Reflection 70: Money and Economics — How Unexamined Structures Mold Our Lives

The Reflection series has two overarching goals. The first is to understand where we are now – a goal grounded in the belief that effective prescriptions for change can only be crafted if we thoroughly understand the many forces that keep us rooted in the status quo. The second: To provide a vivid, detailed, and realistic roadmap for progressively replacing our current ways of operating with more a productive model.

The central role of Radical Decency in the Reflection series — hence inclusion of the phrase in its title — arises from this fundamental premise: Our current, unsatisfactory situation is rooted in a value system that makes competition and winning, domination and control, a priority in virtually every area of living. For this reason, we need to organize our prescription for change around an alternative set of values – Radical Decency – that, systematically applied, can progressively move us toward ways of operating that offer the prospect of better lives and a better world.

While Radical Decency finds its essential elaboration, and offers its greatest rewards, when the conversation shifts to the second, “what to do about it” goal, goal one is, nevertheless, crucial to the overall project. Many of the processes by which the culture’s predominant values infiltrate and take over our lives are so subtle and so thoroughly interwoven into our habitual ways of thinking that – absent a systematic effort to understand them – they are and will remain, quite literally, invisible. And being invisible, their profound effect on our lives and world will go unnoticed and unaddressed.

We need to be constantly on the alert for people who offer these deepening understandings; thinkers who, when we find them, provoke this reaction:

“Wow, I never thought of that but now that you explain it, it seems so obvious! It’s been hiding out, in plain site, my entire life, deeply influencing my outlook and choices. Thank you for expanding and altering my perspective. Now that it’s on my radar screen – now that exists – maybe I/we can do something about it.”

In this Reflection I offer three key ideas of one such thinker, Charles Eisenstein.

  1. Money as an idea and the role it plays in our lives.

In Reflection 25, The Vise of Money, I wrote about the power of money in and over our lives. In other Reflections, I discuss: (1) Our obsession with domination and control; (2) our obsessive pursuit of invulnerability and, implicitly, immortality (Reflection 14, Dying – And Our Epidemic of Immortality); and (3) our individualistic, go it alone outlook on life (Reflection 22, Consumerism – and the Passivity it Breeds; Reflection 29, Community; and Reflection 31, Perfectionism).

In Sacred Economics, Money, Gift, & Society in the Age of Transition, Eisenstein offers a vision of money that brings each of these three ideas together in a new and – for me – perspective altering synthesis.

Eisenstein’s key insight is that we have deeply internalized this unacknowledged, and massively influential, view of money:

The one thing that most closely resembles the divine is money. It is an invisible, immortal force that steers all things, omnipotent and limitless, an ‘invisible hand’ that, it is said, makes the world go round. Yet money today is an abstraction, usually mere bits in a computer, far removed from materiality and exempt from nature’s most important laws, for it does not decay and return to the soil as all other things do. Instead, it bears the properties of eternal preservation and everlasting increase.

Notice how profoundly in synch with, and reinforcing of, our disease of individual omnipotence, dominance and control this view of money is. The unspoken assumption, endemic in our culture, is that if I have enough money, it will surround me with a cloak of safety and indestructibility. And if I am tireless in its pursuit, and manage my egg nest in the “right way,” this shield of safety will grow and grow.

Needless to say, invulnerability in any guise is an unattainable fantasy. No amount of money can shield us from disappointment, fear, anxiety, aging and death. But when the story that propels our obsessive pursuit of financial security is implicit and unnamed, our ability to resist it is greatly reduced. For this reason, Eisenstein’s ability to name it and explain its consequences is a great gift: An essential, empowering prelude to action.

  1. Interest’s formative role in molding the world we live in.

Eisenstein’s next great insight, for me, is his deconstruction of interest. I have always assumed that, short of usurious excess, interest is a value free mechanism. “Of course,” if you lend or invest your money, you should receive a fair return. But, as Eisenstein points out, certain things inevitably result when interest is at the center of our conception of money and economics.

When an exchange of goods includes a supplier of money, entitled to receive value for his contribution (through payment of interest), two key elements are added that don’t exist in a money-free economic system. First, new wealth has to be created, over and above the value of the goods exchanged, in order to pay the lender or investor. In addition, this new wealth has to be “monetized;” that is, converted into a form that allows it to be transferred to the moneylender. And this can only occur when someone exercises control or ownership over the resource in question, so it can be transformed into a commodity, capable of being transferred for value in the marketplace.

As you can see, so long as interest is charged for the use of money, the pressure to create new monetized sources of value – to pay this third party, now injected into this “fair value for fair value” exchange between two parties – will be never ending. And the continual generation of new value results in an ever-growing economy that, in turn, requires the generation of more and more monetized wealth, to pay the interest owed on its ever-expanding pool of capital/money.

When this system first emerged – and for many centuries thereafter – this monetization process was largely limited to land, natural resources, and industrial and agricultural labor. But now that the system has grown to rule the world, the process has become all encompassing, monetizing even such inherently human gifts such as story telling and music – through copyright laws – and (even more perversely) friendship and emotional support – through the rise, in the 20th century, of professions such as psychotherapy and coaching.

As Eisenstein points out, this process is deeply destructive of our sense of community and connectedness. Buying something that was once freely given – like a song or a sympathetic ear – cripples our sense of mutuality. You have given me a commodity, not a gift, and having paid for it I owe you nothing more.

It also feeds an attitude of reckless indifference to our own well-being and that of others. Because the consuming imperative is to convert every resource into a saleable commodity, we mindlessly exploit each other and the environment, and work ever more demanding hours at spirit-deadening jobs.

Eisenstein argues, persuasively I think, that the obviously material rewards of this system – at least for those us who have relatively privileged positions within are – are not worth the price.

He also points out that it is unsustainable. Eventually, we will run out of new resources that can provide the added monetized value, needed to provide capital with the interest that is demanded for its use. Indeed, this moment could conceivably be near as we read about banks that, for several years now, have been sitting on vast pools of uninvested capital because sufficiently attractive investments are not available.

  1. The government’s monopoly over money and its consequences.

A final perspective expanding insight, offered by Eisenstein, is his discussion of currency; that is, the stuff we refer to as money. We take for granted that money is something that only national or supra-national governments can issue. And yet that too, like are assumptions about money and interest, is a social convention that seems inevitable and “right” only because it has been in place for so long.

In other societies, the standard medium of exchange has been beads, pelts or, in a barter-based system, nothing at all. And Eisenstein points to numerous, albeit isolated and short lived examples of alternative, local system’s of money that have cropped up at various times in our history, particularly during the Great Depression and in other times of economic stress.

Our current monetary system thoroughly ties us to the national and international economy. Like it or not, large nation/international institutions offer the most reliable and readily accessible sources of credit (national banks), goods (Walmart, Lowes, Exxon, Starbucks) and, increasingly, services as well (web-based repair services, national legal and accounting firms, LA Fitness and the Hair Cuttery).

This phenomenon is deeply consequential beginning, once again, with our sense of community. Our lives revolve around economic activity – work and consumption. And as things stand now, there are no practical, economic realities to bind us together with our neighbors. To the contrary, why do business locally when a national chain is right down the street or, increasingly, a few taps away on your computer? And, of course, the neighbor we ignore as a vendor is also far less likely to become a consumer of our products and services – or a friend.

The other enormous price we pay is in the control over our lives. There is no negotiating with a national bank or retail chain. Most everything is take it or leave it. And, equally, there is no place to go to seek effective redress for a missed delivery or a 40-minute wait on hold.


To his credit, Eisenstein fully embraces the challenge of offering a cure for the cultural diseases he identifies. So, for example, he suggests that things would be different if our economic system made room for local currencies, in addition, to a national one.

The theory? As a local vender, I would readily accept a local script that allows purchases from other local vendors only, since it would offer one more way to increase sales. And that would, in turn, impel me to find other local vendors willing to accept the “local dollars” I receive for the goods and services I need. In this way, a virtuous counter trend to our increasing globalization would take root and accelerate.

He also makes the following argument in favor of “negative interest”: If each dollar lost 5% of its value, each year, money would no longer be immortal. It would, instead, be aligned with the natural state of affairs in which all things decay and die. And with money in this more natural state, we would have no incentive to horde money – and insist on a positive return on its use – since our choice would be to use it or watch it disappear.

Our current economic structures – generally seen as unchanging and unchangeable – reinforce behaviors that are deeply exploitative of our selves, others and the world, all in a vain attempt to make us invulnerable to the vicissitudes of life. As Eisenstein see it, changes such as the ones he spells out are essential if we hope to create more connected and nourishing lives.


Eisenstein’s prescriptions for change are, for me, more problematic than his analysis of what ails us. To begin with, they fail to adequately account for values; the issue that Radical Decency puts at the center of its approach.

What I see over and over is that when we re-jigger the system, but fail to address the underlying values that drive it, these new systems are, more typically than not, perverted in ways that allow our “compete and win” ways to continue; e.g., the examples, that history offers, of locally based economies that – freed from the problematic economic structures Eisenstein describes – were nonetheless highly authoritarian and exploitative.

I also question his prognosis for the future: His view that macro trends are impelling us toward solutions that, in our present political environment, seem far-fetched and visionary. I only wish I shared his sense of certainty and optimism about where we are headed in this exceedingly complex world.

But these and other concerns notwithstanding, I close with these thoughts:

  1. It is easy to pick holes in prescriptions for change that tackle forces – in place for thousands of years – that are generally seen as unchanging and unchangeable; and
  1. Paradigm-shifting analyses of what’s wrong are profoundly important since they are an essential prelude to paradigm-shifting solutions.

Eisenberg’s is a formidable and original thinker. We need to be deeply attentive both to analysis and, not withstanding the all too easy ability to pick holes in them, to his prescriptions for change as well.