CEPRID

MONEY’S GOODNESS

Moving on towards New Ways of Getting Along

Monday 25 March 2013 by CEPRID

Mailer Mattié

Instituto Simone Weil/CEPRID

English translation by Sylvia María Valls

"To live in this world without knowing the hidden laws of the natural sciences is like ignoring the language of the country one was born in."

HazratInayat Khan

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. "

Henry Ford, 1922

"I believe that the future will learn more from the spirit of Gesell than from that of Marx."

J.M. Keynes

The loan sharks’ principles

We are a majority and we will unite in order to put into practice global agreements: Mother Earth is sacred, the time has come to emancipate social life from the greed for Money; we require sources of inspiration because we do not trust ideologies that betray reality and hide the truth through propaganda, thereby maiming world peace and humanity’s wellbeing: the inspiration derived from collective experience and the intelligence to change everything that debases our relationship with the planet, our communitarian conviviality, the work and means to satisfy our needs. An artificial view of nature, of work and of money has led us to the precarious social situation that we face today; source, itself, of all the minority privileges that govern us, the pillars of that economic society that emerged in Europe during the XVIII C. hand in hand with the self-regulated markets, starting with the complex and dramatic historical process that Karl Polanyi masterfully described and analyzed in his book The Great Transformation. A Critique of Economic Liberalism, published in New York in 1944.* A process that shaped, in fact, the notion and functioning of modern society, establishing for the first time in the history of mankind, the prevalence of an autonomous and differentiated economic sphere within the social context.

In order to manage such a metamorphosis, it became essential to break apart the unity that land and work constituted –the very substance of society—and reduce them to the category offictitious commodities; that is to say, things destined to commercial exchanges. Consequently,economic society was built upon the foundation of what Polanyi called fictitious commoditieswhose consolidation came about during the XIX C. precisely as a result of the development of a labor market, to his mind “the most powerful of all modern institutions.” A projection of reality constructed and endorsed by economic thinking along with the expansion of the industrial system: an ideological construct that reached a definitive form over the last two hundred years through laws, institutions and collective identities.

The fiction of commodities, hence, subordinated nature to the interests of the economy and reduced human motivations to material factors: Adam Smith’s homo oeconomicus to whom he attributed, in the XVIII C., a natural selfishness and inborn inclination towards private property and exchanges; an abstraction meant to set-up a profile of human identity linked to work as merchandise and to man´s hypothetical faculty to bestow economic value to all things. This constitutes a quaint definition, indeed, that ignores, without remorse or afterthoughts, cooperative and reciprocal modes of interacting throughout the millennia by those communities partaking in the referred to civilizations.

The conversion of nature and work into fictitious commodities entailed, on the whole, the mercantalization of knowledge, of human abilities and of the commonwealth such as forests and soil, traditionally managed in a collective way; it meant, consequently, the disintegration of the community following the destruction of its main principles of cohesion. Thus, the disappearance of ancient ways of life and the creation of new, economic, institutions constituted, together, the two opposing movements of the great transformation that triggered in society the appearance of self-regulated markets: the devil’s factory, as Polanyi called them.

Nonetheless, maintaining this dangerous social mutation has always entailed risks that go far beyond the economic sphere, threatening one’s own social existence; this accounts for how come economic societyhas had to defend itself constantly with the creation of social institutions. Ever since the XIXth C., in effect, it has been posible to identify times of extraordinary tension between the forces of the market and the pressing social demands for protection; dangerous culs-de sac, dead-end alleys, to which Polanyi attributed, for example, the rise of fascism in Europe and Second World War during the XXth C.

The development of economic society, in fact, appears as a continual succession of periods of prosperity and crisis. The cause –as Simone Weil stated in an article entitled L’Engagement syndical, published in France in 1931—is that the benefits generated by the exploitation of fictitious merchandise finally wind up in the hands of the financial segment of the economy whose objective is precisely to augment its wealth through activities alien to production and to work. This is to say that, if we consider how economic activity answers increasingy to the incentive of earnings to which no work corresponds, since speculation violates the law of offer and demand, then, once it stops, the economy as a whole becomes paralyzed. Following Weil, then, the crises are not generated by the productive sysem –as many economists and followers of Marx maintain, blinded as they are by ideology—; they come up as a result of the uncontrolled growth of overproduction in the financial sphere. In reality they make manifest that the end goal of economics in modern society is the increase of parasitic gain: hence, it is unavoidable that attention be placed upon the monetary system and the institution of money.

Silvio Gesell –theoretician, pacifist, businessman, born in Sank Vith (previously Germany, now Belgium), who spent years in Argentina— published a study in 1916 about money under the title El ordeneconómico natural [The natural economic order] where he explained the workings of the monetary system in contemporary society and the dynamics leading to economic crises, an analysis that coincided with Simone Weil’s conclusions. For Gesell, the purpose of economic production is not plus value, commercial gain or the satisfaction of human needs: its ultimate end is the interest that money generates. The fact that money can be accumulated without material consequences –as opposed to what happens with the majority of goods—, allows its owners to interrupt the free functioning of the market of goods and services which requires a means for carrying out the exchanges. This way, those who accumulate money also acquire the power to demand interest, a tribute in order for the owner to make it available once again in the market; interest, consequently, is an impediment to the free circulation of coinage: this is how speculative accumulation functions, the source of wealth that is alien to labor. The problem appears, however, once the amount of money accumulated prevents the absorption of a high percentage of production, brinking about the closing down of enterprises unable to pay or acquire new debts, and unemployment’s social spiral. This is how crises break out, when monetary speculation ruins the productive economy and everything connected with interest collapses, society picking up the tab instead of those who generate the costs, just like what happens with industrial activities that externalize the costs of its collateral effects –human and ecological, among others. This economic society, hence, depends entirely upon the functioning of a monetary system based on two contradictory ways of using money: as a means of exchange and as a means for bringing about accumulation.

Production, then, must create enough gain so as to be able to cover the interest, something that is possible only as long as salaries are kept low and the price of merchandise is raised: this being the tribute we pay in order to satisfy our needs through the market; the power of money, hence, brings to bear its enormous weight and pressure over the workers, the producers and the consumers. In Gesell’s words, money that demands interest is, consequently, the fundamental presupposition of commercial exchange; this is to say, it turns economic activity into an end that remains alien to human prosperity.

Gesell figured, on the other hand, that a monetary system cemented on interest was four thousand years old; in this sense, it is possible to state that economic institutions since the time of the great transformation, have achieved their greatest development, putting the merchandise fiction at its service, distinguishing to the utmost money’s functions and instituting the “right to the product of someone else’s work”. As his research showed, early in the XXth C. money as a medium for exchange, the gold standard in effect, absorbed between 30 and 50 percent of the total production of goods; at present, 88 percent of the money in circulation is financial money corresponding to debt and derivatives, and only 1 percent is paper money. The financial economy, in fact, stands for approximately 90 percent of all economic activity worldwide. Money, hence, went from being a material symbol used primarily in order to facilitate exchanges, to being the most powerful economic institution created by western thought.

In the economy –Gesell concluded— we see that the principles of usury prevail since its primary objective is the exercise of usury. Undoubtedly, we have had the abundance of the planet at our disposal, so far, in order to comply with the illegitimate tributes demanded by interest, with such usury exercising a growing pressure towards the amplification of the universe of fictitious merchandise, right up to the limits we find ourselves in today: seeds, the human genome, biodiversity, cultural wealth, ancestral knowledge and all the riches of land and sea. A tribute that is, besides, the main element contributing to the extreme differentiation that obtains throughtout the economy, society and nature: the main source of all the problems menancing the world today.

Gesell, besides, blamed economic theory for the ignorance prevailing in society around the issue of money, something he considered a failure on the part of science. In particular –he said—, the theoreticians of value –that economic fantasy—turned economics into an impenetrable domaine thanks to the use of fuzzy concepts that disfigure reality, contributing towards the creation of a sort of monetary witchdoctoring. The monetary matter –he maintained—, is always distorted in the mouths of experts and of politicians, possibly also because they are all involved in the hoax: the State, the parties, the trade-unions, the international economic institutions and the universities.

Ending the charlatan’s reign.

The institution of Money is founded on the false premise that economic growth is limitless; i.e., it presupposes that the source of interest in unending. The truth is that economic growth over the last decades has gone from depending primarily upon the monopoly of areas such as war, services and finances, if we consider that the production of goods has stood at ground zero, in spite of the leverage owed to the so-calledemerging countries such as China, Brazil and India; quite the case, the totality of the economy in the developed countries grows at an average of under 2 percent, wheras in the emerging economies it is 5.6 percent. Besides, the costs of turning nature into merchandise are increasingly higher –and also those ofexternalities: contamination and eviction of entire communities from their territories, for example—, given that a greater investiment and technological innovation are required; a situation that in our days is coincidental with financial overproduction in the midst of a great concentration of property and of unprecedented environmental risks. The definitive proof of the unsustainability of the economic society model implies, without a doubt, the collapse of the theoretical and conceptual system that has sustained it; a world that relies upon the fiction of turning human beings and nature into merchandise could not have expected a different fate.

In the midst of the turbulence of the crisis, we see how the payment of tribute increases its pressure upon services –health, education and transportation, principally-; a thoroughly sufficient set of factors. Thus, the palliative to delaying the final collapse is to pay the interest by generating more debt… for how long? In Spain, for example, the external debt corresponds to 91 percent of the GNP; in Greece, it reaches 87 percent; in Portugal, 108 percent; in the United Kingdom and Germany, the amount is over 80 percent. Evidence allows one to conclude that the pillars of the great transformation are collapsing at an accelerated rate; we are, consequently, faced with the challenges of an inevitable transition.

In fact, just as Gesell foresaw in 1929, “the government, parties, men of science (…) have come to the end of a wisdom that, evidentally, was never anything other than quackery.” The transition, hence, demands that we leave the moth-ridden ship of ideologies behind us in order to set out on a conscious and creative path, freely assuming the knowledge, so far disregarded, of cultural diversity and of the technological and scientific commonwealth suppressed because of the threat it has represented against the privileges of interest: free science, the new sphere of social activism claiming, among its precursors, the 26 year old young man persecuted for defending Internet disclosure of academic documents, Aaron Swartz, who committed suicide in New York in 2013.

Alternatives to the collapse of the great transformation require, of course, new ways of connecting economy and society: to impung the fiction of merchandise and to reconstruct a unity integrating land and work in such a way as to bring us closer to the truth of human identity, of nature and of community. On the other hand, a social order that projects its economy as a means towards the satisfaction of needs, recovers important links of continuity with humanity’s historical trajectory and incorporates its legacy to such transformation. Quite the case, to undo the autonomy of the economic sphere implies the intervention of certain basic principles of social organization that are part and parcel of our common heritage: those linked with relations of reciprocity, cooperation, redistribution and complementarity that prevent, on the whole, the reproduction of privileges and inequalities; a society, finally, that puts into practice the communitarian tendencies of homo reciprocans.

As Polanyi pointed out, human ideas and projects must come into being through the agency of new institutions, complementary, in any case, to those that stand for the achievements of old social gains favoring democracy, justice, the satisfaction of our needs, truth and beauty; inspired, of course, by a new language. Simone Weil –in La personne et le sacré [The Person and the Sacred], 1942—, conceived them in these terms: “Above those institutions dedicated to protecting the law, persons, democratic freedoms, it is necessary to invent others destined to detect and abolish everything that in contemporary life crushes souls under the weight of injustice, of lies and ugliness. They must be invented given that they are unknown and that it is impossible to doubt them to be indispensable.” Thus, the change in the relationship human beings maintain with nature and in definitions of work and money, for example, would find their expression in society’s new institutions.

Answers to the debacle imply, also, a total challenging of the pretense that human needs are infinite. A mistaken interpretation that prevents one from distinguishing those needs from such things as can satisfy them and to which, paradoxically, a permanent state of scarcity is attributed –quite as the Chilean economist Manfred Max-Neef, author Human Scale Development, pinpointed at the close of last century; an argument, besides, that is part and parcel of the chicanery used in order to hide that, behind limitless economic growth, what is to be found is the tribute exacted by interest. In this respect, then, I propose that we approach once again the inspiration we find in Simone Weil’s thought: the notion of the earthly needs of body and soul –which she summed up shortly before her death in 1943 in her essay “Study for a Declaration of Human Obligations”, perhaps the best expression of her convictions concerning life and the social world and also the backbone of her great opus, The Need for Roots (L’Enracinement).

The human body –she wrote- needs above all nourishment, warmth, sleep, hygiene, rest, exercise and fresh air; the needs of the soul, however, may be arranged into complementary couples. Thus, the human soul needs equality and hierarchy; consented obedience and freedom; truth and freedom of expression; solitude and social life; personal and collective property; punishment and honor; participation in community tasks and personal initiative; security and risk. But above all –she emphasized—the human soul is in need of roots: to grow roots in a natural environment that will allow one to be a part of the universe. She conceived their satisfaction, besides, as subjected to specific conditions and limited only by the needs of others.

This way, hence, hierarchies must be legitimate, referring them to a scale of responsibilities that are removed from those derived from political or economic power; an authority is legitimate because it enjoys the moral recognition of the collectivity and, hence, does not require to be imposed; only legitimate hierarchies –Weil said- can govern in a healthy environment that does not deprive individuals of voluntary (consented) obedience. As far as truth goes, it demands that all member of a community have access to knowledge in order to defend what is good and fair and to protect themselves from errors, manipulation and lies. As pertains to freedom, it implies multiple possibilities for choice with only normative restrictions as established by legitimate hierarchies; if there is no freedom for thought –she stated—the limits set against thought translate themselves into limits imposed upon freedom.Collective work, responsibility and initiative satisfy, equally, a human being’s need to be useful; in modern society the latter is determined exclusively by the labor market and, outside of them, the person must face direct moral and material consequences. Human beings equally need a certain level of security that will offer protection in the face of vulnerability and of violence in all of their manifestations; nonetheless –as she wrote—, risk is an indispensable incentive throughout one’s life. As pertains to honor, it bestows consideration upon the individual within the social sphere wherein one dwells, while collective and communitarian property offers a feeling of belonging to the social group; persons, besides –she thought—, should own their own house and a small piece of land to cultivate within its proximity.

Rootedness, however, may be the greatest vital need to be found in human beings, as she asserted; this is to say, participation in a network of social ties defined by the common elements to be found in culture, in language, in history along with the intimations about the future that may be derived from them: a common past that sustains the members of a community, just as it inspires and beckons the future. In fact, she considered everything that might uproot a person and prevent one from growing roots as something criminal:the destruction of a people’s traditions, war, economic enslavement and money, which she thought should be discredited in view of the fact that it reduces human initiative to greed and power. She also thought that education –whose purpose she thought to be a strengthening of the faculties of attention—could become an instrument of uprootedness whenever it falls into the practice of vulgarizing knowledge and culture so that what is obtained, instead, is an indifference towards truth; the latter ultimately amounts to an indifference towards justice and the good.

Weil thought, equally, that the limitations of the modern world in its efforts to satisfy human needs had as one of its causes the insufficiency of the system of rights which failed to consider obligations as their point of departure. Rights, independent from obligations –she said—are linked to personal matters and thereby to a notion of the individual that excludes the collectivity; that is to say, it links back to private property, equality and freedom while excluding its complements such as collective or communitarian property, legitimate hierarchies or consented obedience. Her definition of the complementary aspects of earthly needs allows one to understand, henceforward, that the endwithal of social organization is to guarantee that all its members will be able to satisfy them, and it is to this effect that multiple and diverse means and instruments must be put to the test.

These are arguments, what is more, constituting a sharp critique of the modern model of society in which means and ends are deliberately and self-interestedly confused: the political system and the economy –she stated—, are conceived as ends, when, truth be said, they should become means towards the well-being of individuals. According to Weil, then, only a social order involving such a metamorphosis may be considered appropriate and capable of contributing to the strengthening of individuals as human beings, thereby transforming itself into a real alternative in the face of all the manifestations of injustice, oppression and uprootedness prevailing today.

The satisfaction of human needs, thus, must liberate itself totally from the tribute imposed by interest. Its elimination –a fundamental condition for the disappearance of privileges and illegitimate hierarchies—implies, hence, a profound redefinition of the social agreements that have structured the democracy we have known so far, exclusively identified with parliamentarism and thereby prisoner to the political parties that distribute power among themselves.

Land and Peace

The planet is a living being that creates, as the original cultures maintained over the millennia; it is the source of life, does not produce: herein the truth hidden by the belief system upon which the fiction of merchandise rests. Humanity, in effect, has developed different forms of social organization attending to knowledge and to the precise observation of those laws of nature that reveal its sacred character; “the beauty of the universe –Weil wrote- and the eternal wisdom of its disposition,” is what we may consider sacred. A social order, hence, suffused with spirituality.

The mercantilizatiion of nature reduces life to utilitarian matter. The evolution of patriarchical religions expresses this inversion very well, separating what is sacred from what is real, placing it beyond human reach or, in any case, reducing it to the four walls of a temple. Nonetheless, thousands of peoples have found ways of protecting themselves from genocidal attacks and from progress thanks to a wisdom that allows them to perceive the spirituality arising from the forests, the water, mountains, plants and animals; an experience that fortunately is beginning to filter through the cracked walls of a modern western world. This inversion, truthfully, has transmuted the basis of life into the source of interest; a transformation that advances to the extent that the fiction of merchandise takes over the land and the biodiversity. In effect, millions of farmers throughout the world find themselves forced to become indebeted to the owners of the land and of the seeds, a burden that has led hundreds of farmers in countries such as India to commit suicide.

In1917, Gesell gave a conference in Zurich, Free Land. The Basic Condition for Peace, where he proposed the practice, necessary to intervene the property of the land which he considered, along with money, another of the fundamental institutions of a modern economy. Gesell was of the opinion that all persons, without distinction, should have the same rights vis a vis the planet, so that no individual, State, nation or society would possess the slightest privilege. His point of depature was the confirmation of a new international institution that he named The Great League for Peace, member States would assume the obligation of abolishing private and state property over the land and the underground –agricultural land, forests, urban lots, mines, oil fields and everything lying underground, by way of indeminization payments. As an alternative, such States would implement a system of public and universal renting to which any person could access freely notwithstanding his orgin, language or social condition. The land would be distributed in accordance with the size of families and tenants, including some portion for certain communities thus requiring it. We do not know whether Gesell thought about including women as tenats or lessees, although his project did entail, as well, that the State redistribute integrally the rent thereby received among all the mothers in the country according to the number of children.

In his opinión, this practice would eliminate the reasons that lead to conflicts among nations, under the name of sovereignty, over the wealth of the land and its underground –today we would have to add control over the soft water throughout the planet—one of the main sources of violence in the world; this is to say, it would mean establishing a security valve for world peace. The free land model would allow, besides, that people might move freely throughout the world; Gesell thought, quite so, that no State or nation should exercise sovereignty over the planet and, thereby, adjudicate to itself the right to fix frontiers which prevent free circulation or to charge customs fees. This way it would be possible, besides, to eliminate importation and exportation of merchandise with the favoring of free transit. This is a thought that undoubtedly acquires a new actuality within a world context in which competition for increasingly scarce resources constantly provokes tension in international relations. Nevertheless, it also cries out for the incorporation of an alternative way of looking at the irreplaceable perspective of cultural diversity: that we approach the real level of complexity of contemporary problems related to the land. It is not possible to ignore, for example, the struggle for the recovery and defense of their ancestral lands waged by the native peoples, including the reality to which the Plurinational States of South America refers, where we see these elements converging: state action in keeping with the international markets’ interests, as refers to sources of energy such as petroleum and gas, the extreme concentration of latifundia and the political and cultural resistence of the indigenous communities.

Manibusnostrisconstruximos [With our hands we build.]

Economic ideologies have contributed also towards hiding the true nature of human labor and thefiction of merchandise, of course, reviles it. “Let us lift the cover that has so far kept it hidden” –Gesell demanded—, considering that work has no intrinsic value in economic terms: it is a human quality, not a piece of merchandise; consequently –he insisted—it must be clearly differentiated from its product. In reality, the worker is not being paid for his labor, but for the product of his work: what results from his knowledge and abilities. Gesell, nonetheless, was in favor of the model of division of labor to be found in modern society, to which he attributed the benefits of the development of production, forgetting –as Weil concluded in 1934 in Reflections on the Causes of Freedom and Social Opression [Freedom and Opression] –that the subjection of workers is inherent to such a system, in which there are those who order and those who execute, independently of the type of proprietary regimen in force in a particular society. For her, first and foremost, work –participation in common tasks that would involve personal initiative—was one of the needs of the soul: “a certain contact with reality, with truth, with the beauty of the universe and with the eternal wisdom accounting for their disposition” –that is to say, allows us to live in community and at the same time to come into contact with the sacred: reasons that made her consider the act of denigrating it comparable to a sacrilege. “Were the workers to feel it –she wrote in 1942- their resistence would not boil down to a plea for the reaffirmation of their gains but a ferocious and desperate uprising and a scream of hope from the depths of the heart. That sinister face is what the worker’s movement has stood for, with its trade-unions, its parties and its left-wing intellectuals.” In her view, history has only exceptionally shown forms of social organization that remain free from the oppression of work; precisely, those that correspond to very low levels of production, in which the division of labor is not very advanced and no over-production is generated. Opression, then, may be considered a social phenomenon inseperable from more developed economies; in the least developed ones, hunting, fishing and collecting are –as she put it—a reaction to the pressure nature brings to bear upon the community.

— Thus, in order to build a first representation, an ideal of a new civilization removed from the religion of the economy, she proposed that manual work be ranked as a supreme value and as the nucleus of economic activity —as had been the case, for example, during the High Middle Ages in those free communities, with their assemblies and councils, that prevailed in some parts of the Iberian Peninsula and in the Occitanian society of what is today southern France, going all the way back to the XIIth and XIIIth Centuries, with both these experiences refuting the self-serving depictions of a generalizedobscurantism that had supposedly charactered Medieval Europe. The work of hands, consequently, would be valued not for its productivity, but for constituting a vital, liberating activity for the individual; it would not be the object exclusively of honors and rewards but considered as a human need conferring meaning to one’s existence. The new civilization, finally, would place manual work at the very center of culture, thereby embodying a truly revolutionary achievement: as she put it, “the only spiritual conquest in human thought since Greek civilization.” This revolution that would imply removing work from under the power of money requires, in effect, separating it from the imposition, cohersion and limitations of the law and of workers’ claims; to encase it, so to speak, within a framework that is not what we call economic: a good reputation, the legitimacy of hierarchies, creativity, vocation, solidarity, cooperation, identity, personal freedom, autonomy, the creation of social capital and the construction of community, among others. Today, besides, in the midst of the serious crisis created by unemployment now affecting the majority of the countries in the world –in Zimbabwe, for example, 95 percent of the GNP and, in Spain, 52 percent of people under 25 years old-, the consensus is on the rise among several sectors of the population concerning the actual possibility of establishing the so-called social dividend or basic rent: sufficient income to cover the material needs of people thereby allowing for the emancipation of work, turning salaried employment into no more than a secondary option.

A means for exchange and nothing more

The transition towards new forms of social interaction demands an economy free from the power of money so that the most important step is to extinguish interest and put an end to financial speculation. Gesell thought that the goodness of money lay in its function, given that the fundamental objective is to create abundance and to distribute it; that is to say, to connect goods with human needs. He considered, equally, that bartering was neither an easy nor a secure way of carrying out exchanges as it was impossible to use a worldwide scale. Thus, what he called free money was an adequate substitute for what we have now, able to ensure, accelerate and cheapen the commercialization of merchandise: these being the basic characteristics that a sound instrument for exchange must be able to embody.

This way, in The Natural Economic Order, he proposed the creation of a new international monetary system through the radical reform that free money devoid of interest would install. In this respect, he established criteria for eliminating the funcition of accumulation and strengthening its function as a means for exchange, imposing costs to its hoarding in order to promote what he called the coercitive circulation of coinage: a way of allowing for money retained or withdrawn from circulation to circulate again. Transfering unto coinage the perishable quality of goods and thereby eliminating the characteristics that allow for its accumulation, a monetary reform which included the taxation of accumulation, considered as well the application of a rate of depreciation for money –“exchange bills exposed to rusting” a negative interest that stood in practice for a sort of tax on circulation. Additionally, the proposal established that the State be able to print money in accordance with the needs of the division of labor; which is like saying, in keeping with the requirements of the growth of production and of the avoidance of market disequilibrium. Gesell equally proposed the creation of aForeign-Exchange International Association, an institution whose objective would be to put into circulation a coin common to all the countries –without excluding national ones—thereby promoting equilibrium in international commercial relations in the absence of customs since –he underlined—thefree money system demands agreements at the local, regional and global levels.

The New Money

The American mathematician and philosopher Charles Eisenstein, activist in favor of negative growth and of the gift economy, published in 2011 the book Sacred Economics: Money, Gift and Community in an Age of Transition, whose inspiration comes, in great part, from Gesell’s original ideas. The author formulates the inversion of the funcitioning of the present day monetary system through agreements for the protection of our natural heritage. Its economic function would be to facilitate the diversification of production and the exchange of goods, noting that the lower the local production is, the greater becomes the need for money. Even though Eisenstein does not consider it, it would also entails a mechanism for redistribution were a specific percentage to be destined to financing the social dividend.

In a country such as Venezuela, for example, within the context of a transition, money could be emited that would be backed by petroleum, gas or iron minerals to be kept unexploited; funds that could be used, in turn, for deminishing the exteme dependence by society on the exportation of hydrocarbons and to stimulate internal and local production. We find a precedent, by the way, when, in the year 2007, several social organizations from Ecuador proposed the Yasuni-ITT Initiative, with the objective of avoiding the exploitation of a great oil field in the Yasuní National Park –one of the zones with the greatest biodiversity in the planet, where the Tagaeri and Taromenane original peoples dwell in voluntary isolation.TheEquatorian State would receive in exchange a monetary compensation coming from the developed countries, equivalent minimally speaking to 50 percent of the benefits to be obtained when the sale of pertroleum took place; the project calculated, besides, that it would prevent the emission of 400 million tons of carbon dioxide, thereby complying with the world struggle against climatic change. In absence of biorregional and global agreements, one understands how the Yasuní Initiative could have so pitifully stumbled across so many obstacles.

Nonetheless, to yasunize the emision of money could also entail a complementary agreement with other projects connecting the economy with the environment. This is the case with, for example,Common Welfare Economy, a proposal by the Austrian economist and activist in favor of alternatives to financial markets, Christian Felber. The model has begun to function along with a few other pioneering enterprises in various European countries since 2010; it is open and is permanently under construction. In synthesis, it has to do with granting advantages to those enterprises that decide to substitute profit and competition for values such as trust, honesty and responsibility, cooperation, solidarity, generosity and compassion. In this sense, the balance of the common welfare would measure the degree of social, ecological and democratic performance as a new parameter of entrepreneurial achievement. Thus, the most successful enterprises in this respect would have at their disposal incentives for facing the higher production costs i.e., by a lowering of taxes, by access to credits with less interest or by a priority in terms of purchases from the public sector. The model supposes making the monetary benefit compatible with the objectives of the common good; as a political movement, this group is active and exercises pressure on governments so that these principles may become part of national laws.

Eisenstein, on the other hand, proposes –besides a depreciation rate for coins—implementing a tax on liquidity in relation primarily with electronic money. This way, the new coin, subjected to losing value over time, would constitute a stimulus to credit, even at zero interest; coming together with negative interest, its function as a means for exchange is privileged and the function as a means for accumulation is annulled: if money is as perishable as a “sack of potatoes” –he points out-, nobody will want to store it but use it instead, the sooner the better.

Parallel to the creation of new money, the proliferation of bartering networks is highlighted, along with time banks as a way of exchanging knowledge and abilities; at the same time, the introduction of social coins would act as an instrument for the revitalization of local economies and for connecting goods and human needs. Presently, for example, these experiences are multiplying in countries such as Spain and Greece, whose institutions are being seriously affected as a result of the financial crisis. Nonetheless, in Eisenstein’s opinion, the transition should lead finally to the fruition of agift economy given the growth of the number of exchanges in which no money is used.

Negative growth or de-growth: democracy and community

Gesell supposed that the elimination of interest in the new economic order would be enough for balancing out production. Today we know that even though a reformation of the monetary system is indispensable, industrial economic growth has reached an unsustainable limit. This reality, in effect, is a main item for imagining such a transition as total answer to the very mechanisms in the economy which are destroying society and nature. This is to say, a true revolution that will guide collective knowledge towards the common good in order to restore the natural, social, cultural, scientific and spiritual capital that has been sacrificed to the tribute of interest –with the common good understood, in the words of Vandana Shiva, as the outcome of giving and receiving: the result of reciprocity. The purpose is to move on, from private and state property, towards the practice of essential common values and ways of communitarian life implying a radical inversion of how economic and political institutions function. We need, finally, these new institutions in order to come closer to a society founded upon truth and justice, beyond rights and labor’s limited claims.

Money as a means of exchange will be able to guarantee that wealth, instead of accumulating, will be distributed; nonetheless, wealth would be the outcome, ever more, of a process of de-growth without which we will probably not survive; in other words, wealth will have its origin in what Eisenstein has called the recuperation of social capital. De-growth, of course, represents the beginning of the end of the radical monopoly of industrial production –to use Ivan Illich’s expression—and, consequently, the hegemony of the labor market as an economic institution. A collapse which will surely contribute to the emergence of other productive activites propelled by new values guiding scientific and technological research, including the real possibility of the availability of free energy, just as Nikola Tesla’s genius foresaw over a century ago.

We create social capital, build community and generate negative growth, then, when we opt for alternatives to the industrial market in relation, for example, to medicine, trasnsportation, production and distribution of agricultural products etcetera; equally as awell, when we replace the use of mercantalized services (the caring for children, for the old, schooling, the making of clothes, technical repairs, the preparation of food, among others) for the personal sharing of our knowledge and abilities. In order to facilitate the transition and avoid a social collapse, Eisenstein proposes, besides, a global agreement establishing a rate of negative growth close to two percent annually during the next two centuries, with an index available in this respect that would allow for comparison with the GNP.

On the other hand, the new order –as Gesell thought—should develop to the total exclusion of all privileges: as a reflection of nature’s laws. Polanyi thought, as well, that a solid and democratic economy depended upon a democratic society, convinced as he was that the enhancement of our freedoms was the destiny awaiting modern societies. At the political level, hence, the transition requires that authority be exercised by legitimate hierarchies issuing from a direct democracy rooted in the communities: as Sylvia Valls reminds us from Mexico, we are the only species that governs itself through illegitimate hierarchies. Legitimate hierarchies, hence, are called upon to substitute political parties that defend the values and interests of present day economic society, perverting the freedom of expression by means of propaganda since –as Weil said— “they never listen to the truth.” It is, hence, the substitution of the intermediaries that would lead to a real democracy, as has been loudly stated in many languages by the indignados of the world: all those who say that we have had enough!“Power –Gesell predicted—will be torn away from the privileged, and the human race, with guidance from the most capable, will rise to the summit.”


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