Of all the differences that separate the feudal economy
sketched out in last week’s post from the market economy most of us inhabit
today, the one that tends to throw people for a loop most effectively is the near-total
absence of money in everyday medieval life. Money is so central to current
notions of economics that getting by without it is all but unthinkable these
days. The fact—and of course it is a
fact—that the vast majority of human societies, complex civilizations among
them, have gotten by just fine without money of any kind barely registers in
our collective imagination.
One source of this curious blindness, I’ve come to think, is
the way that the logic of money is presented to students in school. Those of my
readers who sat through an Economics 101 class will no doubt recall the sort of
narrative that inevitably pops up in textbooks when this point is raised. You
have, let’s say, a pig farmer who has bad teeth, but the only dentist in the
village is Jewish, so the pig farmer can’t simply swap pork chops and bacon for
dental work. Barter might be an option, but according to the usual textbook
narrative, that would end up requiring some sort of complicated multiparty deal
whereby the pig farmer gives pork to the carpenter, who builds a garage for the
auto repairman, who fixes the hairdresser’s car, and eventually things get back
around to the dentist. Once money enters the picture, by contrast, the pig
farmer sells bacon and pork chops to all and sundry, uses the proceeds to pay
the dentist, and everyone’s happy. Right?
Well, maybe. Let’s stop right there for a moment, and take a
look at the presuppositions hardwired into this little story. First of all, the
narrative assumes that participants have a single rigidly defined
economic role: the pig farmer can only raise pigs, the dentist can
only fix teeth, and so on. Furthermore, it assumes that participants
can’t anticipate needs and adapt to them: even though he knows the
only dentist in town is Jewish, the pig farmer can’t do the logical thing and
start raising lambs for Passover on the side, or what have you. Finally, the
narrative assumes that participants can only interact economically
through market exchanges: there are no other options for meeting
needs for goods and services, no other way to arrange exchanges between people
other than market transactions driven by the law of supply and demand.
Even in modern industrial societies, these three
presuppositions are rarely true. I happen to know several pig farmers, for
example, and none of them are so hyperspecialized that their contributions to
economic exchanges are limited to pork products; garden truck, fresh eggs,
venison, moonshine, and a good many other things could come into the equation
as well. For that matter, outside the bizarre feedlot landscape of industrial
agriculture, mixed farms raising a variety of crops and livestock are far more
resilient than single-crop farms, and thus considerably more common in
societies that haven’t shoved every economic activity into the procrustean bed
of the money economy.
As for the second point raised above, the law of supply and
demand works just as effectively in a barter economy as in a money economy, and
successful participants are always on the lookout for a good or service that’s
in short supply relative to potential demand, and so can be bartered with
advantage. It’s no accident that traditional village economies tend to be
exquisitely adapted to produce exactly that mix of goods and services the
inhabitants of the village need and want.
Finally, of course, there are many ways of handling the
production and distribution of goods and services without engaging in market
exchanges. The household economy, in which members of each household produce
goods and services that they themselves consume, is the foundation of economic
activity in most human societies, and still accounted for the majority of
economic value produced in the United States until not much more than a century
ago. The gift economy, in which members of a community give their excess
production to other members of the same community in the expectation that the
gift will be reciprocated, is immensely common; so is the feudal economy
delineated in last week’s post, with its systematic exclusion of market forces
from the economic sphere. There are others, plenty of them, and none of them
require money at all.
Thus the logic behind money pretty clearly isn’t what the
textbook story claims it is. That doesn’t mean that there’s no logic to it at
all; what it means is that nobody wants to talk about what it is that money is
actually meant to do. Fortunately, we’ve discussed the relevant issues in last
week’s post, so I can sum up the matter here in a single sentence: the point of
money is that it makes intermediation easy.
Intermediation, for those of my readers who weren’t paying
attention last week, is the process by which other people insert themselves
between the producer and the consumer of any good or service, and take a cut of
the proceeds of the transaction. That’s very easy to do in a money economy,
because—as we all know from personal experience—the intermediaries can simply
charge fees for whatever service they claim to provide, and then cash in those
fees for whatever goods and services they happen to want.
Imagine, by way of contrast, the predicament of an
intermediary who wanted to insert himself into, and take a cut out of, a
money-free transaction between the pig farmer and the dentist. We’ll suppose
that the arrangement the two of them have worked out is that the pig farmer
raises enough lambs each year that all the Jewish families in town can have a
proper Passover seder, the dentist takes care of the dental needs of the pig
farmer and his family, and the other families in the Jewish community work
things out with the dentist in exchange for their lambs—a type of arrangement,
half barter and half gift economy, that’s tolerably common in close-knit
communities.
Intermediation works by taking a cut from each transaction.
The cut may be described as a tax, a fee, an interest payment, a service
charge, or what have you, but it amounts to the same thing: whenever money
changes hands, part of it gets siphoned off for the benefit of the
intermediaries involved in the transaction. The same thing can be done in some
money-free transactions, but not all. Our intermediary might be able to demand
a certain amount of meat from each Passover lamb, or require the pig farmer to
raise one lamb for the intermediary per six lambs raised for the local Jewish
families, though this assumes that he either likes lamb chops or can swap the
lamb to someone else for something he wants.
What on earth, though, is he going to do to take a cut from
the dentist’s side of the transaction? There
wouldn’t be much point in demanding one tooth out of every six the dentist
extracts, for example, and requiring the dentist to fill one of the
intermediary’s teeth for every twenty other teeth he fills would be awkward at
best—what if the intermediary doesn’t happen to need any teeth filled this
year? What’s more, once intermediation is reduced to such crassly physical
terms, it’s hard to pretend that it’s anything but a parasitic relationship
that benefits the intermediary at everyone else’s expense.
What makes intermediation seem to make sense in a money
economy is that money is the primary intermediation. Money
is a system of arbitrary tokens used to facilitate exchange, but it’s also a
good deal more than that. It’s the framework of laws, institutions, and power
relationships that creates the tokens, defines their official value, and
mandates that they be used for certain classes of economic exchange. Once the
use of money is required for any purpose, the people who control the
framework—whether those people are government officials, bankers, or what have
you—get to decide the terms on which everyone else gets access to money, which
amounts to effective control over everyone else. That is to say, they become
the primary intermediaries, and every other intermediation depends on them and
the money system they control.
This is why, to cite only one example, British colonial
administrators in Africa imposed a house tax on the native population, even
though the cost of administering and collecting the tax was more than the
revenue the tax brought in. By requiring the tax to be paid in money rather
than in kind, the colonial government forced the natives to participate in the
money economy, on terms that were of course set by the colonial administration
and British business interests. The money economy is the basis on which nearly
all other forms of intermediation rest, and forcing the native peoples to work
for money instead of allowing them to meet their economic needs in some less
easily exploited fashion was an essential part of the mechanism that pumped
wealth out of the colonies for Britain’s benefit.
Watch the way that the money economy has insinuated itself
into every dimension of modern life in an industrial society and you’ve got a
ringside seat from which to observe the metastasis of intermediation in recent
decades. Where money goes, intermediation follows: that’s one of the unmentionable realities of
political economy, the science that Adam Smith actually founded, but was
gutted, stuffed, and mounted on the wall—turned, that is, into the contemporary
pseudoscience of economics—once it became painfully clear just what kind of
trouble got stirred up when people got to talking about the implications of the
links between political power and economic wealth.
There’s another side to the metastasis just mentioned,
though, and it has to do with the habits of thought that the money economy both
requires and reinforces. At the heart of the entire system of money is the
concept of abstract value, the idea that goods and services share a common,
objective attribute called “value” that can be gauged according to the
one-dimensional measurement of price.
It’s an astonishingly complex concept, and so needs
unpacking here. Philosophers generally recognize a crucial distinction between
facts and values; there are various ways of distinguishing them, but the one
that matters for our present purposes is that facts are collective and values
are individual. Consider the statement “it rained here last night.” Given
agreed-upon definitions of “here” and “last night,” that’s a factual statement;
all those who stood outside last night in the town where I live and looked up
at the sky got raindrops on their faces. In the strict sense of the word, facts
are objective—that is, they deal with the properties of objects of perception,
such as raindrops and nights.
Values, by contrast, are subjective—that is, they deal with
the properties of perceiving subjects, such as people who look up at the sky
and notice wetness on their faces. One person is annoyed by the rain, another
is pleased, another is completely indifferent to it, and these value judgments
are irreducibly personal; it’s not that the rain is annoying, pleasant, or
indifferent, it’s the individuals who are affected in these ways. Nor are these
personal valuations easy to sort out along a linear scale without drastic
distortion. The human experience of value is a richly multidimensional thing;
even in a language as poorly furnished with descriptive terms for emotion as
English is, there are countless shades of meaning available for talking about
positive valuations, and at least as many more for negative ones.
From that vast universe of human experience, the concept of
abstract value extracts a single variable—“how much will you give for it?”—and
reduces the answer to a numerical scale denominated in dollars and cents or the
local equivalent. Like any other act of reductive abstraction, it has its uses,
but the benefits of any such act always have to be measured against the blind
spots generated by reductive modes of thinking, and the consequences of that
induced blindness must either be guarded against or paid in full. The latter is
far and away the more common of the two, and it’s certainly the option that modern
industrial society has enthusiastically chosen.
Those of my readers who want to see the blindness just
mentioned in full spate need only turn to any of the popular cornucopian
economic theorists of our time. The fond and fatuous insistence that resource
depletion can’t possibly be a problem, because investing additional capital
will inevitably turn up new supplies—precisely the same logic, by the way, that
appears in the legendary utterance “I can’t be overdrawn, I still have checks
left!”—unfolds precisely from the flattening out of qualitative value into
quantitative price just discussed. The
habit of reducing every kind of value to bare price is profitable in a money
economy, since it facilitates ignoring every variable that might get in the way
of making money off transactions;
unfortunately it misses a minor but crucial fact, which is that the laws of
physics and ecology trump the laws of economics, and can neither be bribed nor
bought.
The contemporary fixation on abstract value isn’t limited to
economists and those who believe them, nor is its potential for catastrophic
consequences. I’m thinking here specifically of those people who have grasped
the fact that industrial civilization is picking up speed on the downslope of
its decline, but whose main response to it consists of trying to find some way
to stash away as much abstract value as possible now, so that it will be
available to them in some prospective postcollapse society. Far more often than
not, gold plays a central role in that strategy, though there are a variety of
less popular vehicles that play starring roles the same sort of plan.
Now of course it was probably inevitable in a consumer
society like ours that even the downfall of industrial civilization would be
turned promptly into yet another reason to go shopping. Still, there’s another
difficulty here, and that’s that the same strategy has been tried before, many
times, in the last years of other civilizations. There’s an ample body of
historical evidence that can be used to see just how well it works. The short
form? Don’t go there.
It so happens, for example, that in there among the sagas
and songs of early medieval Europe are a handful that deal with historical
events in the years right after the fall of Rome: the Nibelungenlied,
Beowulf, the oldest strata of Norse saga, and some others. Now of
course all these started out as oral traditions, and finally found their way
into written form centuries after the events they chronicle, when their
compilers had no way to check their facts; they also include plenty of folktale
and myth, as oral traditions generally do. Still, they describe events and
social customs that have been confirmed by surviving records and archeological
evidence, and offer one of the best glimpses we’ve got into the lived
experience of descent into a dark age.
Precious metals played an important part in the political
economy of that age—no surprises there, as the Roman world had a precious-metal
currency, and since banks had not been invented yet, portable objects of gold
and silver were the most common way that the Roman world’s well-off classes
stashed their personal wealth. As the western empire foundered in the fifth
century CE and its market economy came apart, hoarding precious metals became standard
practice, and rural villas, the doomsteads of the day, popped up all over. When
archeologists excavate those villas, they routinely find evidence that they
were looted and burnt when the empire fell, and tolerably often the
archeologists or a hobbyist with a metal detector has located the buried stash
of precious metals somewhere nearby, an expressive reminder of just how much
benefit that store of abstract wealth actually provided to its owner.
That’s the same story you get from all the old legends: when
treasure turns up, a lot of people are about to die. The Volsunga
saga and the Nibelungenlied, for example, are
versions of the same story, based on dim memories of events in the Rhine valley
in the century or so after Rome’s fall. The primary plot engine of those events
is a hoard of the usual late Roman kind,
which passes from hand to hand by way of murder, torture, treachery,
vengeance, and the extermination of entire dynasties. For that matter, when
Beowulf dies after slaying his dragon, and his people discover that the dragon
was guarding a treasure, do they rejoice? Not at all; they take it for granted
that the kings and warriors of every neighboring kingdom are going to come and
slaughter them to get it—and in fact that’s what happens. That’s business as
usual in a dark age society.
The problem with stockpiling gold on the brink of a dark age
is thus simply another dimension, if a more extreme one, of the broader problem
with intermediation. It bears remembering that gold is not wealth; it’s simply
a durable form of money, and thus, like every other form of money, an arbitrary
token embodying a claim to real wealth—that is, goods and services—that other
people produce. If the goods and services aren’t available, a basement safe
full of gold coins won’t change that fact, and if the people who have the goods
and services need them more than they want gold, the same is true. Even if the
goods and services are to be had, if everyone with gold is bidding for the same
diminished supply, that gold isn’t going to buy anything close to what it does
today. What’s more, tokens of abstract value have another disadvantage in a
society where the rule of law has broken down: they attract violence the way a
dead rat draws flies.
The fetish for stockpiling gold has always struck me, in
fact, as the best possible proof that most of the people who think they are
preparing for total social collapse haven’t actually thought the matter
through, and considered the conditions that will obtain after the rubble stops
bouncing. Let’s say industrial civilization comes apart, quickly or slowly, and
you have gold. In that case, either you
spend it to purchase goods and services after the collapse, or you don’t. If
you do, everyone in your vicinity will soon know that you have gold, the rule
of law no longer discourages people from killing you and taking it in the best
Nibelungenlied fashion, and sooner or later you’ll run out
of ammo. If you don’t, what good will the gold do you?
The era when Nibelungenlied conditions
apply—when, for example, armed gangs move from one doomstead to another,
annihilating the people holed up there, living for a while on what they find,
and then moving on to the next, or when local governments round up the families
of those believed to have gold and torture them to death, starting with the
children, until someone breaks—is a common stage of dark ages. It’s a
self-terminating one, since sooner or later the available supply of precious
metals or other carriers of abstract wealth are spread thin across the
available supply of warlords. This can take anything up to a century or two
before we reach the stage commemorated in the Anglo-Saxon poem “The Seafarer:”
Nearon nú cyningas ne cáseras,
ne goldgiefan swylce iú wáeron
(No more are there kings or caesars or gold-givers as once there were).
That’s when things begin settling down and the sort of feudal arrangement sketched out in last week’s post begins to emerge, when money and the market play little role in most people’s lives and labor and land become the foundation of a new, impoverished, but relatively stable society where the rule of law again becomes a reality. None of us living today will see that period arrive, but it’s good to know where the process is headed. We’ll discuss the practical implications of that knowledge in a future post.
