World Affairs

Vol. 4, Number 2 (Apr.–Jun. 2000)

 

Money and the Power of Knowledge
By Jerzy A Wojciechowski

 

Unequal Freedoms: the Global Market as an Ethical System
John McMurtry, Connecticut: Garamond and Kumarian Press, 1998, pp 410

John McMurtry has done us a signal service writing Unequal Freedoms. The world monetary situation is obviously not conducive to human wellbeing and is in need of fundamental reform. Such reform, to be beneficial to the commonweal, will have to be based on an adequate understanding of the existing financial system, its aims, its methods and its consequences. Unequal Freedoms provides us with such insight. In the words of the author:

"This book analyses the unexamined normative presuppositions and implications of the global market paradigm as a total value system. Tracking the historical development of its axioms and prescriptions through Smith, Ricardo, Hayek and Friedman to the current World Trade Organization, it demonstrates with extensive documentation that currently erupting social and ecological crises follow from this paradigm’s organizing principles the more its programme of "deregulation" and "restructuring" is implemented. The analysis shows that the required resources of resolution lie in defined principles of public policy grounded in life co-ordinates not recognizable by market theory, and increasingly overridden by its self-referential system of profitably priced goods."

The value of the book consists not only in the rigour of the analysis of the market doctrine underlying world economy and in the devastating critique of this doctrine. Its greatest value lies in the breadth and depth of the author’s intellectual perspective. Whether he realized it or not, he has written a metaphysical treatise about money and the human quest for it.

Obviously, a work of this magnitude can and should be discussed from various angles. Being no specialist in market matters, I prefer not to discuss the economic issues raised by the book. I am certain, others, more qualified than myself, will do so. Instead, I will concentrate on other problems raised by McMurtry’s book. I will do this in the light of my theory of Ecology of Knowledge. I developed this theory to deal with the problem, overlooked by philosophers, of the relationship existing between knowers and the product of their intellectual activity, the body of knowledge, the knowledge construct (KC). In contradistinction to what we have always assumed, and intuitively believe, the relationship: knowers-the KC is neither simple nor exclusively beneficial for individual knowers and collectively. Without going into any details, let me point out that all the great problems facing humanity presently, such as overpopulation, pollution, future shock, atomic weapons and growing inequalities among humans, whether individuals or societies, to name but a few issues, are the direct or indirect result of the development of knowledge. The more knowledge develops, the more dramatic its consequences become. Let me begin my analysis with a discussion of the origin of capitalism, and let us distinguish between money as such and the human desire for it, ie, human greed. In other words, let us differentiate between things humans yearn for and human nature. Money is now the all-powerful, all-consuming god, the central divinity of present day Olympus. Has it played such a role in the past? If we equate money with the symbol of possessions, and consider it as a means of satisfying our desires, then the answer is certainly yes. The Greek myth of Midas, the king who desired that everything he touches turns into gold and died of hunger as a result of his wish, and the story of the Hebrews who erected the statue of the Golden Calf while Moses conversed with God on Mount Sinai, indicate that money has always had the god-like potential of becoming an object of ardent worship. It means that money is not just an economical issue, but a moral and metaphysical problem as well. This fact fully justifies McMurtry’s approach.

If this is the case, two questions come to mind, one concerning humans, the other concerning the financial situation. One may wonder whether contemporary money-makers are any different from Midas or worshippers of the Golden Calf. Are they really greedier than their forefathers or are they only better equipped in their search for the Holy Grail, and more favourably positioned to achieve the desired aim? If we are to believe the Greek myth and the Old Testament, not much seems to have changed in human nature in the past three millennia. The builders of the Golden Calf would, presumably, feel right at home at the Stock Exchange, and would have been just as successful in trading stocks as are their distant descendants.

One may wonder, therefore, why there was no stock exchange in the time of Moses? Wall Street, after all, is definitely a more successful money producer than the Golden Calf. Was the absence of a Stock Exchange in the time of Moses due to the lower IQ of the contemporaries of Moses? Or was it due to other causes? We have no proof that the level of intelligence then was lower than it is now. There is, however, one obvious difference between then and now in the realm of knowledge. Knowledge and the resulting power to do things have increased dramatically in the past three millennia. It is not a change in human nature which produced Stock Exchanges and round-the-clock, round-the-globe trading transactions, but the progress of knowledge.

Science and technology have been developing hand in hand and largely, unbeknownst to scientists, enlarging dramatically the realm of desirable objects. Consequently, it is knowledge which fans our desires and provides the means of satisfying them. Strange as it may sound, without the founders of modern science, without the likes of Copernicus and Galileo, Descartes and Newton, Lavoisier and Faraday, and without the brilliant English toolmakers of the first half of the nineteenth century who revolutionised machine production, there would not have been modern capitalism and its excesses. Now people can dedicate their lives to the production of money for the purpose of making more money, to make, in turn, even more money. This exciting game was made possible by the increase of productivity resulting in an ever greater stock of goods and the accompanying increase of available money supply.

Another important development aggravating the socio-economic situation is the process of globalisation presently taking place. It produces, among others, two consequences: it increases dramatically the scope of financial operations, and, transcending national borders, it escapes from the control of national governments. Thus technology, because it makes possible this border less game, has, unwittingly, produced a new realm, a no-man’s-land, dimensionless, immaterial; a curious product of the human intellect. It is man made but not inhabited by humans. Its denizens are electronic waves produced by humans, and serving human purpose, more precisely the purpose of senders and receivers who derive profit from the use of this realm. Unfortunately, they form a minority of humanity, but the access to and the use of this domain offers them almost unlimited advantages in the profit gamble.

It is worth looking deeper into this new sphere of human activity. Compared with material, concrete existence that always happens somewhere and is circumscribed by the dimensions of a place, the borderless no-man’s-land of global exchanges has the aspects of an abstraction. Coincidentally, the money which floats in this abstract realm is also an abstraction: zeros and ones of the binary computer code. This is a new development also generated by the development of knowledge. Until the First World War money was essentially a concrete thing. It was made of gold and silver, or at least of copper, and if it was paper, it was convertible into bullion. Not any more.

The sums now circulating around the world from one computer to another are by far greater than the amount of gold contained in all the world’s central banks put together. In other words, there is not enough gold in the world to support the value of available money. Thus money has become in fact a new entity: abstract, immaterial and yet all powerful. A mental being whose meaning, ie, value, results from and is supported by two things, namely the need of a means of exchange, its traditional role and justification, and the desire to accumulate wealth, ie, money as such. To the extent that money is an abstraction, it can be multiplied ad infinitum, just like numbers. Thus the money game has become a numbers game, and is made possible by the intellectual capacity to handle numbers, ie, to count. There is a condition that makes the money game possible, which is fundamental but often overlooked. Namely, it presupposes a well-working social order, national and international. The reason why this condition is not adequately analysed by economists is as interesting as it is revealing. The social order, or simply society, cannot exist on economic grounds only. Society is an ordered cohesive, ie, synergistic human multiplicity. The synergy requires not only self-interest à la Adam Smith but also compassion, striving for the commonweal, ie, not only taking but also giving. It is the giving that belongs to the realm of moral values that the economists, and materialists in general, have trouble dealing with.

As far as the capacity to count is concerned, we see interesting parallels between the growth of financial transactions and the development of knowledge, namely the development of mathematics and of counting devices from the abacus to the computer. Without the latter, and without modern communication technology, especially the optical cable linking the major trading centres of the world, the round-the-clock, around-the-world trading game presently being played would not be possible. It is worth stressing that it is the laying of the optical cable across the oceans which freed the international transactions from control of state authorities. Advances in technology defeated state controls, and eliminated borders, creating the stateless no-man’s-land alluded to earlier.

We may ask whether this electronic realm is a new form of civil commons(that is, any co-operative social construct which protects or enables human or environmental life) and if it is not, what, if any, is its relationship to them. First of all, let us point out that the notion of civil commons is a flexible one, because it is knowledge-dependent. To form the notion of civil commons we have to realize that our biological existence as well as our socio-cultural existence and our human evolution depends on external conditions. It would seem that our dependence on the outside world is so obvious that the awareness of this fact should be innate and universal. And yet it is not. The recent interest in the notion of civil commons and the present flurry of publications on this subject prove that we had forgotten about our earthly conditioning, and are just now remembering it, under the impact of the ecological predicament.

The intriguing question is who are the "we"? Does the "we" mean all of humanity or a part of it? The answer to this question is of great relevance to the discussion of the notion of civil commons and to that of capitalism. The fact is that the perception of human relations to the outside world is culturally conditioned. In this respect, Westerners are in a very particular situation. With the exception of our culture, all other cultures view humans as an integral, indistinct part of nature. Our Western, ie, Judeo-Christian culture stands apart. It considers humans as being distinct from the rest of nature, the result of a distinctive act of creation, made in the image of God and placed above nature. Hence, the famous and momentous message of the Book of Genesis: "Go forth, and multiply, fill up the earth and submit it to your domination."

This message happens to be the defining statement of our Western culture, one which sets us apart from the rest of humanity. It made possible the development of science and technology and made us, Westerners, conquerors of nature and of the non-Western cultures. At the same time it lets us forget that we are an integral part of nature, ie, the earth-system, and that we depend on it for our very survival. Moreover, the Bible-generated worldview allowed Francis Bacon to conceive his epochal idea of radically improving the human condition through the exploitation of nature. To achieve this aim, it was necessary to discover the laws of nature by means of science. In the opinion of Bacon, the aim of science, and of knowledge in general, is eminently practical: the enrichment of humanity.

Having substituted the practical endeavour as the aim of knowledge for the traditional, contemplative ideal, Bacon revolutionised the perception of knowledge. Doing this, he became the ideologue of the Modern Age of which all we Westerners are products. Moreover, he made possible the accumulation of wealth to a previously unimaginable level and, consequently, the development of capitalism. With constantly more powerful means for exploitation of nature at his disposal, modern, white man brought about the ecological predicament which threatens our very existence, and as a consequence of it, the interest in the civil commons.

Earlier we said that the notion of civil commons is flexible because it is knowledge-dependent. Let us now be more specific. The understanding of civil commons is proportional to the level of knowledge in general and to the comprehension of humans as such in the first place. This, in turn, entails a grasp of the relation of humans to nature and of the conditions of human evolution. All this knowledge is imperfect and in constant progression. The fact is that we do not have a perfect understanding of ourselves, of our nature, of our insertion in the ambient world, nor of the laws and final aims of human evolution. Hence we do not have a perfect understanding of civil commons. This, however, does not mean that we have no grasp of the meaning of civil commons and do not understand the need to work for the commonweal.

As we have mentioned earlier, commonweal is not a scientific but a moral notion. One cannot discuss it without moral judgments which, in turn, involve the distinction between good and evil. One may, perhaps, remark that the notions of morality, of good and evil, have no place in modern, materialistic, scientific mentality. Modern science, after all, was developed as an objective, quantitative, and, in theory, value-free cognition. Science was not conceived to provide us with moral evaluations of the human condition. Powerful as it is, science is value blind. But science provides us with constantly more powerful means of action. These, in turn, impact increasingly on the environment and on humans themselves, and alter the conditions of human existence. They produce wealth and pollution, enable the growth of the human bio-mass and make the future more and more unpredictable and fraught with danger. This in turn compels the need for ever more sophisticated and numerous evaluations of the consequences of our activity.

The more knowledgeable we are, the more powerful we become and the more we require moral judgments for our survival. This may seem a rather strange and unexpected result of the development of modern science. It underlines the fact that we never can foresee all the consequences of our ideas. Under the influence of knowledge, the future becomes more and more open and increasingly different from the present. This has far-reaching consequences for our understanding of the problematique under discussion, and in general for the comprehension of social reality and evaluation of existing social, political and economic theories. "Everything changes and nothing remains," said Heraclitus. Under the impact of science, human reality increasingly conforms to Heraclitean vision.

Let us be more specific. The more the future is different from the past, the less the past can serve us as an example and a teacher for evaluating concrete situations. Does this mean that the past has lost all value for coping with the present and planning for the future? Not quite. We said earlier that human nature has not changed much in the past three millennia. Specific forms are resistant to change. Thanks to this fact paleontology can make sense of evolution. If we concentrate on human nature, we can form explanations whose value is resistant to change. This is why ancient myth and Bible stories are as valid today as they were in the fabled past.

The myth of Midas provides the timeless teaching that gold is not life sustainable. Nor is greed, which fuels the desire for gold. Underlying this statement is a more profound truth about human nature, namely, that our nature is the seat of good and evil tendencies and that the latter are life destructive, ie, contrary to fundamental human desires. Such tendencies manifest themselves both individually and socially. On the social level they take the form of economic and/or political doctrines. When discussing them, let us not forget that they are merely manifestations of human desires, ie, externalisations of the homo sapiens as sapiens. They are really projections of ourselves, not abstract, supra human entities. They are formalized and theoretical expressions of our ideas and longings. They are indeed "us" writ large. This is why it is befitting to close these remarks about this remarkable criticism of the capitalist system and the underlying doctrine with the well-known statement of the great American thinker, Pogo: "We have seen the enemy and the enemy is us."