Read Sacred Economics: Money, Gift, and Society in the Age of Transition Online
Authors: Charles Eisenstein
Sacred Economics: Money, Gift, and Society in the Age of Transition (36 page)
1.
GDP is likely to contract more quickly and less smoothly than population, perhaps by 1 to 2 percent per year, or about one-half per generation. This is on a global scale. In some countries growth will persist longer than in others.
2.
Yong, “Fertility Rates Climb Back Up.”
3.
Caron, “Abundance Creates Utility but Destroys Exchange Value.”
4.
To be sure, there are things at which technological medicine excels. It is inferior to herbal medicine at treating most of the chronic conditions that afflict people today, but it is unsurpassed in most emergency situations. I am not advocating its termination, only its recession back into its proper realm. The same goes for many of the other bloated institutions that dominate our society.
5.
Jarvis, “When Innovation Yields Efficiency.”
6.
Reasons, “Innovative Deflation.”
THE SOCIAL DIVIDEND
Most men would feel insulted if it were proposed to employ them in throwing stones over a wall, and then in throwing them back, merely that they might earn their wages. But many are no more worthily employed now
.
—Henry David Thoreau
Clearly the most unfortunate people are those who must do the same thing over and over again, every minute, or perhaps twenty to the minute. They deserve the shortest hours and the highest pay
.
—John Kenneth Galbraith
In large part, the history of technology is the history of labor-saving devices. A diesel backhoe can do the work of five hundred men with shovels. A bulldozer can do the work of five hundred lumberjacks with axes. A computer can do the work of five hundred old-time accountants with pens and paper. After centuries of technological advances, why do we find ourselves working just as much as ever? Why do most people on earth still live in a daily experience of scarcity? For centuries, futurists have predicted an imminent age of leisure. Why has it never happened?
The reason is that, at every opportunity, we have chosen to produce more rather than to work less. We have been helpless to choose otherwise.
Under the current system, growth in leisure is impossible without some kind of wealth redistribution. Imagine what would happen if, all of a sudden, a magical technology were found that could double the productivity of every worker. Now the same amount of goods is available with half the labor. If (as in a steady-state or degrowth economy) demand does not increase, then half the workers are now superfluous. To stay competitive, firms must fire half their workers, make them part-time, or pay them less. Aggregate wages will fall by half since no one will pay workers more than the revenues they are generating for the employer. The laid-off workers no longer have the money to buy the products, even though they are about 50 percent cheaper. In the end, despite more goods being available with less effort, the money to buy those goods doesn’t get to the people who could use them. Leisure has increased all right; it is called “unemployment”—and the results are catastrophic: a rapid concentration of wealth, deflation, bankruptcies, and so on as described in
Chapter 6
.
The ensuing socioeconomic calamity can be averted in two ways: wealth redistribution or growth. To accomplish the former, we could simply take money away from the employed and give it to the unemployed, subsidize firms in keeping superfluous employees, or pay everyone a social wage regardless of whether they work or not. These redistributive policies diminish the relative wealth and power of the holders of money. The other solution, in the above scenario, would be to double demand so as to keep everyone employed.
Since, generally speaking, the rich are in control of things and don’t want their wealth to be redistributed, the traditional solution to the problem of overproduction and underemployment is to somehow generate economic growth, which means increasing
demand for new goods and services. One way to do that is through exports; obviously, this solution cannot work for the planet as a whole. Another way to increase demand is, as I have abundantly described, to colonize the nonmonetary realm—to make people buy what was once free. Finally, we can simply destroy excess production through war and waste. All of these measures keep everyone hard at work when natural demand has been sated.
The ideology of growth, the story of Ascent, says that natural demand can never be sated, that it is infinitely (upwardly) elastic. It assumes an endless supply of new markets, new needs, and new desires. But as I have observed, the only object of desire that knows no satiety is money. The assumption of limitless needs and therefore limitless demand drives the insanity we see today—and the economic logic that justifies it.
1
In the past we always had a choice of what to do with gains in efficiency: work less or consume more. Compelled by a growth-dependent money system, we consistently chose the latter. Instead of working less hard to meet existing needs more easily, we have constantly created new needs to meet or, more often, transferred needs from the gift into the money realm or sought to fulfill infinite needs with finite things. Such has driven our ascent, the development of our gifts of hand and mind. Though the cost to nature, culture, spirit, and humanity has been high, this development is not without its rightful purpose. Today, as the natural and cultural commonwealth is exhausted, the context of our choice—work less or consume more—is changing. The age of ascent is winding to a close, and we seek to apply the gifts we have developed toward their true purpose in a new relationship to Earth. The age of growth is over. John Maynard Keynes expressed a premonition of this epochal shift in
Economic Consequences of the Peace:
On the one hand the laboring classes accepted … a situation in which they could call their own very little of the cake that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of “saving” became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the nonconsumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment.
And so the cake increased; but to what end was not clearly contemplated
. Individuals would be
exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory—the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.
2
On the collective level, not consuming the cake means choosing growth over leisure. More efficient production technology allows us either to work less or to work just as hard and produce more stuff. Our economic system requires and embodies the latter choice. But despite today’s association of “Keynesian” economics with fiscal stimulus, Keynes himself never saw stimulus as a permanent solution. As a society, we have been artificially stimulating demand now for seventy years, through military spending, highway construction, and subsidies for accelerating extraction, construction, consumption, and imperialism. Attempting to uphold economic growth and keep the marginal efficiency of capital ahead of interest, we have trapped ourselves in a pattern of more and more production, whether we need it or not. Adapting to this trap, economic theory, with its assumption of infinite wants, says we will always “need it,” always need to produce more and more, if not in one industry then in another. I have described this process differently: as a depletion of first one realm and then another of natural, social, cultural, and spiritual capital. Keynes did not state it so explicitly, living as he did in the ideological context of Ascent, but he clearly intuited it. His use of the past tense in the above passage suggests, at least to me, that one day it would be time to eat the cake: to choose less work over more stuff.
A positive risk-free interest rate is the economic aspect of the “exhortation” Keynes described to “cultivate the pleasures of security and anticipation” or, in my language, to mortgage the present moment to the future, to choose security, or a semblance thereof, over freedom. You see, the economic logic I have described has a personal dimension as well. For the past age, we have had an incentive to choose work over leisure, even when we didn’t need the money, because interest promises that our money will be able to buy even more leisure in the future. By abstaining from pleasure and leisure—and indeed, all too often, from our best impulses—we might even attain the economic version of heaven: early retirement. But as often with religion, the promise of heaven only serves to keep us in chains. The time of our servitude, though, is over. The condition of the planet now urgently demands that we turn our attention away from “growing the cake.”
Ever since the dawn of the industrial era, we have borne an ever-present anxiety that we will be replaced by machines. And indeed this has come to pass for many, as machines take over functions once performed by humans. The only way to maintain full employment has been through growth, and yet here I am calling for an end to growth and an end to full employment (for money) as well. So, given that our age-old anxiety is upon us, let us examine what, exactly, it means for our labor to be replaced by a machine.
To be taken over by a machine, the job one is doing must have been mechanical to begin with. As society as a whole became more mechanized, more and more jobs took on the machine’s characteristics of uniformity, routine, and standardization. This was unavoidable
when these jobs were to operate machines or otherwise plug into machine-dominated processes. Herein lies a much deeper source of our anxiety: not that we will be replaced by machines, but that we will
become
machines, that we will live and work like machines.
The most famous antimachine movement, the Luddites of the early nineteenth century, were aware of this. According to researcher Kirkpatrick Sale, theirs was not a blind, superstitious hatred of machinery; they thought machinery had its proper place. They were outraged not only by their loss of livelihood but by the shoddy products, numbing tedium, constant danger, and dehumanizing conditions of the factories. They were resisting the mechanization of labor. The replacement of highly skilled, autonomous production with degrading, dangerous factory work is an affront to the human spirit.
The goal of a compassionate economy, therefore, is not to provide “jobs,” as most liberal politicians seem to think. Once work has become mechanical, it is in a sense too late—inhuman work might as well be done by machines. I cannot help but remark on the inanity of economic programs that seek to make more “jobs,” as if we needed more goods and more services. Why do we want to create more jobs? It is so people have money to live. For that purpose, they might as well dig holes in the ground and fill them up again, as Keynes famously quipped. Present economic policies attempt just that: witness the current efforts to reignite housing construction at a time when there are 19 million vacant housing units in the United States!
3
Wouldn’t it be better to pay people to
do nothing at all, and free up their creative energy to meet the urgent needs of the world?
Clearly, we possess the means and face the necessity to grow less, to work less, and to turn our energies toward other things. It is time to redeem the age-old promise of industry: that technology will allow a dramatic reduction in the workweek and usher in an “age of leisure.” Unfortunately, the term
leisure
carries connotations of frivolity and dissipation that are inconsistent with the urgent needs of the planet and its people as the age turns. There is a vast amount of important work to be done, work that is consistent with degrowth because it won’t necessarily produce salable product. There are forests to replant, sick people to care for, an entire planet to be healed. I think we are going to be very busy. We are going to work hard doing deeply meaningful things that no longer must fight upstream against the flow of money, the imperative of growth. Yet I also believe we will have more true leisure—the experience of the abundance of time—than we do today. The scarcity of time is one reason we overconsume, attempting to compensate for the loss of this most primal of all wealth. Time is life. To be truly rich is to have sovereignty over our own time.
So far I have described a system that shifts financial incentives toward the preservation and expansion of the ecosystem and the rest of the commons, allowing money to flow to those who need it in the absence of growth. But there is an even more radical way to end the principle of “money shall go to those who will generate even more of it” upon which modern banking is based. Why not just give people money? Everyone?
4
This is the idea of a “social
dividend” or “social wage,” advocated in the 1920s by Major Douglas, founder of the social credit movement.
The idea has both an economic and a moral rationale. Douglas, a British engineer, observed the same thing Marx did—that workers receive a shrinking share of revenues as industry becomes less labor-intensive and more capital-intensive—eventually leading to poverty, polarization of wealth, and economic depression due to falling demand. As a remedy, he proposed issuing fiat money in an amount sufficient for all citizens to purchase the products of their own labor, both as a direct per-capita payment and as a rebate on purchases—a negative sales tax. This proposal is not as far outside the economic mainstream as you may think—the stimulus checks sent out to all U.S. households in 2008 were a dilute form of a social dividend and were intended to have precisely the effect Douglas envisioned: to bring money to those who will spend it and counter economic depression.
5
These were not welfare checks given only to the poor. They were stimulus checks given to everyone.
