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Loki: Deus vs Machina
Thomas Kuhn, CFA
April 28, 2020 •
The dominance of the USD in the global financial system has been lampooned by Bitcoin and other digital assets. We take a view of this absurd challenge at its most potent - playing the role of the trickster.
It has been God backing the global financial system, if US Dollars can be trusted. The medieval sentiment 'In God We Trust' snuck into the original 1776 design of the Great Seal of the United States and was raised to adorn the currency during the height of the United States economic power in 1956.
Although the most famous pronouncement of Gods death was in 1882 in Friedrich Nietzsche' 'The Gay Science', the death of God had been discussed earlier in the 19th century, notably by the lesser-known Max Stirner whose philosophies were a similar type of existentialist psychology. Regardless of potentially spooky similarities between the two, that God may no longer be with us was something they both agreed upon in the 19th century.
So it was a strange addition to the currency of the global superpower, strange enough to feel as if it may potentially have been in bad faith. Potentially that the money was the God and there was little behind that but puppets and shadows.
So is it coincidence that the sentiment matches the neo-liberalism of the United States in the second half of the 20th century, which placed the power of money at the centre of social, cultural and political objectives. The pursuit of money was an end unto itself, a self-realising end, that if pursued, would make-right for its imperfections accrued along the way — after the fact. With money achieving a transcendence above scrutiny from its physical realities (that the pure pursuit of money was not self-realising, that there could be negative consequences of material greed) before the fact in the late 1940's, it was money we trusted in 1956, having achieved a supernatural status.
What had been implicit then went on to formally enter culture in the 1980's, when Gordon Gekko announced that 'Greed was good'. Money, US Dollars to be precise, was God, and the blind pursuit of Gods will — neo-liberalism — was morality.
Having earned an absolute moral right in neo-liberalism over the course of 50 years, money was almost immediately degraded in a series of arrogant responses to events that set the global financial system on a course to total failure.
After a large and compelling flag was raised in the Global Financial Crises, Bitcoin emerged shortly afterwards as an anarchistic type of money, uncontrollable and de-centralised and seemingly to make fun of the entire enterprise of finance.
Finance in kind, has rarely taken Bitcoin, Cryptocurrencies or Digital assets seriously, seeing them as a kind of bad joke.
Mythological stories are supposed to reach across time, through culture and to express universal human experiences in nuanced ways that continue to hold value after the zeitgeist has changed. Mythology is supposed as unavoidable, the tragic or comedic boundaries of the human experience through which we bounce off like a pinball careening from Icarus to Theseus, King Arthur to Scheherazade. Mythology had embedded itself into the human experience with its 1000 illustrious fables until Christianity began to dominate myth with its own powerful take that included a commandment that instructed 'thou shalt have no other Gods before me'.
Soon after the death of God, first Nietzsche and then Freud brought the non-Christian abstract reality back to life with the radical subjectivity of Nietzsche and the 'unconscious mind' of Freud.
But it was Carl Jung one of Freuds young contemporaries, an intelligence he thought would be an heir to his 'new science' of psychoanalysis, that resurrected Mythology, returning it to its previous glory in his work. After a fierce intellectual union the two encountered irreconcilable differences. One of these differences was Freuds inability to escape his conditioning, promoting a judeo-christian, monothestic view of reality that saw humans as base animals with vaguely suppressed violent tendencies and sexual obsessions, where Jung took a less dichotomous approach to psychology and developed foundational ideas of the human experience that led to interpretations of mythology — to understand myth with the broad and universal rules of his 'collective unconscious'.
The first thing that Jung had done was to take Freuds unconscious mind and view it outside of the dichotomy of good and evil — a post-religion take. Within the individual unconscious mind, Jung proposed a 'collective unconscious' in which a shared human experience played itself out at the level of archetypal metaphysical models, of the mythological boundaries re-emerging to guide and fortell a recurring human experience.
Jung's archetypes were recurring cultural manifestations, from events and characters to motifs. For example, a masculine force was a single thing with its own essence, its own identifiable thread of consistency embedded in masculine things called the anima with a similar force for femininity he called the animus.
His archetypal characters included the great mother, father, child, devil, god, wise old man, wise old woman, the hero and The Trickster.
Modern story-telling, especially todays movies have Jungian archetypes (as well as Joseph Cambell's heroes journey story-telling structure) consciously embedded into them — as recipe now for hollywood — but they also turn up as Delueze' Rhizomes, a recurring, broad, stateless phenomenon that takes form in the nature of reality, within subjectivity rather than as a result of subjectivity.
The Trickster
According to Jung, the trickster is 'an archetypal psychic structure of extreme antiquity' and for Byrd Gibbens — Professor at the University of Arkansas at Little Rock 'Many native traditions held clowns and tricksters as essential to any contact with the sacred. People could not pray until they had laughed, because laughter opens and frees from rigid preconception. Humans had to have tricksters within the most sacred ceremonies lest they forget the sacred comes through upset, reversal surprise.'
The Jesters role is to create the comedic moment, where comedy is the moment of relief from a set of social and cultural realities that, taken to their natural conclusion, would lead to inevitable tragedy. The ability to perform this role is no small task and involves firstly a deep understanding of what those realities are, and secondly to be capable of disregarding all of its dire consequences to find the logic that can be reversed, the paradox to explore, the stupid detail to magnify or the unstoppable force to discount with a goal to manifest absurdity, comedy and existential reflection.
The ability to take tragedy and turn it into something comedic is a type of shape-shifting and results in a fundamental and important change in state.
Alchemists, who took elemental changes from chemical reaction as types of ritualistic changes in the nature of reality had imbued the chemical mercury with the qualities of the Roman trickster God — Mercurius. Mercury is highly transformative — interchangaeable between seemingly radically different forms as if to undergo a 'tortuous ordeal of purification and renewal'.
Jung gives a concrete example of the trickster with alchemical Mercurius with 'his fondness for sly jokes, malicious pranks, his powers as a shape-shifter, his dual nature, half animal, half divine'.
But the trickster is also embodied in other objects and symbols as well. In Killorglin, Irelands oldest annual event is the 3-day 'puck fair', where pubs stay open longer than usual and in the town centre a goat is raised on top of a scaffold.
That goat is 'King Puck' for the duration of the fair (a goat is known as a puck). The entire festival was borne of the bloodthirsty Oliver Cromwell's conquest of Ireland during a period that Ireland did not have her own king. In raising a wild goat as their king, the inhabitants of Killorglin mounted a criticism of Cromwell as well as English rule, simultaneously making the idea of a King ridiculous. It is this abstract mechanism that is embodied in the trickster archetype.
And to underwrite Jung while reiterating him, Jesters were consistent features of empires, from Ancient Egypt, the Roman Empire, Aztecs, Medieval Europe and so on, often with a special political role. The archetypal tricksters way of viewing reality would be contextualised for each individual cultural reality but perform very similar tasks, as a universal human phenomenon.
The dichotomous, paradoxical mind of the Jester could also be used to deliver bad news to a king. When the French fleet was destroyed by the English, Philllipe VI's jester concluded that English Sailors 'don't have the guts to jump into the water like our brave French'. This type of role had been eventually taken over by satirists in plays and even later as newspaper cartoonists with their brand of political satire.
The archetype was not lost on Dostoevsky either, who wrote a book titled 'The Idiot' with a goal to contrast the paradoxes of Christianity with Russian socio-cultural norms. Dostoevsky's idiot held his own deeply felt values and explored his own experience of living upto those values in contrast with his surroundings. It is instructive in how the literary giant saw himself — as an idiot, a fool, as the trickster archetype who would emerge as one of the most important writers in history, influencing Nietzsche as well as Jean-Paul Sartre.
One of the most famous and popular today is the Norse God Loki, of which recent movies have constructed his character in full light of these well-developed modern conceptions.
Loki is taken as a trickster-God, as the archetypal trickster, pointing out the paradoxes of reality, of challenging the Gods, of breaking the rules and taking things to places that nobody thought possible
Most tellingly, in Richard Wagners masterpiece 'Ring of the Nibelung', Loki sets Valhalla alight, destroying the Gods in the event of Ragnarok — the cataclysmic destruction of the cosmos and everything in it. Not including the Gods, but especially the Gods.
And perhaps this — the ability to destroy the Gods — is the most important quality of The Trickster.
'In God We Trust'
So when the excesses of the US Dollar global financial system began to emerge in enormous moral hazard, creating existential systematic risk during the Global Financial Crises (and again after Covid-19) –we conclude that trust in the US Dollar God has failed because the US Dollar system has failed.
After a period of corporate excess in the late 90's and early 00's, the Global Financial Crises was the final flag to be raised to realise that this Emperor was no longer wearing clothes — but it would take a Jester to point this out.
And so out of the very serious, philosophical and absolute critique of the US Dollar global financial system that is Bitcoin, the Jester archetype fully embodied itself in Bitcoin, cryptocurrencies and digital assets.
Bitcoin was a new form of money — intelligently designed! Ridiculous! Secretly traded over the internet to purchase illegal goods! It boggled the mind! An industry of criminals and outsiders; how could it be money? It was for fools, 'probably rat poison squared' according to worlds greatest investor Warren Buffet who didn't get it — neither did the eminent Jamie Dimon.
But an enormous, global community did, who viewed the moral hazard of the US Federal Reserve banks control over the monetary supply as an existential threat. They had an instinct that bailing out the politically connected Goldman Sachs and JP Morgan with billions of dollars while allowing Bear Sterns to fail was a corruption through which they could no longer trust in God.
Although there were efforts to 'occupy wall street' and political intentions to slap banks on the wrist, some idiots, jesters and fools decided to do something crazy, to do a wild thing and start to build a new financial system. This undertaking would undermine the ideological raison d'etre of the United States and its dominance of the global financial system with its paradoxes revealed far and wide, its excesses parodied, its nakedness laughed at.
It was an announcement to burn down Valhalla, to invite Ragnarok.
So if there is any doubt about the virility of the Jester archetype, take a look at crypto culture, especially its meme culture. It is in the duality of holding paradoxical, dichotomous views simultaneously. To take nothing about the very serious nature of finance seriously, to lampoon the US Dollar and offer a challenge to it called Doge.
To joke, to ridicule and to offhandedly discount the omnipotence of the US Dollar, against most experts and especially against the eminent figures in global finance. To completely disrespect and disregard it, and build a new system around it as if the global financial system could be so easily improved by outsiders.
Ragnarok : Covid-19
'In Norse mythology, Ragnarok is a series of events, including a great battle, foretold to lead to the death of a number of great figures (including the gods), natural disaster and the submersion of the world in water. After these events, the world will resurface anew and fertile, the surviving and returning gods will meet and the world will be repopulated'.
When the US Federal Reserve Bank announced that the Repo markets required $500 billion of liquidity late December 2019, this commentator took that to mean that the Quantitative Easing of the Global Financial Crises had not just failed, but had magnified the problem it had hoped to solve. It was simply a matter of time after that liquidity entered the system before more would be required. Extraneous liquidity had become an exponential requirement of insatiable global financial markets.
God here is the absolute trust in the US Dollar, in its role in the Global Financial System, in its infallibility and the infallibility of its priests — Alan Greenspan, Ben Bernanke, Milton Friedman et al
Their actions in the global financial system began to look more like the corruption of the system rather than an efficient and properly functioning system, creating points of interest for Loki, the trickster archetype. The lure was the infallible power of the system, of the emperor-making Federal Reserve Bank Governors, of Milton Friedmans monetarist economics and his and others neo-liberalism that was supposed to self-correct — that was suggested as inherently morally self-correcting!
The trickster archetype gains momentum as the logic of the system is used against it, its deficiencies highlighted and its absolute pre-eminence challenged. As this rationale emerges, and especially when it is reinforced in practice, the archetype gains relevance and power.
This has been highlighted in cryptocurrency recently where the mood is always at-arms-length to what is important. The crypto community on twitter is indulgent to the point of hubris in playing the role of trickster.
But there is more to consider on the subject.
The tricksters role is to provide comedy — not in the modern sense of the word but in the true sense of what comedy is — of unlocking the rigid state of reality that leads to negative and terminal outcomes to create space for new horizons. The role is to glean comedy from tragedy, to facilitate a looping progression that underwrites the human experience — from tragedy to comedy and comedy to tragedy — a Sisyphean process endured for eternity.
But from within the view of the trickster, this utility is neither sought nor gained. After performing their task and achieving their end, tricksters are no longer required — their job is simply to view potential tragedy, illuminate the inconsistencies, laugh at the paradoxes, and make merry while the sun shines.
After Ragnarok
With some irony (and perhaps without any at all) the Norse' Ragnarok, which translates to 'Twilight of the Gods', is a book title of Nietzsche, who was inspired by Wagner (before falling out). For Nietzsche, after the death of God there would be a 'revaluation of all values' in which new ideals would be discovered, new value systems would be built. Similarly to the Norse Ragnarok, potentially new Gods to discover?
For all of the historical sentiment of the crypto community and its value in the context of the Jester archetype, it is this new step that is most important now — to discover and build new value systems. For this, there are instructive elements already existing in crypto.
De-centralisation Vs centralisation includes a socio-cultural theory of power.
Bitcoin includes a philosophy of monetary value — to answer the question of what money is for the first time in history.
The tokenomics incentive structures and systematic game theory are some of the most sophisticated systems of their kind that we have ever seen
There are likely others as well as other ways to view things.
So perhaps embedded within the trickster archetype and its ability to be a God-killer are some of the values we should consider in a revaluation of values — in the world after Ragnarok — after we realise in the coming period that the USD has failed as a global reserve currency. That we cannot trust in God.
After all, it is an historical problem of authoritative hierarchies accruing power and consolidating it until power becomes a self-realising end-goal. Tragedy inevitably emerges from a reality unable to contradict itself, with too much power to be contradicted by others.
This is how neo-liberalism, the belief in competitive free-markets as an inherently moral end-goal in itself requires trillions of extraneous liquidity to support the 'free' market.
The moral hazard is in an action that utterly annihilates the foundation of the reasoning behind that action. A circular logic, a feedback loop within a system — an ideological inbreeding.
Symbolised by the pyramid also represented on the US Dollar, authoritative hierarchy is inevitably degenerative, inevitably increasingly centralised. Through this process it always and must become ridiculous, highlighted by whomever is willing to ridicule — unless it employs some trickster/jester mechanism.
So can maintaining a trickster archetype inoculate us against this ancient and recurring problem — that make realising the trickster necessary?
Written By: Thomas Kuhn, CFA
Thomas is a 12-year veteran of financial markets working to bring digital assets into the fold of traditional financial markets. With an interest in fundamental analysis with a technical overlay, Thomas actively takes positions in the markets he covers. As well as producing education for traders, Thomas writes for Mine Digital, CFA Asia-Pacific Research Exchange and Hackernoon.
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