The Metaphysics of Money

To mention money and metaphysics in the same sentence, as I did at the close of last week’s post, is to invite any number of misunderstandings. The hoary habit of thinking that walls off philosophical questions in a ghetto of abstractions apart from the world of ordinary life gets in the way of clarity here as so often, but there’s an even more basic problem: most people these days have no clear notion of what the word “metaphysics” means in the first place.

The tangled history of the word probably makes that inevitable. A nameless librarian in ancient Alexandria first coined it out of sheer desperation while cataloging the works of Aristotle; most of the treatises got names based on their subject matter – Physics, Meteorology, Poetics, and so on – but one difficult treatise was labeled simply meta phusikoi, “the stuff that comes after the Physics.” Then, as the fourth-grade history paper put it, some other stuff happened – the library of Alexandria burned, Rome fell, what was left of the classical world got tipped into history’s dumpster by a band of helpful Visigoths, and so on. When the dust finally cleared, Aristotle was very nearly the only systematic ancient thinker whose works were still around, and so he became, in Dante’s words, “the master of those who know.”

That meant, among other things, that the labels assigned to his treatises by that anonymous Alexandrian savant became the basic categories of scholarship in the Middle Ages. (Most of them remain basic categories today, which is why your local university has departments of physics, meteorology, and so on.) Metaphysics was no exception, and the philosophical issues Aristotle tackled in that treatise have carried that label ever since.

Those issues are what Aristotle himself called “first philosophy:” an analysis of the basic terms that have to be sorted out before any kind of philosophy can be sure of its foundations. The medieval scholars who blew the dust off Aristotle’s treatise, however, interpreted his work in their own way, which meant that the basic issues of philosophy were redefined in terms of Christian, Muslim, or Jewish theology. By the time the 18th century rolled around, metaphysics as a discipline was almost entirely identified with the theological basis given it by the scholars of the Middle Ages, and so it got dropped like a hot potato as secularism swept the academic world.

By the end of the 19th century even theologians had stopped doing metaphysics in the old style, and most of the people practicing what used to be called metaphysics weren’t using the word. At that point, in a fine display of history’s twisted sense of humor, the word got picked up by the American folk religious movement ancestral to today’s New Age scene, and turned into a label for their own beliefs. The town in southern Oregon where I used to live has a Metaphysical Library, which even had a few books on metaphysics in the philosophical sense of the world, though how they got there I have no idea. The vast majority of the books were on past lives, channeled entities, flying saucers, evil conspiracies, and the rest of the mental furniture of contemporary alternative culture.

Thus it’s probably necessary to point out that when I mention the metaphysics of money, I ‘m not referring to claims that money was invented by a conspiracy of evil space lizards, or that you can get as much money as you want by convincing yourself that money really, really wants to bed down in your wallet. You can find books making both these claims at the library just mentioned, as it happens, but both beliefs – and a good many statements less obviously absurd – are in large part produced by a failure to engage in the other kind of metaphysics, the thoughtful consideration of the basic categories of thought itself.

That sort of analysis seems very abstruse and impractical, until you notice the consequences of ignoring it. Sweeping claims are being made these days about whether certain things exist or do not exist, for example, by people who never seem to have examined their own presuppositions about what it means to exist and how a thing can be known to exist. That’s the problem with the ghettoizing of philosophy mentioned earlier; the philosophical issues you ignore can still sneak up on you while you’re not looking, and turn your best attempts at thinking into gibberish.

This, finally, is where metaphysics and money come together. Last week’s post discussed some of the reasons why you can get better economic advice from a randomly chosen fortune cookie at your local Asian buffet than from the most prestigious contemporary economists. Part of it, as I pointed out, was the way that the boom-bust cycle makes giving bad advice the most lucrative career strategy for economists; another part is due to the attempts of economists to make their field a theoretical science without going to the trouble of grounding their theories in an adequate foundation of historical fact.

Still, there’s a third factor at work, and it’s even more pervasive than the two just named. It’s far from unique to economics – in one way or another, it underlies a great many of the mistakes that are tipping our own civilization into the same dumpster that received the ruins of Rome – but it stands out in the field of economics with particular clarity. Its roots are in a metaphysical error which might as well be called, after one of its most influential practitioners, Descartes’ fallacy.

Rene Descartes is famous nowadays for saying “I think, therefore I am.” Few people these days take the time to find out what he meant by that statement, and fewer still catch onto the radical project that underlay it. Without too much inaccuracy, Descartes can be called the first modern thinker. Certainly he was the first to embrace what has become an automatic presupposition of modern thought, the notion of the individual self as an isolated, independent witness whose thoughts and experiences are entirely its own. What existed, to Descartes, was limited to what he could know, and know precisely, with the same exactness as a geometrical proof.

Descartes was arguing, in effect, that “to be” means the same thing as “to be known,” and “to be known” in turn equals “to be precisely defined.” It’s clear that he recognized, and intended, the sweeping implications of this metaphysical stance. It’s equally clear that a great many of the people who unknowingly follow his lead nowadays either accept those implications uncritically or have never noticed their existence. In the hands of much of modern science, in particular, Descartes’ equation has been blended with a passion for quantitative measurement to produce an even more extreme form of the same logic. To a great many scientists today, what exists is limited to what can be known; what can be known is limited to what can be measured; and what can be measured is treated as though it was identical to its measurements.

You can get away with this in physics, and still do excellent science. The objects studied by physics follow patterns that can be modeled effectively by mathematics, and most of them are so remote from ordinary human experience that anything about them that doesn’t measure easily can be ignored without too much trouble. Try doing this in sciences closer to the realm of everyday human life, on the other hand, and you can count on running into trouble, because in that realm Descartes’ approach is usually a bad idea, and the modern scientific expansion of it an even worse one. What can be measured is only a subset of what can be known, and what can be known, at least in any given situation, is only a subset of what exists; nor does the fact that some properties of a thing can be measured according to some numerical scale prevent it from having other properties at least as important that are not subject to that kind of measurement.

The sort of bad logic that treats quantitative measurements as the only things that really exist is pervasive in the sciences, but its grip is even tighter on those fields of study that want to claim the prestige of science but can’t quite pass muster. Economics could be the poster child for this noxious effect. Down through the generations, against the sound advice of its best practitioners, economists have consistently treated the one thing in their field that can easily and consistently be measured with numbers – money – as though it was the one thing that matters. It’s easy to see how seductive this habit can be, since it seems to allow everything to be measured on a common scale; the problem, of course, is that everything that can’t be flattened out into that common scale gets mislaid, and as often as not these mislaid factors prove to be decisive.

In The Wealth of Nations, Adam Smith criticizes the notion – as common in his time as in ours – that money is the same thing as wealth. The wealth of a country, he points out, consists of the product of its natural resources and collective labor: in modern terms, it’s the sum total of the goods and services produced by a nation’s ecosystems and economy. In another place, though, he defines wealth as anything that can be valued in money. These definitions do not conflict with one another; rather, they make the crucial point that money is not wealth but the yardstick by which modern cultures measure wealth. This ought to be the first thing we teach children about money, though of course it isn’t.

It probably ought to be the first thing we teach economists about money, too, but the power of Descartes’ fallacy stands in the way. Money is a unit of measurement, so it’s inherently easy to define, understand, and quantify. Wealth is much less easy to force into the Procrustean bed of numbers; that’s why we use money as a rough and ready way of sorting out the relative value of different kinds of wealth so they can be exchanged without too much trouble. Money is so convenient as a way of measuring wealth that very often it ends up eclipsing wealth, and this is why most economists nowadays, even when they think they’re talking about wealth, are actually talking about money. This becomes especially problematic when, as so often happens, they start attributing to wealth characteristics that are only true of money.

This habit of thought pervades contemporary economics. For a relevant example, watch the way most economists these days brush aside the immense challenges of peak oil with the assurance that if oil ever does get scarce, the market will come up with alternatives. Implicit in this claim is the assumption that any energy source is as good as any other, and that the total amount in the system is effectively unlimited. This is true of money – one dollar bill is worth exactly the same amount as any other, and the total number of dollars in circulation is as close to limitless, these days, as the printing presses of the US Treasury can make it – but it is emphatically not true of energy resources, or of any other form of wealth.

Compare any two energy resources in practical terms and it’s clear that in most cases they’re not even apples and oranges; they’re apples and orangutans. Take petroleum and solar energy as good examples. A highly concentrated form of chemical energy and a rather diffuse form of electromagnetic energy have very little in common, and even when they can do the same things – you can heat a house with passive solar design, for example, or you can heat it with an oil-fired burner – the technologies are totally different. Easy talk about swapping one for the other thus evades the immense challenge and nearly unimaginable cost of scrapping multiple continent-wide infrastructures geared to oil and building new ones suited to solar energy. (There are plenty of other questions that it ducks, too, but this one will do for starters.)

Presumably an economist would notice something odd if he sat down at a lunch counter, ordered the daily special, and was handed instead a box of socket wrenches, even if the price of the wrenches was exactly the same as the daily special. If the economist was starving on a desert island and a crate that washed ashore proved to contain socket wrenches rather than food, the difference would be a matter of life or death. This latter is uncomfortably close to our position just now, as the world’s energy companies race each other and the clock to extract fossil fuels in nearly unimaginable volumes from the Earth’s dwindling supplies. If we allow ourselves to wait until those supplies start to run short, it will be much too late to start retooling our civilization for some other energy resource, even if one happens to turn up.

Because a subculture of erudite scholars in the economics departments of universities have made a metaphysical error, in other words, our civilization may have missed its chance to dodge disaster. It’s hard to think of a better argument for the importance of metaphysics than that. Still, the problem sketched in this post extends much further than I’ve had space to outline here, and the way in which money has metastatized in our society to become the measure of all things has become a massive though unrecognized barrier in the way of any attempt to improve a rapidly worsening situation. We’ll explore that in next week’s post.