naked capitalism

By Dan Kervick, a PhD in Philosophy and an active independent scholar specializing in the philosophy of David Hume who also does research in decision theory and analytic metaphysics. Cross posted from New Economics Perspectives.

Where We Can Go from Here

I have asked the reader to follow me through a lengthy series of reflections and thought experiments on the nature and role of money in modern economies.   Some might ask why this issue is so important.  How can these ruminations on the nature of modern monetary systems help guide our thinking on the task of building a more fair and decent society of democratic equals?   How can they help us create a society in which democratic solidarity trumps self-regarding and avaricious greed, and in which broad and shared prosperity replaces the concentrated economic privilege and supremacy of the few?

It is important to keep the political problem of money in proper perspective.  No one needs to be reminded that money plays an incredibly significant role in modern societies.  But it is also important not to overrate the role of money.  The most important reason to reflect on the nature of money is that by doing so we better understand all those things that are not money, all of the sources of real and non-instrumental value in the world that are the ultimate ends we seek and the ultimate sources of our happiness.  And as we improve our understanding of the purposes served by money and monetary systems, our improved understanding can help liberate us from our dependency on monetary systems controlled by the powerful.

Clearly money is just an instrument:  a tool that helps us to organize our economic lives.  It is used for assigning quantitative values to the real goods and services we produce.  It assists in the production, distribution and exchange of those goods and services, and in the prudent storage of value and purchasing power over time.   A monetary system cannot be separated from the larger economic and social order of which it is a part.   A more democratic monetary system will therefore be part of a more democratic economic system and a more democratic society.

The cause of genuine democracy will, of course, require steps that go well beyond reform of the monetary system.  If we seek a more democratic society, one in which decision-making power over our everyday lives and common futures is more evenly distributed among all of our people, it will be necessary for all of us to embrace the demanding responsibilities of democratic governance.   This can be hard to do in the face of so many decades of governmental failure, where government itself has sometimes seemed to have become nothing but a tool of the plutocracy.  Some of the tendency in recent history among dissidents and reformers has been to pull away from one another other rather than pull together.  Some of us hope only to liberate ourselves from government and from one another in order to be left alone to pursue our individual happiness on our own terms.

This thoroughly individualistic approach cannot succeed. The cravings for ever more personal freedom, and for ever more liberation from the responsibilities of democratic government, will only lead to the eventual dissolution of democratic government and the triumph of authoritarianism.  Either we work together as equals to govern our lives and govern our societies, or ambitious and ruthless people commanding great stores of wealth will take advantage of the vacuum to seize control and govern our societies for us.   The urge for freedom is natural and praiseworthy, but the dream of a real and durable freedom that can exist outside the cooperative efforts of a democratic people practicing vigilant and industrious democratic governance is not the dream of a free people, but the twilight illusion of a defeated and alienated people who have given up on the kinds of freedom and well-being that can only be achieved through social solidarity and teamwork.

In the end, we are dependent and social creatures, built by nature for social and community life, and for relationships based on love, fellowship and friendship.

We have been living in recent decades through an anti-social era of greed, separation and inequality.   Those of us who have lived this way for a long time might have become accustomed to the norms and practices of this era, and might even have convinced ourselves that these norms and practices are appropriate and healthy.   But the rising generation of young people, whose natural and healthy sociality and friendliness has not yet been too damaged and disfigured by the ruthless demands of the system of greed know that something  is wrong.  They know that our present way of economic life is disordered and out of balance.

The anti-social era has been marked by a fatalistic passivity in the face of unregulated commerce and market behavior.    But the forlorn era of low social expectations is dying; we can feel it.   People are tired of being on their own.   The defeatist dogma about social change characterizing this dying era is that we can’t choose our society’s future, because people are too weak and stupid and selfish and limited for collective effort to succeed on a large scale.  The future can onlyemerge in an entirely unpredictable fashion from the crisscrossing patterns of individuals pursuing their own personal goals without any significant degree of social cooperation or coordination.   The result of this trend in thinking has been a withering of the social imagination and the enfeeblement of the democratic practices of our people.

In the neoliberal world of the past few decades, politics has become small, unambitious and managerial.   This dispirited managerial government presides over a society in which pathologies of social living are promoted as virtues: radical individualism, greed, ambitions of supremacy, cravings for isolation, hatred of community, and a debasement of healthy human relationships into commercial and exploitative transactions come to be seen as normal.   But the gloomy religions of self-seeking isolation are not just debilitating; they are dispiriting.  As David Graeber has written, “the last thirty years have seen the construction of a vast bureaucratic apparatus for the creation and maintenance of hopelessness, a giant machine designed, first and foremost, to destroy any sense of possible alternative futures.”

The fading era of market fundamentalism and hyper-individualism was trumpeted as the “end of history.”   But history is starting up again.   In the shadow of the current recession, we are beginning to recapture the optimistic sense that the future is something we can envision and choose.  We can work to build a social consensus about the future we want, make large and ambitious choices about the shape of that future and then work with one another in the task of creating the future we have envisioned.   We need not sit back, wait, and just see what turns up.  The possibility of a mass democratic movement for profound social change begins with the recognition that the machine of despair is a lie, and that success is actually possible.

It is starting.   People all over the world, frustrated by the dismal and meaningless pursuit of individual achievement and material gain alone without larger social purpose, and fatigued by the insecurity, stresses and manic busyness that afflict the neoliberal individual, are reaching out to re-forge the social contract, establish a new sense of justice based on teamwork and equality, and articulate visions of the human future that are a match for the inherent human dignity we sense in ourselves and recognize in our fellows.   The world that we have passively allowed to be built around us by commercial frenzy devoid of higher purpose is an assault on that dignity.

It is notable and inspiring that as the Occupy Wall Street movement took shape around the United States and other parts of the world, the participants in the occupations organized themselves as communities of equals, in which every voice is equally prized and harmonious consensus is avidly sought.  The hunger for democratic community and self-determination is palpable.  This is not the laissez faire form of self-determination, in which each individual strives only to determine the course of one individual life, but a more encompassing phenomenon, in which people strive to build and sustain communities and then work together as equals in order to make well-founded, democratic decisions to determine the direction of the community.   It’s hard work.    But the work is inspiring and ennobling, and people are naturally drawn to it.

In both the United States and Europe, policy-making elites – whose allegiances are to the plutocrats who are responsible for funding and sustaining the political operations of these elites – are aggressively working to take advantage of the stress and confusion caused by the present global economic crisis to dismantle progressive social systems.  They are targeting systems of public ownership and organized social cooperation, and are working to undermine the capacity for democratic governance.   For the very wealthy, democratic governments represent nothing but competitors.   These governments have sometimes acted in the past to diminish some of the formidable power the wealthy would otherwise possess over entire societies, and they sometimes even strip them of some of the wealth that they have earned from the sweat of others.  Plutocrats would like nothing better than to put real democracy out of business, and to leave behind nothing but a toy facsimile of democracy – something like a high school student government that is allowed to engage in a little democratic role-playing inside an adult social institution that the students really don’t control.

So the plutocrats have put out a stark and coordinated message through the media channels they control, and through the opinion-leaders they own and influence.  It is a message designed to invoke fear and panic, and to achieve democratic surrender:   The message is that we are out of money, that our governments are bankrupt, that they must opt for austerity and downsizing and contraction, and that we must hand over even more decision-making to bankers, bond markets and technocrats – the functionaries of the plutocracy.
This message is preposterous.   Societies build their futures and common wealth out of the real resources they possess, not out of money.  Money is only a tool, and it is the simplest and most inexpensive tool we can make.   Modern democracies are very rich in human, material and technological resources.   We are not “out of” anything important of real and fundamental value.  The plutocrats might be out of ideas; and they are running out of time.   But the democratic peoples over whom the plutocrats are trying to reassert control are only out of patience with the plutocracy.

And this brings us back to the issue of monetary democracy.  The time has come to consider some specifics:  What role can money play in building a more democratic society?  How should we organize our monetary system so that the public’s money is ruled by the public and made to serve public purposes, and is not instead perverted into an instrument that primarily serves plutocrats in their drive to rule over the public?   In the final installment in this series I will propose six tasks for democratic economic reform, each of which has some dependence on the democratic reform of our monetary system.