Money is our God.
The structure of Capitalism is religious, according to a growing number of independent thinkers. It is the worship of ‘debt’.
An article appearing in the (Dutch) De Groene Amsterdammer, written by Frank Mulder.
Part 2
How do we get rid of the devil?
In general economists have no clue about religion. Economic textbooks shy away from the goal-means-mechanism that Goudzwaard introduces. The exceptions are Father and Son Skidelsky whose book appeared in 2012: How Much Is Enough? Money and the Good Life. Skidelsky Senior is a political economist at Oxford and a member of the House of Lords. Son Skidelsky is a political scientist. They tell us that, although main stream economists have grandiose ideas aiming for the wellbeing for everybody, our way to attain that lofty goal will do us in.
“Blame Keynes”, so says Robert Jacob Alexander Baron Skidelsky when interviewed in connection with the translation of their book into Dutch. “Keynes condemned greed and usury, but was of the opinion that they were necessary for a while to generate productivity. Eventually, when we are so rich that we can afford to take it easy, we hopefully will abandon that position.”
Skidelsky describes the switching of the goal with the means with the age-old metaphor of a deal with the devil. “It is the classical Faustian bargain” says Skidelsky. “Faust was a man who, according to tradition, made a deal with the devil to obtain the goals he was after. There are several versions, some to do with money or sex or power, but the end result is always that the devil comes to claim the soul. We all know that it is impossible to call on the devil for help and not pay the ultimate price.”
But then, early in the 19th century, we encounter the Goethe version. He romanticizes the matter and shows that the deal actually is quite clever. The devil in the end loses his prey because God favours the cause of progress and so saves his soul. “That is an unreal solution,” says Skidelsky, “because pre-modern people would never have fallen for this. Ever since Aristotle they know that the good life is not something that lies in the future. The good life consists of the kind of life that is made worthy by life itself. It is not possible to attain the good life through less than the best we are capable of. In the West we have succumbed to the means at the expense of our goals.
Father and son Skidelsky list a series of very concrete guidelines to escape from the Faustian contract. They are both interesting and down-to-earth, but all is not well: on the very last page of their book, without further elaboration, they put a damper on the entire affair. They write: “We question whether a society without the inspiration of faith can accomplish the return to the good life.” This made me wonder (says Frank Mulder, the Dutch author of this essay): “What’s the use trying to do this in society if faith is on the way out?” So I asked Skidelsky: “You think that faith is disappearing? That is a secular thesis that I can’t buy. I am convinced that we’ll see all sorts of religious revivals. People have to be motivated to go into a different direction and that means they will explore different ways: You wait and see.”
(See my remarks on this at the very end. I believe that Skidelsky is correct.)
We regard the financial markets as the motors of the economy. They have to run closely behind the real economy in order to retain their dynamics. One of the former presidents of the German Bundesbank, Hans Tietmeyer said in Davos a while ago: “At last the financial markets are in control rather than politics. Perhaps that’s why Lloyd Blankfein, former boss of Goldman Sachs – the largest money-maker on earth – during the 2008 money crisis with a straight face dared to assert that by providing money to business, he was doing ‘the work of God’. He didn’t say which god.
The reversal of goal and means has also been described by the already cited Philip Goodchild, philosopher and theologian at the University of Nottingham, UK. In 2007 he wrote the book Theology of Money. In a telephone interview he explains that “Nobody regards money as their ultimate goal in life, but I look at what takes place in real life. When, in daily life, we pay obeisance to money, if money determines our values, then that is our real religion”.
Goodchild reasons the same way as Benjamins who also sees money as something more than a means of exchange, more than merely a bookkeeping entry. “Money in essence is a debit entry created by commercial banks. In case of government bodies such as the USA Federal Bank they create money through the now well-known QE: Quantitative Easing – $85 Billion each month. However money is not something we possess, it is an obligation, the symbol of the debt of some other person or corporation or government. Therefore it possesses a power that affects us all. The money we carry around in our wallets is always en route to a return – with profit – to its creator, because money always goes back to its base, which is money. “This collective debt is hanging over our economy as a crude reminder that compels us to earn money. We need that debt to be able to realize our goals, but, at the same time, it burdens us with certain limitations and rules. It is a force that has hollowed out the traditional society and has given us a new social structure. All these issues point to a deity. Yet that same deity is in reality just as powerless as the old gods. The system plays around with its weakness. We have to listen to the requirements of the financial markets: if we don’t, they simply collapse. And that is not allowed to happen because we depend on them. Therefore what benefits the markets is more urgent than the interests of the man on the street.”
Debts can only be discharged with new money which is, in turn another debit. “It’s a trap from which there is no escape. The economy is being driven by a steadily escalating monetary debt, a debt not only from one rich banker to another, but a debt from everybody to everybody else. It’s impossible to have no growth, because that leads to stagnation, which means that, in order to revive the economy we have to assume more debt. In Great Britain there is a new housing bubble, which is a solution that is an antidote for the crisis, but at the same time it creates a real problem.
Goodchild again: “In the final analysis there are only three ways to get rid of debt. (1) devaluation of the country’s currency;(2) induce inflation, and (3) go bankrupt. At some time in the future we have to face this debt problem.”
He continues: “One thing I have underestimated, and that is the capacity of the central banks to pump up the economy by assuming these debts. That really is a new phase in capitalism: they are the new bubble, so to say. It never leaves their balance sheets: it circulates from one account to another. This means that – for the time being- the economy still functions.
“However, the political consequences are enormous. The influence of the central banks has become gigantic. They did not grab this influence, no, it has been put on their shoulders. They still are trying to figure out how to use this authority. What is clear is that from now on they are in charge of economic policy. Good bye to democracy. The only aim now is financial stability. The only aim now is the abstract power of the debt obligations.”
“This means that the Mammon is dead,” asserts Goodchild. “The (financial) crisis has exposed the Mammon. But people refuse to believe this. They try to repair the damage which will be risky. They are trying to keep a dying patient alive. Perhaps he will survive for a decade, as in Japan. Soap bubbles can expand forever, as long as nature can tolerate economic growth. But soap bubbles also produce continuous crises. Time and again there is the risk of collapse, and when it does come there will be an immense crisis in democracy, endangering it as a social system.”
These are unorthodox opinions.
Yes, these are unusual insights, and also important. It is for obvious reasons that thinkers such as Goodchild and Goudzwaard belong to a tiny club of prophets who, prior to the onset of the crisis, issued warning signs. Their theological analysis aided them to see through the illusions. But do they offer solutions? Is it really possible to do without these idols? Many theologians don’t buy this. They contend that humanity has an inborn inclination to always worship something or another.
“We cannot pull ourselves out of the quagmire by our own bootstraps. We need to be liberated from these notions”, says Roelf Haan, a development economist and theologian. “I can’t live without transcendence, without faith. To have faith does not mean that I take delight in my mysticism but that I interpret the world in a certain way. I believe that God looks at history from the point of view of the poor, those who fall through the cracks. That sort of vision does not bank on the system: on the contrary it attempts to free itself from it. That is not some kind of escapism. We have to think outside the system, but, at the same time we must operate in the day-to-day economy.”
Christian theology asserts that we can escape the trap of goal and means. “Redemption is an economic concept,” says the Czech multi-tasker Sedl?cek. “The redemption of which the Bible speaks refers in the first place to the buying back – redeem – of a person who had become a slave on account of his debts. Jesus continuously uses economic language. “Sin” also means “debt”. Jesus proclaimed the Year of Jubilee, the year the Jews expected to cancel all debts. He did away with the cold accounting calculation of good and evil and substituted it with ‘grace’. All those morality systems in search of debt are swept away in one grandiose gesture. The entire idea of tit for tat is replaced by love. Love, in the end, triumphs over law.”
What has this to do with economists? “Quite a bit”, according to Sedl?cek: “The way the Greeks tackled the problem of debt is pure theology. According to the law we still are entitled to money. Either that or are we supposed to wipe the slate clean? And how often must we do that? Seven times? Seventy times seven times? But that is impossible. But in Jesus’ time all this debt cancelling also made no sense at all. That’s why it is so unique. And it applies to us all, because in the end it’s the only way out to get rid of the Devil.”
My remarks.
For the time being we are stuck with the devil. Debt and the devil will do us in. We are taught by Jesus to pray to ‘forgive us our debts as we forgive our debtors’. I believe that these debts include environmental debts, which are also immense beyond calculation. Jesus wondered whether he would find faith on earth upon his return. (Luke 18: 8). Of course there will be faith. When we lose faith in the New Creation – which I think is the kind of faith Jesus is referring to – where Jesus will be among us as the Primus Inter Pares, the first among equals, people will concoct all sorts of substitute-faiths with have no real substance.
Next week:
What did Jesus think about money?
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