[R-G] [BillTottenWeblog] Nature, Wealth, and Money

[Bill Totten]

by John Michael Greer

The Archdruid Report (July 15 2009)

Druid perspectives on nature, culture, and the future of industrial society


Since the beginning of the current series of Archdruid Report posts on
economics, I've wondered in an idle sort of way if it might come to the
attention of a professional economist or two. Last week's post, though,
seems to have settled that issue. I deliberately begged a question in that
post, one that cuts to the core of conventional economic theory, and it
would have taken a degree of self-control exceedingly rare in any
profession for a mainstream economist to read the discussion and not rise
to the bait.

I'm referring, of course, to the cavalier way in which the concept of
money was treated in last week's post. In terms of mainstream economics,
it's nonsense to talk about wealth or value without discussing how those
things are reflected in some form of pricing mechanism - that is, how
they're measured in money. The widely held belief that the wealth produced
by nature is valueless until it's transformed into something else by human
labor, in fact, bases itself largely on the fact that nobody has to pay
the nonhuman world for that wealth, and so figuring out its price poses a
major challenge - not insoluble, but significant enough that few
economists have been willing to take it up.

Since Adam Smith launched modern economics in 1776 with The Wealth of
Nations, unresolved disputes over the nature of money have formed a fault
line running straight through the heartland of economic thought. Some
economists - these days, the majority - treat wealth and money as
interchangeable concepts. Others - the minority nowadays - draw a sharp
distinction between them. Those who accept the identity of money and
wealth seem most often to think of the rules governing money as something
akin to laws of nature, untainted by human purposes and agendas; those who
draw a distinction between them tend to see those rules as social
constructs that benefit some people at the expense of others.

Longtime readers of The Archdruid Report will probably have little trouble
guessing where along this spectrum of debate I can be found. It's simple
cultural chauvinism to insist that the particular, and peculiar, form of
money used in contemporary Western societies is the only one that matters.
Over the span of human history, money is a fairly late invention, and
until very recently it played only a small part in the lives of most
people even in the societies that used it; until the eighteenth century,
even in the Western world, a majority of all goods and services were
produced and exchanged within the household economy, or in local customary
economies that made no use of money, and only the well off could expect to
handle money on a daily basis.

Every human society has had some social mechanism for distributing goods
and services. Paleoanthropologists have argued that it was precisely the
evolution of food sharing within bands of ancestral humans that gave our
species the evolutionary edge to expand across the globe in the face of
wide variations in habitat and the rigors of ice age climates. Hunting and
gathering societies around the world have intricate arrangements for
sorting out who gets how much of the various natural sources of wealth
available to them; so do the horticultural and pastoral human ecologies
that evolved out of the hunter-gatherer pattern. Some of these latter use
a particular trade good in certain contexts as a general marker for value
- think of the shell-bead wampum strands used by the First Nations in
eastern North America, for example - but these get used only in a
restricted class of prestige exchanges, and play no role in everyday
exchanges of goods and services. The same thing was true of gold and
silver coinage in many ancient and medieval societies; most of the
population of medieval England, for example, could expect to go from one
winter to the next without seeing more than a handful of silver coins.