Why Money Sucks - and Why It Doesn't
Friday, October 10, 2008

Since a lot of people seem to be very focused on the subject of "money" lately, I thought I'd take this opportunity to present a little Portly Lecture.

*clearing throat*

The first form of inter-tribal "commodity" money (approx. 9000 -1 bc) was probably livestock/cattle, and some archaeologists/anthropologists suspect that the first form of "representative" money (something that was not the Valuable Thing itself, but rather, an acceptable stand-in for the Valuable Thing) might have been a scrap of hide that represented one cow or one sheep, etc. -- so that you didn't have to actually move the cattle around in order to make the deal -- because moving cattle costs them energy and requires feeding them along the way, and risks them being attacked by predators, etc..

Cowrie shells later had a good go as "money" in a number of cultures (one of the Chinese characters for money is actually based on the shape of a cowrie shell). Cowries and other shells were used as currency in parts of Africa, Asia, and North America. Cowrie shells and later coined money are sometimes referred to as "commodity" money, but I actually think that they were "representational" money as well, for reasons I'll go into below.

Some other forms of "commodity money" (think of this as "stuff that everybody will probably need/use at some point, or which they can trade to someone else who will probably need it) that humans have tried on during the last 11,000 years or so are: amber, drums, eggs, feathers, gongs, ivory, jade, leather, mats, nails, oxen, pigs, quartz, rice, salt, shovel-heads, hoes, various metal ingots, and thimbles.

Why the history lesson? Well, to make one point very clear: Money is nothing more than agreement.

The proof of this is that, even though Cowrie shells were considered perfectly good as legal tender in a wide range of ancient cultures, I'm guessing that you would not be willing to let me purchase your house with them today. (If you would be willing to do so, please email me -- I happen to have some very lovely cowrie shells.)

I find myself particularly bemused when thinking about Cowries as currency, because, although they are pretty and shiny and all, they really have no intrinsic "survival" value aside from any agreement the ancients might have had that they were recognized currency (unlike, say, eggs, salt, or shovel-heads).

You can't eat a cowrie shell. You can't turn a cowrie shell into a tool. Unless you have someone else who agrees with you that they are "money", they are exclusively ornamental.

Which is why I laugh when I hear people rant about the importance of the "gold standard".

Archaeological finds suggest that gold has been used as a form of currency since the 7th century BCE.

My chuckles about the gold standard stem from the fact that gold is so closely parallel to cowrie shells in many respects: Pretty. Shiny. Can't eat it. Lousy for making tools.

In fact, gold's widespread usefulness as a Valuable Thing in its own right (rather than its value as ornament, or any agreements about gold as a currency) is fairly recent -- arriving with the advent of industrial, electronic, and medical uses for gold.

So in the sense of gold's pre-industrial-age value as currency, I actually think gold kind of sucks when compared to cowries as a form of currency -- because gold is heavy -- really heavy -- and the whole idea of agreed-upon currency is to create a portable symbol of agreement so that the underlying barter of goods (which is the true purpose of any representational economic system) is more efficient.

The transport inefficiencies with gold and other metal coinage (why risk a dozen perfectly good oxen dragging some heavy-ass gold around with you as you vacationed in Capri? -- not to mention the danger of robbers) was probably what gave rise to paper money -- and we've been moving toward ever more efficient and portable agreements about money since paper money was first printed in China in the 5th century CE -- we've moved from printed currency to "checks" to paper credit cards and accounts to plastic with numbers to magnetic strips.

But again -- this is all just an agreement -- a rather fragile agreement, as we have been witnessing in recent weeks.

At the end of the US Civil War, Confederate paper money (which started out with a high value at the start of Secession) was valueless -- after the War, these tokens of previous agreement were used to insulate clothing and as litter for hen-houses.

Nowadays, you can buy a set of 13 Confederate banknotes on ebay for around $8 -- but it still isn't valued as currency -- it's been relegated to the pretty/shiny/unusual classification that an ancient trade-bead or cowrie shell has -- because it lacks this one thing:

Agreement.

When I send you a check or a paypal transfer or whatever for xx.xx$USD, it's because we agree that xx.xx$USD=xx.xx$USD or xx.xx₤ or xx.xx$Canadian or xx.xxPesos or xx.xxYen or whatever.

That agreement changes day to day, and here's the first reason that Money Sucks:


We don't. We really don't. Not in this culture, anyway. We go online and look at the rate for today that someone else (not us) agrees that our "money" is worth as compared to other types of "money", or as compared to what "our money" was worth yesterday, and then we either groan or cheer.

And when we try to find out who that "someone else" might be? It's this mysterious something called "The Market". It's no one that we can talk to or negotiate with -- it's this huge, weird system that most of us feel baffled and confused by.

Truth is, though, that "The Market" is nothing but a network of human beings and their agreements, and believe me -- somewhere, there is someone (or a collection of someones) who types in numbers and makes decisions and today, I know that that someone is not me, and that collection of someones is not me and my friends/allies/acquaintances (and if some of you friends/allies/acquaintances out there are in this group of someones, and you're holding out on me here, I am letting you know right now that I am not getting you a birthday present this year!).


The second way that money sucks is this: The vast majority of people on this planet live in societies in which money is pretty much necessary for basic survival. This, in itself, is not a problem, as agreement on a portable method of exchange is handy and efficient and facilitates a wider range of exchanges.

The problem arises because of this: The vast majority of that vast majority exchange hours of their time, and the use of their energy (in varying forms of muscle-power, brain-power, etc.) in order to "earn" money.

As Joe says at 5:00 of this clip: ".... my life. I sold it to you for $300 freakin' dollars a week!"



Again, even this "sale of life" is not, in itself, a problem -- but here's the rub for me:

Let's take two jobs:

Person A is a 22-year-old delivery-driver, making $10/hour.

Person B is a 48-year-old retail salesperson, making minimum wage ($6.55/hour).

(And yes, these are real-life examples based on people that I actually know.)

Each of them are selling hours of their life, with comparable energy-outputs in terms of physical demands.

Where do I find the arrogance to say that an hour of one of these individual's lives is worth more or less than an hour of the other's?

Think of someone you love for a moment. Let's say that they are about to die, and you have the power to ransom them -- for a price. How much would you pay for another hour of their existence? How much for another day? Another year?

This is where the concept of money gets really difficult for me. I simply have a hard time getting behind any system which arbitrarily "agrees" that an hour of one human being's existence can be worth, say, $120/hour (or more), while an hour of another human being's existence can be worth 50 cents (or less).

I've struggled with this concept for a long, long time, and have not yet resolved it for myself to any degree of real satisfaction.

I suppose that makes me a socialist.

When I add the reality that the valuation of what an hour of my life is worth according to "The Market" may change at any moment, with or without my agreement, or the agreement of the person making $120/hr or certainly, the person making 50 cents/hr . . . . . well . . . . . . why do so many people seem shocked that the system is disintegrating? I believe that we all knew that it wasn't fair, or balanced, or even realistic over the long term -- I believe that we all knew this -- for a very long time.

So, now that I've talked about how much money sucks, let me tell you why I think it doesn't suck:

Money, as a pure concept of a mutually-agreed-upon form of efficient exchange, definitely does not suck. If you and I and a whole bunch of other people can agree that cowrie shells can stand in for a number of other things that we might want to exchange easily and portably, I think that's great.

However, I think that there are some things that are currently not agreed-upon in global human society that we should settle -- before we get on with this whole "money" thing:

1) Everyone who wants it gets a place to live that is safe and hygienic.
2) Everyone who wants it gets enough to eat.
3) Everyone who wants it gets serviceable clothing that will protect them from the elements.
4) Everyone who wants it gets medical care and treatment.

Once that's all taken care of, anyone who wants to develop a trade or service for which they charge 200 cowries per hour is free to do so (as long as it doesn't impact the basic right of any other human to enjoy basic shelter, food, clothing, and medical care). I can agree with them (or not) that I will turn over my cowrie shells at their hourly rate for whatever trinket or service they are selling.

I mean -- if we're going to play a gigantic shell-game -- then let's play it with gusto, and consciousness, and mutual agreement.

Posted byPortlyDyke at 1:05 AM  

8 comments:

Anonymous said... October 10, 2008 at 1:49 AM  

Well, you are assuming (I guess) that the concept of private property is OK. I don't think that's very socialist :P

Anonymous said... October 10, 2008 at 4:33 AM  

Criminy! I was contemplating just last eve emailing you, Portly, for your advice on just this very subject, in the context of creating a feminist workplace. (It's a proposed feminist workplace, at this stage) I'm floored by the coincidence!
I am always impressed by your ability to put "abstract" concepts and solutions in "real", workable environments, and your fairness and ability to talk to and get rid of trolls on Shakesville so bravely and fairly always makes me feel happy and confident and proud.
Thanks for being on the Internets - email may well follow if that's ok?

NameChanged said... October 11, 2008 at 9:07 PM  

Portly Dyke.

When I was a child I had a hard time with money. "But how do you know it's worth that much?" I would ask. My dad would just sigh and say, "Because that's how much it's worth, ok?"

Now it's not such a stupid question.

Thank you for always being more clear in your posts than is necessary. You lay out problems and solutions without sounding condescending or over my head.

splord said... October 12, 2008 at 6:46 PM  

Excellent post -- as bloody usual. ;)

Reminded me of something I wrote once, so I posted it at my place.

Anonymous said... October 12, 2008 at 6:47 PM  

Portly, you continue to amaze me with your ability to distill things to their essence. Every post lately is better than the previous. I say again that I'd love to be able to vote for you for president, but you would a) probably be too smart to want it and b) definitely be too smart for most people to want to vote for you.

Thanks again for your wisdom and clarity.

Anonymous said... October 14, 2008 at 6:04 PM  

Argh. We had a very confusing discussion about this in Current International Affairs. (Yes, my high school offers a Current Affairs course--and African American History! Now if only we could get some women's studies classes, my life would be complete.) The gold standard as it was explained just seemed very, very stupid and self-defeating. That said, I am not surprised the republicans would have us go back to that.

Where do I find the arrogance to say that an hour of one of these individual's lives is worth more or less than an hour of the other's?

Think of someone you love for a moment. Let's say that they are about to die, and you have the power to ransom them -- for a price. How much would you pay for another hour of their existence? How much for another day? Another year?

Thank you for expressing this and writing it all out so eloquently. I do agree that a people and not a few persons need to decide the inherent value of a thing--and as with many important things in life, value goes back to that squishy thing that cannot be quantified no matter how hard we try; humanity. The intangible is invaluable, the value of love never decreases but only becomes more dear. Perhaps if we could get people to start buying imaginary shares of that, the standard of living would be much, much better.

Anonymous said... October 26, 2008 at 7:14 AM  

PD ...brilliant ... I know that you must have been on Obama's short-list for VP , or should have been ... cabinet positions are still up for grabs.

The Cunning Runt said... October 31, 2008 at 7:12 PM  

I read the first few paragraphs of this, and agree whole-heartedly. If I had the facility to read the entire thing, I would doubtless agree with it all. But my acumen with words is shrinking, shrinking, and I didn't 'cause I can't.

Nonetheless, my initial impression was that this is brilliant.

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