From Brett Scott, ASOMOCO Altered States Of Monetary Consciousness Econ Life 101 series on Substack.
1: Creatures on a Planet
A collection of collections of processes involving tens of thousands of people who relied on sunlight, air, water and food to keep themselves alive while arranging metals from rock ore, liquids from clouds, and chemical compounds (originally formed in the heart of long-dead stars) into combinations that we’ve labelled in our head and culture as ‘Red Bull’, while assisted by energy derived from burning fossilised organic matter.
A bottle of Red Bull might look like a discrete object, but it’s a collection of processes, and these processes go on even as it’s sitting on the shelf.
Economy from first principles:
- Not all that we value is in the economy: Two of the most precious things in our existence – sunlight and air – come to us for free. No labour is required to get these. (Although Aldo Leopold defined ecology as the study of “animal economics”. The study of how the other Earthlings meet their needs, on this same planet, faced with the same challenges. Tell the plants that no labour is required to produce oxygenated air!) Without these basic life supports, there would be no economy, so - in a sense - they transcend the economic realm. You don’t have to think about the pricing of sunlight, or the supply of air. They are simply taken for granted.
- All economic value comes from us applying our energy to the earth: Process of using our energy to find things, create things, or bring things to life is the foundation of what we’d eventually come to call ‘the economy’.
- Humans are not independent. We’re interdependent: Each of us only exists because others birthed and raised us, and we can only read this because others taught us language and skills. Other people built us, and it’s this that later allows us to build our independent ‘sense of self’, but a society is always an interdependent mesh of people who can’t survive alone. “An interdependent network always precedes the individual. The individual never precedes the network.”
- ‘The economy’ is the mesh of interdependent relations we are pulled into and draw upon to provision for ourselves: The economy isn’t a collection of solo individuals who ‘choose’ to interact. It’s an interdependent mesh of people who cannot survive without each other. We don’t necessarily experience every connection in that mesh directly - some of our economic production will be done in direct conjunction with other people, but much will indirectly draw on strangers you can’t see.
- Economic life is given meaning by other parts of life: Our economic life is one part of our being, not a discreet realm with its own laws, and it cannot be separated from everything else that we live out - whether that be our family life, romantic life, political life, cultural life, spiritual life or creative life. All these lives are intertwined, and have been since the beginning of humanity. Without these ‘non-economic’ strands - like community connections and love - there would be no point in doing anything ‘economic’.
When you draw with a pencil, is it just your individual self that is creating that drawing? How many men and manhours went into creating that pencil alone?
2: Humans Natures
There’s a long history of people arguing about ‘human nature’. Are we selfish or altruistic? Are we good or evil? Are we X or Y? One common feature of these debates is that the disagreeing parties agree that we are one thing, but fight over what that one thing is.
There’s a strong historic tendency for big philosophers to seek universal descriptions of reality, in which one thing applies everywhere without having to co-exist simultaneously with other things that may contradict it (i.e. either-or thinking, rather than both-and thinking). Studying economies, though, becomes much more interesting and open-ended when you reject tired debates about fundamental human nature, and simply bypass them by accepting that we are multifaceted.
In the final analysis this is a thought experiment, because there isn’t literally a way to ‘split’ the different parts of ourselves. To return to our image of the prism, a white light beam is the whole spectrum of colours at once. Similarly, we are our whole spectrum of natures at once.
This, though, opens up a powerful question. Does our current economic system amplify, or favour, particular parts of the ‘spectrum’ in you? Which parts of yourself are pushed into the background when you approach a modern economy, and which are brought to the fore? Does our economy ‘filter’ out certain parts of the spectrum of our natures? Does it ‘colour’ us?
3: Everyday Communism, Reciprocity, and Hierarchy
These views of human nature become very important in politics, because cherry-picking a single part of us and presenting it as the whole is a classic political tool. The attempt to pinpoint how we are in turn inform visions of how the economy should be.
For example, we feel love towards others sometimes. Presenting this fraction of us as the whole of us is a hallmark of ‘hippie’ culture. The story told within that culture might be like this: the universe is founded on love, but humans have lost their way and become separated from their true selves, torn apart by illusory differences, fragmented from oneness. To repair this situation, the culture might present an alternative vision of economic life that involves building eco-villages, communes and small permaculture cooperatives (or - more recently - futuristic ‘solarpunk’ eco-utopias).
On the other hand, we can be angry and violent towards each other, and if you foreground that you get to far-right culture, with it’s ‘dominate or be dominated’ mentality. The story here might be: the world is a Darwinian struggle between races and civilisations, and you must protect your family while crushing threats. Somebody with this world-view might gravitate towards nationalism and protectionism in an economy - revering a ‘strong man’ leader like Putin, Trump or Viktor Orbán - but could simultaneously lean towards ‘every man for himself’ libertarian visions of the economy.
Economists notice that we have an accumulative and competitive streak, and turn this into a world-view in which all humans are calculating agents out for themselves. This Homo Economicus vision can fuse with far-right visions of domination - that idea that we live in a ‘dog eats dog’ world where you’re in an endless struggle with others - but it’s also very typical for economists to explain cooperation in terms of self-interest (‘we cooperate for our personal gain’).
Graeber points out that any economic situation has (at least) three simultaneous moral principles - senses of what’s right or wrong to do - that exist in parallel to each other. They are:
- Everyday communism: the sense that someone who is in more need than you can ask things from you, provided their need is great enough, or the demand on you isn’t too extreme
- Reciprocity (and exchange): the sense that, if you’re roughly equal to someone, neither of you gets priority, and if the other person requests or expects something of you, you can request or expect something of them too.
- Hierarchy: the sense that a person in a position of high status power is not subject to the rules of everyday communism or reciprocity.
4: The Pandora’s Box of Money
We can look at hunter-gatherers, tribes, peasant societies and industrial market societies, but to visualize economic history, we must never stack them from an imagined lower to higher form. Rather, we must see them in parallel. From this perspective, the big economic story is not one of a ‘natural evolution’ from lower states of being to higher states of being. Rather, it’s about the displacement of one broad style of economy - human economies - by state-based market economies that co-evolve with state-backed commercial capitalist money.
…to accept the possibility that money was introduced into a world where there was no intrinsic or systemic ‘demand’ for it (much like my body has no demand for cigarettes in a world where I’ve never encountered them). From this perspective, the history of money is a series of political-economic events where people who didn’t rely on money slowly took little puffs on it in limited situations - the monetary equivalent of ‘social smoking’ - or were forced into it through acts of political coercion. This sets off a shift, then a slippage that becomes a landslide. Resistance to dependence on money erodes, then collapses, locking the society in.
The capitalist money that we’re used to… is inherently linked to the rise of states, imperialism and colonial conquest. In basic terms, political actors introduce credit systems, forms of coinage, and tribute systems that gradually snowball into larger systems. Money acts as a dissolution agent, dissolving situations of small-scale interdependence and recombining them into large-scale interdependence. It transforms smaller discrete economies into larger integrated ones.
5: The Rise of Fluid Interdependence
In simplified terms, when state-backed money spreads and entrenches itself, it eventually erodes other ways of being and sets off a chain reaction in which market-style exchange gradually moves from the periphery to the centre. An inversion happens. Once monetary markets reach a certain scale, they become like a vortex that begins sucking in other styles of economy. I’ve represented that in abstract terms below. Imagine the centre as a market vortex pulling in older styles of economy that previously had a different centre of gravity.
If you’re sitting in the centre of the market vortex, these half-integrated spaces on the edges appear like frontiers waiting to be taken over.
From the perspective of someone immersed in market society, this process of absorption is often called ‘development’.
6: The Market Worldview
A recession is a chain reaction in which people unplug connections by pulling away payments, and shrink away from interdependence as a result of anxiety about their own position. An economic boom, by contrast, involves people leaning into interdependence, setting of an optimistic chain reaction in the other direction.
This is what you’re doing when you apply for a job. In essence you’re competing to cooperate in the production process by sucking up to a relatively powerful node in the economic network: you want to become one of their inputs, by selling your labour to them for money.
The Hadza show us that human needs are finite, so this process of expansion has to involve us moving away from basic needs towards artificial desires. That’s partly why this growth impulse is sometimes interpreted as stemming from ‘greed’ - the idea that people want more and more - but greed can equally be an adaptive response to the sense of insecurity in a market. Put differently, greed can stem from fear. Fear is a powerful factor in markets, because ‘market forces’ are not necessarily under anyone’s direct control. Even Red Bull execs, who certainly have more power than their workers and more power than any individual buyer of their product, still feel anxiety about their position and feel compelled to continue the competitive struggle by pushing out new products or automating their operations.
Consider a modern society where you’re told to ‘market your skills’, as if they were discrete ‘objects’ that could be broken off from you and sold. This attempt to package elements of yourself, or your image, is commodification creeping into your inner world (or your inner ‘primary rainforest’).
In a human economy, the focus is on humans, who are seen to be the source of economic value. In a market economy, value is imagined to reside in commodities that are detached from humans. A classic hallmark of a market society is that products start being seen as having a ‘life of their own’, and one way to visualize this is through a mushroom metaphor. Mushrooms are the highly visible fruit of a largely invisible mycellial network. A ‘commodity fetish’ viewpoint would be one in which you fixate on the mushroom, and forget that the network is there. Similarly, in our economies, we fixate on detached products and forget about who is behind them, or their ecological context. Insofar as the ‘mycellial’ network of our economy is recognized, it’s seen to serve the production of ‘mushrooms’ - commodities - rather than the other way around.
** So, our underlying reality is actually cooperation, but it can manifest on the surface as a competitive struggle.** If you focus solely on that surface-level struggle, and ignore the underlying situation you’re struggling towards (which is to be locked into states of interdependence) you can imagine yourself as ‘independent’. This goes hand in hand with commodity fetishism, where you forget that there are people that you are collaborating with behind all products.
7: Coming of Age in Corporate Capitalism
In many parts of the world, new generations are now growing up almost fully immersed in corporate capitalism, a market structure dominated by inescapable mega-firms that constantly seek out new frontiers of commodification. Twenty years ago we’d struggle to conceptualize food outside a supermarket, but now we have kids who struggle to conceptualize navigation outside of Google, communication outside of WhatsApp, or dating outside of apps.
Older capitalism allowed payment without intermediation, but - in the current moment - that’s perceived as slowing down the vortex. Newer automated surveillance capitalism requires digital payments, and this manifests in the cultural realm as an ideology that says cash is ‘inefficient’ or ‘inconvenient’.
Self-help culture is characterized by a few key things. Firstly, it presents the economy as if it were some kind of natural storm that you must master. You don’t need to understand the storm - it’s simply taken as a given - but you are told that success is all about riding it. It also individualizes and depoliticizes this act of riding: the overarching vibe is ‘life’s unfair, so get used to it, stop whinging and take personal control’. Self-help culture is central within libertarianism, the political ideology the refuses to recognize that other people are core to the ‘self-making’ process. Put differently, libertarian self-help culture pushes you to fixate on the surface of capitalism, rather than the deep structure.
Some basic vibes that emerge from economics starting points, and which get passed on to its students:
- Vibe: Emphasis on individuals: Economics starts with a vision of ‘independent’ adulthood (what our microeconomics textbook calls a ‘unit’). In the first instance this is a fully grown adult, but it becomes a metaphor for larger ‘units’ like firms, industries or states. Economists then try to model how they bounce off each other
- Vibe: Emphasis on rational calculation: To do this modelling, economists must give these units a particular character. Initially, this was Homo Economicus (see Part 2), with the units being calculating, self-interested, utility-maximising entities. Over the years this has been altered (e.g. Daniel Kahneman’s work in behavioural economics made the units more ‘irrational’), but Homo Economicus is like a ghost that continues to haunt the discipline
- Vibe: Emphasis on choices: Our textbook above fixates on the choices and decisions made by the units. This might be people choosing what job to do, or what product to buy, or a firm deciding what to invest in. The fixation upon this (allegedly) voluntary choice is based on another shadow thought-structure, which is the myth of exit. Note how they present workers as having some open-ended ability to choose ‘where to work and how much work to do’. It’s almost as if they imagine that workers could choose to not work, as if we all had the option to just walk away from society, to back out of the structure and dissolve the relations
- Vibe: Emphasis on exchange: Economics de facto assumes that our primary ‘economic decisions’ take the form of exchange. Put differently, they seldom recognize any moral logic beyond formal tit-for-tat reciprocity, and don’t take seriously David Graeber’s perspective that we covered in Part 3. Any moral logic beyond exchange is either seen as outside of economics, or explainable by exchange
- Vibe: Emphasis on equilibrium: if your starting point is solo individuals who are driven (by a particular motivation) towards each other to exchange, you need a resolution point that will cause them to retreat back to a point of stability, having all been satisfied. This imagined stable state of resolution is called equilibrium
There are various other vibes that can be derived from these ones. For example, economists will often also have:
- Commodity orientations to money: if your worldview starts with floating people trying to convince each other to exchange floating commodities, you will probably also by default generate a mythology of money as a special commodity with a special power to convince. Many economists know that money actually isn’t a commodity, but will nevertheless use this metaphorical framework to treat it as if it were, because their underlying paradigm starts to tremble if they don’t
- Everything as calculated exchange: as we saw in Part 6, markets and exchange are just the ‘tip of the economic iceberg’, but - in the hands of economists - that tip often gets used to explain the base of the iceberg. This is not restricted to economists (for example, classical liberalism explains society as a contractual deal between individuals) but economists have a track record of pushing this logic to an extreme
- Depolitization: a worldview made up of solo units voluntarily trading is politically useful if you want to disguise power relations. Big banks, for example, would never use standard economics for their trading decisions, because they know that markets are driven by power and herd behaviour, but it’s politically useful for them that economists present markets as if they were driven by apolitical physics
- Object and nouns, rather than processes and verbs: This is a complex topic, but Economics often has a mechanical or ‘dead’ vibe to it, as opposed to a morphing organic vibe. That’s because, deep in the recesses of their minds, economists often picture our underlying reality as stable objects - e.g. self-contained people and things that can be labelled through nouns. These then go through moments of instability (e.g. exchange) before reaching equilibrium again. This is in contrast to worldviews that see our underlying reality as unstable change characterized by endless active processes that can only be labelled through verbs. In the world of process philosophy, for example, the apparently stable objects that economists model are actually just illusions that form at the intersection of processes
8: Economic Numbness
Regardless of motivation, many small investors imagine that investment is the act of ‘making money from money’. They might have been told that they can earn a ‘passive income’ without working by getting their money to ‘work for them’, but all of these phrases are euphemisms. As we can see in our corporate circuit, what they’re really trying to do is get a cut of the profits derived from other people’s labour, ecosystems and (in the final analysis) the sun.
In the capitalist system, profit emerges if input costs are lower than output revenues, so to reduce the former managers might seek to: Drive down wages of workers, or dominate over suppliers.
The big shareholders and senior managers of companies often like to claim that they ‘create jobs’, as if they were handing out some kind of charity. In reality, the people sitting around the BP boardroom in London make nothing unless workers actually operate their assets. They may ‘create jobs’, but workers ‘create billionaires’.
9: Ouroboros Capitalism
CEOs and other professional managers often derive their sense of self from how well they navigate a single corporation to success, as if they were captains steering a ship. Financiers, by contrast, are fickle. They’re not rewarded for standing by a specific project, and seeking to bring it to fruition against all odds. Rather, they are rewarded simply for the absolute amount of money they make. I used to work in finance, and saw first-hand how financiers are trained to scan the world for investment returns. If a company they’re invested in is looking troubled, they don’t stay loyal. They bail for the exit, or ‘jump ship’. The world of finance is all about this constant jumping from one corporation to another, seeking to optimise for returns.
This speculative mentality is damaging to the soul - it leads to financiers having a particularly shallow take on reality - but it also leads to tension between ‘financial capitalism’, dominated by big shareholders and financiers, and ‘managerial capitalism’, dominated by big CEOs. What’s called ‘financialization’ is where the logic of finance begins to dominate our economy, such that even CEOs become fickle and short-term in their actions, like a captain who is prepared to throw people and projects overboard at any moment.
Workers often end up in a situation of ‘stockholm syndrome’: they are dominated by companies, but nevertheless imagine them as saviors that they must suck up to. Consumer capitalism looms as the reward for this. Our dominant economic ideology says that you live to work, and you work to consume. Consumerism, then, is the process by which your sense of self gets attached to what you buy, rather than who you are. In a sense, financial and managerial capitalism are the ‘back-end’ of capitalism, while consumer capitalism is the public face.
These contradictions can be glimpsed if you take any point in the system and follow it along a winding path. For example, the consumer demands cheaper goods because they don’t earn enough, which pushes competing capitalists to drive down labour costs, which lowers incomes for workers, which leads to them demanding cheaper goods. Alternatively, the capitalist demands higher profits, which requires that consumers spend more, and that workers get paid less, but workers are consumers, and if they’re paid less they can’t spend more. There’s a constant angst, almost as if our system is trying to rip itself apart, and there are at least three meta-problems that emerge through this.
Humans are adaptive and can adjust their expectations and culture to their environment. Rather than accumulating a new high score every time economic growth and technology accelerates, we are just as prone to ‘rebasing’ to zero. Recognizing this becomes very important if you’re interested in thinking about what a ‘good society’ actually is. This critique of ‘high score’ concepts of progress extends beyond capitalism - it applies to any system that claims that it’s able to ‘upgrade’ society. The search for a new high score may in the end be pointless.
Saying that our system is ‘broken’ implies that it’s like a vast machine built by a designer to achieve a particular purpose, and that it’s now failed. This idea that our system is supposed to do something different to what it does is very abstract. It suggests that our system was overtly designed, when in reality our system has often been cobbled together without foresight or specific long-term intent. It also implies that there was some agreed-upon non-contradictory end purpose for this system, when in reality our system is a contradictory vortex that works at cross-purposes, not only between different people, but even within us, and with itself.
So, the system isn’t broken. It’s just doing what is does. What we call ‘utopian’ thinking, however, tends to revolve around a ‘fixing’ mentality. To ‘fix’ is to repair, but also to make stable. A utopian thinker imagines themselves like a repairman coming to fix a machine that’s broken, to return it to some perfect non-contradictory state, and then to fix that state into place for perpetuity. In reality, large-scale systems like ours have uncontrollable aspects that cannot really be fixed. So, when we make political demands to shift our system, we’re not really like repairmen. We are more like cells in a superorganism trying to will the whole towards a new state of being with a new set of contradictions.
One of the greatest problems we have in doing this, however, is that our ‘superorganism’ is so large and complex that most people can’t understand it. Even if they do understand it, they may disagree on where its problems lie. Even if they agree on where its problems lie, they find it very hard to get consensus on what to change. Even if they can get consensus, they find it very hard to coordinate that plan, to overcome resistance, and to prevent adaptations occuring in the system that will neutralise or thwart them.
10: The Re-Growths
Many people are just trying to survive, and often don’t have the emotional space or energy to think about shiftingä the structure of our world, especially when it’s so hard to see, and so hard to envisage changing. While there’s a small class of people who do specialize in thinking about how to change stuff, the majority of people in the world are employed in maintaining stuff, and often partly derive their sense of self from that role.
The first step may be to realise that our diverse and conflicting perspectives on economies often stem from a common source: the need for survival, inclusion, identity and meaning.
Paradigms of change:
- Market solutions. If you’re stuck in Capitalist Realism, the most obvious path is to seek market solutions to the problems you see, which will appear as the only ‘realistic’ option you have. This gives rise to (shallow) solutionism, in which you attempt to use capitalism to fix itself. Examples: sustainable capitalism, natural capital, social enterprise, compassionate capitalism.
- Managing and reforming. An alternative paradigm, then, involves attempting to alter the political structures that underlie it. This is what drives reformist movements, who call for regulations and policies to steer capitalism in a more positive direction, or to manage its excesses. Examples: ordoliberalism, social market economy, Keynesianism, Modern Monetary Theory, Doughnut Economics, circular economy.
- Rejecting and Replacing. Capitalism is seen to contain the seeds of its opposite, and this is supposed to lead to the emergence of systemic contradictions that will eventually break the structure and cause it to reconfigure. Believes in going directly against the systemic processes to fight it (anti-capitalism), or in heavily accelerating those processes to cause the ‘caterpillar’ to transform more quickly (left-wing accelerationism).
- Counterbalancing. The core tension revolves around whether a movement imagines itself as leading to some future ‘butterfly’, or whether it imagines itself like an opposing strand in a web, providing a counterweight to some antagonistic force. The more centrist projects imagine themselves as ‘complementing’ the mainstream system (e.g. complementary currencies), while left anarchist ‘autonomous’ zones (Christiania in Copenhagen, Užupis in Vilnuis, Exarcheia in Athens) and breakaway right-wing ‘anarcho-capitalist’ enclaves (e.g. Liberland) imagine themselves as citadels of resistance. Conservative libertarian projects also include seasteading, and - more recently - Network State thinking, which is a revised version of libertarian utopianism mixed with blockchain technology. The left-leaning version of these technological movements includes platform coops, collaborative finance (CoFi), and ‘Re-Fi’ (regenerative finance). Examples: collaborative economy, cooperative economy, commons-based economy and regenerative economy.
- Evolving. One cross-cutting paradigm is the belief that our system can be pushed towards ‘evolving’ into a new state.