“No one sews a patch of unshrunk cloth on an old garment, for the patch will pull away from the garment, making the tear worse. Neither do people pour new wine into old wineskins. If they do, the skins will burst; the wine will run out and the wineskins will be ruined. No, they pour new wine into new wineskins, and both are preserved.”
Matthew 9:16-17: New International Version
by David Bryan
Broadly, the invisible chest contains a combination of the new gems of the economy consisting of social media, the internet, technology and virtual forces which guides individual actions in today’s market. This invisible chest is connected to the invisible hand: the economic forces. The invisible hand is Adam Smith’s metaphor and has been a central one in economics since 1776. “It’s a neat metaphor” but it is not the only economic forces guiding the direction of society.
There are also two other forces at play; “the invisible handshake” encompassing social and historical forces and the “invisible foot” representing political and legal forces.
It is posit that the theory of the invisible chest is just as important as the invisible hand, invisible handshake and the invisible foot in modern day economics.
Bitcoin and Crypto-currencies
The invisible chest theory was borne out of this author’s struggle to crystallize the right definition and explanation for the rise of crypto-currencies, such as the ever popular Bitcoin and place it in its proper perspective of the new economic dynamic of today’s society.
The argument is that the invisible chest gives insight into the economic phenomena of not only Bitcoin, but the stories relating to the Amazon effect, the #MeToo movement, Uber, Netflix and even Angry Birds.
It was not that Bitcoin was an anomaly confounding analysis and market regulators as to how to properly define Bitcoin, whether as a money or as an asset; it was there was a need “to expand the dimensions of economic analysis” to encapsulate Bitcoin.
Bitcoin is part of the invisible chest. Bitcoin, indeed; has no rival. But so too was the steel pan- the last musical instrument to be created in the 20th century; but it was still classed as a musical instrument, just like the guitar, the drum, the piano, and the violin- all made by specific manufactures.
So the point is this: there is absolutely no correlation between Bitcoin and the steel pan. But both are defined within there specific groupings. The question is then: Is Bitcoin money?
Bitcoin is part of the money market ecosystem, where there are clear rules defining the difference between “issuance”, “printing” and “regulation” when it comes to money and the creation of money.
Money is issued from the governing authority, printed under authority and regulated by the authority. Financial institutions operate on the same money spectrum even though they loan “money”, there are still under and are regulated by the authority.
Bitcoin, crypto-currencies and those computer financial institutions using block chain technology issuing “bitcoin money” are unregulated.
Bitcoin and crypto- currencies cannot be considered “money”, but are rightfully designated in the same class of stocks and bonds, categorizing them therefore as financial assets.
All assets currently operating, buying and or selling on the market are under supervised regulation and regulated. Crypto- currencies and Bitcoin cannot be the exception given the amount of money, risk, volume and values in the trading of these crypto assets.
Action by the authorities to regulate crypto currencies must be immediate and decisive in order to protect any foreseeable contagion to investors and any possible fallout from the crypto currencies market.
If we know of the realistic possibility of ‘tulip fever’ every thing must be done to prevent the break out and spread to harm the population. Panic and and melt down must be avoided; as far as possible; so as to quarantine any attempt of a massive sell-off which may infect and cause any sudden market crashes in traditional arenas.
Bitcoin, first general mis-conception is that because people do not understand or like it , does not mean other capitalist cannot enjoy it. By that, is meant to say ;if Bitcoin is a financial vehicle which allows others to capitalize on the creation of wealth, that is all well and good and shows the working of a free market economy.
There are those who prefer to drive a particular model car but all vehicles are subject to rules and regulations once they are on the road. Bitcoin will have to adhere to those laws which govern the sale and purchase of financial asset vehicles in order to protect the safety of the market.
Secondly, the fact that Bitcoin can be accessed at ATM machines does not make it money. You can also get any type of snack at a vending machine, but that doesn’t make the snack an asset. If some one made an ATM for gold, it will still dispense gold, and gold is not money.
Bitcoin at its premium, therefore is now considered an important element in the invisible chest that is guiding the invisible hand of economic forces and cannot escape regulation; since it has a great influence on individual action in the market. But it is not alone.
The Invisible chest can be divided but not limited to the following:-
(1) Social Media -: consist of companies such as Facebook, Google, Instagram, SnapChat, Telegram, What’s App, Twitter etc;
(a) Subdivided into #MeToo, #Times Up, #BlackLivesMatter etc
(2) Internet: On-Line companies:- consist of Amazon, Alibaba, Netflix, Paypal, Uber etc
(3)Technology: consist of companies, Microsoft , Apple, Smart phones, Cloud base technology, etc
(a) sub-divided Message Apps: Texts eg. Angry Birds; Candy Cush, Uber etc
(4) Virtual specialized Cyber; Reditt, drudgereport, HuffingtonPost, TripAdvisor
The above are just a few of the examples and are not exhaustive and some companies can overlap such as Uber.
The invisible chest fits right into the micro and macro theories of economics. To demonstrate the relationship of the invisible chest in today’s market and society one has to apply the economic theory to reality.
This author took a random unscientific selection of stories on Saturday January 13, 2018 from the internet in an attempt of objective analysis of the workings of the invisible chest.
Facebook: Share price drops 4.4 per cent after news feed change announcement wiping $3.3 billion off website founder’s fortune.
(a) Sub group: Hashtag Twitter:
Washington Post headline:’ Sexual Harrassment Inc.” How the #MeToo movement is sparking a wave of Start-ups: The article quoted one start-up eEquitable; to help companies and employee address issues of bias,discrimination, harassment and the uncomfortable situations that fall in between.”
One another example from the random selection was
Technology: Smart -phone;Texts:
” Mobile phone users received a message saying “Ballistic missile threat inbound to Hawaii seek immediate shelter. This is not a drill”. Hawaii text message alert was ‘false alarm’.
It must be noted that the #MeToo movement effected society and deal with an issue which required urgent attention for women in every sphere; the media, film, sports and music to the extent it created real change ; that Time magazine voted the hashtag #MeToo; Person of the year for 2016.
Not to be outdone; is the fact that for the very first occurrence in the history, a President of the United States has used Social Media through his Tweets to circumvent established media outlets to go directly to the American people in order to inform Americans in real time his thoughts, policies which cover all aspects of the political economy of the USA; the Executive,the Legislature, the Judiciary and the security forces.
Equally, President Donald Trump’s Twitter account @realDonalTrump featuring his ‘Tweetside Chats’ can influence the markets almost instantaneously as seen from some of his tweets and provide important insights for economic purveyors as seen recently with the important Tax cuts legislation, which resonated with many Fortune 500 companies granting pay raises, bonuses to their employees and declaring new multi-billion dollar investments in the country.
Other real-life examples can be gleaned are for instance:-
If ever there was a company that proves the fact that invisible chest theory is connected to the invisible hand it is Amazon: It has also created the world richest man Jeff Bezos.
In streamlining the retail industry it Amazon by fault or design; has restructured the brick and mortar giant retailers such as K-Mart, Sears, JC Penny and now; Wal-Mart;
Netflix‘s rise was Blockbuster’s demise.
Technology: Message Apps
Some companies can offer an IPO based on the strength and popularity of the App. It has been seen that the Angry Birds game owned by Rovio Entertainment; the Finnish parent of the popular smart phone game had a valuation for their IPO for the Helsinki NASDAQ for $1 billion. Another example is that What’s App was sold to Facebook for $1 billion.
No doubt, the invisible chest has had a real impact on the market -both positive and negative as the case of Tweets which highlight injustice or wrongs.
The same is true that the invisible foot and the invisible handshake work against the invisible hand and the invisible chest for example:
Silk Road were this site was used to masked the distribution of illegal drugs, by users hiding their identity to evade law enforcement and order the drugs online and have them delivered to their door-step. The political and legal forces terminated this site because it was against the law.
In virtual technology, countries are susceptible to cyber attacks such as the one carried out on Sony . Now, some nations have dedicated whole cyber military units to counter this threat.
Even the company Uber has had their licence not renewed and in France the company has come under greater scrutiny because of the need for stricter regulation of that company- again the workings of the invisible foot.
Th problem of cyber hacks where thieves steal massive amounts of on-line data for sale or compromised the privacy of users such as in the case of Ashley Madison or were highly classified information is leaked on the internet compromising law enforcement as in the case of Wikileaks.
The new economic reality is controlled and directed by not three but four invisible forces: the invisible hand, the invisible foot, the invisible handshake and the invisible chest.
The invisible chest is yet another dimension of economic analysis to explain its force in real-world events and the inter-relationship of economics, history, sociology and politics.
I have provided the economic framework of the theory of the invisible chest but it is not limited but open to the practical assumptions of economics in today’s market.