Adam Cowart is one of our Emerging Fellows. He and our other Emerging Fellows will be posting throughout the year. His first article discusses the futures of money and the economy.
On March 19, 2014, in a Canadian courtroom, 66-year-old Arlan Galbraith was convicted of fraud of over $5000 and sentenced to a little over seven years in jail. While all agree that he lost millions of dollars of other people’s money ($42 million to be precise, and contractual obligations to pay another $356 million), many, including some of his victims, are still unsure of whether he willfully defrauded them.
In 2001, Arlan founded Pigeon King Industries. The concept was simple. Pigeon King would sell you a set of breeding pigeons for a certain cost and agree to buy back all offspring at a fixed rate over the next 10 years. Over time the story of what, exactly, the business model would be, shifted. First, the pigeons would be sold to the supposedly lucrative pigeon racing industry, then the story changed to a plan to sell squab meat. In actuality, the offspring were sold to other farmers as breeding pairs, and the excess pigeons were housed at Pigeon Kings’ expense. Ostensibly the plan involved a period of building a “network of breeders” before taking over the world. Eventually, farmers and government got leery. Pigeon inventory started to rise as Pigeon King continued to honor contractual agreements, buying up offspring, despite a dwindling number of buyers. Barns were retrofitted to house the excess inventory. Funds were spent to feed and vaccinate the exploding population. Finally, farmers willing to sign on dried up. Without new buyers, Pigeon King couldn’t pay their existing breeders and the whole thing fell apart.
Sound familiar? Kind of like a Ponzi scheme except, instead of money, the currency was pigeons?
How real will the real economy be in the future? This series of blogs sets out to explore how fiction turns into reality, reality turns into fiction, and how this will shape the future of the real economy. Reality and fiction are often at war with each other. Perhaps we inherently move between periods in which reality is dominant and periods where fiction/myth dominate. And in our most recent fictional turn away from the real, we now have the destructive tools and technologies (and some very good reasons to escape from reality) that allow us to bore deeper and deeper into the mystical archetypal hearts of our own dreams and collective desires. And with this deepening of unreality, we take our systems and structures with us: families, politics and, yes, the economy.
What is the financial market if not a future bet on a compelling story? Between the virtual and financial economies, how will the real economy be influenced? Will it become a “puppet” economy for its two bigger and stronger cousins? Or, with scarcity and limits to growth, will it come roaring back as the dominant economic sphere? Since we abandoned the gold standard, have we drifted into a hyper-real economy from which there is no escape? If late-capitalism requires constant new areas of growth to survive, does the turn to a fictional economy create limitless new areas of expansion?
As for our poor unwanted pigeons, after health and city officials warned of a potential release of the birds, and with the specter of a mass migration to Toronto, where they would blacken the skies and overwhelm parks, much like their now extinct Carrier cousins, the birds were slaughtered en masse. Drowned. Gassed. Burned. Hundreds of millions of fictional dollars. Up in smoke.
Sounds familiar, doesn’t it?
© Adam Cowart 2017