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

The Reflection series has two overarching goals:

  • 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; and
  • To provide a vivid, detailed, and realistic roadmap for progressively replacing our current ways of operating with more productive ways.

Radical Decency offers its greatest rewards when the conversation shifts to goal 2: How to actually live differently. But goal 1, understanding the challenge we face, is also crucial. 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 that, absent a systematic effort to understand them, they are invisible. And being unseen and unacknowledged, they’re almost entirely immune to change.

With this thought in mind, we need to be constantly on the alert for people who offer insight into these hidden mechanisms; 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 it 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’s essence and the role this idea plays in our lives.

In Reflection 14, Dying – And Our Epidemic of Immortality, I discuss how we are groomed by the culture to believe that we can (and should) be in control and dominant in every situation we face in life. With this mindset in place, an all too easy next step is to push the reality of death to the margin of our consciousness; seeing it as something that will happen to at some far off, ever receding, time in the future.

And this, in turn, leads to an embedded belief that if we’re just determined enough, we can go on forever; an unspoken assumption of immortality. If asked, we’ll of course say that we’ll die someday. But we don’t really belief it. Maybe everybody else – but not me.

In Sacred Economics, Money, Gift, & Society in the Age of Transition, Eisenstein offers this fresh – and, for me, perspective altering – vision of the central role that money plays in this life distorting shell game that we play with our own mortality.

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 this view of money is with our (implicit) vision of individual never-ending omnipotence. And this leads to this unspoken assumption, endemic in our culture: If I have enough of this never decaying, always enduring magical stuff, I too will be surrounded by money’s enduring and impenetrable shield of indestructibility.

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 failing to identify this story of money’s omnipotence and immortality, our ability to resist its effects is greatly reduced. For this reason, Eisenstein’s insight is a great gift: An essential, empowering prelude to action.

2. 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 central to our understanding of money.

When an exchange of goods includes a supplier of money, entitled to receive value for his contribution, two key elements are added to a transaction that don’t exist in a money-free exchange. First, new wealth has to be created, over and above the value of the goods exchanged, in order to pay the guy who supplies the money.

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: (1) when someone exercises control or ownership over the “thing” that is being bought and sold; and (2) that “thing” is then assigned a dollar value so that a percentage of it can transferred, not to the buyer, but to the person providing the money.

As you can see, so long as interest is charged for the use of money, the pressure to create new controllable and monetize-able sources of value – in order to pay this third party, now injected into exchange – will be never ending. After all, the lenders will always be pushing for new deals, as will the buyers who need them to pay the ever-expanding amount of interest they owe.

When it first emerged – and for many centuries thereafter – this monetization process was largely limited to land, natural resources, and industrial and agricultural labor. But now this system has become all encompassing. In today’s world, we monetize 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 of ever expanding monetization 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’ve 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 that promote these avaricious ends.

Eisenstein argues, persuasively I think, that the obvious material rewards of this system – even for those us who have relatively privileged positions within it – are not worth the price. He also points out that this system is, ultimately, unsustainable. Eventually, we will run out of new resources that can be monetized in order to provide the added value the suppliers of capital demand. 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.

3. 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 that bind us to 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 when we purchase things is also far less likely seek out our products and services. With these natural points of contact so greatly reduced, so too is the rich web of interconnections that lead to and sustains a sense of community.

We also pay an enormous price in terms of 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 40-minute wait on hold.


To his credit, Eisenstein fully embraces the challenge of offering a cure for the problems 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 me 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 goods and services that 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 it since our only choices would be to use it or watch it disappear.

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 – think campaign finance reform – these new systems are perverted in ways that allow our “compete and win” ways to continue. Thus, for example, many of the examples that history offers of locally based economies, free of the problematic economic structures Eisenstein describes, that were highly authoritarian and exploitative.

I also question his prognosis for the future: His view that macro trends will impel us toward solutions (such as the ones he suggests) that, in our present political environment, seem far-fetched and visionary. I only wish I shared his sense of 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 seen as unchanging and unchangeable; and

2. Paradigm-shifting analyses of what’s wrong are profoundly important since they are an essential prelude to paradigm-shifting solutions.

Eisenberg is a formidable and original thinker. We need to be deeply attentive both to his analysis and, even though we can pick holes in them, to his prescriptions for change as well.