Friday, November 11, 2011

A Crisis of Imagination

At the supermarket buying a loaf of bread and a jar of yoghurt, I saw a German newspaper (Die Zeit) sporting the headline, “What is the alternative to capitalism?” Underneath, dominating the front page, was an appropriate graphic of a big fish eating a smaller fish eating a smaller fish, maybe five fish long. It’s a graphical gesture we all understand. Sadly, the article does not appear to be available online, so, not having bought a copy of the paper, I cannot comment on its content.

A couple of weeks ago, on a mainstream German channel (ARD), Franz Hoermann was allowed his five minutes of fame (his star appears to be rising though, so perhaps more than five minutes are coming his way). In his rapid-fire, academic style, he described the fiat, fractional reserve system. There appeared to be no shock in the audience. The minister for the economy, Philipp Roesler, sat to Hoermann’s left. Next to Roesler sat the finance minister and one of the architects of the Euro, Theo Waigel. Opposite Hoermann sat some markets expert, Dirk Mueller. Of the quartet, only Waigel seemed content to propagate the idea that the money system is fine as it is, is somehow immortal, and needs no substantial adjustments. That a thinker of Hoermann’s oddity should be given any airtime at all on such a mainstream talk show is quite surprising, that the other panelists, and the host too, should (more or less) sympathize with his position (Waigel excepted) more surprising still.

Apparently the BBC (principally Radio 4 and Newsnight) are also broadcasting what I think of as the voice of reason, that is, the type prepared to highlight collapse. Not doom and gloom necessarily, but a deep systemic problem which must be addressed. The Guardian online yesterday morning had a headline in its business section proclaiming the European situation was spiraling out of control, that France and Germany were contemplating a restructuring of the Eurozone. Strange days, as they say, are most certainly afoot. And yet despite this media flurry, a combination of rigged markets, desperate belief, a few heads of state tumbling down the career ladder, some reshuffling, and the situation suddenly seems less desperate. For a while. Nevertheless the taste of profound change in the air can’t be ignored any more. Defenses are crumbling, and I suspect growing numbers of the so-called elite are losing heart. Fewer and fewer of us care about this system as we once did, fewer desire ever growing consumption, ever higher salaries, an ever more frenetic rat race. What’s the point? To be cliched about it, surely there’s more to life than this!

So, is capitalism doomed? Well of course it is, just as is the sun. Only sooner. But it’s the wrong question (sort of).

I’ve covered this topic before, probably too often, so am going to be brief here. What I want to say is that what is being called into question, although labelled “capitalism” by everyone and their aunt, is in fact the price system, and includes the variants of socialism, communism, and fascism humanity has toyed with thus far, though these systems do have important differences.

A price is a piece of information generated by market activity (supply and demand) that tells us—allegedly in an uninfluenced, non-political, ‘value free’ way—what each good and service is worth. Price is therefore Value. Price information as generated by the market is—in ‘free’ market ideology—always true and accurate, as long as the State does not interfere with Price Discovery. Any interference muddies the water, poisons the accuracy of the information, and things no longer work optimally. It’s an elegant and powerful idea. Something organic and ‘natural’ takes place, constantly, no one dominates, and clear, helpful information emerges from the melee, information that guides important matters like how many Ferraris to manufacture, how many potatoes to grow, how many twenty carat diamond rings to produce, and so on. And via the labour market, who gets what amount of purchasing power is similarly discovered, in a ‘value free’ way. If only it were that simple!

As readers of this blog will know, I don’t subscribe to this theory (as it stands), since there can be no such thing as a ‘free’ market. Hence the price system cannot work as advertised. Hence ‘capitalism’ cannot work as advertised. The differences between ‘capitalism’ and ‘communism’ are important, but also somewhat cosmetic. In communism we have the monopoly of State fixing prices. In capitalism we have the monopoly (or oligopoly) or the Corporation fixing prices. Either way we do not have clean and true information contained in prices. Externalities are but one other aspect of this general problem. That we even try to nail value down using a linear scale like Dollar is another.

There are many problems, but perhaps the central one is that the confected dichotomy between Market and State serves no purpose other than to bamboozle and confuse. It is a Punch and Judy show, just as the Left-Right Drama is. One telling sign of this is the infrequency with which lobbying (the modern name for bribery) is discussed as Market interference in State. If Market only works best when ‘free’ from State ‘interference,’ why do we not hear any mainstream discussion of how a ‘free’ State works best when free from Market ‘interference?’

Of course the answer is that the price system is corruptible, corrupted, and benefits approximately 10% of the population at the cost of the remaining 90%. It is an elitist system by design. And that applies to both Market and State. Elitism, entrenched class divisions, wealth, health and education gaps, are systemic properties of the price system while the money system is set up as we have it.

Underneath all of this writhe, like uroboric world serpents, the core assumptions of Competition, Selfishness and Greed, as projected onto nature via misunderstandings of Darwinian theory (Spencer’s “red in tooth and claw”). Of course a millennia old dynamic of elitist control of an exploited non-elite, as established by the state long ago (a HUGE topic), predominantly engenders the kind of competition, selfishness and greed history has delivered thus far. We cooked ourselves in that soup and now see its flavours everywhere we look, even in our imagination. That there is far more to nature than this simplistic Triumvirate of Evil is becoming plainer and plainer, but changing the system forged in those elitist fires, the system which found form and life in historical processes set in motion by farming and ‘taming’ fire, and as these accomplishments gave birth to scarcity and property (twinned phenomena in my humble opinion) which in turn shape our view of All That is; changing a system that old, that much a part of what we all are, is no easy task.

Back to the price system. As we can see, its roots go deep indeed. We ‘need’ it, because we have ‘discovered’ scarcity via farming and property. Because there is not enough to go around, what better way to ‘decide’ who gets what, while keeping the constant threat of a Hobbesian Warre of Each Against All at bay, what better than some ‘anonymous,’ impartial, and incorruptible system? Capitalism. Free Market. The Price System. A force of nature for harnessing our brutish forces of nature.

Cool, only atop the foundational assumption of scarcity no market can stay free. Big fish eat little fish (competition, greed, selfishness), in the twinned realms of Market and State alike, and before you know it, the biggest are writing the rules to suit themselves and their own. ‘Twas ever thus, and ever thus shall be. Until we update the Triumvirate of Evil and embrace abundance, cooperation and faith.

Back to the money system. It is the motor of state apparatus, is its core dynamic embodied in financial infrastructure. Forged in those Competition, Selfishness and Greed fires, the money system stimulates and assumes these three forces equally resolutely. It also requires, by design, perpetual economic growth. Ever-growing economic activity. An ever-expanding money realm into the non-economic realm. An ever-accelerating rat race. What was once done for free, what is ‘idly’ doing nothing—like forests and schools of fish—must be converted into either goods or services. If it’s not working, if it’s not earning money and delivering price information, what possible value can it have? How can we measure a thing, assess it, extract it, profit from it, unless it is sucked into economic life? Look at air, that useless, ubiquitous stuff. It has a price of zero! Let’s earn money from it, put it to work somehow, make it earn its right to exist! But what happens when there’s no nature left to convert into goods and services ??? Let’s not contemplate that.

Except, the mainstream has begun to contemplate just that. We are the mainstream, even we Fringe Nutjobs. The more eloquent we become at presenting our case, the quicker and more effectively the message can spread to others. Then our imaginations can begin the work of envisioning a new system, and put ideas into practice.

Fellow travelers, through this period of upheaval, crisis and opportunity, the time of the Fringe Nutjob has come. People will be asking, in growing numbers, what the alternatives are. Sadly, the “no one knows” answer can be annoying. I suggest pointing out that the system we have is based on profound misunderstandings of the workings of reality, and, as a consequence, has become addicted to perpetual growth. We have designed a system which, were it a car, could only accelerate. Forever. Pressing on the breaks causes it to crash. Designing things differently requires, urgently, a new money system, which will further and necessarily require a redesign of pretty much everything else. All of it can only begin when we are ready to initiate the task. When we badly want something new. Right now recognition of the urgency is paramount. The ideas are there. We need safe-as-possible mechanisms and methodologies for testing them.

It has begun in earnest. Now we have to kick our imaginations into gear, have a lot of faith, and believe in ourselves.

(After reading this please check out this talk, given towards the end of October at Occupy Wall Street, on money, value and information flow. Fascinating stuff. Thanks, Karl, for the link.)


Debra said...

I'm always interested to read you, Toby.
You know me... I told someone on my loony forum last week that I am 100% in agreement with NOBODY, and you are not an exception.
I am going to address what to me, is a major MODERN misconception that we have about how our ideas interreact with THE WAY we do things, practically (and I am NOT going to call that "reality"...).
I think that most people can not get a true grasp on how much the MATERIAL and immaterial world we call civilization is the TRANSLATION of our ideas, and how this translation reacts back to influence our ideas, in turn.
On the money problem : I have a suggestion for you. That you shop OFTEN at a farmer's market, and that you WATCH how business is being done at that farmer's market, and that you watch how money is changing hands.
I am a firm believer in FIRST HAND OBSERVATION. Our greatest philosophers were people who were NOT theorizing in cloud cuckoo land from the top down, they were out in the streets, and in different classes of society, and WATCHING how life was playing out (that is why Rousseau is a GREAT philosopher, because he transcended all social barriers, and was EVERYWHERE). (I am not suggesting that you do not observe, Toby, but I KNOW that the so called university economists, and social scientists, are NOT observing, because they are too busy reading books, or whatever...)
I have a question for you, Toby.
Why, when you go to the farmer's market regularly, for example, does the producer occasionally decide to FORGIVE the one or even ten pennies that you owe him ? Why will he occasionally throw in an extra cheese ? Why will he often sell his produce at a reduced price towards the end of the market day ?
Compare this.. are those pennies forgiven IN A GROCERY STORE ?
Is business conducted in the same manner AT A GROCERY STORE ? What if the grocery store is owned by the person at the cash register, for example ? Will business be done in the same manner ?
HOW DO THE PRICES GET FIXED on the market ? WHO decides ? On what basis ?
I think that if you look at all this carefully, you will see that there is ONE INSTRUMENT OF EXCHANGE, MONEY, but that lots of different people, WHO HAVE VERY DIFFERENT ATTITUDES TOWARDS IT, are behaving in very different fashions.
Can we blame THE INSTRUMENT for what people are doing with it ?
Over on Hell's blog, a long time ago, I insisted that having ALL THAT PLASTIC, those credit cards, had some very serious implications for the way we think about money, and for the way people behave with it.
And one of our friends told us the story of a TEENAGER who, when his mother told him that she didn't have money to pay for something for him, said "but all you have to do is to go to one of those machines, and withdraw the money".
That is a little bit like.... "money grows on trees".
Well, to be an advocate of the devil, ISN'T THAT WHAT PARADISE/FREEDOM IS ALL ABOUT ?
Being able to click your fingers, and have your every desire fall right into your mouth without having to lift a finger for it ?
Being able to do whatever we want, whenever we want. (remember the Descartes quote that I put up here a while ago).
Our attitudes and our beliefs about money are a direct consequence of our attitudes and beliefs about tons of things in the world.
We are well on the way towards creating that Cartesian paradise, and..
we are STILL not satisfied ?

Debra said...

I told my husband this morning...
Actually, I think that the reason for this crisis are so simple that it is frightening.
Our money is now, but always has been, a system of FIAT.
For FIAT to work you have to have faith.
Faith in you FELLOW MAN.
How are we doing on faith in our fellow man, Toby ?
Do you think we're doing great ?
Not me. Not at all.
I think that the constant harping on insecurity is in direct relation to FAITHLESSNESS, and generalized suspicion of EVERYBODY.
If we don't believe, or can't believe in ANYBODY or ANYTHING.
That's terrifyingly logical, isn't it ?
So.. we need to start asking what we should be doing to try to REBUILD FAITH IN OUR FELLOW MAN.

Malagodi said...

Believe in what? Ourselves? Have you looked in the mirror lately?

My brother, believing in 'ourselves', in humanity, is the foundation of hubris.

Combating the twin errors of nihilism and positivism both Jesus and the Buddha pointed to the existential process in evidence all around them as the sole foundation of belief, not a method (such as democracy, or law, or ritual, or practice) or, even worse, the adoption of idols (such as ourselves, which is the Western, ie. Greek, way).

'Oh ye of little faith.' Oy Vey.

Now, as to your point about money I pretty much agree. I see the problem with fiat money and it's structural support mechanism as being wholly inefficient and completely rigged against the small transaction. It is the costs (fiscal and social) imposed by the financial institutions as 'the cost of doing business' that fall most heavily on the poor.

The solution is not in maintaining or trying to improve a system that has as its pretense the goal of making everyone wealthy; that's a fundamental lie. The goal should be, as John Cage rightly said, in "making the world safe for poverty."

Toby said...

And I'm always interested to read your comments, Debbie. Sadly, I can't shop often at farmers markets, since there are none nearby. Nevertheless, I know what you mean about them. And the wee debts and favours that accrue are the stuff of community. But a world of nothing but these farmer's markets is impossible. Even they are based on scarcity. And debts and favours between neighbours and friends and even family members does not require the explicit format of a farmer's market to manifest. Life is richer than that. And, in a tangential way, simpler too.

Nevertheless, I agree (I think) with the thrust of what you're saying. My focus on these virtual pages is to prick holes in the ivory tower. My real world is the huge cosmopolitan city of Berlin. Where I plan to get my fingers 'dirty' is in direct democracy as it is being experimented with by The Pirate Party. On which more later...

Toby said...

Yes, believe in ourselves, Stephen. Such need not be hubris, but only if by "selves" we think "connected self", and by "our" we mean "all of life." Not to be too arty farty, I am indeed talking of humans, but as they emerge from Universe, not in some mythic sense as Separate Lords and Masters of Nature.

And yes, I have looked in the mirror lately. Ouch. There's a lot of work to do, and not very much time. Hence faith is part of what's needed to believe the effort is worthwhile.

Yes, the system is rigged against the little guy, but might I suggest that poverty is merely an 'outcome' of the huge variability of life, yet can only ever be discerned from a particular point of view. 'Where there's muck, there's brass,' goes the saying. Poverty can be felt in richness, and wealth can be found in poverty. Who owns the value-assessment system, and to what ends? That's the question. Also, to what ends do we transact in the first place? Differential advantage? Competition? Greed? Or cooperation, sharing, openness etc? These are foundational questions, far more important than some supposed absolute "poverty" and its avoidance, or plan to render it "safe."

What is "safe?"

Malagodi said...

What Mr. Cage meant was to create a situation where it was safe, or possible to have a life that did not require the vast walls of material wealth for protection.

It is our own personal exorbitant defense spending against mostly imaginary and irrational fears that drives this industrial/consumer economy. This, on top of the actual burden of defending oneself against the occasional thief and the ubiquitous State, along with the oppressive fees and interest charged to finance housing, health and welfare which are particularly burdensome for the poor and working class is where the problem lies, to my mind.

Allen Ginsberg famously asked "America, when will I be able to go into the supermarket and get what I need with my good looks?"

Toby said...

My younger daughter, ten, petite and blond, frequently gets free stuff just by smiling at shopkeepers.

I, on the other hand, never have such luck. Maybe that's why I write poems, like Allen G...

(I think interest (usury) itself is one of the major problems, since it assumes a sort of immortality of value is inherent in money, as well as inherent in The Human Project of Domination. Interest, which is nothing more than non-stop growth, assumes, by default really, the human realm can grow forever. It's that simple, that stupid, that cancerous.)

Debra said...

I think that this week's reading assignment should be... "Pollyana".
I'm not kidding.
I get lots of free stuff.
This is where it gets sticky.
In order for a benediction/grace economy to work, we can not be CALCULATING.
That word says a lot.
But I KNOW, I have an idea WHY I get free stuff, why people like me.
It is a question of being EXACTLY AT THE PLACE WHERE THE MEETING IS TAKING PLACE WITH THE OTHER PERSON, not ahead of the person, not behind him, BUT JUST THERE, and not calculating about WHAT COULD HAPPEN IN THE FUTURE.
The economy of grace/benediction is COMPLEMENTARY to the money economy, and incompatible at the same time.
I think that the relationship between the two is possibly similar to the relationship between.. MEN AND WOMEN when things are going for the best ?
This is also, incidentally, what "The Merchant of Venice" is about.
When I say having faith in ourselves, perhaps I should say, HAVING FAITH IN THE PERSON WE ARE MEETING, not OUR selves.
We need to start realizing that the economy is not just a question of dollars and cents, MONEY.
.... That's why "free gifts" flyers in the mail DON'T WORK...

Toby said...

Well said, Debbie.

"The economy of grace/benediction is COMPLEMENTARY to the money economy, and incompatible at the same time."

I waver on this point, but it really depends on how we define money, the reasons we calculate debt and the degree of accuracy we insist on, how anal we are about that sphere, and so on. But isn't there something mutually exclusive about grace on the one hand, and anal calculation of debt on the other?

And how should we address or relate to the weird word "free"? I can imagine a language without the word, which anyway has its earliest origins in friendship, which is about open ended and dynamic bonds of pleasure, obligation, generosity and debt. Today we have a Skygod interpretation of 'free,' as in 'escape from obligations and bonds', or, 'escape from the sticky mess of the feminine.' So I would say 'freedom' and 'free' have to be revisited, relearned, reloved.

Debra said...

The good news is that it is already being done... THROUGH OUR DISCUSSIONS HERE.
If we want to change the world the way Napoleon changed it, well, that is incompatible with a grace economy.
But if we are content to reach out and touch one or two or three human beings, then it works.
IF WE HAVE CONFIDENCE and FAITH that THEY, IN TURN will continue spreading the... "good news" ??

Toby said...

Yooz riffin' on dat Jehovah's Witness gag, right?

Funny. But scary too. A disturbing mix.

Debra said...

No idea about the Jehovah's Witnesses' gag.
What are you talking about ?
Remember : ich bin der Welt abhanden gekommen...

Toby said...

Oops, I meant gig. But was far too obscure perhaps. When those folks come to your door they ask if you've heard the good news. They are spreading the message that there is indeed good news in these troubled end times.

Debra said...

Well, may surprise you to hear that I have asked the Jehovah's Witness people to come in and chat occasionally.
As it turns out.. although I do not believe whatsoever in their vision of Christianity, I DO believe that they have the right idea about how to contact people.
Even the political parties have noticed the the IMPERSONAL WEB is not as galvanizing as having people come to your door, knock on it, and chat with you.
For SOME people, in this day and age, it is their only contact with a breathing, speaking person in the flesh.
I do not knock on Jehovah's Witnesses, even if I am not crazy about their beliefs.
Now.... IF EVERYBODY WERE JEHOVAH'S WITNESSES, that would be pretty terrible, and I would be very unhappy.
The same would be true if EVERYBODY were believers in the cult of science/technology, or Communists, OR BELIEVERS IN DEMOCRACY, you take your pick...
I do NOT believe in bringing those kingdoms of God TO THE EARTH, Toby.
Let them remain.. UTOPIA.

Toby said...

I did that too (invited two Jehova's Witnesses into my house for a chat), and have even had friends who were Jehova's Witnesses. Though I do knock their teachings and the blind dogma that lies behind them, I was not knocking them in my failed attempt at humour. However, in my experience they do not discuss, they do not really think, they announce, robotically, what they have been taught to announce. I find them, at that level, disturbing. It is far from the intimate human contact you describe. It is not really creative.

As for door to door selling, can we want that today, we isolated specks of consciousness (un)content with our gadgets and electronic communication technologies? I'm not sure, though, as in you and me, there are always exceptions. I suspect, generally, people are thoroughly suspicious of door-to-door salesmen, whether goods, services or messages of hope are for 'sale.'

Each to their own and all that. Me, I'm just banging out what I think is important and leaving the rest to fate. I'd hate to think I were pestering people. Let them come or not come. The type of deep change I think necessary can only come from within.