English - De Groene Amsterdammer 42 (17 October 2013)

Money is our God

Capitalism is more than a model. It is a religion according to a growing number of independent thinkers. “Is it possible that theology can teach something to economists?”

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I wrote this article in Dutch. Bert Hielema translated it.

Haven’t you heard of that crazy human who, for all to see in pure daylight, grabbed a gold bar, carried it onto the trading floor and kept on yelling “I am looking for Mammon! I am looking for Mammon!”

Never heard it before? It’s Nietzsche’s famous parable about the fool who declares that God is dead. However “Being dead”, according to the explanation of the scientist Phillip Goodchild, “now means that this time it’s money’s turn to die.”

Because there were so many floor traders who don’t believe in Mammon they started to ridicule the man. Some wondered whether “He has been bought out”, another person suggested “Perhaps he went bankrupt”; somebody else asked. “Maybe he left for China, where people don’t pay capital gains tax.”

While all these money-men crowd around the besotted man and poke fun at him the fellow jumps up and down, looks straight at them and, totally bewildered, yells: “Where did Mammon go? I know what happened! We killed him – you and I! We all are his murderers! And how did we do that? How were we able to rob the world of her treasures? Who pushed the delete button to wipe out those crazy calculations? What’s going to happen now that we have exposed all our possessions to all possible risks? Where in heaven’s name are we going? Are we gambling it all on the throw of the dice? Are we venturing into the Great Unknown, into the Infinite Nothingness?”

Comments Philip Goodchild: “Yes, the god of money is dead and we have killed him,” in his essay on the debt crisis. He wrote this in a periodical not read by economists but by theologians. So theologians take note! That is not a random event because, according to Goodchild, economics belongs to the realm of theology. Economics also has everything to do with crisis and redemption, with promise and debt. Therefore economics is a power worth listening to because we cannot exist without it. And that means that it resembles a god. That’s why, in order to analyze this, we must involve theology.

Here is another voice

In a restaurant in Prague we find Tomáš Sedláček busy drinking a ginger lemonade. The 36 year old economist with ADHA symptoms races through life as a writer, producer, university lecturer, advisor to the Prime Minister and chief macro-economist with the Czech bank CSOB.

He caused quite a furor at home and abroad with his book The Economy of Good and Evil. In it he borrows, seemingly at random, those economical and theological snippets he finds interesting.

Economics is more than mathematical formulas, asserts Sedláček .

Economists often act as if markets are rational, as if suspended above us there is some sort of intelligence making sure that the outcome is rational. But that is a myth, just as the homo economicus, always on the alert to maximize utility, is a myth. “Mathematical models are beautiful but they exist only in our imagination” so says Sedláček. “People often say that they work in theory but not in real life. Actually the opposite is true. It functions well in real life, but it is difficult to reconcile this with our theories: that’s why we wrap them in all sorts of concoctions: myths in other words. “Nothing wrong with that” says Sedláček, “as long as we realize that they are pure inventions, but, of course, contemporary economy never admits that. Let’s face it: it also takes place in many other sciences. Before you criticize our models, they say, come and study with us for five years: only then can you grasp our methods of validation. Well, that was precisely the way the monks in the Middle Ages reasoned. In my opinion they exactly resemble each other. In those days, monks studied, wearing black clothes; now these people are dressed in white.”

Economists presume that the economy is like a machine, something easy to grasp. “But no, that’s not the case at all. The economy is not something tangible. It cannot exist without the state. It is not a machine: the economy has a soul, so to say.”

Sedláček wants to know how that soul comes into being. “It’s a matter of ethics, a product of our culture, the end result of age-long discussions about good and evil. It goes back all the way to ancient Greek wisdom, to the Judeo-Christian theology. Without that heritage our economy would have never assumed its current form.” Only when we recognize this basis, according to this Czech citizen, is it possible to reveal the myths and the religious background of the modern economy.

Goodchild and Sedláček are only two persons out of a growing body of people who look at the economy with theological eyes.

Take money. Money cannot possibly be reduced to a material phenomenon. Here’s an experiment: place a Hundred Dollar Bill on the table during a meeting. Every few seconds our eyes focus on that piece of paper. It exercises a power by its very presence, independent of time and context. It possesses magic. Theologians call that spirituality. Two Thousand years ago Jesus spoke words which were difficult to digest for his followers: “You cannot serve two masters. You cannot serve God and the Mammon.” The Mammon – a word that carries with it the meaning of money, of security, of authority – strives to attain divine status. Indeed, it is an idol, an idol of the unjust sort, says Jesus, an idol who blinds people.

How is that possible? How can money cause visionary distortion? In other words, how can money impose its own value system? That becomes plain when we observe the two functions which form the basis of money, so say the money experts. In the first place money is a means of exchange. We trade, exchanging goods for money, because in that way we can create more prosperity. That makes money the great symbol of mutuality, of reciprocity. By means of money we are able to suppress evil and scarcity. Our society which cannot function without money, substitutes traditional values, such as benevolence, with this win-win standard, while traditional vices, say envy and greed, are more and more regarded as positive.

Money can also be used as a means to add and subtract. In that way too money can influence our outlook on the world. It’s impossible for money to express everything in dollars and cents. Take love for instance or nature, or community feeling. Basically money is only concerned with tangible items, it’s purely utilitarian. It cannot possibly measure pain and enjoyment, yet even there, money structures society.

Our economic system uses money as the preeminent building block to structure Capitalism. This allows money to have an even greater impact on society. Money does not only colour our values, it also needs our trust, so says Simon Critchley, a British philosopher. In a telephonic interview he explains: “We cannot regard the economy merely as a tool because it is much more than that. Capitalism is an ideology. We regard ourselves too modern to have superstitions, but capitalism is a faith structure, and the crisis in our economy is a crisis of faith. It was for valid reasons that the Romans, at times, featured the goddess Fides – Faith – on their coins. Money is based on faith.”

Critchley – himself an atheist – acknowledges that money tends to assume a dominating position, something in line with what Jesus suggests. Critchley states: “We assume that we are taken in by the goods we buy, but that is not true. It’s money that we worship. Financial markets bank on that. That’s the reason why our entire economic order acquires a religious structure. It’s strange that we hardly give that a thought.”

Although Capitalism has a religious structure this does not mean that it has a religious dogma. All it has is a religious worship structure. Already in 1921 the German-Jewish philosopher Walter Benjamins wrote this in his essay Kapitalismus als Religion (capitalism as religion). Willem Schinkel, sociologist and philosopher, explains what he meant with that. “Capitalism is the worship of debt. That concerns all of us because we all have debt. The word ‘credit’ has as root the Latin verb ‘credo’ which means ‘I believe.’ In Christianity there is the concept of redemption but in the Capitalist type of religion the debt is never repaid. Debt is the basic ingredient. We have to go into debt in order to maintain consumption. In short: debt rules, and because we are part and parcel of this structure, it is difficult to offer criticism.”

Just as in the ancient religions, so too capitalism has its own fetishisms with their peculiar features. Schinkel again: “Just as animistic shamans promote fetishes in the form of images, the credit agencies capture the chaotic financial world out there by means of easy to understand graphics and tables. These acquire authority, a spiritual weight that supersedes the tangible.”

Look at the current Greece situation where the credit agencies devalued its financial situation, blindly following the computer systems, and so brought an entire continent to the brink of bankruptcy. Or look how the Central Bankers, the High Priests of the Capitalist Religion, with a single out of place word are able to cause currencies to tumble.

This comparison with the priests of primitive cultures has already years ago been made by Bob Goudzwaard, economics professor emeritus of the (Amsterdam) Free University, a person who has never been afraid for a bit of theology. According to Goudzwaard all modern ideologies contain at a certain moment traces of theology, including Capitalism, of course. According to him this has to do with a primitive mechanism, that is to say the reversal of goal and means. As individual or as society we pursue legitimate goals, so he explains in his book Hope in Troubled Times (Wegen van Hoop in tijden van Crisis). “We pursue Prosperity or Peace. But when these goals are threatened, we grab every possible means or instrument to get to these goals regardless of the cost. Take economic expansion, a means that in 1957 in the Treaty of Rome is mentioned by name as the necessary road to Prosperity and Peace. A later further development was the deregulation of financial markets. After that the ‘Lisbon’ requirement expressed it even more concretely by mentioning annual three percent economic growth. Everybody, from government minister to banker, claims of course that: “Growth as such is not the goal: our real aim is prosperity and peace for the sake of national wellbeing. But, yes, growth it is the necessary tool.”

According to Goudzwaard this sort of reasoning makes us directly dependent on these provisions. What is really happening is that we put blinkers on, narrowing our vision, which religion tends to do. Goudzwaard asserts that the same thing happened in primitive cultures. People, in times of national distress, ceded part of their authority to what they perceived as higher powers, their idols. Consequently this led to actual worship, complete with certain norms and values. Even human sacrifices were made.

This same assimilation of values Goudzwaard also notices in the modern economy but then on a more rational and systematic level and therefore much more pervasive. “That’s why it has become a virtue in the name of dynamism to break up functioning businesses and sell them piecemeal,” according to Goudzwaard in an interview prior to the credit crisis.

We have come to regard the financial markets as the motors of the economy. They have to run closely behind the real economy in order to retain their dynamics. One of the former presidents of the German Bundesbank, Hans Tietmeyer said in Davos a while ago: “At last the financial markets are in control rather than politics.” Perhaps that’s why Lloyd Blankfein, former boss of Goldman Sachs –  the largest money-maker on earth – during the 2008 money crisis with a straight face dared to assert that by providing money to business, he was doing ‘the work of God’. He didn’t say which god.

The reversal of goal and means has also been described by the already cited Philip Goodchild, philosopher and theologian at the University of Nottingham, UK. In 2007 he wrote the book Theology of Money. In a telephone interview he explains that “Nobody regards money as their ultimate goal in life, but I look at what takes place in real life. When, in daily life, we pay obeisance to money, if money determines our values, then that is our real religion”.

Goodchild reasons the same way as Benjamin who also sees money as something more than a means of exchange, more than merely a bookkeeping entry. “Money in essence is a debit entry created by commercial banks.” In case of government bodies such as the USA Federal Bank they create money through the now well-known QE: Quantitative Easing – $85 Billion each month. “However money is not something we possess, it is an obligation, the symbol of the debt of some other person or corporation or government. Therefore it possesses a power that affects us all. The money we carry around in our wallets is always en route to a return – with profit – to its creator, because money always goes back to its creator. “This collective debt is hanging over our economy as a crude reminder that compels us to earn money. We need that debt to be able to realize our goals, but, at the same time, it burdens us with certain limitations and rules. It is a force that has hollowed out the traditional society and has given us a new social structure. All these issues point to a deity. Yet that same deity is in reality just as powerless as the old gods. The system plays around with its weakness. We have to listen to the requirements of the financial markets: if we don’t, they simply collapse. And that is not allowed to happen because we depend on them. Therefore what benefits the markets is more urgent than the interests of the man on the street.”

Debts can only be discharged with new money which is, in turn another debit. “It’s a trap from which there is no escape. The economy is being driven by a steadily escalating monetary debt, a debt not only from one rich banker to another, but a debt from everybody to everybody else. It’s impossible to have no growth, because that leads to stagnation, which means that, in order to revive the economy we have to assume more debt. In Great Britain there is a new housing bubble, which is a solution that is an antidote for the crisis, but at the same time it creates a real problem.

Goodchild again: “In the final analysis there are only three ways to get rid of debt. (1) devaluation of the country’s currency;(2) induce inflation, and (3) go bankrupt.  At some time in the future we have to face this debt problem.”

He continues: “One thing I have underestimated, and that is the capacity of the central banks to pump up the economy by assuming these debts. That really is a new phase in capitalism: they are the new bubble, so to say. It never leaves their balance sheets: it circulates from one account to another. This means that – for the time being- the economy still functions.

“However, the political consequences are enormous. The influence of the central banks has become gigantic. They did not grab this influence, no, it has been put on their shoulders. They still are trying to figure out how to use this authority. What is clear is that from now on they are in charge of economic policy. Good bye to democracy. The only aim now is financial stability. The only aim now is the abstract power of the debt obligations.”

“This means that the Mammon is dead,” asserts Goodchild. “The (financial) crisis has exposed the Mammon. But people refuse to believe this. They try to repair the damage which will be risky. They are trying to keep a dying patient alive. Perhaps he will survive for a few decades, as in Japan. Bubbles can expand forever, as long as nature can tolerate economic growth. But bubbles also produce continuous crises. Time and again there is the risk of collapse, and when it does come there will be an immense crisis in democracy, endangering it as a social system.”

Yes, these are unusual insights, and also important. It is for obvious reasons that thinkers such as Goodchild and Goudzwaard belong to a tiny club of prophets who, prior to the onset of the crisis, issued warning signs. Their theological analysis aided them to see through the illusions. But do they offer solutions? Is it really possible to do without these idols? Many theologians don’t buy this. They contend that humanity has an inborn inclination to always worship something or another.

We cannot pull ourselves out of the quagmire by our own bootstraps. “We need to be liberated from these notions”, says Roelf Haan, a development economist and theologian. “I can’t live without transcendence, without faith. To have faith does not mean that I take delight in my mysticism but that I interpret the world in a certain way. I believe that God looks at history from the point of view of the poor, those who fall through the cracks. That sort of vision does not bank on the system: on the contrary it attempts to free itself from it. That is not some kind of escapism. We have to think outside the system, but, at the same time we must operate in the day-to-day economy.”

Christian theology asserts that we can escape the trap of goal and means. “Redemption is an economic concept,” says the Czech multi-tasker Sedláček. “The redemption of which the Bible speaks refers in the first place to the buying back – redeem – of a person who had become a slave on account of his debts. Jesus continuously uses economic language. “Sin” also means “debt”. Jesus proclaimed the Year of Jubilee, the year the Jews expected to cancel all debts. He did away with the cold accounting calculation of good and evil and substituted it with ‘grace’. All those morality systems in search of debt are drowned in one grandiose gesture. The entire idea of tit for tat is replaced by love. Love, in the end, triumphs over law.”

What has this to do with economics? “Everything”, according to Sedláček: “The whole issue of the Greek debt is pure theology. According to the law they owe us money. Or are we supposed to wipe the slate clean? And how often must we do that? Seven times? Seventy times seven times? But that doesn't make sense. But in Jesus’ time forgiveness didn't make sense either. That’s why it is so beautiful. And it does make sense, because in the end we will do it.”

How do we get rid of the devil?

In general economists have no clue about theology. Economic textbooks shy away from the goal-means-mechanism that Goudzwaard introduces. One exception is the new book of Father and Son Skidelsky, which appeared in 2012: How Much Is Enough? Money and the Good Life. Skidelsky Senior is a political economist at Oxford and a member of the House of Lords. Son Skidelsky is a political scientist. They tell us that, although main stream economists have grandiose ideas aiming for the wellbeing for everybody, our way to attain that lofty goal will do us in.

“Blame Keynes”, so says Robert Jacob Alexander Baron Skidelsky when interviewed in connection with the translation of their book into Dutch. “Keynes condemned greed and usury, but was of the opinion that they were necessary for a while to generate productivity. Eventually, when we are so rich that we can afford to take it easy, we hopefully will abandon that position.”

Skidelsky describes the switching of the goal with the means with the age-old metaphor of a deal with the devil. “It is the classical Faustian bargain” says Skidelsky. “Faust was a man who, according to tradition, made a deal with the devil to obtain the goals he was after. There are several versions, some to do with money or sex or power, but the end result is always that the devil comes to claim the soul. We all know that it is impossible to call on the devil for help and not pay the ultimate price.”

But then, early in the 19th century, we encounter the Goethe version. He romanticizes the matter and shows that the deal actually is quite clever. The devil in the end loses his prey because God favours the cause of progress and so saves his soul. “That is an unreal solution,” says Skidelsky, “because pre-modern people would never have fallen for this. Ever since Aristotle they know that the good life is not something that lies in the future. The good life consists of the kind of life that is made worthy by life itself. It is not possible to attain the good life through less than the best we are capable of. In the West we have succumbed to the means at the expense of our goals.

Father and son Skidelsky list a series of very concrete guidelines to escape from the Faustian contract. They are both interesting and down-to-earth, but all is not well: on the very last page of their book, without further elaboration, they put a damper on the entire affair. They write: “We question whether a society without the inspiration of faith can accomplish the return to the good life.” This made me wonder (says Frank Mulder): “What’s the use trying to do this in our Western society if faith is on the way out?” Skidelsky's answer: “You think that faith is disappearing? That is a secular thesis that I can’t buy. I am convinced that we’ll see all sorts of religious revivals. People have to be motivated to go into a different direction and that means they will explore different ways: You wait and see.”

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