Saturday, February 26, 2011

Free Market II – The Return to Abundance

Now that I’ve had a prod at the notion of ‘freedom’ as it pertains to ‘free markets,’ it’s time to ponder the extent to which a word like “free” might be useful as we define new perspectives and understandings of trade in the transition from capitalism to X. Because money is the deepest functional component of economics, and because money is the mechanism which ‘decides’ what is distributed to whom in which quantities, it is money’s effect on ‘freedom’ that is of interest here. Money is not in any way ‘value free’ as asserted by its High Priests – nothing which is important to humans can possibly be ‘value free’ – in fact money is probably the most potent symbol shaping society and culture today. There is therefore no more important area of study so overlooked and misunderstood as money. There is, of course, good reason for that:

The paradigm we’re living with is a monopoly of bank debt money. That is the thing that nobody questions. ... It is NOT a good idea in an academic career to talk about the money system. ... Paul Krugman told me personally that it was crazy to talk about the money system. “Didn’t they tell you? Never touch the money system!” ... You’re killing yourself academically if you touch the money system.
Bernard Lietaer. (Professor of Economics)

Sadly, the economic sciences have often been exposed as mathematically faulty, and therefore as unscientific and a pure propaganda tool of the financial elite, by, among others, Nobel Prize winner George Stigler 50 years ago.
Franz Hoermann. (Professor of Economics)

Economists are not economists at all, they're propagandists of money value.
John McMurtry. (Professor of Philosophy)

It should then be no surprise that understanding money has become as self-referential as defining the smell of your nose. Typically, adroitly kept ignorant of the salient details, we all ‘just know’ what money is, exactly as we once ‘knew’ the world was flat. We use money as effortlessly as we use our limbs. It makes ‘intuitive’ sense to earn it through labour, then spend it on desired and needed things. Money has been presented, via shadow theatre and myth, as a story easy to understand: It is an unbiased rewarder and punisher of saintly and devilish human nature, keeping us in line in direct proportion to our deeds. It is free of notions of morality and politics, paves no road to anywhere with any intentions whatsoever. It can’t care about good and bad, it just quietly does its job and leaves the rest to us. And yet behind this expertly painted scenery, money, though ‘just a tool’ with a particular application, is also a designed solution which exacts costs on us all over and above the immediate and comparatively visible cost we call usury.

The costs money brings with it, the effect it has on behaviour, the slow-drip of its power to shape culture and socioeconomics, should, in my view, be teased out primarily via analysis of money’s logical attachment to scarcity. As I have come to understand it, scarcity generates fear of want, obsessive self-protection, addiction to differential advantage, rabid competition, entrenched social divisions, and so on. I think of these costs as direct organic outgrowths of economic activity … activity, that is, as filtered and affected by money. I also believe that any attempt to define markets and economics without explicitly considering these deeper, broader effects can only be unsatisfactory, incomplete and deceptive. Thus, whatever ‘freedom’ there is in monetary systems – ignoring the cosmetic differences between concentrations of power called The State and those called Big Business, and the phony war these titans put on to keep us bewitched – must be studied in terms of purchasing power and power generally, and power’s chronically uneven distribution throughout society.

In short, money cannot be the neutral, ‘value free’ medium promoted by its controllers. Such neutrality is impossible simply because money is so very useful. It is in fact so useful that having none can ruin your entire life, while having millions makes access to material plenty a snap, though likely ruins your emotional and/or spiritual life. Money is an exquisitely refined tool of control – especially when allied with compound interest – a tool no self-respecting elite will lightly relinquish. It follows that any system guided and shaped by money cannot ever be ‘free’ in the sense suggested by Free Markets™.

So, if “We, The Sheeple” want freedom, or some valid approximation of it, we must look elsewhere for it. Happily, a foretaste of the alternative is in clear sight today, though appreciating its broader ramifications takes an act of will. There is a market now in operation which does not use money to determine who can afford what. It’s called The Internet and is a pseudo-example of a non-monetary economy of abundance open to all. (I’m leaving the entry fee out of the discussion, not because I consider it tiny or ‘value for money,’ but because the behaviours of market participants, once ‘through the gate,’ are relevant to this exploration, not the cost of entry.)

To a very significant extent The Internet is a moneyless market; blogging is free, search engines are free, there is free software to download, poetry and literature to read, articles, newspapers, social clubs, comics, films, music, and so on, all a typed address or mouse-click away. At last we can talk of demand as ‘pure.’ That is, in such open conditions demand is no longer money-demand, it’s just demand.

The enthusiasm with which ‘suppliers’ offer their wares for free demolishes the argument that humans are ‘lazy by nature.’ We see ‘work’ blurring with ‘fun’ as digital technology allows boundless access to all who care to consume. In this market place there is simply not enough time to consume what’s on offer, nor is there sufficient demand to meet supply. Also clear to see is that demand is in fact not infinite at a price of zero. Infinite demand is flat out physically impossible, and for blindingly obvious reasons, such as needing to sleep, eat, bathe, having only the one brain to process all that information, and so on.

The Internet, like capitalism, like socialism, like everything, is far from perfect. Addiction is a problem. Pornography is a problem. Disinformation is a problem. And yet considering the state we are in as a species; considering our education; considering the enormous influence of advertising, public relations and propaganda; the might of Big Business and The State; hierarchical and structural social rigidity; the rampant corruption and decadence, aren’t these growing pains fully understandable? The Internet is the first ‘free’ market humanity has known, and we’ve exposed ourselves to it quite suddenly after millennia of scarcity-based, fear-based thinking and doing. We find ourselves face to face with an open and egalitarian playing field while trapped in a stiff, hierarchical society.

And hierarchies everywhere are panicking, some have broken already. The Internet’s presence (alongside the very serious issue of ‘peak everything’ that is becoming increasingly obvious) demands of us a radical change of direction.

What we see in the negatives thrown up by The Internet is characteristic of children set loose in a candy store, or teenagers at college finally out from under their parents’ watchful eyes – sometimes with tragic consequences of course. We are still deeply stained by a system designed from top to bottom to produce obedient and emotionally immature consumers. Perpetual growth and conspicuous consumption are still systemically required to drive the economy faster and faster, which means the economy still needs a steadily growing influx of mindless consumers unthinking enough to see happiness stuck on the other side of the next purchase. Everything revolves around this insatiable hunger, money whips the world on and on, faster and faster, but of course it cannot go on like this. To be wise enough to deal maturely with the arc of our development, we need to build a far freer society from the ground up.

So, finally, what does “free” mean? I believe the word is going to be useful in the sense of "optional." For example, education must be optional by being open and unforced. Work must be optional to the extent that citizens no longer have to exchange their labour just to afford shelter, food, warmth, transport, health care, and so on. Such ideas most likely seem absurd to most, and right now, today, perhaps only a handful of us could actually deal with the freedom we think we have, let alone the type of freedom I’m describing here. To produce humans mature enough for the very open society we are so stumblingly bringing down upon us, we have to trust ourselves to be able to look after ourselves, trust that we in fact want to contribute our talents freely to the functioning of a society which strives to benefit all.

We have nothing to fear but our enforced ignorance, which, though very dangerous indeed, is not insurmountable. In the end it will become clear to us all that accomplishment is reward. Success is reward. Imagine no more nanny state, no more big brother corporations, and let that vision inspire you. For only after their demise can we cope with the effective freedoms waiting for us on the other side of inevitable collapse.


Karl said...

Nice post. I'm curious, are you making use of the new freedoms you describe? For example, do you run your computer with free software?

Money is ignorance. If I had an economics blog that would be the tagline. To continue with the free software example, an ignorant person would pay money to a convicted monopolist for the privilege of using a computer. A knowledgeable person can use the free stuff.

Toby said...

I've been using Linux since the late nineties. It was a battle to begin with, and took quite a bit of learning, but ever since I've stuck with it. Right now I and my daughter use Linux Mint. However, I also have Apple computers at home, and am forced to use windows at work. OS X is not open source, but the software that runs on it is very good, better than what I've found for Linux anyway. OS X has a foot in the open source world through BSD, but should open up all its secrets completely in my opinion. Fat chance of that though!

Money is ignorance in that it requires deep and profound information asymmetry to work 'properly.' It is about differential advantage and exploitation, but is not itself ignorance. Indeed, wielding it successfully requires secret knowledge. Money is secrecy, or money is hidden, something like that is closer to the truth I feel.

Rupert said...

I’ve been thinking about efficiency as the enemy of capitalism and I have come to an understanding. It is.
When I discuss the topic of this systems short comings with friends they cite the better standard of living and/or the procrastination of our demise to ever later dates that those of us in the ‘developed’ world are all enjoying. They tend to associate this ‘success’ with capitalism. (Much like organised religion associates acts of kindness with god.) I think there was a time when this was true, just like there may have been a brief time in our history when the dream that was democracy was at the heart of those at the helm. But these moments were fleeting. Product from the great inventive minds of our times has been high jacked by investment and entrepreneurship. These ideas have found success because the market has made it so. What ideas would blossom and bear fruit if their realisation were not constricted by free market economics? What a world could we build if ‘money were no object’.

Rupert said...

I think we are fast leaving the realm of ideology in thinking that our only limitations should be intellectual and material resources.

Toby said...

Technology is the source of standards of living improvements, PLUS OIL. Since we've known how to use the black goo to power machines we've 'progressed' in leaps and bounds. But, money is a technology too, and it too was (and is) empowered by oil, or easy energy. However, the money technology we use is deeply flawed for already discussed reasons. But money has undoubtedly, in conjunction with oil and human ingenuity, brought humanity to a place where money is no longer necessary, linear growth is at its limit if not beyond, and we humans are in increasing numbers beginning to imagine a very different way of doing things. The challenge to us all is how fast we can realize this at mass level. Can the wise outsiders become society changing insiders quickly enough?

I bloody hope so!