New Money for a New World

by Bernard Lietaer

  Money as an Information Replicator

  Chilean biologists Humberto Maturana and Francisco Varela describe how systems form and maintain themselves through replication: “This process occurs at all levels: molecular, biological, and social. For every system has its own characteristic replication that forms, expands, and holds systems together.”336

  Replicators of ideas and collective emotions are instruments that maintain particular social systems. These collective ideas and emotions are sometimes called “memes,” analogous to the “genes” in biological systems. These memes are the building blocks of a society’s constituent parts, including its structures and dominant beliefs.

  Money is part and parcel of our oldest information system. Writing itself seems to have been initially invented by the Sumerian civilization to record financial transactions, as confirmed by the earliest tablets found in Uruk. Our monetary system now functions as a key information replicator, a vital linchpin that drives particular and consistent behavior patterns. Every dollar created and spent reinforces—replicates—the values that are deeply embedded in the basic design of our currency systems.

  Money shapes our beliefs and social structures and tells us what is and is not possible. This explains how, with the best intentions, even with totally different personal values or perspectives, regardless of gender, race, or socio-cultural biases and affiliations, most of us behave in a manner consistent with the yang shadow axis to obtain money. One expression of this is the emphasis on competition over cooperation. Without it, Western civilization would look and act very differently. Our money is one of the key information replicators that ensures that competition is emphasized throughout society.

  Fear of scarcity and the axis of excessive yang shadows are continually reinforced by our yang-type national currencies. This is reflected in many of our cultural stereotypes, such as the tyrannical, greedy scrooges who sadistically enjoy their power over others. A more recent stereotype is the workaholic executive, addicted to accumulating money, power, and glory, often at the price of any ultimate satisfaction. He ends up lonely in a meaningless world.

  In professional life, many feel the need to ignore their own and other people’s emotions in the performance of their jobs. In the domains of media, medicine, and finance, “professionalism” is equated with taking a hyperrational distance from other people, and is oftentimes seen by others as cynicism and emotional disengagement.

  As things stand now, our true natures are not necessarily reflected by our collective ways of being and doing. We live in a global matrix, in which many of our collective emotions and patterns of behavior are instead conditioned by a monopoly of yang-type currencies that reinforce a very particular, limited set of values on the whole of society and each of us individually. Some of the consequences of this conditioning are examined next.

  CLOSING THOUGHTS

  Our financial markets know only the two emotions of greed and fear, because all financial markets have one common denominator: the type of money that is used to value nearly everything. Financial markets simply mirror our collective archetypal wounding.

  It must be remembered that it is not money itself that is at fault here. Rather, it is the monopoly of yang-type currencies that, like hammers, are imbued with only a limited set of functionalities. When only hammers are available, we start treating everything as nails.

  Despite the many services rendered and achievements made possible by our monetary system, it is the monopoly of national currencies in our world that continually reinforces imbalance. Unlike Hammerville, whose use of only one tool came about through ignorance alone, our limited monetary toolset—by and large the same once created centuries ago at the beginning of the Industrial Age—was brought about not just by ignorance, but also by a long-standing archetypal repression. We examine the consequences more closely in the following chapter.

  CHAPTER TWENTY FOUR - Consequences of Repression

  That which we do not bring to consciousness

  appears in our lives as fate.

  ~CARL GUSTAV JUNG

  When modern psychology and psychotherapy came into being, much of their focus centered on the individual patient—on his or her trauma and personal psychological framework. Many of our challenges and behaviors, however, do not emanate from individual disturbances alone.

  Archetypal psychologist James Hillman observed:

  Too many people have been analyzing their pasts, their childhoods, their memories, their parents, and realizing that it doesn’t do anything—or that it doesn’t do enough. Psychotherapy theory turns it all on you: you are the one who is wrong. [But] If a kid is having trouble or is discouraged, the problem is not just inside the kid; it’s also in the system, the society…Problems come from the environment, the cities, the economy, racism. They come from architecture, school systems, capitalism, exploitation.337

  Problems also derive from money choices. As noted, each type of currency is imbued with specific design features that encourage or discourage particular behaviors and values. Our national currencies were simply not structured to address social, economic, or ethical concerns. Rather, they are international trading currencies designed to promote specific business needs, and to this restricted end they have performed admirably. Though money is not inherently good or bad, and certainly not the root of all evil, the particular design of our national currencies does promote greed, as well as fear of scarcity.338 Given money’s innate capacity to replicate information, and lacking any significant yin-currency system to provide a counterbalance, the skewed yang shadow axis dominates unchallenged, the consequences of which are profound.

  MONEY AND UNDERDEVELOPMENT

  Geopolitical power considerations were the main influence that determined the monetary order. Under today’s monetary rules, less-developed countries must borrow “hard” currencies from the richest countries to keep their economies running. These countries require more and more money just to pay back the interest on previous loans, the payments for which currently amount to about $300 million per day. Activist and rock star Bono notes:

  Africa (alone) spends $200 million every week repaying its debts to the West. That made no sense to me. It means that for every £1 western governments give to the poorest nations, the poor nations pay back £3 to the west! Is that not barbaric? Is it not barbaric that Tanzania spends more on repaying its loans than it does on health care and education combined?339

  After the G8 summit in Okinawa in 2000, former President Obasanjo of Nigeria made this comment on Nigeria’s debt:

  All that we had borrowed up to 1985 or 1986 was around $5 billion. So far we have paid back about $16 billion. Yet we are being told that we still owe about $28 billion. That $28 billion came about because of the foreign creditors’ interest rates. If you ask me what is the worst thing in the world, I will say it is compound interest.340

  When President Obasanjo spoke out a decade ago, the developing world was spending $13 on debt repayment for every dollar it received in grant aid.341 A mere decade later, the repayment cost has nearly doubled to over $25 for every dollar borrowed.

  The monetary rules that have been applied by the IMF to developing nations through its “structural adjustment programs” have been widely criticized. Such adjustment programs, in play since the 1980s, include prioritizing the payback of interest on foreign loans, even if it means dismantling the recipient nation’s educational systems and other long-term social investment programs. It has been claimed that if these same rules were applied to the United States, this superpower would itself regress to Third World status in as little as one or two generations. Would not everybody, including the First World and its financial institutions, be better off if all countries were truly able to develop themselves, free of these draconian constraints?

  Some efforts have been made to counteract the consequences of excessive Third World debt. For instance, the Millennium Movement successfully promoted the cancellation of at least part of the debt of the poorest co
untries, although the debt was not actually cancelled. Rather, the otherwise unpayable debt was transferred to U.S. and European governments that, in turn, passed it onto their own taxpayers, who ended up paying banks on behalf of the developing countries. With such debts written off, these poorest countries are in a position to start going into debt all over again. This approach leaves fundamental questions unaddressed. What, for instance, prompts us to create an international monetary system and to maintain rules that make this debt necessary in the first place? Is it not time to address systemic issues with systemic solutions?

  Though assistance programs and loans to developing nations in the form of national currencies may have noble objectives, the very act of introducing a monopoly of a yang-type currency into a culture can have disastrous effects. We should remember that our national currencies were never designed to promote values such as cooperation or equality, or address the vast majority of our social needs. They were specifically designed to promote industrialization, competition, and nationalism. This very same currency that we are now using—unsuccessfully—to assist developing nations was instead actually used quite effectively to colonize, not liberate, many of those same nations, as seen in Ghana (see insert).

  The Ghana Hut Tax

  The British faced an interesting problem in the 19th century, when they colonized what would later become the nation of Ghana. At the time, Ghana consisted of several hundred more or less sustainable communities, each contained within their own traditional region. They traded, but only with one another in closed circuits established by tradition among the different tribes. This trading system permitted Ghanaians to meet their basic requirements. It also provided some measure of independence from the colonial government and the need for British goods. Yet, one goal of having a colony is to procure a secure market within a well-controlled territory. The British, therefore, sought to break up the self-contained, regional patterns in order to create a demand for British goods and to secure colonial control of the area.

  The British solution was not to start a big advertising or marketing campaign for their goods. It was not even to try to prohibit the old exchange patterns or use coercion to create new ones. It was a lot cheaper, simpler, and more elegant than that. The colonial government simply created, for the first time, a national Ghanaian currency together with a very modest “hut tax.” The tax, (of one shilling per household per year) would be payable only in that national currency. Lo and behold, within a few years, most of the traditional sustainable systems collapsed. Why?

  Every “hut”—every extended family unit in the country—needed to earn some of this new currency to pay their hut tax. This could only be done by trading outside of their traditional framework within a new national system. That alone was sufficient to break up long-standing patterns of regional sustainability.

  The lesson should be clear: trying to encourage local or regional development, while simultaneously maintaining a monopoly of a national or supranational currency, is like treating an alcoholic with alcohol prescriptions. The monopoly of bank-debt money affects all of us, in developing and developed nations alike. It coerces virtually all those who come into contact with it to behave in ways that are consistent with the yang shadow axis.

  The entire field of economics has been based on the erroneous assumption that something in human nature—and not the type of money used—is what predetermines our behavior patterns.

  Economics and the Economic Man

  It was at the height of patriarchy in Western society, when the last witches were still being burned in Europe, that Adam Smith wrote his Theory of Moral Sentiments (1758) and Wealth of Nations (1776). He observed that in all modern societies there existed a universal desire for individuals to accumulate money. This observation heavily influenced the development of Smith’s theory—economics—whose purpose it was to allocate scarce resources through the means of individual private accumulation.

  The psychological cornerstone of economic theory became the idea of the “economic man.” This notion is defined as, “a hypothetical man supposed to be free from altruistic sentiments and motives interfering with a purely selfish pursuit of wealth and its enjoyment.”342 It should be noted that this concept was not introduced nor mentioned by Smith himself.

  In traditional economic models, we are all expected to find the economic man within us and empower him to act. That is, we are supposed to act purely rationally and selfishly, and this process will ultimately benefit all. This notion has, however, long begged contention (see insert).

  The Mythical Economic Man

  The psychological assumptions behind the mythical “economic man” present substantial problems. The definition itself implies that everyone can and should be totally rational—that is, behave in accord with the hyperrational yang shadow of the Magician. In other words, this definition asks us to push aside any vestige of the various yin aspects of ourselves, including any concerns for our communities.

  When the Great Mother is repressed, yin ways and means of knowing are automatically devalued, together with the rest of the yin coherence.

  The concept of economic man also assumes that group behavior is of the same nature as individual behavior. No room is left for any group psychology that may differ qualitatively from individual behavior. The hypothetical economic man entails the mistaken “fallacy of composition,” which fails to take into account that the whole is greater than the sum of its parts.

  Gustave Le Bon, a pioneer of social pyschology, made the following point: “Individual members, however like or unlike their model of life, occupations or intelligence, find themselves overruled by a collective mind set. This way of feeling, thinking and acting directs the individual to behave quite differently from what he would do alone.”343

  Le Bon’s definition of group psychology is quite consistent with the findings of his contemporary Jung, regarding the collective unconscious.

  Economics and the Yang Perspective

  In all fairness, most economists have long been aware of the oversimplifications built into economic man and do not take its assumptions literally. Economist Wesley Clair Mitchell pointed out, “Economics without input from psychology is similar to doing mechanics while ignoring the laws of physics.”344 Even so, the economic man hypothesis persists as an implicit and necessary condition to make the equations of conventional economics work.

  Money’s value-nonneutrality and other more recent findings all point to the very important links between the type of money used and economic behaviors. Instead of being a passive facilitator of exchanges, as traditional economic theory posits, the monopoly of a yang-type currency deeply affects the relationships between, and the collective psychology of, the people who use it. Yet, as great as this impact is, it is only the first consequence of archetypal repression and the yang shadow axis.

  THE DOMINATOR PARADIGM

  Some of the better-known social pathologies of modern-day society include narcissism, consumerism, and fundamentalism. Though they may not appear to be related to our monetary system or to the repression of the Great Mother archetype, our conventional currencies nonetheless feed and activate these pathologies continuously in a catalytic manner. This activation occurs by means of the “dominator paradigm.”

  Dominance is the need to control or maintain authority over others to attain a sense of security or identity for oneself. The desire to dominate justifies the need for a repressive social order, and is deeply linked to our historical patriarchy. Recall here the tyrant, the excessive yang shadow of the Sovereign archetype. Intrinsic within this dominance paradigm, and connected to the patriarchal ideology, is a belief in total control over others. This is expressed as an imagined sense of security founded on power by whatever means necessary, whether military, political, economic, religious, or psychological.

  Other processes that relate to the dominator paradigm in our society today include the glamorization of violence, vicious forms of sport and play, and the fascination with w
ar and aggressive technologies. While we are all subjected culturally to the yang shadow axis, some are more prone to it than others. Someone who is stuck in this shadow axis tends to create a separate and superior identity, and automatically casts as “others” those entities or people that he or she fears, cannot control, or does not understand. These “others” tend to include any group associated with yin characteristics, such as women and Nature, different cultures and races, and so-called primitive societies. This helps explain the long history of the portrayal and the dismissal by mainstream Western society (which is itself caught in a yang shadow axis) of any such others as weak, impotent, irrational, masochistic (each of which are yin shadows), and thus deserving to live in scarcity.