The crisis has just unveiled the core of a long process of awakening and re-exploration of old ideas and values, Charles Eisenstein explains in this interview. His answer is the magic of the gift and a new story for a new world.
Charles is probably one of the most advanced author in the domain of global vision, human relations with a specific focus on money and gift economy. His last book ‘Sacred Economy‘ is a bible about value & money in our society and tomorrow, in which he explains and decrypt the use of money and how it comes into our society with integrated always-growing debts. We had the chance to ask Charles Eisenstein about his views on the new story and what creative energy it unleashes for all of us to design a new world.
It’s been 5 years since the subprime crisis started and crashed the financial system… And it looks like nothing has changed since then! Do you agree?
Charles Eisenstein: You are right. Nothing has changed. And not only has nothing changed, but the basic dynamics have only intensified. More and more of our economy and our social energy is devoted towards the servicing of debts. And that means that concentration of wealth is going to increase and the pressure to find some way to grow the economy will increase, and more and more people are going to be left out. The social welfare system will continue to decay because when the economy shrinks you still need to find the money somewhere, and one way to get it is to transfer the existing assets and use them for the servicing of debts.
You can mine the pensions funds, mine teachers’ salaries, privatize assets… There are lots of ways that you can do this, but you have to to get it from people’s pockets, almost out of their flesh. They will keep doing this until people stop and say ‘no’.
That’s a very pessimistic description of the situation, but others things are emerging now. New ideas are spreading. And you are one of the persons pushing for change…
Charles: Yes, I am actually not a pessimistic person. But it is part of a natural process that when something like capitalism seems to be working quite well, you try to keep the game going. But we are reaching a point where it is intolerable. As we are now at that point, it is also the moment of transition, the point where we can create totally new alternatives. Some people have been thinking of these alternatives for a long time, but no one would take them seriously because the old regime had not yet reached its fulfillment.
Which ideas are gaining momentum now?
Charles: One of them is the universal basic income. People have been talking about it since the 20s. It’s not a new idea at all, but even today it’s very, very far off the radar of many politicians. Another related idea is the fee & dividend system for carbon emissions and other kind of pollutions. There has also been quite a lot of talk about changing the way central banks work. Especially in the US, some high level people have been quietly pushing for implementing the Chicago plan for instance, a proposal by which governments issue money directly, without the private banks.
There are lots of others, but the point is, it’s only when the system doesn’t work anymore that there is an opening for new ideas. It’s only when educated people really can’t get a job, get locked into a permanent underclass, forced to accept boring dead-end jobs for the sake of surviving, and these jobs don’t even contribute to the well-being of any human being nor the society. Then people get fed up and become more open to radical ideas like the universal basic income.
And this is why I am an optimistic, because this is the time we are entering now.
The question of money is a core theme in your book “Sacred Economics.” There is a broad debate now about central banks, money creation and so on, but it looks like all these divisions end up with a disagreement on what money actually is per definition. What is your definition of money?
Charles: I like to go beyond the economists’ definition of money: a means of exchange, a unit of value, a store of value. This explains what money does, not what money is. And what money is and has always been, is basically a social agreement. And the thing is, a social agreement can change.
The social agreement that constitutes money today is connected to many other social agreements that are mostly invisible to us, like what is important in life, what the role of humanity is on Earth, what’s valuable… It’s connected to our deepest social and political mythology. So, because the whole mythology is changing, because we are re-imagining who we are on this planet, therefore the monetary system has to change too. Many activists, whether they are working on environmental issues or poverty, or democracy, all of them are realizing that the money system is working against them. So, at some point part of what they have to do is to make the money system change, so that it is no longer the enemy of the environment, social justice, but its the ally.
If you ask yourself a very naive question: “Why is it that the best financial decision is so oftenly opposite of the best ecological decision when money is just an agreement? Can’t we have a different agreement?” The answer is obviously “Yes!” and I’m not the only one arguing that.
For example, the way that money is created today through interest-bearing debt works pretty well as long as the economy is growing. Every time a bank issue a loan to companies or individuals, they grow the amount of debt more than the amount of money. The bank lends you a million euro, and then you owe the bank two million euros. And that means that we are always in competition to get money from each others. if that were the whole story, after ten years half of the people would be bankrupt, and wealth would concentrate very quickly.
Actually, before that happens, even more new money is lent into the economy and we have more debts. But that’s OK, because that debt will create more money into existence. We see it in debt-trapped countries like Greece or Ireland, when the establishment says the solution is the economy to grow so we can handle these debt payments. At our personal level too, if you work harder or make do with less, maybe you can eventually find a way to repay a personal debt. We are all under systemic pressure to find something to sell, so aspects of life to turn into a service. And this pressure is pushing towards economic growth, which means more and more of nature being converted into products, more and more human relationships being converted into services. The whole thing works as long as there is still some nature to commodify, and something we call community that can be turned into monetized relationships.
The crisis is happening today because there is nothing very much left: there is not much nature left that we can monetize. We can’t convert the atmosphere capacity to absorb CO2 into lots more products. We can’t convert the soil fertility into more sugar cane and animal feed or biofuels. We can’t convert the biodiversity of the ocean into higher and higher fish catches every year. Yet we are recognizing generally that this planet cannot sustain higher and higher productivity, but same thing is happening at the social level.
There is almost no relationship today that’s not monetized in some way. Two hundred years ago a lot of stuff were part of the gift economy, such as the production of entertainment and leisure. People used to get together and sing, now they purchase their entertainment. Now you have to pay to go to a children’s playground, people pay to go to the gym instead of going into the wild. Apart from family, most of our human relationships are now monetized.
How does one turn back to become a gift economy?
Charles: Basically we are running out of things to grow, but we have a money system that necessitates growth. So the first option is to find some new way to grow: we could colonize some new places, start a war to destroy things we will need to rebuild. The second option is to change the money system that allows degrowth or steady-state economy. But it does not mean ‘less of the same’.
Let me clarify. Today most of the meals are cooked outside of homes instead of being cooked in people’s kitchens. Now degrowth does not mean that food no longer gets cooked. Instead, it means people start doing it for each other by themselves again. It does not mean we eat less food, it means that we grow it in our gardens instead of paying into large and transport-dependent agribusiness. It does not mean we no longer drive cars or bicycles; it means that the whole neighborhood could share half the number of cars we have today. We spend like 5% of our time in cars, so when we share things, it allows us to enjoy everything important that we call wealth without leading to pay for it all, and therefore we can get richer and richer in a meaningful sense, even as the total value of goods and services exchanged for money declines. So that’s where the gift economy comes in and we need a monetary system that is not dependent on the servicing of debts.
Once question that comes up in the gift economy is that we are now seeing businesses enter the sharing economy sphere. Is it positive that AirBnb continues to monetize instead of switching to a gift economy?
Charles: AirBnB is a partial step toward the gift economy. People are still paying to stay at each other’s apartment. The intermediary function served by hotels today is being reduced or eliminated. Obviously, couchsurfing is much much more part of the gift economy.
AirBnb enjoys tremendous growth, but that growth is less than the shrinkage in hotel and resort revenue that it displaced.It’s the same pattern as Craigslist in the US. It generates a fair amount of income even if it’s free but it destroyed billions of dollars in classified advertising in newspapers. Wikipedia has destroyed enormous amount of revenues for traditional encyclopedias. Open-source Software, some of the Linux firms make a profit but the profit they make is far far less than the losses from the traditional economy. So this is all part of a degrowth trend.
One question behind about this phenomenon: are we going to see the old system totally destroyed or crash before we truly build something new? Or is there still some hope that we will have a smooth transition?
Charles: The world that we want to have : a world that is even sustainable, a world that is just and beautiful is so far from the world that we have today that there will be some kind of radical break, a moment where we have a feeling that everything has changed and anything is possible. It is that moment of people power. We have seen glimpses of it, again and again, in Egypt for example a year ago : the people are actually in charge. They didn’t really know what to do with that. They basically took on the old model, being still in the habits of representatives of democracy as we know it, saying, “Let’s have a new president.”
Every time, even a very left wing politician is elected in the office, he finds himself in the same global, geopolitical and financial environment as everybody else and ends up doing the same policies.. whether it’s in Greece or Brazil we have this left wing implementing the neo-liberal policies just like everybody else because it’s in their job description.
These examples are multiplying: Egypt, Brazil, Tunisia and now we also have Snowden, Assange, Occupy Wall Street, Indignados, Anonymous – all movements that are repeating the same scenarios of protesting. How do you personally relate to these movements and how do you see them evolving?
Charles: I think they are giving us a glimpse of what’s possible. We haven’t had that moment in the US at all : Occupy was very marginal. We haven’t had millions in the street. Anytime we approached that figure, it was always very safe, permitted, organised, imitation of demonstration. It’s not like people coming in the street and saying “We are not going to leave until everything changes.”
That hasn’t happen yet, and I think here is where it has to happen, because we are the global cops. I always say that it can’t happen anywhere else if it doesn’t happen here. It is the example of other places that allows us to make it happen.
It is that moment of “anything is possible and old world is gone.”
What can we do to help make it happen? We have seen many different movements. How do you see a possible convergence of these ideas and movements and what could be the next step for a stronger cooperation between them?
Charles: That kind of question assumes that what we need to do is to figure out a plan and to coordinate everything. Maybe that is not how it is going to happen. There is something that unifies a very different kind of activism. It has two parts: 1) to disrupt the existing story, 2) to offer a new story.
So, to disrupt the existing story is sometimes as simple as sending the message that, “Hey, your secret knowledge is correct — that knowledge that it’s not supposed to be this way.” It could be disrupted by the fast food workers going on strike. This disrupts the story of “it’s ok for them to get paid 8 dollars an hour and that will never change,” the story called “business as usual,” — strikes can disrupt that. Someday maybe we will have a debt strike where people on a mass scale will stop paying their debt as a conscious form of protest — that would disrupt the story that we call money. When anybody goes on hunger strikes, that is a disruption of the story. It doesn’t allow us to continue operating as if everything was normal.
On a more positive side, when anybody does anything that is generous or heroic, it disrupts the story of “yeah, everybody is in it for themselves, this world rules on competition and greed and you know human beings are just like that.” If it’s someone you admire who accomplishes something miraculous, this might tell you that what you thought was possible was much too small and that a lot more is possible than what you believed.
On a personal level, we can disrupt the story anytime we offer somebody generosity, forgiveness, unconditional acceptance — even just a moment of human contact. This is kind of a convergence between the political and the spiritual and I think this is very important and that the change we are facing goes all the way to that level. This is how deep the change has to happen, how deep the change has to be. It has to go all the way to the core of the way we have been living as human being and our relationship to the planet.
A lot of direct actions, even just telling the story of “Hey, here is what is happening to indigenous people in Equador or Colombia,” or “Here is where the rare earth minerals of your cellphone come from: you expel the indigenous from the land, you clearcut the forest, you make open pit mines…” Telling stories, just telling the truth, can be disruptive.
Instead, the attitude is “I know you are a beautiful person who really cares about the planet and really cares about other people, so here is what you should know and I trust you to integrate this information and having this information will change you as a person. So I don’t need to pressure you, I don’t need to talk about how awful the people are who drive sports cars or how awful executives are.. etc.”
This is also part of telling a new story. What is a human being? Are we really motivated by rational self-interest, to maximize our financial returns, as economic textbooks tell us? Is that really our human nature? Or is it perhaps in our human nature that we are beings of the gift and we have a deep innate desire to contribute something to the well-being of all and that any human being that is not doing that work is going to feel a void, an emptiness in their life.
We can even go to any interaction with corporate executive or bankers or somebody like that and we can go to them with that knowledge in our hearts and see them with compassion, with eyes that say, “Look at this man, trapped behind a desk in this gigantic financial game that has hypnotised him so that he thinks that he will truly benefit from getting a million dollar bonus. Poor guy, I want to free you from this.” We can say that, instead of saying, “You greedy bastard, you know that you are just in it for the money so I’m going to force you out of that. I’m going to make you ashamed of yourself, I’m going to threaten you…” This is not effective and this is what environmentalist have been doing for 40 or 50 years. Environmentalism didn’t start that way though; it started as movement of love.
One more practical question about Bitcoin or the future of money: do you see a transition or evolution toward a Bitcoin-like-global currency? Are we going to have one major currency that emerges or will we see an explosion of the monetary system with a lot of local currencies? Or a revolution of the monetary system at the political level? What is the most plausible scenario for you?
Charles: I don’t know! I think we are entering a time of uncertainty and exploration. We could end up with multiple levels of currency. I don’t think people want to deal with many different currencies; they want to use their card and get their product. So if there is a system where currencies are automatically converted into another, it’s pretty much like having one currency.
With Bitcoin, it’s a very important exploration, I don’t agree with the way it works. I recently wrote an essay on it. It is a bold experiment and we are working out through trial and error what money could look like that embodies our values. Today our values have to fight against money, so we are learning : I can’t predict.
Ok, maybe you could say what would be the best case scenario?
Charles: It could be that we have money that is the ally of ecology, so the best ecological decision is also the best financial decision. We have a system where the beautiful things that we want to do — helping other people and helping the planet — would be supported by the economy and valued by society in material ways. It would be a system where the natural, social and intellectual commons would be reclaimed instead of being divided up.It would be a system where people enjoy basic security and no longer choose their work based on survival.
A system that values the kind of work that can’t even be measured and that has been excluded : that is most of the time what we call women’s work. It’s astounding to see. What the most important thing we can do on planet earth? It’s probably to raise your children in a beautiful way. That, in America at least, is not supported. If you stay home with your children and devote yourself to raise your children, no one pays you to do that, so you don’t get money for this. So you have to put them in daycare instead and go look for some kind of job.
Why is society not supporting the most important thing? That’s one reason for universal basic income.
It comes from a different understanding of who we are and understanding of human nature. An economist would say : “A universal basic income is a bad idea, because then we would have no incentive to work” but what they are saying is “I know you. You don’t really want to work. You don’t really want to contribute. You need to be forced into it. If you had the choice, you would sit in front of your computer and watch internet porn while eating chocolate bars, but we are making you work by holding the threat of starving over your head.” Is that really human nature? Look into yourself — if you had all your money needs met and you had no challenging meaningful work, you would be depressed!
This is part of the transition in understanding who we are as humans.
You did this transition yourself to becoming a recognized author, speaker about human nature and the gift economy. How did it happen to you?
Charles: It wasn’t because I’m especially ethical or moral or spiritual or anything like that, I just couldn’t make myself play along with the proposed game. It was intolerable for me. There are certain things you are supposed to do to make money. I couldn’t make myself do them, so I thought that I had some personal flaws : laziness, procrastination, lack of motivation. But I think that these things are not flaws. I just couldn’t make myself do it and to find what I wanted to do took me a long time. I hope the next generation doesn’t waste 10 or 20 years as I did doing things I didn’t want to do.
What will the future look like in 5 years?
Charles: In the next 5-15 years, things will be much more chaotic and uncertain than they are today. Many things that we take today for granted, we see them as unchangeable or laws. These things will change and we will be in a time in which we don’t know what is real anymore, we don’t know what’s next, we don’t know how to accomplish things. Everything we thought we knew will be revealed as illusion. And so we will go through this period where we don’t know what’s real anymore : the old story will be dead, but the new story will not have been born and that will be a really special time.
Sometimes it’s accelerating, everything is possible, sometimes it is really frightening and dramatic. A lot of people are going through this on a personal level, losing their job or relationship and there is this dizzy feeling of everything falling down — all of the rules of life have changed. This is what is going to happen on a mass level and that is the place where real newness comes from whether from a person or from society. That is the first stage that we will go through.
In the second stage, around 20-25 years from now, the new story of the people will emerge and we will commit to it. It will be empowering and accelerating and it will infuse life with new meaning and new kinds of plans and ambitions. It will be empowering, just as in the 1950′s the idea of “Science is conquering the universe; I’m going to be an astronaut; I’m going to be a nuclear physicist. Let’s go get ‘em!” There will be a burst of social vitality because people will believe that their own, personal story can eventually happen in this new story. We will have this same kind of boundless energy that will be devoted toward healing us collectively and letting ourselves feel all the trauma that happened for thousands of years. That is the longer term.
That will not be completed within our lifetime. But when we are old we will be able to say “Yeah, we turned the corner. We are in the new story now. We are just in the very beginning but we are in it and the system has changed and is aligned with us!”.
Charles, thank you very much!
Charles will be in Europe for a few events in September
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