Thursday, October 23, 2008

Hoarding, Desire, and Money

My previous blog entry touched on the issue of how financial systems relate to our current crisis and its associated suffering. In the Comments section, Steven Sashen pointed to the work of Bernard Lietaer. Like the article I'd quoted (Money and the Crisis of Civilization), Lietaer says that the very way that we've designed and defined "money" is at the root of the problem.

As I said in my own Comment under Steven's... Lietaer isn't some ayahuasca-soaked fringe visionary. He has experience that makes his authority far far greater than my own. But still, since following authorities isn't always a great idea, I'd like to explore and question Lietaer's assertions.

As quoted by Steven, Laietaer writes, "most current money ... engenders hoarding and short-term thinking since you can collect interest by having more money now (with the hope that it will hold you over in the future)."

I can agree with this quote, in that money engenders the "hoarding" of value, just as a refrigerator engenders hoarding of food. But is using a refrigerator a negative thing? Is the negative word "hoarding" really necessary here, rather than say "saving"?

We human beings seem to be wired to desire satisfaction in the moment, moreso than saving for the future. When someone wants money to spend now, our current system allows him to borrow from someone who's been saving it, inducing the deal by agreeing to pay a fee for its temporary use. The effect of this "interest payment" is to counter-balance our desire to spend in the present, increasing the attractiveness of saving (vs immediate spending).

This type of marketplace (borrowing money at interest) is condemned by Islam. Maybe Jesus was criticizing this system also, in saying things like, "... do not worry, saying, 'What shall we eat?' or 'What shall we drink?' or 'What shall we wear?' For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. But seek first the kingdom of God and His righteousness, and all these things shall be added to you." Again, Mohammed and Jesus are just authorities, and it's up to us the living to think it through for ourselves.

This very fact that "money" allows us to store value for the future may be a benefit of the current system. For instance, say I meet a stranger who could use my help with a computer problem. Since I don't know him, I'm hesitant to "gift" my time and effort to him. And maybe he's got no skills or goods that I want or need at the moment, so bartering isn't possible. But because of "money," he can pay me for my help, and I can "hoard" the payback till some later, more favorable situation. Thus, the money system has made it more likely for me to help this stranger.

I don't think that hoarding vs non-hoarding is the issue. Rather, it's why I'm hoarding. Maybe someone saves money so that when his parents are too old and weak to support themselves with their own labor, he'll be able to take care of them using the money he'd "hoarded" earlier. Can we really label that a bad thing?

If my saving is only for me, then yes, it brings suffering. The same could be said about anything I do only for me. Whatever conclusions we reach regarding the best money system, we can always pursue the Big Question: looking into I/my/me-thinking.

5 comments:

goooooood girl said...

Very fine......

Steven Sashen said...

If you look further into Lietaer's work, you'll find that with certain currency designs, saving is completely unnecessary.

That doesn't mean one won't save, but the WAY in which one saves, and the items for which one saves will be dramatically different.

Imagine, if you will, that anyone could earn money by having taking care of you in your old age. And imagine that YOU didn't need to be the one who paid that person... that the ACT ITSELF *created* money (compare that to promising a central bank some real estate that you "own" for the bank to create money).

If that were possible (and it is in Japan, thanks to the furia kipu), then you wouldn't need to save for your old age. There would be motivation and incentive for others to care for you.

While I don't necessarily agree with Lietaer about the ultimate effects of alternative and complementary currency design, the more you explore what has already happened in places that have been living these experiments, the more amazed you'll be by the possibilities and by the impact these ideas can have on the human psyche.

Stuart said...

Steven wrote...
Imagine, if you will, that anyone could earn money by having taking care of you in your old age. And imagine that YOU didn't need to be the one who paid that person... that the ACT ITSELF *created* money (compare that to promising a central bank some real estate that you "own" for the bank to create money).

Thanks again, Steven. I remain befuddled by this whole issue of how money gets created... but at least you've given me a little glimmer of understanding that we might consider alternative currency systems.

Doug said...

Taking a slightly longer view, most criticisms of capitalism don't stand muster. More people - both in absolute and relative terms - have been elevated out of poverty and destitution during the last 30 years of "greed unchecked by common sense government policies" (read: encumbrance) than at any point in human history. No other system has been shown to be better at efficiently allocating resources than free-market capitalism. Transparent markets get things directly to people who need them, and untold sums are wasted when bureaucrats step in to allocate according to political whim.

Certainly the system is vulnerable to imbalances, and can be unjust, but it is also self-righting and flexible. What we are seeing is a (admittedly dramatic) correction of imbalances that have been perpetuated artificially for the last decade or longer. For all the howling that deregulation of financial markets is to blame for the current mess, consider that the source of the rot, the market for home mortgages, is easily the most regulated financial market in America. The government interference that created, perpetuated, even promoted the bubble in house prices deserves as much of the blame for this mess as any of the "greedy" Wall Street types who profited from said bubble.

Stuart said...

Doug said...
the market for home mortgages, is easily the most regulated financial market in America

And we have tax policies that reward people for taking on mortgages. This has encouraged people to take on more debt than they otherwise would, and over time, the effect has been huge.