KZ: Every culture organizes life around a few simple principles, activities, and beliefs. The other institutions and activities of the society hang from that core like branches from a tree trunk. These central acts, institutions, and values form what Ruth Benedict—arguably the most perceptive American anthropologist of the 20th century—called a “cultural configuration.” What’s called paradigms here are some of the branches of the western cultural configuration. One such branch, money must meet the needs of the configuration. So, above all else for current western society money is the source of status, prestige, power (political and physical), security, and individual identity. The Beatles were wrong. Money can buy love. H.L. Hunt and Ted Turner both said it, money is just a way to keep score. Money tells you how attractive, important, well adjusted, influential, feared, and loved you are. In short, money identifies who you are. Over the millennia money has served many purposes beyond these, consistent with the cultural configuration of the time, and an almost endless list of objects have served as the physical face of money (e.g. salt, corn, gold, silver, diamonds, cloth, almonds, tea, dried fish, tobacco, rice, etc.). And tied to all this, money is also the means used to purchase and sell everything from humans to every sort of commodity. But identifying money as the thing that makes members of society rich or poor is too simplistic. Naming money the most flexible cultural invention of humans is justified. Plus, money has a normative dimension. It places some people and items above others and elevates some actions above others. Money today can have two sources, banks and other private money creators, and governments (sovereign money). Which serves best the needs of the cultural configuration is an empirical question. Historically, the answer most common is sovereign money. To paraphrase A.H. Quiggin from “A Survey of Primitive Money: the Beginnings of Currency,” Everyone, except an economist, knows what “money” means, and even an economist can describe it in the course of a chapter or so. To say economists are clueless about money goes too far. But to say economists seem mostly unacquainted with money is not. Economists’ understanding of money is historically and culturally shallow.
PL: I disagree somewhat with your emphasis. Yes money has all those attributes, but its real role with respect to the survival of a society is as a medium of exchange. It is the vita and only link between what we create and what we need.
Mainstream economists recognize that money needs to be addressed of course, but traditionally consider it to be a passive player. In reality, a dysfunctional money system will destroy an economy. People sometimes use the very apt analogy that money is the life-blood of an economy.
KZ: Paul, you say money “…is the vita and only link between what we create and what we need.” That’s absurd. What about the basic emotions, love and hate? What about life and death? What about community and the common good? What about war and peace? They’ve all at one time and another, one place and another linked what humans create and what humans need?
Money is created by humans and then used by humans. It is never passive. Life-blood of the economy, yes. But the economy is created by humans via culture. Which means money is important as a tool for art, religion, family life, crime, marriage, etc. As I noted, money is one of the most flexible inventions of humans.
I’m sure you’re correct that mainstream economists take money as mostly a “medium of exchange.” The other 99.99% of people on earth disagree. Which should tell you how disconnected economists are from their supposed object of study.
PL: Money allows the “love” to flow between members of society, I don’t see how what I said excludes any of the interactions you described. Money represents a voluntary claim that we have on each other as members of society. When I have money, I have access to what you create. Our current money system has led to a gross imbalance and distortion, giving certain members of society an unjust and undeserved claim on the rest of us while starving the majority of access to the money they need to live happy comfortable lives.
Me: This is precisely the point. Money is looked at from a reductionistic economic standpoint when it needs to be viewed from a fully integrative sociological, anthropological, economic AND spiritual-psychological one. Keeping the mass of the populace in a state of individual income scarcity via a monetarily austere system acculturates insecurity and strongly tends to trap people below the upper levels of Maslow’s self actualization pyrimidal model. If we’d instead create individual and systemic monetary grace as in abundance and security with the new insight that you can create exactly that plus beneficial price deflation with a 50% discount/rebate policy at the point of retail sale, that barrier would be removed and with the additional acculturation of even a modicum of wisdom in the form of counseling regarding the plethora of positive and constructive purposes other than and in addition to employment who knows what kind of a “Golden Age” might result?