UNDERSTANDING MONEY

Money is generally understood as a means of exchange. In alternative contexts where the awakening of consciousness is known, it is common to understand money as an energy of exchange that has to do with our attitude of gratitude towards life and our mentality of abundance or scarcity. In the Post The Amazing Labyrinth of Abundance I reflect deeply on why understanding money solely as an energy of exchange is a limited understanding. Why should a child go hungry, because of his mentality of scarcity? Evidently that explanation is not sufficient. Nor is it enough to blame it all on the ambition and corruption of big corporations, politicians and businessmen: when you understand the economic system you realize that even if we were to eliminate all ambition and corruption the problem would remain. Moreover, it goes without saying that many people today are fully convinced of their intention to adopt a mentality of abundance and gratitude towards life, yet that does not produce the expected result in terms of money flow. Rather, those who do well with money are those who adapt well to the conventional economic system (such as Elsy Abundance in the Post Marriage Between Abundance and Sufficiency). 

In reality, money, more than an energy of exchange, is a social institution that (like all our institutions) reflects the cultural mentality of separation: a specific collective neurological organization. If what I have just said sounds very strange, don't worry, here is a very simple explanation that will help you understand this.

Consider the following story (original idea taken from Charles Eisenstein’s book Sacred Economics). Imagine a small village where there is no money. Let’s say people barter with basic goods. 20 families live in the village. Alice produces beans, Peter produces corn, Kimberley has some chickens, Steven is a carpenter. They all do what they with the most basic technologies, of course their agriculture is fully organic (in their world that word makes no sense). When Alice wants some corn and Peter wants some beans, things are very easy: Alice takes some corn from Peter, Peter takes some beans from Alice. Everybody is happy.

Another day Alice wants some corn but Peter doesn’t want any beans. Luckily, Peter does want some eggs, and Kimberley wants some beans. So the exchange goes: Alice gets her corn, Peter gets his eggs, and Kimberley gets her beans. Everybody happy.
Next week, Peter doesn’t want beans nor eggs, he wants to build his house. That would probably take a lot of corn, however Steven doesn’t want that much corn. He actually wants beans but today Alice doesn’t want any corn. So on and so forth. The point is, bartering without a currency can get complicated.
So, one sunny day a Banker arrives to the village. He is actually an honest banker, one who believes people in the village can do better and simply wants to help them. I am not being sarcastic here, I do not want the reader to get distracted by the stereotype of a greedy banker. Anyways, in the vision of sacred economics greed is not a problem but simply a symptom (and by the way a symptom that is present often but not always; there is in my opinion an exaggeration or an obsession in blaming greed or ambition for our civilization’s imminent collapse). Mr. Banker tells the villagers they can do better by having a currency. “You can exchange more efficiently if you have a currency. Not only that, but you can have your economy grow: produce more, and have access to new goods and services. Let me help you. Get me a cow hide and I will cut it in small pieces (standard size). Then I will give each family 10 pieces of hide. The only condition is when I come back next year, each family has to give me back 11 pieces of hide”. The villagers accept the proposal.

Dear reader, don’t jump to conclusions too fast. Let me guide you. First, a total of 200 hide pieces are circulating in the economy, so there is no way all 20 families can pay back 11 pieces because that will take 220 hide pieces. Thus, this would mean at least 2 families have to go bankrupt (unless Mr. Bank issues new hide pieces in the middle of the year). But let’s go step by step. First thing that happens is that indeed exchange is easier now (nothing at all wrong with that). The second thing that happens, is that together with this new technology of exchange something else came into the village: a new mentality of “we can do better”. A very healthy realization that one can improve upon whatever one is doing. For example, at a very low cost Kimberley can get some leftovers from Alice’s corn field and have her chickens produce more eggs. Likewise, Alice can get the chicken’s manure and improve corn yields. If Alice’s corn does better, she will be able to pay back her debt and presumably even keep a profit for herself. With the extra hide pieces, she can increase her family’s consumption, let’s say build a bigger house, perhaps buy a refrigerator, and/or make new investments, innovations in her corn field.

Now, one thing that is intuitive to see is that at the beginning of the monetization of the village, innovations are very easy to implement. At the very beginning, innovations have very low cost and very high payoff, generally speaking. So we can imagine the whole village doing better, innovating, having higher yields, producing more and new goods. When that is the case (increase in economic activity), simply what happens is that before the term is over, some villagers will be calling Mr. Banker to borrow more hide pieces. So physically that is what happens, basically more hide pieces are “printed by the central bank (federal reserve)”, and these are used to pay back the entire debt at the end of the first period. So the economy can in principle grow in a very healthy way, increasing consumption and wellbeing for all villagers and fully servicing the debt. In fact, what’s needed for a healthy economic growth is that the rate of increase in economic activity be the same or higher than the interest rate in the currency (in this example 10%).

A healthy growth like this can happen for several years indeed (maybe a couple centuries?). But the problem is that money (hide pieces) is always issued as debt. So no matter what you do economic activity must always increase. Put simply, no matter what yield you had last year, you have to improve it this year. Think about it biologically for the case of the corn field. When you add the first natural fertilizer yield will do much better. If you keep adding more and more the response in terms of higher yield is less and less to the point that it doesn’t make a difference. So you innovate again: you make a more detailed study of what nutrients the plant need and when, and you move to chemical fertilizers that allow you to provide the plant with the precise dosages that optimize yield (strictly speaking, that maximize profits). (And by the way, the crop is no longer organic as it used to be). Up to the point where you can’t do any better. So you innovate again: you bring in pesticides. Same process. So you innovate again: you get GMO seeds. So on and so forth. 

Economic growth can be sustained by increasing the profitability of what is already being produced, or by transforming some aspect of the gift of life into commercial activity. For example, a mountain that becomes a mining operation. For example, a social relationship such as childcare that was initially a free or reciprocal relationship, and becomes a business relationship.

More than anything the point I want to make is to reach a place in your heart that knows a few things: (1) growth cannot go on forever; (2) while it does go on, it does at an increasing cost for nature and for the wellbeing, health and beauty of all life; and (3) that we have already reached the point where further economic growth is disastrous for the wellbeing and for the beauty of life.

But let’s go back to the village. The economy grows in a healthy way for several years, while Mr. Banker issues more hide pieces. As soon as growing is no longer as easy and as common sense as it was at the beginning, competition naturally arises. That is, the force that leads you to try to do better than others. You can compete for supplies, for customers, for the property rights of new innovations, etc. From one point of view, competition can be healthy, if it is taken as a positive force that simply makes you do whatever you do better; for example if it leads you to healthy and harmless even costless innovations. But pretty soon we know this ceases to be the case. Competition and growth start hurting. Please notice that this is a truth in my heart, perhaps also a truth in your heart. But THIS IS NOT a scientific truth, an intellectual truth. Very legitimately, say an innovator in Silicon Valley might inhabit a different story, a story where healthy innovations can go on forever. All I am saying his is not my truth, and that alternate truths inhabit different stories and become true only in the heart, not in reasoning.

So, at this point, not every family is capable of paying back her debt. This means bankruptcy. This is the moment when the game of musical chairs begin. Every time the music stops, someone goes bankrupt – is left with no chair. The bank auctions the collateral property and the person that naturally buys it is the person that is already doing well, that has the capital for buying properties. So quite naturally economic inequality starts building up. Properties and money will begin accumulating in few hands while more and more families cease to be owners of their land and means of life, and become wage-earners and rent-payers. So you see, economic inequality is endemic to the system, it is not the result of right wing policies nor greedy rich people. As long as money is issued as debt, the pressure for economic growth continually produces inequality as a result.

Not only produces inequality, but it hurts the beauty of the very gift of life in many ways.

I might say this is where the vision of sacred economics begins. By that I am trying to say that there is so much more to be said, and if you’re feeling full of screaming questions inside, you are on the right track. (Many of such questions I can address on the workshops I facilitate, where the conditions are met to dive deeply into these issues with the heart).

The main and most obvious question is probably: why can’t we have an economic system where money is issued at zero interest rate? The answer is that such economic system is not compatible with our deep and not at all obvious culture of separation. Rather than figuring it out ("engineering the correct economic system"), a healthy economic system will arise naturally from a culture of interbeing. Again, this is only 1% of what there is to be said.

It is worth mentioning, if one were to decree the cessation of economic growth, we would necessarily have to accept bankruptcy (which hits the poor hardest), accept widespread unemployment, accept that many families are left on the street, accept a rise in the suicide rate (as happened in the case of Greece), accept that you do not have a budget for social programs such as health and education, etc. What I mean by this is that there is no political or intellectual solution, which is why being realistic means stepping into the mystery. "Let's be realistic: let's do the impossible." 

In a culture, in a collective neuronal arrangement of Separation, if all that surrounds me is Otherness, it is natural that I very easily adopt the (deep and perpetual) belief that it is necessary to improve upon the already existing. (I am referring to the improvement that has to do with control, with exerting the force of reductionist reasoning). We need to increase production, we need to store for the next year, we need to improve our technologies until we become independent of hostile or at best indifferent forces of nature. Note that this belief is present in part in the narrative of sustainable development, not only in the narrative of predatory capitalism (i. e., it is not an ethical or good intentions issue). The alternative by the way is an economy born of trust in life. In a culture of distrust in life, who would lend money without interest, knowing that the person who uses it can make it grow without you taking advantage of it? Which bank would lend money at a zero interest rate, as long as there is a risk of non-payment?

The alternative of believing in the perpetual controlled improvement of what already exists is to rediscover the multiple, elusive, uncontrollable mysteries of happiness in life that lie hidden, latent.


A personal note

In a system that endemically produces inequality and destroys nature, not by lack of good intentions but the very fact of the need of economic growth, it is very difficult to feel comfortable with money. If you want it and don’t want it at the same time how can the universe help you out? 

If I live and let die my emotions I know I am free of guilt and shame. I can make friends with the system, accept it, plan and control my monthly budget, charge for my services, do marketing to convince clients, turn ideas into opportunities to extract money....

But still, being free from all shame and guilt about money I still simply don’t want to reproduce scarcity and the lack of trust. I just can’t feel good doing that. How can I do marketing of my services if it is not from the generosity of actually serving? It is not an issue of reaching a higher standard of virtue, of improving myself to become a better person; it is a matter of feeling good! I want to live generosity. Am I getting it “wrong” still? Just let me know mystery of life, I am listening.

I want to share I have a need to clearly see the vision of an economic system trusted on the generosity of life, where naturally everybody is free. I can’t sleep at night so graciously without this complete vision in my heart. All I can barely see is the freedom to be generous, to trust in life, to know nobody is doing it wrong because they don’t fit or can’t adapt to the current system. After writing today I feel a step closer to live in such a way with the money institution just as it is now. However paradoxical it may be, I welcome it. Wondering over and over if that’s it…  I want to live generosity, and I want to open my eyes and realize there were always so many people already doing that, and I was never alone.

INTRODUCTION TO SACRED ECONOMICS

To be able to talk about a healthy economy firstly it is necessary to clarify the true sickness in our current economy. The sickness is not capitalism, not materialism, not selfishness, not ambition, not inequality. All these are painful symptoms of a deeper illness: Separation. Really all our culture is profoundly sick of Separation.

While we mistake the symptom for the real disease, our attempts at healing it fail just like conventional medicine fails when focused on eliminating symptoms.

“You cannot dismantle the master’s house using the master’s tools”. The system cannot be dismantled using for this purpose the same tools of the system. Peace cannot be built using war as a means. Solidarity cannot be built by accusing the lack of solidarity in others. So what is this Separation about?

More than an ethical failure or a defect in our civilization, Separation is a story, a narrative, even an organizational arrangement in our neurons, which implies that we perceive the Everything through the lens of separation, that is, separated. In this story, mater and spirit are separated, domestic and wild are separated, city and nature are separated, and a long list of etceteras.

Fundamentally, the human is conceived as a being separated from all other beings and separated from the universe. If everything that surrounds me is “otherness”, obviously the more you have the less there is for me. Therefore, I might want to make sure you don’t take my part. If we think there is scarcity, you and I will have to compete, no matter how much we dislike capitalism, and one of us will not be able to fulfill his/her necessities.

Crucially, our intelligence, our rationality has evolved for millennia through the story of Separation. For example, when we want to understand the physiology of an animal, we dissect its corpse (notice the word dissect), and we observe part by part. When we want to understand food, we display the list of ingredients. To complete the information we can include the exact recipe of its preparation: a list of separated objects, in this case a list of ingredients and procedures. However, the soup that your grandmother made you when you were a child, is it really replicable exclusively by a recipe with a list of ingredients and procedures?

The intelligence based on Separation is the logical, linear form of intelligence and it corresponds to masculine intelligence (present in men and women alike). Of course nothing is wrong with it in itself. There is a healthy way of using it; the key is not to ignore that there exist essential aspects of the Everything that are lost when we observe it separated. The problem is that today masculine intelligence is considered as the only form of legitimate intelligence. That is to say, there is an unbalance in the use of our human intelligence. Feminine intelligence, in contrast, is circular. It is about observing the Everything just as it is. Modern science, for example, is specially centered on masculine intelligence. There is no room for feminine intelligence in science. Suffices to note that the conventional scientific method has as a fundamental premise that the observer (the scientist) and the object being observed are separated. In other words, that there exists an objective reality out there (separated from the observer) which one can observe impartially, with the appropriate tools.

Our current economic system is an exclusive expression of masculine intelligence, in fact an immensely sophisticated expression of this type of intelligence. It is not stupid at all, as many conclude in despair when facing its devastating consequences. Being economics and money the priority number one of our civilization, the brightest minds have been dedicated to answer its questions. But these questions have always been addressed under the view of separation and the exclusive use of linear logic. As I said before (and will repeat several times as this is the main issue to be understood), the system cannot be dismantled using the tools of the very same system. Our awful economic system, clearly leading to self-destruction, cannot be changed using only linear, logical, masculine intelligence. By attempting to do that the best one could achieve would be a recreation of essentially the same, perhaps a tiny bit better. The problems we as humanity face today will not be solved in a system that is a tiny bit better.

That is why there is no political solution; it is not about left versus right. The issue is not: “get rid of all the corrupted politicians, and then we will reach an harmonious life”. This is a key absurd feature deeply rooted in our culture: we need to succeed in the battle against ‘otherness’. Same thing in agriculture: “when we exterminate all weeds, all unwanted bugs, when we dominate all forces of nature even the weather, then yes, we will be able to feed the entire population”. In medicine: "when we have all vaccines, when we exterminate all germs, then we will have health". “When we eliminate all terrorists, all dictators, then we will have peace”. Can’t you see it? It is not going to happen, ever. That mentality is typical of the Separated Being. In reality, even if magically one day would come when all businessmen and corporate executives were honest, compassionate, respectful of the environment, -listen to me well!- even if that day arrives, our planetary and economic disaster would not stop!

When we ‘other’ the universe around us, we really ‘other’ part of ourselves. Any battle with the ouside is an agression perpetrated at oneself.

That is why we need to talk about a Sacred Economy: an economy that is not built with the tools of the narrative of Separation. Not built with control, not built with linear logic (although it is fully logic nonetheless), not built conquering or dominating the opposing forces. It is built including. It is built expanding the Being, remembering our true nature.

Growth and Debt in Current Economic System

Allow me to explain briefly, introductorily, the nature of our current economic system (see a more complete discussion of money in Understanding Money). Every time a central bank prints money, it is issued as debt, that is, at the end of the term it has to come back to the central bank increased by the rate of interest. All existing money, in this very moment and in any given moment, is subject to paying interests. There is no official currency (that I know of) that escapes this reality.

Economic growth is the increase in monetary economic activity, measured by the growth of GDP (gross domestic product). GDP is the monetary value of all final goods and services produced in a period. In few words, the only way in which existing money can pay back its interest rate is by printing more money, which is again issued as debt. The only way in which this process can subsist over time is that the rate of economic growth be equal or superior to the interest rate. If there is not enough economic growth, it means debt cannot be repaid in its totality, which means somebody goes bankrupt, be it individuals, institutions or entire countries.

Why are financial crises so common nowadays? Because it is becoming harder and harder to find some resource or some human activity that can be transformed into monetary activity. An intact forest does not show up in GDP, it is not an economic activity that helps service the debt; if harvested, now it is. Any human activity, as long as it is within gratuity, or reciprocity, does not show up in GDP. But if transformed in monetary activity, now it does help to repay the debt.

Economic growth is in reality the transformation of our natural, cultural, social and spiritual capital into monetary commercial activities. When for the most part our capital has been already monetarized, it is ever harder, more costly and more painful to transform into money that which should not belong to anyone, and at the same time it belongs to everybody. That is why the financial crisis coexists with the environmental crisis and the crisis of the human soul.

How much longer can an economy go with exponentially growing debt and economic activity virtually stagnant? How much longer can nature endure the growing pressure to exhaust what remains? How much longer can the heart of each one of us put up with the destruction of beauty and the growing ugliness, the alienation, the heaviness of having to “earn your life”, to “make a living”, and sacrifice your dreams? No doubt, not much longer.

Be it right or left wing the government in office, be it a big and rich country, or a small and poor country, none escapes the necessity of growing economically. As the pressure of debt keeps rising, the smaller ones (people, institutions, corporations and countries) go bankrupt and the bigger ones absorb them, one way or the other. (This is why inequality is endemic to the system). But evidently this cannot go on like this, not even for the most advantaged.

Sacred Economics

Economics is in its essence the care-taking of our home, the EARTH (‘Eco’ means home). That is why we all are a bit economists: we are all interested in the care-taking of our home. We all care in which way we satisfy our necessities and in which way we express our talents and our gifts that we have to share.

Sacred is that which holds two characteristics: (1) unique, and therefore irreplaceable and of infinity value; and (2) connected, related (as opposed to isolated). For example, an industrial egg bought in a supermarket is not irreplaceable at all (it is surrounded by thousands identical eggs); and at the same time it is totally anonymous, it has no connection with the land where it comes from nor with the people that worked so that it could end up in the supermarket. Apparently it has no especial story to tell. A free-range non-industrial egg, which was gifted to me by a neighbor, is clearly the opposite. It has another value in every sense.

A Sacred Economy takes care of our home, the Earth, in a way that fosters, rather than suppresses, the presence of the sacred in everything we experience –in particular, in the way in which we satisfy our needs, and in the way we express our individual talents.

Money tends to do exactly the opposite: (1) it homogenizes because almost everything can be transformed into a price, and (2) it disconnects because as long as I pay it does not matter who is selling it to me nor what story the object has.

The natural essence of life is the Gift. At the origin of life itself there was the Gift. Our life started as a gift, the existence of the planet is a gift, the light and heat of the Sun are a gift, water is a gift, lemons are a gift from the lemon tree. Our deepest state of being, the moment in which we feel the happiest and when we are the most powerful is the moment when we feel with our very guts and all our being the Gratitude of being alive. From this gratitude arises the unstoppable, unbreakable wish to do the most beautiful service to Life, sharing our most precious gift in exchange for what we have received.

If this is the true essence of life, there is no reason why all our human necessities can’t be satisfied, and all our talents expressed, in the spirit of the gift. A Sacred Economy is the Economy of the Gift.

A monetary transaction is closed: when the object and its price are exchanged, the relationship ends. A gift transaction is open: by generating gratitude, the relationship starts or is nourished. Because a gift always carries a subtle part of the person that gives it, the object is not easily replaceable. Certainly, gifting builds community, integration, and union among the people.

An old partner in my life is the anguish in the face of the possibility of scarcity, the fear to be left without. It eases me to observe it as a pattern, which is not my essence, which is not what I know in my heart. I believe many of us share this anguish. Just like we share the pain from the destruction of nature, or the anguish in millions and millions of people in the world of having to do something they don’t love in order to “make a living” (and see how it is less and less sufficient to actually make a living).

In the heart there is the trust that Life already is a gift, that there is no need to “make it”. “Do I realize?” ¡I ask myself! That scarcity, that apparent need of money, how real it is? In the heart there is the generosity, the enthusiasm and the inspiration of doing whatever it takes to be able to serve the beauty of life. In the face of the unavoidable fact that the financial system is headed to collapse, there is no need to be crazy or to be a hero to trust in life, to stand firmly in our deepest dream.

Every wisdom tradition expresses the same knowledge about the essence of life: everything is connected, we are all one, everything is related, we are all family. This is not a moral principle or a superior standard of merit: ¡It is a reality of Life! If you are part of my being, then when you receive more I also receive more. There is no way I can loose.

Sacred Economics is about remembering that one came to this life with a sacred, unique, special purpose. As long as I’m not delivering my highest gift to life, the life I am living is someone else’s life -the life of a character- not my real life.