Sacred Economics
These are the raw clippings from my e-reader of the book Sacred Economics from Charles Eisenstein. A must-read for those who want to enhance their understanding on an issue that is often neglected.: No structural change in the current patterns of exploitation is possible without a new kind of money. A zero or negative interest money is not sufficient but a necssary pillar in the comprehensive series of measures that the author suggests to move to a much more “sustainable” society. Eisenstein goes as far as envisioning a way to “transition” to this new sacred society in a just and peaceful way.
The book was written in 2010 and highglights very well both the causes of the financial crisis of 2007-2009 and the perverse remedies adopted to keep the economy alive. The author was predicting the crisis to resurface after 4-5 years, but still somehow the system is artificially propping itself up. I wonder what Eisestein is thinking now of the possibility of a soft transition….
Note: the clippings give a flavor of some of the key concepts but do not give any info about the structure of the book. Therefore they are a very poor substitute for it. Yet….
(current money’s attributes of) eternal preservation and everlasting increase, both of which are profoundly unnatural.
changeless. Money’s divine property of abstraction, of disconnection from the real world of things, reached its extreme in the early years of the twenty-first century as the financial economy lost its mooring in the real economy and took on a life of its own. The vast fortunes of Wall Street were unconnected to any material production,
So when I speak of making money sacred, I am not invoking a supernatural agency to infuse sacredness into the inert, mundane objects of nature. I am rather reaching back to an earlier time, a time before the divorce of matter and spirit, when sacredness was endemic to all things.
And what is the sacred? It has two aspects: uniqueness and relatedness.
What is this “home that was always there,” this “truth that has always existed”? It is the truth of the unity or the connectedness of all things, and the feeling is that of participating in something greater than oneself, yet which also is oneself. In ecology, this is the principle of interdependence:
If the sacred is the gateway to the underlying unity of all things, it is equally a gateway to the uniqueness and specialness of each thing.
Fortunately, as the old world falls apart, our knowledge of what is possible expands, and with it expands our courage and our willingness to act. The present convergence of crises—in money, energy, education, health, water, soil, climate, politics, the environment, and more—is a birth crisis, expelling us from the old world into a new.
I dedicate all of my work to the more beautiful world our hearts tell us is possible.
In the beginning was the Gift: in the archetypal beginning of the world, at the beginning of our lives, and in the infancy of the human species. Gratitude therefore is natural to us, so primal, so elemental that it is very difficult to define. Perhaps it is the feeling of having received a gift, and the desire to give in turn. We might therefore expect primitive people, connected with this primal gratitude, to enact it in their social and economic relationships. Indeed, they did.
gifts flow continuously, only stopping in their circulation when they meet a real, present need.
Unlike a modern money transaction, which is closed and leaves no obligation, a gift transaction is open-ended, creating an ongoing tie between the participants.
Gifts embody the key qualities of the sacredness I discussed in the introduction. First, uniqueness: unlike the standardized commodities of today, purchased in closed transactions with money and alienated from their origins, gifts are unique to the extent that they partake of the giver.
Second, wholeness, interdependency: gifts expand the circle of self to include the entire community.
It is ironic indeed that money, originally a means of connecting gifts with needs, originally an outgrowth of a sacred gift economy, is now precisely what blocks the blossoming of our desire to give, keeping us in deadening jobs out of economic necessity, and forestalling our most generous impulses with the words, “I can’t afford to do that.”
In nature, headlong growth and all-out competition are features of immature ecosystems, followed by complex interdependency, symbiosis, cooperation, and the cycling of resources. The next stage of human economy will parallel what we are beginning to understand about nature.
It will call forth the gifts of each of us; it will emphasize cooperation over competition; it will encourage circulation over hoarding; and it will be cyclical, not linear.
greed is not written into our biology but is a mere symptom of the perception of scarcity.
In fact, we are going to make do with more: more beauty, more community, more fulfillment, more art, more music, and material objects that are fewer in number but superior in utility and aesthetics.
The cheapness of our things is part of their devaluation, casting us into a cheap world where everything is generic and expendable.
When everything is subject to money, then the scarcity of money makes everything scarce, including the basis of human life and happiness. Such is the life of the slave—one whose actions are compelled by threat to survival.
For the animal, child, or hunter-gatherer, time is essentially infinite. Today its monetization has subjected it, like the rest, to scarcity.
Time is life. When we experience time as scarce, we experience life as short and poor.
Money: its functions, such as medium of exchange, unit of account, and store of value.
I believe that the next step in the evolution of human money will be not a return to an earlier form of currency, but its transformation from an unconscious to an intentional embodiment of our agreements.
characteristics that make money unique. Among them are that it is both concrete and abstract, that it is homogeneous, impersonal, a universal aim, and a universal means, and that it is unlimited.
standard sign that wipes out variations in purity and weight. Quality is not important, only quantity. Because money is convertible into all other things it infects them with the same feature, turning them into commodities—objects that, as long as they meet certain criteria, are seen as identical.
“promotes a sense of homogeneity among things in general.” All things are equal, because they can be sold for money, which can in turn be used to buy any other thing.
In the commodity world, things are equal to the money that can replace them. Their primary attribute is their “value”—an abstraction. I feel a distancing, a letdown, in the phrase, “You can always buy another one.” Can you see how this promotes an antimaterialism, a detachment from the physical world in which each person, place, and thing is special, unique?
One manifestation of this spirit-matter split that gives primacy to the former is the idea, “Sure, economic reform is a worthy cause, but what is much more important is a transformation of human consciousness.” I think this view is mistaken, for it is based on a false dichotomy of consciousness and action, and ultimately of spirit and matter. On a deep level, money and consciousness are intertwined. Each is bound up in the other.
homogeneity of money accompanied the rapid development of standardized commodity goods for trade.
Just as money homogenizes the things it touches, so also does it homogenize and depersonalize its users: “It facilitates the kind of commercial exchange that is disembedded from all other relations.”
Unlike other objects, money retains no trace of its origins and no trace of those through whom it has passed.
Money is therefore not only a universal aim; it is a universal means as well, and indeed it is largely because it is a universal means that it is also a universal end, of which one can never have too much.
I will not advocate the abolition of money. Money has exceeded its proper bounds, become the means to attain things that should never be infected by its homogeneity and depersonalization; meanwhile, as we have universalized it as means, those things that money truly cannot buy have become unattainable, and no matter how much money we have, we can obtain only their semblance. The solution is to restore money to its proper role. For indeed there are things that human beings can create only with money, or with some equivalent means of coordinating human activity on a mass scale. In its sacred form, money is the implement of a story, an embodied agreement that assigns roles and focuses intention.
The reason that no amount of money can ever be enough is that we use it to fulfill needs that money cannot actually fulfill.
enslaved to their money? When the primary function of money is as a medium of exchange, it is subject to the same limits as the goods for which it is exchanged, and our desire for it is limited by our satiety. It is when money takes on the additional function of store-of-value that our desire for it becomes unlimited. One idea I will therefore explore is the decoupling of money as medium-of-exchange from money as store-of-value. This idea has ancient roots going back to Aristotle, who distinguished between two kinds of wealth-getting: for the sake of accumulation, and for the sake of meeting other needs. The former kind of wealth-getting, he says, is “unnatural” and, moreover, bears no limit.
Looking out upon the strip mines and the clear-cuts and the dead zones and the genocides and the debased consumer culture, we ask, What is the origin of this monstrous machine that chews up beauty and spits out money? The discrete and separate self, surveying a universe that is fundamentally Other, naturally treats the natural and human world as a pile of instrumental, accidental stuff. The rest of the world is fundamentally not-self. Why should we care about it, beyond our own foreseeable utility?
the idea of property occurs quite naturally to the separate self.
The urge to own diminishes as our sense of connectedness and gratitude grows, and we realize that our labor power is not our own, and what I make is not properly mine. Is not my ability to labor, and my life itself, a gift too? In that realization, we desire to give our creations to all that have contributed to our being and granted us the gift of life.
Can we instead create an economic system that liberates, celebrates, and rewards the innate urge to give?
a system that rewards flow and not accumulation, creating and not owning, giving and not having.
“Property is robbery,” proclaimed Proudhon: tracing back the origin of any piece of property through a succession of “legitimate” transfers, we eventually get to the first owner—the one who simply took it, the one who separated it off from the realm of “ours” or “God’s” into the realm of “mine.” Usually this happened by force, as in the seizure of the vast lands of all North
We need an economic system that disallows profit-by-owning
Can we reward those who put resources to best use without rewarding the mere fact of ownership?
There must be exclusive right of possession of land, for the man who uses it must have secure possession of land in order to reap the products of his labor. But his right of possession must be limited by the equal right of all, and should therefore be conditioned upon the payment to the community by the possessor of an equivalent for any special valuable privilege thus accorded him. Why should someone profit from the use-value of land by the mere fact of owning it, especially when the origin of that ownership is based on ancient injustice?
the public ownership of all land, available for private leasing at a rate that would approximate the economic rent.
that the right to profit from mere ownership of money is just as illegitimate as the right to profit from the mere ownership of land.
money is deeply and irretrievably implicated in the conversion of the land commons into private property, the final and defining stage of which is its reduction to the status of just another commodity that can be bought and sold. So too have other elements of our natural and cultural bequest been cordoned off, turned into property, and finally, as “goods and services,” into money. This is not to say that it is immoral to work for money; it is, rather, immoral for money to work for you. What rental is on land, so interest is on money. Money is the corpse of the commons, the embodiment of all that was once common and free, turned now into property of the purest form. The next several chapters will substantiate this claim, describing exactly how and why interest-bearing money, by nature, usurps the commons, ruins the planet, and reduces the vast majority of humanity to peonage.
“A patent is a device that enables one man to claim special financial rewards for being the last link in the complicated social process that produced the invention.”
The same is true of songs, stories, and all other cultural innovations.
After it has been so long manipulated, chopped up, habituated to intense stimuli, and jerked around from one lurid but empty object to another, our attention is so fragmented we cannot sustain it long enough to create anything independent of the programs that surround us. We lose our capacity to sustain thought, understand nuance, and put ourselves in another person’s shoes. Susceptible to any simplistic narrative with immediate emotional appeal, we are easy targets not just for advertising, but for propaganda, demagoguery, and fascism. In various ways, all of these serve the money power.
Social capital refers primarily to relationships and skills, the “services” that people once provided for themselves and each other in a gift economy,
The monetization of social capital is the strip-mining of community.
The commoditization of social relationships leaves us with nothing to do together but to consume. Joint consumption does nothing to build community because it requires no gifts.
The propertization and privatization of the economic realm leaves us, to coin a phrase, helplessly independent—independent of anyone we know, and dependent on impersonal, coercive institutions that govern from afar.
nearly every good and service available today meets needs that were once met for free.
The money system we have inherited will always compel us to choose growth over leisure.
Money has facilitated the development of a metahuman organism of seven billion cells
However, the anti-interest money systems I will propose and describe in this book are not motivated by mere morality. Interest is more than just the proceeds of a crime, more even than the ongoing income from a crime already committed. It is also the engine of continued robbery; it is a force that compels us all, however kind in our intentions, into willing or unwilling complicity in the strip-mining of the earth.
The true culprit, the true puppet-master that manipulates our elites from behind the scenes, is the money system itself: a credit-based, interest-driven system that arises from the ancient, rising tide of separation; that generates competition, polarization, and greed; that compels endless exponential growth; and, most importantly, that is coming to an end in our time as the fuel for that growth—social, natural, cultural, and spiritual capital—runs out.
the source of evil in our world is beyond conscious human agency. There are puppet-masters, but they are systems and ideologies, not people.
usury, better known as interest.
use the power of ownership to gain even more
how competition, insecurity, and greed are woven into our economy because of interest.
Because of interest, at any given time the amount of money owed is greater than the amount of money already existing. To make new money to keep the whole system going, we have to breed more chickens—in other words, we have to create more “goods and services.” The principal way of doing so is to begin selling something that was once free. It is to convert forests into timber, music into product, ideas into intellectual property, social reciprocity into paid services.
The imperative of perpetual growth implicit in interest-based money is what drives the relentless conversion of life, world, and spirit into money.
credit exchanges not just “goods now for goods in the future,” but goods now for more goods in the future.
To service debt or just to live, either you take existing wealth from someone else (hence, competition) or you create “new” wealth by drawing from the commons.
Without wealth redistribution, social chaos is unavoidable in an interest-bearing, debt-based money system, especially when growth slows. Nonetheless, wealth redistribution always happens against the resistance of the wealthy, for it is their wealth that is being redistributed. Economic policy therefore reflects a balancing act between the redistribution and preservation of wealth, tending over time toward the minimum amount of redistribution necessary to maintain social order.
Increasingly, debts become inescapable, a lifelong claim on the labor of the debtor, who occupies a state of peonage.
Only when the legal system and the legitimacy of the state begin to fall apart is personal debt repudiation possible. Such unraveling reveals money and property as the social conventions that they are.
In theory, countries with a resilient domestic economy and resources to barter with neighbors can simply default on their sovereign debts. In practice, they rarely do. Rulers, democratic or otherwise, usually ally themselves with the global financial establishment and receive rich rewards for doing so.
first bribes to rulers, then threats, then a coup, then, if all else fails, an invasion. The goal is to get the country to accept and make payments on loans—to go into debt and stay there.
In the old days, military power and forced tribute were the instruments of empire; today it is debt. Debt forces nations and individuals to devote their productivity toward money.
the time of debt repudiation may be closer than we think. The legitimacy of the status quo is wearing thin, and when just a few debtors repudiate their debt, the rest will follow suit. There is even a sound legal basis for repudiation: the principle of odious debt, which says that fraudulently incurred debts are invalid. Nations can dispute debts incurred by dictators who colluded with lenders to enrich themselves and their cronies and built useless megaprojects that didn’t serve the nation. Individuals can dispute consumer and mortgage loans sold them through deceptive lending practices. Perhaps a time is soon coming when we will shake off our burdens.
A final way to redistribute wealth is through inflation. On the face of it, inflation is a covert, partial form of debt annulment because it allows debts to be repaid in currency that is less valuable than it was at the time of the original loan. It is an equalizing force, reducing the value of both money and debt over time.
inflation is usually accompanied by rising interest rates,
To have inflation, the money must be in the hands of people who will spend it. Is money that no one spends still money?
Our Newtonian-Cartesian intuitions see money as a thing; actually, it is a relationship. When it is concentrated in few hands, we become less related, less connected to the things that sustain and enrich life.
What ordinary people fear is price inflation without wage inflation.
If both prices and wages rise, then inflation is essentially a tax on idle money, redistributing wealth away from the wealthy and counteracting the effects of interest.
inflation is more a consequence or symptom of wealth redistribution than a means to achieve it
ideologies of our civilization that I call the Story of Self and Story of the World. But we can’t just change our attitudes about money; we must change money too, which after all is the embodiment of our attitudes. Ultimately, work on self is inseparable from work in the world.
The money system we have today is the manifestation of the scarcity mentality that has dominated our civilization for centuries. When that mentality changes, the money system will change to embody a new consciousness. In our current money system, it is mathematically impossible for more than a minority of people to live in abundance, because the money creation process maintains a systemic scarcity. One man’s prosperity is another man’s poverty.
The present crisis is the final stage of what began in the 1930s. Successive solutions to the fundamental problem of keeping pace with money that expands with the rate of interest have been applied, and exhausted. The first effective solution was war, a state that has been permanent since 1940. Unfortunately, or rather fortunately, nuclear weapons and a shift in human consciousness have limited the solution of endless military escalation. War between the great powers is no longer possible. Other solutions—globalization, technology-enabled development of new goods and services to replace human functions never before commoditized, technology-enabled plunder of natural resources once off limits, and finally financial autocannibalism—have similarly run their course. Unless there are realms of wealth I have not considered, and new depths of poverty, misery, and alienation to which we might plunge, the inevitable cannot be delayed much longer.
capital began a desperate search for other ways to maintain its expansion.
To maintain the exponential growth of money, either the volume of goods and services must be able to keep pace with it, or imperialism and war must be able to escalate indefinitely.
Yet even abandoning this folly, we still must face the depletion of fuel (remember, I mean not literal energy sources, but any bond of nature or culture that can be turned into a commodity). Most of the proposals for addressing the present economic crisis amount to finding more fuel. Whether it is drilling more oil wells, paving over more green space, or spurring consumer spending, the goal is to reignite economic growth—that is, to expand the realm of goods and services. It means finding new things for which we can pay. Today, unimaginably to our forebears, we pay even for our water and our songs. What else is left to convert into money?
aggregated over the totality of the social, natural, cultural, and spiritual commons, the basic argument of Peak Oil remains valid. Instead of Peak Oil, we are facing Peak Everything.
“What is the most beautiful thing I can do?”
you have wealth now, I recommend, as your investment advisor, that you use it to enrich the people around you in lasting ways.
capacity to coordinate our activities and focus our common efforts.
Money is merely a social agreement, a story that assigns meaning and roles. The classical definition of money—a medium of exchange, a store of value, a unit of account—describes what money does, but not what it is. Physically, it is now next to nothing. Socially, it is next to everything: the primary agent for the coordination of human activity and the focusing of collective human intention.
no financial or economic reform can possibly work that does not include a new kind of money. The new money must embody a new story, one that treats nature not only as a mother, but as a lover
We will still have a need for money for a long time to come because we need magical symbols to reify our Story of the People, to apply it to the physical world as a creative template.
The essential character of money will not change: it will consist of magical talismans, whether physical or electronic, through which we assign roles, focus intention, and coordinate human activity.
“From each according to his abilities, to each according to his needs.” This is a good description of any gift network, whether a human body, an ecosystem, or a tribal gift culture.
This desire of an assurance of return, a compensation for the risk of generosity, is the fundamental mind-set of interest, an adolescent mind-set to be superseded by a more expansive adult self that has matured into full membership in the community of being.
We are here to express our gifts; it is among our deepest desires, and we cannot be fully alive otherwise.
And so, as humanity faces the coming-of-age ordeal of the present crises and transitions into adulthood, a new economic system is emerging that embodies the new human identity of the connected self living in cocreative partnership with Earth. Our economic system and money system will no longer be agents of taking, of exploitation, of the aggrandizement of the separate self. They will instead be agents of giving, of creation, of service, and of abundance.
The money of the future will be backed by the things we want to nurture, create, and preserve: by undeveloped land, clean water and air, great works of art and architecture, biodiversity and the genetic commons, unused development rights, unused carbon credits, uncollected patent royalties, relationships not converted into services, and natural resources not converted into goods. Even, indeed, by gold still in the ground.
Generalized, the principle is, “The use of any thing for money will increase the supply of that thing.”
opportunity to infuse some consciousness into our choice of money. It is time to ask ourselves what collective story we wish to enact upon this earth, and to choose a money system aligned with that story.
This sacred ecomomy will bear the following characteristics: It will restore the mentality of the gift to our vocations and economic life. It will reverse the money-induced homogenization and depersonalization of society. It will be an extension of the ecosystem, not a violation of it. It will promote local economies and revive community. It will encourage initiative and reward entrepreneurship. It will be consistent with zero growth, yet foster the continued development of our uniquely human gifts. It will promote an equitable distribution of wealth. It will promote a new materialism that treats the world as sacred. It will be aligned with political egalitarianism and people power and will not induce more centralized control. It will restore lost realms of natural, social, cultural, and spiritual capital. And, most importantly, it is something that we can start creating right now!
A sacred economy is an extension of the ecology and obeys all of its rules, among them the law of return. Specifically, that means that every substance produced through industrial processes or other human activities is either used in some other human activity or, ultimately, returned to the ecology in a form, and at a rate, that other beings can process.
Why do I call such an economy “sacred” rather than natural or ecological? It is because of the sacredness of gifts. To obey the law of return is to honor the spirit of the Gift because we receive what has been given us, and from that gift, we give in turn. Gifts are meant to be passed
From an atheistic perspective, a zero-waste economy is the economic realization of the interconnectedness of all beings. It embodies the truth that as I do unto the other, so I do unto myself.
because you and I are not fundamentally separate. The internalization of all costs is simply the economic embodiment of that principle of interbeingness:
What is property but a social agreement that a certain person has certain rights to use something in certain prescribed ways? Property is not an objective feature of reality, and to reify it and make it into something elemental, as both capitalistic and communistic theory do, is to unconsciously enslave ourselves to the story that contains it
the essential purpose of government—is to serve as the trustee of the commons.
protective reverence for nature induces, on the individual level, the same reverent attitude toward the things we make from natural raw materials.
In a world where the things we need and use go bad, sharing comes naturally.
Money today, however, is not like bread, fruit, or indeed any natural object. It is the lone exception to nature’s law of return, the law of life, death, and rebirth, which says that all things ultimately return to their source.
We associate money very closely with self. As the word “mine” implies, we see our money almost as an extension of our selves, which is why we feel “ripped off” when it is taken from
Money, then, violates not only the natural law of return, but the spiritual law of impermanence.
This deep link between money and being is good news because human identity today is undergoing a profound metamorphosis. What kind of money will be consistent with the new self, the connected self, and a world in which we increasingly realize the truth of interconnectedness: that more for you is more for me? Given the determining role of interest, the first alternative currency system to consider is one that structurally eliminates it, or even that bears interest’s opposite. After all, if interest causes competition, scarcity, and polarization, then might not its opposite create cooperation, abundance, and community? And if interest represents the proceeds from the ancient and ongoing robbery of the commons, might not its opposite replenish it?
the larger process of which decay is part: renewal, rebirth, recycling, and the spiraling evolution toward more vastly integrated complexity.
It is time to reclaim the beauty and necessity of decay,
use paper currency to which a stamp costing a small fraction of the note’s value had to be affixed periodically. This effectively attached a maintenance cost to monetary wealth.
But today, as in Gesell’s time, money is preferred to goods. The ability to withhold the medium of exchange allows money holders to charge interest; they occupy a privileged position compared to holders of real capital (and even more so to those who sell their time, 100 percent of which disappears each day it goes unsold). The result is an increasing polarization of wealth because everyone essentially pays a tribute to the owners of money.
Gesell advocated currency decay as a device for decoupling money as a store-of-value from money as a medium of exchange. Money would no longer be preferred to physical capital. The result, he foresaw, would be an end to the artificial scarcity and economic depression that happens when there are plenty of goods to be exchanged but a lack of money by which to exchange them.
There is little room in any highly developed economy for further domestic growth. The solution for at least twenty years has been, in effect, to import growth from developing countries by using the monetization of their social and natural commons to prop up our own debt pyramid.
Another option would be to ban official physical currency altogether, which could vastly increase the power of government since every electronic transaction could be recorded. Frightening as that is to those (including myself) who are wary of the surveillance state, my response to that concern is, “Too late.” Already today nearly all important transactions are done electronically anyway, with the notable exception of those involving illegal drugs.
Moreover, there is no reason why unofficial currencies shouldn’t thrive alongside the official, negative-interest electronic currency.
Generally speaking, money lost to demurrage must be injected back into the economy; otherwise the level of reserves would shrink every year, regardless of the need for money to facilitate economic activity. The result would be the same pattern of defaults, scarcity, and concentration of wealth that threatens us today.
that people should not be able to profit from the mere fact of ownership. Holders of wealth are its caretakers, its stewards, and if they do not put it to socially beneficial use, then eventually that wealth should flow away to others who will.
crisis is the inevitable slowing of growth, and given that we are transitioning to an ecological, steady-state economy, decaying currency proposals offer more than a temporary fix for a stagnant economy; they promise a sustainable, long-term foundation for a permanently nongrowing economy. Historically, economic contraction or stagnant growth has meant human misery: economic polarization, a sharpening of the divide between the haves and the have-nots. Free-money prevents this from happening by providing a way for money to circulate without needing to be driven by growth-dependent lending.
What would happen if debt were monetized into free-money? Then, although creditors would not lose their money overnight as they do with defaults or systemic financial collapse, the bailout wouldn’t further enrich them either, because they would receive a depreciating asset. As for the debtors, the monetary authority could reduce or annul their debts by any amount it thought appropriate (which would likely be determined through a political process).
We may have no choice but to rescue the wealthy, for each part of the global economy is connected to all the others, but let that rescue come at a price: the gradual freeing of society from debt.
Amid all the technical details of money and finance, let us not lose sight of the heart of this endeavor: to restore money to its true purpose as a connector of gifts and needs and as a magical talisman that coordinates human creativity toward a common end. It feels strange to say that money is a key part of the more beautiful world my heart tells me is possible, because money has long been repellant to me as an obvious cause of so much ruin and evil. However, our repugnance toward money is based on what money has been, not on what it could be. Negative-interest money, backed by things that are sacred, in an ecological economy, turns the intuitions of the Age of Usury on their head. It is utterly revolutionary, fundamentally altering the human experience. This transformation reverberates across all levels, from outer to inner, from the economic to the spiritual.
The internalization of external costs works synergistically with decaying currency to make money a force for good. The former aligns private interest with public interest; the latter promotes long-term thinking over short-term thinking.
The equivalent in modern economics of “universal means” and “universal end” are “medium of exchange” and “store of value.” (…) combining these two functions into a single object begs trouble because a medium of exchange needs to circulate to be useful, while a store of value is kept (stored) away from circulation.
This contradiction has, for centuries or more, created a tension between the wealth of the individual and the wealth of society.
The zero-interest loans in a free-money economy are analogous to the gifts of yore. While such loans may appear to violate the gift principle that the reciprocal gift not be specified in advance, they are gifts: gifts not of money but of the use of money.
All that is needed is a money system that encourages, rather than deters, that generosity. No miraculous change in human nature is necessary.
The scarcity of money has aggravated their conversion into money. It is an attitude of scarcity, not of abundance, that has led to the depletion of our natural commons. Competition and the accumulation of more than one needs are the natural response to a perceived scarcity of resources. The obscene overconsumption and waste of our society arise from our poverty: the deficit of being that afflicts the discrete and separate self, the scarcity of money in an interest-based system, the poverty of relationship that comes from the severance of our ties to community and to nature, the relentless pressure to do anything, anything at all, to make a living. In contrast, the natural response to an atmosphere of abundance is generosity and sharing.
Free-money embodies the spiritual teachings of abundance, interconnectedness, and impermanence. These teachings, however, present a truth that is in conflict with the world we have created through our beliefs, in particular that set of beliefs that composes the story of money. It is time to get used to a new world, in which we no longer try to get rich by keeping, by hoarding, by having. It is a world in which we are rich by giving.
Unfortunately, collapse scenarios involve immense suffering: hundreds of millions or billions of casualties. Moreover, they involve the erasure of the entire edifice of civilization, the good along with the bad.
at every opportunity, we have chosen to produce more rather than to work less.
Internalization of costs redirects the flow of money, and the flow of human activity, away from consumption and toward the sacred. Negative interest money allows investment to go to uses that don’t generate even more money than went in and ends the discounting of the future. However, these measures alone may not be enough because some of the work necessary for the healing of the world is fundamentally uneconomic.
The question, then, is how to create conditions that allow people to do important work that does not generate an economic return. As with redistribution of wealth, there are essentially two ways. One is the social dividend I have described, which exists today in dilute form as stimulus checks, tax credits, welfare payments, and so forth. This gives people the economic freedom to pursue activities that no one will hire them to do (because they won’t generate income for an employer) and that produce nothing salable. The second way to foster noneconomic work is for the government (or other entity) to pay people to do the beautiful and necessary things that we have come to value.
At stake are two competing visions of human nature, and therefore two visions of how to run society. One says, “Free people from economic exigency, and they will do beautiful work.” The other says, “Provide beautiful work, and use economic exigency to induce people to do it.” The first trusts people’s natural desire to create and their capacity to self-organize; the second puts the decision of how to allocate human labor into the hands of policy makers. I think that both will have a place for a long time to come, and that eventually, as political processes become more inclusive, grass-roots, and self-organizing, the two will merge into one.
“When do I get to live my life, not the one I’m paid to live?”
human beings naturally desire to give. We are born into gratitude: the knowledge we have received and the desire to give in turn.
A sacred economy is one that liberates our desire to work, our desire to give.
To the extent we live in a world that runs on the labor of many people doing jobs that are beneath human dignity, not just in airports of course, but in factories, sweatshops, plantations, and nearly everywhere else, we live in a slave world.
A proper community, we should remember also, is a commonwealth: a place, a resource, an economy. It answers the needs, practical as well as social and spiritual, of its members—among them the need to need one another. The answer to the present alignment of political power with wealth is the restoration of the identity of community and economy. —Wendell Berry
A sacred way of life connects us to the people and places around us. That means that a sacred economy must be in large part a local economy, in which we have multidimensional, personal relationships with the land and people who meet our needs, and whose needs we meet in turn. Otherwise we suffer a divide between the social and the material, in which our social relationships lack substance, and in which our economic relationships are impersonal.
homogenization of culture.
Much global trade is only economic because of hidden social and ecological subsidies, which would be eliminated by the internalization of costs. Commons-backed currency relocalizes economic power since many of the commons are local or bioregional in nature. Negative-interest money removes the pressure to maintain growth through the conversion of the unique, local relationships and natural wealth of other lands into commodities.
the localization of money itself.
Local economy faces us with the consequences of our actions, tightening the circle of karma and fostering a sense of self that includes others. Local economy is therefore aligned with the deep spiritual shift of our time.
Local currencies are viable only to the extent that producers are making goods and services that are consumed locally by people who themselves produce locally consumed goods and services.
Import replacement cannot happen if local producers must compete with unrestricted, cheap imports. That is why such an economy can only manifest as an intentional choice motivated by a new Story of the People that generates shared vision, values, and goals. In other words, it will happen only through some form of democracy, popular action, and a government that responds to the will of its people rather than the will of international banks, investors, and the bond market.
A common question when we meet each other is, “What do you do?” “What do you need?” or “What can I do for you?” Beyond the meeting of immediate needs, you can see from this description the power of time banks to restore community. They generate the kind of economic and social resiliency that sustains life in times of turmoil. As money unravels, it is important to have alternative structures for the meeting of human needs.
When time-based currency replaces monetary transactions, it is a great equalizing force in society. The danger is that time currency can also end up transferring formerly gift-based activity into the realm of the quantified. The future, perhaps, belongs to nonmonetary, nonquantified ways of connecting gifts and needs.
The development of mutual-credit systems is extremely significant, for credit essentially represents a society’s choice of who gets access to money and how much
Ultimately, what economics attempts to measure, underneath money, is the totality of all that human beings make and do for each other.
assume that we can and should quantify the good, and that in order to do so, we must convert everything into a standard unit of measure. Money and measure are indeed closely intertwined.
Money, which facilitates the meeting of our quantifiable needs, will have a place in human life for many centuries to come. It will occupy a diminished role, however, as I described in the chapter on degrowth. Instead of obsessively fulfilling and overfulfilling our finite needs to the present degree of obscene hypertrophy, we will turn our energy to the unmet qualitative needs that so impoverish us today. To meet our unquantifiable needs, we need nonmonetary circulation. When the qualitative is matched with the quantitative, the infinite to the finite, then the former is debased. The exchange of beauty for money, intimacy for money, attention for money—all smell of prostitution.
Whether or not money is involved, the fundamental issues of economy—what people make and do for each other—are these: (1) how to connect the provider of a gift with the person who needs that gift; (2) how to acknowledge and honor those who give generously of their gifts; and (3) how to coordinate the gifts of many people across space and time in order to create things transcending the needs or gifts of any individual.
cardinal functions of money: medium of exchange, unit of account, and store of value.
As money aligns with social and ecological good, and as new structures arise that reward contribution to the commonwealth, the relationships around work will lose their spirit of mutual exploitation. The raison d’être of business organizations will shift. Quantifiable contributions to the good of society and the planet will receive monetary reward, and unquantifiable contributions will accrue rewards of status, gratitude, and goodwill mediated through the new social and symbolic structures emerging today.
the model of wealth from owning will give way to that of wealth by giving.
- NEGATIVE-INTEREST CURRENCY
- ELIMINATION OF ECONOMIC RENTS, AND COMPENSATION FOR DEPLETION OF THE COMMONS
Shifting the tax burden away from labor and toward property will become more and more attractive as wage earners’ situations become desperate.
\3. INTERNALIZATION OF SOCIAL AND ENVIRONMENTAL COSTS
\4. ECONOMIC AND MONETARY LOCALIZATION
\5. THE SOCIAL DIVIDEND
\6. ECONOMIC DEGROWTH
\7. GIFT CULTURE AND P2P ECONOMICS
Each aspect of the monetary evolution described in this book imbues money with the properties of gift: Over time, giving and receiving must be in balance. The internalization of ecological costs ensures that we will take no more from earth than we can give. The source of a gift is to be acknowledged. The restoration of the commons means that any use of what belongs to all is acknowledged by a payment that goes to all. Gifts circulate rather than accumulate. Decaying currency ensures that wealth remains a function of flow rather than of owning. Gifts flow toward the greatest need. A social dividend ensures that the basic survival needs of every person are met.
gift consciousness.
Gratitude, moreover, arises not just from the receiving of gifts, but also from their witnessing. The generosity of others moves us toward generosity ourselves. We desire to give to those who are generous. We are moved by their openness, by their vulnerability, by their trust. We want to take care of them.
the obligations and commitments that arise from gifts and their expected requital are a glue that holds the society together.
most gifts were social in nature.
We can feel the absence of that social glue today. In the logic of me and mine, any obligation, any dependency, is a threat. Gifts naturally create obligations, so, in the Age of Separation, people have become afraid to give and even more afraid to receive.
Part of living in the gift is to recognize and abide by the obligation to receive as well as to give.
“To refuse to give, to fail to invite, just as to refuse to accept, is tantamount to declaring war; it is to reject the bond of alliance and commonality.”
When gratitude inspires a return gift, we must not give it too quickly, or it becomes a mere transaction, not so different from a purchase. Then it cancels out obligation rather than tying giver and receiver more closely.
To fully receive is to willingly put yourself in a position of obligation, either to the giver or to society at large.
I usually do not advocate heroic, abrupt transitions. If you are wealthy, perhaps a good way to gently adopt nonaccumulation is to apply demurrage to your own accumulated wealth right now, shrinking it by about 5 percent per year. It is going to happen anyway in a sacred economy—why not start living it now?
To the holders of wealth, I invite you to think in terms of what you will create through collective human agency. Or, how can you use money in the most beautiful way?
I believe the universe will return to us what we have given, perhaps in some other form, perhaps, indeed, multiplied a hundredfold. Ultimately, then, the essence of nonaccumulation lies in the intention with which money is given, lent, invested, or saved. In the spirit of the gift, we focus on the purpose and let the return to ourselves be secondary, an afterthought.
We have lived our lives by the assumption that what was good for us would be good for the world. We have been wrong. We must change our lives so that it will be possible to live by the contrary assumption, that what is good for the world will be good for us. And that requires that we make the effort to know the world and learn what is good for it. —Wendell Berry
Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community. —Andrew Carnegie
The challenge of excess wealth is to give of it in a way that is beautiful.
Upon death, we take with us only what we have given.
Today, investing is what people do to preserve their wealth. In a sacred economy, it is what we do to share our wealth.
If interest-generating investments are fundamentally unethical, contributing to the despoliation of the natural and social commons, then obviously we should not invest money at interest. The same goes for any investment that drives the expansion of the realm of goods and services. As socially conscious investors, you don’t want to contribute to the monetization of life and nature. There is no escape from this principle.
When we are embedded in gift community, we naturally direct our gratitude not only toward the proximate giver but toward the community as a whole, and we take care of its neediest members (gifts seek needs).
shift the focus of investment toward using accumulated money as the gift that it is: a gift from the old world to the new, a gift from the ancestors to the future.
Those who possess an accumulation of money have, at their disposal, the means to focus and organize society’s labor.
The increase of money can come only at the cost of the nonmonetized realm, but the expenditure of money can restore that realm as long as that expenditure is not an investment that seeks the further commodification of the social or natural commons.
using money to destroy money. By this I mean to use money to restore and protect the natural, social, cultural, and spiritual commons from which it was originally created.
In a subtle way, any endeavor that shrinks the money realm draws on gifts. If you offer reskilling courses, train holistic healers, or teach permaculture, you are ultimately shrinking the realm of goods and services.
self-righteousness. The purpose of right livelihood is to give your energies toward something you love.
The attitude of the giver, in contrast, says, “I will give you this gift—and I trust you to give me what you think is appropriate.” If you give a great gift, and no gratitude results, then perhaps that is a sign that you have given it to the wrong person. The spirit of the Gift responds to needs. To generate gratitude is not the goal of giving; it is a sign, an indicator, that the gift was given well, that it met a need.
it feels wrong to charge money for my work, it feels fine to accept money from people who feel grateful for having received it. The degree of gratitude is unique to each person. I cannot know in advance how valuable this book will be to you; even you cannot know it in advance. That is why it is contrary to the spirit of the gift to pay for something unknown in advance.
Gratitude requires an unpaid debt, and we will be motivated to proceed only so long as the debt is felt.
It is important not to make “living in the gift” into a fetish, or into a standard of virtue. Don’t do it in order to be good. Do it in order to feel good.
As long as my gift intention is authentic, I find that the inflow of gifts matches or exceeds the outflow.
Because the return gift comes later, as we step into gift-based livelihood we live for a time in faith.
“Your consultation is a generous gift from someone that came before you. If you would like to gift-forward in that spirit, you can do so however you choose. Monetary or other gifts may be left in the gift box in the Karma Clinic office or mailed to …”
charge money only to cover your own direct costs.
make it clear to the recipient that your time, labor, and expertise are a gift.
“the story of the gift” referenced earlier. Traditionally, gifts were often accompanied by stories that helped the receiver appreciate their value.
unexpected fruits that arise from the mystery
Gift mentality is a kind of faith, a kind of surrender—and that is a prerequisite for miracles to arise.
Actually fear is a guardian, holding us in a safe space in which to grow; you could even say that fear is a gift. Eventually, as we grow, the fears that were once protective become limiting, and we desire to be born.
Ending the struggle to be good also means that giving does not involve a feeling of sacrifice or self-abnegation. We give because we want to, not because we should. Gratitude, the recognition that one has received and the desire to give in turn, is our innate default state. How could it not be, when life, breath, and world are gifts?
As you step into a gift mentality, let your feelings guide you. Let your giving arise from gratitude and not the desire to measure up to some standard of virtue.
We have no community because community is woven from gifts. How can we create community when we pay for all we need?
Community is not some add-on to our other needs, not a separate ingredient for happiness along with food, shelter, music, touch, intellectual stimulation, and other forms of physical and spiritual nourishment. Community arises from the meeting of these needs. There is no community possible among a group of people who do not need each other. Therefore, any life that seeks to be independent of other people for the meeting of one’s needs is a life without community.
The gifts that weave community cannot be mere superficialities; they must meet real needs. Only then do they inspire gratitude and create the obligations that bind people together.
poor people develop much stronger communities than rich people do. They have more unmet needs.
The financially independent person is not bereft of community because he meets all of his needs via money—he is bereft of community because he is not meeting his needs except through money.
Money, impersonal and generic, can by itself only meet needs that are the same. It can meet the need for calories,
In the ubiquitous realm of money, we hunger for all that is intimate, personal, and unique.
I think we will move toward a more ecological way of life by positive choice.
Instead of saying, “Too bad we have to leave our gigantic suburban homes behind because they use too much energy,” we will no longer want those homes because we will recognize and respond to our need for personal, connected, sacred dwellings in tight communities. The same goes for the rest of the modern consumer lifestyle. We will put it aside because we can no longer stand the emptiness, the ugliness. We are starving for spiritual nourishment. We are starving for a life that is personal, connected, and meaningful. By choice, that is where we will direct our energy. When we do so, community will arise anew because this spiritual nourishment can only come to us as a gift, as part of a web of gifts in which we participate as giver and receiver.
Real beauty, which I might call life or soul, goes to the very heart of an object, and it is inseparable from its function, not secondary to the perfection of function.
paradoxical feeling, “This is more beautiful than it has to be, yet it could be no other way.”
It is not that focus on functionality brings about beauty as well; it is that the creative principles and creative spirit that go into making something beautiful are the same that go into making it functional. It starts with the intention to make something the best one can.
Just as society is composed of human beings, so also is the human being a product of the society. Remember the truth of the connected self: we are our relationships.
each object of that economy, each object that human beings create and circulate, must embody connection to all that environs it. Today, ours is an economy of separation:
In comparing objects, we can ask ourselves, “Which of these has more life?” “Which of these is more a mirror of my self?” “Does this object make me feel my humanity is expanding—or contracting?”
A sacred object embodies something of the infinite. It is, therefore, intrinsically antithetical to the commodity, which is defined by a finite list of measurable specifications.
underlying connection between beauty and function suggests a parallel harmony between survival and the expression of our gifts.
“I was suddenly certain that the people who had built that place had done all this deliberately. I felt certain—no matter how peculiar or unlikely it sounds today, as I am telling it again—that they had made that place, knowing that the blue dragonfly would come and sit by me. However it sounds now, at the time when it happened, while I sat on that stair, there was no doubt in my mind at all that there was a level of skill in the people who had made this place that I had never experienced before. I remember shivering as I became aware of my own ignorance. I felt the existence of a level of skill and knowledge beyond anything I had ever come across before”.
Such skill, transcending what we think is possible, is latent within all of us today. The great project of humanity is to recover it, and build a world upon it.
Money’s homogeneity and anonymity (my dollars are the same as yours) therefore make it incompatible with gift principles and with the two features of sacredness I described in the introduction: uniqueness and connectedness. Therefore, I foresee money eventually losing its homogeneity and gaining the capacity to bear with it its history.
Although the effects of negative-interest currency, elimination of economic rents, localization, and a social dividend are indeed revolutionary, the means to achieve them are not. Indeed, they all exist in embryonic form already.
