Has Money Become Obsolete?

This article, L’argent est-il devenu obsolète ? from Monday’s Le Monde is astonishingly similar to some of the core material of Sacred Economics. It is wonderful to see these important ideas spreading. Translation by Al Evans.

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.


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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11 Responses to Has Money Become Obsolete?

  1. aniahavah says:

    It seems to me, all we have to do world-wide is change our mind. We can continue to use the systems we have in place and the people in their current jobs. The shift that will turn our economy right-side-up is a simple change of heart – where we work to serve our customers, rather than exploit them for our own profit.

    The people staffing “United Health Care” which I am a member of, simply need to, en masse, reverse the energetic flow of business from pleasing bosses to providing good health care to its members. Well functioning systems and organizations don’t need to collapse, but to have a change of heart in the people who work in them – honoring their integrity and service more than making money for the company – and trusting in the process.

    • A change of heart, yes. And then, built on top of that change of heart, a money system that isn’t constantly in opposition to integrity and service. Since money derives its value from our agreements (about the interpretation of symbols), then why couldn’t we create a money system that rewards integrity and service? Well, we can! That’s what this book is about: aligning money with what is becoming sacred to us. It isn’t just our attitudes about money that must change though, it is the money system itself.

      • Steve Bean says:

        It would actually be a change of thinking, not of heart. The use of money affects our minds, not our hearts, except perhaps that it distracts us from them.

        I agree with aniahavah that the existing infrastructure, roles (jobs), and necessary behaviors could continue absent money in the mix. Why do you believe that some form of money is necessary, Charles? It’s like telling deaf people that sound is necessary or blind people that light is. (That one just came to me. I like it. I’d been trying to find an analogy, but money is so ubiquitous that it’s challenging.)

      • I explain why I think it is necessary in the book (though I would be happy to be wrong) in a couple places. Here is one:

        On the level of a family, clan, or hunter-gatherer band, money is not necessary to operate a gift economy. Nor is it necessary in the next larger unit of social organization: the village or tribe of a few hundred people. There, if I don’t need anything from you now, either you will (acting from gratitude) give me something that I need in the future, or you will give to someone else, who gives to someone else, who gives to me. This is the “circle of the gift,” the basis of community. In a tribe or village, the scale of society is small enough that those who give to me recognize my gifts to others. Such is not the case in a mass society like ours. If I give generously to you, the farmer in Hawaii who grew my ginger or the engineer in Japan who designed my cell phone display won’t know about it. So instead of personal recognition of gifts, we use money: the representation of gratitude. The social witnessing of gifts becomes anonymous.
        Money becomes necessary when the range of our gifts must extend beyond the people we know personally. Such is the case when economic scale and the division of labor exceed the tribal or village level. Indeed, the first money appeared in the first agricultural civilizations that developed beyond the Neolithic village: Mesopotamia, Egypt, China, and India. Traditional, decentralized gift networks gave way to centralized systems of redistribution, with the temple, and later the royal palace, as the hub.

        Here is another:

        In the metahuman body we call society, money is like a signaling molecule that directs resources to where they are needed. It mediates economic relationships among our collective body’s far-flung parts. It is one of many symbolic systems that defines and coordinates our “organs”: governments, institutions, and organizations of all types. Unfortunately, money conveys only certain kinds of information (mostly about quantifiable gifts, needs, and desires). To achieve health, we therefore need other ways of “organ”-izing and coordinating human activity.

        There is another I can’t find, but it has to do with a vision of money as something that ultimately will guide us in the way we direct our gifts. If money is aligned with the good of society and the planet, then it can help align us with that good. For example, what if (unlike today) society places a higher value on cleaning up toxic waste rather than creating more product. We can have a money system in which the former is more lucrative than the latter. Money should be an embodiment of society’s values, so as to align our behavior with those values. It ultimately can help people decide what is necessary.

      • Steve Bean says:

        Charles, I appreciate you finding and sharing those excerpts. I have some questions about a couple statements that you might want to consider.

        “If I give generously to you, the farmer in Hawaii who grew my ginger or the engineer in Japan who designed my cell phone display won’t know about it.”

        Is it true that the farmer won’t (can’t) know about it? (This gets to my earlier contention that it’s about a change of thinking, and also that today we don’t live in a world of mostly isolated tribes and villages.)

        “Money becomes necessary when the range of our gifts must extend beyond the people we know personally. … Indeed, the first money appeared in the first agricultural civilizations that developed beyond the Neolithic village…”

        Why does it become necessary? Do you believe that because it happened in the past it must always be?

        “money is like a signaling molecule that directs resources to where they are needed.”

        Is that true, or is that simply our belief, perhaps our intention? (See my thoughts on the use of money, below.)

        “We can have a money system in which the former is more lucrative than the latter. Money should be an embodiment of society’s values, so as to align our behavior with those values. It ultimately can help people decide what is necessary.”

        How is this different from our current “money system” in which supply and demand influence prices (and investments), which in turn influence spending, and in which government spending presumably aligns with society’s values?

        I’ll try to find that third example so I can better understand how you imagine money being “aligned” a certain way. My current understanding is that the use of money (not money per se) inherently creates incentives (due to its nature as exchange currency and store of value), and that those incentives lead to motivated people exploiting other people, the planet, and other life forms in order to accumulate wealth and (perceived) power at every level–that is, not only by the wealthiest individuals.

        Again, those questions are for your consideration. Of course, I’m happy to discuss any of this further.

  2. Tom Smith says:

    Great article, thanks for sharing.

    Amazed how far we’ve come when things like this are in Le Monde..

  3. Debra says:

    As I tell Toby from time to time, I am not really sure that “money” is our problem.
    After all, the way it “works” or doesn’t work is the reflexion on what we BELIEVE it to be, to do, not to be, etc.
    Since you have a quote from “Le Monde”, I will bring up a 1995 book by Dominique Meda, called “Work, a disappearing value” (original title, before she got too much flak about it, and had to change it to “Work, a disappearing value ?”).
    Meda is a French social scientist/philosopher who gives a generalist perspective on the history and PHILOSOPHY behind work.
    What surprises me in her book is that she does not make an extremely important distinction (in MY book…) between work for money, and work that is outside the monetary system.
    I believe that work INSIDE the monetary system WORKS to the extent that work OUTSIDE the monetary system is recognized and perceived as HAVING VALUE (which is obviously NOT MONETARY VALUE if it is outside the monetary system.)
    I will say the same thing to you as I would like to say to Dominique Meda.
    Money and work have been intricated since the Protestant Reform.
    We are now at the point where we are, in a moralistic fashion, decreeing that MONEY MUST COME FROM WORK, and ONLY from work.
    This… idolatrous exclusion is, in my opinion, what is destroying BOTH our relationship to money, AND TO WORK.
    This rather petty moralism is putting an extremely heavy burden on WORK AND MONEY. Work FOR MONEY, since it is supposed to be… OUR SALVATION. Salvation for all of us ADULT men and women.
    At the same time that work FOR MONEY has become our salvation… MONEY has become the measure of all things. Logical, since money measures work, which is.. OUR SALVATION.
    I work FOR FREE. In my home, at a local library.
    By working for free, I can not “earn my living”, but since somebody is GRACIOUS enough to give me the money I need to live, I can work for free.
    I believe that the illness is at least dual : money.. AND work…
    So, we will have to change our attitudes about work, in order to fix money.
    By the way, I also happen to believe that rampant egalitarianism, as a disorganized religion is also an ENORMOUS part of our problem.
    Sorry about all those capitals, but as Toby would agree, I am a rather flamboyant, excessive person…

    • I agree that the solution isn’t to abolish money, but I think that the fact that such an idea appears in Le Monde is significant. It shows that a deeper level of solution is coming onto the radar screen.

      • Zap says:

        Hello, this article is pretty old but i hope you still follow the comments.
        Have you seen The Venus Project and what it advocates? They predicted decades ago the collapse of ‘money’ – and it seems their predictions may soon be proven right.
        What do you think of their other ideas?

  4. Debra says:

    This morning I stuck onto Toby’s blog, “Econosophy and Other Musings”, where we are having a rollicking good time thinking and discussing together (very rare on the Web, I must say…), my current conviction on our problem(s).
    Much observation, and much thought leads me to believe that the biggest problem lies in the way we are living (or should I say.. NOT LIVING ??) our daily lives.
    I believe that we need a revolution.
    But.. NOT A REVOLUTION like the French one, which gave French society a hangover from which it has not yet recovered (nor like… THE REFORMATION, another major revolution which is still sending out shock waves into our modernity).
    A revolution in.. OUR HEARTS, MINDS, AND SOULS.
    Like, in France where I am living, 9 people out of 10 gripe constantly about how cold people are in daily life, how impersonal, and uncaring.
    But… those 9 are waiting for SOMEBODY ELSE to say the first word, be the first person to smile, etc.
    It simply doesn’t occur to them that THEY could be the first person TO TAKE AN INITIATIVE.
    In such a context, abolishing money, as A BIG SOLUTION, will not necessarily have effects on those 9 people. They will still find something to gripe about, and we will have the motor for our next.. UTOPIA. (I think that the best utopias are the ones that remain utopias, without many well intentioned people trying to realize the kingdom of heaven on earth.)
    Up until now, we seem to have constantly believed that it is possible to legislate the kingdom of heaven ? paradise ? We seem to believe that we will ultimately find a way of GETTING BACK INTO THE GARDEN.
    But… what if we started thinking that we NEVER LEFT THE GARDEN ?
    What would happen then ??
    This may sound rather abstract and philosophical, but I am a firm believer that our ideas are constantly visible in our daily lives, which in turn, influence our ideas.
    A table is NOT.. just a material object…

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