Sacred Economics

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Book by Charles Eisenstein

Book: Charles Eistenstein. Sacred Economics. 2010


Charles Eisenstein:

"Why is it that whenever I investigate the causes of any phenomenon that bothers me, whether it is nuclear waste, the prison industry, or the dissolution of community, I dig down one or two levels and I get to money? Why is money a force for evil in the world? And why has it so often been a force for evil in my own life, discouraging me from doing what I love, encouraging me to devote my gifts toward things I don't care about? I wrote this book, Sacred Economics, because I believe it doesn't have to be this way. Money doesn't have to be the enemy of art, of love, of beauty. However, it is not merely our attitudes toward money that have to change, as some self-help gurus proclaim, because the money system itself has built into its very design anxiety, scarcity, competition, and the endless growth of the realm of the owned. Within such a money system, our aspirations to create community, ecological health, social justice, and abundance for all face an upstream battle, fighting against the current of the money system.

Fortunately, as this book describes, the days of that system are numbered; indeed its collapse is built into its very design. Sacred Economics describes the dynamics of its collapse, reframing it as a birth crisis propelling humanity into a very different world. The book then describes the new money system and economy that will emerge afterward, an economy whose outlines we can already see today like a recessive gene hidden inside each institution of the old world, waiting the time for its expression. Its elements include negative-interest currency, resource-based economics, commons-based currency, peer-to-peer economics, gift economics, degrowth, local currency, mutual credit, and a new materialism -- embodied in the money system -- that sees the planet and every being on it as sacred.

Finally, the book explores the personal dimensions of this transition. The new world is not something we can passively await; it is something we can create and indeed that we can begin living right now. The days of the separate self, seeking to maximize financial self-interest in a hostile world, are drawing to a close. The intuitions of the connected self, tied to other beings through sacred relationships of giving and receiving, are becoming stronger. They draw us toward a new (and very ancient) way of being that is unfamiliar to us, though it strikes a deep chord. This book is part of its relearning."



"Today we associate money with the profane, and for good reason. If anything is sacred in this world, it is surely not money. Money seems to be the enemy of all our better instincts, as is clear every time the thought "I can't afford to" blocks an impulse toward kindness or generosity. Money seems to be the enemy of beauty, as the disparaging term "a sellout" demonstrates. Money seems to be the enemy of every worthy social and political reform, as corporate power steers legislation toward the aggrandizement of its own profits. Money seems to be destroying the earth, as we pillage the oceans, the forests, the soil, and every species to feed a greed that knows no end.

From at least the time that Jesus threw the moneychangers from the temple, we have sensed that there is something unholy about money. When a politician seeks money instead of the public good, we call him corrupt. Adjectives like "dirty" and "filthy" naturally describe money. Monks are supposed to have little to do with it: "You cannot serve God and Mammon."

At the same time, no one can deny that money has a mysterious, magical quality as well, the power to alter human behavior and coordinate human activity. From ancient times thinkers have marveled at the ability of a mere mark to confer this power upon a disk of metal or slip of paper. Unfortunately, looking at the world around us, it is hard to avoid concluding that the magic of money is an evil magic.

Obviously, if we are to make money into something sacred, nothing less than a wholesale revolution in money will suffice, a transformation of its essential nature. It is not merely our attitudes about money that must change, as some self-help gurus and "prosperity programming" teachers would have us believe; rather, we will create a new kind of money that embodies and reinforces our changed attitudes. Sacred Economics describes this new money and the new economy that will coalesce around it. It also explores the metamorphosis in human identity that is both a cause and a result of the transformation of money. The changed attitudes of which I speak go all the way to the core of what it is to be human: they include our understanding of the purpose of life, humanity's role on the planet, the relationship of the individual to the human and natural community; even what it is to be an individual, a self. This should not be surprising, since we experience money (and property) as an extension of our selves; hence the possessive pronoun "mine" to describe it, the same pronoun we use to identify our arms and heads. My money, my car, my hand, my liver. Consider as well the sense of violation we feel when we are robbed or "ripped off," as if part of our very selves had been taken.

A transformation from profanity to sacredness in money, something so deep a part of our identity, something so central to the workings of the world, would have profound effects indeed. But what does it mean for money, or anything else for that matter, to be sacred? It is in a crucial sense the opposite of what sacred has come to mean. For several thousand years, increasingly, the concepts of sacred, holy, and divine have referred to something separate from nature, the world, and the flesh. Three or four thousand years ago the gods began a migration from the lakes, forests, rivers, and mountains into the sky, becoming the imperial overlords of nature rather than its essence. As divinity separated from nature, so also it became unholy to involve oneself too deeply in the affairs of the world. The human being changed from a living soul to a mere receptacle of spirit, a profane envelope for a sacred soul, culminating in the Cartesian mote of consciousness observing the world but not participating in it, and the Newtonian watchmaker God doing the same. To be divine was to be supernatural, non-material. If God participated in the world at all, it was through miracles -- divine intercessions violating or superseding nature's laws.

Yet, paradoxically, this separate, abstract thing called spirit is supposed to be what animates the world. Ask the religious person what has changed when a person dies, and she will say the soul has left the body. Ask her who makes the rain fall and the wind blow, and she will say it is God. To be sure, Galileo and Newton appeared to have removed God from these everyday workings of the world, explaining it instead as the clockwork of a vast machine of impersonal force and mass, but even they still needed the Clockmaker to wind it up in the beginning, to imbue the universe with the potential energy that has run it ever since. This conception is still with us today as the Big Bang, a primordial event that is the source of the "negative entropy" that allows movement and life. In any case, our culture's notion of spirit is that of something separate and non-worldly, that yet can miraculously intervene in material affairs, and that even animates and directs them in some mysterious way.

It is hugely ironic and hugely significant that the one thing on the planet most closely resembling the forgoing conception of the divine is money! It is an invisible, immortal force that surrounds and steers all things, omnipotent and limitless, an "invisible hand" that, it is said, makes the world go 'round. Yet, money today is an abstraction, at most symbols on a piece of paper, but usually mere bits in a computer. It exists in a realm far removed from materiality. In that realm, it is exempt from nature's most important laws, for it does not decay and return to the soil as all other things do, but is rather preserved, changeless, in its vaults and computer files, even growing with time thanks to interest. It bears the properties of eternal preservation and everlasting increase, both of which are profoundly unnatural. The natural substance that comes closest to these properties is gold, which does not rust, tarnish, or decay. Early on, gold was therefore used both as money and as a metaphor for the divine soul, that which is incorruptible and changeless.

Money's divine property of abstraction, of disconnection from the real world of things, reached its extreme in the early years of the 21st century as the financial economy lost its mooring in the real economy and took on a life of its own. The vast fortunes of Wall Street were unconnected to any material production, seeming to exist in a separate realm.

Looking down from Olympian heights, the financiers called themselves "masters of the universe," channeling the power of the god they served to bring fortune or ruin upon the masses, to literally move mountains, raze forests, change the course of rivers, cause the rise and fall of nations. But money soon proved to be a capricious god. As I write these words, it seems that the increasingly frantic rituals that the financial priesthood uses to placate the god money are in vain. Like the clergy of a dying religion, they exhort their followers to greater sacrifices while blaming their misfortunes either on sin (greedy bankers, irresponsible consumers) or on the mysterious whims of God (the financial markets). Soon, perhaps, we will blame the priests themselves.

What we call deflation, an earlier culture might have called, "God abandoning the world." Money is disappearing, and with it a third property of spirit, the animating force of the human realm. At this writing, all over the world machines stand idle. Factories have ground to a halt, construction equipment sits derelict in the yard. Yet all the human and material inputs to operate them still exist. There is still fuel, there are still raw materials, and there are still human beings in abundance who know how to operate the machines. It is rather something immaterial, that animating spirit, which has fled. What has fled is money. That is the only thing missing, so insubstantial (in the form of electrons in computers) that it can hardly be said to exist at all, yet so powerful that without it, human productivity grinds to a halt. It is as if God had forsaken the world. Even beyond the mechanical realm, we can see the demotivating effects of lack of money. Consider the stereotype of the unemployed man, nearly broke, slouched in front of the TV in his undershirt, drinking a beer, hardly able to rise from his chair. Money, it seems, animates people as well as machines. Without it we are dispirited.

We do not realize that our concept of the divine has attracted to it a god that fits that concept, and given it sovereignty over the earth. By divorcing the soul from the flesh, spirit from matter, and God from nature, we have installed a ruling power that is soulless, alienating, ungodly and unnatural. So when I speak of making money sacred, I am not invoking a supernatural agency to infuse sacredness into the inert, mundane objects of nature. I am rather reaching back to an earlier time, a time before the divorce of matter and spirit, when sacredness was endemic to all things.

My understanding of sacredness is secondary to my feeling of sacredness, or to put it better, to the feeling of being in the presence of the sacred. I cannot define that feeling, nor need I define it, because I am sure that you have felt it as well. In the presence of the sacred, we are moved to the very core of our being, we feel reverence and awe, humility and amazement, and a profound sense of gratitude. Even though, intellectually, I know that I am in the presence of the sacred all the time, only rarely do I actually feel its fullness. When I do, I feel like I have returned to a home that was always there and to a truth that has always existed. It can happen when I observe an insect or a plant, hear a symphony of birdsongs or frog calls, feel mud between my toes, gaze upon an object beautifully made, apprehend the impossibly coordinated complexity of a cell or an ecosystem, witness a synchronicity or symbol in my life, watch happy children at play, am touched by a work of genius. Extraordinary though these experiences are, they are in no sense separate from the rest of life. Indeed, their power comes from the glimpse they give of a realer world, a sacred world that underlies and interpenetrates our own.

What is this "home that was always there, this truth that has always existed"? It is the truth of the unity or the connectedness of all things, and the feeling is that of participating in something far greater than oneself, yet which also is oneself. In ecology, this is the principle of interdependence: that all beings depend for their survival on the web of other beings that surrounds them, ultimately extending out to encompass the entire planet. The extinction of any species diminishes our own wholeness, our own health, our own selves: something of our very being is lost. We can feel this sense of loss directly, as an emotion, as well as indirectly through the multiplying health crises of our time. This book will draw from ecology to help describe a sacred economy. For example, in the planetary ecosystem there is no such thing as waste: the waste of one creature is the food of another, creating a sacred gift circle. For an economy to be sacred, it must be the same.

If the sacred is the gateway to the underlying unity of all things, it is equally a gateway to the uniqueness and specialness of each thing. A sacred object is one-of-a-kind; it carries a unique essence that cannot be reduced to a set of generic qualities. That is why reductionistic science seems to rob the world of its sacredness, since everything becomes one or another combination of a handful of generic building blocks. This conception mirrors our economic system, itself consisting mainly of standardized, generic commodities, job descriptions, processes, data, inputs and outputs and, most generic of all, money, the ultimate abstraction. In earlier times it was not so. Tribal peoples saw each being not primarily as a member of a category, but as a unique enspirited individual. Even rocks, clouds, and apparently identical drops of water were thought to be sentient, unique beings. The products of the human hand were unique as well, bearing through their distinguishing irregularities the signature of the maker. Here was the link between the two qualities of the sacred, connectedness and uniqueness: in their uniqueness, objects retain the mark of their origin, their place in the great matrix of being, their dependency on the rest of creation for their existence.

In this book I will describe a vision of a money system and an economy that is sacred. In other words, I will describe an economy that is no longer separate, in fact or in perception, from the natural matrix that underlies it. I will describe a reunion of the long-sundered realms of human and nature. The human economy will no longer be something separate from nature; it will be an extension of nature that obeys all of its laws and bears all of its beauty, wholeness, and enchantment.

Within every institution of our civilization, no matter how ugly or corrupt, there is the germ of something beautiful: the same note at a higher octave. Money is no exception: its original purpose is simply to connect human gifts with human needs, so that we might all live in greater abundance. How instead money has come to generate scarcity rather than abundance, competition rather than sharing, is one of the threads of this book. Yet despite what it has become, in that original beauty of money we can catch a glimpse of what will one day make it sacred again. We intuitively recognize the exchange of gifts as a sacred occasion, which is why we instinctively make a ceremony out of gift-giving. Sacred money, then, will be a medium of gifting, a means to recreate the gift economy of a hunter-gatherer or village society on a planetary level. A sacred economy will be an economy of the Gift.

Sacred Economics describes this future and also maps out a practical way to get there. Long ago I grew tired of reading books that criticized some aspect of our society without offering a positive alternative. Then, I grew tired of books that offered a positive alternative that seemed impossible to reach: "We must reduce carbon emissions by 90%." Then I grew tired of books that offered a plausible means of reaching it, that did not describe what I, personally, could do to create it. Sacred Economics operates on all four levels: it offers a fundamental analysis of what has gone wrong with money; it describes a more beautiful world based on a different kind of money and economy; it explains the collective actions necessary to create that world and the means by which these actions can come about; and it explores the personal dimensions of the world-transformation, the change in identity and being that I call "living in the Gift."

The economic crisis we face today is just one of many crises that are converging upon us all at once: crises in energy, education, health, water, soil, climate, politics, and the environment. My previous book, The Ascent of Humanity, traced the origin of each to a common root, millennia old, that I call Separation. Their convergence is a birth crisis, in which we are expelled from the old world into the new. Unavoidably, these crises invade our personal lives, our world falls apart, and we too are born into a new world, a new identity. This is why so many people sense a spiritual dimension to the planetary crisis.

I dedicate all of my work to the more beautiful world our hearts tell us is possible. I say our "hearts", because our minds tell us it is not possible. Our minds doubt that things will ever be much different than experience has taught us. You may, as you read the forgoing encomium to a sacred economy, have felt a wave of cynicism, contempt, or despair. You might have felt an urge to dismiss my words as hopelessly idealistic. Indeed, I myself was tempted to tone down my description, to make it more plausible, more responsible, more in line with our low expectations for what life and the world can be. But such an attenuation would not have been the truth. I will, using the tools of the mind, speak what is in my heart. In my heart I know that an economy and society this beautiful is possible for us to create, and indeed, that anything less than that is unworthy of us. Are we so broken, that we would aspire to anything less than a sacred world?" (

Cultural and Spiritual Capital

Charles Eisenstein:

"Natural capital is one of four broad categories of the commonwealth that also comprises social, cultural, and spiritual capital. Each consists of things that were once free, part of self-sufficiency or the gift economy, that we now pay for. The robbery then is not from mother earth, but from mother culture.

The most familiar of these other forms of capital in the economic discourse is cultural capital, which goes by the term intellectual property. In former times, the vast fund of stories, ideas, songs, artistic motifs, images, and technical inventions formed a commons that everyone could draw upon for pleasure and productivity, or incorporate into yet other innovations. In the Middle Ages, minstrels would listen to each other’s songs and borrow new tunes that they liked, modify them, and circulate them back into the commons of music. Today artists and their corporate sponsors scramble to copyright and protect each new creation, and vigorously prosecute anyone who tries to incorporate those songs into their own. The same happens in every creative sphere.1

The moral justification for intellectual property is, again, “If I am my own, and my labor power belongs to me, then what I make is mine.” But even granting the premise that “I am my own,” the implicit assumption that artistic and intellectual creations arise ex nihilo from the mind of the creator, independent of cultural context, is absurd. Any intellectual creation (including this book) draws on bits and pieces of the sea of culture around us, and from the fund of images, melodies, and ideas that are deeply imprinted upon the human psyche, or perhaps even innate to it. As Lewis Mumford puts it, “A patent is a device that enables one man to claim special financial rewards for being the last link in the complicated social process that produced the invention.”2 The same is true of songs, stories, and all other cultural innovations. By making them private property, we are walling off something that is not ours. We are stealing from the cultural commons. And because, like land, pieces of the cultural commons are themselves productive of continued wealth, this theft is an ongoing crime that contributes to the divide between the haves and the have-nots, the owners and the renters, the creditors and the debtors.

The Russian anarchist Peter Kropotkin made this general point eloquently:

- Every machine has had the same history—a long record of sleepless nights and of poverty, of disillusions and of joys, of partial improvements discovered by several generations of nameless workers, who have added to the original invention these little nothings, without which the most fertile idea would remain fruitless. More than that: every new invention is a synthesis, the resultant of innumerable inventions which have preceded it in the vast field of mechanics and industry. Science and industry, knowledge and application, discovery and practical realization leading to new discoveries, cunning of brain and of hand, toil of mind and muscle—all work together. Each discovery, each advance, each increase in the sum of human riches, owes its being to the physical and mental travail of the past and the present. By what right then can any one whatever appropriate the least morsel of this immense whole and say—This is mine, not yours?

Such considerations inform my desire to make my books freely available online and to forgo some of the normal copyrights. I could not have written this book outside a vast organic matrix of ideas, a commonwealth of cultural capital that I cannot rightfully enclose.

Spiritual capital is more subtle. It refers to our mental and sensuous capacities, for example, the ability to concentrate, to create worlds of the imagination, and to derive pleasure from experiencing life. When I was young, in the very last days before television and video games came to dominate American childhood, we created our own worlds with intricate story lines, practicing the psychic technologies that adults can use to fashion their lives and their collective reality: forming a vision, telling a story around that vision that assigns meanings and roles, playing out those roles, and so on. Today, those worlds of the imagination come prefabricated from TV studios and software companies, and children wander through cheap, gaudy, often violent worlds created by distant strangers. These come with prefabricated images as well, and the ability to form their own images (we call this ability imagination) atrophies. Unable to envision a new world, the child grows up accustomed to accepting whatever reality is handed her. Could this, perhaps, be contributing to the political passivity of the American public?

Another depletion of spiritual capital comes via the intense sensory stimulation of electronic media. Modern action films, for instance, are so fast-paced, so loud, so grossly stimulating, that older movies seem boring in comparison, not to mention books or the world of nature. Despite my best efforts to limit their exposure to modern excesses, my children can barely stand to watch any film made before 1975. Once habituated to intense stimulation, in its absence we get the withdrawal symptom we call boredom. We become dependent, and therefore must pay to acquire something that was once available simply by virtue of being alive. A baby or a hunter-gatherer will be fascinated by the slow processes of nature: a twig floating on the water, a bee visiting a flower, and other things that are beyond the anemic attentiveness of modern adults. Just as the Roman coloni had to pay to use the land they needed to survive, so also must most people today pay the owners of the processes, media, and capital necessary to create the extreme sensory stimulation that they need to feel alive.

It may not be readily apparent that spiritual capital constitutes a commons. What has really been appropriated here is a locus of attention. The capabilities of the human mind that I call spiritual capital do not exist in isolation; it is our upbringing, our nurture, our cultural surroundings that foster and direct them. Our ability to imagine and to obtain sensory fulfillment is to a great degree a collective ability, one today that we can no longer exercise from the freely available sources of mind and nature, but must purchase from their new owners.

The collective attention of the human race is a commons like the land or the air. Like them, it is a raw material of human creativity. To make a tool, to do any work, to do anything at all requires that one place attention on that task rather than on some other. The ubiquity of advertising and media in our society is a co-optation of the collective human attention, and a depletion of our divine bequest. On the road, everywhere my eyes turn, there is a billboard. On the subway, on the internet, on the street, commercial messages reach out to “capture” our attention. They infiltrate our very thoughts, our narratives, our inner dialog, and via these, our emotions, desires, and beliefs, turning all toward the making of product and profit. Our attention is hardly our own anymore, so easily do the powers of politics and commerce manipulate it.

After it has been so long manipulated, chopped up, habituated to intense stimuli, and jerked around from one lurid but empty object to another, our attention is so fragmented we cannot sustain it long enough to create anything independent of the programs that surround us. We lose our capacity to sustain thought, understand nuance, and put ourselves in another person’s shoes. Susceptible to any simplistic narrative with immediate emotional appeal, we are easy targets not just for advertising, but for propaganda, demagoguery, and fascism. In various ways, all of these serve the money power."

Mutual Credit

Charles Eisenstein:

" In any mutual-credit system, members have access to credit without the involvement of a bank. Instead of paying money to use money, as in an interest-based credit system, credit is a free social good available to all who have earned the trust of the community. Essentially, today’s credit system is an example of the privatization of the commons I discussed earlier in the book, in this case the “credit commons”—a community’s general judgment of the creditworthiness of each of its members. Mutual-credit systems reclaim this commons by issuing credit cooperatively rather than for private profit.

Mutual credit is not so much a type of currency as a means of issuing that currency. In the dominant system, it is primarily banks that grant access to money by extending credit. In a mutual-credit system, this power goes to the users themselves.

The development of mutual-credit systems is extremely significant, for credit essentially represents a society’s choice of who gets access to money and how much of it. Mutual credit replaces the traditional functions of banks. People with a negative credit balance are under social pressure, and the pressure of their own conscience, to offer goods and services that will bring their account back into positive territory. But I’m sure you can see a potential problem with this system when applied on a large scale. What is to prevent one of the participants from running up a higher and higher negative balance, in essence receiving goods for nothing? The system needs a way to prevent this and eliminate participants who abuse it.

Without negative-balance limits, a mutual-credit currency can be created in unlimited amounts simply by the will to make a transaction. This might seem like a good thing, but it won’t work if that currency is used to exchange scarce goods.1 Ultimately, money represents a social agreement on how to allocate labor and materials. Not everyone can have access to enough credit, say, to construct a multibillion-dollar semiconductor plant or buy the world’s largest diamond.

More sophisticated mutual-credit systems have flexible credit limits based on responsible participation. Global Exchange Trading System (GETS; a proprietary credit-clearing system) and Community Exchange System (CES) use complicated formulas in which credit limits rise with time according to how much or how well one has participated in the system. Those who have fulfilled their negative-balance obligations in the past get a larger credit limit. This formula functions just like a conventional credit rating.

The real world, however, does not always conform to a formula. Different kinds of businesses have different credit needs, and sometimes exceptional circumstances arise that merit a temporary increase in credit. Some mechanism is needed to set these limits and to grant or reject requests for credit. This might require research, familiarity with industries and markets, and knowledge of the borrower’s reputation and circumstances. It could also encompass the social and ecological effects of the investment. Whatever entity performs this function, be it a traditional bank, cooperative, or P2P community, must have a good general understanding of business and must be willing to assume responsibility for its evaluations.

New forms of P2P banking run up against the same general problem of determining creditworthiness over the anonymous gulf of cyberspace. One could imagine a system in which a database connects you, who have $5,000 you want to lend for six months, to a distant person who wants to borrow it for six months. You don’t know her. How do you know she is creditworthy? Perhaps some user rating system à la eBay could provide a partial solution, but such systems are easily gamed. What you really need is a trustworthy institution that knows her better than you do to assure you of her creditworthiness. You lend your money to that institution, and that institution lends it to her. Sound familiar? It’s called a bank.

Banking, like money, has a sacred dimension: a banker is someone who finds beautiful uses for money. If I have more money than I can use, I can say, “Here, Ms. Banker, please find someone who can use this money well until I need it back.” Decaying currency, described in Chapter 12, aligns this conception of banking with self-interest. It will continue to be a necessary function even when “better” no longer means “to increase my personal wealth.”

Whether it is through social consensus, formulas, or the decisions of specialists, there must be some way to allocate credit. Banking functions, whether implicit or explicit, will always exist. Today, a banking cartel has monopolized these functions, profiting not only from its expertise in allocating credit toward its most remunerative use but also from its monopoly control over the former credit commons. Ultimately, a new banking system might arise from the ground up, starting with small mutual-credit cooperatives that form exchange agreements with each other. Convertibility among different mutual-credit systems is a hot topic in the field, with prototypes being developed by CES and the Metacurrency Initiative. The challenge is to strike a balance between convertibility, in order to allow long-distance trade, and insulation of the members’ internal economy from outside predation or financial shocks. These are essentially the same issues that face small sovereign currencies today.

Mutual-credit systems reclaim the functions of banking for a local community, a business community, or a cooperative entity. They foster and protect the internal economy of their members, insulating it from external shocks and financial predation in the same way that local currencies do. Indeed, local currencies will never be able to expand beyond marginal status unless they have a credit mechanism that protects them from the speculative runs that numerous national currencies have suffered in the last twenty years. Local and regional credit-clearing organizations can exercise capital control functions similar to those that wiser nations imposed when developing their economies through import substitution. The most famous mutual-credit system, Switzerland’s WIR, provides a rather extreme model for this principle: once you buy into it, you are not permitted to cash out. On a local level, this would force foreign investors to source components locally. Less extreme but similar measures were applied by Taiwan, Japan, Singapore, and South Korea in the 1950s and 1960s, when they restricted foreign companies’ repatriation of profits."

Disintermediation and the P2P Revolution

"Another source of economic shrinkage is the disintermediation that the internet has made possible. Disintermediation refers to the elimination of intermediaries: agents, brokers, middlemen, and so forth. Consider the example of Craigslist, which according to one estimate has destroyed $10 billion of annual revenue from classified ads, replacing it with only $100 million of its own revenues.1 Google has also made advertising more efficient (cheaper), not only seizing ad revenue from existing media but also reducing total industry-wide advertising expenditures. (Total “adspend” across all media fell by 9 percent in 2009.) Of course, as advertising has become cheaper, it has also become more ubiquitous; even so, the total size of the ad industry has peaked. Yes, we are passing through the time of “peak advertising” as the commons of the public attention has been saturated. I hope you aren’t too sad about the end of growth in advertising, which has been a major contributor to GDP growth. Meanwhile, many of the traditional functions of advertising and marketing which were once paid services are now being met for free through social networking. Similarly, the blogosphere has taken over many of the functions of traditional news distribution, but again at much less cost. The same is true of travel agency, stock brokerage, and many other industries where brokers and agents are no longer necessary. All of these factors contribute to economic deflation.

Disintermediation and open source software are both part of a more general phenomenon: the peer-to-peer (P2P) revolution. The older hierarchical and centralized structures of distribution, circulation, and production required a lot of money and human effort to administer. Moreover, their very nature isolated people from each other within narrow specialties, making gift exchange impossible.

Disintermediation is even affecting the credit system and subverting banks’ traditional role as financial intermediaries connecting investors and borrowers. Corporations bypass banks by obtaining financing directly from money markets, while new P2P lending websites such as LendingClub and now allow individuals to borrow directly from each other. Commercial credit-clearing rings, mutual factoring systems, and commercial barter networks, which I will discuss later, are other ways that information technology is reducing the role of centralized intermediary institutions. All of these developments will reduce GDP by lowering spending on “financial services.”

Because these ever-cheaper “information economy” services are a factor of production in nearly every other sector, degrowth here is contagious. This is true even in industries that we think of as growth industries. In 2000, for example, $371 billion was spent on PC hardware, including printers, servicing, and data storage. By 2009, this had shrunk to $326 billion. Obviously, this drop is not because we are buying fewer computers; it is because costs have fallen dramatically.

The commonest profit model on the internet is to run ads, essentially limiting the size of the entire digital economy to what level of advertising the physical economy can support. But the internet cannibalizes even itself: websites that offer free product reviews and price comparison searches render the very advertising that supports them obsolete.

What is happening is that the business model that has worked for all human history (find something people do for themselves or each other in a gift economy, take it away from them, and then sell it back) is being reversed. The internet is allowing people once again to do things for themselves and each other without paying for it. Eric Reasons comments,

Maybe the reason we’re having such a hard time finding out ways to monetize various internet services like Twitter, Facebook, and YouTube, is that they can’t be monetized … or at least not at replacement rates to the industries and services that they’re supplanting. This is exactly what the print media is finding out the hard way as it tries to shift to an online model.2

The internet is a participatory gift economy, a P2P network in which there is no consistent distinction between a producer and a consumer. When we share news, product recommendations, songs, and so forth with our online networks, we do not charge anyone for our “information services.” It is a gift economy. The content of most websites is free as well. Reasons concludes,

We’re told to believe in our future in a knowledge-based economy, but nobody has really figured out how to make real money of it. Of those who are making money off of it (Craigslist, Google), they are making pennies per dollar in the old markets that they’ve upset or practically eliminated with their innovation. This isn’t because we haven’t found the right monetization scheme yet. It is because innovation is leading to efficiency and not growth, and that is exerting deflationary pressure on bloated industries. Moreover, it is largely being done by us, the end user, in our free time, because we want to create and share, not just consume.

While a redirection toward a participatory gift economy is new, the threat of overcapacity and underemployment has bedeviled capitalism for centuries, indicating that we don’t need to work as hard as we do to support human life. Indeed, the imminent advent of an age of leisure has been before us ever since the first industrial machines came into use, machines that could “do the work of a thousand men.” Yet the implied promise, that soon we would all have to work only one-thousandth as hard, shows no signs of manifesting. And here I am promising it again. Will this vision likewise prove to be a mirage? No. The key difference is that we won’t rely on technological improvements in efficiency alone to enable greater leisure. The key is degrowth, not efficiency. It seems very counterintuitive: that degrowth—economic recession—will be what ushers in true affluence for the many.

In a growth economy, the labor that could be freed up through technological progress is devoted instead to producing more and more stuff. If in 1870 it took ten labor-hours to produce the necessities of life for a household, and today it takes one labor-hour to produce the same quantity of things, then our system conspires to make us consume as much as ten households did in 1870. We hear talk about the American consumer, the engine of global economic growth. Implicit is a vision of wealth identified with endlessly accelerating consumption. A new computer every month, a new car every year, a bigger house every five years—new, more, bigger, better. It seems insane, but it is economically necessary in our present system because deflation dynamics lurk close at hand, awaiting the day when consumption lags behind productivity growth.

I do not foresee an abrupt transition to the economy I describe. Let us indulge our gentle disposition and allow that the habits of slavery are of long standing and may need some time to unwind. I foresee a degrowth rate of around 2 percent, so that our use of raw materials, our pollution of the air and water, and our time spent working for money not love falls by about half with each generation, until eventually the pace of degrowth slows as the economy approaches an equilibrium relationship with the planet a couple hundred years from now.

The system I have described offers an alternative to this future of bigger, better, and more followed by catastrophic collapse. Negative interest allows productive investment to continue, and money to circulate, even when the marginal return on capital is zero or less, while a commons-backed currency frees work to go toward nonconsumptive purposes. Next I will describe a third thread in the tapestry: the social dividend, which frees the purchasing power of workers from the need for full employment in the money economy."

Principles as defined by Chris Lindstrom

Chris Lindstrom:

"Here are a few principles of sacred economics. It is a concept and practice I am still evolving, and I would love your feedback on it.

Giving and Receiving

Life is a constant act of giving and receiving. In order for life to thrive, energy must circulate. It is a general principle that in any system the energy that goes out of that system must be replenished. This is true for our breath when we breathe in oxygen and exhale carbon dioxide, and it is true when we consume food and drink and expel human waste. This ecological reciprocity is key to life. In nature, every bit of waste becomes the food of another organism. In our rape and pillage economy, we have overloaded the environment with wastes that it cannot use, so they become toxic and destructive. And so it must be with money, if indeed, money remains a part of human society. Money must be made to account in some way or another for the generosity of the sun, the air, the waters. It must be real reflection of nature, and it must be sure that all things that we extract from nature go back in a way that nature can assimilate in a life-sustaining way.


Chief Seattle said in a famous speech, “How can you buy or sell the sky, the warmth of the land? The idea is strange to us. If we do not own the freshness of the air and the sparkle of the water, how can you buy them?” This principle is shared amongst all indigenous peoples and is central to an economics of the sacred. Putting land, or the rights to land, in the marketplace creates a cultural disconnection from nature, because people become preoccupied with an artificiallyprescribed monetary value, rather than understanding that land’s real value cannot be measured, only experienced by relating to it with gratitude and reverence. ‘Property-fication’ also forces us to relate to land in terms of ‘plots’ and artificially created borders, thereby negating the natural seamless-ness and interconnectedness of ecology.


Information is only scarce, when people make it scarce. If I have knowledge, sharing it does not deprive me of it; it only makes everyone better off. Unfortunately, the modern education system operates on the opposite principle: putting a price on knowledge, so only a few can access it, thereby keeping it scarce. Part of Sacred Economics will be dismantling this scarcity of learning in our lives. It will mean breaking out of the monopoly of schooling, and instead exploring and creating a myriad of learning spaces to connect to the passions, dreams, needs, questions, of each person and community.


Sacred Economics cannot have interest as the principle means by which money is created. Very few people know this, but the fact is, all money is created as interest-bearing debt. This creates a fundamental burden on society to work under stress, to keep ahead of the compounding of compound interest. If you think about it, the mathematics of interest dictate that those who have more money earn greater profits on their money than those with less. This very simple yet profound reality is at the core of our social woes. Nearly all religions have in them some prohibition against usury. Islamic countries, in fact, have instituted this prohibition into their laws. Yet, these warnings have been completely ignored in western society. The recent financial bubble bursts are simply what is destined to happen when we base our system on usury. The bubbles of debt, financial speculation, and real estate grow so big that they overwhelm the physical economy, essentially eating away at it, just like cancer depletes the life force of the body until it collapses completely.


The modern economy is very good at making people feel separate and alone. By creating an intrinsic wealth gap into the system, it tends to build resentment and depression into the minds of those who have less, and it creates a fear of that resentment in the minds of those with excess wealth. It also compels people to exploit the land, so as to get ahead in the market. The result is social and ecological alienation and degradation. This way of being is illusory and pathological. Einstein once said,

“A human being is a part of the whole that we call the universe, a part limited in time and space. And yet we experience ourselves, our thoughts and feelings, as something separated from the rest — a kind of optical illusion of our consciousness. This illusion is a prison for us, restricting us to our personal desires and to affection for only the few people nearest us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living beings and all of nature.”

I believe that this task is the only thing that will allow human beings to continue living on this earth. To be here, to be alive, is a blessing that needs to be appreciated through the way we interact with one another, by bringing forth generosity and love, consciously, into all dimensions of life. Dismantling the systems of domination that perpetuate the illusion of separation, most notably, the neo-liberal system of economics, but also religion and politics, is the most important step in the liberation of humanity.

However, this cannot be done by any activities that oppose the system. We must do it through dis-engaging from it. We can do this gradually by creating new systems, new social organisms, that, like the emergence of a butterfly out of a caterpillar, will feed off of the energy, resources and knowledge generated by the old system. Once this process begins, it will be unstoppable. I believe that it has, indeed, already begun." (

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Neotraditional Economics