Sacred Economics by Charles Eisenstein
More of what matters, less of what costs the earth
This is an engaging book for Eisenstein uses many fascinating analogies and parallels to frame his arguments and his vision for our post crunch future is a fully integrated set of proposals – Georgist philosophy being strongly featured.
According to Eisenstein, ‘Sacred’ … ‘has two aspects: uniqueness and relatedness. A sacred object or being is one that is special…. one of a kind, ….. infinitely precious, ….. irreplaceable.’
‘Frinstance! Some years ago, the local kids in the village, Bangalow, northern NSW, built themselves a BMX track on land in front of the disused station platform. At weekends and after school they beavered away with shovels, adzes wheelbarrows building jumps, humps and runs; test runs and changes were a continuing feature. The worker/riders hung out on the platform. That track was ‘sacred’! There had been much mentoring, collaboration, learning, giving and taking, differences settled, a hierarchy based on merit, talent and mutual respect; much ‘relatedness’! Negligible money changed hands – it did not boost the GDP at all! It was an element of Sacred Economy.
Much of this book is about money. The classical definition of money – a medium of exchange, a unit of account and a store of value – is examined from many standpoints. How money has come to create an illusion of scarcity in a world of abundance – it is the money that is scarce not the goods and services. How money, unlike all that it can be exchanged for, can grow over time – everything else degrades or has ‘carry costs’. How money may be likened to technology in its in-built propensity to feed on itself, to grow exponentially. How it has been backed by gold and therefore valuable – or is it that gold was valuable because it could be changed for dollars? How today, money is valuable only because of the social agreement that it is so! ‘Physically, it is now next to nothing. Socially, it is next to everything…..’ Eisenstein believes the present monetary system has been a perfect complement to man’s Ascent – from total dependence on nature to almost total mastery of nature – and that this has been for a purpose but we are entering a period of change, a crisis ‘that will provoke us into doing the work we need to do’.
He writes, ‘The purpose of this book is to ….. to illuminate … that money is the ally, and not the enemy, of the more beautiful world our hearts tell us is possible’ The crisis is not due to money per se but to usury – the charging of interest by the owners of money. Usury has become a dominant force, the puppet master ‘that manipulates our elites behind the scenes’. What is used as money today is interest-bearing debt and mathematically, this must grow simply to meet the interest payments. For this reason, the money realm is constantly expanding seeking ever more facets of human activity to monetise.
In addition to driving the expansion of the money realm, usury also generates the competition between us as individuals; it complements the West’s Age of the Individual. To meet the interest payments extra money must be borrowed; by whom? If you are smart, somebody else! Thus usury is destructive of community. Usury also fosters the growing pressure on the environment. As Eisenstein writes, ‘Constant, underlying debt-pressure means there will always be people (corporations, governments and criminals! CC) who are insecure or desperate …. under pressure to survive, ready to cut down the last forest, catch the last fish, liquidate whatever social, natural, cultural and spiritual capital is still available.’ There is a brilliant parable – originally from Bernard Lietaer’s, The Future of Money’ – on how the system affects communities and their natural and social environments in Chapter 6, (page 95).
The social, natural, cultural and spiritual capital of which Eisenstein writes is our common wealth – ours to share. It is everything that was not made by any man – land, the genome, air, the electromagnetic spectrum – and all that was free in earlier times – entertainment, childcare and playtime, sport, food preparation – and ‘the centuries-long accumulation of human knowledge and technology’ – now branded, ‘intellectual property’. The crunch is inevitable because so much of our commonwealth has already been privatised, there are not many domains left for the expanding realm of money to take over that the marginal efficiency of capital has declined significantly. Unless the return on capital is above interest rates, capital flows will dry up and the economy – as measured by GDP – will shrink; today this is politically unacceptable.
The expansion of the money realm is not part of a global conspiracy, it’s just the way the system works, globally and locally. Consider that BMX track at Bangalow; it was on railway land and not insured in any way so the Shire Council paid a contractor to demolish it. A few years later – with the aid of a State Government grant, a BMX track was built on private property outside the village; it is available for a fee and fully insured, of course. A totally monetised BMX track is now contributing to the growth of GDP and community indebtedness; a classic local example of how money ‘takes over’ and what Eisenstein describes as the age old business model; find something that folks get for free, take it away, make it unavailable – then sell it back to them!
On taxes, ‘we have it backwards’. He writes, ‘we are forced to pay on the circulation of goods – a sales tax – whilst there is no tax on the accumulation of wealth not used for exchange.’ Thus he foresees taxes being shifted from individuals’ earnings and consumption on to the use and exploitation of the commons – land tax, pollution, mineral extraction, all the unpaid externalities of commerce and production not part of our consumption costs today. The Henry Tax Review carried some similar proposals!
The most radical proposal is that we change from usury – positive interest on deposits – to negative interest rates. If usury is the root of all evil, eliminating it will get rid of the harmful effects; but if we reverse it we will get real benefits. Negative interest, money that degrades with time, is a difficult concept but it would ensure that we did not keep money idle, we would not deposit it with a bank to give us a risk-free income. We would be ‘encouraged’ into finding some truly productive use, thus facilitating the flow of goods and services, creating ‘abundance’.
Negative interest rates would, over time, redistribute wealth and thus reduce inequality; presently growing unhealthily within and between nations. There is sound research that shows reducing inequality would have community wide ‘health and happiness’ benefits but is essential if social unrest is to be ‘avoided’. A Citizens’ Income as a civic entitlement – as proposed early last century by Major Douglas – is another key element; at present our earned incomes are insufficient to purchase all the fruits of our labours so we borrow to keep the system going! Multiple currencies – local, national, international – are also foreseen.
Eisenstein looks forward to a recession lasting decades in which GDP falls steadily – and our real standard of living, being and relating improves beyond our present dreams; ‘I want to live in a world of beautiful things created by people who love what they do’, he explains. And he sees some glimmers/trends that the world is moving in the right direction but there is a need for us to help.
This is a book for all those who think the world is in a mess and want to do something about it. Who wish to understand how we got here – and what transition might be possible. A book not just to read but to study, comprehend and work from – and the text is freely available online! Here’s a teaser – watch the short film .