Sacred Economics: Money, Gift & Society in the Age of Transition

by Charles Eisenstein

2011,  Evolver Editions (link to free download)

Book Review

The title Sacred Economics sounds like a New Age treatise on spirituality. The book is actually about the end of capitalism. It offers an extremely well-researched discussion of the history of money, capitalist economics and the world wide movement for economic re-localization. By avoiding simplistic clichés about greedy corporate CEOs and amoral banksters, Eisenstein arrives at some startling conclusions. Tracing the western conception of money back to its earliest origins, he makes a strong case that money itself is responsible for rapacious growth and resource depletion, greed and the demise of community.

Money and the Loss of the Commons

The main focus of Part I is an exploration of the profound effect money has on human thinking and psychology. Part II focuses on economic relocalization and other practical steps activists can take to restore the original gift economy.

Part I begins with an analysis of the dual illusions of separateness and of scarcity. Both, Eisenstein argues, are mistaken beliefs stemming from the privatization of communally owned land. This, in turn, was an early consequence of the introduction of money.

Prior to Roman times, land, like air and water, was considered part of the commons and couldn’t be owned. Under Roman tradition, there was no way for an “individual” (a Greek invention related to the concept of money and personal wealth) to legitimately take possession of common lands. Thus the Roman aristocracy had to seize it by force, just as Europeans stole the communal lands of Native Americans, Maori and indigenous Australians.

During the many centuries our ancestors had access to communal lands for their herds and crops, they enjoyed a sense of interconnectedness and interdependency. This was lost when the wealthy began fencing it off as private property. This loss of interconnectedness has left all of us with a profound inner emptiness we experience as never having enough.

How Money Destroyed the Gift Economy

Part I also describes the gift economy that characterizes all primitive cultures. Public gift giving was the primary mechanism all early societies used to satisfy basic survival needs. As civilizations became more complex, gift exchange and barter were impractical over long distances. This led money was introduced as a common medium of exchange.

An early artifact of the introduction of money is the mistaken belief that the basic necessities of life are in short supply. This illusion underpins all western economic theory. In fact many textbooks define economics as the study of human behavior under conditions of scarcity. As Eisentein points out, this is a ludicrous notion in a world in which vast quantities of food, energy and raw materials go to waste.

The Origin of Greed

Eisenstein attributes greed to this illusion of scarcity. He can see no other explanation for low income people giving away far more money, relative to income, than their rich counterparts. Rich people worry about money more and are more inclined to perceive scarcity when none exists. Einstein talks about the immense anxiety people in rich countries experience over “financial security.” No matter how much they accumulate, it’s never enough.

Debt, Usury and Perpetual Growth

Sacred Economics argues that what economists commonly refer to as growth is the expansion of scarcity into areas of life once characterized by abundance. Fresh water, which was once abundant, has become scarce following its transformation into a commodity most of us are forced to pay for.

The fractional reserve banking system, which allows bankers to loan money they create out of thin air, accentuates the pressure to convert more and more of the commons into commodities. The amount of debt created is always greater than the money supply. Current global debt ($75 trillion) is more than twice global wealth ($30 trillion). This results in constant pressure to create more goods and services to repay personal, corporate and public debt.

Growing pressure to repay debt only hastens the rate at which natural resources, such as fossil fuels, minerals, forests, fish and water, are converted to commodities. A parallel process is causing the social, cultural and spiritual commons to be dismantled. Stuff that was free throughout all human history – stories, songs, images, ideas, clever sayings – are copyrighted or trademarked to enable them to be bought and sold.

Einsenstein’s Confusion About Marxism.

The only weakness of Sacred Economics are some mistaken and contradictory assumptions Eisenstein makes about Marxism. He makes the assertion in Part I that capitalism needs to be replaced, but not in a “Marxist” way. He claims this would remove any “monetary” incentive for people to produce goods and services that are useful to the community. This seems to contradict his call for the a return to a gift economy in which people contribute to the community for intangible rewards (public recognition, status and esteem) rather than monetary reward.

Below Eisentein speaks briefly about his book.

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