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.