Kant once wrote that “A hundred real thalers do not contain the least coin more than a hundred possible thalers.” (Critique of Pure Reason, A599)
These words might have been true in 1781, but at the time I’m writing this, a US dollar is worth 264 Linden dollars. Something unprecedented is going on with virtual currencies.
Kant’s point was to claim that, given a concept, to claim that the object posited by the concept exists is to add nothing to the concept itself. It just describes a particular relationship between the concept and the real world. This seems like a rather academic argument—and it is—but it points out the futility of trying to prove that something exists by armchair reasoning. Kant was specifically targeting Anselm’s ontological argument for the existence of God.
If we were to set about looking for 100 thalers, we wouldn’t have to specify that we’re looking for 100 thalers that exist. The last bit would be taken for granted. So trying to add existence as an additional predicate to the concept of our 100 thalers is pointless, according to Kant.
That would indisputably be the case, if we only ever approached concepts as necessarily referring to objects in the real world. But that’s not true; make-believe is another way that we engage with concepts. A child at play could indeed be searching for 100 thalers that do not exist. I’ve spent a lot of time lately trying to rustle up Gil while playing Final Fantasy XII.
In Kant’s time, the distinction between fiction and non-fiction was clear. But during the twentieth century, mass media allowed fiction to become the jumping-off point for new social realities. Fan communities made the production of entire fictional universes profitable. People began speaking Klingon and invested themselves in social role-playing games.
The social element is key to explaining how virtual currency has broken through to the real world. If I like something, it has value to me, whether it’s real or fictional. If the pool of people who value something is large enough, and trade can occur, than economic forces will come into play. Online role-playing games has allowed the creation of fictional goods that can be traded among massive numbers of people.
It cannot go unremarked that while fictional money has become real, our real money long ago became fictional. With the abolishment of the gold standard and the adoption of fiat currency, our money became nothing but a function of intersubjective perception of value—a move that prepared us to accept the possibility of virtual currencies.
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5 comments:
...which makes me have a terrible feeling about the current credit situation in the US.
I just have one point to argue with you on (and it was an offhand remark, anyway). You said that Kant's statements are a rather academic argument. I disagree - Kant is defining the modern idea of opportunity cost, and setting up the concepts behind long-term investment - a very real-world, everyday application.
@david
It’s not entirely clear to me what Kant’s refutation of the ontological argument has to do with opportunity cost. Could you elaborate further?
I was required to assume the statement was making claim in the context of your argument as well as the initial application - about money (since that's how you applied it in the second paragraph) as well as the existence of God.
I assume thalers is some kind of currency. The statement then appears to read, in the context of the overall topic of your article, that money which you possess now is no more valuable than money which you might possess (minus, of course, depreciation and inflation) and thus setting up the idea that a return on investment to be realized in the future is just as valuable as actual hard currency available now.
For example, Linden dollars are only viable currency in the Second Life universe - a universe which cannot fulfill any of our physical needs which we generally want currency for. However, if the Linden dollar's worth to the US dollar is increasing, I could invest US dollars to purchase Linden dollars with the expectation that I will receive more US dollars later for my investment. I have reduced my hard currency dollars, but since I value my possible return as much as my current dollars, I accept that I will have overall more value and be able to fulfill my physical needs in more extravagant ways later on.
Ah, now I see what you mean. Kant isn’t talking about opportunity cost per se—he's just using thalers as a convenient, quantifiable example to illustrate his metaphysical point.
But the point—the equivalence of concepts without regard to the existence of their objects—is certainly necessary to do any real calculation of opportunity cost.
I’m reminded of Sartre’s point that free will requires imagination as a precondition. When I’m trying to decide whether to spend my thalers on gold bricks or bottles of Cristal, both choices remain imaginary until I actually make a decision and execute it. There could be no rational basis for realizing the opportunity cost if I can’t recognize the value of nonexistent states of affairs.
I think you’ve missed the point of my post, though, if you believe that Linden dollars only have value insofar as they can be redeemed for US dollars. It’s true that they can’t be readily exchanged for physical goods, but man does not live by bread alone.
I understood the point of the post. I was just using Linden dollars as a readily-apparent example of investment.
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