The flawed narrative of Yuval Harari, Klaus Schwab and the World Economic Forum

Before Christmas, Tucker Carlson and Dan Bongino discussed why Professor Yuval Harari and the World Economic Forum (WEF) pose a threat to our lives.

It feels like this topic soon will be on most people, so I decided to write a note on this.

Klaus Schwab, who is the founder of WEF, relies heavily on Harari’s teaching when he formulates his policy recommendations to leaders around the world.

Harari knows a lot of historical facts, is good at storytelling and masters the art of rhetoric.

Commentators and academics therefore find it difficult to show exactly where Harari goes wrong in his analysis.

What I want to bring to everyone’s’ attention, is that Harari and Schwab base their policy recommendation on a narrative about the history of our civilization that simply isn’t correct.

It’s probably the repetition of this narrative that makes Schwab’s communication so effective when he talks to intellectuals, policymakers, journalists and leaders of giant corporations who firmly believe in “leadership” and the idea of technocratic global governance.

However, when we point out the flaws in Harari’s analysis of humankind and our history, it becomes a lot easier to shoot down his and Schwab’s ideas.

Therefore, I hope you will join me in this thread, as it in about ten minutes enables you to understand where Harari went so terribly wrong.

Harari’s background and some of his ideas

Wikipedia gives us the following introduction to him:

«Yuval Noah Harari (Hebrew: יובל נח הררי [juˈval ˈnoaχ haˈʁaʁi]; born 1976) is an Israeli author, public intellectual, historian and professor in the Department of History at the Hebrew University of Jerusalem. He is the author of the popular science bestsellers Sapiens: A Brief History of Humankind (2014), Homo Deus: A Brief History of Tomorrow (2016), and 21 Lessons for the 21st Century (2018). His writings examine free will, consciousness, intelligence, happiness, and suffering. »

Harari, who also describes himself as an atheist and a vegan, promotes such ideas as:

In short, Harari suggests that what we use to refer to as the foundation of liberal society is pure imagination, while the development of an apartheid-like dystopia is completely natural.

Harari’s understanding of the history of civilization

Harari’s analysis of the history is greatly affected by his lack of understanding of the service that money renders to humankind and how different monetary systems dictate the development of very different forms of society.

He writes in Sapiens that:

«Money is the most universal and most efficient system of mutual trust ever devised. »

This and other statements he has made about money tell us that he has understood that money is a cornerstone of our civilization, something which definitely is true.

From there on, it unfortunately goes all south for him.

Harari’s problem is that he doesn’t seem to understand that we get a very different society when people have monetary freedom (the right to use which money they like best, also referred to as «currency competition») compared to when a group of people has a monopoly in money production.

In the former, everyone must work to get money.

In the latter, a small elite can extract wealth from everyone else because they can produce money instead of working for it.

Harari, for his part, doesn’t make any such distinction at all.

Monetary freedom in a historical context

Monetary freedom has most likely been the dominant system throughout the more than 5000 years that we have had civilizations.

It’s the monopoly in money production that is the anomaly.

We don’t have sources that inform us about any such monetary policy before the Greek city state of Athens in the 5th century BC used inflation to finance its war against the Spartans.

The policy spread with the expansion of the Roman empire, which started debasing its coins towards the end of the 1st century AD.

We had monetary freedom in Norway until 1050 AD.

The Dutch reintroduced it in the Netherlands after the rebellion in 1566 and they had it for about 150 years.

The Irish held on to monetary freedom until they lost against the English in the 17th century AD.

The Americans established de facto monetary freedom in the US after the revolution in 1783, and it lasted until 1857. And, finally, Argentina followed the same path as the US from the revolution in 1816 and until 1880.

It’s this system, that the new president of Argentina, Javier Milei, now wants to reestablish.

Institutions in a society with monetary freedom

Societies with monetary freedom typically have no or very weak central governments. Instead, families, relatives and clans have strong bonds.

Furthermore, private property is almost sacred, and one rarely sees large scale wars in this type of societies.

The reason is that without a monopoly in money creation it becomes difficult to set up an apparatus that can extract wealth from the people to finance this type of aggression.

However, the decentralized structure and a strong will to defend against intruders mean that they can be very capable of defending their freedom, as was the case in the region of Norway, where I live, until 1050 AD.

You can say that a society that has monetary freedom and little or no state primarily is rigged for defense and production, while a society with a monopoly in monetary production is rigged for expansionary war and destruction.

Why compound interest is of paramount importance

In order to understand why civilizations develop so differently with different monetary systems, one needs to understand the effect of compound interest.

A typical rate of monetary inflation (expansion of the money supply) in societies with monopolies in money production, has been 7-8% per year.

In a society where money makes up half of all economic transactions, an annual expansion of 7% means that the ones who control the monopoly can extract and take control of 7% of the society’s production each year.

Due to the effect of positive compound interest, constantly increasing the money supply by 7% each year can theoretically result in an accumulated wealth extraction that has doubled in as little as 10 years, tripled within 16 years and quadrupled in 20 years.

The rest of the society experiences the exact opposite, as people see that their money loses value at a negative compounding rate of 7% each year.

Therefore, those who are far away from the money spigot may have to double their productivity in 10 years, triple it in 16 years and quadruple it in 20 years if they want to preserve their share of wealth, their standard of living and keep their means of production, compared to a situation with no manipulation of the money supply.

This is of course nigh on impossible.

Therefore, establishing a monopoly in money production can easily transform a society from being fundamentally decentralized into becoming a two tier system in less than a generation.

It typically ends up with a small wealthy class of creditors with a lot of political power on one hand, and a large poor and indebted class of people with no or little political power on the other hand.

It all sounds so familiar, doesn’t it?

The combined effect of the compound positive interest rates for the «elite» and the compound negative interest rates for the rest explains how enormous effect a monopoly in money production has on society.

The gargantuan redistribution of wealth that takes place in such a society should be compared with what happens in a society without this system, where the distribution of wealth (and power) will be much more evenly spread.

This also helps explaining why families and kinship can remain a lot stronger in societies with monetary freedom.

Once a group of powerful men begins to fuel its influence with a monopoly in money production, the emerging state apparatus basically outcompetes the family and the clan as social institutions.

Why countries with monetary freedom become powerful magnets

When you set up a system with monetary freedom in one country, it quickly attracts talent and capital from countries with monopolies in money production. It’s almost as if monetary freedom is a nuclear-powered magnet.

The explanation for this effect is that it’s much more profitable to work and invest in a country with money that doesn’t steal from you.

Therefore, people “vote” with their feet and their savings.

Harari doesn’t seem to be sufficiently aware of these mechanisms.

For instance, in Sapiens, he explains the Golden Age of the Netherlands with a boom in bank credit.

The reality, however, is that it was monetary freedom, sound money and full reserve banking that served as the foundation for the fantastic growth that the Dutch experienced in the 16th and 17th Century.

Because the other countries had kings and emperors who extracted wealth from their citizens via aggressive monetary policies, the very opposite system in the Netherlands caused it to attract capital and talent from the other countries at an extreme pace.

Harari also fails to recognize that it was the exact same mechanisms that played out after the American and Argentinian revolutions.

European rulers stuck with their monopolies in money production and continued to pillage their underlings.

As a result, Europe literally became drained of talent and capital that fled to America.

Conclusion

Harari’s Sapiens is supposed to be an exposition of the history of humankind. However, due to the defects that I have shed light on above, the book cannot at all serve this purpose.

Perhaps Harari doesn’t understand it himself, but his narrative of humankind and the history of civilization draws squarely on the type of society we get when a ruling class is allowed to have a monopoly in money creation.

But as you now realize, this version of civilization is neither natural, nor has it been the dominant way of how we organize our activities.

On the contrary, the normal and above all more human situation has been a civilization with monetary freedom, a significantly smaller state apparatus and a decentralized society where strong institutions such as family, kinship and respect of private property keep it all together.

People should therefore be very skeptical to Harari’s and Schwab’s visions for humankind and how we should organize us in the future.

If you want to join forces in the battle of ideas, I would appreciate it if you followed me here on Nostr and shared this post.