Friday, March 16, 2012


I'm in New York until late in May as a Visiting Scholar of the Economics Department of the New School for Social Research and collaborating with Cameron Tonkinwise (Chair, Design Thinking and Sustainability, School of Design Strategies, Parsons) on some critical papers on sustainable production and exchange.

This weekend co-editor of Life Without Money Frans Timmerman and contributor Ariel Salleh will appear with me on a Left Forum panel focusing on our book Occupy the World: Life Without Money (10 am Sunday March 18) and I will appear on another, focusing on three books, including Life Without Money: Capitalism, Sustainability and Economic Democracy (noon Sunday March 18).

Last weekend I was in Chicago and presented at a small CPE seminar at the University of Wisconsin Madison arranged by Erik Olin Wright and Bob Freeland. The discussion afterwards reminded me of the workshop Ariel Salleh, Terry Leahy and I presented at the 2011 TASA conference at the University of Newcastle in Australia. Of all the disciplines, sociologists seem to have limited, less critical and/or vague understandings of economics, regarding economics as irrelevant and/or with a worrisome degree of complacency. They also have partial understandings of the nature and extent of the environmental crisis facing us.

Nevertheless, this group definitely take economics seriously and, given a precis offered by one of the participants on Monday,  I was confident I got the main points of some of our arguments across.

Erik made a strident defence of a generalised unit of account as a useful measure in complex economies and of keeping money in certain spheres of the economy. At the same time he agreed that commodification and monetary values permeated too many sectors of our society, which would be improved if such inroads were rolled back. He expressed great confidence that environmental and social values can be fed into prices created in a democratic way. He seemed to suggest a democratic form of planned national economies in which, he argued, trade would still be vital.

It is hard to unpack such impasses. However, I make several observations that anyone holding Erik's kind of a position needs to address with respect to the process hazily described and the 'money' thereby created:

1. How can you create a set of indicators that form an index ('money') when social and environmental values are often contradictory and social and environmental contexts are so complex? For example, to avoid resource depletion (including of non-renewable energy sources) one might consider more time-consuming and exacting production options demanding superior effort and training/skills, a social cost = an environmental benefit. Often all options involve environmental benefits and costs and social benefits and costs. How do you, let alone usefully, compound such contradictory (and subjective) sets of valuations into one price?

2. It would be useful to know how proponents of such vastly different price structures and monetary mechanisms define money under current capitalist systems: do they hold a labour theory of value? If not, how do they define money holistically and in each of its functions, i.e. as a unit of account and circulating symbol of value? Then, how do they see the abstract social character of money changing under the system they propose?

3. Money as we know it, as a generalised and universal unit of account, arises as such through everyday marketplace activities within capitalist production for trade at a profit. In other words, money is defined by our behaviour. Marx pointed out a series of tests for 'utopian socialists' who advocate imputing prices. He said, in effect, 'Okay, so you give everything, say a fair price as it leaves its point of production but what happens given that some goods and services aren't salable (no-one wants them or not at that price)? Therefore, the imputed price cannot be effectively carried through in practice?'

4. If you keep 'money' what is it about it that you are keeping and what are you changing? If it's not the 'free market' mechanism of prices altering as signals to productive units to increase or decrease production of certain goods and services, what exact role is price fulfilling and why do you maintain this is the most effective way to fulfill that purpose?

5. If money is reserved for only certain, say minimal sectors — Erik suggesting that the most complex production processes required monetary calculations to operate efficiently — then there is the added problem that inputs in non-monetary areas cannot be satisfactorily (i.e. monetarily) factored in. In fact, reserving pricing to the most complex sectors, i.e. having the greatest number of inputs, automatically exaggerates this gap, because these sectors are at the top of the economic chain.

I could keep going, but those are enough meaty questions to start with.



1 comment:

  1. You might be interested in this highly critical review of Erik Olin Wright's Envisaging Real Utopias book, published by Verso in 2010. In 'Real Men Find Real Utopias' Russell Jacoby criticises Wright roundly and perhaps this has some bearing on the discussion over money and revolution referred to in this post? Jacoby's review can be found in the Winter 2011 issue of DISSENT (USA).

    Real Men Find Real Utopias
    By Russell Jacoby
    Envisioning Real Utopias
    by Erik Olin Wright
    Verso, 2010, 394 pp

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