MQ-5: Money Makes The World Go Round? (‘Mythquake’ series)

More on the Mythquake book-project – a book I’ll probably never have time to finish, so here I’m handing it over to whoever might like to take it up.

In the previous chapter, ‘MQ-4: Whoever you voted for…‘, we moved into the level of mythquakes that most people would probably notice within their everyday lives, with politics as the given example. Note, though, that most politics is only a level-4 or thereabouts: despite all of the pretensions of importance, most of it is really little more than arguing about the position of a single deckchair on the Titanic, and for most people, not much – if anything – of real significance will change with each change of government. But here at MQ-5 we do start to get into realms of significant damage, and that do start to affect most people whenever there’s some kind of breakdown – a catastrophic collapse of over-extended assumptions. The example I’ve used here is the comfortably-complacent ‘certainties’ of current economics – and particularly the notion that ‘economics’ is solely synonymous with money.

(Another general aside: yes, we’re currently in the midst of yet another ‘Global Financial Crisis’, and for some countries – and certainly for many individuals – the impacts are occasionally rippling upward in impacts to what might seem like MQ-6 or even MQ-7 levels. But in practice, much of the talk of ‘crisis’ is little more than arguing about what to do about a single broken deckchair on the Titanic: it still doesn’t address any of the deeper issues, and history makes it plain that this is merely the current expression of a regular boom/bust cycle – a repeated pattern of mythquakes that point to much deeper and much more serious fault-lines in the structure of our everyday reality.)

This chapter contains the following sections [all notes-only]:

  • Managing the household
  • A monetary mismatch
  • Back to barter?

Book-development notes are shown in italics inside square-brackets, [like this]. Further commentary on the development-notes is in ordinary type inside curly-braces, {like this}.

MQ-5: Money makes the world go round?

Richter 5: Moderate earthquake. May cause slight damage to well-constructed buildings, but can cause major damage to poorly-constructed buildings. Equivalent to around thirty kilotons of TNT (Nagasaki atomic bomb). Around two to three per day.

Mercalli V: Doors swing open or closed; small objects move; liquid may spill from open containers; almost everyone feels movement; sleepers awake.

Mercalli VI: People have trouble walking; everyone feels movement; objects fall from shelves; furniture moves; trees and bushes shake; windows break, plaster walls may crack, other non-structural damage in poorly-constructed buildings.

Managing the household

[Economics as ‘management of the purse’ vs ‘management of the household’ – money as ‘the easy bit’; meaninglessness of GDP/GNP as a measure of anything.]

{The word ‘economics’ literally translates as ‘the management of the household’. Up until the mid-19th century the word ‘economist’ was essentially synonymous with ‘housewife’ – hence the tautologous term ‘home economics’. Ever since then, though, there’s been a ‘term-hijack‘ which has constrained the view of ‘the management of the household’ to monetary transactions between households – an absurdly limited concept of what actually goes on within and between the various types and scales of economy. We now have ‘micro-economics’, that describes pricing, and ‘macro-economics’, that describes monetary aspects of world trade; but we still have almost no models of economics that describe the whole of an economy. There are some attempts to make this happen, such as GRI (Global Reporting Initiative), and the somewhat bizarre but actually more-realistic ‘Gross National Happiness’ metrics of Bhutan – but always we seem to be dragged back to the monetarist delusion that purports that every activity and every form of value can be can somehow be reduced to monetary terms alone. (It doesn’t work: consider the price of a hug, for example, or the value of hope; likewise the absurdity of putting a monetary ‘valuation’ on irreplaceable personal items such as family photographs.) The mismatch between the over-simplified views of monetary-based ‘economics’ and the much more complex realities of ‘management of the household’ will guarantee repeated mythquakes of varying severity.}

[GDP measures amount of money in circulation, without reference to the purpose or use of that money, e.g. according to GDP measures, crime is good (because keeping people in prison is ‘economic activity’), natural disasters are good (repairing damage is ‘economic activity’), wastefulness is good (excess consumption represents increased ‘economic activity’); proper ‘management of the household’ is therefore ‘bad for the economy’, voluntary work of any kind is ‘bad for the economy’]

{One of the most bizarre notions in current ‘economics’ is the belief that ‘the economy’ depends on people not being economical, but instead must be as wasteful as possible. We are exhorted to spend, spend, spend to keep ‘the wheels of industry’ from falling off: so ingrained is this belief amongst ‘economists’ that the official response in Australia to the ‘Global Financial Crisis’ was to issue everyone with a $900 tax-rebate in the hope that they would go out and spend it on something. Other absurdities can be seen in the notes above. There are so many issues here, around scrambled notions of ‘economics’, that this section alone could be a book in its own right.}

A monetary mismatch

[“Money makes the world go stop” – mismatch between monetary income and resource needs through the stereotyped life-cycle; money-economy as the worst system for managing resources that we could devise.]

{The main aim and claim for monetary economics is that it provides the best possible means to manage the society’s resources. It’s a claim that simply does not hold up in practice: in fact in some it’s almost the worst possible system we could devise. Part of the reason is because of the way we calculate ‘profit’ or ‘loss’ across a single set of transaction rather than across the whole of a system; and it also seems that every time a monetary transaction is involved, the overall system comes to grinding halt – see ‘Money is the root of all… wasted time?‘. Another problem is that it only works at all for those have something ‘monetisable’ to exchange – an assumption which doesn’t actually apply to probably the large majority of the population whose work – like most of mine, in fact – is not ‘monetisable’, or who are somehow classed as ‘not working’. (I still get very upset when I hear a woman say “I don’t work, I’m only a mother”: parenting is some of the hardest work that there is, and what’s that word “only” doing in there, anyway?)

And if we take a map of the stereotype lifecycle, from child to teenager to first leaving home to getting together with a partner to having kids and so on, and onward to old age with perhaps a few serious incidents of accident or illness along the way, and then map probable resource-needs and probable resource-availability against that timeline, we can see straight away that there’s an almost perfect mismatch: whenever we least need resources is when they’re most likely to be available, and certainly when we most need resources is when they’re least likely to be available. In a money-economy we’re supposed somehow to smooth out the bumps via savings and loans and insurances and the like – which have proved, unfortunately, not only to be extremely messy, complicated and unreliable, but also to be a magnet for theft of various kinds, so much so that it’s clear that the system now barely works at all. The word ‘mortgage’ also literally translates as ‘death-pledge’ – a term which is proving all too accurate as gaming of house-prices has resulted in a system that takes ever larger proportions of people’s working life to pay off.

In short, the money-economy does not work – which means it’s a very, very serious source of mythquakes of mid-intensity and, increasingly, above.}

Back to barter?

[Money is simply a standardised form of barter; likewise ‘alternative currencies’, ‘time-currencies’ and ‘Local Energy Transfer Schemes’ (LETS) are merely variations on the exact same theme; barter is not the answer, but a key part of the problem – and unless we tackle that deeper problem, the mythquake-stress will keep building up.]

{If money doesn’t work as a means to manage the economy, what’s the alternative? Various people have proposed a variety of ‘alternative currencies’, some of them based on exchange of time rather than exchange of physical and/or virtual objects – but in practice all of them have been shown to introduce their own complications and failure-points, and none of them so far have explained how it would work for that large majority who have no means or option to exchange anything directly with others. Others have proposed ‘going back to barter’, but the exact same problems still apply, and in essence money is simply a standardised, virtualised form of barter – in many ways an advance on barter, rather than an inherent failure as such. Given that none of these systems can be made to work at a true whole-of-economy scale, it’s clear that the real problem lies deeper than barter itself. Just what that it might be is something that will become clearer as we go along: but in the meantime, expect many more mythquakes around the increasingly-muddled mess that is the money-economy.}

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