Twenty theses about money

Published online 21 April 2008.

Since almost all of you forgot to read my diary of last February about Hutchinson, Mellor, and Olsen’s The Politics of Money, I’m going to try to encapsulate the wisdom contained therein in a series of bullet points, with links added.  Maybe I was too long-winded back then.

(Crossposted at Docudharma)


Yeah, there are other things to be concerned about.  Peak oil; abrupt climate change; overfishing; authoritarianism in government; and so on.

One thing we will have to focus upon as we head into the 21st century is the role of the money system in creating the mess we’re in.  As Hutchinson, Mellor, and Olsen point out in The Politics of Money, money is not politically neutral.

The guardians of the “science” of economics would like to pretend that economic life is all about “choices.”  Yeah.  We “choose” to eat, or to starve to death.  I suppose the recent occurrence of global food riots were a matter of “choice” too.  Let’s look at the most telling sentence in that article:

One reason: billions of people are buying ever-greater quantities of food — especially in booming China and India, where many have stopped growing their own food and now have the cash to buy a lot more of it.

In short, increasing dependence upon the money system privileges some to eat, and others to starve.

Our perceptions of economics are colored by the social-scientific division of labor as it developed historically.  Here I would refer you to the link at the bottom of my blogroll, the one labeled “Global Political Economy,” to read Kees van der Pijl’s “A Survey of Global Political Economy.”  Economics is dealt with in chapter 2: the break-up of “political economy” (the discipline of Smith, Ricardo, and Marx) into “politics” and “economics” was motivated as a reaction to Marxism, and so “economics” was created in the 19th century as a science that took the perspective of the investor (through “marginalism”).

If we look at economic decisions politically, however, we can see how “the economy” (as it currently stands) is an economic oligarchy, a system where a rich few make the important decisions.  What we need to cope with abrupt climate change, I argue, is an economic democracy, a system where economic decisions devolve unto individual people — but not individuals conceived as “the masses” (as we currently are), or as “consumers” (as we currently are) or as “voters” (to be plied as we are with psychological strategies via political advertising), but rather as “community members” in systems where all power devolves unto democratic community.  Is that so radical?  Anyway:


1.  Money wouldn’t mean much if it were just a substance.  The residents of “Utopia” (in the Thomas More text) had lots of gold, but it was worthless to them except as jewelry.  So if we are to probe the meaning of money, we must regard money as a social relationship, the same way that it’s regarded by the folks who drive the Brinks Trucks which drive the stuff from locked safe to locked safe under armed guard.

2. Money, then, is a social relationship, as you have to have some to participate in “mainstream society” as a “buyer.”  The social relationship that is money defines the social world as composed of buyers and sellers.

3. Money as such is a social institution, as practically everyone these days participates in the money economy as a seller or as a buyer.  Money’s twin institution is property —  when you are a buyer you are also an owner.

4. Most of the human race has nothing to sell but its labor-power.  In the social world defined by wage labor, the human being is a commodity, a storehouse of labor-power who can be rented by the hour.

5. In a social world defined by money, everything that can be owned is a commodity, an item that can be exchanged for money.  To own something, however, one has to be able to enclose it.  The planet Mars is not a commodity because we can’t reach it, thus we can’t enclose it.  The oceans and atmosphere cannot be owned because they cannot be enclosed as such without destroying their character as oceans and atmosphere.  (This is an important refutation of the right-wing position on the “tragedy of the commons”: since the air and oceans can’t be privatized, there must be a commons, and since there has to be a commons, it must be defended, communally.)  Liquids and gases, however, can be owned if they are enclosed.

6. Since money is something we exchange for property, money itself is granted social value as a universal property-substitute.  Marx’s The Power of Money describes this quality succinctly.

7. Since the social institution that is “property” assumes the enclosure of things, when we buy something we also buy its enclosure.

8. Money, then, is a claim upon enclosure.  Or, more generally, money is a claim upon human labor, whether that human labor be expended to enclose things and to defend their property rights, or to manufacture commodities.

9. The property of money as a claim upon human labor is realized by the fact of social labor.  Since we work for money, money has value.  If we did not work for money, money would have no value.

10. The ability to manufacture money is called “seigniorage.”

11. Our US dollar-based money system grants the rights of seigniorage to the banks.  Banks are granted the right to issue debt “based on reserves” or, more specifically, with their relationship with the Federal Reserve to continually have reserves.  The right to issue debt “based on reserves” is not 1-to-1; banks can issue debt without each dollar being accounted-for in reserves.

12. The government, as the guarantor of property, can borrow as much from the banks as it wants; thus it, also, possesses seigniorage.

13. Thus we have a debt-based money system, in which money is created by debt.

14. In a debt-based money system, businesses must continually strive to increase profits, because only with continual profits can debts be paid off (or can further debt, i.e. money, be generated).

15. The businesses which are most successful at doing this are the domain of an investor class, a group of people who possess a sort of oligopoly of money- and property-power.

16. The so-called “free market” actually requires extensive planning and organization.  The overall framework for this, the capitalist economy, “has been centrally planned and controlled from its origins in the interests of the ruling elite.” (Hutchinson et al., p. 91)

17. Everything is buyable in a debt-based money system, but only at the cost of incurring further debt.  If the processes of debt-accumulation are allowed to proceed toward their logical ends (and with the help of the new bankruptcy laws), the folks who have seigniorage (the banks, the government, and, essentially, the investor class) will possess everyone else in what is called “debt peonage.”  “Debt peonage” is, in essence, the claim of some upon whole lifetimes of labor by others.

18. The alternative to “debt peonage” is to be written out of the economy altogether.  This is the fate of those living in the world’s slums today.  Increasing slum populations are the cause of practically all of the world’s population growth.

19. The alternative to a debt-based money system is a credit-based money system.  In such a system, money is issued as “credit” by communities of workers, who back its value with their labor-power.  The institutionalization of a credit-based money system, however, would mean economic democracy, or, rather, socialism.

20.  The alternative to slum life outside of the money economy is “living off of the land,” a matter continually impoverished by business interests within the money economy for the sake of their own profits.  (See Maria Mies and Veronika Bennholdt-Thomsen’s The Subsistence Perspective for more detail on this matter.)


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