Morality & the Meaning of Money

Dreams of individual accomplishment and desires to contribute to the common good become firmly attached to waged work, where they can be hijacked to rather different ends: to produce neither individual riches nor social wealth, but privately appropriately surplus value.

- Kathi Weeks, “The Problem with Work”

Capitalism lures us onward like the mechanical hare before the greyhounds, insisting that the economy is infinite and sharing therefore irrelevant. Just enough greyhounds catch a real hare now and then to keep the others running till they drop. In the past it was only the poor who lost the game; now it is the planet.

- Ronald Wright, “A Short History of Progress”

In our last post, we looked at the national debt, the debt ceiling, government bonds, and bunch of other economic stuff. There were lots of numbers and percentages, and some callbacks to earlier entries on this blog, from the Transparent Trojan Horse to the Polarization Industrial Complex.

But for this piece, let’s talk about morality, the work ethic, and the general meaning of money in today’s America. I’ll go lighter on the numbers and try to keep it as conversational as possible.

Let’s start with the basics. What is money? What does it represent? What is behind it? The first thing to note is that money is not connected to anything physical any longer. Once upon a time, money was backed by gold or other precious metals, things that supposedly held worth more than any wispy ideations of value. But no countries in the world use the gold standard any more, because it is not a framework that can work for a modern global economy. The US has not been on the gold standard since 1971, and the last country to have some ties to gold was Switzerland, which severed those links in 1999.

Well, if money isn’t backed by any physical substance, then what props it up and gives it gravitas? The answer is that money is a distillation of the multitudinous interactions of a society itself, including political structure, legal arrangements, interpersonal customs, economic relations, physical infrastructure, and tax regimes. All of these relationships, and more, give form and substance to the stability or instability of any particular currency. A country’s money is only as valuable as all of these other social connections are reliable.

The value of the US dollar, then, is a cipher for the stability of our nation as a whole. More than 65 other countries peg their currency to the US dollar, and 11 countries use the greenback directly as their official currency. The USD is the global reserve currency as well, and key commodities like oil and gold are mostly priced in US dollars, because our currency is regarded as the most stable, flexible, and liquid asset on the planet. At any one time, there is around $7 trillion in USD held in other countries’ own reserves, on top of the additional $7.4 trillion held in US government bonds that we reviewed in the last post on the ‘national debt.’

So money is a crystallization of the stability and productivity of a political unit, not just an economic unit. People use US dollars not just because the American economy churns out private profit, but because the US government always pays back principal and interest on its bonds, and because our political structure reinforces contracts, patents, copyrights, trade agreements, treaties, and other legal and logistical infrastructure elements, allowing economic actors to operate with confidence.

Unfortunately, the problem is that our political and economic leaders currently run the show so that the financial sector can reap enormous rewards, big corporations can monopolize the business landscape, and the hyper-wealthy can expand their capture of the country’s wealth and resources. This is made possible because the US long ago crossed the threshold where profits had to be rolled back into the production process (including labor) to allow for continued growth. Businesses have mastered the art of churning out big rates of profit without having to invest a lot in the human-skill part of the equation. Automation, information technology, global supply-chains, contract and part-time work, global trade agreements, the evolution of international business law — all of these developments have funneled money upwards at an accelerating pace.

The result is an economy and society where money and power are easily attainable for those who already have them, and scarce for everyone else. Ours is a system evolved to concentrate wealth and influence in a smaller and tighter plutocracy, and that is the de facto truth underlying our political and economic stability. That is the brute, overriding political message of our society: abundance all around, but very difficult for most people to get a sniff of it.

So while this political-economic reality is clear to the plutocrats, who are literally playing by a different set of rules that they themselves have written, these truths must be hidden and/or explained away to the rest of us. Enter the work ethic and the moralization of money. Despite its obvious falsity, we still cling to the ideas that labor is virtuous, that money should be scarce by design, and that everyone should have to work their asses off to ‘make a living.’ Our deep evolutionary brains are here co-opted to buttress these notions, as we are hard-wired to look diligently and intensely around us for cheaters and free-riders. This is a mental framework that makes sense in small foraging groups with no continuous food surplus, but it is a poor guide to the realities of a modern industrial society.

At the top levels of our economy, wealth and power have almost nothing to do with morality, hard work, or social value. Significant chunks of the plutocracy are amassed through inheritance and passive rent returns, which have nothing to do with ethical purity or virtue. Does anyone believe that Jeff Bezos or Elon Musk are millions of times more noble or diligent than a firefighter, a teacher, or an elder healthcare worker? Are hedge-fund billionaires creating vastly more social utility than plumbers, nurses, or garbage collectors? Do Bill Gates and Warren Buffet work 23 hours a day, 365 days a year, while the rest of us layabouts only put in a measly 40-hour week?

We all know these things. We all know that, in the real world, money has almost nothing to do with morality or virtue, and yet we continue to operate as if it does. This creates huge problems for public policy. If we continue to pretend that money, labor, and virtue are tightly connected, then we will continue to push hard for re-inflating the economic value of labor, even if all of the macro-trends in economics and technology are driving everything in the exact opposite direction. In our desperate attempt to make social improvement contingent on more money for working, the we’ll continue to NOT look at wealth distribution, because we still see the wealthy as virtuous, and all of their profits as the result of hard work.

But in a plutocratic society, this means that the only road open to us is to pursue more economic growth, in hopes that the sheer volume of transactions will overwhelm our awareness of the underlying unjustness of the distributional system itself. It means that public policy will focus on more “fixing” the people (better known as “workers”), so that they better fit the current demands of the marketplace. And that carries over into the language of national competitiveness, national achievement levels, the pursuit of a world class workforce, etc. We can’t let the Chinese ‘win,’ for God’s sake.

Our political propaganda classes run all of this through the virtuous, laundering filters of education, entrepreneurship, people fulfilling their dreams and reaching their full potential, etc. But this all feeds, and feeds off of, the idea that money is a by-product of hard work, determination, and discipline. And while there are certainly some systemic injustices that block this boulevard of dreams for many, the goal of public policy should be to eliminate those barriers, to level the playing fields so that the natural fairness of the system can be unleashed, where all can fulfill their dreams and find their fortunes.

Every inspiring story of a celebrity who has overcome adversity to reach the heights of success only contributes to this false narrative. Again, our evolutionary brains betray us, as we are hard-wired to be captivated by personal dramas, making these rags-to-riches tales irresistible. But they are not reflective of actual social reality at the macro-level. No matter how hard we try, everyone cannot be rich. Everyone cannot have an amazing education and a thrilling career. We cannot be Lake Wobegon, where everyone is above average, a nation of surgeons, millionaire app-designers, and highly-paid union electricians.

Rather, these are the realities:

• The economic value of human labor is declining, in the US and globally. Nothing will reverse this trend, because labor-saving technology (surprise, surprise)… saves labor. Don’t be deceived by the temporary wage increases spun out by the post-Covid adjustment of the labor market. Businesses have too much power to ever allow labor to be in the driver’s seat for real. The downward drift of labor-value will continue.
• Income and wealth inequality are also increasing, both nationally and globally, as the same technological tools of power that degrade labor-value also allow for the hyper-concentration of control and influence of those already at the top. Nothing will reverse this trend either, as the plutocracy has easily captured the organs of government and mass communication, which ensures that we all stay on message.
• To keep regular people in line, we’re fed just enough crumbs to keep us out of the streets (most of us, at least), and then given pipe-dream desserts, visions of glittering techno-green utopias or nostalgic revanchist theocracies. To achieve any of these dreams, of course, money must still be kept scarce for regular people, and overall economic growth is needed to provide enough cash to those who must still work hard to get it.
• And all the while, that growth is consuming the planet.

In these circumstances, a constructive vision of designed contraction is unthinkable. But that is exactly what we need.

Cover image: “The Harvesters,” by Pieter Bruegel the Elder (1565)

Originally published at http://entropolitanblog.com on February 23, 2023.