In last week’s post, I referred to what I call the Dogma of Money as one of the three main drivers of modern Western civilisation and its reign of quantity (as Rene Guenon termed it). It’s worth expanding on this idea somewhat because many of the enormous problems facing society at the moment revolve around it. The neoliberal agenda elevated the Dogma of Money to the central role it now plays in governing our lives and those chickens are coming home to roost as we speak.
If the modern economy could be summarised in a single rule, it would be this: monetise everything. That’s why we have the obsession with GDP, which is a measurement of monetisation. Frederic Bastiat pointed out the limitations of this approach 150 years ago. When you focus entirely on quantitative results to the exclusion of lived reality, you end up where we are now with all kinds of obviously toxic things going on and a governing class that couldn’t care less because they see their job as solely about making the numbers go higher (which is also what happens when you elect managers instead of leaders).
Like so much of our world these days, this focus on quantitative measurement began in earnest during the world wars. The use of GDP and similar metrics made sense in that scenario because the whole economy had been turned towards the war effort. You didn’t need to qualitatively investigate what was being produced because you already knew it was the food, uniforms, and weapons needed by the troops. The vast bureaucratic apparatus that we now take for granted was created in that environment, and, it has to be said, bureaucracies do a good job when you give them a repetitive task to do over and again. They are organisational machines.
The use of quantitative methods was not only justified because the whole economy was on a war footing; it was valid because the wars were a contest to see whose economy could produce more stuff. If memory serves me correctly, it was Ernst Jünger who said that WW1 could be divided into two parts. The first half was relatively tame and civilised. The second half became a battle of volume. As war production hit its stride, both sides began launching enormous quantities of bombs against each other. In the end, Germany’s loss was mostly economic in nature. It couldn’t outproduce the Allies once the United States joined the fray.
The same dynamic held in WW2, and it was once again the United States which tilted the scales by ramping up its economic production and distributing the goods not just to Britain but, perhaps more importantly, to the USSR. In any case, it was once quantity which won the wars and that’s why quantitative metrics like GDP were perfectly valid.
It’s fitting that GDP only measures monetised production because war is always facilitated by money. Professional soldiers have always needed to be paid. But even modern conscript armies need money. Napoleon’s conscripts were given a wage, as were the soldiers in the world wars. In addition, modern warfare also requires vast payments to the companies producing the things needed to prosecute the war. Therefore, because the entire economies of the combatant nations were turned to the war effort, the two world wars represented an unprecedented monetisation of society in general.
Because we live in the aftermath of that, it’s hard for us to imagine that for most of history “the economy” revolved around non-monetary transactions, including all the economic activity that takes place in the household. At least here in Australia, prior to the wars, anybody that had access to land would use it to grow vegetables. If there was enough space, you’d have backyard chickens. There’d invariably be a lemon tree in the corner of the yard too. People expected to make and mend some of their own clothing, cook their own meals, and generally produce things for themselves. This kind of home production is non-monetary in nature.
It was this informal economy that was elbowed aside during the wars as every last resource was siphoned into the war effort, all of which was facilitated by monetary transactions. Because Australia was far away from the actual fighting, one of the side effects of this was to create a mini-boom in wages, which led to things like a spike in public drunkenness as people splurged their newfound wealth. Some politicians here complained that the public were not saving enough of their earnings and thereby reinvesting into the war effort.
In any case, we can see that the paradigm for the post-war economy was created during the worlds wars. The original purpose of growing the monetised economy had been to defeat the enemy. But what would be its purpose once the enemy was defeated? What happened was that “the economy”, which now referred exclusively to monetised transactions, became an end in itself. The purpose of growth was more growth. The GDP went from being a fairly useful measure of wartime production to a quasi-religious indicator of economic virtue.
While the Cold War was ongoing, this fixation on the economy still had some element of higher purpose in the fight against communism. But the collapse of the USSR put an end to that. With nobody left to fight, we elevated the economy to the rank of demigod through the neoliberal agenda. The last vestiges of the notion that the economy should serve some higher purpose were dismissed. It would now be society which was subordinate to the economy.
Of course, the financialisation process had begun well before then. The neoliberal agenda simply elevated it to the official state religion; well, the globalist religion. The result is a system that runs on the very simple rule that we mentioned at the beginning of this post: monetise everything. Finance has now been allowed to intervene in every aspect of life. Nothing happens anymore without money changing hands.
Perhaps the easiest way to see that is to look at all the activities that would once have belonged inextricably to the non-monetary economy of the household. Nobody even has the idea of growing their own food anymore. Making or mending clothes is a forgotten skill. The raising of children has been outsourced to schools and childcare centres. Even the preparation and cooking of food has been handed over to the market, if the prevalence of food delivery drivers on scooters is any indication. The household is now a place of consumption, not production. It, too, has been monetised.
So complete has the financialisation process been in the last few decades that, at this point, you’d have to say that we are running out of things to monetise. Perhaps the next step will be to start charging people for the privilege of existing. How about a fixed rate of $1.95 for every hour you’re alive. We’ll call it the Life Tax. Or maybe $0.01 per breath taken: the Oxygen Tax. Wim Hof could adapt his deep breathing technique to help lower the amount of tax us useless breathers need to pay to the bankers and bureaucrats.
Jokes aside, it really does seem that we have now entered a period where there is nothing left to monetise and the financial system is metabolising society instead. We need to get back to the idea that the economy should serve us, not the other way around. In order to get there, however, we’ll have to figure out some value system other than the Dogma of Money.