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The Tyranny of Money

2014 March 14
by Ian Welsh

For much of the Medieval era money was hardly used by most people. Serfs owed their lords service and the products of their hand. They would work for their liege for a set number of days a year, they would give him grain, or animals, or clothes they had spun, or some other product of their labor and the land. In exchange they had the right to work a piece of land and to live on it.

As time went by, nobles would prefer money, and would try to have their tenants and serfs pay them in coin, but this was resisted, and often violently. Allowing people to pay in kind, not coin, was considered generous, and often bought peace.

Given a choice to pay your taxes by working for the government for a few weeks, how many people would take it? What if you could do the same for the utility company: 2 days work a month for electricity and water? Cable?

We think of serfdom as horrible, and in many ways it was: but wouldn’t it be nice to have the right to just pay in labor sometimes, and forget the cash? Certainly in those times when jobs have been scarce, millions would take such a deal.

The point here is that distributing goods and services through paid labor wasn’t the way things were done in many societies. Indeed, though hunter-gatherers certainly had trade, if they wanted to eat they went out and gathered some food, or hunted. If they wanted clothes, they made them themselves.

But money is more than a way of distributing goods, it is a way of ordering our behaviour.

Those people who have more money tell those of us without money how we will spend our days. With modern technology they keep us on a leash even at home, through texts and emails and cellphones. We spend more time working for someone else than any other activity save sleep.

The simplest way to think of money is as permission. Money allows whoever has it to determine how other people spend their time. This can be directly, by hiring them, or it can be indirectly, by buying the proceeds of their labor, which economists call demand. (If you want something, and you don’t have the money to buy it, you are not demand.)

Money lets you do what you want: start a library, start a company manufacturing electric cars, start a think tank; fly by private jet. Money is freedom for those who have it, and servitude for those who need it.

This is the theoretical power of the consumer: moving in large groups, ordinary people can effect large shifts in demand, and thus have power. This can be a great power, but in the modern world it is rarely used effectively because most of what you need you must buy from a small group of firms who offer essentially the same goods or services. There is little difference between health insurers, less difference between telecom companies; there is usually only one newspaper per major city; the supermarkets all offer the same food at about the same prices; credit card companies all offer about the same rates to the same people, and so on.

When the prices are about the same, the product is about the same, and the services are about the same, consumer power fades. You may buy your internet from company A or company B, but public broadband or open Wifi networks aren’t available. You may buy health insurance from company A or B, but in America universal health care isn’t available. And you can elect party A, or party B, but they will both institute neoliberal policies.

15 Responses
  1. Celsius 233 permalink
    March 14, 2014

    “And you can elect party A, or party B, but they will both institute neoliberal policies.” Ian

    I call it; The two parties are different siblings of the same mother…
    Lambert calls it kayfabe; I like kayfabe.

  2. David Kowalski permalink
    March 14, 2014

    Even “public services” are often not quite that. In Medicare, the government subsidizes private alternatives which are paid 15% more and tempt consumers with “free” benefits. Then we are told that medicare will go bankrupt so benefits under the traditional plan must be reduced or co-pays increased. In my town, the garbage service is paid for through taxes but contracted out to private companies. Public schools have to compete at a disadvantage against “charter schools.”

    My “favorite” is that free speech now officially gives more protection to corporations and money than it does to actual free speech. demonstrators at public rallies are cordoned off and political fund raisers are protected by the police. This isn’t new. john Adams made it illegal to oppose either the Federal government or himself (the Sedition Act) back in the 1700′s. Mild disapproval? OK. Newspaper publishers were prosecuted. Adams was not re-elected but it was close. His ideas were so popular that his political party, the Federalists, soon died.

    About a century later, the Populists were winning substantial backing for real reform. They, too were crushed by the money party. In the south, the appeal was racism: whites were peeled off from blacks by giving them exclusive rights to jobs in the cotton mills (cough, cough). Blacks were disenfranchised (LA was the last state to do this in 1896). In the north and west, the movement was co-opted (William Jennings Bryant took some of their ideas, but not all) and then crushed by spending $8 million to elect McKinley vs. $500,000 for Bryan. In addition, the corporates frightened voters in the midwest by posting signs in factories that literally said, “This factory will be closed if Bryant wins.”

    McKinley was sold evfen after election as the next Lincoln. To put it mildly, he wasn’t. When he was assassinated (and he died because of inept medical care) sermons across the country lauded him. Uh huh. Today, he’s remembered mostly for a mountain in Alaska named for him when he was a US Senator. Increasingly, the mountain is being called by its rightful name, Denali.

  3. March 14, 2014

    I like the similar Iain Banks formulation of money as a method of allocating poverty as well. After all, if society couldn’t use the scarcity of food, health care, shelter, and other goods as a way to motivate its members, how could it be certain that individuals would behave properly? Without poverty, how could people be kept under control?

  4. pond permalink
    March 14, 2014

    One thing about money is how statistics, and even public policy, are all determined by dollar amounts. For example we read about other countries and how poor they are with average wages a few dollars a day. But if you own your shack and farm your land and fish in the lake, you have food and shelter and do not have to pay a dime. Meanwhile living in New York City will require a tremendous daily amount of dollars for food and shelter.

  5. Formerly T-Bear permalink
    March 14, 2014

    Would seem the lack of money is where tyranny resides, whereas money’s presence helps satisfy economic need, want and desire and allows development of human potentials. Money as with any useful tool can be abused or misused, which only reflects upon the quality of education received on money’s proper use. Money is nothing more than economic value, suspended in time until it can be put to economic use and consumed. All economic value arrises from labour, whether derived from hunter/gatherer, farming/herding, artisanal/craftsmanship, manufacturing, industrialization or service. Money represents that value created by labour and is used to obtain the economic goods that satisfy needs, wants or desires and is thereby consumed. Economics is the study of this process and the superstructures developed to further this process. Political economics delves into the study of power structures needed to maintain an economic group and its resources.

  6. scruff permalink
    March 14, 2014

    Along similar lines, a “job” is not the creation of meaningful work that enriches society, it is the emergent object from the destruction of the possibility of meaningful work… until such a point where the possibility of that work is so restricted that it can only be done in a way that enriches another, and according to that other’s ideals. This is what runs through my head every time I hear some fluff about “creating jobs”.

    John Michael Greer makes a point about the assimilation of certain work into the money economy – where many things (such as making clothes, meals, fixing the home) used to be *assumed* to be done by members of the family outside the purview of the money economy, they are now mostly done by spending money to hire someone else to do them. In some ways this offers the individual more freedom… in other ways it more closely binds them to the economic activity of the society, rendering them less free from the economic will of that society.

  7. March 14, 2014

    Indeed. Those who imply that money is “merely” a storage space for activity, like a battery or a capacitor, ignores the incredible significance of introducing such an element into the “circuitry” of life. Some people understand the capacitor better than others, and they will take advantage.

  8. Jerome Armstrong permalink
    March 14, 2014

    Money has been completely different since the loss of the agrarian model for a means to live. You can see the last strikes toward making it happen, with the transcendentalists and their attempts. The agrarian lifestyle eventually became replaced by the consumer lifestyle. And as these seem to be meta narratives of our culture, we are probably in it for a long time; only eventually to be replaced by some variation of a consciousness lifestyle.

  9. Ian Welsh permalink*
    March 14, 2014

    Money isn’t a battery, it doesn’t store value. It might represent stored value, if you’ve set up your economy correctly.

  10. March 15, 2014

    I like this essay. Why are we not “busting the trusts?” Why do most of us have to “owe our souls to the company store?” We have no solidarity or even understand the meaning. But Americans did understand in the past. David Kowalski zeros in on the Populists who rose out of farmer outrage over the monopolistic practices of the railroads that charged them more to ship their produce than they could get for it. And the PTB cleverly, once again, kept a division between farmers and city workers, so was one of the reasons that the movement died.

    Pond makes the excellent point about quality of life. The late great Joe Bageant spent much of his last years in Belize where everybody has a small plot of land and free healthcare. You can bathe in the ocean. Spend time singing and telling stories. It is not an accident that the Wobblies lobbied for more leisure time, less work hours rather than more pay. For in a person’s free time is when they can create things like a song or a well designed chair or shish kebab. Or revolution.

    Jerome mentions the transcendentalists. There is a very good book about the rise of the anarchist thinkers in Great Britain called “Anarchist Seeds Beneath the Snow” . Although it only starts in the mid 19th century rather than going back to Paine, it has really interesting chapters on William Morris, founder of the Arts and Crafts movement, and especially liked the chapter on Oscar Wilde and his essay “The Soul of Man Under Socialism”. Colin Ward and Prince Kropotkin seem to be the greatest of the anarchist thinkers.

    @ Celsius 233
    It was here at Ian’s site that a commenter called “4″ used the term “kayfabe”. I then used it over at “Naked Capitalism” and Lambert picked up on it and popularized it. He did give me credit for it over there and I immediately said that I had got it here from “4″. Interesting the way we think we are just making an off handed remark and now a new word has entered the political landscape. Cross pollination. And also an example of the creative commons and a bit of fraternal i.e. anarchist organization.

  11. Celsius 233 permalink
    March 16, 2014

    @ montanamaven
    March 15, 2014
    How interesting; some actual history. Thanks for that.

  12. Jessica permalink
    March 16, 2014

    Excellent points. I would like to tweak it a little bit. From Lawrence Goodwyn’s “The Populist Moment” (an excellent case study of how to build a movement to shift power from the oligarchs and elites to ordinary people), I got the impression that often the role of local commercial interests deserves more attention, for example grain elevator operators and equipment dealers. Also, the role of debt and the control of credit was enormous. In the South, the role of debt was paramount. (Graeber’s book on debt is also excellent.)
    Debt somehow paralyzes people morally, makes us feel like less as people, makes us vulnerable and less able to resist immoral social pressures, for example the pressures on white peasants in the South of the US to support racist repression of blacks. (On a roll, sorry) I think this runs deeper than ideology or elite control of the media. I don’t know exactly what it is, but it seems to be something wired deep into us back on the savannahs of East Africa, something about reciprocity and guarding against free-loaders. If so, it must have been as helpful to the species then and there as it is destructive now.
    I am _not_ saying it is immutable human nature to see debtors as lesser human beings than creditors, even when we are the debtors, even when that means giving up daughters and sons and spouses and ourselves into slavery. But if it runs so deep that we share it even to some degree with other primates, than we will need to construct something culturally to counterbalance that. Just as we override other pre-cultural drives that no longer serve us.

    Thank for the reference to “Anarchist Seeds Beneath the Snow”. I am checking that out now.

  13. Jessica permalink
    March 16, 2014

    More on the Populists

    Useful lesson for the future
    Goodwyn’s book makes clear that the silver mining interests and Democrats such as William Jennings Bryant were able to hijack (and soon after discard) the nascent Populist Party by seizing control in those areas of the country that had not built up a strong movement culture through the cooperative movement. Populists in places such as Kansas and Texas had learned the hard way the need for a popularly-controlled monetary system. In states where Populism was just a new political movement, without the deep-rooted movement culture, it was more controlled by its electoral candidates. They were happy to give up the radical notion of non-metal money and instead support a gold+silver standard to replace the gold standard. This was analogous to the role of the Public Option as a way to forestall real reform with single payer. The silver mining interests poured much money into this pseudo-reform proposal for obvious reasons.
    In the US, we are not at the point where this lesson is important, but it can’t hurt to be aware of this pattern beforehand.
    It is very easy to imagine a 3rd party or a 3rd-party-like insurgency within the Democratic Party (or even Rand type Republicans) starting out working for a real reform but being diverted into a pseudo-reform that has strong backing from some oligarchic/elite faction that would benefit from the pseudo-reform (even if no one else would).

  14. David Kowalski permalink
    March 16, 2014

    I was thinking about this further and two more examples come up showing the tyranny of money. The first is corporate and rich people’s opposition to regulation (aka, stopping cheating in trade). the second is the resistance to properly accounting for and assessing costs for externalities caused by corporations (pollution, illness, loss of jobs).

    The first problem is ancient and goes back to the development of agriculture and the first cities. Agriculture meant that people had some surplus that could be traded and began along with cities about 8,000 years ago. By 3,000 BC (5,000 years ago), cheating was such a serious problem that weights and measures and trade had to be regulated by the gods and the temples in Sumeria were doing it. This may very well have happened earlier.

    Money, of course, became the means of trade. That, too, needed regulation. The Romans debased the currency by issuing gold coins that were made of electrum, a mix of mostly gold and a smaller amount of silver. People over the centuries did their own cheating with coins, slicing off little bits of the metal and using it. That’s way old coins tend to look something like stop signs.

    Not to worry. This was eventually stopped but not until the late 1600′s. Isaac newton was made Keeper of the Mint, as a gift from the British government but turned his mind to the problem. Ever notice those little grooves along the side of coins? There are 25 of them and Newton invented them to stop the ancient practice of taking off a little gold or silver. In the US, pennies and nickles don’t have mill marks because the value of the metal was too small for cheating.

    Money’s latest tricks have been to counter assessing the costs of externalities. Asbestos makers like Johns Manville frequently entered bankruptcy to avoid paying workers for damages to their health. Trade agreements get around and now supercede domestic laws against pollution or safety standards and for minimum wages, unionization, and health and safety of both workers and consumers. This is called “free trade.”

    Mark Twain observed rather cynically in “The Gilded Age” that America had the best government that money could buy. That’s spread and a lot of the restraints have been eliminated.

  15. David Kowalski permalink
    March 16, 2014

    I should have noticed this earlier. Montanamaven asks why we aren’t busting up the trusts? A hundred years ago, Wilson changed the focus of anti-trust enforcement. Big was no longer bad. Bad behavior which had to be proven was bad. That’s why mergers frequently include the dumping of “monopolistic” assets and some unknown gas station chain like Valero is popping up all over the place.

    Yes, making it sound good but gutting the effectiveness was a gift of an academic “liberal” in Wilson.

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