Thesis Number: #5 (Page 1 of 9)
Money acquires the power to pollute politics and injure people’s lives when laws are subordinated to the culture of cheating. Monetary reform cannot occur without an informed consensus behind the need to re-socialise rents, and re-privatise earned incomes. Democratising a nation’s finances would eliminate the incentives that drive governments into debt and people into abject poverty.
The Pathology of Money
WHEN people allow their social income (rents) to be privately appropriated, a slow-motion catastrophe is triggered. Trauma is transmitted throughout the living space. Society’s foundations are undermined, culture is contorted and the collective consciousness is ruptured. The initial damage is then compounded when people are tempted by the emerging culture of cheating. This is why “money” came to assume a hostile role in modern society. A tool that is inert, with no intrinsic moral status, is exploited by those who find that it can be used to enable them to grab a share of rents. Once this is understood, the perception of money as a menace begins to dissolve.
In the 16th century, the bankers of Amsterdam and London were drawn into the culture of cheating by monarchs on the make. When their forces were combined, Europe was redirected along an evolutionary path that led directly to the financial crisis of 2008. The moneymen did invent a cannibalistic system that preyed on the people who worked to add value to the wealth of their nations, but they did so only after the lead was taken by kings who betrayed their duty of care to their people.
To attribute the root of evil to the love of money (1 Timothy 6:10), is to distract from the source of society’s ills. This notion was revived by Pope Francis in his first address on “free market capitalism”, in which he condemned the “cult of money” (Squires 2013). But money was invented as a benign instrument 6,000 years ago to facilitate more satisfying, complex urban ways of living. It supplanted evolutionary sentiments when a few people were allowed to abuse the trust that is the glue that binds all communities.
Love, whether for money or any other object, is a psychological state. A personal proclivity could not assume social significance if customs and practices were not reshaped to elevate that psychic condition into an institutionalised process. In the case of the idolatrous treatment of money, the formative influences are not to be found in money itself, but with a statecraft dedicated to enhancing anti-social behaviour. That behaviour found its systematic expression in a culture of rent-seeking. As that culture was embedded deeper into the community, the pathology of money surfaced as distortions in inter-personal relationships along with the wrecking of people’s social and natural habitats.
Institutionalised arrangements for creating something called “money” are necessary for a dynamic economy based on exchanging goods and services to enhance the quality of life. But from the earliest city civilisations onwards, debts became a problem. In Mesopotamia, indebtedness stemmed from crises like droughts (that caused famines, obliging people to borrow money) or because of tribute exacted by imperial powers. This coloured the reputation of “money”. Disentangling that history is central to the restoration of sanity in society.
In antiquity, debts that fuelled crises resulted in the adoption of a custom known as Jubilee. Non-commercial debts were periodically cancelled. Debt was not recognised as a healthy feature of society, but one that destabilised communities (Hudson et. al. 1996, 1999, 2002). But we must stress that, at the heart of the Jubilee arrangement was the restoration of land to families who had lost it.
Our society has come to treat debt as even virtuous. People had to be sublimated into accepting this attitude, for a matrix of legal, moral and institutional arrangements was created that ruptured trust and dislocated people from the means of livelihood. Understanding this history is the key to applying the correct reforms.
If we follow the money trail, we are driven to an examination of the circumstances that formed the modern State. We discover that, at its heart, the political project of the State was one of income redistribution: resources of value were redistributed from those who created them to those who commanded privileged power. Today, that corrupted power is exposed by the way in which high finance devours the lives of those who pay their way by earning their living (Box 1).
The Royal Bank of Scotland became a victim of the financial crisis of 2008 because its mortgages had funded land speculation. It was rescued by taxpayers, who ended up owning 84% of the bank. In December 2010 it was announced that RBS would offer a “product” to enable people to bet on whether house prices would rise (Barrett 2010). In 2013, two reports revealed how RBS forced viable businesses into bankruptcy. In some cases, debtors’ properties were sold at favourable prices to subsidiaries of the bank.