Tokenism

The Credit Strategist Nov. 1, 2021

The word “token” generally depicts something lacking in substance; it is not a word applied to particularly robust or enduring objects. We use “token” to describe cryptocurrencies in the sense of coins or vouchers that can be exchanged for goods or services (i.e. like a subway token). We also use it to describe people who are chosen for positions in business or politics based on their appearance as a symbolic gesture rather than on their merits. We live in a tokenized world filled with symbols without substance as financial, political, and intellectual capital assume increasingly intangible forms, creating instability and volatility. This phenomenon began years ago but was accelerated by digital technology which moves in exponential rather than linear waves. Empty money and empty suits are just two examples of the hollowing out of our world and the elevation of form over substance, insincerity over authenticity, the fake over the real.

The French philosopher Jean Baudrillard warned that “[t]he transition from signs that dissimulate something to signs that dissimulate that there is nothing marks a decisive turning point. The first reflects a theology of truth and secrecy (to which the notion of ideology still belongs). The second inaugurates the era of simulacra and of simulation, in which there is no longer a God to recognize his own, no longer a Last Judgment to separate the false from the true, the real from its artificial resurrection, as everything is already dead and resurrected in advance.” My friend Professor Mark Taylor of Columbia University wrote the best book on finance I’ve ever read (Confidence Games: Money and Markets in a World Without Redemption, Chicago, The University of Chicago Press, 2004) where he described the consequences of dematerializing financial markets.