by Charles Eisenstein
Eisenstein probes the impact of money on our society and on Earth’s limited resources. In his view, the effects are pervasive and overwhelmingly negative. It’s a huge topic, and despite a fair amount of detail in his arguments, he still leaves much unsaid. He offers solutions which are highly idealistic and leftist.
His initial premise holds that world’s current economic system requires perpetual growth, that the earth’s natural resources are limited, and Q.E.D., the current system is doomed to fail. He further posits that gross inequities in wealth distribution create much suffering and unhappiness. None of these assertions are new and both have elements of truth. However he ignores many key facts. For example, he does not mention that GDP, which is the primary measure of economic activity, does not require use of natural resources. A masseuse can receive payment in exchange for a massage, which will increase economic output. Yet no trees were cut and no oil burned. The same goes for many online services, using just tiny amounts of electricity to promote services and the transfers of money that make our economy spin.
Eisenstein ignores these low-impact economic activities and instead focuses on those facts which suit his story. He writes from the perspective of someone living in the United States, with only scant mention of the vast social and economic variety on this planet. While he briefly acknowledges that Marxist doctrine failed, he clings to many of the same highly socialistic principles. He dissects the harmful aspects of our current money system and proposes extreme alternatives which would strike most observers as highly problematic and unrealistic.
In a nutshell, he proposes making interest illegal (Islamic law), backing money with natural resources (think cap-and-trade), that most people give freely of their time and services (gift economy, open source), that banks require full reserves instead of fractional reserves (already done in some places). None of this is new, which he admits. Some of these experiments work well on a small scale while others have failed. Yet all of these relatively small-scale experiments operate in an environment of fungible fiat currency. The author does not offer a hypothesis of how these systems would function without the supporting role of today’s money.
The author argues in support of these policies by claiming that they would be far less destructive of nature, lead to far less wealth concentration, and generally make people happier. His arguments have elements of truth, at least in populations that are well-suited for such rules, though he fails to show why things would be different this time or how society would function without a fungible, liquid, international money system. Nothing is mentioned of the recent century of failed communist rule that prohibited private ownership.
All of these experiments have been tried before, with mixed results, and in some cases disastrous results. Most would agree that the huge social safety net in Norway is successful, primarily because that small, homogeneous population enjoys vast oil wealth (as do several small Arab nations). By contrast, similar policies have failed miserably in Venezuela, which also has huge oil wealth. A more honest discussion of the topic would delve into the social differences between these populations and admit we are far more complex than our money system.
He devotes considerable effort to explaining his disdain for the practice of charging interest on loans, yet fails to explore the significant portion of the human population that already forbid interest – namely that part of the Muslim world that adheres to Islamic law. The fact that the author fails to explain such obvious examples or offer more nuanced arguments makes his assertions extreme. He chooses only the evidence that fits his viewpoint and blatantly ignores the rest. His most obvious omission is a discussion of human nature. Human motivations are varied and complex, and human society evolved away from tribal gift economies for a reason. He seems to long for those ‘good ‘ol days’ without delving into why we replaced early systems in the first place.
His arguments then can be summarized as a sort of ‘why can’t we all just get along?’. Unfortunately, such utopian thinking might actually lead to even bigger problems, as socially conscious people give away their money (as the author suggests), leaving even more concentration of wealth among greedy capitalists.
So this is a book of half-truths, ultimately more misleading than blatant lies. Yes, money is sometimes used as a tool for evil and is in some ways similar to the problem of nuclear weapons. We cannot un-invent nuclear weapon technology, so we are left with the intractable problem of nuclear arms. We have not yet learned how to put the cat back into the bag.
Technically well-written, though unbalanced, idealistic. Best aspect of this book is that it stimulates thought on a challenging topic. Fortunately there are many experiments currently underway in many places that address some of the problems of our money system and Eisenstein does mention a few of these. Who knows? – some of these economic innovations may one day grow to quietly eclipse our current money system.