Economics is commonly defined as the study of the allocation of scarce resources. There is one assumption built into the core of contemporary economics. The assumption is that being rational or acting rationally is a matter of maximizing self-interest.
The assumption that underlies almost all economic theory these days is the assumption that the only goal of the truly rational person is to maximize their self-interest.
The conjunction of the apparent scarcity of resources along with the understanding of humanity as self-interested leads inevitably to rampant inequality where the majority cannot share adequately in the scarce resources.
In an article titled “Money:Bridging Present Reality and Vision” Dave Belden argues that the best solution to resolve the fundamental inequalities which result from the current economic status quo is to get rid of money and exchange-based interaction altogether.
Dave Belden has in fact come up with a sophisticated articulation of how Society may remain functional in the event that we had to get rid of money. He envisions a world of willing gifting and sharing as a substitute for our current system of placing a monetary value on everything and providing services only for monetary remuneration. Dave Belden has a vision of a society where people’s endeavor is aimed not at self-gain but rather at altruism and beneficence. He wants a world where we do not act to acquire resources for ourselves but rather act to make a contribution to the society we live in. He thinks we can get to this world by getting rid of money and an exchange-based economy.
I truly appreciate the nobility of Belden’s vision and agree that a change in the current economic status quo is required. I am however not convinced that such drastic measures are required.
The issue that underpins the rampant inequality with regards to the distribution of scarce resources is not primarily a result of a money and exchange-based economy, rather it is an issue of the intent of the individuals engaging in the economy.
The cause of the problem of inequality and poverty is a result of the underlying assumption of economic theory regarding what it means to be a rational agent.
The problems we have are the result of rampant self-interest. Money has lent itself as an efficient tool for producing the inequalities that will inevitably result from the conjunction of rampant self interest and scarce resources. To blame money however is to blame the tool and not the way of being that directly causes the problem.
Blaming money in this instance seems equivalent to blaming guns for the existence of violence.
It is true that guns lend themselves as excellent tools for doing violence but to blame them for the existence of violence is to fail to understand the human genesis of violence.
The key variable that needs to change is the intent of the individuals acting in the economy. This can change even in the event that money remains the primary tool for economic engagement. There is nothing inherently malevolent about money. Money is a tool and it can be used to do good or it can be used to do bad. How it is used is entirely dependent upon the intent of the individual using it. What we require is that ever increasing numbers of people concern themselves about what they can contribute rather than what they can gain from an engagement. It seems that this is the core of Belden’s vision. This can be achieved even if we do not get rid of money.
I think then it is wise to caution that we should not throw the baby out with the bath water.
Comments
3 responses to “To Pay or Not to Pay… Is Money the Problem?”
Hi Assad,
I am in the process of reading “Why Nations Fail”, which is absolutely fascinating. To understand the economic landscape, you first need to understand the political landscape. Where the political landscape is set up as extractive, the economic institutions tend to follow suit. Individuals will tend to respond to the overall framework in a way that is distrustful & lacking generosity.
Where the political institutions are set up in an inclusive way, economic institutions will tend to be the same. Individuals will respond in a way that is far more trusting and generous.
You are right to say that the key variable is the way individuals choose to respond, but to the extent that those people are either empowered or disempowered will have a great impact on the path they choose to follow. Setting up our societies in a way that empowers the average citizen, gives them hope for justice and fairness and allows them to express themselves in a mature way will create the possibility for a virtuous cycle of benevolent intent.
Hi Robert,
Thank you for this comment.
In light of what you say it is apparent that the question of how we structure society and hence economic engagement within society is not irrelevant. It makes me think of Plato’s noble lie where he thinks that we in fact have an obligation to create the right sorts of attitudes towards virtue in the youth even if this entails telling them a lie.
Similarly we may have an obligation to think very hard about which mode of structuring society, and hence economic engagement, is most conducive to the production of benevolent intent in the citizens. I still think though that it is important to first and foremost keep the end of benevolent intent firmly in sight as it is the variable which enables a just and benevolent society. To Belden’s credit this insight does seem to underlie his whole endeavour.
Thoughts from the previous discussions; If a majority of the people in an area have benevolent intent in a broad sense, their leadership will ultimately be from people who also have benevolent intent. Although it’s much easier to instil benevolent intent in a society from the top down it can also come about in any number of other ways. At worst just keeping it alive in some individuals and groupings within a society/ larger group will at least mean that people don’t have to reinvent the “benevolence wheel” when selfishness and expediency fail them and their social structures.
Assad, I haven’t read Plato but even a ‘noble lie’ doesn’t sound good to me?