Money – an Antinomy

Thesis: Money makes the world go round.

In our world, money is the measure of all things.

It is useful, we are told, by the economic sages, as a store of value and medium of exchange. Without the institution of money we would have to rely on supplying our own needs or bartering real goods with each other. This raises problems of coordination of supply and demand, and of storage of stuff. How do I find the people who produce what I need and want what I can produce? If no such people exist, how do I find the time to swap my produce for something that I can swap again for what I want? How long a chain of bartering is feasible? And where do I store the intervening (possibly perishable) goods between one link and the next? This presents a daunting and impossibly inefficient picture. But along comes money – something we all agree to treat as a universal solvent of value, easy to swap for anything, easy to store without risk of decay, requiring no complicated deliberate coordination of a network of production and exchange. As long as we all trust each other to accept this medium, it is a fantastic social benefit.

And once it exists it can be used to do more than just enable exchange between different people in different places. It can travel through time. We can save it up for the future, to enable us to live once we can no longer produce anything to swap for what we need.

Can we imagine a world without money? That seems very hard to do.

Antithesis: Money is the root of all evil.

Money increases the possibility of extreme inequality in resources between people (and peoples). The accumulation of wealth in vast amounts is much easier in practice when that wealth can be stored as gold in a bank vault or even better as digital records in a virtual vault, rather than in the form of goods, land, buildings, etc., which take effort to maintain and make use of. And once inequality in possession of wealth exists, it gives the wealthy people power over the rest. Unequal wealth is, at bottom, a tool of power over other people. When money is the measure of all things, we all need access to it to live, so those who control the money can control the people who need it. (If we were all equally wealthy, wealth would not give us power over each other. In that case it probably would make little sense to talk of wealthy individuals; instead society as a whole would be wealthy.)

With accumulated inequality, money becomes, instead of a mere medium of exchange or a convenient stand-in for valued things, a bestower of power and worthiness on its owners and of value on what can be bought. People without money come to be seen as valueless, because they lack the fundamental economic power – purchasing power. And things that cannot be bought and sold, like ecosystems and kindness, cannot be valued. The economic magic of the invisible hand that supposedly adjusts supply and demand to create an ideal equilibrium ignores the needs of the poor and the non-human, because those ‘demands’ are not expressed in monetary terms. So we see desperate attempts to protect the environment by ‘monetizing’ its ‘services’ or creating a market in carbon emissions. Meanwhile, inequality in power grows, as the institutions of government, meant to serve us all, are captured by the power of money over information, over political parties, over elected decision-makers.

To those that have shall be given…

 

But does the usefulness of money, the apparently essential services it provides, require that such unequal wealth must be possible? Can the concept of a medium of exchange be separated from that of a store of value that can be accumulated so that some people end up holding vastly more than others? Can the antinomy be resolved? Universal basic income anyone?

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Social mobility – reprise

I’m currently reading Robert Peston’s book, WTF, which discusses, among other things, the decline in social mobility and the increase in and entrenchment of inequality in Britain and the USA. Social mobility has been in the news too with the resignations from the UK social mobility board. This reminded me of a post from 2014, which I thought I’d repost as it still seems relevant (and this blog has a few more followers than it had then).

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haves and have-nots

Repost starts here:

I’ve been thinking about the idea of ‘social mobility’ lately. You tend to hear the words spoken by politicians in worthy discussions about improving the lot of the poor, reducing child poverty, enabling people to move up the social scale. Not like the bad old days when people were all trapped in the class they were born to. It sounds quite a good thing, this social mobility.

But the picture that it evokes, of a social ladder (like, if not identical to, the property ladder) that we are all trying (encouraged) to climb, seems problematic to me. It suggests that we can all go up indefinitely, or at least that no one is going down. No one mentions that social mobility might go down as well as up the ladder, or that there might be snakes too. ‘Social mobility’ seems to be a way of avoiding talking about redistribution of wealth (we don’t want to scare the party donors after all).

But wait – am I confusing upward social mobility with increased wealth? Aren’t these two different things? Possibly, but there is a long and complicated discussion to be had. (See http://www.youtube.com/watch?v=SfiFTEaz_0U for a classic view of the distinction – when social mobility seemed impossible and ‘innate breeding’ was an accepted notion – how much has changed since then?) Grant for the moment that in our consumer society, money is the bottom line. This is why, for instance, educational qualifications (which, in another world/time, might be valued purely for the sake of the learning they represent as a good in itself) are now justified in financial terms as a means to an end – the return on your investment of time and money (debt) will be greater lifetime earnings, they say. So I will pursue this line of thought on the assumption that social mobility and increased income/wealth are very closely related, if not identical.

But if positive social mobility is possible without a balancing negative mobility, that is, without redistribution of wealth, there must be an ever-growing pot of resources to enable us all to have more. The myth of unlimited growth hovers in the background. [2017 comment: Peston seems to accept growth as a permanent goal at least as far as I’ve read.]

Let’s look harder at the ladder. The people at the bottom have no jobs and their incomes are (more or less grudgingly) paid by the rest of society, through taxes or charity. They have little or no power or freedom to choose how they live their lives. They are surplus to requirements. This is the position that the philanthropic politicians want to lift people out of (incidentally reducing the benefits bill).

The next rung (or the first rung, like the ‘starter home’) is a minimum wage job, not much more power or freedom here (maybe less actually) than at the ground level but at least you’re not so dependent on benefits (this is the theory, remember). As you go up, you get paid more for your labour/time. The idea is that you and your time are worth more because you have become more skilled. You have joined a more exclusive group and the law of supply and demand requires that your price goes up. So we must all get more skilled, get degrees, certification, continuous professional development, etc., to make ourselves rarer and more expensive. (There’s a bit of a paradox there, isn’t there? If we are all getting more skilled we can’t be getter rarer, so how can we be worth more?)

Anyway, what about the top of the ladder? The logical progression of increasing value, increasing return to time, is the place the city traders all want to be, where you have acquired so much wealth that you don’t need to work at all anymore, because your money will work for you, and you can live comfortably, nay luxuriously, on the interest alone. These lucky few have escaped from the law of supply and demand. Like the people at the bottom, they have no jobs, but that does not matter, because they have money. If this is the top of the ladder, it is very clear that we can’t all get there – someone needs to be doing the work that holds the ladder up. That is to say that the top of the ladder depends on there being people further down, whose work is undervalued enough to generate excess returns which are the interest on which the truly wealthy can live without working.

What if you try to define social mobility in other terms, not just money? What might it mean? Social mobility seems to carry with it a notion of hierarchy. (I used the term ‘social scale’ above, without really thinking about it. Did you notice? Did it grate?) We talk of ‘upwardly mobile’ people, and there is a sense of rising status in society, of becoming more socially valued, of people ‘bettering themselves’, like the virtuous Big Issue sellers pulling themselves up by their bootstraps. Is this just to fall back into old assumptions of class divisions? When we talk of social mobility are we just aiming for a society where everyone is at least middle class? Where everyone aspires to be management level and every job requires a degree?

Try again. What is social mobility without an assumed hierarchy?

To be socially mobile is not to be trapped in a particular place in society. It is to have many ways of living life open to one. Having more money is only one way of achieving that (though there is surely some minimum level of financial resources which is necessary). More important, it seems to me, is having the ability to choose the goals you want to pursue, the things that will make your life valuable to you, and having access to the resources (financial, but more importantly educational and institutional) to apply yourself to those goals. In these terms, education matters not because it (theoretically) gets you a better paid job, but because it gives you the skills to make those choices and to pursue those goals, whatever they are, in a considered way (to live well for less, as the supermarket ad has it).

But why call this social mobility? Why not just say we want to achieve a society (à la Rawls) which provides to all the basic goods necessary to live a life they can find worthwhile? It’s not about moving up a hierarchy determined by socially accepted notions of value, whether that’s in terms of money or class. It’s about freedom to choose, a freedom which depends on some fundamental things: education, health, a sustainable place to live. And if that involves some redistribution of wealth, some restraint of the ‘free market’, so be it.

Is there any conclusion to these ramblings? Only this perhaps – I think ‘social mobility’ is a red herring. It quietly accepts a hierarchical view of society, while suggesting that hierarchy is ok as long as there’s a chance of moving up it.

Cassandra

The name ‘Cassandra’ keeps coming to mind of late. So I looked her up on wikipedia and found this: ‘She grabbed an axe in one hand and a burning torch in the other, and ran towards the Trojan Horse, intent on destroying it herself to stop the Greeks from destroying Troy.’

Hence:

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In case you can’t zoom in on the text, and with apologies for mixed metaphors and mangled mythology:

‘Do not accept this gift-horse,’ Cassandra cried. ‘Send it back, unopened, to the Tory Brexiteers whence it came. It is a hubristic folly and a gross misdirection; it distracts us from great thefts and greater catastrophes to come. If you look in its mouth, you’ll find the teeth of a wolf.

‘While we gaze, amazed, at its massive and cumbersome form, they are eating the heart of the state, making a meal of our common wealth and fanning the flames of ecological crisis.’

But her own torch and axe were puny, and the baying press-hounds and their trolls bellowed ‘fake news!’, and called her ‘mad woman!’, ‘traitor!’, ‘treehugger!’ and she was not believed.

Pastoral (or carrion)

This is the first linocut I’ve done for ages; it’s also the biggest one I’ve done – 15″ x 5″. The image came to mind last week, from wherever images come from, and lino seemed like the best medium to use.

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in progress

Printed by burnishing with the back of a spoon – I never manage even pressure, hence the patchy edge.

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linoprint – artist’s proof