... transition - the hard labour phase, just before actually giving birth...
And where is our monetary economy in all of that?
Smart Money
From our cashless past, author Charles Eisenstein finds future solutions
By Rosette Royale
Assistant Editor
Want to know how to make more money in 2012? Easy. Monitor your holdings so you can sell losers and buy into big trends. Stop diversifying your investment portfolio, since owing too many funds ensures mediocre results. And don’t fall for below-average price/earnings multiples and price-to-book values because cheap stocks can be a recipe for disaster. Sounds like great advice, huh?
Perhaps it is, if you subscribe to Forbes Magazine. After all, those were the top three tips in its 2012 investment guide, which appeared in the same issue as its list of top 20 private companies in the U.S. (In case you’re wondering, agribusiness giant Cargill, with estimated sales of $109.6 billion, was No. 1.) All this and more can be gleaned in the magazine’s year-end special edition “The 20 New Rules of Money.”
These days, most people would agree our society needs new rules for money. Foreclosures, student loans, living wages, double-dip recession, tax-and-spend, bust-and-boom, bull market/bear market, debt ceilings, trade deficits: We’re awash in a world where money seems to rule our lives. But what if that could change? What if our concept of money changed? Author Charles Eisenstein wondered the same. So he researched old and new economic theories and wrote a book. He called it “Sacred Economics: Money, Gift and Society in an Age of Transition.”
With a clear and compassionate tone, Eisenstein describes how our troubled relationship with money has caused our economic system to teeter like a blindfolded behemoth balancing on stilts made of chopsticks. He ties our concept of a mark, a yen, a buck and a pound to the unparalleled scarcity many experience. And he relates how so-called rational philosophies of money have endangered our planet.
But he doesn’t stop there. Eisenstein proposes ways to find stable footing. Some notions, such as replacing debt-bearing interest with negative interest, sound preposterous while others, like local and gift economies, sound naïve.
Eisenstein practices what he preaches: all the thought-provoking information in “Sacred Economics” can be read for free online at: realitysandwich.com/homepage_sacred_economics.
His prescriptions for how to achieve a healthier economy, and the evidence of why these ideas could work, are so well-reasoned, they might convince Warren Buffett to give up his $39 billion Nebraska home. Or at least allow some of us to move in with him rent-free.
Eisenstein made a few stops in the Seattle area in early January. A few days before his arrival, we chatted by phone. In a wide-ranging conversation, we talked about what money is and isn’t, the notion of the sacred, the gift of cell phone cameras, the Occupy movement and how we can create a revolution founded on love.
I’m going to start with a very broad question: How would you define money?
You know, almost any definition of money gets you into trouble. The only one I usually work with is it’s an agreement among human beings that gives value to something. Sometimes I also define it as a kind of magic, the embodiment of a story we use to create things in the social realm. It’s a way to coordinate human activity so you can define roles between different people.
You know, the usual economist’s definitions of money — a medium of exchange, stored value, unit of account — those are more about what money does, not what money is. But I think that to even say money is a thing leads people into error. People have all kinds of different definitions about what money is, but it’s really not a thing: It’s a relationship.
You used the word “story.” How do story and money relate to each other?
When I talk about a story, I’m talking about a system of interpretations or a system of meanings that tell us what’s valuable or what’s real. Anything that you want to do in this social reality depends on convincing other people to do it, or bringing other people along with you to do it. The way that we communicate with other people is largely through symbols — words, numbers, books — and money is among them. Let me give you an example.
You want to build a house. Why is the cement truck going to show up on Tuesday morning with cement for the foundation? That would be an insane act if there weren’t the story of the house that includes schedules and contracts and lists of materials. The story of the house includes money as part of it, because the agreements that give money value are part of our cultural stories, the story that we call America. There is no objective thing that is America. A squirrel runs back and forth across the border all the time and doesn’t know whether it’s in Canada or the United States, because this thing only exists because of the shared agreements, interpretations, meanings. Money is like that, too. It’s attached to other stories that create our whole civilization.
The title of your book is “Sacred Economics.” So how do you define the sacred?
It’s not something that has this extra-material spirit imbued into it. That’s an obsolete understanding. We know something is sacred when we can see its uniqueness and its relationships. So you might have some special object that your grandmother gave you that’s sacred to you — say it’s her wedding ring. It might be identical to another wedding ring made of the same materials — the same width, same weight and everything — but to you, that one is special. It’s sacred because it came from your grandmother. It has all kinds of other associations, the same way we can see a giant sequoia or some huge tree as sacred, especially if that tree is where you had your tire swing as a kid, and it’s connected to other people and beings you’re connected with. But when the tree has been cut down and converted into board feet, sent to a lumber mill, and then you buy those boards at Home Depot, those aren’t sacred anymore. It becomes a commodity. It doesn’t matter, generally speaking, where it came from. It has no more history; it has no connections.
And our whole economy has become commoditized and ruled by money, which also has no history. It’s valuable, no matter where it came from, no matter what horrible things happened to make that money, whether your friend gave it to you as a present or whether you stole it from your worst enemy, it still has the same value. And that’s very different from the things that human beings used to live with. Everything that you lived with a few hundred, a few thousand years ago was either made by yourself or someone you knew very well. So we lived in a much more intimate world. And so that’s what I’m talking about when I talk about sacred.
How can we heal this disconnection and alienation living in a monetized world where almost everybody we interact with is a stranger? You go to the store and interact with strangers. A stranger made your house, your clothes, grew your food, sang your songs. That is a profound aberration, historically speaking. I know your newspaper is distributed in large part by homeless people. In a way, people who are poorer in money are richer in community, because they don’t live as much in this standardized, commoditized world.
In the intro you said your book is going to describe “a more beautiful world based on a different kind of money and economy.” So, please, please, please tell me, what kind of economy, what kind of money will create a more beautiful world?
That takes some doing. That’s why I wrote a whole book. But people, understandably, have a very negative impression about money and what it does. That’s because money is responsible for a lot of horrible things. And in the book I ask, “Why?” Why have we agreed to make it a force for evil? Why have we agreed that you can get paid a lot of money cutting down forests, but you can’t make a lot of money planting forests? Why have we agreed you can get a lot of money by forcing people off their land and onto plantations that are unsustainable, but there’s not a lot of money in permaculture? Why did we set it up that you can make a lot of money opening liquor stores in the inner city, but you can’t make a lot of money teaching people to garden in the inner city?
So I investigate: What is it about money that makes it a force for evil? The answer’s not really that simple, but one of the big things is that it’s created through interest-bearing debt, which means that essentially there’s never enough: We’re always in competition with each other, whether we want to be or not, and money is always scarce. There’s always more debt than there is money, and everyone, generally speaking, is under pressure in some way to pay off debts. And this also drives endless economic growth.
[The book] sets up some of the solutions of what money would look like if it didn’t have interest. There’s about six or seven main pillars of the vision, and one of them is negative-interest economics, one of them is internalization of external costs, another is localization, another is peer-to-peer and gift economics.
So let’s talk about a gift economy. How would it work?
It’s already happening, actually. One way is through couch surfing or Craigslist. People using the Internet often will just offer something they don’t ask money for. When this is done in a community, this strengthens a community, because you see that what you give is going to people who are also giving to people that you know, and eventually it comes back to you. And the more that you enter into gift relationships with people, the more you come to depend on each other. You don’t get this independence you have when you have a high income — “I don’t need anybody, I can just pay people for anything I want.” Now you actually need people. So it can happen locally, just like in old-time small towns, or it can happen globally. A lot of things we used to pay for are now becoming free because of the Internet. Music, for example: It was free a hundred years ago, because everyone sang their own songs. Then it became intellectual property. But now you don’t really have to pay for music if you don’t want to, and the amount you do have to pay is less and less, even if you scrupulously abide by all the laws.
I write all my books on open-source software: People make it and put it out there as a gift. Journalism happens largely for free, when people use their cell phone cameras, like when people got pepper sprayed at UC Davis. That news was not found by a professional journalist paid to be there. So that’s part of a gift economy too.
What it means is we’re able to satisfy more of our desires and needs without money. And that means there is less need and potential for economic growth. And that means that the money system is going to continue its crisis, because the money system [needs] growth.
But some say it’s illegal to just get music you want to hear. Or that it’s really great to have professional journalists because they know journalistic ethics.
I don’t think we’ll necessarily see the demise of professional journalism, but probably a shrinkage in its extent. A lot of things that professional journalists did are now being done democratically. Maybe the way they are compensated will be different.
To say that you’re compensated: That says you don’t really want to do your work, so we’re going to make up for it by giving you money. Economics says that it’s good that we have scarce money otherwise people wouldn’t have any motive to work. But I can tell just by talking to you that even if you were a billionaire, you’d still be doing this work, because you like it. I imagine you don’t get paid a huge salary.
Oh, I’m a millionaire.
You’re not doing it for the money. Almost no one who’s doing really great, exciting, dynamic things is doing it for the money. We can have a vibrant, productive, wealthy world without having to induce people, through money, to do what they don’t want to do.
One of the other pillars you mentioned, negative interest: How does that work?
The hardcore economics approach is that you institute a liquidity tax on federal reserved deposits. Today, part of the economic problem is that banks have vast reserves, but they’re not lending them out to businesses that will make productive investments and hire employees. They would rather keep the money at low interest in a very safe investment than lend it out. But if holding that money came with a penalty, then they would be happy to lend it out, even if they weren’t going to get a positive return on that investment. And this is a proposal that’s been floated by some pretty heavyweight economists. It’s not a half-baked idea, but it sounds like a half-baked idea.
For hunter-gatherers, possessions were a burden. In early agricultural societies, if you stored up a lot of grain, it would get eaten by rats and go bad. So if you were a super competent farmer and fabulous hunter: How do you stay wealthy? In early societies, you gave away as much as possible. You created this reservoir of gratitude in your society. So then if you broke your ankle and couldn’t farm or hunt, there’d be lots of people who’d like to take care of you, because of all the contributions you made. So in those societies, wealth came through giving.
The reason was you couldn’t hold onto wealth. If you tried, it would decay. And that’s a law of nature. Everything returns to its source. But money is different: You can hold onto it in perpetuity and it’ll grow all by itself. It’s very different from grain, from meat, or pretty much anything in the natural world. And that’s pretty much the vision we’ve created between the human and natural realm: We think we humans can operate under different rules. So to make an economy more aligned to logical principles, we have to make money align with logical principles. It has to decay. And then wealth will no longer be a matter of how much can I control or how much can I keep for myself, and I’ll only share it if you give me even more. And if you don’t, I’ll sue you.
You have this YouTube video called “The Revolution is Love” about Occupy Wall Street. I can imagine what you mean by that title, but what kind of revolutionary love are you talking about?
First, let me say, Ian McKenzie came up with that title. He’s a filmmaker from Vancouver, so I want to give credit where credit is due.
Usually, when we think of revolution, we think of bringing down the bad guys. And there’s a lot of that, even in the Occupy movement — the stuff about the 1 percent and greedy bankers and corporate executives. And the idea is that these awful people are in charge and “If I were in charge, I wouldn’t do those things.” So it’s very judgmental.
But in the rare occasions where a revolution is successful in bringing down the powers that be, what happens is a new 1 percent materializes and perpetrates the same atrocities, maybe in a different way. The judgmental mentality that says, “I’ll never do that” is wrong. If you were in that position, you would, because those positions and those institutions have their own logic. And I think it’s important to remember, even among the bankers, even among the corporate executives, those are divine human beings, too, who really want to do the right thing, who want to participate in the creation of a more beautiful world. And when we look at the system and other people with those kinds of eyes, we’re moved to different strategies and different kinds of actions. I think that people who would otherwise be our opponents would be a lot less defensive, if we’re not coming from “You guys are awful,” and “We’re going to tear you down,” and “What’s wrong with you?” but rather to come with the attitude of “I know this isn’t really working for you either. You’re not meant to spend your life maximizing market share. You’re not meant to profit off of the degradation of other human beings. That’s beneath you. You’re better than that. And maybe you’re afraid to leave your position behind, and you’ve been bedazzled by the fake promises of monetary wealth. But we see that you’re waking up from that.” Because I don’t think there’s any hope in overcoming the powers that be with force. They’re much more powerful in terms of force. A deeper revolution invokes the power of love.
I think “We are the 99 percent” is a great slogan. But occasionally I say, “We are the 100 percent. We are all of us.” It’s all of us together. We all have to figure it out together. I think everybody’s coming along in this transition.
This transition?
Well, we’re facing a transition. All of our systems, all of our institutions are breaking down. It’s not just money: The ecosystem, medicine, education is in crisis, the criminal justice system, politics is paralyzed. So we’re facing a multitude of crises, and I see them as a birth crisis. We’re in a transition into a very, very different world, a very different civilization. You can describe that in a lot of ways, but one of the ways is a civilization that is no longer seeking to defeat or conquer or transcend nature. We can’t escape the effects of our actions on the planet. We have to devote ourselves to the well-being of all beings. That’s at the core of it. We’re kinda rejoining the community of life.
~ Real Change News - Smart Money Interview
For myself, I am searching for the way to live in alignment with the notion of a gift economy, with a moneyless society grounded in a resource-based economy. It is possible and people are starting to do it in different places around the world. The Zeitgeist Movement and the Venus Project are exploring these ideas. Robert Theobald put forward the notion of having full unemployment and all people being paid a guaranteed basic income. Buckminster Fuller talked about us having all the resources and technology we need to no longer have to compete for anything... that the future was the age of collaboration...
ALL THIS IS POSSIBLE NOW...
WE JUST HAVE TO WANT IT
AND TO MAKE IT HAPPEN
WE JUST HAVE TO WANT IT
AND TO MAKE IT HAPPEN
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