Thinking Toward a New Economy

We're accustomed to thinking of money and possession as real, tangible things, when in reality both are imaginary. Until we face up to this and reconsider the implications, we will never be free of the lazy habits of mind that trap us all in our present economic predicament.

Money simply does not exist in and of itself. It doesn't have a fixed value. It doesn't represent anything.

Until 1971, true, all convertible currencies were ultimately backed by an international monetary system that rested on the U.S. dollar, which in turn was theoretically backed by 35 ounces of gold bullion. When Richard Nixon devalued the dollar, the international system put in its place a parallel purely symbolic unit, the Special Drawing Right, which was initially supposed to represent the theoretical value of US$ 1,00 = 0.888671 grams of fine gold.

Of course, the dollar value of gold (and conversely the gold value of dollars), is a moving target in actual living experience. There is no such thing as an SDR.

In brief, in and of itself, money is a fiction. We all work for and dream of and believe in (our national religion is really the worship of the dollar) something that, in reality, doesn't exist.

The second customary thought we must abandon is the notion of the right to possess. No one really owns anything.

Sure, if I go into your house and take your computer, you can call the cops, have me tried and put in jail. In theory, society gives you have the power of coercion to your computer as yours and not mine.

Note, however, that in some less safe neighborhoods, where cops are not in evidence, your chance to exercise your property claim is highly suspect. Everything belongs to whoever can seize it first and hold onto it by brute force.

The reality is that those who possess the most have access to the most powerful forms of coercion, from thugs to cops to the atomic bomb. They gain that access by convincing the thugs and cops and military to accept the fictional item known as money, in exchange for protection of their right to possess.

In fact, all of this is always temporary. Even the rich get feeble and die. We possess nothing, not even our bodies.

Everything that has happened in recent weeks on Wall Street and in the financial sector is merely the dawning of these two truths: money does not really exist and no one really owns anything.