By Edgar S. Cahn
We have a fixation on money. Now we call it by a fancy word, financialization. But the problem that fiscal fixation creates was captured centuries ago in an ancient myth, the myth of King Midas. As the story goes, Midas wanted gold, lots and lots of gold. He never had enough and wanted everything he touched to turn to gold. And he got his wish – only to find out that the touch came with its own curse, its own pathology. First, it made all his food inedible metal; then it turned his daughter into a lifeless statue.
Like Midas, we are driven and controlled by the need for money. In this money centered world, dialogs with government and foundation officials, with investors, businesses and non-profits, with communities and families are relentlessly framed in monetary terms: cost-benefit, return on investment, risk assessment, deficit reduction, opportunity costs and Gross Domestic Product. Our world is a world of numbers defined by the flow of money. Value is defined by price; present value is derived by discounting the future, and future value is projected from our assumptions about interest rates. We translate the value of things and people into the language of costs, price and economic exchange. And we are monolingual – we only speak money.
To understand why and how a fixation on money foreseeably produces unwanted outcomes, we can look to lessons the Irish learned from farming just one crop – potatoes – centuries ago. Potatoes were what everyone ate. They became the crop on which the Irish farming economy depended. One particular type of potato, the Irish lumper, became the sole subsistence food for one third of the country. The potato had three times the caloric value of grain, was cheap and easy to grow and slow to spoil. In addition, potatoes also provided the food for livestock, Ireland’s primary export to Britain. It was easy to overlook one flaw in that seamless cycle. There was a certain fungus, phytophthora infestans, to which that specific type of potato was distinctively vulnerable. It came to be known as the “potato blight.”
In 1845 between one-third and half of Ireland’s potato crop was destroyed by this fungus It is estimated that at the eve of the famine 30% of Irish people were largely or wholly dependent on potatoes for their food. By 1846, the entire crop had been wiped out. A recurrence in 1848 and 1849 wiped out subsequent crops. By 1851, 1 million Irish – nearly one-eighth of the population — were dead from starvation, cholera and nutrition-related disease. By 1855, 2 million people had fled to Canada, the United States, Australia and elsewhere.
The story of the Irish potato famine may not be exactly parallel to the tale of King Midas – but Midas presumably would have starved to death just as surely as the impoverished Irish. His obsession with a narrow form of wealth dehumanized everything and everyone around him. He could only see their value using one narrow yardstick.
When the great economist John Maynard Keynes accused human societies of being capable of shutting down the sun and the stars “because they pay no dividends”, he was speaking at least in the tradition of an enlightened Midas. But the potato famine suggests a secondary implication for the ancient story – that, if transforming everything into precious metal paradoxically impoverishes, so does the kind of monoculture that emerges as a result of this kind of myopia. And monoculture, because of its reliance on a faulty and narrow fixation on desired outcome, is what this paper is about.
Our learning from what dependence on potatoes meant can be summed up in general principles that characterize what risks associated with any monocultures. Plant just one crop – and three consequences follow: (1) The entire economy depends on that crop. (2) The soil on which that crop relies is depleted and so future plantings require purchases of fertilizer and pesticide (3) That crop becomes vulnerable to viruses and pests which adapt to extracting nutrients from that crop.
Reliance on one Crop We can analogize Ireland’s exclusive reliance on potatoes for food and cattle feed to our peculiar and growing reliance on the finance industry. In 2008, the finance industry underwent a failure analogous to the Irish Potato famine. The crisis took the form of a liquidity crisis triggered by bursting of the US housing bubble which caused the values of securities tied to real estate pricing to plummet. One third of the value of the world’s companies was wiped out by this crisis. Bank failures, fiscal crises, budget deficits and a deep recession have all provided a continuing reminder of the fragility of our underlying financial system. That’s what happens when a monocrop fails.
When a monocrop goes down, the poor and most vulnerable are hit hardest. That happened in Ireland. Likewise, in the USA, the greatest impact of the 2008 recession was felt by minorities. Various studies report that between 2005 and 2009, Hispanic households lost 66 percent of their wealth and black households lost 53% compared to white households which lost only 16 percent. By 2010, when the overall unemployment rate was approximately 10 percent, it was 16 percent for blacks and 13 percent for Latinos. In the richest nation in the world, 45% of African American children, 39% of Hispanic children and 51% of the children in public schools lived in poverty.
Extraction of moral nutrients from the soil of community. Monocrops do not grow naturally, so in order for them to flourish we have to make changes to the entire ecosystem. In the same way a monocrop extracts critical nutrients from the soil, a fixation on the pursuit of money drains personal relationships, depletes informal support systems, commercializes professional callings and contaminates democratic processes. Just as a monocrop requires us to buy fertilizer and pesticides produced by others, so too, in the civic domain, the loss of organic support systems and the erosion of social networks escalates dependence on paid professional services provided by the non-profit industrial complex.
We have witnessed this parallel depletion of trust, of community engagement, of social networks, of associations in the civic domain. Putnam sounded the alarm in Bowling Alone, noting that attendance at a public meeting on town or school affairs was down 35%; service as an officer of a club or organization, down 42%; service on a committee for a local organization down 39%; membership of parent-teacher associations: down 61%; average membership rate for thirty-two national chapter-based associations; down almost 10%; and membership rates for men’s bowling leagues: down 73% (Ferguson, The Great Degeneration p117).
The civic sphere has its equivalent to the fertilizer and pesticides that agribusiness relies on to compensate for monoculture cultivation and extraction. As our civic version of pesticides for infestations, we rely on prisons, police sweeps, juvenile penitentiaries aka training schools, suspensions from school, aggressive prosecutions of female-headed households for neglect and abuse. As civic fertilizer imported to compensate for the depletion of organic social capital and functional communities, we resort to nursing homes, foster care, obligatory community service to receive subsistence income (TANF), enrollment in the military, and special education programs (IEP) to supply the equivalent of enhanced social interaction associated with middle class families. For those coming out of institutionalized settings, we have re-entry programs of dubious effectiveness. These institutions are all built in order to support the monocrop, either directly, or by managing the unnatural consequences in the changed environment.
A monocrop is peculiarly vulnerable to viruses and pests which siphon off nutrients from that crop. Financialization empowers crony capitalism, augmenting the political power of the wealthy. Not too long ago, Occupy Wall Street brought to national consciousness the extent to which the finance industry has extracted the abundance generated by our economy and channeled it to the wealthy. The stock market more than doubled in value since the recession. Since the richest 5% own about 80% of all non-pension stocks, guess who got it? Disparity widens the further one goes up in the income distribution. The top 1% of income earners went from receiving roughly 10% of all pre-tax income from 1950 to 1980 to receiving approximately 20% of all pre-tax income. And fully half of that gain (10%) went to the very top .01%. That one-hundredth of a percent went from receiving 3-4% of all pretax income to receiving 10% of all pre-tax income. The richest 5% of households gained at least $1.6 million in new wealth. If the US had the same income distribution it had in 1979, each family in the bottom 80% of the income distribution would have $11,000 more per year in income on average, or $916 per month. Yet, half of the U.S. population lives in poverty or is low-income, according to U.S. Census data.
The financialization of our economy relegates citizens in a democracy to two functions: being a consumer and getting money to be a consumer. How much we are valued as consumers was made apparent by George Bush’s exhortation to the nation to “go shopping” as the way to affirm our country’s core values and resilience after the 9-11 terrorist attack. As workers earning money in order to consume, we are simply a cost factor that must be reduced by automation or by outsourcing to developing nations that can provide a less expensive workforce. When financialization takes hold, the promise of monetized systems to supply all fails more and more of us. As workers earning wages are squeezed, they rely more and more heavily on debt which feeds the financialization bug – and owners of capital gain more and more power and wealth.
The result is the depletion of our shared sense of purpose and well-being. System after system – public education, child welfare, juvenile justice, family support, neighborhood development, elder care – exhibits various stages of dysfunction and malfunction. Financialization overwhelms and subsumes remedy via the political process. Corporations are persons with First Amendment rights according to Supreme Court decisions. Laws imposing limitations on corporate expenditures in politics to promote corporate interests have been struck down as interfering with their exercise of the rights of association and speech protected by the First Amendment.
Government becomes the scapegoat. And we increasingly lack trust in our own collective capacity to do anything. Ultimately, we lose faith in our ability to take effective collective action. We learn how to distrust each other – unless it comes with the dollar’s imprimatur: In God We Trust.
What to Do
In agriculture, we have developed ways to deal with the consequences of a monocrop: (1) planting different types of crops, (2) diversification that restores the nutrients that the monoculture has extracted, (3) letting the land lie fallow, (4) crop rotation. All of these create a polyculture that offsets the damage done by monoculture without eliminating the original monoculture crop. In different ways, they substitute a long term return that promotes sustainability for the short term profit generated by monocrop farming.
Given the dominance and power of the Midas monoculture, what can be done to mitigate its controlling and deadening impact? What if we approach social problems as byproducts of our reliance on a monetary monocrop? What would polyculture look like? How do we create an ecologically healthy economy? How do we bring life forces back into neighborhoods and into community? How do we restore the quest for justice to economics?
What might be the civic equivalent of diversification, crop rotation, letting the land go fallow and organic farming?
In agriculture, polyculture offsets the three negative consequences of monoculture:
- Providing resilience that mitigates the disaster that would otherwise cascade from the failure of the monocrop;
- Restoring nutrients to the soil that the monocrop has depleted; and
- Warding off the fungi, pests and rodents that have adapted to extract sustenance from the monocrop.
The challenge is to set an analogous process in motion to advance the emergence of a civic polyculture that can cumulatively mitigate or prevent the externalities generated by the Midas monoculture.
The quest is urgent: Our present crony capitalism will continue to drive growing disparity exponentially. Structural racism remains pervasive and feeds despair; millions of children go hungry for lack of food; despair finds expression in withdrawal and in violence; political polarization is on the rise reflecting a deeper public rift on the role of government and the terms of mutual interdependence; democracy has been radically undermined by superpacs; politicians reward the rich with new tax cuts, funded by increase the deficit and cutting basic desperately needed basic health care. Meanwhile the profit driven extraction of natural resources puts in jeopardy the planet’s capacity to sustain life.
So then, how do we create the civic equivalent of polyculture? What does that mean? How do we initiate it? How do we enable it to go to scale? This Article submits that getting to a healthy civic polyculture involves a three step process: Reframe, Diversify, Renew.
Reframe: – Economics needs to acknowledge the centrality of the Core Economy
Creating a healthy civic polyculture involves reframing our understanding of economic growth and prosperity. That reframing starts with understanding that home, family, kinfolk, neighbors, community and civil society constitute a special economic sphere where exchanges of value happen all the time – but those exchanges are driven by values other than market price.
To be sure, economists have long acknowledged the existence of an economic sphere outside of market. Designated the “non-market” economy, it includes illegal transactions, drug dealing and money laundering. Those activities, while not formally included in the Gross Domestic Product are driven by money and are not our concern.
Our interest is in the economic sphere of household and community which provide the basic ecosystem for our species. In the 1970’s, Hazel Henderson dubbed it the Love Economy. Neva Goodwin, an ecological economist, has designated that subsystem the Core Sphere of the Economy. Regarded as separate, the Core Economy generates a volume of activity estimated to equal at least as much as 40% of the GDP. A partial catalog of the Core Economy’s productivity would include: rearing children, preserving functioning families, creating safe and vibrant neighborhoods, caring for the frail and vulnerable, standing up for what’s right, taking a stand to oppose what seems wrong or unfair, producing a workforce (including corporate CEO’s) that doesn’t steal, holding officials accountable, and incubating civic movements that mobilize to create change and advance social justice.
In designating that non-market sphere of life as an economy, we return to the root Greek word, Oeconomica – management of the household — from which the term “economics” originated. The Core Economy has always played a critical role in addressing basic needs. It is the economy that needs revitalization and growth. It took decades for environmental economists to get us to appreciate that natural ecosystems provide critical life support services that even a multi-million dollar biosphere was unable to duplicate. It wasn’t until 1985 that scientists realized the significance of what their instruments had been telling them since 1976: that there was major thinning of the ozone layer in the stratosphere.
In much the same way that we ignored the ozone layer, we have ignored, overlooked, and undervalued the Core Economy as if we could always count on family, neighborhood, community, and civil society to be infinitely resilient, capable of absorbing all manner of toxicity and yet retaining adequate residual capacity for self-renewal.
Moving from the Midas Monoculture to a Polyculture begins with a recognition of and concern for the entire ecosystem that supports life – for our species and for other species. Home, neighborhood, and community are the ecological niche of our species. Efforts to create a civic polyculture represent an environmental preservation effort for that ecosystem.
An ecosystem perspective provides the starting point from which to protect and restore the fragile human biosphere that requires trust and decency, that nurtures healthy neighborhoods, nurtures children, cares for the elderly, preserves basic human rights and sustains democratic governance. The survival of our species depends upon the restoration of our habitat. We need to restore the Core Economy to health and vitality. But what does that entail? How do we do it? How might we get there?
We begin with this reframing that incorporates the Core Economy as central to economics. We proceed then to ask how best to diversify in order to advance a civic polyculture that values types of activity that the market does not value. That will require reliance on mediums of exchange other than money. We need to elevate their role.
Diversify– Breaking money’s de facto monopoly as definer of value.
Government creates our money supply primarily by authorizing banks to make loans on which they charge interest. Our regular money supply need not be the only game in town: on that front, Bitcoin has provided a kind of global wake-up call. But a fundamental distinction needs to be made between alternative currencies and complementary currencies.
Bitcoin is an alternative currency. Alternative currencies seek to be a substitute for money. Pricing in alternative currencies tends to mirror market pricing in government-issued money.
Complementary currencies (such as learning credits and time credits) are different. They are complementary because they define value differently from monetary price. Thus, learning credits measure the acquisition of knowledge or the development of some functional competence. Earning them takes inputs of varying amounts of labor. The competence or expertise they confirm may vary in market value. A degree in philosophy may vary in market value from a degree in engineering, but an earned credit (reflected in a transcript or certificate or degree) reflects a level of mastery recognized by others.
The ability to transmit learning gained across generations should rank high on a scale of Darwinian assets; humans had learning going on in the caves and jungles. Since the thirteenth century a system of degrees (Bachelor, Master and Doctorate degrees) came into existence and degree granting authority empowered universities. In the 1900’s, the Carnegie Unit and the student hour became adopted for measuring educational attainment.
Learning credits conferred by decrees, certificates, academic credits, and licenses constitute a medium of exchange that defines and confers value in distinctive ways. Examples include service learning, practicums, internships, community service requirements, residencies and clinical education.
Historically, learning, whether formally recognized or not, has both intrinsic and extrinsic value. As human beings and as citizens, we explore and we learn to act more wisely, to appreciate ideas and culture, to deepen our connections with our past and with others. While learning has an instrumental value as a pathway to employment, the sense of meaning, purpose, growth and personal fulfillment gained from learning transcends market value.
Sources of credentialing can vary. Professional associations and licensing authorities can establish levels of expertise and specialization. The recent decision by the Boy Scouts to extend access to Eagle Scout status to females demonstrates how organizations can expand access to measures of value stemming from membership linked to learning and performance.
As a medium of exchange, learning credits produce labor and services that would not be available otherwise. They also define a culture, a legacy, a sense of identity, a community of shared values that is unique.
Originally called service credits, Time Credits are an indirect product of President Johnson’s War on Poverty. The legislation implementing that effort required “maximum feasible participation of the poor” as a core element of anti-poverty programs. Compliance with that requirement generated extraordinary results. Programs started systematically enlisting clients as essential partners and coworkers needed to run Head Start, the Job Corps, Foster Grandparents, Manpower Development Programs, and Community Action Programs. Those programs surfaced a vast, untapped store of human capacity in the most disadvantaged communities. Discretionary grants generated legions of nonprofits with leadership honed during the ‘60s and ‘70s. All of this was paid for by money – but that was before profit making became our national fixation and financialization became ever more dominant.
When funding cutbacks ensued in the ‘80’, TimeBanking emerged as a new complementary currency to address critical needs and to harness the vast capacity that the civil rights movement and the war on poverty had made visible. The first Time Credit programs were funded by the Robert Wood Johnson Foundation as an initiative to provide support to enable frail elderly persons to remain in community. It did not take long for creative thinkers to apply TimeBanking to multiple social problems.
Every time bank follows a few basic rules: All hours are equal in value, regardless of whether a member provides a highly skilled professional service or simply drives another member to a doctor’s appointment. Members earn time credits by helping other members or by engaging in some joint initiative that addresses a specific problem, generates mutual support or builds a sense of community. Walking a dog, holding a neighborhood potluck, writing a report for an organization, organizing home visits for persons discharged by a hospital all earn time credits. The sponsoring organization determines which activities it wants to promote that will advance mission.
Time credits are not for sale and cannot be converted into money. Members can spend time credits only on labor that builds community resources, furthers a charitable purpose, provides personal support, or remedies a social problem. When a member receives an hour of service, there may be a moral or social obligation to pay it back, but there is no legally enforceable obligation to do so. (The US Internal Revenue Service has ruled that because time banks are not commercial barter organizations, time credits do not count as taxable income.)
TimeBanking provides a vehicle to link the monetary and core economies. That currency enables all persons to utilize their time to define and validate their status as a contributor and a social asset. In varied programs using Time Banking, persons classified as unemployed or unemployable — arrested teenagers, disabled and elderly persons, undocumented immigrants, home-comers returning from prisons — have each been enlisted as a work force in programs having a transformative impact on previously intractable social problems.
New possibilities emerge when complementary currencies function as mediums of exchange that document value that is needed and recognized by others. Thanks to technology, the potential of such mediums of exchange to generate and reward labor is just now beginning to be more widely appreciated. As experiential learning gains acceptance, service credits and learning credits can complement each other, overlap, or merge. Both break the de facto monopoly of money as the definer of value. Both can be of critical importance in restoring the core economy and birthing both a monetary and a civic polyculture.
One example: Every student at the University of the District of Columbia School of Law takes a required course, Law & Justice in which students must earn forty time credits logged in the law school’s own Time Bank. Once they have fulfilled that requirement, they remain members of the TimeBank, available to help each other or to develop student generated initiatives.
That TimeBank at the law school was established to build community, reduce cutthroat competition, and generate diversity in first year study groups. Many students earn those forty hours helping seniors learn about benefits to which they are entitled. That triggers a kind of generalized reciprocity. To secure these services from the law students, the seniors enroll in a community Time Bank to pay-it-forward by helping others in their senior complex and by spreading word both about the law school’s services and about TimeBanking.
Renew: Co-production as Incubator
We have inadvertently created a society where all too often the only way the most disadvantaged and disenfranchised residents can get official attention and services is by having a need, problem or disadvantage that triggers intervention. Historically, the development of entitlements represented a major advance over discretionary charity for society’s unfortunates. But apart from conferring a benefit based on specified need or past service, entitlements are not designed to identify or enlist the present strengths and capacities of the recipient. Yet, eligibility for a benefit does not preclude having untapped capacity that may be invaluable to rebuilding the Core Economy. Co-production is about activating that capacity in one previously defined only as a recipient.
Our ability to listen to each other, to care for each other, to comfort each other, to come to each other’s rescue, to recognize and oppose what is unfair, and to come together in small groups to make things happen are universals; they define us as human beings. They are not scarce – so they may have little or no market value. But that residual capacity is what animates the world of peer support, of extended families, of elders helping elders, of youth groups, of neighbors helping neighbors, of seniors sitting on front stoops, on affinity groups and networks that come together. It galvanizes the collective efficacy that make neighborhoods safe. It is the ground source of movements for social justice. And it is the world of place, the social world that sets unspoken, internalized norms that shape behavior. That is the world that can birth polyculture.
Both learning credits and time credits require an institutional or organizational base to issue them and to direct their use to address unmet needs. Currently, those institutions – non-profits, educational institutions, government offices – are funded by rendering services. Their income depends on the services that staff provide.
But what if non-profits also could be funded for the services that they enlist their clients and their communities to render? Community based, faith-based, civic and educational organizations could provide the infrastructure needed to mobilize the community and recognize contribution. Their clientele, their membership, their enrollees then become co-creators and co-producers of the efforts that contribute to greater community well-being. Faith-based organizations and health-care organizations could function as catalysts by hosting TimeBanks for their clientele.
Example: Currently, the Archdiocese of New York operates New York City’s largest non-denominational TimeBank. Over 1,600 members have exchanged almost 58,000 hours of service since 2014. Members earn credits by shopping for groceries, providing escorts to appointments, fixing home appliances, placing friendly phone calls or prayer calls, knitting blankets, and more. The credits earned can be spent for classes in calligraphy, English, Spanish, cooking and trips to the museum. The bank creates a community where members make new friends and share home-cooked food at monthly potluck dinners, and teams pitch in when anyone comes home from the hospital and needs a support system. Surveys of those both giving and receiving the services show improvements in self-reported physical and mental health and reductions in social isolation.
Co-production is the name that TimeBanks USA has given to that partnering process. The intentional initiation and nurturing of co-production is needed, more than ever now, to rebuild community, to remedy intractable disparities, to advance social justice and to enable non-profit organizations and institutions to realize their mission.
Reviving, renewing or restoring the Core Economy in order to offset the externalities generated by the Midas Monoculture takes a process. Initiating that process takes change: change in the ways that human service organizations, institutions, and professionals function; change in the ways that recipients can be enlisted to “pay-it-forward”; and change in what funders support, reward and even require.
Educational, faith-based institutions and community-based institutions can transform the King Midas monoculture by initiating or forming partnerships to launch and administer co-production initiatives. Faith-based institutions can literally give new currency to spiritual values. Nonprofits can redefine what non-profit means utilizing Time Credits and Learning Credits that transcend bottom-line bookkeeping. Each Institution of higher learning could realize its own mission more fully by asking how it might enlist those whom it serves as co-producers. By combining three currencies — learning credits, time credits and tuition credits – educational institutions can enlist and enroll entire communities to embark on a learning journey to address critical problems. They could grant associate faculty status to local architects of system change who pioneer service-learning projects. Their students would experience learning as an opportunity to expand the range of the possible in projects that address critical social problems by enlisting those whom they help as partners.
Educational institutions are at the frontier, wrestling with the question: what is the future of work in a world of robots and artificial intelligence? Co-production initiatives, utilizing complementary currencies, will generate new answers. In partnership with faith-based institutions and non-profits, we can choose collectively to embark on a new phase of evolution – social, intellectual and ethical evolution for our species.
In a world preoccupied by an unbridled quest for money and power, we are living with the political, economic, social and environmental equivalent of Midas’ preoccupation. Midas saw the error in his preoccupation with gold as is the exclusive measure of value – but it took the loss of his daughter to appreciate the necessity for radical change. Social justice, the daughter of democracy, is at similar risk. An exclusive fixation on money and more money won’t enable us to nurture the values, generate the effort, or enlist the people that money does not value. Standing alone, money and market will not generate or sustain the effort needed to preserve the resilient sustainable ecosystem our species needs to survive.
We cannot allow money in its current form to continue to dominate how we measure value. We cannot exclude types of work that reknit community and advance social justice simply because the market does not reward it and contributors are not regarded as participants in the labor market. Central to this ecosystem is the world of work described by Marilyn Waring in her path breaking book, If Women Counted. But counting is only the first step.
To make this transformation, we need mediums of exchange that recognize all forms of contribution. We can develop initiatives and credentials earned by engagement that advance civic polyculture. Web-based information technology now enables us to document and validate contribution and efforts not valued by the market economy. It is time to undertake a conscious, collective effort to break out of the Midas monoculture.
We have what we need – if we use what we have.