Wednesday 5 January 2022

Collapse You Say, Part 10/Time for Change, Part 1: Money

Waves, rocks and ice on the Lake Huron shore

Earlier in this series (Parts 5 and 6) I looked at overpopulation and overconsumption and concluded that while both are serious problems, overpopulation is going to take decades to solve, while overconsumption could be addressed quite quickly. By reducing our level of consumption, we would reduce our impact on the planet and give ourselves time to reduce our population.

In my last post I looked at some of the unintended and negative consequences of the industrialization we've experienced over the last few centuries. I concluded that most of the blame for overconsumption can be laid squarely at the feet of capitalism, with its insatiable hunger to accumulate wealth, its inescapable need for endless growth, and its inability to tackle any problem that can't be solved by making a profit. These days some people are calling capitalism a "death cult", based on those characteristics and the fact that we live on a finite planet. I think they are quite right to do so.

Clearly, the blame for overconsumption should not fall on the supposed innate greed and materialism of individual, ordinary people. The upper classes (mainly capitalists) are superlative consumers and do a great deal of harm themselves. And their marketing efforts have turned the rest of us into pretty good consumers, too. Turn off their incessantly blaring marketing machine and things would be quite different—reducing consumption would look at lot more doable. We'd have a real chance of solving both of our major problems (overpopulation and overconsumption), getting ourselves out of overshoot and avoiding at least part of the die-off that is currently looming ahead of us.

It seems that at this point in this series of posts I am done trying to show that collapse is real and I'm ready to look at what we can do about it. And that is why I am changing the name of this series in the middle of it. It is, indeed "time for change". In truth, I probably should have made the name change starting at Part 7, but it's too late for that now.

Of course, many people in the "collapse sphere" will tell you that what we face is a predicament, not a problem—in the sense that it can't be solved, only adapted to. To those folks I would say, relax—I agree. My idea of a solution to the problems facing us is for us to adapt to them, and that adaptation will probably look a lot like collapse to many of you. We need to have fewer people, all consuming at lower levels that can be sustained by the biosphere, and we must start using up non-renewable resources at a drastically lower rate, until we can manage to replace them with renewables. To quote John Michael Greer, we need to get by with LESS—less energy, less stuff, less stimulation (entertainment). If we choose to do nothing, we'll get there via a brutally hard and deep collapse. But if we deliberately work at adapting instead of trying to save "business as usual", we can get there by a much gentler route, with a lot less grief, and with a better outcome at the end. Still involving major changes to our supposedly "non-negotiable" lifestyles, though.

At the end of my last post (months ago) I promised to tie up a couple of loose ends in my discussion of finance and government, and to talk about how to solve our overconsumption problem by getting rid of capitalism. Over these last few months, I've come up with a wealth of material on these topics and so what was to have been a single post will now be broken up into at least three: I'll be talking about money (finance) today, hierarchies (government) in my next post and what to do about capitalism in the one after that.

Money

Money is a tool and, like all technology, it is not neutral but is designed to be used by certain people for a certain purpose. Money is used by rich people to make more money—to accumulate wealth, and to control poor people. Sure, it can be adapted to other purposes, but I don't believe we can ever stop it from being used for those basic, inherent purposes.

If you study basic economics, you'll be told that money has three primary uses: as a medium of exchange, a unit of account and a store of value. All three of those really just amount to keeping score in the complex game that is our economy. That score keeping is done in ways that facilitate the business of accumulating wealth. This helps those with lots of money get more of it, and works against those with little. We are told that not keeping score would be even worse, but the more I look into it, the less reason I see to believe that.

Capitalism started out with capitalists using their own money to build infrastructure (factories, mines, railways, etc.) to build stuff, which could then be sold for a profit. This soon changed to using borrowed money to do the same. The banks did very well on that, and before long the other capitalists saw that it is possible to use money directly to make more money, dispensing with factories and production of physical goods. This is known as "financialization" and while there are still lots of factories, making lots of stuff (much of it unnecessary), the financial sector is in some ways the business success story of the last century.

Unfortunately, our financial system creates money as debt, which must be paid back with interest. In order to do that, the economy must continually grow. If growth stops or even slows down, it collapses. At the same time, the eventual consequence of growth is also collapse.

The other primary use of money is as a tool for social control. Everything we need has been monetized—the only way to obtain the necessities of life (and much else) is to pay for them with money. Only a very few people live self-sufficiently today, outside of this system. The rest of us need money to live, and a job to obtain that money. In capitalist societies, most of the value created by your work goes to the capitalists, with as little as possible going to you as wages. This makes it challenging to get ahead.

During my lifetime, it stopped being possible to save up enough money to buy large ticket items like an education, a car, a house and so forth. For most people, especially those without rich parents, such things are necessities and can only be had by going into debt to get the required money up front. And it is getting harder and harder to pay back that debt. But that debt must be paid back is a strong value in our culture. To declare bankruptcy and effectively have your debts forgiven means losing essentially everything you have worked for. This leaves us in a position of being under the control of the banks, with very little that we can do about it.

If you look closely, though, you'll see that while not paying debts has nasty consequences for the lower classes, people in the upper classes can often come to some other arrangement if their debts become too onerous. In particular, capitalists whose businesses fail often walk away with little or no consequences since those businesses are set up as corporations with "limited liability".

So, it's pretty clear that in any society that uses money (keeps score) and makes accumulation of wealth a goal, the result will be ever growing inequality between the upper classes and everyone else. In the past, many societies that used money and debt, even without capitalism in the modern sense of the word, found that for the lower classes debt grew over the years until it crippled society. That was because the lower classes played an important part in those societies and when they were crushed under a mountain of debt, the whole society was negatively affected. It was necessary to have a "jubilee" every so often and forgive debts in order to get things working again.

But under modern capitalism, that's never going to happen—the lower classes are, to an ever greater extent, seen as not having an important role to play. Much of traditional work has been replaced by automation. If we are crippled by debt, it doesn't immediately bring our whole society to a halt. Indeed, much of that debt is held by the upper classes, who see it as a benefit. For the rest of us, debt offers a means to allow us to continue consuming, borrowing money just to give it back to the capitalists, with little time for thought about long term consequences.

Most of us are like fish swimming in a sea of money and monetary concerns, unaware that there is any alternative. We are certainly told that there is not. But we need to ask ourselves if money and this whole "keeping score" thing is beneficial or even necessary? Is there any way we could manage to get by without money?

Economists will tell you that money was invented to get away from the inconveniences of barter. But anthropologists who have actually studied pre-monetary societies, would tell you that that is nonsense—barter was used rarely, mainly for trading with strangers. Inside a community, among people who know each other, there are ways of living without money or barter. We'll go into more detail on that in a bit.

Conservative moralists, who have a great deal of influence these days, are concerned about "moral hazard"—telling us that keeping score using money is necessary to maintain fairness, and make sure that people don't take advantage of each other. In fact, very few people do take advantage. And keeping score mostly leads to growing inequality, which is in itself unfair.

And, of course, accountants would have us believe that the whole of modern civilization would grind to a halt if their ledgers didn't balance.

That's all very convenient for those at the top who actually do benefit, but most of these things could be eliminated without hurting the rest of us. And what's really necessary could be rearranged to benefit us and not just the rich.

If we turn to the study of anthropology again, we find that quite frequently during our prehistory we lived in small egalitarian bands who did just fine without money and largely without keeping score. What little score keeping there was, was informal and aimed at censuring people who didn't share well, to prevent accumulation rather than facilitating it.

For such hunter gatherers getting an adequate supply of protein was often challenging and that is one reason why hunting larger game was done enthusiastically, even though it was often not very successful. Hunters were expected to share the meat when they did make a kill, and generally did so, without expecting thanks or any special treatment for making this contribution.

Scientists studying such societies have observed that altruism (sharing) is a strong part of the culture, and have been puzzled about how altruism could be selected for on an evolutionary basis. It would seem that any individual with an inclination to share would inevitably be taken advantage of by less altruistic people, and individuals with innate altruistic impulses would soon be selected out of the gene pool. And indeed they would have been, if selection was acting solely on individuals. But selection also acted on the level of bands, and bands whose members shared well did better and were selected for strongly enough that such behaviour was eventually evolved into human beings. Mutual aid is a powerful tool for achieving success in groups and a major factor in the evolution of many species, certainly including our own.

Even today one can observe that there is a great deal of benefit to acting on a basis of mutual aid, working together altruistically in groups. In societies such as ours where there seems to be an ethos against altruism (a la Ayn Rand), people still do act altruistically, often as if compelled to do so. This tends to reduce the effectiveness of money as a control mechanism, and so it is not popular with those in power, but it still happens. And even in large capitalistic companies, in those cases where people are still working together in groups, you will find a co-operative, egalitarian culture, because it is the best way of getting the work done. Of course, management prefers to isolate workers, so as to better control them. Solidarity is a dangerous thing, from management's viewpoint.

Hunter gatherers had very little in the way of possessions—their nomadic lifestyle didn't allow for much in the way of accumulation. So you might say that money would have been of little use to them anyway.

But many tribal societies practicing herding or even sedentary agriculture, who had more in the way of possessions, and more opportunity to accumulate wealth, often got along without money or score keeping as well. In some such cultures, when you compliment another's possession, the owner is obligated to give you that possession. Strange as it seems to us, this is the basis of exchange in these societies and it works just fine for them. Since everyone is subject to the same rules, being greedy backfires very quickly.

It has become clear to me that the concept of fairness is quite different between monetary and non-monetary cultures. Diametrically opposite, in fact.

In our monetary society, fairness means playing by the rules, rules that are intended to facilitate accumulation. Successful people are expected to accumulate wealth. Indeed that is our definition of success—we are taught to admire such people, and to aspire to be like them.

In pre-monetary societies, fairness meant behaving altruistically—sharing, being generous and serving the other people in your community rather than taking advantage of them. Because the groups were small, it was obvious to everyone when an individual failed to share and do their part, and such individuals faced censure from their fellows.

If they had kept score you would see that, over time, the rest of the community came to be more and more indebted to skilled people. To our modern eyes, it might seem like the less skilled were taking advantage of the more highly skilled, but they didn't see it that way. Indeed it was frowned upon for successful people to put on airs in such cultures, or to use their skills to accumulate wealth. They considered it their responsibility to support their community. It was seen as just what human beings do, to the extent of their abilities. And everyone expected that their needs would be seen to by their community, to the extent that was possible. The result of all this was strongly beneficial to the community as a whole, including those we might see as being taken advantage of.

If that sounds like communism to you —from each according to their ability and to each according to their needs—you're right. That is exactly what it was, and a good thing, too.

Occasionally, in our lengthy pre-historic past, the idea of money (or at least the concept of credit) was adopted by various cultures. It caught on pretty quickly because it could be used for all the "advantages" we've been discussing here. In some cases there were also built in mechanisms for redistributing wealth—things like potlatches, funeral feasts and so forth, so that inequality didn't grow destructively, and runaway growth didn't have its inevitable environmental effects.

In other cases where inequality was allowed to accumulated across generations, the mass of people soon caught on and rebelled, reverting to more equitable ways of organizing things. In still other cases, societal collapse resulted. And finally, in cases where neither of those things happened, you ended up with the societies that eventually developed into to our modern capitalist civilization. Sadly, by the time those who were on the losing end of such arrangements realized what was going on, it was too late—those at the top of the organization were firmly in control, and not interested in changes that would impinge negatively on them. We were stuck in the sort of societies we currently have. Which brings us to the subject of hierarchies, which I will get to in my next post.

What I am intending to suggest here is that there are ways of supplying the needs of a society without causing inequality to grow. And without needing the economy to grow endlessly beyond the capacity of the planet to support. The sort of examples I've mentioned here are only a very few of the ways this might be done and I believe we may yet come up with new ideas that work even better.

In closing, I should probably (for the sake of completeness, but with little hope of achieving it) make a few comments on markets and property.

Markets

At the most basic level, markets exist to place a value on goods and services. But never forget—the value of goods only needs to be determined because we are keeping score, and using money to do it. In any case, the supposed magic of the "free market" is largely theoretical. At best, it can only work when all the players involved have roughly equal power. In capitalism, the capitalists have considerably more power than workers and consumers, and love markets because they are open to manipulation and control. Being able to game the market actually creates many of the problems inherent to capitalism.

Property and Ownership

The concept of private property is central to enabling the accumulation of wealth. The strong take what they wish, have the power to hold onto it, and use it to generate further wealth. Civilization consists largely of having laws to protect the private property of the rich and a police force to enforce them.

In such a system, owners have the right to abuse their property and deplete its resources, with consequences that are currently beginning to come due the world over (climate change, habitat destruction, resource depletion). In a sustainable society, land and resources would be the property of the community as a whole and that ownership would be about stewardship not exploitation.

We should also be clear that there is a distinction here between private and personal property. Personal property consists of items that you use in daily life (like your toothbrush, and your shoes and clothes). A community might elect to extend personal property rights to tools, homes and garden plots. But if you take property rights much further, you end up with individuals having the right to exploit land and resources to their own benefit and the detriment of the community and planet as a whole. Which is exactly what we want to avoid.

During the last few months while I've been dragging my feet about writing for this blog, I've been reading a number of very interesting books, which bear upon what we are discussing. Here is a list of those books, along with a few that I've read previously, but that also have been a help.

Debt, The First 5000 Years, by David Graeber

Hierarchy in the Forest: the evolution of egalitarian behavior, by Christopher Boehm

The Art of Not Being Governed, by James C. Scott

Against the Grain, a deep history of the earliest states, by James C. Scott

Living at the Edges of Capitalism: Adventures in Exile and Mutual Aid, by Andrej Grubacic

The Dawn of Everything, by David Graeber and David Wengrow


Links to the rest of this series of posts: Collapse, you say?

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