Has money become obsolete?
Official sources and the media are readying us: a fresh global crisis will soon kick off which will be worse than 2008. There is open talk of “catastrophes” and “disasters”. But then what? What will our lives be like in the aftermath of a large-scale banking and financial collapse? Argentina went down this path in 2002. Having alone been thus affected and at the price of mass impoverishment, this country’s economy has since managed to engineer a partial turnaround. Right now, European and North American financial sectors in their entirety could well capsize beyond all hope of rescue.
At what point will the stock market crash cease to be something picked up on the news wires and instead become blindingly obvious at street-level? The answer is when money loses its customary purpose: either becoming scarce (deflation) or circulating in vast, albeit devalued, quantities (inflation). In both cases, the circulation of commodities and services will gradually come to a halt since nowhere will their owners be able to find anybody with the ‘right’ wherewithal permitting these owners access in turn to other commodities and services. They will thus be led to keep them for themselves. There will be fully-stocked shops devoid of customers, fully operational factories but no factory hand in sight, and teacherless schools since for months no salaries have been paid. Something so axiomatic that it had disappeared from view will then have to be acknowledged: there is no crisis in production itself. Productivity in every sector is continually on the rise. Arable land can meet global food requirements with factories and workshops even producing far more than what is actually needed, desirable and sustainable. The world’s woes are not due, as in the Middle Ages, to natural disasters but to a kind of sorcery that separates man from his product.
What no longer functions is the “interface” that lies between man and what he produces: money. Modernity has seen money become the “universal mediation” (Marx). The present crisis confronts us with the paradox at the core of capitalist society, i.e. its production of goods and services is not an end in itself but simply a means. The sole objective is the amassing of money – the investment of one pound in order to create two. As a result, “real” production in its entirety can be affected and even come to a standstill should this mechanism break down. Like the Tantalus of Greek myth, we are thus tortured by the riches we can see but are always out of our reach because we are unable to pay for them. This enforced renunciation has always been the lot of the poor but unprecedented circumstances may well see it now affect very nearly the whole society. The last word of the market is to leave us to starve amidst mountains of rotting food that carry a do-not-touch warning.
The decriers of the world of high finance assure us, however, that investments, credit, and the stock market are merely the outgrowths of an economic body in fine fettle. Once the bubble bursts, market turbulence and casualties will of course ensue but this will merely be a hiccup and the scene will soon be set again for a renewed period of economic growth and stability. Is this really so? We obtain nearly everything in this day and age in exchange for payment. This is especially, though not exclusively, so for the majority of city-dwellers who invariably depend on outside agencies for food, heating, electricity, medical care and transport. Should supermarkets, electricity suppliers, petrol pumps and hospitals then accept only fast diminishing reserves of the “right” money (eg. not the by then totally devalued indigenous tender, but rather a strong foreign currency), destitution is just around the corner. In the event that there are enough of us, ready for the “insurrection” to boot, we could still storm the supermarkets or siphon off electricity free. But in the face of supermarkets with empty shelves and widespread, extended power cuts because the funds to pay electricity suppliers and workers have dried up, what then? Barter, new forms of mutual support and direct exchange could be organized: it might even provide an excellent opportunity to revivify social cohesion. But is it really credible that this could be swiftly and extensively achieved against a backdrop of mayhem and looting? Some will then point to the countryside as the place where raw materials may be had by all. It comes as a matter of some regret then that the European Union has spent decades paying farmers to cut down trees, tear up their vineyards and send their livestock to slaughter… In the aftermath of the collapse of Eastern-bloc countries, millions of people managed to survive thanks to relatives in rural areas with their small allotments. Could the same be said of present-day France or Germany?
There is of course no certainty that things will come to such a pass. But even a partial collapse of the financial system will bring us face to face with the consequences of the fact that we have bound ourselves hand and foot to money, having invested it with the exclusive task of powering society. We are serenaded with assurances that money has existed since the dawn of history, yet in pre-capitalist societies its role was no more than a marginal one. Only in recent decades have we got to the point where money is the vector for every semblance of life, infiltrating the deepest recesses of individual and collective existence. Without the money to make things circulate, we are like a body drained of blood.
Money is only real, however, when it is the expression of labour actually carried out and of the value embodied by this labour. In every other respect money is merely a fiction based on nothing but the confidence the parties concerned have in each other, a confidence that could vanish from one moment to the next as is presently the case. The phenomenon we are now witnessing is one unforeseen by economics, that is to say not the crisis of a single currency and the economy it represents to the advantage of another, stronger currency. Rather, the euro, dollar and yen are all in crisis and there is no way that the few countries still rated AAA by the ratings agencies will alone be able to rescue the global economy. Nowhere do any of the proposed economic fixes work. The free market is as dysfunctional as the State, austerity as dysfunctional as the recovery, Keynesianism as dysfunctional as monetarism. Indeed, the problem lies at a far deeper level. We are in actual fact witnessing a devaluation of money per se together with the eclipse of its function; in short, its obsolescence. None of this has come about though as the result of a conscious decision taken by mankind finally become weary of what Sophocles early on termed “the worst custom that ever grew among mankind” but as an uncontrolled, chaotic and extremely dangerous process. It is as if the wheelchair has been taken away from somebody who had long ago lost the use of his lower limbs. Money is our fetish; a god we ourselves created, yet on whom we think we depend and to whom we are prepared to sacrifice everything in order to appease his wrath…
What, then, is to be done? There is no shortage of proponents of alternative fixes: socially responsible economy, systems of local exchange, demurrage, cooperative assistance… all of which could, in the best-case scenario, work at an extremely localized level provided that a viable situation obtains everywhere else. Nevertheless, one thing remains certain: “outrage” at banking industry “excesses” or bankers’ “greed” is not enough. Despite the latter’s very real existence, it is not the cause but the result of flagging capitalist dynamics. The replacement of living labour – the sole source of value which in the form of money is the sole aim of capitalist production – by a plethora of technologies that create no value, has virtually exhausted the source of the production of value. By being forced, under competitive pressure, to develop these technologies, capitalism has managed in the long run to dig its own grave. This process, which has been part and parcel of its basic logic from the very beginning, has crossed a critical threshold over the last few decades. It has only been possible to cover up the non-profitability of capital’s use by resorting to ever larger amounts of credit, i.e. to the advance consumption of anticipated future profits. At the present juncture, even this artificial extension of the life of capital seems to have used up all its resources.
Grounds may therefore be adduced for the necessity – and here too the obvious possibility and opportunity – of withdrawing from a system based on value and abstract labour, money and the commodity, capital and wages. This leap into the unknown is a daunting prospect, even for the inveterate censurers of the crimes of the “capitalists”. The present focus tends to be on hounding the vile speculator and although it is hard not to share the outrage at banking industry profits, it should be stressed that all this falls far short of a systemic critique of capitalism. It comes as no surprise to learn then that for Barack Obama and George Soros such outrage is understandable. Nevertheless, the reality is considerably more tragic: in the event of a serial bank default and a stop to the issue of legal tender, all of us may well be dragged under in their wake for we have long been stripped of the possibility of living in any way other than by spending money. It would be a good thing were we to go back to the drawing board – but who can say at what “price” this would be achieved!
Nobody can in all honesty claim to know how to organize life for tens of millions of people once money has lost its raison d’être. At the very least, an acknowledgement of the problem might be a good place to start. Like life post-oil, we may need to make preparations for life post-money.