Monday, January 21, 2013

Money and Magic

Here's an interesting site: Magic, Maths, and Money.

This post talks about the beginnings of science as an outgrowth of monetary systems rather than medieval alchemy, a point I have made before:
There is a well developed theory that a key impetus for the development of European science in the seventeenth century  was magical thinking, developed and promoted through the sixteenth century by the likes of Paracelsus, John Dee and Emperor Rudolph II.  While there is little doubt that Hermeticism and Alchemy had a significant influence on the development of natural philosophy, magical thinking cannot explain the uniqueness of the scientific developments in Europe in the 1600s, since magic is a feature of all cultures, notably China.  But this factual observation is tempered with an opinion, that good science is open where as magic is hidden and secretive, this is a central theme in Mauss' A General Theory of Magic.

An alternative, minority, theory for the foundations of modern science is in European financial practice.  I prefer this theory because, by their very nature markets are social, collaborative, open, forums (those queasy about markets might wish to consider my view).  Evidence for the significance of financial practice in the development of science comes in the fact that Copernicus was trained in financial mathematics and wrote on money before he wrote on cosmology, the Merchant Adventurer Thomas Gresham was a more influential contemporary of Dee, despite relative number of contemporary biographies of the two Elizabethians, who laid the basis of the Royal Society with the establishment of Gresham College. Simon Stevin was trained in finance and founded the influential Dutch Mathematical School that inspired Descartes and performed many of the experiments that Galileo is famous for.  While Newton's interest in magic has been promoted, the fact that he spent half his life running the Mint is often overlooked.

Furthermore, magic was most influential in central Europe, centred on Rudolph's court, while the scientific revolution was centred in western Europe, by the likes of Huygens and Bernoulli who were as likely to work on financial problems as physical ones.  Finally, my observation of good financial practitioners is that, contrary to popular belief, they do not believe they can control the markets, rather they have to navigate through its intrinsic uncertainties using the best tools available - specifically mathematics.  This contrasts with the image of the magician controlling nature.
And the ultimate point:
It might seem to be splitting hairs to argue in favour of science originating out of finance rather than magic, but I am of the opinion that creation myths have a critical role in how cultures view themselves.  If science believes it emerges out of magic it will be forever associated with secret knowledge that enables the magician to control nature and convert base metal into gold.  If we regard science as originating out of markets constructed social instruments, then it is natural that we think of science as being "just another" social construction and it is made more human, and possibly more relevant.  Simultaneously, and this is my ultimate objective, we shall start observing markets from a scientific perspective, rather than having them hidden from public oversight by a veil of mystery and obscure incantations.
Magic, Markets, and Models of Science (Magic, Maths and Money). And see also this post: Creation Myths:
This definition of science allows economics to base itself on an unjustified myth  that barter evolves into money. However, it could alternatively allow economics to build itself on the Pandora myth, a myth that is remarkably similar to the story of the Fall in the Bible. It might be argued that the barter-money myth is un-scientific, since it is not supported by evidence, just as the Biblical myth is not supported by evidence. However, the barter-money myth endures because it conforms to two key characteristics of mainstream contemporary science. The myth is progressive, it describes a linear process where by the system evolves from a primitive beginning to the complex end we experience, and it is material, its explanations, involving people, goods and metal tokens, do not rely on metaphysical concepts such as society, trust or


  1. I know of another blogger who writes about the connection between money and magic, Elaine Meinel Supkis at Culture of Life News. Whenever she mentions the Derivatives Beast, the Cave of Wealth and Death, Risky vs. Safety, or Infinity leading to Zero, she's expounding on the magical nature of money. It's really quite interesting, and it almost makes it worth putting up with her thinking Global Warming will be a good thing or her paranoid anti-Zionism that borders on anti-Semitism--almost.

  2. The name of the blog is "Magic, Maths and Money" not Myths.

    1. Whoops! corrected, thanks. But I still like my title better.

  3. Magic in the middle ages was a primitive form of clinical psychology, which can often do much more to improve one's happiness than either science or money. Thus the motto of alchemy is "visitare interiorae terrae, rectificando, incontras occultum lapidum" or VITRIOL, which translates "visit the interior of the earth, rectifying things, you will encounter the hidden stone". The interior of the earth is the mind, the hidden stone is happiness. Religion is supposed to be clinical psychology, but religion has a strong tendency hollow out into an empty ritual, run by lickspittles, with the message reducing to "praise be the status quo and don't complain about your lot in life", and that is what happened to Christianity in the later middle ages. There have been attempts to renovate Christianity, the most important of which was the introduction of the assumption of the virgin, which effectively creates a Goddess element, but it isn't clear that this has been effective. When modern Catholics are feeling depressed, they mostly go to a shrink just like non-religious people, rather than relying on their religion.

    Astrology is the oldest form of clinical psychology, btw, and evolved out of astronomy, just as alchemy evolved out of chemistry, freudianism evolved out of medicine (using metaphors from hydraulics) and modern clinical psychology is currently evolving from neurobiology (using metaphors from the computer industry), etc. It is common for intellectuals to turn from studying material science to social science and finally to clinical psychology, because the rewards of the latter can be immediate and massive, whether the rewards of the former are typically trivial. A depressed person, and many intellectuals were and are depressed, can have their life transformed by self-application of their investigations into clinical psychology. Whereas the most usual result for great discoveries in material and especially social science is to be abused by other scientists who don't like seeing the accepted theories, in which they are deeply invested, overturned, or who are jealous, etc. In some cases, e.g. Galileo, there's even trouble with the law.

    Science that is of value to the military, or science applied to finance, is safer, provided you can get some powerful person to recognize the practical application of your ideas and then protect you from attacks. Nothing surprising about scientists being called in to solve finance problems. Pascal turned his mind to probability because a friend wanted to know why he kept losing at a gamblig game. Scientists today continue to turn their minds to finance because, da-dum, that's where the money is (along with the military). Science for the sake of science just doesn't pay well. As for fame, that is mostly desired by fools and those who have never tasted what a booby prize fame is.

    The idea that science is a social construction is adolescent-level trolling. That question of whether understanding physics is a worthwhile way to spend one's life or society's resources is a moral question, and the answer is thus a social construction. But the laws of physics themselves are merely phenomena of nature, abstract to be sure, but no more social constructions than a rock or the ocean or the moon.


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