The personal, social, ecological and economic consequences of money

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We all know the benefits of money. We’re bombarded by them every day. Economists, politicians, journalists, CEOs of corporations and charities, advertisers, tabloids, everyone from Adam Smith to Katie Price and other celebrities famous for the inhaling and exhaling of atmospheric gases – they’ve all extolled the virtues of money, repetitiously, every day. The world certainly doesn’t need me to add to its considerable applause. Therefore “as time is short”, I will do as Thoreau(23) and “I will leave out all the flattery and retain all the criticism”.

The Economies of Scale (EOS) married to money

The concept of money is central to the mechanisms of modern economics, especially the dominant capitalist model of our time. Two of economics most basic principles, the economies of scale and the division of labour, are of particular importance to the scope of this book. Both have always existed to some extent, as any couple who has made dinner for ten people, and any wife who chopped the carrots as the husband washed the potatoes for it, will testify to. But the advent of money, married to these principles, introduced an unharmonious element, creating an extremity our forebears could never have imagined.

My goal is to show you how both these economic principles, once married to the idea of money, consummated their relationship by giving birth to forces that would lead to the pillaging of the planet, the exploitation of both human and non-human life on it, and the transforming of traditional crafts and sustainable livelihoods into boring jobs on the assembly line of industrialised society, jobs that offer little in the way of freedom, creativity or autonomy. But most importantly of all, I aim to show you why such extreme consequences are only possible because of – and an inevitable product of – this tool we call money.

The economies of scale principle is powerful, yet extremely simple. It basically means that as one entity, be it a corporation, a farmer or the State, produces increasingly larger quantities of something, they can potentially benefit from increasing cost and/or labour efficiencies as the scale of the operation increases, up to a point. For example, lets say it cost £1 million to construct a factory that produces one of Adam Smith’s little pins. If they were to produce just one pin it would have to be sold for over £1 million just to break even. However, if it produces 100 million pins, which it probably would like to do, then each pin only costs one pence. The more it produces, the cheaper it can become, theoretically meaning increased sales and even cheaper pins until that factory hits its maximum output. This same idea is also responsible for the fact that I can post a package from England to Ireland at the cost of only a couple of pounds, and that the tiny population of Cuckoo’s Knob can have a car, a BlackBerry (not the fruit, that other phoney thing) and a liposuction treatment to remove the fat they accumulated from sitting on an assembly line producing BlackBerrys and from driving cars.

What’s the problem with that? I hear you demand! Nothing, at first glance. That is until you realise that the economies of scale, taken to their logical conclusion, lead to what I call the ecologies of industrialisation. Yes, it is a very efficient economic model, and that’s precisely the problem. Our realisation that efficiencies can increase with scale, (and this is the important point) coupled with the ability of money to logistically allow humanity to reach such incredible scales, means that cost-efficiency demands production on vast scales, which requires both vast material inputs and vast monocultures of consumers demanding identical products. This has led us to the brutally efficient looting of the Earth, the death of its fertility, the puncturing of its lungs, the stripping of everything else that we humans would classify as a resource (which other species would call a part of their home) and the impersonalisation and homogenisation of entire cultures. If you want to see an example of this, go to a clear-cut of an ancient forest and inhale the deep sadness that the machines have left behind. There is no denying this economic model is efficient – too efficient for the dry eyes of any person that has retained any connection to the rest of the community of life.

Without money, the maximum scale we could reach is one where real relationships based on trust were possible, most likely a village with a population of approximately one hundred and fifty people or fewer (give or take eighty), which is the famous number of people that research by anthropologist Robin Dunbar(24) suggests we can have a meaningful relationship with. Money acts as a proxy for trust in economic transactions where the consumer never gets to meet the producer. Without money nobody from Italy is going to spend all day producing tins of beans destined for some village in the south-west of England, in the trust that they’re off working in the same spirit producing cider to be shipped to Rome. It’s a nice thought, but it’s just never going to happen. Money enables you to trade with people you’ll never get to know or meet. Why we would ever want to is a deeper question.

This most basic of economic ideas tempts us into a world where we can make almost anything we want, as long as we can then convince enough people to buy them with the money they, in turn, get from working in jobs we increasingly find devoid of meaning, creativity and autonomy.

This is why I believe that the environmental and counter-culture movements, in particular, are grossly misguided when they claim that simply consuming less will make any significant difference whilst they still live lifestyles that require complex technologies, some of which the people involved in them – often my friends – tell me they “just couldn’t give up”. How they propose to have a clean, healthy planet and products requiring mass industrialisation, I have no idea, and when questioned on it, neither do they. The higher the level of technology, the larger the economies of scale that are needed to justify them (with a few exceptions, such as very expensive technologies like jet fighters, nuclear warheads and public surveillance systems, most of which we pay for collectively through our taxes, and which none of us need directly in our daily lives). Large economies of scale mean that large numbers of people must buy them and (again, this point is crucial) it fundamentally requires as few of us as possible to share the ones we’ve bought. Everyone needing to buy one means that every hill is mined, every ocean floor bottom-trawled, every forest flat-packed. Every forest flat-packed and ocean floor bottom-trawled means no oxygen for you and me. No oxygen means death.

That’s the complicated version, and it is not even that complicated. The simple version is this: our age old desire to benefit from the economies of scale – a very natural thing in itself – married with the invasive species money (the common weed, Pecunia), is making our biosphere uninhabitable for increasing numbers of species.

This is one of the major reasons that I argue for full localisation of our economies (I will explain what I exactly mean by this in chapter two) using small-scale, appropriate technology. By this I mean any technology that any human being could produce for themselves and their local community without its existence being dependent on many other people owning one independently also, or on all communities around the world (who sit on the copper, oil, etc. that our high tech products require) being forced, covertly or otherwise, into adopting the same economic and political ideologies. Such low impact technologies can be shared with the entire community, saving everyone time and effort and materials, as their existence isn’t based on the economic imperative that everyone needs to have one in order for the initial outlay in capital infrastructure to be covered. The economies of scale principle is the reason that, even in times of so-called austerity, you’ll never hear a politician say we should share more; the Prime Minister can only have a nice new washing machine, after all, if enough of his voters wants to own one of their own too.

Having said all that, far be it from me to be even remotely critical of anyone attempting to minimise their impact on the biosphere. It all makes a difference and it is highly admirable in a world that doesn’t make it easy. It is also a great personal policy to adopt in these transitionary phases. Yet in the long term we must wake up to the fact that we need to design ways of life that don’t require these economies of scale in order to prosper, so that it is possible to share the fruits of our labour without our entire economic model, which demands we don’t share resources, crashing in on us.

In order for the economies of scale theory to be scaled up to the level it is today, it must be married not only to the concept of money, but also to the idea of specialised division of labour.