Thursday, November 3, 2011

Has Money Become Obsolete?

This is a Le Monde article translated by Al Evans, which I found at Charles Eisenstein's blog. Enjoy.

By Anselm Jappe

The media and official sources are preparing us: in the next few months, maybe even the next few weeks, a new worldwide financial crisis will begin, and it will be worse than in 2008. Catastrophes and disasters are being openly discussed. But what will happen after? What will our lives be like if banks and public finances fail on a vast scale? Presently, all European and North American financial systems are in danger of going down together, with no possible savior.

But at what point will the stock-market crash stop being a news story for the media, and become an event we will notice out on the street? The answer: When money can no longer fulfill its usual function, either because it becomes scarce (deflation), or because it circulates in enormous, but devalued quantities (inflation). In either case, the circulation of goods and services slows, perhaps to a complete standstill. Their possessors will no longer find anyone who can pay them in “valid” money which permits them, in turn, to buy other goods and services. So they’ll keep what they have.

The stores will be full, but without customers; the factories will be in perfect operating condition, but with nobody working there; the teachers will no longer go to the schools, because they haven’t been paid in months. Then we will be made aware of a truth which is so obvious we didn’t notice it: there is no crisis in production itself. Productivity in all sectors is continuously increasing. The amount of arable soil available can feed the entire world population. The shops and factories can produce even more than is necessary, desirable, or even sustainable. The miseries of the world are not due, as they were in the Middle Ages, to natural catastrophes, but to a kind of “enchantment” that separates men and their products.

What is not working any more is the “interface” between men and what they produce, namely, money. The crisis confronts us with the fundamental paradox of capitalist society: The production of goods and services is not an end in itself, but only a means. The only true end is to multiply money, to invest one euro and get two back.

However, those who hold capitalist finance in contempt assure us that finance, credit, and the markets are only foreign growths on a healthy economic body. Once the bubble bursts, there will be turbulence and bankruptcies, but in the end it will only be a “healthy” storm and we will begin again with a stronger, more real economy. Really? Today, we get almost everything by paying for it. If the supermarket, the electric company, the gas station, and the hospital accept only cash money, and if there isn’t much of it any more, we will soon be in distress. If there are enough of us, we can still take the supermarket by assault, or connect ourselves directly to the electrical network.

But when the supermarket is no longer resupplied, and the electric plant stops running because it can’t pay its workers and suppliers, what then? Barter systems could be organized, new kinds of solidarity, direct exchanges. It would even be a good opportunity to renew social connections. But who can believe that we could accomplish this in a very brief time on a large scale, in the midst of chaos and looting? “We will go to the country,” say some, “to appropriate the raw materials directly.” Too bad the European Community has been paying peasants, for years, to cur down their trees, pull up their vines, and slaughter their livestock…. After the collapse of the countries of Eastern Europe, millions of people survived thanks to relatives who lived in the country and to kitchen gardens. Will we be able to say the same in France or Germany?

It is not certain that we will arrive at these extremes. But even a partial collapse of the financial system will have consequences due to the fact that we have given ourselves, hands and feet bound, to money, giving it the exclusive task of assuring the function of society. Money has existed since the dawn of history, we are told — but in pre-capitalist societies, it played only a marginal role. It is only the the last few decades that we have arrived at the point where almost every part of life involves money and where money has filtered even into the smallest hidden corners of individual and collective existence.

But money is only real when it represents some work that has actually been done and the value that this work has created. All other money is only a fiction, based only on the mutual agreement of the players, and confidence in this agreement could evaporate. We are witnessing a phenomenon not foreseen by economic science — not a crisis of a single kind of money and the economy it represents, to the advantage of another, stronger economy. The euro, the dollar, and the yen are all involved in a crisis. The few countries still rated AAA by the rating agencies cannot, by themselves, save the world economy. None of the proposed economic recipes is working, anywhere. The market functions as poorly as the state, austerity as poorly as stimulus, Keynesianism as poorly as monetarism.

Thus we are witnessing a devaluation of money as such, the loss of its role, its obsolescence. But not by the conscious decision of a humanity finally tired of what even Sophocles called the most ill-omened invention of mankind. It is rather by a process uncontrolled, chaotic, and extremely dangerous. It is like taking the wheelchair from someone after he has long been denied the natural use of his legs. Money is our fetish, a god we created ourselves, on which we believe ourselves dependent and whose anger we are ready to sacrifice anything to appease.

Nobody can honestly say he knows how to organize the lives of tens of millions of people when money loses its function. It would be good to at least admit the problem exists. Perhaps we should prepare ourselves for the age after money as for the age after oil.


Debra said...

I am currently reading a book by a French philosopher called Dominique Meda, called "Work, a value going down the tube".
I have noticed that Dominique Meda has devoted an entire book to talking about work, and the tyranny of economics in our lives, BUT...
She does not really manage to get a hold on how we have INTRICATED work INTO money, how we have managed to assign EXCLUSIVE VALUE to WORK FOR MONEY, in order to give us identity, and meaning to our lives, in true evangelistic fashion.
The key word is "exclusive". It is the idolatry word. It means that you are looking so hard for salvation in one area that you can not see that there are other possibilities, and you have NO IMAGINATION for anything else. Work for money.. WORKS only to the extent that your society recognizes value for work NOT for money, NOT BY EVERYBODY, etc.
Money works... to the extent that you do NOT decree that the ONLY way to acquire it is THROUGH work. This means that speculation is NOT the end of the world (although speculation on currency and interest are not good for the VALUE of money..). But... globalization has made speculation BIGGER AND BIGGER, and our disappointment at realizing that work will not bring us SALVATION has made it explode...
One of the key problems with the article is the fiction one.
It is ONLY a problem if you are constantly running after THE TRUTH, AND.. if you consider fiction to be a LIE in opposition to the truth.
IF... you consider fiction to be a lie, as we have been consistently doing for quite some time, under Platonic influence, moreover, intricated into Judeo-Christian oppositions between TRUE and FALSE Gods, well, then, in the long run, you are going to ATTACK all your FICTIONAL SYMBOLIC SYSTEMS and bring them down.
Because... try as hard as you will, THE WORD IS NOT THE THING.
And you are NOT going to make the word THE THING.
All assignations of value are ARBITRARY, thus RELATIVE, not absolute.
I believe that we MUST do certain things to restrain the idolatry of money as a reserve value (which I don't believe in...).
Shutting down stores on Sundays is INDISPENSABLE.
Just little things like that can help, for example.
The problem is not with money, it is with our current ideas about it...
We have.. TOO MANY IDEAS, too..
And we are not getting our LITERAL HANDS dirty enough these days...
One other thing...
The trust issue is a big one.
If... you have lost your faith, how are you going to get it back again ? WHO will manage to convince you to believe again ?
This is.. a bottomless pit. The more the governments attempt to reasssure the markets.... THE LESS THE MARKETS ARE REASSURED. Logical.
It's like a two year old who is screaming in the grocery store... comes a time when handing him all the candy bars will not make him stop screaming for ANOTHER ONE, and all the rational arguments will not stop him either.
You pretty much have to haul off and smack him one...
But you do have to bring him back to his senses...
UNTIL THE NEXT TIME. Because, like us all, he is human, and he will DO IT AGAIN. THE WAY WE ALL DO...Trying to pretend that you HAVE THE RIGHT to punish him ONCE AND FOR ALL (in the best of all possible worlds...) is cloud cuckoo land psychology which many of us are very good at, by the way...
The same holds true for the markets.
Putting the cart in front of the horse takes you... NOWHERE...

Debra said...

You will find me crazy to be preoccupied about the devaluation of money, but...
I think it COULD be the sign that Western civilization is going.. THE MELANCHOLY WAY.
My dear departed Daddy was pretty good about diagnosing melancholy, as a forensic pathologist.
The melancholics are those who have SO LITTLE FAITH, SO LITTLE HOPE that they are capable of putting themselves AND OTHERS out of their "misery" with the best of intentions...
Rational people can't understand this.
But man is not a rational animal...

Toby said...

Good stuff, Debbie.

My take is that we are fumbling towards a wiser paradigm than the Newtonian/Cartesian one we have been glued to for so long, and that money, as one of all those fictions that belongs to it, will have to change, along with its other fictions. Including the fiction, as you point out, that there are 'hard facts' 'out there' to which we must adhere with 'the right words' or the right combination of the right words.

At the same time we are not paying close enough attention to feedback from 'out there.' We are in cloud cuckoo land on many fronts. Some fictions are less helpful, less 'accurate,' than others. Humanity has built up a vast and complex infrastructure of institutions and beliefs that still, to some flimsy though perceptible degree, protect millions of us from the fallout of the planet's warning groans, the market's groans, the decadence... While we can still deceive ourselves that the larger order fiction of Ascent is valid, many of the subsidiary fictions, long due an 'update', can be sustained (more or less).

And I would say too, we must beware solipsism. Yes, it's all fiction in the end, but that does not make us powerful Masters of Reality. Whatever Reality is.

And what are markets, exactly? These bourse for trading debt and money. As we have them, or, as they have us, is, in my eyes, unsustainable (in a bad way). I don't think we can smack them back to some good function. I think they will unravel then reemerge in a very different form and 'place' (culturally speaking) and fulfil a 'new' function of bringing people's creativity together. That's a way off yet, but I think that's where Markets are headed (should we wake up in time).

Frank Powers said...

Thanks for the article. Very appreciated.
I'm wondering where we are going right now, all of us... Or rather: How we will manage to walk that path we seem to be almost inevitably due to walk on right now...

Debra said...

Hey Toby,
Next week I am going to check out a documentary on..
the clitoris.
I learned a year ago that back in 1998 somebody up and REALIZED that our "theories" (....) about the clitoris, shall we say EVEN THE LITTLE MAP we had of it was off course....
I consider that TO BE PROOF, Toby.
I'll let you fill in what I have left blank.
I agree with you about the way things morph themselves around into new combinations, if I am reading you right.
Two BIG additional problems that are in the background right now, out of our sight.
The way that Western Civilization is fast becoming.. THE ONLY CIVILIZATION on the planet, and the way that it is also turning "the wild" (outside) into "civilization" : WESTERN civilization. (inside)
When you get so much concentration of idolatry, Toby, the risk of the whole thing breaking up is enormous.
Is it already breaking up under our eyes ?
If it IS breaking up WE CAN'T SEE it, because you can't WATCH something that is happening to you...
That point of view problem.

Cool Breeze said...


Eisenstein has a great 'summary and road map' in chapter 17 of "Sacred Economics". It includes things like negative interest, steady economic degrowth, resource backed localized currencies & credit, and basically a transformation from the old money paradigm to a synergistic web of more suitable alternatives.

He's been posting the chapters for free at the Reality Sandwich blog and I believe it is the next chapter due to be posted. The only problem is that it all sounds WAY too logical to overcome the psychological hurdles of the status quo. The good news is that he points out much of it is already happening. Hopefully he's correct in saying that it wont so much be a violent knee jerk/collapse as it will be a metamorphasis.

Toby said...

Hi FP! That's the $64,000 trillion question, and while like Cool Breeze I'm all for Eisenstein's tentative road map (these things have to be hammered out) the existence of many such road maps does not a summer make. That is, no amount of pontificating, however well intentioned or eloquent, or even bang on the money, can amount to anything until we start doing. When will we consciously begin, in our millions, to be the change we want to see in the world? How many of us are ready to make that step? Right now the numbers are small but growing, so there are grounds for cautious optimism. Check out this interview of Eisenstein by Michael Ruppert (full of very useful information):

Ah, the clitoris. That wondrous thing. It does not surprise me at all that man has surmised its constitution and role incorrectly, and I agree with you as to how portentous it is to 'realise' this error at this stage of the game. Very dramatic, very appropriate.

As to the way things morph under our efforts to explain and understand, I had the famous "World and mind arise together" quote that has so influenced me. And yes, we can't see the details of the collapse, which I believe to be well underway only I can't prove it (could be projection on my part), it's not totally invisible I feel. The Western paradigm is at least identifiable, and there is literature and philosophy to read and imbibe that can get the western mind out of certain loops and offer different perspectives. In that way our collapse can be perceived/detected. There are other ways I'm sure, but I take your point. We are it. The tongue cannot taste itself.