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Economic Metabolism

This article is inspired by the article Money, Community & Social Change  (on complimentary currency systems by Astrid Ware) and is also a follow on from my own article Systems Analysis of Economic Social Engineering.

The excellent Interview with Bernard Lietaer reproduced in Astrid's article discusses a VERY important piece of the puzzle of how to bring harmony back into this world. I will comment on it here from the perspective of economics as a social metabolic process within a collective organism. This homology (meaningful parallel) brings out some interesting implications and explains just why complimentary currency systems can be such a revolutionary change.

I first discuss some general principles and then comment on the interview within that context...

Lietaer defines "money, or currency, as an agreement within a community to use something as a medium of exchange... And most of the time, it's done unconsciously... We're living in this money world like fish in water, taking it completely for granted." This role of money as a "medium of exchange" is the basis of the parallels between economics and biochemistry.

In my news log articles The Gaian-Ego Hypothesis, Systems Analysis of Economic Social Engineering and Ego and the Denial of Complexity I comment that from the perspective of system theory, civilisation is functionally equivalent to a higher level organism in which we organisms are its cells and civilisation is the nervous system, with ourselves as the nerve cells. I comment that "All of our thoughts, communications and actions are the passage of signals through that global nervous system and economics has emerged as one of the primary metabolic processes that drives that system just as biochemistry drives organisms."

Economics isn't the only medium of exchange, for instance, words, images, objects, gestures and anything that is a medium of communication is a medium of exchange. But what makes currency different is that it is also a medium of stored value whereas with words, for example, their value arises from very subjective interpretations and is thus very changeable, whereas an agreement on the value of a measure of gold can be more objectively quantified and thus the value can be stored and transferred. Its stable value depends on the finite nature of the medium of exchange, it relies on the principle of conservation of value that preserves value throughout the network of exchanges. Whereas words can be created and copied and multiplied, gold cannot so it became the original means of stored value and transfer of value. This then became abstracted into paper notes, which then became disassociated from gold and then with the printing presses pumping out paper notes they lost their finite nature and became "fiat money" which is an unstable mechanism of stored value. This lies at the heart of the instability of the current economic system and it is what gives vast power and influence to those that have the 'authority' to print the fiat money.

But what is stored value and transfer of value in terms of complex systems in general and biochemistry in particular? It takes two forms that can be described as meaning and energy. These both relate to information where meaning relates to the symbolic form of the token of exchange and energy relates to the bulk quantity of tokens of exchange, energy is just the bulk flow of information that manifests influence.

For example, between cells in an organism there is an intricate network of interactions mediated by the exchange of biochemical messages or tokens of exchange. They must not only be meaningful in order to facilitate coherent communication and interaction but they must also be of sufficient quantity, only then can coherent communication and interaction occur to sustain the network of interactions that integrate the cells into a healthy organism. When the communications are corrupted by false or misleading meanings (e.g. toxins) or when the interaction energy is insufficient (e.g. mineral deficiencies) the network of interactions becomes dysfunctional and disintegration sets in. Also when the cells themselves develop confused interpretations (frayed or corrupted DNA in cells or false beliefs and cynicism in ourselves) then the meanings are misinterpreted and the coherence of the communication breaks down.

Currency creates a medium of exchange within particular systems of exchange (metabolic processes), different systems have different emergent properties, like the different properties of different organs. A community is localised like an organ such as the liver and an interest group is distributed but characterised by its agenda like a bodily function such as the immune system. Each organ (community) and bodily function (interest group) has its own metabolic exchange processes and uses particular biochemical mediums of exchange that have appropriate meaning and sufficient interaction energy within that context. Much of the communication is mediated by non-conserved symbols such as words, traditions and so on but the conserved symbols are vital to the exchange of stored value such as labour or assets.

On the larger scale blood, oxygen, sugars, salts and so on are universal currencies that mediate between all organs and bodily functions and help integrate the whole into a coherent functional super-system. These can be universal cultural symbols, broadly believed ideologies and common languages which are all non-conserved currencies that serve to transfer meaning but the conserved currencies such as gold and money are vital for the reliable transfer of stored value. The spread of the common currencies, whether non-conserved or conserved delimits the range of collective integration. For example, the spread of American culture as the common non-conserved currency and the use of the American dollar as the common conserved currency throughout the world is effectively the assimilation of the planet into the American organism and over time these conditions will inevitably result in the Americanisation of the planet.

If an organ (community) that is rich in a particular bio-molecular messenger (medium of exchange) is unable to use it and must rely on the flow of other more scarce bio-molecular messengers from outside (mass currency) then its healthy functioning will be impeded and it will be controlled by the external flow of the medium of exchange. I.e. the cells can only interact and the organ can only function when those external bio-molecular messengers are available. Only when organs utilise exchange mechanisms that are plentiful and appropriate for their particular needs can their functioning be free and healthy. If the outside flow is sufficient the organ can be healthy but it is controlled and that flow can be conditional thereby manipulating the organ or it can be cut off thereby starving the organ.

Broader integration does require a degree of interdependence but in order to be robust it should be built upon a degree of self-sufficiency as well. Furthermore, the system of integrative supply (monetary system) must be managed in the interests of the health of the whole organism (humanity and the planet) and not for the narrow interests of a particular part of the organism (capital hoarders), otherwise the organism suffers and when it eventually dies all parts die with it. I.e. of what use is vast wealth when civilisation collapses? Can the wealthy enjoy their wealth when the world spirals in chaos and annihilation?

Certain exchange processes or metabolic processes are suitable only for certain contexts. For example, if a liver-centric metabolic process becomes expansionist and forces other cells to engage in its metabolic exchange system then those cells begin acting like liver cells and the organism experiences an enlarged liver that encroaches on the functioning of other organs and can be fatal. Another example is that if a mass currency such as blood dominates localised mediums of exchange, say there is internal bleeding and an organ's exchange processes are disrupted by the influx of blood that interferes with the healthy biochemical interactions; this too can be fatal.

Now I will comment on some issues raised in the interview, but hold these concepts in mind, i.e. the meaning and energy of a system of exchange and the role of the network of interactions in integrating a collection of sub-systems into a coherent super-system.

Money is not value neutral. "societies that are using different kinds of currency have also very different collective emotions concerning money. The generally accepted theory-dating back to Adam Smith-is that money is value neutral. Money is supposed to be just a passive medium of exchange. It supposedly doesn't affect the kind of transactions we make, or the kind of relations we establish while making those exchanges." This was a theory based upon insufficient understanding of the complexity and diversity of the collective organism. It is like trying to make an organism function solely in terms of blood or to make society function solely in terms of the written word - many mediums of exchange are required to satisfy all the varied contexts in which systems of exchange or metabolic processes occur.

"The evidence is now in: this hypothesis turns out to be incorrect. Money is not value neutral. Let's return to the example of the fureai kippu that I was mentioning earlier, the elderly care currency in Japan. A survey among the elderly asked them what they prefer: the services provided by people who are paid in yen, the national currency; or the services provided by the people paid in fureai kippu. The universal answer: those paid in fureai kippu, "because the relationships are different." This is one example of evidence that currency is not neutral. Another example: there is typically a reluctance among friends to pay for help provided by using national currency. If a friend is helping you move or paint and you pay him with national currency, it just doesn't feel right. Interesting isn't it?"

Control of Money supply and hoarding. "Assume that a Martian lands in Denver on the wrong side of the tracks. He ends up in one of the ghettos and finds that the houses are run down, the kids not taken care of, the elderly in trouble, and the trees dying. He sees all these things, and discovers that there are people and organizations absolutely equipped and ready to solve every one of those problems. So this Martian asks, "What are you waiting for?" The answer: "We're waiting for money." "

In so many cases throughout the world there is so much need for an exchange of value in terms of time, effort, ingenuity, products and services and so much potential supply of these things but for the lack of money these things are neglected. The organs cannot function because there is no medium of exchange to facilitate the interactions. Whilst in other cases there is an abundance of money, there are vast accumulations that go to waste or are spent frivolously or counter-productively. This arises from the fact that money has lost its connection with true value and has ceased to be an effective medium of exchange. It is controlled by central banks and only serves the interests of those in power. Too often the powerful have free reign to indulge their cravings and enlarge their delusions whilst vital metabolic processes are starved thus sickening the entire organism.

All the organs are forced into dependence on a particular blood supply and the supplier controls who gets it and organs with the power to hoard it do so, thus most organs are depleted whilst some are bloated with it. This is what happens when individual organs (communities) and bodily functions (interest groups) are not free to engage in systems of exchange that serve their purposes, instead they are all subservient to the whims of some other system. Because of this there is massive disease and disintegration throughout the body of society.

Fragmentation and Assimilation. "exclusive use of a competitive programmed currency in a community tends to be destructive for the community fabric. This isn't theory. We've seen this happen at the tribe level, with the collapses of traditional societies. I've seen one happen myself in Peru among the Chipibo in the Amazon. That tribe had been in existence for thousands of years. When they started using the national currency among themselves, the whole community fabric collapsed in five years' time. The same thing happened here during the 19th century in the Northwestern United States and Canada, in the traditional indigenous societies. The moment they started using white man's currency among themselves, the community collapsed, the traditional fabric broke down."

Consider a small organism (analogous to an isolated tribe) that has its own coherent and healthy metabolic processes (systems of exchange) that are central to its healthy functioning and continued integration. Then this organism is swallowed by a larger organism and it is surrounded by the metabolic process of the larger organism. This foreign system of exchange invades and permeates the smaller system of exchange. There are now different biochemical messengers flowing around that swamp the smaller metabolic processes. The cells can no longer exchange meaningful signals in their own symbolic language and the flow of these signals diminishes (reduced interaction energy) whilst at the same time they must all adapt to the new symbolic messages which are in high concentration (high interaction energy) so new meanings are transferred between the cells thus changing the nature of their communications and interactions so the previously healthy organism is torn apart and assimilated into the larger organism.

In the biological case 'swallowing' usually places the smaller organism within a very caustic environment that is designed to destroy it and render its component parts available for assimilation into the larger organism. This can be seen in societies in terms of genocide, cultural genocide, destruction of traditional lands, customs and languages, fragmentation of traditional power structures, invalidation of traditional currencies and enforcement of the mass currency, mass traditions, mass language and so on. This effectively 'digests' the tribe, fragmenting it and assimilating the component individuals into the larger society.

Complementary currency sustains collectives based around communities or agendas. Consider the case of Bali. "People are remarkably artistic in that island. Their communities are unusually strong. They have festivals that are totally mind-blowing, and can last a month. They're having a good time. It's a comparatively non-violent society. And what I found is that it isn't a simple coincidence that they have been using a dual currency system for many centuries. All these unusual characteristics of Bali turn out directly to be nurtured by their dual money system."

"The first is the conventional national currency... the second is a time currency where the unit of account is a block of time of approximately three hours... the decisions are made democratically to launch any big community project. It could be to put on a festival or build a school. For each project, they always make two complementary budgets: one in the national currency, and one in time. That second currency-called "narayan banjar" (meaning work for the common good of the community)-is created by the people themselves. They don't have to compete in the outside world to obtain that second currency, and it fosters cooperation between the members of the community."

"Here's why it works: poor communities don't have a lot of national currency, but they tend to have a lot of time. In rich communities, the opposite tends to be the case-people have more national currency, but less time. In either case, each banjar is capable of creating extraordinary events just by budgeting and using more of the kind of currency - national or time - in which they are rich. This balance is a key contribution to the unusually strong community spirit that prevails in Bali... Here is an example of how a currency can make a difference."

Because that community can use its own exchange system using resources in which it is rich it can create a strong metabolic process and sustain a healthy organic system. It doesn't rely on outside control or outside metabolic processes, it can define its own meanings and sustain a strong flow of interaction energy that creates a strong network of interactions that binds the people into a strong, dynamic and healthy community.

"there are entire neighborhoods that used time dollar systems to create a neighborhood watch system that got rid of drugs and gangs." This example is like the use of an interest based currency to create an immune system, i.e. to create and sustain a protective mechanism within a small organism (community) that protects it from "free radicals" and other toxins that are products of unhealthy metabolism and that further inhibit the healthy metabolic processes.

A healthy collective organism. For this we need healthy organs (communities), healthy bodily functions (interest groups) and healthy integration of these into a coherent whole. This requires appropriate systems of exchange within each context. Firstly the local systems of exchange need to utilise mediums of exchange that are meaningful and sufficiently plentiful in the local systems, such as time, knowledge, crafts or compassion. Secondly the broader exchange system must serve an integrative role with the health of whole as its primary guide. If it serves only the interests of a small part of the whole then the whole organism will suffer and likely die.

Conclusion. Civilisation is a complex adaptive system. It is composed by living organisms in essentially the same way that we are composed of living cells. Hence it is a new kind of organism on a higher level. We cannot continue using simplistic mechanistic ideas about civilisation or conceiving of it only in terms of fragmented traditional discourses. We must use the best of modern wisdom (e.g. system theory, biology, psychology, etc) to understand this situation, to properly know ourselves and our true role within society before we can attain harmony and health for ourselves, for society and for the planet as a whole.

Just as cells and organisms suffer disease and death, so too do civilisations. Just as we suffer from psychological disorders and delusions so too does civilisation. It is not a clockwork mechanism for us to engineer, it is a living feeling and increasingly sentient being within which we participate. Its life is our collective life, its disease is our collective disease and its joy is our collective joy. If the diseases are overcome and health and vitality where to flourish it would raise the whole of humanity and the planet to new levels of joy, power and wisdom.

Think of yourself when you are feeling worn out, sick and depressed then compare that to when you are feeling strong, vital and on top of the world. This is the degree to which society can change - it's not some unreachable utopia - it's simply the healthy functioning of the collective organism. It cannot be brought about be isolated and narrowly conceived agendas no matter how well meaning, it can only be secured by holistic awareness and holistically appropriate action.

We can be healthy - it is well within our reach. All that is required is the collective will to overcome our ignorance and delusions that keep us trapped in dysfunctional interactions. The dysfunctions are becoming undeniable and people are waking up to the deeper reality of things. We are on the verge of a major transition toward a new kind of civilisation - one that doesn't struggle and limp in spite of its disease but instead thrives in joy and vitality.

Best wishes :)
John Ringland

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