Charles Eisenstein wants to Devalue your Money to Save the
Economy
by Erik Curren
Imagine if you had a warehouse full of bread that would go stale in three days. You’d want to get rid of it as quickly as possible. Of course, you wouldn’t try to sell it at premium prices. Instead, you’d want to hold a liquidation sale. Or, maybe even not go through the bother of trying to sell it at all — just give it away. In that way, you’d earn both gratitude and favors that you could call in later. In a sense, giving away all your bread would become an investment in social capital.
Or, consider the linguist who asked an indigenous hunter
from Brazil’s Piraha tribe why, when he felled some big game, he threw a big
feast, letting his guests eat up all the meat in one orgy of indulgence,
instead of thriftily drying the meat to save it for the future? In response,
the hunter laughed and replied, “I store meat in the belly of my brother.”
Charles Eisenstein, author of Sacred Economics: Money, Gift,
and Society in the Age of Transition, told me these two stories in a recent
interview as a way to illustrate how wealth can reside in human relationships
rather than merely be stored up goods or in their proxy — money.
Nature and relationships
The last two centuries stand out from the rest of human
history for the dominance of money as a medium of exchange. “Most of our
ancestors didn’t use money very much, not for food, shelter, clothing, or
entertainment. All these were done by people helping each other out in the
family or extended family,” Eisenstein told me.
In the past, only a small part of the population, mostly
merchants, handled money on a regular basis. Now, nearly everybody needs money
just to buy daily necessities.
Ever since the Industrial Revolution, the marketplace has
expanded from a sideshow into the world economy’s main event. ”The monetized realm
has grown, converting nature into products and relationships into paid services
until there’s almost nothing left to convert anymore,” Eisenstein told me.
We can’t cut down
more forests or increase the fish catch. What’s less recognized is that the
social space to convert relationships into services has almost reached its peak
too. We pay for almost everything, even the most intimate things, like cooking
meals. People hardly sing anymore — we pay for our entertainment. There’s
almost no community left, community being a group of people who share gifts.
You look at your neighbor driving out of his garage in his car and you might
say hi, but behind that there’s a view that you don’t need each other.
Aside from the anomie and alienation this creates for
people, the problem is that peak nature and peak relationships are together
slowing growth and starving the economy.
Our economy cannot function without growth because most
money is not printed by governments, as people usually imagine, but is instead
loaned into existence by central banks and commercial lenders, who can loan out
ten dollars or more for every dollar they’re required to have in their vaults.
In effect, then, a lender creates new money with every loan.
And the whole point of making loans is to earn interest for
the lender.
But for the borrower, interest obliges her to pay back more
than she borrowed. And to earn the money to pay back the principal plus
accumulated interest, the borrower will need to create goods and services.
Multiply that out across the whole economy, and it becomes an imperative for
economic growth.
“Without growth, debt
increases faster than income and wealth and the whole system crashes. Before
that, you get polarization of wealth income and unemployment,” Eisenstein said,
aptly describing today’s plutocratic rule by the top 1%.
So, since all national currencies, whether the dollar or the
Euro or the Yuan, allow lenders to earn interest, the whole economy becomes
addicted to economic growth. As long as we continue to let banks create our
money through their loans, we’ll all have to keep creating more goods and
services, thus despoiling the Earth and exploiting each other just to stay
above water.
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