MONEY - THE SOLVENT
A commodity appears, at first sight, a very trivial thing, and easily understood. It's analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.
For this section, you might remove the word commodities in Marx's description of commodity fetishism - perhaps his most important contribution to modern thought. Replace the word "commodities" with the word "money," and you have stated the overarching theme of the following arguments about the nature of money.
Money appears, at first sight, a very trivial thing, and easily understood. It's analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.
Plenty of other people who may not adhere to what has become Marxist doctrine in the pursuit of political power have nonetheless taken hold of this critical insight that Marx provided. Alf Hornborg, a Swedish Human Ecology Professor and anthropologist, applied the notion of fetishism to machines and made some astonishing discoveries, about which I'll write further along.
For now, we just need to settle on a general definition for "fetishism," then explain why it is important.
Wikipedia has a very good entry on the subject of "commodity fetishism," and I'll just quote the lead:.
In Karl Marx's critique of the political economy of capitalism, commodity fetishism is the perception of the social relationships involved in production, not as relationships among people, but as economic relationships among the money and commodities exchanged in market trade. As such, commodity fetishism transforms the subjective, abstract aspects of economic value into objective, real things that people believe have intrinsic value.
We judge the state of the world through the conceptual filters with which we are most familiar and well-practiced.
When we live in a society where money is an absolute necessity for the survival of almost all people, then all people will become well-practiced in exchanging money for things, and of understanding the world itself as fundamentally a monetary exchange. We go to the grocery store, and we see beautiful clusters of fat green grapes, with a little sticker that says "Grown in Chile," we don't mess with the sticker in most cases, we look at the price tag. We see the commodity - this thing we want, but which is produced-for-sale (definition of a commodity) - and we see our money, and we make a calculation based on getting the most of that commodity that we can in exchange for the least amount of money.
We are unaccustomed, and indeed disinclined, to think about that actual human relations that were necessary to produce a cluster of fat green grapes onto the produce stands of your local Meijers or Super-Walmart. This is how fetishism works. The reference to fetishes is one aimed back at ideas of magic in both philosophy and religion (metaphysical subtleties and theological niceties). Belief in a fetish was belief that certain objects had certain kinds of special powers. The special power of the commodity is to appear - as if by magic - on that produce stand with a price fixed to it. This is the way commodities appear to many of us, because we are not looking critically at the commodity and trying to understand its history. We don't need to know what kind of farm is was grown on in Chile, nor the labor conditions there, nor the environmental impact of producing fruit on such a large scale, nor the forms of handling and transportation, nor the labor relations of transportation, nor the environmental impact of that transportation, nor the practices and holdings of the companies that own the farms and the transportation, and so on.
So this is commodity fetishism, but as we learned from Polanyi, some things behave in potentially destructive ways when they are transformed into commodities themselves, i.e., land, labor, and money. Interestingly enough, though he wrote in 1945, Polanyi was prescient on this, because we have now seen serial financial collapses - we are still in the one from 2007 - and social calamities base precisely on people treating money as a thing to buy and sell.
Let's look now more closely at money and try to get a fix on exactly what it is and what it does.
If you teach a child to shop, to go to the corner store with a dollar and buy a treat, for example, the child will learn quickly how to go through the appropriate steps to get the treat. She will also come to value the money, in the way a child values things, as "mine." She will not understand anything we are about to read about money, but she will be familiar with money - a magically-appearing object - and even learn to use it more effectively and broadly over time. Most of us use a remote for television sets, while very few of us really understand how the thing works.
Consequently, most Western people go through life seeking money and using money without getting past the "mine" stage. Some money is mine. Other money is not mine. What time is dinner? I wonder what kind of bird that is.
I want to make the case that money is a thing so simultaneously powerful and amoral that we ought to consider how we treat and use money in the same ways we consider how to treat and use explosives. For that, we have to look well beyond mine-not-mine.
In a sense, the monetized, industrial, market society has created a general regression to childhood for the whole society - the child says "mine," then she learns "more," and then she finally learns "now." Our society is based exactly on sustaining that infantile attitude for everyone, because it is the mind of a child trapped in an adult's body, the consumer. Mine, more, now! I can sell shit with that.
The Jesus of the Gospels doesn't seem very inclined to talk about sex, which we hear about all the time in church, but he talks about money all the time. Jesus says watch out for it, that it is dangerous. You cannot serve God and Money at the same time. That is ascribing a hell of a lot of power to money.
In his own terrestrial lifetime, Jesus saw a process wherein money facilitated terrible suffering. In 1st Century Palestine, the greatest misuse of money was - as it may be now - debt. Subsistence farmers would have a bad year, be forced to borrow, become unable to pay, and lose their land - themselves becoming then either wage labor or servants. Jesus was a wage laborer, likely as not in Sepphoris, a massive Herodian city and cultural center that was under construction in his lifetime. Sepphoris was around three miles from Nazareth, the village of around 200 people where Jesus grew up.
Dependence on money always means dependence on money that is controlled by someone. To the degree that you are not that someone, your are dependent on the people who do control it. If you have no money, but need money to survive, then you have to do something for someone with money, like surrender your farm or work for them or both. One difference between Jesus' time and now is that then there were many people who could survive without money, or without a great deal of it. Nowadays, in the West at least, and more and more now worldwide, the overwhelming majority of people cannot survive without money, precisely because everything necessary for life has been systematically commoditized for the market and destroyed in its non-commoditized forms.
This dependence invests the people who learn how to accumulate money with an enormous power, and one that merits fear and extreme caution. We know, as Christians, that the story of the Fall is a story telling humans that we ought not seek the power of God. It is the first temptation, before any other, and history has proven that those who seek power want consolidate and aggrandize it; and they will become amoral in order to achieve that. A haughty spirit goes before a fall.
So money makes consolidations of power possible in very particular ways, as we are seeing in our own epoch. Other cultural forms, besides money, were used to take and consolidate the power of coercive force against other people. Evil is evil, but money has the capacity in the wrong hands to amplify evils beyond anyone's former imaginations.
The reason is not only moral failure, it is also built into the mechanics of money - it is structural. Or a better analog is chemical. Money functions as a solvent. To explain that, we have to go back and look at all kinds of exchange, then try to understand the ways particular kinds of exchange have related and particular kinds of social consequences.
Exchange is two things at once: a material process in nature and (variable) culturally-determined kinds of human-to-human exchange. Both these processes - natural exchange and human exchange - are interdeterminate, that is, they evolve together because of a close relationship, which means they need to be studied together if we are to understand them. It also means that every human practice of exchange has some kind of knock-on effect in the material-cultural world.
If two clans meet once a month to barter, there is a relatively slow velocity to exchange, and the exchanges are of different goods - not money. If Clan 1 makes knives and Clan 2 makes pots, then this exchange is never priced, and the exchange is of one kind of good for a different kind of good. Every kitchen and cook area requires knives and pots. Both walk away fully equipped with exactly what they want, first hand. There is no symbolism in the exchange. No one is exploited, and the environmental impact is minimal.
Symbolism in trade, like symbolism in anything else, corresponds to abstraction. They aren't the same, but they are correspondent. The greater the number of layers of symbols, the greater the degree of abstraction.
Money - of whatever kind - happens when a meaning of value is assigned to a substance that is not traded for its own utility. If we have three clans, and one has paint, but Clan 1 wants paint, while Clan 2 doesn't, then Clan 3 might exchange paint for extra knives, then exchange the knives for pots. As these relations become more complex, exchange is governed by a low velocity.
The addition of a universal-equivalent (an abstract value) increases the velocity of exchange.
That is why money is useful, and why money - of some kind - is unlikely to ever disappear. There are some people who argue for the abolition of money, having recognized the destructive potential of money, but this is a naive and utopian position that sees money as immoral as opposed to amoral. Money can produce a good, i.e, increasing the velocity of exchange. Like any good, exchange velocity can become its opposite after a certain threshold. Salt is good, but too much salt is toxic. But velocity doesn't tell the whole story. Money has a quantitative aspect, and its effect - exchange-velocity - also has a quantitative effect. You can have more or less money. And you can have greater or lesser velocity.
We know that money can engender the "mine" response, and the "more" response. We know it possessively and quantitatively. Bu money also has a quality that is not well-understood.
Barter mirrors signals, or signs, in nature, that have two aspects. To understand this, we need to enter the field of "semiotics," or signs. In all of nature, we see stimulus and response, two parts, or a dyad. One thing does something, and another entity does something in response. The billiard ball hits another billiard ball, and the second ball moves.
With signification - language being a good example - a third aspect is added, meaning. I say the word "plate" to signify an actual flattened dish. But signification also implies that there is more than one subject involved. I don't need to tell myself that there is a plate. I tell you the word, and you interpret it. It has meaning.
We have introduced a level of abstraction, or a move away from concrete reality. If I go to a restaurant and order the "vegetarian plate," I am no longer referring to the actual plate, but to the type of food I want on the plate... an additional degree of abstraction. Money works in a similar way for exchange. Money is a sign that mediates exchange.
But where the sign/word-symbol "plate" has a specific "referrent," which is an actual plate, or even something served on a plate, money can stand for any number of unrelated things. I can exchange money for a ham, a pair of glasses, a palm reading, or a dose of heroin.
It is here where money becomes a different kind of sign than language. Chris Waller, in his essay, "The Semiotic Theory of Money," says:
The abstraction of language facilitated the development of intellectual richness. The abstraction of money facilitated the development of material wealth. The world was created through language. Money can likewise be creative.
By "the world," of course, he means our perceptions of the world in the form of ideas. Now, "intellectual richness" is itself a metaphor, and it is a metaphor based on material wealth - the accumulation of goods, meaning the latter gives the meaning to the former.
The accumulation of ideas and knowledge does not create scarcity by taking from one and giving to another. The accumulation of wealth most often does, whether it is by plunder or purchase. Money's character is unique from intellectual acumen, even if there are useful comparisons between the two. Those differences, however, also matter. Money needs to be understood first of all as money.
If a unit of value, say a dollar, says anything, it says it in one word. We can make the word up, so I'll use the sound "ding." One dollar is "ding." Two dollars is "ding ding." Five dollars is "ding ding ding ding ding." It's like a music that can be played with only one note. We have the unit - dollar - modified by a number. We don't have red dollars and blue dollars, big dollars and small dollars, soft dollars and hard dollars, or moral and immoral dollars.
If I am very rich, there is only one thing I require: a hell of a lot of dollars. It is purely quantitative, and the same thing applies whether I gained those dollars by day-trading, by running a factory, or by robbing banks. I am rich because I have a lot of dollars (and others have few, which gives me power over them).
It is true that a form of material complexity has increased based on money, but again, wealth is a different, though related, idea. In the next section, we will look at the most material aspect of nature in the form of natural law, i.e., thermodynamics, and show a radical disconnection between monetary wealth and thermodynamic order.
For now, the important thing to note is how money increases exchange velocities, while at the same time it creates the potential for a new form of wealth accumulation.
For the vast majority of time that societies of Homo sapiens have existed - by latest calculations, around 200,000 years - exchange media beyond barter have been highly localized if they existed at all. The first exchange media that can be confirmed are from around 10,000 years ago, the last 5 percent of the age of Homo sapiens. Those media themselves had use-value, as differentiated from exchange-value. They were cattle.
So while there was a surplus of cattle, cattle can become an agreed-upon exchange-value, even though you can still milk them, or make new cattle, or eat them. They retained their use-value.
General-purpose money, the kind we use now, has no value except as exchange value. And there are other aspects of ever-more-abstracted money that increase exchange-velocity. If spondylus shells are used as money, for example, even though they can still be used for decoration, they are at least more portable than a cow. I can travel further, faster, and get more stuff (at least as far as spo0ndulys shells are accepted as a soluble exchange-equivalent.
So money underwent certain evolutions, each creating a greater degree of abstraction.
Precious metals became more universally accepted, and they could be minted and pre-weighed to simplify (and speed up) exchange. This was specie money, even more abstract than a local product exchanged in a small, insular society.
Eventually, we started to issue paper-notes that were titles to specie that was stored somewhere else. The gold standard was a system where your dollar bill was theoretically exchangeable for 1/35 of a Troy ounce of gold, even if you went your whole life without ever seeing any gold. People just exchanged the paper notes. Another degree of abstraction: the note is a symbol for the gold, which is a symbol for a quantitative value that is a symbol for whatever is purchased.
Eventually, the gold standard was dropped, and the note stood for X-value, backed by a political establishment that demanded that kind of note for the payment of taxes. That's what "legal tender" means on your dollar bill - it is legal for paying taxes. You can try to pay your taxes with cows if you like. Good luck with that.
Now, we can actually get paid and pay others with magnetically-encoded plastic cards, and even over a computer. Uber-abstraction. And as we have seen, uber-accumulation - with a tiny minority atop the worldwide heap of humanity that "owns" an enormous amount of X-values. "Ding ding ding ding ding ding ding... etc. etc. etc..."
We also see a staggering increase in velocity. A tech-savvy teenager with a healthy dose of inherited wealth can jump onto E-Trade and swap ownership shares (or more abstractly, derivatives) for transnational corporations at a in a matter of seconds. He or she can swap, buy, and sell (exchange) a thousand times in a single day without breaking a sweat.
Liquidity - having money on hand. There is a reason we say that someone with a degree of disposable income is "solvent." She or he has the monetary capacity to break-loose (solvents break things down) those use values that have been produced as commodities. I can break loose some food from a commodity warehouse called a grocery store. I can also break loose powdered rhinoceros horn that I believe to be an aphrodisiac if I like. I need not know anything about poaching in South Africa, which could lead to the disruption of an ecosystem and the extinction of a species.
Money - The greater its abstraction, the more general its use, the more potent it is as a solvent.
Because we all now use money, even depend on it for our survival, and because when we exchange money for goods, we are rewarded with the use-value of the goods, we become habituated not only to the process of exchange, but to the reward, the appetite for which is not slaked, but stimulated. We begin to value money in the way we might value an addictive drug - as something that can produce results right away (velocity), something that can make us feel better fast.
This appetite - which can be externally stimulated - turns money into an end in itself. This appetite - which can be externally stimulated - turns money into an end in itself.
For the love of money is a root of all kinds of evil. (italics added)
- 1 Timothy 6:10
Money, the solvent, not only dissolves material goods from source to consumer (from the rhinoceros to sexually-insecure me), it stimulates a demand for more material goods.
Material goods begin in certain places as part of the general environment and as part of the human social environment. When material goods are dissolved easily and quickly, without controls on extraction, then not only are aspects of the environment dissolved, but the material bases of existing societies are dissolved.
Alf Hornborg said that general-purpose money allows us to trade tracts of rain forest for Coca-Cola. The follow-on is that the people who lived in and on that forest have the basis of their social existence dissolved in the process. Because social relations are imbricated in a specific material environment, the dissolution of material environments creates the dissolution of communities.
Money is a solvent that can dissolve the bonds of community. The combination of exchange-velocity and the "addictive" character of money-exchanges in an ever more commodified society is a volatile and dangerous mix, where capricious appetites can and are placed aboard a high-velocity vehicle.
General-purpose money is an entitlement to commodities (which are placed for sale), but when - as Polanyi noted - labor, land, and money itself are commodities, then the entitlement of the rich extends to... labor, land, and money. When I go to a restaurant and pay for a meal, my money entitles me to some food, yes, but also to the labor of a cook and a servant (waiter/waitress). As Alf Hornborg once said, money allows one to appropriate time and space (That's velocity!). I can literally travel from New York to London in a few hours by shelling out the right amount of cash. How fast can someone without money make the same trip?
And because money is exchanged between people, where it becomes a species of power, we can say that the money-sign always signifies a social relation. This is important on its own, but it is also important because we are material as well as social beings. Our very existence is contingent - forgive me - on a material foundation that transfers energy and matter into and out of our bodies.