Stones are not money. Poems are not money. I’ve tried them both. Pieces of paper are money though. Especially the ones covered with intricate designs and the face of a famous dead person. We have agreed on that, ‘Yes pieces of paper can be money, poetry and stones cannot’ . We have certified and assigned value to the pieces of paper, the poetry not so much.
We have created entire bureaucratic departments for the purpose of investigating what happened to our money in case someone takes it or if we lose it, they’re called police departments. We have entire business corporations dedicated to tracking our money, where it goes and what it buys, they’re called credit card companies. Money is the highest good, valued above all things. We have built temples to it called banks and we spend most of our time pursuing it or worrying about it. It is our religion.
When we speak about the ’economy’ we invoke our most sacred principles because it has to do with how the money flows. “It’s the economy stupid” was Bill Clinton’s rallying cry that won him the presidency in 1992. Having a job and ‘making money’ is tantamount to being a good person. Reference to the ‘Dow’, (which sounds exactly like ‘Tao’, the ancient Chinese philosophy of balance and harmony) is a ritual of the nightly news shows. ‘The economy’ and ‘the Dow’ are terms that have iconic status and stand like the great pillars of the parthenon supporting our societies and our world view. So let’s take a look at money and see what it’s worth.
For most of our history there was no money and no accumulation of wealth. Everything you owned you carried with you as you moved thru the landscape of your Paleolithic world. Everything you needed you made from scratch on the spot from materials you found in situ, wood and stone, plant fiber and shells from the rivers, animals from the forest. Nobody was rich and nobody was poor. Wealth was in the information you had gathered about the environment, the jokes you could tell after dinner around the campfire, the wisdom you could share, some insight into how the world worked. That made you famous. It was the currency of the time coded and archived in the form of story and dispensed whenever needed, deposits and withdrawals, the Federal Reserve Bank of the time. Stories are what we used to exchange value and bring meaning into our lives 50,000 years ago.
Of course those early tribal humans did not live in isolation. There were other bands nearby and there was trade between them – barter. I’ll give you this buffalo skin for those obsidian stones, I’ll give you two strong chickens and a rooster for 6 good Hickory branches strong enough to make bows. Agreeing to a price was part of the process and a form of socialization. It was a chance to get to know the neighbors. But the main problem with bartering is that the value of two chickens and a rooster is very much in the mind of the beholder as are the 6 boughs strong enough to make bows, therefore the exchange rate was never guaranteed and neither was the exchange. Nevertheless, barter was our first means of assigning value to objects in order to trade them.
Commodity money, on the other hand, used common essential items such as salt or tobacco or seeds as a unit of exchange. It replaced barter because of the convenience of having an exchange rate that everyone agreed to. One example of commodity money is in prisons where things are bought and sold with cigarettes since currency is not allowed. Curiously, back during the days of the American colonies, tobacco was also used as a currency. This idea came from the Indians, of course, who used not only tobacco but wampum (beadwork) as an exchange medium. Chocolate beans (cacao) were used as money by the Aztecs and the Hudson’s Bay Company, during their economic colonization of the Canadien north, created an exchange rate for trade with the Indians that looked like this:
• 5 pounds of sugar cost 1 beaver pelt
• 2 scissors cost 1 beaver pelt
• 20 fish hooks cost 1 beaver pelt
• 1 pair of shoes cost 1 beaver pelt
• 1 gun cost 12 beaver pelts
Coins eventually replaced the commodity because it was much easier to carry around and didn’t smell. It’s value was based on the metal it was made from – silver dollars and gold doubloons. Back in the day, the Romans made coins out of bronze which had a set weight and an intrinsic value – it could be melted down to make tools or weapons.
Then along came representational money. Money that had no value except what you believed it had; just a piece of paper with writing and symbols in some grand fashion and the famous dead person’s face on it. This represented a certain amount of gold or silver which you now owned as attested to by the piece of paper. You were, in fact, entitled to go to Fort Knox and ask for your $20 in gold if you chose to. The US currency was representational money based on the gold standard until 1933 when Congress nullified it
It’s also called fiat money which means it has value simply because the government (and God) says it does. ‘Fiat’ is the Latin word for “let it be done”. There’s no gold or silver backing it up anywhere, it’s value rises and falls based on the confidence people have in their government (and God). Even today, on the American dollar bill, right there in capital letters floating in the sky between the eagle and the all seeing eye; “In God We Trust” it says confidently. Without trust, money as a financial tool doesn’t work so it helps if you can enlist God’s endorsement as well as that of the Federal Reserve Bank. The Federal Reserve figures prominently in the design of the one dollar bill also, appearing overhead on the front side watching over George Washington.
Now we have virtual money, essentially digital data zooming around in the form of numbers inside a computer network connected to other computer networks keeping track of our credits and debits, our stock market purchases and our Amazon orders. You never see anything, only the quiet obsequiousness of the glowing computer screens. That ubiquitous plastic we carry around in our medicine pouch has become money, and with just a touch, in just a flash it’s done, the exchange, the magic has happened.
And the evolution hasn’t stopped there, crypto currency is the latest and most abstract form of money. It has created an entirely new class of currency, a new way of imagining it. By solving a complicated mathematical problem called an algorithm, value is assigned to a person (computer address) that discovered the answer. It’s really hard to do, takes alot of computing power, and the problems get exponentially harder as new crypto coins are mined, so if you can do it, you should get a reward right? That’s called a crypto coin or a bit coin or any one of the many crypto currencies out there. But the point is you can’t just create money willy nilly like the Federal Reserve Bank, it’s got to be difficult in order to have value. The network then records each transaction on an open source block chain which is a piece of encrypted code that is distributed to the millions of people with their millions of computers who are part of that block chain all over the world. No one knows who they are or how to reach them so no one (not even AI) can steal it (theoretically). Got it? It moves seamlessly, effortlessly from one computer to the other anywhere in the world with no bank fee and no oversight and with complete anonymity. The validity of the transaction is maintained by the independent, connected computers all holding the same code. Shared computing, creates the trust for cryptocurrency.
So that’s the history of money. We are really into money, and always have been ever since we invented it 12,000 years ago back in the Fertile Crescent to keep track of the grain coming and going from the royal granaries. It has fascinated and enchanted us as if it were imbued with magical powers. In 1519 Cortez landed on the shores of Mexico with 400 men, 6 ships and 88 horses. Within two years he had defeated the mighty Aztec empire, captured its emperor, Cuauhtemoc, and availed himself of all it’s riches. That story is well told elsewhere and it’s a fantastic one, but at some point in the saga one of the conquered nobles, probably just before he was about to get his head cut off, asked Cortez a question, “What is it that motivates you Spaniards?”. Cortez is said to have replied, “Spaniards have a disease and it is only cured by gold.” The disease has not been cured, however, instead it has become a world-wide pandemic.
“Money, it’s a gas, grab that cash with both hands and make a stash”, said Pink Floyd in their 1973 classic ’Money’. And even though it’s value as an exchange medium is unquestioned, money has one serious liability – you can never have enough of it. It’s very existence implies imbalance and in that way it has affected and infected our civilizations since the time of the Romans and before. Wars were fought for it (and still are). People get divorced, discarded and commit suicide for the lack of it. We build monuments to it: glorious business towers in the middle of our most prestigious cities and two blocks away the street people are living on park benches, discarded by society, demented. Wall Street, the IMF, the Council of Economic Advisers, the World Economic Forum are all top level organizations, they direct the economic currents of out time, they hold together the very fabric of our societies, they see everything in terms of money.
Money has its benefits. It’s a useful servant and has allowed us to grow rich and build empires but it also has a corrosive effect. While we exchange our money for goods and services we also codify our darker urges to control and dominate and accumulate as much money as we can. Not that many people even think about that when they’re shopping at the mall. It’s an enjoyable experience, seeing the shops, deciding on what to buy, making the currency exchange and thank you and walking out with a bag on your arm. But if you follow the flow of money all the way back thru the wholesalers and the dealers and the transporters and the original producers and everybody else who had a part to play in the manufacture of that item, it will end up somewhere that mother nature got robbed and everyone else got paid for robbing her.
Maybe we should re-evaluate our current from of currencies. Are there better ways of doing this? Are there, in fact, other forms of currency that can be used, in reality, not like some wacky urban bohemian poet trying to get a free latte for a poem at the cafe? It seems to me that ‘currency’ is something we imagine. We imagine it to be real, so it is real. What else could we imagine that’s not so prone to engendering greed? Are we afraid to imagine something like that? That might be the first question. I can imagine it and it’s a world very much like the one in which our Paleolithic ancestors lived. I can imagine a world where wisdom and stories are considered treasures and can be traded for goods and services in kind – usually other stories probably, but practical things too. What is a potlatch if not a great helluva party where you give things away to your friends to celebrate how rich you are?
Without money there would be no economy and no means of becoming wealthy and that is the point of it, isn’t it? To better oneself and prosper and isn’t that measured by money? ‘Economy’, is derived from two Greek words that translate as ’household’ and ‘manage’. We use the word economy to describe the production, distribution and consumption of goods as expressed in a currency, the ‘dollar value’. But the economy also implies the individuals, businesses, organizations and government agencies that maintain and guide the process. It also includes the raw materials we take from the earth (called resources in the Economics textbooks) to create the products that we buy and sell. Economy is also work, the work that people do (and horses and cows) and the money invested in those people, horses, cows, robots, what have you. These days machines do most of the work and we just manage them – in the advanced countries anyway. The dividing line between who lives in a first world country and who lives in a third world country is just that. How much labor is being done by human beings laboring away and how much is done by machines. This division of labor is the new caste system. By this standard are ye judged oh nations of the world. If you’ve got robots building electric cars you are first world, if you’re farming rice by hand or maybe with one buffalo in the Mekong delta then you are third world and poor.
If we were ‘managing our household’ in the original Greek meaning of it then that would be really good but in reality we are operating an economic system that is based on continuous growth (capitalism) while we live on a planet that has limited resources. The consequences of that situation are only now coming to bear. We’re going to have to find another planet to exploit or learn how to live sustainably on this one, otherwise the consequences are going to be catastrophic – extinction. That’s what happens when a biosphere is no longer able to sustain a species. It has happened over and over again in the history of the earth and it is happening right now for many species from frogs to insects to birds. And that’s just the animals, who knows what plants are disappearing. For sure the diversity of the biosphere is being reduced, genomes are being erased. Our safety net, our life line, the biosphere that supports us with its complex interaction of all the different organisms is being weakened, by us the humans. Man we are something else, up here on top of the food chain, looking out over everything. What we don’t realize is that we are dependent on all the organisms beneath us on the food chain to stay alive on top of the food chain. We’re not managing this well.
Inventing an economy that doesn’t depend on raping the planet is a project ripe for somebody to take on. Maybe someone like William Kamkwamba, a teenager from Malawi, who built a wind powered generator out of bicycle parts to provide electricity for his village and then got a scholarship to finish his education so he could return home one day and help bring electricity to all of Malawi. Or someone like Muhammad Yunus the Pulitzer Prize winning economist from Bangladesh who came up with the idea of micro-lending to empower people who couldn’t qualify for bank loans. With fifteen or twenty dollars they were able to start up their own businesses whether it was selling their garden produce in the market or weaving on their home loom or some other good idea. They just needed a little boost and the Grameen Bank, which he founded, has issued millions of loans to people (mostly women) to help them get started. Now they have enough money to raise their standard of living: send their kids to school or repair the leaky roof, hook up electricity and have a light and a blender. And not only in Bangladesh but in other countries as well, this system is working.
Just like electric cars and alternative energy took off slowly and built momentum, the benefits of the new economy will gradually become obvious to all. Even the rich capitalists need a stable world to operate in. Nobody wins if everybody loses. More and more people will experience the benefits of a new economy and like it. The great shutdown of 2020 brought more people out into the streets of my neighborhood with their kids and their dogs than I have ever seen before in my life. People were HAPPY. It was weird. One of my neighbors began putting their lawn chairs out by the street in the evening around 4 or 5 o’clock to watch their kids riding their bikes and to visit with their neighbors across the street who were also in their front yard sitting in their lawn chairs watching their kids playing in the street.
Anyways that’s what I think about money.