The “Human World” without Money, Debt, and Financial Institutions

When you look at the economic state of America, the former beacon upon a hill and economic dynamo, one cannot help but to muse about how the country has fallen so hard and so fast.  But rather than dive too deeply and get into facts and figures and economic / political theory, I want to get to the point and highlight what I think is the core problem — our creation of money, debt, and financial institutions. 

At some point in time, human civilization decided that money, pieces of paper and coins, could represent value and value created.  Here is the first step we took into obscurity.  I find it very strange that a piece of paper or coin can accurately represent value.  Trade and barter made sense.  Give me your basket of fruit in exchange for my hunk of meat and we have a fair deal.  Imagine, if we could put a modern man back in time, and he was to offer a hunter a ten-dollar bill in exchange for a hunk of meat.  The hunter would look at the piece of paper and say, “what in the hell am I supposed to do with this?”  I have a broad question when it comes to assuming money has intrinsic worth.  How much money would it take to buy the sun, fresh rivers, a bountiful ocean, clean crisp air, and fertile soil?  These elements have immense value for they are the basis for life, yet we can’t put a monetary value on what they are worth — although I am sure there are some economists modeling out the worth of the elements to support the new green economy.  Good luck with those calculations. 

The next step into obscurity was the idea that the money supply could be increased or in current terms printed.  Hey, we are out of money so lets just print more.  Brilliant! There is a limited supply of gold, jewels, and goods and therefore one can make a reasonable leap of faith that these limited items could be linked in some shape or form to value.  But when you can simply print more money it obviously waters down the relationship between approximate value and true value.  At one point money was linked to the gold supply (gold standard), but apparently the powers that be didn’t like that restriction and elected to sever the relationship.  

But Man didn’t stop there.  He also came up with an even more entrepreneurial and innovative concept — the loan.  Why wait until you have earned enough money to buy this or that when you can have it today for a small monthly fee and the promise you will pay back the original amount some time in the future?  Finally, man capped it all off with the invention of financial markets.  Thus the invention of Wall Street and Investment “Bankstas”. Now you could print more money and take out a loan and then throw it all into the financial market and make more money without actually doing any work.  As long as you made a good guess where to invest your money you can hit the jack pot!.  And if your are connected and obtain inside information your chances to hit the jack pot increase.  And if you are a trader controlling huge funds and can move the market up or down with rumours or a touch of a button, your chances increase exponentially to make lots of money for doing nothing of value. 

Currently, vast amounts of money flow so fluidly and rapidly (thanks to electronic flows of money…yet another step into obsurity) through financial, business, and government institutions that nobody understands what is going on.  Watching the talking business heads on tv is a true comedy.  “Well, the Dow went down 100 points in the morning due to the debt crisis fears in Europe but rebounded in the afternoon because an article mentioned that China might step in to help stabilize Italy”.  The most comical aspect is that these talking heads  claim to understand what is going on with the economy and interpreting what is causing the stock market to go up and down on any given day probably make over six figures.  This leads me to my next point.

Money, which has a watered down assumed intrinsic worth as previously mentioned, flows rapidly to sources that we “perceive” to have value equal to that already inflated assumption of the intrinsic worth of money.  If our “perceived” value of the source receiving vast amounts of money is wrong, then we have really dug ourselves in a hole.  And I would argue that our perception of what is valuable is off-base in many cases.  From a big picture perspective, looking at the earth from space and then zooming in on our society, is a rookie NFL quarterback fresh out of college really worth $20 million?  I enjoy watching football especially college, but the amount of money we pay folks for hitting or throwing balls is out of line.  Is the latest and greatest reality star that has suddenly emerged from obscurity worth millions of dollars?  Those Jersey Shore celebs sure are valuable human beings.  I have watched the show a few times so I am guilty of increasing the net worth of these boneheads.  Is the hottest rap or pop star worth multi-million green backs?  I do think Rhianna is pretty hot.  Guilty again.

Jeff Skilling -- President Enron (currently in jail)

Was Jeff Skilling (Enron president) or Bernie Madoff ever worth the huge sums of money they earned through compensation and stock grants?  Do the top earning 20% of Americans really generate 84% of the value in America?  Are 40 million people in the United States (and 1 in 5 children) that are below the poverty line really worth what their measly earnings say they are worth or could be worth?  Clearly, something is out of whack.  And in my opinion,the distortion is caused by the possibility that our perceived value of what has value is way off base and we have made an erroneous assumption about the intrinsic value of money.  Combine the above flaws with loans, debt, and financial speculation and you have a house of cards and misallocated “wealth”.  Two movies worth watching on this topic are “The Smartest Guys in the Room” (documentary on Enron implosion) and “Too Big to Fail” (the mortgage-backed security frenzy).

But what would we do without money, loans, credit, debt, banks, Wall Street, and Investment “Bankstas”?  How would society function?  This may come as a surprise, but every society on this planet, excluding the “Human World”, operates without money and the related baggage.  And man himself at one point operated without money.  In every other society on Earth, including the Apex species, value is pretty clear and money has no meaning or intrinsic worth.  And there certainly aren’t any problems with “perceived” value.  The currency in all other societies on earth is energy.  Some of the more advanced societies combine their energy via cooperation to obtain one of the ultimate valuable prizes — food.  They also work together for protection and ultimately survival.  And many of these societies have been around much longer than ourselves. 

Imagine the sense of freedom these apex predators enjoy without money and particularly debt!  But their societies aren’t free from stress or hardship.  If the society or individual doesn’t find food, they die.  No one is going to come to their aid.  But that doesn’t mean that these apex predators don’t find time for fun or enjoy being alive.  The bond between members of these societies is strong for without each other it would be a very lonely and dangerous world.  Not all members of these societies are treated completely equal — Only the lucky few earn mating rights through various competitions and the prize certainly has value and a bit of pleasure!  Although some inequality exists, they each play a crucial part such that the whole has access to the fruits earned through cooperation.  Of course we would be in position to adapt lessons from these societies because we have an opposable thumb, a large brain, and free hands since we walk upright.  We have the power to create and manipulate the environment around us.  All we need to do is define true value, define our missions, use our brains, thumbs, free hands, and spend our currency (our energy) to make it happen. 

Otherwise, the vast majority of us will remain like domesticated pigeons huddling together looking up at the few fortunate hawks.

9 thoughts on “The “Human World” without Money, Debt, and Financial Institutions

  1. I agree with you that money is the scurge of the Earth, and is a fundamental reason as to why we now face our impending destruction. I have written about this in a post titled: Falso Idols. have a read if you like.

  2. This is an excellent post that succinctly speaks to the ridiculous, disconnected perversion of the senses that is modern life. You’ve got to wonder how much further all of this can go. I don’t believe that any human being is really bred for this kind of life. The way in which the financial system rewards people who don’t actually create anything useful is a tragic irony that no one, right now, seems to know how to fix. The system has become so unbalanced, however, that eventually something is going to give. When people no longer have the money to buy the products that the financial system exploits there will have to be some kind of change. The belly always has the last say.

  3. I agree that leaving the gold standard was a huge mistake. With that said, the rest of your discussion suggests a timeline that seems questionable. Debt existed before money. Also, it sounds reasonable to trade meat for vegetables, unless I don’t like meat. If I will not accept meat for my vegetables, then you are put in the position of having to trade your meat for something else that I’m willing to accept for my vegetables. If you think that’s silly, consider that I truly don’t like seafood. If I grow oranges, and you fish, then my dislike of seafood means you have to work harder to avoid scurvy. Using money, whether it’s copper coins, or pieces of paper, makes it easier for you to get rid of your excess fish and get the oranges you need to avoid scurvy.

    • I think my friend…you need to read the post slowly and carefully once again. If I couldn’t trade my meat…then I would eat it myself. There is soooooo much more content here and if that is your reply…you are insulting me for the time I spent to post this muse.

  4. As promised… (my reply to your comment on my blog… never quite sure how well things connect up in the blogosphere…) Money Debt Financial Institutions – all of them, to my mind, great inventions.

    Money – as your cartoon nicely illustrates, money spares you from the waste of energy involved in having to carry a cow round in your pocket; money enables division of labour so you can focus down on doing a few things more effectively; money enables you to go travelling and see if the grass might indeed be greener. BUT. For people to be confident in what money can stand in for, the money supply has to balance production, which means central control, which means control by those who value power over others which means … all kinds of games can kick in.

    Debt – I recently read of a rich man who saw what I would certainly consider to be the light and went off round the world with a backpack plus a stack of his money. He talked to people who were desperately poor and found that many of them were busting to do something useful but simply couldn’t get started – maybe for want of some bit of equipment or tools they could use. He gave them the money they reckoned they needed – not big sums. A year later he went back to see how they were getting on. Most were getting on just fine and – which interests me greatly – they insisted on paying him his money back and were proud to do be able to do so. BUT. As WingedPanther notes, debt existed before money. You bet it did. Debt obligations seem to have been one of the great glues in early human society. And there is nothing like having someone in your debt, if you want to exercise power over them. Lending money simply extended this dynamic and with the added dimension of interest on the loan… again, all kinds of games can kick in.

    Financial Institutions – Insurance? – not a bad idea, in principle. Mortgages? – damn good idea, to my mind, to borrow from a home loans mutual so the money you spend on your shelter goes towards a future in which no one can take that shelter away from you. BUT BUT BUT..

    Seems to me that there is absolutely no good thing in human society that cannot be grasped by power and used to coerce others into serving somebody else’s will. The ramifications of what money has made possible in this respect would take an age to unpack but I do think we’ve just gone through a quantum leap in what power can do with money. And it’s made that leap with a staggering expansion in indebtedness. So great has this expansion been that governments look to me to be no more than work camp managers in a global economy that is entirely run by and for the benefit of those few who control the wealth funds. And because the first commandment that these few are obeying is ‘If thou hast money though shalt turn it into bigger money’, we are now in a viciously positive feedback loop whereby the bigger money gets, the harder people have to work to turn it into even more money and the fewer these people need to be in order to expand – or even simply sustain – profitability. Thus do we converge on a situation in which, except for a tiny plutocratic minority, 80 percent are out of work and 20 percent are working 24/7. At which point there is no more market left and the machine stops.

    Total insanity. The only way out of it I can even begin to glimpse that doesn’t involve catastrophic economic and social breakdown is consciousness of what is happening, followed by a paying off of all debts, followed by a reversion to one of the core human ethical perceptions, which the three monotheistic religions built into their ground rules, which is ‘thou shalt not charge interest on a loan’. I’ve no idea whether that is remotely realistic, but consciousness of the full implications of borrowing and paying interest would be a good start.

    Sorry, I’ve banged on far too long, but these issues really do exercise me and I’m glad to find someone who is equally appalled by the current state of things at an appropriately deep level. Just a few questions, which I do not have an answer to, but which I’d like to know the answers to if you or anyone else knows them (my guess, though, is that the questions do not actually apply to anything that anyone can positively distinguish out there in the real world – like all those bundled-up toxic loans):

    1) what proportion of invested capital is actually devoted to pension funds?
    2) how much interest per year, globally, is paid on credit card debt?
    3) how much interest per year, globally, is paid on government debt?
    4) where exactly is the interest referred to in 2 and 3 going?

    I recently heard that, globally, the monetary value imputed to derivatives is ten-times gross annual global productivity. That seems like an awful lot of speculation.

    And I didn’t even get on to the centrality of values and what it is to be human….!

  5. Ah a world without money TC, wouldn’t that be wonderful…I will be back…( I’m starting to sound like the Terminator now)

  6. Upon extensive studies on the state of humanity, attempts at alternative intentional communities, nutritional protection from adverse environmental conditions, failure of regulatory agencies, etc. I “saw” a network diagram and an equation. This specific network topology appears to be what our attempts at socializing trend towards. It also appears to be an intrinsic quality each of us has as how the neurons of the associated cortex share all for the good of all. Appears feasible that an application could be made to facilitate people using this networking idea. Investigation of the concept has brought me to understand that money is just a symptom of a much broader problem. We allow second-order cybernetic assumptions to hold sway over how we govern or steer ourselves. I’ve come to see that there is only one institution we should seek to materialize, our humanity. Otherwise looks like humanity will take those great powers availed via our information explosion and apply them for ends that do not include sustaining ourselves. All for one and one for all or nothing at all appears to be the situation. Contact me directly for more information.

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