Crypto and other New Faiths

People need to believe in something

Malcolm Kyeyune writes,

the Internet today is full of strange new quasi-faiths, many offering competing narratives of what went wrong after 2008, each offering a secret knowledge—a gnosis—through which an enlightened few can hope to escape and purify themselves.

…Such monumental shifts in economic reality invariably produce dramatic shifts in people’s social reality, as old expectations and beliefs no longer match up with the way things are. In earlier eras of American history, major crises, as well as the ideological and religious revivals that often followed them, played out in streets, churches, tent meetings, and lodges. Now the process takes shape primarily online, where the new Gnostics preach.

According to Olson, the average profile of someone inside the more speculative part of the crypto boom was as follows: middle class, but downwardly mobile, with a susceptibility to the confidence tricks and fraud endemic to the crypto market, stemming largely from unfamiliarity with the actual economy, the challenges of running a business, and so on. . .these people tended to exhibit the unstable emotional mix of hope, confusion, and righteous fury that Olson identifies.

Kyeyune refers to a video lecture by Dan Olson.

I would argue that this was also the demographic and personality type of people who fell for multilevel marketing scams in the 1970s or the Internet stock bubble of 1998-1999.

‘Adam Smith’ (George J.W. Goodman), who wrote the 1960s best-seller The Money Game, later wrote a much less successful book, Powers of the Mind, which takes the reader on a tour of the odd spiritual movements that emerged in the 1970s. The book is a gem if you can find it. Or read Tom Wolfe’s classic The Electric Kool-Aid Acid Test, about the early faith in LSD. And note that psychedelics are making a comeback.

In fact, the one thing I would question about the Kyeyune-Olson thesis is the suggestion that there is something unusual about the present time in this regard. People need faith. In prior centuries, for most people, institutionalized religion seems to have addressed people’s need to believe. Perhaps. Or perhaps the various religious spin-offs and heresies that have appeared throughout history show that there has always been an alienated segment of the population seeking an alternative faith.

In any case, my theory is that the demand for exotic faiths comes from people who are personally far from the social median. People who are especially unhappy. People who are especially mentally unstable. People who are especially disconnected from the mainstream community.

How societies perform is likely to depend on the extent to which alienation is channeled constructively—or else suppressed. If you think that you want the mainstream faith (in government and banks, for example) to get wiped out, be careful what you wish for.