Money Talks, Bullshit Walks (or, Scarcity: a New Look at an Old Devil)

In Aztec, the notion of deference is regarded as crucial. Consequently, according to Nida, ‘it is impossible to say anything to anyone without indicating the relative degree of respect to which the hearer and speaker are entitled in the community’ (1964:95).
Mona Baker, In Other Words (2011:95)

A friend of mine used the expression that is this post’s title a little while ago, and it struck me as a true statement. As someone concerned with the resource-based economy direction (demoting money and promoting wealth), I recognise that this simple truism deserves my attention, which it has had these last few months. In what follows, I’m going to try and associate the validity of this truism with both capitalism (which is in a state of advanced breakdown in my opinion), and the change of direction humanity is stumblingly bringing about.

When we commit to something, we invest in it. If that investment is to mean something, both to ourselves and those around us, losing what we’ve invested must be painful. Because of money’s importance, when we risk our money investing in something, people recognise that we believe in that something (unless we are compulsive gamblers or otherwise of unsound mind). Thus the risk of losing something valuable causes us to carefully appraise what of our scarce resources we invest in which projects and endeavours. For believers in a resource-based economy, this begs the question: does abundance mean we won’t take anything seriously? Put another way, must things be scarce to be valued?

The most obvious example to help us look at this is air. It is abundantly available and has a price of zero. Accordingly, we might argue, we have treated it rather cavalierly. Only as we have started to notice that its delicate ability to sustain life on earth is threatened by our reckless treatment of it have we begun to try and figure out how to look after it. In other words, as the abundance we earlier perceived doesn’t seem to be the whole truth about air, as scarcity enters the picture, so we treat the item with increasing respect and wisdom. The same, it could be argued, goes for planet earth.

The economy

There is a curious paradox here. Economics presents nature as a subset of the economy (concealed in "other inputs"), as an inexhaustible supply of idle resources to be converted, via labour and machines, into goods and services, then sold as scarce commodities via supply and demand (price discovery) processes. (If this assumption were dropped, perpetual economic growth could not be held to be both desirable and possible.) We might express this as follows: abundance + labour & capital = scarcity. For this to hold, labour and machines must be limiting in some way, a sort of conduit through which idle resources must pass to become goods and services. We might look at this conduit as partly consisting of time; even if we could work 24/7, we have to go to market and have time to consume what we buy there. That is, we can’t only earn and produce, we have to spend and consume too. Society needs time to demand/consume what it supplies/produces, as it were.

Demand is an area of economics which is also abundant, or insatiable. Indeed, economics is the study of how best to distribute scarce goods and services to an infinitely greedy humanity, goods and services which are scarce precisely because humans are insatiably greedy. To expand on the earlier equation then: abundance + labour & capital = scarcity (because of demand abundance). Scarcity is thus inescapable, if we accept this sort of thinking. Scarcity appears to emerge within the pincers of posited abundance. In other words, scarcity and abundance happily coexist in economic theory. They are not mutually exclusive.

Of course, the other reason for scarcity in the price system is that if supply exceeds demand (which might be a definition of economic abundance), price falls to zero (‘I couldn’t give it away!’). Suppliers must limit the amount of stuff they bring to market to keep price/profit as high as possible. In other words, for there to be prices above zero, demand must exceed supply, generally speaking. (Let’s not forget the advertising industry that manufactures artificial demand.) In short, the picture is somewhat clouded, although the simple mechanics sketched above make the necessity of scarcity to the market system very clear.

I have come to think of abundance and scarcity as matters of perception and organisation (again, we mustn’t forget advertising). For example, the question, ‘How much is enough?’ cannot reasonably be answered. There is no specific enough. Against what yardstick of what phenomenon? Happiness (immeasurable)? Health (immeasurable)? Security (immeasurable)? So when dealing with the problems of scarcity and abundance, we are not dealing with absolutes. To draw on the preceding paragraph, abundance need not be about infinite amounts, only amounts that consistently exceed demand. I don’t think economics has quite mastered scarcity and abundance, and by logical extension, value. There is much for us to learn and discover here.

And yet the truth of “money talks, bullshit walks” remains. Should we seek to initiate a resource-based economy at all? How would humans value things if there were more than enough of everything? Look how we’re treating the earth. The Perpetual Growth paradigm says nature can keep on providing idle resources to be turned into ever expanding amounts of goods and services forever, that planet earth can take everything we throw at it (or throw away on it). I’m with those who believe infinite growth (of the economic realm) in a finite system is impossible. Unless we treat the ecosystems which engender and support us with intelligence, wisdom and respect, we have it in our power to destroy ourselves. A better model for envisioning economic activity might look something like this:

  Source: Positive Money/David A Jones

Let’s recap the conundrum. On the one hand, we have the current economic paradigm which sees abundance on the input side and scarcity on the output side. On the other, we have a possible future system which sees scarcity on the input side and abundance on the output side. If the reason we are trashing earth’s ecosystems is because of the flawed assumption of input abundance, does it not follow that we will trash ‘goods and services’ if they are abundant? Not necessarily. It all depends on how we raise our kids, how we educate ourselves, and what we see as the function of ‘goods and services’ in a resource-based economy.

In a RBE, there are no goods and services. There is no market. Things like housing, clothing, computing, communication, energy, travel and education would be available with no price tag and are therefore not goods and services. There can be no consumerism, no ‘I want the latest iGadget’, no keeping up with the Joneses (as we experience them today; there will always be the pursuit of novelty and excitement). A full-on, global RBE is only possible if people really understand the benefit of treating, with wisdom and respect, the systems that make their prosperity possible. That’s the idea, at least. In the way we learned to perceive air as a scarce resource, that treating the air with respect is good for humanity generally, so too can people learn to treat housing, transportation, gadgets etc. with respect, even if there is no private property. As in the current paradigm, there would be no binary choice between absolute scarcity or abundance; humanity would deal with scarcity and abundance from a different mindset.

So what happens to money? I think something like it will still be around, albeit in a vastly different form and with a vastly different role, perhaps unrecognisable to our eyes, perhaps something equivalent to kudos or deference (as in the quote that opens this post). “Money (or some related equivalent) talks, bullshit walks” will still apply. There will be respect, accomplishment, social standing (though not as class-based as today’s), expertise, reputation, and other ‘rewards’ for social contribution. Only, the ‘price’ for losing one or all of them won’t be starvation on the streets.

We might argue that these immeasurable social phenomena will be the new money, the only remaining social currency. They are of course with us today, so are nothing new. They will be scarce and require hard work to build up and earn. People in an RBE will not lightly risk this new money, just as we don’t lightly risk contemporary money. Because we are social animals with strong preferences and dislikes as well as very varied ambitions, this aspect of value and scarcity will never leave us. But the abundance the RBE idea references is a more sensible abundance than that assumed of nature today, and is certainly not some absolute, infinite abundance.

As I have repeatedly stated, an RBE is a direction, not a destination. This article is thus somewhat out of keeping with recent posts. I wanted to return to RBE proper, as it were, because I still believe the direction, which is essentially the prioritizing of human concern and environment in the context of reasonable sustainability, is the only game in town that makes lasting sense. It deserves more attention from more people than it is getting, not because it is a finished idea we can implement tomorrow, but because it is an open idea that is both wise and intelligent, if still in its infancy.