from Social to Universal, what comes after a Monetized Economy?

Cross posted: limits of a monetized economy

I've written about the failure of our economic models to account for our happiness and wel.... I want to go into a little more detail about what an alternative view for our society might look like post-money, but first, some more general news about the failure of our economic models to register real value outside of the work place in terms of the Global Economy.

 

Current Opinion from some Economists today...

...expresses a criticism of the FED. At the Roosevelt Institute there recently was a panel on the Future of the Federal Reserve, a large debate surrounding the current actions and criticisms of the Federal Reserve as well as panel talks about the FED's current program, the so called QE2 which is scheduled to be halted by June of this year without a clear date (or even plans) for a better and more effective QE3.

It seems that the general consensus agreed upon by everyone except the Fed and the government is that QE2 was in fact too conservative to be a success and was in fact a failure. QE2 did not generate the jobs people hoped for nor did it spark the economy with low interest rates.

The FED becomes an easy target in current debates as to why the economy is at risk as to why haven't job growth happened and who is to blame. I am not an economist, so I will spare you the details, but I am very interested in the subject. If anything, we are plagued by a systematic failure of the existing financial infrastructure. The problem comes from huge debt. In order to handle many of the national and international debts that are due this year entire nations will have to get debt financing. The question, of course, is who do they get it from?

If the government that prints money has no money to pay for its debt, then who does it?

The current bailout situations and the burst of that financial bubble earlier in 2008-9 resulted in monetizing private debt as public debt. A short term solution seems to be simply to do the same thing again. If that happens, loser in these transactions will be individuals who have saved up money. It will eat away at the savings of the American public -- in fact of the rest of the world since the US dollar is known as "reserve currency" meaning that people in other countries will use the US dollar to transact business because their own government's money is not considered stable enough. In fact, China has the largest amount of US currency in reserve, totalling an astounding 3 trillion dollars.

But of course, decisions the FED stem directly from situations here in the U.S. and not of the rest of the world.

This might stave off the problem for another time, but the debt problem persists. Interest rates will mount and at some future point an even larger debt will be incurred, things time with our public economy and our private savings exhausted... our credit exhausted...

So what is the solution?

If you are not sure if you can trust the reserve currency, the idea is to switch to a currency you CAN trust. In this case, GOLD and SILVER. SO you see that the price of gold is to break $1,600 for a troy ounce by the end of 2011. Additionally companies that mine metals are a desired commodity as well as indicated by China's repeated bids to buy foreign mining and farming companies. In fact there are rumored talks among some of China's officials to reinvest their U.S. Currency into Gold.

So why aren't U.S. officials fazed? Everyone's doing the same dance right now -- everyone's still using U.S. currency. At some point there needs to be an exit strategy. According to Max Keiser, Goldman-Sachs officials have started sipon money from the stock mar.... One such online company, Zynga, wildly successful for its which had made a move last year in Oct 2010 to create its own currency. With the investment of Goldman-Sachs officials, the Fed is investigating the matter. According to Keiser though, Goldman-Sachs is siphoning money from Wall Street all the while keeping the bubble of pricing up through the use of computers that trade. One of his evidences despite the Dow's recent record high even in this bad economy stems from the drop in VOLUME even while the PRICE is high. The idea being that the unwitting American shareholder will be left holding the worthless shares when this new bubble bursts.

 

Holding the bag means holding... what?

So my judgmental sentiments aside, it seems that when the economy "downsizes" in value because of inflation -- because the monetization of our economy creates excess value, value based on speculation of the future value of money -- the system will implode. Much of this is doom and gloom. One fair indicator of when this will happen in the near future is the fall of the United States as an economic power -- passing its economic torch to its largest landowner, China as soon as 2016 according to Chris Martenson.

This of course may not happen, 2016 still is over one presidential term away, and who knows maybe Bernanke will wisen up and the Financial overlords that bombed a 65 trillion dollar world economy to personally make for themselves a few million will find themselves in jail...

But if that doesn't happen, there's a good chance that we homo sapiens will have to reorganize into a new resource distribution system. Doubtlessly, this will involve money, as people have always had money, but it may not involve capital as the primary exchange for labor.

This is a little beyond the scope of this post, but it's perhaps important to note that democratization of private industries is not the key to establishing a more free society.  The logic of freedom, as Zizek put it eloquently:
the key to actual freedom resides in the “apolitical” network of social relations, from the market to the family. Here the change required is not political reform but a transformation of the social relations of production—which entails precisely revolutionary class struggle rather than democratic elections or any other “political” measure in the narrow sense of the term. We do not vote on who owns what, or about relations in the factory, and so on — such matters remain outside the sphere of the political, and it is illusory to expect that one will effectively change things by “extending” democracy into the economic sphere (by, say, reorganizing the banks to place them under popular control). Radical changes in this domain need to be made outside the sphere of legal “rights.” In “democratic” procedures (which, of course, can have a positive role to play), no matter how radical our anti-capitalism, solutions are sought solely through those democratic mechanisms which themselves form part of the apparatuses of the “bourgeois” state that guarantees the undisturbed reproduction of capital.


He continues on here, citing how violence is the inescapable and inevitable truth of the States' impotence, and that extending the logic of the state into new regimes is a needless pro.... So rather than dwell in violence and democracy, let us instead move back into the apolitical communities where most of us are heavily invested and are infact, as American sitcoms like to show us, largely apolitical.


There are perhaps an infinite number of possibilities but I will cover only one form, Peer to Peer Networks, which, instead of being an extension of state democracy, or state anything, rather is an extension of the communal commons "space" by which most of us interact anyway... (even if it's not recognized by our current global the economy as such.)

 

Introducing Peer to Peer Networks

The rosey scenario of so called Peer to Peer Networks comes from a computer analogy but it carries with it a sociological ideology of individuals interacting as individuals and not through the manifests of corporations. Peer to Peer interaction gets a great deal of exploration through P2P Foundation, a utopian organization that seeks to explore the very real possibility of a new form of distribution closer to the maxim 'think global, act local' in which interested individuals interact with one another in mutually beneficial ways. If you think this is radically different from Homo Economius, you're absolutely right. This organization tends towards the touchy-feely-poetics but one article likens the difference between spiritual self-suifficiency vs interdependent interbeiningness via "spiritual collectives" vs "gurus" with the emphasis on collectives as being more wholesome since we are socially interconnected.

There is much to be said and in my opinion (not said) about how P2P is beneficial but as presented here, the impetus is to take a larger view of who we are as human beings and offer a human solution rather than one concocted through the confines of "Rational Choice Theory". The thinker I would like to cite for this line of thought is Hazel Henderson.

Henderson is a grown-up hippie. Her main attack on the economy today stems from what she sees as two critiques:
  • Seeing monetary exchange as the only meaningful measurement of production
  • understanding human beings as theoritical economic creatures that seek only to maximize utility and reduce cost

 

She points out of course, that people are not so perfectly greedy, although greed is a part of who we are... and that over half of all the meaningful production occurs through the work of women. The PTA meetings, the cooking, the cleaning, even helping your neighbor paint their house on the weekend -- these are meaningful acts of production that are not measured in any form of monetary exchange. Likewise, for her, financial instruments whose only purpose is to change a tax status or promote speculation is not a meaningful act of production, although it carries with it a monetary cost. Many of the 'goods' we enjoy, like the environment, likewise cannot be monetized, valued or taken into the consideration as a cost inherent in any kind of business plan. As such, the environment is generally worthless and meaningless according to economic theory. Also, our hanging onto the notion of GDP as a meaningful measurement of economic health makes no sense, especially since new cars may be exchanged between two countries and then counted as GDP for both countries.  Structurally her critique means a few things:

  • Money fails as an indicator of meaning since it fails to objectively capture what we value
  • On the producer side, a variety of interactions exist without any consideration of money (they are valueless, even if those behaviors maintain the quality of life for all)
Our attempt to organize our society around economic theories of value is a terrible thing, resulting in incredible amounts of waste and human misery. We work too long to support those we love who we never see because we have to work.  An extensive video of hers can be found here: The Alternative Economy of Hazel Henderson.

If you are like me, then I apologize, because the only thing I find somewhat grating is that she calls it the "Love Economy". All the same, her suggestion is not to remove money, but to de-center it.  Instead of money, we would find meaningful metrics in the healthiness of society through several different axises which are not tied to the market.  She cites thirteen separate axises of human need.  For instance, the quality of clean air will be measured by environmental engineers on a scale relevant to their industry, not to a dollar value which can then be compared to other monetized "goods" and found to be more or less valuable than other goods as an 'objective' dollar amount.

The Love Economy however, is just one expression of P2P. In the larger picture, the Love Economy stems from a trying to arrange society in order to maximize it values, something which is largely impossible to maintain if you hold that the only value is the collection of money.

This would mean the end of the cost-benefit analysis and ROI for decision making. (If you would like to glance a governmental body of text related to the work I do on a daily basis for businesses, take a peek: Cost Benefit Analysis for Americans with Disabilities Act 2010, in particular "side transfer for water closets 602.3".) Even if this text puts you off, I am afraid most of us would not be able to function without these kinds of "objective" guidelines.  How would managers or committees decide any course of action without a financial basis to limit and define meaningful activity?

It's most likely too, that the destruction of money as the primary signifier/coupler/de-/re-territorialisating agent will signal the end of corporations. The injunction of corporations as legal entities that benefits key players in the corporate hierarchy must end.  Corporations as entities of ownership and resource control were seen by Marx as a form of communism and collective ownership, but modern corporations are concentrations of wealth and power in the hands of a relative few:  I forget where I heard this but something like the top 34 corporations in the world have more GDP than all but the top 8 countries, of which the corporations are "members of", but you can imagine how long that would last, especially with a weakened US dollar.  As reported by Lenin's Tomb this class struggle is comparable to what's happening in other countries like the middle east because it's a class struggle, even if the stakes are somewhat different.  If corporations throw their weight around, of course local governments that can't follow them need to provide conditions for those corporations such that a corporation will understand that it makes monetary sense for them to stay.  This is perhaps ironic for those of us living in the United States, as our material wealth in the 50s - 90s had come from corporation's exploitation and the oppression of other nations for the US's material interests, as pointed out by Keith Hart.

But now that the corporations have become increasingly powerful in a global economy, they have the option of forcing by design or accident local changes to their favor.  It's not too far off then, that Corporations can be considered the dominant species on the planet.

 

from Social to Universal in a Global Economy

Given such a dramatic statement, for us individuals to understand our place in the world we cannot rely on simply being just a citizen of a nation or a worker inside another corporation.  We have to understand our role as producers and consumers, first and foremost (since that is how we meaningfully interact with a value-system of money).  This switch from citizen to consumer/producer fuels much of the current revolution in Search Engine Optimization.  Most of the industry is still mulling over how social networking influences online presence.

Online presence includes all the online discussion in the 3rd dimension of consumer to consumer (the first being business to consumer and the second being consumer to business).  The freedom of information on the internet has eliminated the days when corporations had control over their timely product unveilings, or their press releases.  The internet has allowed companies to have a better feedback of what works for their customers and what doesn't.  Since the speed of information is so much faster, companies need to release products that aren't perfected in order to remain competitive or deal with informal press releases better.  Both Apple and Coke have proven adept at providing expression as their main marketing maneuver rather than the more traditional marketing which aims at offering consumers impressions.  The influx of twitters and facebook "likes" and "shares" have proven to....  Already all the major SEO companies have begun to recognize that in good marketing relationships with customers online, your cusomters produce your best (and worse) content.  More often than not, relationship building online and instantaneous information flow has allowed each of us to become both consumer and producer.

Which brings me to back to the original point, the producer-consumer dichotomy. One interesting point, among others, that came from an interview with Rachel Botsman came from her observation that we generally think of ourselves as citizens only, or first. That kind of view will need to change in the near future when we have to reorient ourselves as simply participants. In a peer to peer economy, we will be both consumer and producer, not just consumer. We will be directly responsible for our individual interaction and participation as to how resources are transacted. Her example is eBay, in which strangers can participate on equal footing for remote merchandise that is bought without examination.

The philosophical implications of this are many.  The internet has provided a new objective, recordable voting mechanism for companies to be ranked even before consumers open their wallet to "vote" in economic transactions.  A blogger can collect a valuable audience which then becomes an asset to marketers.  Facebook is an extremely intelligent implementation of this kind of collection of information, perhaps one that rivals even Google, with it's long term information hoarding.  This kind of objective interaction with the Other verges on an interaction with the Universal.

Arguably this kind of dichotomy was marked by the first modern cosmopolitian philosopher, Hegel.  Hegel reverses the formalism of Kant by extending Kant beyond subjectivity and as Zizek says, Subjectivising substance devoid of content.  By the imposition of his dialectical process, Hegel reaches the notion of the Universal, garnishing a multitudinous rambling along the way.  Any contemporary philosopher who seeks to tackle the universal must address Hegel, even if it's by avoiding the Hegelian Dialectic method.

The most traditional conception of the universal is best expressed through Lacan's (read Zizek's) Real in which madness, phantasms and partial objects cannot cohere into a meaningful subject.  Is this rhetorically not the perfect analogy to describe the unlinked disorder of the internet where we reach 404 and partial hits on keywords -- such as when I search for one word and get something completely different that I click on?  I don't want to go into schizoanalysis or anything like that.  Rather I want to point out that our relationship with the universal, especially as monitored through the internet is mediated by a direct attempt by a... (and other paranoiac applications).  Whether this be through the paranoid discourse of the state (legality) or through the internet's opposing hysteria as expressed through Bing's initial video campagin today we have the increased injunction from the Other Enjoy! and Obey! simultaneously.

This is not a new injunction.  I won't blame this on Hegel, but increasingly in an more ethnic world with global trade, everything becomes relevant for examination -- starting with culture and human rights and ending with intellectual property and intangible costs.

Overlawyered.com's author, Walter Olson has written extensively about how the legal system has developed into the political monstrosity it exists as today.   Apparently attorneys before law school were more pragmatic, trained on their job in apprenticeships.  After law school invoked a liberal agenda to use the legal system to argue for change, everything became a matter of litigation -- what was perhaps previously a personal dispute between you and your boss now became a matter of employee and employer for all to bear witness to.  Increasingly individual concerns have become scrutinized, first through totalitarian states like Stalin and Maoist Communisms, but more recently in the overlawyered culture that exists today -- anyone can sue anyone for anything, right or wrong.  The influx of attorneys qua politicians (up to 30% or 40% of politicians are attorneys, I believe) comes from the desire to use the court room as a place to change law, which it isn't supposed to be.  Legislation is supposed to change laws.

Anyway, in many ways, the injection of the internet into the intermix of what is accountable (accidential emails, even blogging about belly dancing can ruin a divorce settlement).  This kind of dissemination of all aspects of human life even a humorous but somewhat mostly true guide on how to live with your ... becomes fodder for the voracious paranoia (followed by aimless surfing/hysteria) leaving footprints of human desire and meaning objectified even if this wealth of information doesn't lend itself directly to meaning.

Don't get me wrong, participation in the world is definitively more meaningful than retracting into rigid rationalism, i.e., Hegel is more relevant than Kant, who can't even leave his house without a God as a universal-guideline.  After all, isn't that what WW2 showed Sartre?  Young Sartre stopped writing so much and took his place as a public intellectual, held himself accountable for his actions and attempted to take his message of humanism and authenticity in the face of an ever-growing global economy of maginalization and monetization of human meaning.  After all, old Sartre knew that meaning was in social interaction not in transactions.

Social interactions is something people complain about losing, in an environment with too many people, when we can be alone in a city of one or fifty million people.  Companies are finding out that we got choices -- as with any sales person today has to answer to each of their clients: "Why should we buy from you?"

Just like companies are discovering that collecting Facebook shares and re-tweets is the truest indicator of actual meaning.  And that meaningful relationship will lead to trust, reliance and transactions.  Given this article, that social networking produces the same chemicals falling in love, perhaps I should rescind my statement -- that love economy isn't so far off.... only perhaps "economy" is outdated.

Perhaps we should call it the love network.

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Comment by Alexander Lee on June 30, 2011 at 5:53am

Speaking from the people I know, there are many intelligent individuals who see the problem but prefer to drink and party themselves silly instead of doing anything about anything.  Productivity is for chumps.  I don't know anyone who might be considered blue collar -- and the individuals I tend to relate with socially are artists of every caliber.  Many of them, the ones who party the hardest, are those who wait for the end days to come before they take anything seriously.

 

Of course they are the same age I am and we all live in Los Angeles.  Perhaps that's the problem there.  From what I remember of academics, many of them either believe in the fundamental soundness of the system as guaranteed by its largeness or remain staunchy optimistic.

Comment by John McCreery on May 5, 2011 at 1:54pm
Is it that people don't care? Could it be that they are preoccupied—declines in participation in academically oriented lists as the end of term approaches are entirely predictable? Could it be that this is not the time or place? In my case, I come to OAC partly as a retreat from the political debates endemic in other forums in which I participate. I like having a place where I can, at least briefly, take a rest from politics and discuss academic issues.
Comment by Alexander Lee on May 5, 2011 at 12:02pm

Many of the issues we should be paying attention to and being upset about no one seems to care.

 

For instance, we're losing our savings through inflation.    The government still subsidizes oil companies.  Things like that.

Comment by Alexander Lee on May 5, 2011 at 12:00pm

Ive heard of him but not read anything he wrote.  I liked a youtube video he had a few years ago about what good sci-fi writing is which actually borders on what we might conceive of as good design.

 

I don't think our economy will fail in the sense of a French Revolution or the end of money, but it's fun to think of other ways in which we can distribute.

 

Personally I think the real economy is becoming more and more apparent as nations print more money and we lose our purchasing power because we don't want to pay more tax.

Comment by John McCreery on April 30, 2011 at 3:13am
Alexander, are you aware of the work of science-fiction author, designer and futurologist Bruce Sterling? As I read what you have written here, I am reminded of


Distraction (1998)
Campbell Award nominee, 1999[9]; Hugo Award nominee, 1999[9]; Locus SF Award nominee, 1999[9]; Clarke Award winner, 2000[10]
A master political strategist and a genius genetic researcher find love as they fight an insane Louisiana governor for control of a high-tech scientific facility in a post-collapse United States. US editions: ISBN 0-553-10484-5 (hardcover), ISBN 0-553-57639-9 (paperback).

It isn't the plot that comes to mind. But if this is the novel I think it is, there is a marvelous description of a near future in which the unemployed wander the great plains in camper vans powered by generators that extract biofuel and produce food from prairie grass. Since this the 21st century, they are all on the Web. Leaders rise and fall by being voted up or down in real time. Since by this time everybody else has left for the coasts, they just drift around the plains like the buffalo used to do.

How is this relevant to your proposal? Makes me think about the "real economy," the one where people/peoples compete for scarce resources and, historically speaking, have often been pretty nasty about it.

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