Saturday, 28 February 2015

Money as a result of lack of trust

The normal convention is to see money as being based on trust in the sense that we trust that others will accept money as part of transactions for goods and services. In this article, I want to turn this premise around and argue that money has its origins in a lack of trust and that it is about being able to enforce obligations and possibly slavery.

Why do I think that I can challenge the dominant theory of the origins of money and replace it with an alternative theory? The standard theory of the development of money is that it developed as a result of the division of labour and as a way to get around the difficulties of a barter system (Smith, 1776). However, this has been challenged by Graeber (2011) who contends that it developed as a way of accounting for debt obligations. What Graeber is contending is that early communities freely gave in order to satisfy need but there was an understanding that there would be a reciprocal gift when the giver had a need. In his study, Graeber contends that token began to be given as a way of reminding recipients of the debt obligation.

I want to pursue this idea further and argue that these token were given not as a sign of trust but rather as a sign of lack of trust. What I am arguing is that the giver was not convinced that the receiver would return the obligation so sought a means of accounting for the obligation. By creating some token that symbolised the obligation and the size of the obligation, the giver now had a claim over the receiver. When these claims begin to be enforceable within the community then these tokens begin to take on value. If these tokens of obligation begin to be traded as a way of passing the obligation to another party then we have the making of money. Some would argue that this trading of tokens of obligation is when trust comes into the system since the secondary recipient is now trusted to fulfil the original obligation. If instead of the token being given as a reminder of an obligation but rather as a reminder of a claim then we have the making of a modern money system and of the desire to have these tokens backed by some tangible value.

So much of our monetary assumptions are based on the idea that money is a form of trust that these tokens of money will retain their value and be accepted as payment for goods and services. With currency that was backed by a precious metal (i.e. gold or silver) or some other resource, then the recipient of the currency has the expectation that the original issuer will redeem the currency tokens for that resource on demand. However, when the amount of currency in circulation exceeds the backing resources then it is no longer possible for the claim to be honoured. Now most currencies are not backed by tangible resources and are instead honoured by a countries central bank as the issuer of the currency. However, this is beginning to be eroded with the development of complementary currencies and digital currencies.

My contention is that even now, a person holding money is more about a claim that the person has to resources or services offered by a community because of resources and services that they have made avail;able to the community in the past. It is a symbol of a lack of trust in the community to provide such resources or services and in a person being willing to offer their resources and services to the community when a need is identified. The offer of a debt token for resources and services is a way of enticing a member of society to participate in the sharing to meet the needs of the community.

Because we have turned it around from an obligation to return the favour to a payment for resources and services rendered, the system has removed the obligation to meet need and a greater mistrust of those who find themselves unable to compete or without access to resources or services to trade in the community. Further I would contend that the emphasis on having to offer a resource or service that others are prepared to pay for enslaves people into a system of work dependency and removes the freedom to explore their use of talents in other areas that may not have the same financial return.

Returning to a currency backed by a resource may reduce the trust that is required in a system where the token of exchange is based on a willingness to accept it as a token of exchange. However, the underlying need for the tokens in the first place is based on a mistrust of others and their willingness to meet needs that they have the resources to satisfy.

References

Graeber, D. (2011) Debt: The first 5,000 years. New York: Melville House Publishing

Smith, A. (2005 [1776]) An inquiry into the nature and causes of the wealth of nations. Electronic Classics Series, Pennsylvania Stats University. Available from: http://www.rrojasdatabank.info/Wealth-Nations.pdf or http://www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nations.pdf

Have we been here before?

I have been rereading Brian McLaren's (2007) “Everything must change.” He finishes chapter 10 by talking about “Jesus resituated.” Basically, he describes the context in which Jesus lived, that is the Roman empire which promoted wealth and peace for all but in reality this was wealth and peace for a small elite while the rest were enslaved, taxed, enlisted, or treated as production units for empires prosperity, and security systems. The Roman empire framing story was about the benefits for those in the empire except for those who were on the margins. The surrounding countries were either in fear of the empire or they hoped to join it so that they could share in the perceived prosperity of the empire. The empire enlisted young men to defend its boarders and treated women as production factories to supply the needed men for the wars. McLaren also talks about how it was dangerous to speak out against the imperial machine.

It seems that there are some parallels with our current rumbling societal machine with its so called prosperity through growth framing story. We are called to endure austerity (except for the wealthy elite, corporate executives, and wealthy sports stars and celebrities) to ensure that we share in the later prosperity of the new juggernaut. To protect, the prosperity especially for the elite, the rest must pay their taxes, see their incomes squeezed, and be enlisted in the fight against those who would see to oppose the stumbling juggernaut.

We see immigration as an increasing problem as people outside the juggernaut perceive the relative prosperity of those within and nations on the boarders struggle to become a part but are excluded if they don't measure up to the stringent economic standards of the juggernaut.

Radicals and terrorists operate in marginalised countries attacking resources that the juggernaut needs for survival. Young people are not yet being conscripted but they are being encouraged to join the military machinery to defend the juggernaut from these rebel factions. New laws and agreements are introduced that maintain the rights of the wealthy and corporates at the expense of all others.

It couldn't be possible in the framing story that those who are being conscripted could possibly be radicalised by a system that promised prosperity for all except the poor, the middle class, those who did not agree with the framing story, those who questioned the direction of the juggernaut, etc.

Like the Roman empire, this modern age juggernaut will continue to rumble along as long as the majority of it citizens will accept the dominate framing story despite the hardship they endure and the growing inequality in society. After all it is the juggernaut that enables them to meet their needs and provides their security. Does it matter that a few who are cast out on the fringes become radicalised and fight against the juggernaut? The juggernaut is superior and can bring down these radicals.

But wait, what happened to the mighty Roman empire? What happened to the empires that European nations built? What happened and is happening in the nations they once colonised? Surely, we can't question the imperial mandate and its story that we have repeated throughout generations?

References

McLaren, B. D. (2007). everything must change: When the world's biggest problems and Jesus' good news collide. Nashville: Thomas Nelson.

Saturday, 21 February 2015

Who has the fresh vision?

Over the last two weeks, I have listened to people talking about sustainability through localising economies and the framing stories that we live by. In world events, the Greek election has resulted in a government that claimed to be anti-austerity and the new Greek governments desire to renegotiate their funding package has dominated the economic news. The Ukraine and ISIS conflicts are also major news items that are a backdrop to this blog.

What hits the British news channels shows a complete lack of new initiatives, new ideas, and the questioning of the direction that capitalist society is rushing in. The dominant politicians whose voices dominate our news seem stuck in the same framing story and same objectives. They ask us to decide in the upcoming election who is best to lead us down the same path to economic slavery and self-destruction. The difference if there really is one is about the pace of the actions that they want to carry out.

I had hoped that the result of the Greek elections might have seen a new brand of politician who was prepared to stand up to the dominant framing story and say a clear “No” to other European politicians but what we see is simply a desire to stay with the same framing story but to go at a slower pace. Why shouldn't Greece take control of its own currency? Why should its people have to carry a debt incurred through private banker decision making and a philosophy that newly created money (the property of the people's efforts) shouldn't be given to the government to spend into existence? Why can't Greece default on their debt and declare an inability to pay especially when that debt is crippling the country? Why can't Greece generate new money to clear internal debts or to pay for internal projects where the resources are already available? Oh, what I am asking is not in line with the current framing story. It might mean that wealthy countries have to face up to their responsibility in bring Greece and other nations to their knees. The wealthier nations might be exposed as the new economic colonial power.

We seem locked into an economic framing story that is focussed on growth as the solution to stop austerity and austerity as the solution to solve a spirally debt crisis and as the enabler of growth. A framing story that is manipulated by all major political leaders to justify unjust actions that cause greater inequality and poverty. Further, these politicians have no shame in manipulating statistics to promote their own agendas while our news media simply accept the stories with unquestioning loyalty to the framing story. Surely, this is a recipe for self destruction.

We have been reading Brian McLaren's “Everything must change” (2007) where McLaren talks of how in colonialism, the colonialists acted with overconfidence in their own superiority treating the indigenous peoples as inferior. Supposedly, we are now in a new era where we are facing up to the consequences of our colonialist actions. Yet this same colonialist superiority attitude is obvious when you review the events around the civil rights movement in the US. The film Selma clearly shows this but so did our visit to the Civil Rights Museum in Greensboro, North Carolina where the first lunch bar sit-in occurred. We don't seem to be able to shake off this attitude that some people are more superior and should dictate to the rest of us.

I sense this same attitude in my workplace. Those of us at the bottom of the pay heap are treated as though we have nothing to offer in planning the future. Instead we are loaded with excessive workloads and not given the opportunities to feed into decision making processes. There is a dominate story that is about conforming to the dominant stories of the nation. Universities have lost their way as being the places for fostering critical thinking and the questioning of the direction of society. I am not saying there is no innovation. What I am saying is that those innovations fall within the direction of the dominant story of the need for growth and the capitalist economic paradigm.

Our British Prime Minster, David Cameron, and the Chancellor of the Exchequer, George Osborne believe they have superior knowledge to anyone else and can dictate to the nation. The problem is that I see other political leaders doing precisely the same so that the general population is enslaved to the corporate objectives. The international corporation has become the new colonialist and the politicians the puppets. Profit and growth take precedence over sustainability and equality. The rest of us are slaves to this capitalist machinery.

Despite the claims to be postmodern or postcolonial, our attitudes have not changed. We are charging down the same road to self destruction as in previous generations. It is time to stop thinking that our politicians and our democratic processes will solve our problems. We need to be taking the initiative into our own hands and forcing the politicians out of the way. I don't mean through violent force or protest. To do so, we need to foster ways of changing the dominant framing stories. We need to change our economic thinking and what it means to build for the future. Short term survival needs to be replaced with an understanding of long term sustainability and how to build a more equal society that stops writing off large sections of the population. We need a new vision and new direction. This vision may need to dismantle current economic conventions and means of measuring success. The time for change is now.

To this end, I am looking at a research project that I am calling PETTIT (peace innovation through transforming economic thinking). Like the title of Brian McLaren's book, I believe everything must change but that this change must come from a questioning of the framing story that the majority of the population live by. There are three major questions that we need to answer:

  1. What are the possible framing stories that we want to tell?
  2. How do we evaluate the consequences of these framing stories?
  3. How can we challenge the existing framing stories and bring dramatic change to society?

I have some ideas that flow from previous research on the way people understand phenomenon and from being involved in education. The problem is that this work isn't small. It isn't something that fits into the neat little research funding stories. It is multifaceted and it needs wide support to succeed. However, all journeys start with a single step and this is the journey that I am prepared to embark upon.

References

McLaren, B. D. (2007). everything must change: When the world's biggest problems and Jesus' good news collide. Nashville: Thomas Nelson.

Sunday, 1 February 2015

Accounting, Debt, and Society

It is now some months ago that we looked at this chapter (Jackson & Dyson 2012, chapter 8). In fact, the reading group has now completed reading the book and I still struggling with this blog entry. Why?

The chapter describes the transition process with particular emphasis on the reorganisation of the Bank of England accounts and those of commercial banks. Although I depicted these changes in Keynote presentation animation sequence, I struggle to present it in a blog more clearly than it is represented in the book. So I am not going to attempt to restate it or copy their diagrams to a blog. Maybe at some point, I mat publish the animation.

However, it isn't the difficulty of presenting the accounts that challenges my thinking. What is important to me is the way that accounting relates to how we came to be in our current economic position. What I am going to argue is that all our problems stem from a desire to keep account and to know what we have or don't have. I know that some in the reading group have objected to my views on this.

I was hoping that I might have Graeber's (2012) book by now and have read some more on the history of debt. Graeber, according to Jackson and Dyson (2012, p 33-34), contends that debt goes back to a time when “goods where freely given with the caveat that the person receiving them would have to return the favour at some point.” It is the accounting for or quantification of these debt obligations that forms the basis of the formation of money.

Here I will depart from Jackson and Dyson's argument and draw on some of my own faith and belief objectives. As long as the obligation to return a favour is simply an implicit part of the community, there is a freedom to share and interact based on ability to meet need. Once we begin to account for the obligation we begin to argue about the value of the obligation and whether everyone is meeting their obligations. The freedom to share as we are able is diminished and it slowly transforms to the system that we now labour under. The obligation to pay for goods and services enslaves the community to work (often meaningless work) simply to foster trade and in order to live as part of the community.

In our modern society, it has gone step forward so that we are bombarded with messages to purchase items that we don't need. Lenshyn (2014) talks of how when sitting with his son watching cartoons, during one of the advertising breaks, his son turns and asks for the toy being advertised. Lenshyn calls it a barrage to consume. I find myself feeling the same way when I am bombarded with advertising leaflets through my mail box or spam emails. The share volume consumes time to clear. Yet, the message of our society is that we need to push out there messages to purchase, to continually upgrade to the newest and greatest. It is hard to switch off to this drive because it invades the way our society works.

How did we get to this point from a society that in my terms felt an obligation to freely meet need where ever and when ever that was possible. Maybe we don't believe it ever existed. I know for many they don't see it now as a possibility.

The result is that we talk about having to produce to “pay our way in the world.” Surely we produce to meet need, to improve the quality of life. No, these are not the focus of our attention. The focus in our society is no longer on need. Rather we are focused on profit and to ensure that we are making a profit we keep account. We condemn people to slavery so they can be part of our consumerist society. Those who aren't able to participate or don't wish to participate are condemned.

Yes, I campaign for a change in the way money is created because I don't believe money should be the constraint on what we do to help others or to improve the quality of life for everyone on the planet. It seems to me that our values and economic assumptions are twisted and we have lost sight of the primary objective of meeting need and improving the quality of life for everything on this planet.

Yes, chapter 8 presented a new accounting structure for banking but is this only part of the solution?

References

Andrew Jackson and Ben Dyson (2012) Modernising Money: Why our monetary system is broken and how it can be fixed. London: Positive Money.

David Graeber (2012) Debt: The First 5,000 Years. New York: Melville House Publishing.

Lenshyn, C. (2014). Gelassenheit: Deepening the alternative presence of Jesus. In J. Harader & A. O. Green (Eds.), A Living Alternative: Anabaptist Christianity in a Post-Christendom World (pp. 19-27). New York: Ettelloc Publishing.