Wednesday, February 22, 2012

Getting it right

This was given as a guest sermon at the Unitarian Universalist Society of Oneonta on February 19th, 2012. It benefitted greatly from the advice of the UUSO minister, Rev. Craig Schwallenberg. It was preceded by three short readings.

“The value of a unit of currency is a measure of one’s trust in other human beings.”
—David Graeber

My earliest memory of money is of seeing my mother at her desk, paying bills. I asked what she was doing, and she explained. Then I asked about that little book that she was writing in and tearing things out of, and she told me it was a checkbook, and explained how that worked. How she and Dad, instead of using money to pay for things, would write out a check.

And I thought to myself, How cool is that?

At some point, of course, she explained to me that the checkbook wasn’t some magic way of paying for things without having money, that they had to put money in the bank first, and only then could they write checks.

But it turns out I wasn’t quite as wrong as a child as I later thought I had been.

Because there’s nothing that is inherently money, money is just a social arrangement, an agreement that these things will be stand-ins, tokens, that you can use to change ownership. If you can change the agreement, you can change what money is, and who has how much of it, and who owns what.

And what about that other thing, ownership?

Our notions of it go back at least to Roman law, where it is defined as a relationship between a person and a thing. This is a tricky business in a slave society, where a person can be owned and the law says that ownership is about things. But there’s a deeper problem with the Roman definition. It’s partly true that ownership is a relationship between a person and a thing, but it’s more accurate to say that ownership is a relationship among people, about things.

If you were living in total isolation, you could say you owned everything around you, but that would be pointless. Ownership only takes on real meaning when there’s someone else who might own a thing instead of you. That’s because meaningful ownership is an agreement among people. It’s an agreement that covers who can make what kinds of decisions about which things.

So ownership and money are about relationships among people. They are also a powerful social technology. To see that, look at the termite mound.

What the termites build is a marvel of engineering, and they do it without an architect, a planner, or even anyone in charge at all. Each individual is governed by genetically encoded rules that tell it how to respond to changes in temperature, humidity, and air flow, how to react to chemicals emitted by other termites or by enemies. No single termite, not even any group of termites, “thinks” about what the colony “should” do. Each individual just follows its rules, and the result looks like purposeful action, with nobody in charge.

Though this system is truly wondrous, it’s not hard to understand from an evolutionary perspective. Colonies where termites had effective genetic rules—more effective than other colonies’ rules—would thrive and their rules would get passed on. Genetic shifts that changed the rules would persist if they were helpful, or get wiped out if they weren’t. The result is genetic codes for behaviors that make individuals into parts of useful structures.

Humans face a similar problem. An isolated human is usually a dead human—we do much better in groups. So, like the termites, we need rules about how we’re going to coordinate our actions into a useful whole. But genetic rules, though they work well for the termites, aren’t ideal for all situations. A person has a lot more possible actions than a termite, so we’d need a much more complicated set of genetic rules to deploy all those options.

And genetics are slow. It takes many generations to adapt to a new climate, a new predator, a new source of food.

Cultural traits, culturally encoded behaviors, can evolve just like genetically driven ones, and following the same principles—relative success is rewarded with survival. But culture can change much faster than genes.

The earliest known human solution to the termite problem is what can be called “baseline communism.” There isn’t a lot to own. Money plays the role of what the anthropologist David Graeber calls a social currency. It’s not used for day-to-day transactions, but to rearrange or repair social relationships, as with marriage, adoption, or atonement for murder.

For the day-to-day business of how to live productively in a group, there are simple cultural norms of sharing. There’s the expectation that I will share with you, and you will share with me. There are no formal records of debts or loans, but people keep rough account of who is a good neighbor and who isn’t pulling their weight—the story of Nasruddin and the donkey shows someone being told off for taking unfair advantage of generosity. And because we are all in each other’s debt, we don’t charge interest—the story of Nasruddin and the pots shows the traditional rules pushing back against an effort to bring the idea of interest into neighborly relations.

Nasruddin, from Wikipedia

As the Nasruddin stories illustrate, this is a moral economy, where your ability to benefit over the long term is linked to your living up to the culture’s standards of being a good neighbor.

Eventually, these baseline communist societies give way to hierarchical ones: the pharaohs in Egypt, the priests of Mesopotamian temples, the kings and lords of feudal Europe. Instead of a norm that tells us all to share with each other, the new norm is that “that guy’s in charge”—and he more or less owns everything, too.

Baseline communism allows people the advantages of living together and cooperating, without the need for someone to be in charge. But it has its limitations. Because it depends on trusting people you know, its size is limited by the number of people you can know well enough to trust. Because nobody’s in charge, it can’t pursue large goals. And because it’s based on norms of behavior—who shares what with whom and when—it’s somewhat static. It can change faster than behaviors based on our genes, but a culture based on norms can’t change too quickly, or else its rules cease to be norms.

Hierarchical society partly solves these problems. You don’t have to know people well enough to trust them. You just have to know who is above you and who is below you in the hierarchy, a structure that is usually maintained by some combination of religious teachings and the threat of the sword. And we get large-scale projects: Egypt’s pyramids, the massive irrigation works of what is now Iraq, the castles and cathedrals of Europe.

Money’s there, but it’s primarily an accounting tool, used for keeping track of large-scale obligations. As before, it’s not used much in everyday transactions, since those are governed by the hierarchical structure of the society: the peasant has to give the lord a share of his crop and a part of his labor. And where the hierarchy doesn’t reach, into the relations among neighbors, the old baseline communism lingers on.
The society functions, but it’s not much of a bargain for those in the lower parts of the social structure: the serfs, the laborers, the slaves. To our way of thinking, it’s an immoral economy, where some rule and others are ruled, for no very good reason.

It gives way, eventually, to the world we live in today, the market. This is where ownership and money come into their own. There's that quote at the beginning of the post about how the value of a unit of currency is a measure of our trust in other people. That isn’t quite right. The strength of a currency isn’t the measure of our trust in other human beings in general. Rather, it measures how much we trust them in one particular regard: we accept money in exchange for something directly useful, because we trust that other human beings will do exactly the same thing. Beyond that, money makes it possible for us to interact with other people without trusting them worth a damn. In baseline communism, I share with you because I know you and trust you. In hierarchical society I give to you because it’s my obligation, or I take from you because it’s my right. In market society, I need not know anything about you other than that you’ve put cash on the table.

And my ownership of things, my ability to make decisions about how a thing is to be used, is not a function of my being a good neighbor, nor does it depend on my position as a temple priest or a member of the nobility. It’s a different sort of social agreement, completely fungible, based, presumably, on an unbroken chain of valid swaps, carried out with money. And going forward, I can transfer that ownership on to anyone with whom I can make a deal. Ownership and money are the blood and the bones of market society.

And what a society it is.

The market partly delivers on its promise of decentralized coordination. We don’t need anyone telling us to drink less orange juice after a bad harvest, or to plant fewer orange groves if people lose their taste for the fruit. We just follow the scent of money, with the goal of accumulating ownership, and the result is something that looks like purposeful action on the level of the whole society.

In other words, Adam Smith’s invisible hand is the termite colony writ large. It has the suppleness of decentralized coordination, but also the dynamism of rules governed by culture rather than by genes. And because the most important norm for the market is, “This is money,” almost all our other norms are flexible. But if market society has all the wonders of a termite mound and then some, it also has a termite mound’s morality—which is to say, none at all. It is strictly amoral.

Nor is it guaranteed a future. The fact that something has evolved—whether it be a termite species with genetic coordination, or a market economy tied together by money—just means that its ancestors were successful. The past is filled to the brim with species and cultures that died out, and every last one of them was descended from success stories, because evolution works by not letting failure have descendants. So any species alive today, any society functioning today, however robust it appears, could perfectly well be an evolutionary dead end.

In other words, it’s possible to get it wrong.

This is where the Czech experience of the 20th century may be instructive. Czechoslovakia was put together at the end of World War I on some of the ruins of the Habsburg Empire. The new leaders saw the nobility’s ownership of vast tracts of land as the legacy of a historical injustice, so they took much of the land and distributed it to farmers. 20 years later, the country was occupied by Hitler, who saw Czechoslovakia as a historical injustice, so he rearranged ownership again—most drastically for Jewish citizens, but many Czechs came off poorly as well.

After World War II, it was time to do it again. It was easy to make the case against Germans who had arrived as part of the occupation. But on top of that, the presence of an ethnic German minority in liberated Czechoslovakia was seen as a historical injustice, even though many of them were from families that had lived in the Czech lands for centuries. Almost all the three million German speakers of Czechoslovakia were expelled from the country, with only what they could take in a suitcase.

In 1948 the communist party came to power, and now it was the bourgeoisie whose ownership was intolerable. Almost all property was nationalized, and the taint of being “middle class” even spilled over onto the children, who might be limited in their career options because their families were considered to be “class enemies” of the new order.

In 1968 there was an effort to reform communism from within, and when that was put down by a Soviet-led invasion, there was another wave of rearranging ownership.

And most recently, there was 1989 and its aftermath—the fall of the communist regime and the reestablishment of a market economy. Some property was returned to former owners or their heirs. Some was sold at auction. Some was slipped out the backdoor to well-connected individuals. But it’s all settled—at least for now.

So the Czechs spent the whole 20th century trying to enact one vision of justice after another, by rearranging the relationships among people that are embodied in ownership. They spent the century trying to get it right.

What about us?

The mythology we teach, our version of the tales of Mullah Nasruddin, is the Horatio Alger story, the idea that personal wealth is the result of hard work, initiative, ingenuity, and intelligent risk-taking. But the great concentration of wealth in the last 30 years hasn’t all been so virtuous.

There’s been ingenuity alright, but a large piece of it has been focused on how to use the social agreement that is money, in order to rearrange the social agreement that is ownership. How to write a check without having first having put money in the bank. How to use that to get ahold of something real, without doing anything useful for others either now or later. Some of this ingenuity has been illegal. All of it has been destructive.

We’re told we should move forward rather than look back, but that’s misguided. Once we’ve allowed massive injustice into our ownership arrangements, then everything that arises from them is tainted with that same injustice.

We probably don’t want to overhaul everything every 10 or 20 years the way the Czechs did.

And I don’t think we want to go back to the limitations of baseline communism—there are some really nice features of living in a large, complex society. Even something as simple as a checking account is a great convenience; it’s also dependent on that complexity, dependent on our social technologies.

But ownership and money aren’t just the bones and the blood of a market society. They are, in the end, about relationships among people.

And we need to find a way to get those relationships right.

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