Sunday, January 19, 2014

Living out of gift

Sitting on the plane coming home on Friday, I found myself next to a Dutch engineer who was determined to enter into conversation. His last and successful gambit was to ask me whether I was enjoying the book I was reading. ''Yes," I replied, thinking if only he would leave me alone to enjoy it!

However, as is often the way with these things, we discovered that we had both met one of the book's oft quoted writers - the economist and monetary theorist - Bernhard Lietaer and greatly appreciated his radical proposals for overhauling our financial and monetary systems.

The book itself was Charles Eisenstein's 'Sacred Economics: Money, Gift & Society in an Age of Transition' that likewise aims to chart pathways through our current dilemmas.

At heart the conflict is between a monetary system that keeps on growing running up against a finite planet; and, a monetary system that, while it grows, is skewed towards allowing accumulation for the few and a destabilising inequality. It is, also, about a financial system that keeps breaking down. If it were a car, we would have long since either traded it in for another or taken it back to the garage and demanded our money back.

Money that ought to be a symbol of a flow of transactions within a real space of making and doing has become a thing to be sought in itself, as an anxious guarantee of security in a world of scarcity. This is not a new phenomenon but an accelerating one. Yet this world of scarcity is, as Eisenstein compellingly argues, a 'social construct' one that we can and should unwind and replace with another, more fruitful and compelling story. The book in essence is a long, practical exploration of Gandhi's observation that we live in a world that has everything we need but not for everything we greed. Meanwhile, most of what we need ought to be gifted rather than bought. The most moving sections of the book are when Eisenstein re-imagines the potential for an economy grounded in gift (as it is now, of course, were we to recognise it - we are all born into gratitude and mature out of our family's, our society's and nature's gifting).

Within this space, there are pressing demands of which the most powerful in my view is that there is simply 'too much money' in our current system, most of it conjured out of air through complex financial transactions that do not occupy the 'real economy' but which, sooner or later, must be translated from abstraction into real things. Thus, both the pressure to monetarise things that used to be free (or modestly priced public goods) such, as for example, bottled water, to convert ever more natural capital into goods (disappearing rainforest exchanged for palm oil plantations); and, 'asset bubbles' as this excess money desperately deludes itself about the 'next big thing', say, property in China!

How do we begin to take money out of the system? To which one answer (agreed on by my Dutch travelling companion and myself) was negative interest. What if there was a disincentive to accumulate capital (and no right to earn 'rent' simply from owning money)? You would have to invest it and the best place to invest it would be in real goods and services that have sustainability over time built into them. A forest investment would not be a short term act of profit maximisation but a long term act of restoration, care and management for the future. You could also 'invest' your money in things that preserved your capital (rather than aimed at 20% returns), for example, community and social enterprises that were building the infrastructure of connection and care that the new world we are creating demands.

Before one objects that 'negative interest' is simply fantasy not only has it been tried before - most compellingly during a series of regional experiments with local currencies during the depressions of the 20s and 30s with remarkable results, but also (too) briefly by the Swedish Central Bank in 2009 (and widely discussed by other central bankers). The only flaw here is that it is being seen as a 'temporary' measure to re-stimulate broken economies rather than part of a long term policy option to change how we see money - not as an abstract store of ever increasing value but once more as a convenient way of circulating flows of transactions through living communities.

As money decays, there is less of it about, so will that not depress economies? But this is to confuse (as we do now) the amount of activity with its quality (and its locality) and the assumption that anything of economic value most be translated into monetary transaction which when you think of it is nonsense. Child birth, rearing, nurturing and commissioning into adulthood is all gift (mostly) and yet is the most important task of home and community making imaginable - the true meaning of economy. Economies exist wherever trusted transaction is possible, and money is only one way of facilitating those transactions.

Less money (negative interest) is only one of Eisenstein's interlocking suggestions that include internalising the social/environmental costs of production that will reverse the flow of globalisation and regionalise economies again, making local currencies viable once more; and, a social dividend that enables everyone to be assured of a minimal level of existence. It is an attractive vision well articulated and argued (mostly) and illustrates a direction of travel that we can take willingly now or will have to fashion more problematically out of the ruins of the old system, now running its course.

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