The Awesome Science of Chinonomics

How important is it to feel like you belong? To many of us, very important. We are social animals that constantly feel the need to be accepted . Religion, sports teams fan clubs, political parties. All examples of groups of people that share something in common. Networks of people. The concept goes beyond human association based on interests or values. Networks are formed around the use of common instruments: languages, gadgets, credit cards. Why join a network? Because you benefit from the fact that other people belong to that very same club. As a non-native English speaker, you learn English because the world of international business speaks English, not Russian, Greek or Arabic. You get a Visa Card instead of a Discover or Diners Club because you want to have access to the biggest network of POS in the world (87% of merchants worldwide accept it). You buy a gasoline-powered vehicle instead of one using Natural Gas because you want access to the well-established network of gas...

We hear it all the time: the Internet is becoming more and more important in our lives. We read news on it, we socialize , shop, bank , and get an increasing share of our entertainment from it. A whole parallel cyber-universe coexists with the brick-and-mortar (often more boring) reality we brave every morning we step out of our beds. The Wachowsky brothers were not that crazy after all. We choose to live in a computer-generated reality -- a "Matrix" called Internet. Our Facebook self is nothing but our own residual self image --the "Neo" version of ourselves. One would think the parallelisms between cyberspace and real life should extend to many more areas. If there is a marketplace in cyberspace -where you can get anywhere from a prostitute to a Bentley- and a bunch of social networks where humans interact -some even find their soul mates-, the same natural/legal rights and social institutions that underpin growth and stability in the brick-and-mortar world ...

"Work hard and you will get the reward". That is a tenet any good parent would like to teach their children. The idea rests on the basic principle (assumed to be true) that whatever reward you get will not be snatched from you by someone else. The principle in question: Property Rights . Property rights are a keystone of human civilization. When we discovered farming, the primitive farmer had to make sure whatever he was growing was not going to be stolen by any passing nomad tribe that "didn't get the memo" that a farmer was growing something for his own consumption or benefit and that it could not just be taken. Imagine how difficult it was to go from communal to private property. Enforcement of property rights became one of the primal functions of proto-States and other central authority entities created in the beginnings of civilization. The difficulty of enforcement of property rights even shapes human culture. The "culture of honor" displayed i...

If you found a penny on the ground, would you pick it up? Most people would not. In fact many believe they should be discontinued . They argue that pennies are not commonly accepted, that they are worth more for their metal content than for their monetary (fiat) value, that they are impractical to carry around, and that they are an inefficient store of value (breaking 2 out of 3 qualities money must have: medium of exchange, store of value and unit of account). In sum, the penny is a vestigial remnant of an era long gone that has no purpose anymore - much like the appendix or the wisdom teeth in the human body. Does this mean that pennies are really worthless? Fiat money is a very funny thing. It is worth something because we are told so by decree and because we expect (or believe) that someone else will also expect (or believe) it will be worth something when they take it from us in exchange for a good or a service. Enter the key word: "expectations". We hear often abou...