I grew up believing that art and culture shaped civilization and humanity’s collective needs, while politics and financial markets merely reflected them. This view delayed my curiosity about the true nature of financial markets until my early thirties, and another decade passed before I arrived at the (hopefully) coherent reflections on markets I share below. I include this biographical note because I suspect many people are in a similar boat. You may have followed your own circuitous, idiosyncratic path of learning and, as I once did, feel that something important is missing in your understanding of the machinations that drive our civilization under the hood.
Living within a single community, country, or cultural bubble can make it hard to see the broader nature of civilization or the needs of people whose lives differ significantly from our own. When I sought clarity or wisdom in my youth, I turned to music, art, and ancient texts, sources of “truths” I believed were essential to civilization. I’ve since realized these rarely have the power to reveal what the world actually needs right now. In stark contrast, this is precisely what markets signal directly in real time.
Much of the prosperity we seek depends on cooperation. Old wisdom can inspire and provide psychological grounding, but it cannot reveal the timely guidance humanity needs today. A real-time accounting of global trade can. These are two very different things: one appeals to individuals for personal reasons; the other is a vast, shared collection of highly relevant data. This market data is especially critical because it applies to everyone’s perceptions and current reality, not simply our own.
We need to look at one another in the present and use a common language to express what we want to achieve. That is the true purpose of the free market, our best means of building a better civilization.
If monetary policy is fair and access is broad, the market provides a peaceful, apolitical way for each of us to signal our needs and move continually toward a more prosperous future through a perpetual consensus.
Those who devised modern capitalism in centuries past sensed this function. Market forces at work in this way might even be understood as the direct expression of Adam Smith’s invisible hand. But for many political and technological reasons, that vision has been slow to emerge.
Today, with the internet connecting us globally and crypto providing a financial base layer built on accountability instead of politics, we can finally envision a new phase of free-market capitalism that accelerates civilization, one in which goods, services, information, and sound financial infrastructure can be freely accessed and traded by everyone in the world, fostering maximal cooperation across humanity. But we still have to build it.