A friend of ours emailed us saying that a friend of his responded to the title and blurb about our book in this way: ‘All societies use money of some sort or other. Think cowrie shells, pigs, cattle, etc. In capitalist societies, when groups try to dispense with official currency, they substitute with barter based on credit which is still a form of money. Most such attempts wind up producing their own form of currency. So I don’t think the downfall of capitalism will be preceded by the disappearance of “money”.’ Our response follows.
Although many non-capitalist societies have used objects or promises in similar ways to the way we use money as a means of exchange, they are all ‘limited-purpose’ monies or currencies. A key distinction between cowrie shells and cattle and a one dollar coin circulating amongst people arises from what you can do with these ‘monies’ in the social context in which they function as a currency. In non-capitalist societies ownership of the means of production, such as land, is not negotiable but rather arranged through inheritance or other social arrangements. Therefore that kind of money buys a very limited number of things and, most importantly, is marginal to the everyday functioning of the mode of production (the way people gain their sustenance and structure power).
In contrast, in capitalist societies money is necessarily ‘general/all-purpose money’ and has much wider uses. In the advanced capitalism of the North many realms of material production and social organisation are run strictly along market-based principles, so a lot of important decision-making incorporates monetary valuations and relationships. In fact money — gold, the British pound or US dollar — is the key building block of power structures and the means and mode of production within capitalism.
From this perspective it is curious to suggest, ‘I don’t think the downfall of capitalism will be preceded by the disappearance of “money”.’ If we focus on money as a unit of account as it exists in capitalism today, this function is absolutely critical to the functioning of our social system. Capitalism and its general-purpose monies that we are most familiar with are conjoined like chicken and egg. The fall of capitalism would necessarily entail the end of money, as we know it. After all ‘money is as money does’ and it is really the social behaviour around money that makes it what it is in any specific context.
The strict definition of barter that we like to stick to in theoretical discussions refers to the direct exchange of one good and/or service for another good and/or service, or unilateral exchange. In fact alternative currencies — alternative to the official/formal tender — generally represent another set of systems again, which try to develop local multilateral trading systems. These kinds of systems have been operating for decades and generally grow to a level where they stabilize and are popular for a limited set of exchanges between limited numbers of people. The operation of these currencies often complements capitalism rather than challenges it. For instance, whether or not LETS are radicalising or stabilising organisations depends how they work. Look at our answers to the FAQ at www.lifewithoutmoney.info
In our book, we discuss a practical example of a community that uses a form of exchange, ‘labour credit’, that can be compared in some ways with money but, most importantly, goes in a completely different direction from the all-purpose money at the heart of capitalism and from most alternative currencies. In our example, labour credit involves devoting a certain amount of time per week to general communal duties in exchange for being provided with one’s basic needs. Because this arrangement takes place in a relatively closed circuit, whereby all the agents have collective decision-making power over the content and form of the exchanges they are engaging in, then what they are doing is quite different from making exchanges based on either limited-purpose or general-purpose monies. Of course, for certain purposes they are obliged to trade with the ‘real world’ at which point the non-market system breaks down by the very nature of the case — we live within capitalism.