Currently Reading:

Desert Solitaire
by Edward Abbey

Sacred Economics

Sacred Economics

Charles Eisenstein

The first thing I’ll say about Sacred Economics is that I completely agree with the spirit of it. What Eisenstein advocates is essentially a transition from a debt-based economy to a gift-based economy. Through tools like time-depreciated currency and negative interest rates, he hopes to reduce incentives for hoarding wealth, and increase incentives for circulating it. His monetary goal is to change money from something that demarcates units of debt, and to change it into something representing units of things that have intrinsic worth – gratitude, time, natural resources, things that Eisenstein considers in the realm of the “sacred”. He rightly recognizes that an economy based on a requirement of infinite growth can’t last. Modern economic indicators are almost entirely growth-based: when the economy is “flat” or contracts, economists and politicians go nuts. But growth isn’t always a good thing, and in many cases contraction is to our benefit. His lawn mower example illustrates this nicely:

There are about twenty houses on my block. We all have yards, and we all have lawn mowers. We each mow our yard maybe once every two weeks on average; some more, some less. So that’s twenty lawn mowers, each getting used about two hours a month. The rest of the time, they sit idle. Suppose we each had spent $500 on our lawn mower. That’s $10,000 we’ve put into the GDP.

But what if instead of buying twenty mowers, all twenty houses got together, and purchased two really nice lawn mowers – say, at $1,000 each. We can each still spend two hours a month mowing our lawn, but with a much nicer mower. Sure, we have to work out a schedule, which means meeting our neighbors and working with them, probably mediating disputes as they come up. What we end up with is a tighter community, a better lawn mower to use, and we’ve saved $400 per household. That should be a good thing, but from the point of view of traditional economic metrics, it’s a bad thing – we’ve decreased GDP by $8,000. We’ve improved our quality of life, we all profit by sharing, and with the money we’ve saved, we can retire that much earlier or work that much less, but we’ve hurt the mystical entity known as The Economy, and set the experts chattering about “consumer confidence” and other such nonsense.

And that’s really the central flaw in modern economics: when we assume that perpetual growth is possible and even desirable, we stop caring how people are living as long as the NASDAQ ticker keeps rising. We devalue things that have real value – spending quality time with people about whom we care – in favor of larger and larger numbers. And we over-consume resources and over-create waste in the process, because we treat people as if they exist to serve The Economy, instead of demanding that the economy serve the people.

Maybe the craziest part is that it sounds crazy to suggest that we do otherwise. Suggest that banks, corporations, and regulatory agencies should exist to serve people, rather than the other way around, and you’ll be labeled a left-wing nut job. You’ll be called a job-killer and worse. That’s how far we’ve gone into this particular rabbit-hole. Eisenstein doesn’t predict inevitable collapse, the way some doomsday seers do. He’s more optimistic than that. He predicts that things will get a bit worse before they get better, but that we’ll realize why, and that we’ll choose to do better. He predicts that we’ll choose to scale back, choose steady-state economics, choose to work less and spend less and enjoy life more. Because why should we have one person working a seventy-hour week while another can’t find a job at all? Neither of them is all that happy about it, and the compromise seems pretty obvious.

So I do agree with Eisenstein’s ideals. I’m not qualified to comment on them as an economist, but as ideals, they make a lot of sense to me. I am, however, qualified to comment on his work as a social scientist and as an historian, and on those fronts, I’m afraid he’s a mess. His historical work is jaw-droppingly slip-shod. If the book were an undergraduate thesis, it would be returned covered in red ink. It’s not that what he says is necessarily wrong; it’s that he makes broad statements with insufficient citation, and then bases arguments on them. Things like “Stone Age people.. had loose concepts of time and were rarely in a hurry”. Maybe it’s true; maybe it isn’t. I have no idea. It sounds truth-y, but there isn’t any citation to back it up. Other places, there are citations, but all from the same source. In his chapter “Money and the Mind”, Eisenstein relates his version of the history of currency and its place in the social psyche. There are thirteen citations in the chapter, and nine of them are from the same book (published in 2004). As a scholar, you just can’t do that, especially where historical research is concerned.

I understand: it’s not primarily an historical work, and Eisenstein’s degrees are in philosophy and mathematics, not history or anthropology. But for those parts of his argument, he needed to collaborate with an historian or anthropologist, because he comes out of those chapters looking untrained and a bit silly. And maybe he needed to collaborate with a trained economist for the parts of the argument pertaining to interest rates and depreciating currency; I don’t know enough myself to be able to evaluate those parts of his argument. Like his assessment of “Stone Age people”, they sound truth-y enough.

All of which only partly detract from an otherwise compelling book. It’s the kind of book sure to start arguments, sure to instigate name-calling, and sure to convince some people to quit their jobs and start doing something they find truly valuable for less money. Because most of us have abundance in all the wrong things, and scarcity in the things that we ourselves recognize as valuable. And that’s the “sacred” that Eisenstein wants us to cultivate.