Intelligent Money: Inflation, Marks & Spencer and Time
(Continued from Intelligent Monetary Policy: Greenspan and the End of Forward Guidance)
Inflation
Following on from my last article, my conclusion was that inflation systematically cleaved the US economy into two distinct Americas: those who captured the windfall of asset appreciation, and those who were structurally displaced by it. It was precisely these compounding, asymmetric economic fractures that ignited the populist firestorm, the very revolt that has propelled Donald Trump back into the Oval Office and installed Kevin Warsh at the helm of the Fed. It is also the revolt that has brought Mayor Mamdani, AOC, and Elizabeth Warren into the limelight. Populism now springs from both the left and the right. We can remain in denial about inflation, but the reality is that we don’t need the Fed or anybody else to tell us we are imagining it. Higher prices and the massive debt hole are very real. The true test is what it costs to own a home and fill the fridge with food. Today, young people are so bereft of hope that they can’t do anything, and they’ve fallen into a grave depression and despair. They believe they’ll never own a home; therefore, they aren’t having kids. Many can’t find a job, which they believe is because the algorithms are replacing them, too, just like the policymakers. But is this a true understanding of the new reality?
I say no. Elitism can be replaced by a more egalitarian outcome, not one based on communism but on creativity. To survive, the Fed cannot merely remain a “banker to the banks.” It must structurally shift its gaze away from the institutional balance sheet and directly toward the private individual. If the individual, rather than the corporation, is the new sovereign economic actor, monetary policy must interface with them directly. This isn’t about welfare; it’s about system survival. If the central bank cannot provide direct, frictionless liquidity, infrastructure access, and monetary stability to the non-W-2 individual, the populace will simply bypass the Fed entirely. This is why it’s important for new stablecoin entities to have access to the Fed’s clearing system. The banks are saying no. They don’t want to give up their exclusive privileges. But the shift will happen sooner or later anyway. People will migrate their wealth to decentralized, algorithmic alternatives that do recognize their individual sovereignty.
Institutional elitism can be superseded by a radically egalitarian future, one rooted not in the forced parity of communism, but in the boundless, decentralized expression of human creativity.
Wetware/Heartware
I am mapping out a blueprint of a world where capital no longer relies on us, humans. It is also a world where labor is automated. So, what happens to people? To humanity? Are we just driven off a cliff of obsolescence? No, we created everything that got us here: the people, the products, and the processes.
For example, I made a massive life decision when I left the White House to decline the various offers to work inside the policy-making machinery of government. Instead, I wanted to create the most extraordinary, powerful, problem-solving, novelty-seeking phenomenon in the known universe. A human child. I have spent nearly a quarter of a century devoted to one growing person. She is, like the rest of us, wetware. Humans are the most extraordinary computational phenomena. We are biological creations that solve problems through curiosity, a dogged desire to solve them, and a relentless drive to explore and understand. Creating a person was not a divergence from my career path. It IS my career path. Others chose to upgrade hardware and to upgrade software. As a result, we can place a star in a box (small modular nuclear reactors) that are coming online at an incredible rate. We have ChatGPT, Fable, and more. We can now make fertilizer out of thin air and produce food in a building using only artificial light and regenerative soils. We have extended our eyes with the James Webb Space Telescope and can now construct new materials atom by atom, thus allowing us to create reality directly from imagination instead of being stuck with crafting from what already exists. We can allow money, algos, and the financial system to optimize themselves so that scarcity ends and abundance becomes not just possible but the central feature of our future. How does all this happen? What is the true source? Human curiosity. Human interest in solving problems. This is where heartware becomes the critical factor determining the future of humanity. Wetware with heartware is what’s needed now. That’s the road I took. I am wetware, and my heartware told me to create a human and cultivate its curiosity and capability. That is my greatest achievement in this life. It is also a way to see and explain the world economy.
Heartware, to remind, is the systemic framework, design philosophy, and leadership doctrine that repurposes the explosive wealth of a hyper-automated economy to protect, sustain, and elevate the human infrastructure. It is the conscious engineering of social stability, shifting leadership’s core focus from managing corporate margins to stewarding civilization. Unlike Hardware (the physical compute infrastructure, like NVIDIA server racks) and Software (the autonomous code and algorithmic pricing mechanisms), Heartware serves as the protective casing for humanity’s vulnerable “wetware.” It is anchored not in soft moral altruism, but in the cold, pragmatic math of systemic self-preservation. Heartware rejects the notion that distributing abundance is a matter of “being nice.” Instead, it recognizes that social stability is a prerequisite for economic viability. Just as a mechanical engine requires oil to prevent a catastrophic blowout, a hyper-efficient market requires citizens with purchasing power to keep the economic wheel turning. Heartware completely redraws the blueprint of the social safety net by replacing passive, top-down bureaucratic handouts with structural access. Handouts treat citizens as liabilities, fostering dependency, boredom, and a degradation of dignity. Access treats humans as assets. It ensures universal access to the “deflation dividend” (hyper-cheap energy, healthcare, and education) and the raw infrastructure of the new world (compute power and AI tools). Access eliminates survival-mode anxiety so that human curiosity can be unleashed.
Heartware treats human well-being as a mandatory foundational input rather than an operational expense. In a post-work society where algorithms autonomously calculate the price of money and software writes itself, heartware allows it all to scale globally.
Heartware turns the old economic myth of “inherent human laziness” on its head. It recognizes that humans are hardwired to seek mastery, purpose, and connection. When automated systems absorb the grueling, mechanical grunt work of the world, Heartware intentionally structures society to feed the soul. It shifts the cultural status symbols away from conspicuous consumption toward conspicuous contribution, providing the launchpad for a new, tech-enabled Human Renaissance.
Why?
Technology is forcing us to face a fundamental, structural question: What is the purpose of an economy? It is to meet at least our basic human needs but it should be to meet our highest human needs.
If an economy is merely a closed loop of machines generating capital for other machines, it ceases to have any human legitimacy.
I once saw an avant-garde Chinese film in London about AI that showed a single cop car driving in endless circles around a city. It had clearly found that the best way to prevent illegal activity was to simply eliminate humans. No one was left. But the self-driving AI cop car was left wondering about its purpose.
So, I am going to argue that the purpose of the economy is to allow every individual to become the greatest version of themselves possible. The purpose of the economy is self-actualization. In the past, its purpose was to serve the interests of corporations because companies were safe houses where people lived. They provided income and meaning. They provided the necessary products we needed to live, from food to housing. But it's always been our heartware, not corporate enclosure, that has enabled real growth, value creation, and wealth generation.
Marks and Spencer
London, 1931. The global economy is locked in the throes of the Great Depression, but on the British high street, Marks & Spencer is booming. The Chairman, Simon Marks, is obsessed with modernization. He is pouring capital into beautifully redesigned, hyper-efficient stores to attract customers, operating under the era's standard corporate logic: maximize sales, minimize labor costs.
Then came a fateful dinner party.
Simon Marks was introduced to Flora Solomon, a brilliant, iron-willed Russian émigré who had recently lost her family fortune in the crash. She possessed a fierce, unyielding social conscience. She had well-developed Heartware. Rather than making polite small talk with one of the most powerful retailers in Britain, Flora looked Simon Marks in the eye and delivered a legendary gut-punch:
“You are expanding by exploiting your workers.”
Marks was stunned, but instead of getting defensive or storming out, he was intrigued and quietly horrified. He challenged her: if she thought things were so terrible, she should go look for herself. He gave her full authority to inspect his stores, interview his staff, and report back.
Flora went to work. What she found at the “back of the shop” was a bleak contrast to the glittering showrooms out front. The young female shop assistants were regularly fainting. Management’s baseline assumption was traditional, dismissive paternalism. They assumed the girls were fragile, dramatic, or lazy. But Flora dug deeper. She interviewed the girls and looked at their lives. She deployed Heartware.
She discovered that these girls weren’t fainting because they were weak; they were fainting because they were starving.
At the height of the Depression, many of these young women were the sole breadwinners for their entire extended families. They were paid low wages, and every