The Truth About Pioneers…
ine why pioneers take so many arrows, and are
And Why It Could Be
Different This Time
by Paul A. Rosenberg
1. It’s crazy!
2. It may be possible -- so what?
3. I said it was a good idea all along.
4. I thought of it first.
-- The four stages of response to any new and
revolutionary innovation, by Arthur C. Clarke.
New ideas are met with opposition, almost al-
ways. The original innovators very seldom get
the credit they deserve. I’ve had it happen to me,
and I suppose that most of the readers of this
magazine have had it happen to them at one
time or another, in one way or another.
So, here we have a magazine dedicated to digital
currencies. I think I’m not alone in having mixed
feelings. Are we in the early, middle or end stag-
es of Clarke’s formulation?
To be sure, digital currencies are a better idea.
Everyone should use them. Everyone will use
them. But the early stages of such a journey are
not easy. I’m not saying that we shouldn’t under-
take the hard work; I deeply respect the people
who have been doing this, and I want them to
continue. But if we want to keep ourselves from
psychological scars, we really should under-
stand what we’re going through, and not have
unreasonable expectations.
The truth about pioneers is ugly. There can be a
good deal of romance attached after the fact, but
actually living through it is very seldom glamor-
ous. The pioneers who die contented are usually
only those who have lived long enough and who
have read enough to understand what happened
to them.
But, digital currencies are coming of age and, as
I say, it just might be different this time. I’m not
guaranteeing it, mind you, but I do think it is pos-
sible, and possibly even likely.
But before I get hopeful, it’s important to exam-
subjected to so many disappointments.
NO GOOD DEED GOES UNPUNISHED
Humanity has a hard time with change. F.A.
Hayek pointed out that most people will not ac-
cept a new thing until they see someone else
acting in that way and prospering from it. Only
then they will act. So, if Hayek is correct, the
act of pioneering will always be judged as dan-
gerous by most people. They may not actively
oppose and punish the new act, but neither will
they follow.
Additionally, there are people with an inherent
control bias – a psychological need for things
to remain under control. Bear in mind that these
people may not be malicious; they just fear cha-
os, and see it as the preliminary stage of destruc-
tion. So, they will try to force a pioneer back into
a quiet, predictable group. The frightening part
of this is that people with this control bias are
very often drawn into controlling professions –
like government and law enforcement.
So, whether from simple discomfort or a psycho-
logical bent, most people will not welcome pio-
neering efforts. Not all that many will oppose the
pioneer, but opposition can be extended from the
fearful to the apathetic fairly easily, by invoking
threats to self-esteem. If the fearful can define
the pioneer as undermining or insulting the root
of people’s self-esteem, the previously uninter-
ested masses will turn on the pioneers.
It usually requires only a small number of con-
trol-biased people to get the masses stirred up.
If they can locate shared reasons for self-esteem
amongst the populace… and if they can position
the pioneer as dethroning their self-esteem, peo-
ple get crazy, and the pioneers have to get the
hell out or suffer the consequences.
THE HISTORICAL RECORD
As much as I think the preceding section makes
sense, I think I should invoke the historical re-
cord as well. So, one well-known example:
Almost all of us remember who Martin Luther
as the man credited with the Reformation. But
Luther was emphatically not the great innova-
tor. There were many before him. These were
the true pioneers, who made the initial formula-
tions and who died as outcasts. Luther was only
one more in the chain… the one who was doing
the same things when the populace finally got
comfortable enough and brave enough to follow.
Luther is taught in every schoolroom, but the
braver and better Jan Hus is almost never men-
tioned, much less the Lollards, the Waldensians,
and their almost utterly forgotten predecessors.
These were the true pioneers, but unless you’ve
spent time studying this subject, you’ve probably
never heard of them.
AND THE GOOD NEWS?
So, after all this depressing history (and I even
left out the nasty parts about people being burned
at the stake), why might it be different this time?
One of the curious scientific facts that I have
collected down through the years regards the
movement of sand dunes. It turns out that the
length of each movement of an entire dune cor-
responds to the distance that one grain can be
blown by the local winds. It makes perfect sense
if you think about it for a minute, but it had never
occurred to me previous to hearing it on some
Nature show.
What grabbed me about this trivia was that this
is precisely how changes occur in human affairs:
The group jumps forward only to the distance
that an average member can handle. What this
means (aside from explaining the continual frus-
tration of the better jumpers) is that the accep-
tance of a new idea has very little to do with the
merits of the idea, and almost everything to do
with the psychological impact it has upon the av-
erage person.
This sand-dune allegory is encouraging to us for
one big reason: The winds have picked up.
As smart people have been saying since I was a
child, the pace of change is increasing. And that
means that each jump is longer than the previ-
ous. And that is why the pioneers may just get a
piece of the action this time. As regards mass
psychologically, the situation is tilted in our direc-
tion as well. Since everything in general is chang-
ing faster, we are just one more new thing that is
confronting people, not a single, obvious threat.
Even when they do focus on us, their attention
is likely to be diverted soon enough. None of us
have been burned at the stake yet, and there are
no mobs marching in the streets.
The one thing we must be very careful about is
the self-esteem factor. If we walk around saying,
“I told you so,” we’ll make a lot of trouble for our-
selves. If we have any sense, we will not force
people to admit they were wrong. That stops
them in their tracks and turns them into our en-
emies.
Understand clearly: Clarke’s four steps are psy-
chological reactions to change – they are coping
mechanisms. If we start demanding our proper
credit, we may be justified, but we will also pre-
vent people from actually changing. Don’t pre-
sume that everyone else has strength of charac-
ter in precisely the same ways you do.
SO, WHERE ARE WE?
It’s always very difficult to predict the end of a
storm when you are in the middle of it. Is today’s
calm permanent, or merely the eye of a hurri-
cane? It is in situations like these where per-
sonal inclinations tend to fill-in the blank spaces
between the facts, and lead to errors. Nonethe-
less, I’m inclined to say that we are approaching
Stage 3: I said it was a good idea all along. Yes,
I am definitely an optimist, but not without some
solid basis for my hopeful outlook.
So, the evidence that we are really at Clarke’s
stage three?
First of all that even after many attacks, digital
currencies are not going away. It would have
been reasonable to expect people to run away
from digital currencies, but they have not. And
new people do not seem to be lacking. A com-
plex situation, to be sure (with HYIPs and all),
but one that has been much more positive than it
seemed it would be.
And, if so, it’s time for us to stay the course and
to work very hard at being magnanimous.
Paul is the author of A Lodging of Wayfaring
Men and other books. You can find his work
at: www.veraverba.com © Copyright 2007 by
Paul A. Rosenberg

The most striking new development to me was

that the Senior Fellow and Director of Internation-
al Economics for the Council on Foreign Rela-
tions, Benn Steil, has written not one, but several
widely published articles, promoting the idea of
digital gold currencies. The head economic guy
at the CFR, writing articles on digital gold replac-
ing national (fiat) currencies and lauding Hayek?
I could hardly believe it when I first heard it. Then
I feared for the man.

Steil’s article Digital Gold And A Flawed Global

Order, ended with this comment:

As radical and implausible as it may sound,

digitizing the earth’s 2,500-year experiment
with commodity money may ultimately prove Instantly named Freedom Book of The Month and a
far more sustainable than our recent 35-year major influence in the Cyber - underground, A Lodg-
experiment with monetary sovereignty. ing of Wayfaring Men is the story of freedom-seekers
who create an alternative society on the Internet - a
That line could have been written by one of us virtual society, with no possibility of oversight or con-
radicals, yet here it is from the Director of Inter- trol. It grows so fast that governments and “leaders”
national Economics of what is arguable the most are terrified, and fight to co-opt this cyber-society be-
non-radical of all organizations. In addition, the fore it undermines the power of the governing elite.
article ran in The Financial Times – again, no
radical publication! Similar articles of Steil’s have
run in Foreign Affairs – a publication that is wide-
ly considered to be the most pro-establishment
of any!

And, I will add, Steil remains in his position, and

continues to make his case boldly.

Are the Martin Luthers starting to arrive? I

know, it’s hard to imagine that this could be
true, especially with the recent legal actions
against digital and gold currency providers.
Nonetheless, these are just the type of mind-
less reactions we would expect from con-
trol-biased people who are losing their grip.