Why Money at All?

Here is an excerpt from a comment on Chapter 7 posted on Reality Sandwich.

I am a 64 year old hippie. The flower children knew capitalism was dead. Its demise has been painful to say the least. Free is what it is, has been, and will be. Freedom is movement and flexibility. Yoga saying-the same energy free creates ecstasy, and when blocked creates disease and suffering. Coupla hints from the sixties-Money doesn’t talk, it swears[Bob Dylan] More men will rob you with a pen than with a knife[Woody Guthrie] Do we really want to train these innocent beautiful children of the future to play with money? They are content with free and giving freely.

I offered the following response: ” We certainly don’t want to train children to play with money-as-we-know it. But what if money were something profoundly different than it is today? That is what this book describes. How can we align money with what is becoming sacred to us? We are so used to associating money with the destruction of all that is good, true, and beautiful — and with good reason! But ultimately, money is a social agreement. What if the nature of that agreement changed, so that it rewarded and encouraged, or you could even say, so that it guided us toward, actions that serve the good of society and the planet? Oh, and I offer you and all the hippies a deep bow.”

As this comment demonstrates, our intuitions about money are deeply conditioned by what money has been in our experience. It has been a force for scarcity, for greed, for the denial of our dreams, for the ravaging of the biosphere, and for the exploitation of other cultures. At the same time, it has been necessary for our survival in this society, and, it would seem, for the acquisition of much we desire. Thus we bear a deeply fraught ambivalence toward money, wanting it and hating it at the same time. No wonder we would have done with it.

The transformation of money that I describe in Sacred Economics is so profound as to turn the intuitions of the Age of Usury on their head. What if money were a way to help you distinguish what choice served the greater benefit of all beings? What if it were an embodiment of society’s gratitude for your gifts? What if it were no longer based on debt and no longer an agent of our enslavement?

Many ancient cultures — universally gift cultures — believed that a spirit traveled along with the gift, a spirit that compelled reciprocation to the giver or to the community, an enforcer of flow. Made famous by Mauss with his description of the hau of Maori culture, it is an immaterial spirit, intangible yet powerful. In its non-materiality and power, the hau is much like money, or at least it points to what money could be. As electronic bits it is indeed quite nearly immaterial, existing in the realm of symbol. When you part with a gift, it is gone, leaving only its immaterial imprint — some symbols inscribed on paper or saved on a computer. And, again like the hau, it has the power to compel flow, to guide gifts back to the one who has given them.

Money today is failing us, causing a stagnation in the flow of gifts, and hence a horrendous concentration of wealth in fewer and fewer hands. Its failure offers us an opportunity to restore money to the spirit of the gift, and make it a suitable plaything for the free children of the future.


About Charles Eisenstein

I am the author of The Ascent of Humanity and Sacred Economics. I am also a public speaker and member of the faculty of Goddard College.
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5 Responses to Why Money at All?

  1. Jim says:

    Sorry to contradict, Charles, but “we,” collectively, have developed an ambivalent attitude toward money — not simply “associating money with the destruction of all that is good, true, and beautiful,” but also assuming that the control of money means the control of life. Some take the latter aspect as a motivating challenge, while others feel themselves to be victims of this scheme.

    As we move to shift the definition of money and its role in our lives and our culture, we must also face healing and re-evaluation of the stories we’ve created around money — the heroic and satisfying as well as the tragic and painful — so we can begin a new story based on more realistic assumptions.

    — Jim-el

    • Contradict? How dare you!
      Actually I agree, that not everything associated with money is ugly. One thing I admire is the entrepreneurial spirit, which is related to the motivating challenge you mention. Also, many people today are using money in beautiful ways. This is another reason why I don’t advocate, as my commenter does, the abolition of money, but rather a transformation into something that we can glimpse even today.

  2. Toby says:

    I don’t advocate the abolition of money either, but certainly a path that, though perhaps not followable to its end, has as its direction the end of money, its steady demotion down to the smallest role possible. This idea is in your book, but, to my eyes, not sufficiently conspicuously. 😉

    I am over half-way through “Sacred Economics” and find it full of treasure, but perhaps it contains insufficient internal logic to ‘prove’ money is a beautiful thing at heart, and that complex society needs it to organize large scale projects between strangers, e.g. to build a multi-billion dollar microprocessor factory. To touch on the latter first: Many complex projects are organized and sustained today without money, such as Linux, and other open source projects. I don’t see why, in the right conditions and in the right paradigm, a huge factory could not also be built without money-incentives. As to beautiful, why is instant repayment of a gift beautiful? Doesn’t payment end the flow, depersonalize the exchange? I don’t pay people for the gifts they give me at Christmas. Why should it be beautiful to do so at other times? If you give me a loaf of bread because you have too many, why is it beautiful for me to pay you for that on the spot? Why not keep the bond alive?

    Marshall Sahlins (in Stone Age Economics) defines three degrees of reciprocity: open, generalized and negative. Open reciprocity is gift giving with no expectation of return (though return can happen); generalized is e.g. a treaty or other agreement which is transparent and mutually beneficial to both parties — neither profits at the other’s expense. Negative, which is reserved for the Alien Other, is market trading, and means profiting at The Other’s expense; subterfuge, information asymmetry and deception are allowed, necessary even. This is not a beautiful reciprocity. Isn’t money necessarily attached to negative, or market-based reciprocity? Isn’t profit likewise so attached?

    Nevertheless, I agree with you that we cannot abandon money. However, since money is a story, a different story which excludes money might be possible. I cannot rule out that some (admittedly unlikely) sequence of events shows humanity how silly money is, and a new story to live without it emerges as that realization dawns. It would take maybe generations (to be exact!), but as a clearly perceived direction to pursue it is not beyond the realms of possibility.

    That said I think we will always have money (how vacillating I am!), because money is about punishment and reward, which are necessary parts of being, of nature, of trial and error, of life. Something consensus-based to deal with value-judgment with some unit of account or other, will always be there. In some ways language, a medium of exchange, does this. However, such a money might be so different from today’s–by which I mean our perception of money today–as to be unrecognizable to most of us.

    The appendix blew my mind, by the way. Money in two places at once to explain FRB. Great analogy!

  3. Great comment. First, I do believe that over a long time span, we will no longer have something that we would recognize today as money. Another way to see the degrowth economy I describe in the book (which means degrowth in the realm of monetized goods and services) is that it is a gradual replacement of money with other means of coordinating the flow of gifts. It is impossible to predict, but I think we’ll see degrowth of about 2% a year; in other words, a halving of the money economy with each generation.
    The open source movement is certainly part of this, and it does offer a possible model (one of many) for a moneyless economy. One might object that it is “subsidized” by the external money economy that surrounds it; one might also object that because it deals primarily in non-scarce goods (digital products) that its model is of limited applicability to the material economy. But I believe it is extremely significant.
    I’m quite familiar with Sahlins’ work. One way to see what is happening is that the third degree of reciprocity is becoming obsolete as we realize our interdependency and become all one tribe on earth.
    One more thing: money can also act as kind of a signaling molecule in the meta-human collective organism that guides us toward the best application of our gifts when they extend beyond the personal or community realm. Ideally, a high price for a certain activity should embody society’s valuing of that activity. So as it becomes important to society to clean up toxic waste dumps or convert damaged land to permaculture, such activities should be highly remunerative. Money can guide us toward socially beneficial uses of our time. Today it pretty much does the opposite, but that’s a different story. Multicellular organisms have ways for cells to signal what they need, and the multi-humuan organism needs the same. This is one way to define money,which allows for it to be something very different from what we know today. It could eventually evolve into some kind of “reputation currency” as happens in the open source world. There is still, however, the problem of marrying non-scarce currencies with a world of finite resources.

    • Toby says:

      On my way to work this morning I made it to the bottom of page 319 (of Sacred Economics). The last thing I did at work was to type out my comment and questions above, having previously ‘decided’ not to pester you with the questions therein until I’d finished the book. Maybe you’d addressed them in there somewhere. But the post “Why Money at All?” kinda begged me to lay them out here. So I did.

      Then I got on the train and read pages 320 and 321. Basically you answered everything I asked in those two pages. I rushed to my laptop to let you know you’d already addressed my questions before I’d asked them, but the network was down. I cooked supper for my wife and two girls, fixed the network problem, and came straight your site. You’ve just answered the questions again. Sorry, Charles. Ah, the impatience of middle-aged men with a new-found passion! My mid-life crisis is a passion with the money system, and what it might be. None of my teachers could have predicted that!

      I love the signaling molecule analogy too. Wonderfully, money can only only work in that decentralized way after we’ve freed it from the grip of the Money Power. An exciting prospect.

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