The Magicians and TANSTAAFL

Any sufficiently advanced technology is indistinguishable from magic.

--Arthur C. Clarke, 1961

It would be funny if the situation weren't so dire. Yesterday, against the advice of many economists, and with nays from the entire opposition party, the House passed the biggest spending package in history of the United States, and quite possibly, in history of the world. This, at a time when the country is in the red to the tune of almost ten trillion dollars, not counting our future unfunded obligations to Medicare and Social Security.

Insanity is too kind of a word.

And as I was trying to figure out what these guys could possibly be thinking, Clarke's Third Law of Prediction popped into my head and stubbornly took up residence.

First published in his essay Hazards of Prophecy: The Failure of Imagination, in the book Profiles of the Future, published when I was just coming out of diapers. Last night, I tossed and turned in sleepless frutration, trying to figure out who it is exactly whose imagination has failed: the Pols or the Founders.

Most certainly it is the Pols, but before I go into that, I think a little background on Clarke's Third Law is in order. In his novella Against the Fall of Night, human civilization stalls out after a billion years of evolution. The remnants of the human race live among the left overs of the now defunct advanced civilization, and use the technology that they cannot understand or replicate. To them, it is magic.

And it occured to me, in the wee hours, that money and economics, is as inexplicable to politicians the world over, as those sidewalks that flowed like rivers were to the savages living on the edge of their ancestors glory in Against the Fall of Night. Economics is a technology. Money, derided by many as some fastastical evil force, is understood by civilized people as a tool for the purpose of trade. For civilized people, economics should then simply be the study of how money and trade work in reality.

But failing to understand the origin and purpose of money, the Pols treat Economics like magic. They believe that if they mumble the right words and make the right gestures, they can change reality to fit their fantasy of what the world ought to be like. They are like the primitive peoples of the South Seas during WW II, who upon seeing that these fantastic men came on airplanes with radios and canned goods, build straw replicas of the airplanes and waited for the Cargo to rain down from heaven.

The Fed, not recognizing that they are running on empty, has anounced cuts in interest rates that have gone almost to zero, and then express surprise that the banks don't lend. Like the Cargo Culters, they print money that has no meaning (our money supply has increased over 70% in the past three months), but because they have said the right words and made the right gestures, they cannot figure out why the economy does not right itself.

Meanwhile, the Pols in Congress have succumbed to the panic of DO SOMETHING and are borrowing against the funny money that is being printed over at Treasury, which is presided over by a tax cheat. And they believe their cause is just, and it MUST WORK because, after all, they are saying the right words and making the right gestures.

None of them has any clue as to what money is or how economies function.

None of them believe that they should know these things before they begin to fiddle with the ticking time bomb of economic collapse.

It HAS to work! They have had all the best intentions in the world as they said the right words and made the right gestures.

Reality does not care one whit about human intentions.

The natural consequence of Clarke's Third Law are upon us.

The technology of money and trade are apparently sufficiently complex to the Pols in Washington, and in the state capitals around the nation, that it is indistinguishable from magic.

It is like giving a thermonuclear weapon to barbarians. We'd be well advised to get out of the way if we can.

Failing that, it might be a good idea to make some preparations.

Because as the characters invented by Robert A. Heinlein in his novel The Moon is a Harsh Mistress used to say, "TANSTAAFL*!"

Honey, should we put our money under your side of the mattress or mine? The magicians are at work.

*There Ain't No Such Thing As A Free Lunch.