Here is a piece by Douglas Rushkoff at Edge which tries to get at the deep roots of economic theory, and finds it wanting:
The economy in which we operate is not a natural system, but a set of rules developed in the Late Middle Ages in order to prevent the unchecked rise of a merchant class that was creating and exchanging value with impunity. This was what we might today call a peer-to-peer economy, and did not depend on central employers or even central currency.
People brought grain in from the fields, had it weighed at a grain store, and left with a receipt — usually stamped into a thin piece of foil. The foil could be torn into smaller pieces and used as currency in town. Each piece represented a specific amount of grain. The money was quite literally earned into existence — and the total amount in circulation reflected the abundance of the crop.
He goes on to argue that in successive distortions we have ended up creating ever-more elaborate ‘theories’ about the economy which are wrong in themselves and generate ‘growth’ rather than ‘long-term value’:
We ended up with an economy based in scarcity and competition rather than abundance and collaboration; an economy that requires growth and eschews sustainable business models.
It may or may not better reflect the laws of nature — and that it is a conversation we really should have — but it is certainly not the result of entirely natural set of principles in action. It is a system designed by certain people at a certain moment in history, with very specific interests.
Therefore:
The net (whether we’re talking Web 2.0, Wikipedia, social networks or laptops) offers people the opportunity to build economies based on different rules — commerce that exists outside the economic map we have mistaken for the territory of human interaction.
We can startup and even scale companies with little or no money, making the banks and investment capital on which business once depended obsolete.
That’s the real reason for the so-called economic crisis: there is less of a market for the debt on which the top-heavy game is based.
I don’t really understand all this in technical terms, although he seems to be on to something when he identifies the rise of centrally controlled money as the start of a huge number of artificial problems which are with us today – and increasingly exposed?
I find my comfort instead in Ayn Rand’s Money Speech, which is not about economics but about the way free people create and share value.
It justs get better every time you read it:
"So you think that money is the root of all evil?" said Francisco d’Anconia. "Have you ever asked what is the root of money?
Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value.
Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money.
Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow.
Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?
"Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes.
"But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think.
"Or did you say it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. It’s the person who would sell his soul for a nickel, who is loudest in proclaiming his hatred of money–and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.
"You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while you’re damning its life-blood–money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities.
That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves–slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer.
"If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to make money.’
No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.
The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide– as, I think, he will…
Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out."
Are there popular stirrings in the USA to heave out the looters and moochers across government and aim for first principles again?
Fraser Nelson helpfully steers us towards the UK’s greatest-ever looter:
Learn it off by heart:
Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil?
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