].

That statement serves as a powerful tool for understanding and addressing complex issues. When observing behaviors that may appear unusual — such as individuals identifying as "trans-species," a phenomenon linked to mental health concerns [^pinna2022] — it's essential to consider the underlying incentives. Who benefits most from a society in which individuals remain financially constrained, dependent, and uninformed? A fiat-based monetary system functions as a modern form of economic control, keeping people poor by design. Taxes, effectively a penalty for productivity, contrast sharply with welfare programs, which often reward dependency and reinforce reliance on the government. Meanwhile, government narratives and selective information shape public beliefs, protecting institutional interests and discouraging critical inquiry[^3].

Conclusion

Like the fungus that infects in parasitic way an ant's nervous system - Ophiocordyceps Unilateralis -, rendering it a zombie [^britannica2024] controlled by an external force, similarly, modern bureaucracies exploit the mechanisms of fiat money, debt, and taxation [^rothbard2009] to maintain control over individuals, steering them away from self-reliance and critical thinking toward a state of perpetual dependence.

The parallels are striking: just as the fungus manipulates the ant's behavior to secure its reproduction, governments manipulate public perception, creating crises, shaping incentives, and fostering dependence[^rothbard2009] through welfare programs[^caplan2001rational], inflated debt[^ammous2018], and coercive taxation. These mechanisms suppress individuality, reduce productivity, and shift power further into centralized hands[^gentzkow2006media], leaving citizens "zombified", detached from purpose and independence.

"Even bacteria respond to motivation."[^dufrene2020]

If tolerated — even by you, dear reader — this parasitic cycle will continue to erode humanity's dignity and potential. The solution lies in reclaiming agency by building a society grounded in sound money, meaningful productivity, and spiritual and cultural foundations that connect us to higher purposes. As warned in Jeremiah 17:5 [^4], trusting fallible human systems leads to enslavement. True freedom comes from rejecting exploitative bureaucracies and embracing systems aligned with truth, autonomy, and resilience.

Another way is to fully understand the system and opt out. This requires mastering the rules and using them to your advantage. If legal avenues exist to avoid taxation, expropriation, eminent domain, or government coercion, then the first step is to change the game for yourself.

The monetary system and government incentives shape human behavior, influencing those who allow themselves to be controlled by them.

fiat #bitcoin #austrian-economics #freedom #slavery #money #government #antipropaganda #propaganda #taxes #tax #greenagenda #wef #who

Footnote

[^1]: M2 refers to savings deposits + money market mutual funds + small time deposits. M2 includes all of M1 plus "near money" (M0), which consists of savings deposits, money market accounts, and small-denomination time deposits (like certificates of deposit under a certain amount). M2 is commonly tracked by central banks to gauge medium-term economic activity and savings behavior, as it includes money that people save rather than spend immediately.

[^2]: Since the 1990s, societies worldwide have been confronted by a series of global crises, often framed as urgent and overwhelming challenges. All scams. Including deforestation, ocean and air pollution, nuclear waste, oil spills, plastic and soil pollution, drought, fossil fuel consumption, rising sea levels, species extinction, extreme weather, global warming, melting glaciers, acid rain, and, recently, climate change. Each crisis has shaped public opinion and policy, and also created new laws, regulations, and taxes.

[^3]: Politicians are merely psychopath[^hareleonmayersalinasfolino2022][^klaas2023] parasites.

[^4]: Cursed is the one who trusts in man, who draws strength from mere flesh and whose heart turns away from the Lord.

References

Bibtex

bibtex @book{ammous2018, title={The Bitcoin Standard: The Decentralized Alternative to Central Banking}, author={Ammous, Saifedean}, year={2018}, publisher={Wiley}, url={https://saifedean.com/tbs} } @book{ammous2023, author = {Saifedean Ammous}, title = {Principles of Economics}, year = {2023}, publisher = {Saifedean Ammous}, address = {Self-published}, url = {https://saifedean.com/poe} } @book{ammous2021, author = {Saifedean Ammous}, title = {The Fiat Standard: The Debt Slavery Alternative to Human Civilization}, year = {2021}, publisher = {Wiley}, address = {Hoboken, NJ}, url = {https://saifedean.com/tfs} } @book{rothbard1993man, author = {Murray N. Rothbard}, title = {Man, Economy, and State: A Treatise on Economic Principles}, year = {1993}, publisher = {Ludwig von Mises Institute}, address = {Auburn, Alabama}, note = {Originally published in 1962}, url = {https://mises.org/library/man-economy-and-state-power-and-market} } @book{hoppe2001, author = {Hans-Hermann Hoppe}, title = {Democracy: The God That Failed: The Economics and Politics of Monarchy, Democracy, and Natural Order}, year = {2001}, publisher = {Transaction Publishers}, address = {New Brunswick, NJ}, url = {https://mises.org/library/democracy-god-failed} } @book{mises1998, author = {Ludwig von Mises}, title = {Human Action: A Treatise on Economics}, year = {1998}, publisher = {Ludwig von Mises Institute}, address = {Auburn, Alabama}, note = {Originally published in 1949}, url = {https://mises.org/library/human-action-0} } @article{gentzkow2006media, author = {Matthew Gentzkow and Jesse M. Shapiro}, title = {Media Bias and Reputation}, journal = {Journal of Political Economy}, volume = {114}, number = {2}, pages = {280-316}, year = {2006}, publisher = {University of Chicago Press}, url = {https://doi.org/10.1086/499414} } @article{caplan2001rational, author = {Bryan Caplan}, title = {Rational Irrationality and the Microfoundations of Political Failure}, journal = {Public Choice}, volume = {107}, number = {3}, pages = {311-331}, year = {2001}, publisher = {Springer}, url = {https://doi.org/10.1023/A:1010349129605} } @book{federalreserve1975modern, author = {{Federal Reserve Bank of Chicago}}, title = {Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion}, year = {1975}, publisher = {Federal Reserve Bank of Chicago}, url = {https://archive.org/details/modern-money-mechanics/mode/2up} } @misc{bundesbank2024, author = {{Deutsche Bundesbank}}, title = {Minimum Reserves}, year = {n.d.}, url = {https://www.bundesbank.de/en/tasks/monetary-policy/minimum-reserves/minimum-reserves-625912}, note = {Accessed: 2024-11-07} } @article{ambler1987, author = {Wayne Ambler}, title = {Aristotle on Nature and Politics: The Case of Slavery}, journal = {Political Theory}, volume = {15}, number = {3}, pages = {390-410}, year = {1987}, month = {Aug.} } @book{kiyosaki2019, author = {Robert T. Kiyosaki}, title = {FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer}, year = {2019}, month = {April}, publisher = {Plata Publishing}, address = {Scottsdale, AZ}, note = {Paperback, Illustrated Edition} } @article{hareleonmayersalinasfolino2022, title = {Psychopathy and crimes against humanity: A conceptual and empirical examination of human rights violators}, journal = {Journal of Criminal Justice}, volume = {81}, pages = {101901}, year = {2022}, issn = {0047-2352}, doi = {https://doi.org/10.1016/j.jcrimjus.2022.101901}, url = {https://www.sciencedirect.com/science/article/pii/S0047235222000216}, author = {Robert D. Hare and Elizabeth León-Mayer and Joanna Rocuant Salinas and Jorge Folino and Craig S. Neumann}, keywords = {Crimes against humanity, Human rights violators, Terrorism, Psychopathy, PCL-R, SRP-SF, Four-factor model, Latent profile analysis}, abstract = {Purpose There is a dearth of empirical data on the contributions of personality, psychopathology, and psychopathy to terrorism and its actors. Because of a fortuitous set of circumstances, we had access to a sample of men convicted of crimes against humanity (CAH) committed during the Pinochet regime, each rated by expert clinicians on the Psychopathy Checklist-Revised (PCL-R). We also had PCL-R ratings for samples of general offenders and community participants. Methods We determined the psychometric properties of the PCL-R for these samples, performed structural equation modeling (SEM) to investigate the factor structure of the PCL-R, and conducted a latent profile analysis (LPA) of the obtained factors to identify classes or subtypes within the samples. Results The PCL-R's psychometric properties and factor structure were in accord with findings from other countries and settings. The PCL-R total scores of the CAH and general offenders were virtually the same but much higher than those of the community sample. However, the CAH group had extraordinarily high scores on the Interpersonal/Affective facets yet relatively low scores on the Lifestyle/Antisocial facets. LPA identified the expected four latent classes, with most CAH men located within the Callous-Conning class. Conclusions The results of this study provide unique information about the psychopathic propensities of a sample of state violators of human rights. Their pattern of PCL-R scores was consistent with an extreme disposition for self-serving, callous, and ruthless treatment of others, without guilt or remorse, and in the absence of a prior documented history of severe antisocial behavior.} } @misc{klaas2023, author = "{Brian Klaas}", title = "{{How many politicians are psychopaths?}}", howpublished = {\url{https://www.forkingpaths.co/p/how-many-politicians-are-psychopaths}}, note = {Online; accessed 29 January 2024}, year=2023 } @article{pinna2022, title={Mental health in transgender individuals: a systematic review}, author={Pinna, Federica and Paribello, Pasquale and Somaini, Giulia and Corona, Alice and Ventriglio, Antonio and Corrias, Carolina and Frau, Ilaria and Murgia, Roberto and El Kacemi, Sabrina and Galeazzi, Gian Maria and others}, journal={International Review of Psychiatry}, volume={34}, number={3-4}, pages={292--359}, year={2022}, publisher={Taylor \& Francis}, doi={10.1080/09540261.2022.2093629}, url={https://pubmed.ncbi.nlm.nih.gov/36151828/} } @book{rothbard2009, title={Anatomy of the State}, author={Rothbard, Murray}, year={2009}, publisher={Ludwig von Mises Institute} } @misc{britannica2024, author = {{Encyclopaedia Britannica}}, title = {Zombie-Ant Fungus}, year = {n.d.}, url = {https://www.britannica.com/science/zombie-ant-fungus}, note = {Accessed: 2024-11-07} } @misc{amoedo2024, author = {Renato Amoedo}, title = {Até as bactérias respondem a uma motivação}, year = {2024}, note = {Famosa frase mencionada em entrevistas e podcasts relacionados a comportamento e motivação}, howpublished = {Comentário público}, } @article{dufrene2020, title={Mechanomicrobiology: how bacteria sense and respond to forces}, author={Dufrêne, Yves F. and Persat, Alexandre}, journal={Nature Reviews Microbiology}, volume={18}, pages={227--240}, year={2020}, month={April}, doi={10.1038/s41579-019-0314-2}, url={https://doi.org/10.1038/s41579-019-0314-2}, publisher={Springer Nature}, note={Accepted 06 December 2019, Published 20 January 2020} } @misc{mungerquote, author = {Munger, Charlie}, title = {Show me the incentive and I will show you the outcome}, note = {Often attributed to Charlie Munger, known for his wisdom on finance and life as Warren Buffett's business partner.}, howpublished = {Quote}, year = {n.d.}, url = {https://elevatesociety.com/quotes-by-charlie-munger/} }