Friday, April 2, 2010

Money and my need to write

This is a quick sharing of ideas on money. I have not edited this in great detail. I am trying not to get to caught up in that. I am struggling to get my writing flow back – call it writers block. I need to write an editorial for the Cape Times on money and I need to get my thesis going. So, please recognize that this is more an exercise in writing then an actually constructed paper.


I recently attended the first of hopefully many Next Economy Dialogues sponsored by both the Cape Times and the Department of Economic Development. It was an interesting conversation with some key words and ideas being expressed. Yet, I was haunted by one element to all of the ideas, especially those that actually proposed something – from increased infrastructure investment to the green economy to executive pay and dual economies. It assumes two things 1) that these elements are in one sense disconnected – that we can operate with an idea of two economies but not look at the relationship that exists between them and undoubtedly reinforces them – it is a classic dualistic framework. The second issue I have is 2) that the discussion operates from an assumption that the "laws of economics" are fixed and given – essentially natural – and that it is about finding the right combination of variables to allow the capitalist economy to manifest in all its glory, a glory hidden beneath the badly aligned variables; basically capitalist economic laws are a given and we need to find a way to enable them to operate which will result in increasing equality, rising standards of living and a form of happiness and contentment.

This doesn't surprise me; this is often how it is. We assume the system, which identifies the problems, which means we know what the solution is – to enable the assumed system to more fully operate. Where is the relationship in all of this? These problems that we identify are they independent of the system? Does the actual system have anything to do with the creation of these problems? Can the system operate without these inequalities? Can it operate in a way that will be sustainable and holistic? Can it operate in a way that it will guarantee every new entrant into this life a decent place to live to eat to pray and clothes to wear? Why do we assume this system can do this?

I ask this question not to say that this system can't – though I tend to believe that it can't, certainly not in the long term – provide what it promises. But, I think that if we are going to try and solve the problems of this country, South Africa  (which is really just a microcosm of the global picture) then we need to integrate the elements (the variables) not in isolation but in relationship, but not from within the system but from a vantage point that can more objectively look at it. I guess trying to be an alien in your own reality. What happens if we drop the assumptions – that money needs to be created through private banks, that individuality is primary or that the economy is an expression of the natural unfolding of the kernel of capitalism, that the economy is separate from the politics? I am not sure that I am making my point. So, let me try and bring it into my thoughts around money.

You see for me, one of the elements that are often assumed is that of money. It is assumed that its form is in its most advanced stage, that the elements that dominate its creation and reproduction are the best and most viable forms. Money is viewed as a problem, yet is the thing we all want. It is viewed as abundant by some but its quantity is controlled by a system of elite banks (though, my belief is this power of banks is slowly eroding with the rise of virtual currencies and mobile phones). There are so many contradictions to money that we could fill a whole book with the lists. Yet, there is one fundamental question that rarely seems to get asked – it doesn't get asked by Vavi at COSATU, I don't hear Bobby Godsell talking about it when he mentions value and I don't hear Minister Patel saying anything about money when talking about green economies.

This is both strange and not surprising, yet it is important because (taking us back to our earlier discussion of what creates the problem) the question of the creation of money doesn't actually come into the discussion. The assumption might be that we need to expand financial services or create new credit laws – not much different than saying we need more infrastructure investment and more hospitals, right? I mean, this just sounds like a band-aid in all cases and it does not explore the relationships. What relationship is there between the way we create money and the types of inequalities that we struggle with. And, if we can take a step back and ask if the actual system we are living in is creating these problems that we have identified – say inequality and poverty – then what role does capitalist money play in that systems creation and reinforcement and does extending its reach make it more likely to reduce the problems we have identified? If we create money the same way with the same people controlling its creation will it truly resolve the problem? How can we keep trying the same thing and expect different solutions? Yes, I am paraphrasing an oft-associated comment with Einstein but you don't need to be a genius to agree with it and realize the logic.

I argue not for one form of money or another. I argue for the realization that it, money (and all the other "problems" we may identify) are elements in relationship with the other variables and because of money's huge power within this economy we need to understand how it is used and how it (or rather those that control its creation) reuse the economy to sustain itself – as for example a problem of scarcity, and bubbles and crashes. We have to be willing to ask the question of what an alternative form of money would look like? Could changing its characteristics have big impacts on the economy and society? Would it be complementary or in conflict with the dominant money?

There have been many histories of money written through time. No shortage of information about the evolution of money from shells to gold to banking to what it is today. Yet, many of these studies seem to ignore money as something that has not evolved as a result of the economy – it is seen as much as infrastructure, as a necessary element yet at the same time its production is assumed as an outgrowth of the economy. One of the theorist's who has explored money as something that has its own forces of production, as something that is constituted of its own social relations that are not necessarily direct outgrowth of the economy is Geoffrey Ingham in the UK. The importance here is to see money not as assumed, or as naturally capitalist (in that its characteristics underpin the dominant elements of capitalism or essentially we could say, respect or acknowledge those elements) but as something that has shifted and changed in very particular moments. Who then changes money and when has money changed and why and by whom and who has come out in control of the supply of money and has that control of money creation become crucial to the operating of today's political-economy and what would happen, as Keith Hart an anthropologist has proposed, if money became more democratic (in the sense that its production is not controlled by a few but by all or the many)?

I ask this question not because I propose it as an alternative, but because I believe that is exactly what is going on today around us. The proliferation of multiple (numbering in the thousands) community currencies (a generic term I use to cover many different kinds of monetary forms that have not been created by the state or the banks but generally by self-organized communities) is a growing trend. The rise of cheap mobile technologies and the Internet offers great opportunities for the increased production of community currencies with much lower costs and barriers to entry. It also opens up the opportunity for a reconfiguration of ideas of local vs global in this movement. Could currencies be shared with global communities with these technologies? 

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