Sacred Economics: Money, Gift, and Society in the Age of Transition (49 page)

Right investment is to array money in sacred vestments: to use it to create, protect, and sustain the things that are becoming sacred to us today. These are the same things that will form the backbone of tomorrow’s economy. Right investment is therefore practice for the coming world, both psychological practice and
practical preparation. It accustoms one to the new mentality of wealth—finding channels for productive giving—and it creates and strengthens those channels, which might persist even when the present money system collapses. Money as we know it might disappear, but the relationships of gratitude and obligation will remain.

If you’ll indulge a bit of poetic speculation, all I have said in the previous paragraph is also true of that other “coming world”—the world beyond the grave. You needn’t believe in an afterlife to understand this. Imagine yourself on your deathbed, realizing that you will take nothing with you. Just as financial investments won’t survive economic collapse, so also does the end of life mean the end of all our accumulations. At that moment, what will give you joy? The memory of all you have given.
Upon death, we take with us only what we have given
. As in a gift culture, that is what our wealth will be. By giving, we lay up treasures in heaven. When we merge with the All, we receive that which we gave to all.

For people with little money, the most beautiful way to use it probably starts with feeding oneself and one’s children and meeting certain basic necessities of human life. Beyond oneself and one’s loved ones, though, the beautiful use of money requires something we might call “investing.” In a sacred economy, investment has a meaning nearly opposite of what it means today. Today, investing is what people do to preserve their wealth. In a sacred economy, it is what we do to share our wealth.

Like nonaccumulation, the concept is so simple that even a child can understand it. It says, “I have more money than I can use, so I will let someone else use it.” That is an investment or a loan. And a bank or other investment intermediary is someone who is adept at finding someone else to use it. Banking, in its sacred dimension, says, “I will help you find someone who can
use your money beautifully.” I once shared this idea with an actual banker whom I met at a conference, and tears came to his eyes—tears of the recognition of the spiritual essence of his calling.

A thousand years from now, when money is so different from what we know today that we might not even recognize it as money, the basic idea of investment will remain. That is because, thanks to the fundamental abundance of the universe and the infinitude of human creativity, we will often have access to a flow of gifts far beyond our immediate needs. We will always have the wherewithal—increasing over time—to create marvels through collective human effort and in partnership with Lover Earth. At the most basic level, sacred investing is simply the intentional channeling of this superabundance toward a creative purpose. It begins with the meeting of needs and unfolds into the creation of beauty.

Right investing manifests the spirit of the gift. Unfortunately, present-day investing bears the opposite spirit: either it is motivated by the extraction not the bestowal of wealth, or the return gift is specified in advance or coerced thereafter, or both. It says, “I will give you the use of this money, but only if you give me even more in return.” Whether it is an equity investment or a loan, I am profiting through my exclusive possession of a scarce resource, with the goal of controlling more and more of it. Another way to see it is that the impetus for the return gift is not gratitude. Despite what the chairman’s message in the annual report says, the board of directors does not determine its dividend payment in a spirit of gratitude to its millions of faceless investors.

Even before an economy realizing the core principles of the gift crystallizes, we can begin living it. Right investing—investing according to the spirit and logic of the Gift—is possible right now. The ideas I am about to offer will become much more obvious after the transition to a new economy, and the overarching stories of that economy—the connected self and Lover Earth—will support them. Today, to apply these ideas requires faith, vision, and courage. You will not receive the affirmation of any person or institution still immersed in the old story. From their perspective, what I am about to offer you is insane.

What I am going to describe is far more radical than “socially conscious investing” or “ethical investing.” While these ideas are steps in the right direction, they harbor an internal contradiction. By seeking a positive financial return, they perpetuate the conversion of the world into money.

Traditional investment, which is perfectly defensible in the context of Ascent, seeks to contribute to the growth of the money realm and gain a part of that contribution as a reward. The venture capitalist identifies high-growth opportunities and provides the money to bring them to fruition. In a steady-state or degrowth economy, this model is no longer appropriate, just as it
feels
no longer appropriate for more and more people in the investing class—hence the turn toward a different investment goal: the restoration, and not the more efficient exploitation, of the natural and social commons.

Let me restate: there is no money to be made for the investors in such restoration. Any “socially conscious investment” scheme that promises a normal rate of return harbors a lie, whether consciously or not. I will illustrate with two examples.

After a talk I gave, a very bright and compassionate woman active in socially conscious investing protested, “Surely not all profitable
investments contribute to the liquidation of the commonwealth. What if I invest in a company that has a great new invention for, say, cheap, portable photovoltaic chargers? I help to capitalize that company; they sell lots of units; we all make money; and the planet benefits too.” Fine, but if the company sold the units at a lower price (e.g., just high enough a profit margin to finance R&D and capital reinvestment), then wouldn’t it do the planet even more good by making the device more accessible? The goal of paying interest or dividends to investors, to give them a positive rate of return, conflicts with the goal that makes the company socially or environmentally “conscious.”

Let me be clear—I am not suggesting that entrepreneurs put themselves out of business by selling at breakeven. I am talking about investing, not earning. It is one thing to receive rewards for doing good work in the world; it is quite another to add money to money by virtue of having money. In the above example, it would be fine to charge enough to keep the business viable, to pay employees well, and to finance expansion, research, and so forth. But beyond that, corporations must earn an additional amount that goes out to investors in the form of interest payments or dividends. Where does this additional amount come from? From the same place all money today comes from: interest-bearing debt and the conversion of the world into money. So if you really want to contribute to the good of the world, don’t ask for a return on your investment. Don’t try to give and take at the same time. If you want to take (and you might have good reasons for doing so), then take, but don’t pretend you are giving.

A second example will make this point clearer. Consider one of the most inspiring types of socially conscious investing: microloans to women in South Asia. These programs have apparently been a
huge success, empowering women in India and Bangladesh with new livelihoods while bearing an extremely low rate of defaults. If there were ever an example of “doing well by doing good,” this is it. You lend $500 to an Indian woman to buy a milch cow. She sells the milk to her fellow villagers and earns enough income to feed her family and pay off the interest and principal on the loan. Sounds great, but consider for a moment: where does the repayment money come from? It comes from the villagers. And where do they get that money? They get it through selling some other good or service—in other words, through the conversion of some part of their social or natural commons into money as described in
Chapter 4
. The effect is the same as that of the infamous “hut tax” that the British (and other colonial powers) used to destroy the self-sufficient local economies of Africa during the colonial era.
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It was simply a small annual tax, payable only in national currency, that forced the indigenous people to sell their labor and their local commodities for that currency. Local economies quickly unraveled and turned into a market for British goods and a source of labor and raw materials.

With her cow, the woman has far more milk than her family can consume. To whom will she give the surplus? Because she must pay back a monetary loan, like it or not she will give it to those willing and able to pay for it. If the cow had been free, and she’d had no compulsion to earn money, she might have distributed the milk through the channels of a traditional gift network. With a financial obligation hanging over her head, she cannot do this even if she wants to. Following this thread farther, who are those willing and able to pay for milk? They are those who themselves earn a
cash income. People who need milk cannot get it if they are living mostly in a gift economy. The entry of a new “business” into the village nudges it away from traditional reciprocity networks and toward the world of money.

If it weren’t for the interest on the loan, the infusion of $500 into the community might not be a bad thing. It is often the case in modern impoverished communities that people have goods and services to exchange but lack the means to exchange them because of the breakdown of gift culture. The original owner of the cow might use the money to pay villagers for things he needs, and when that money eventually circulates back to the woman who bought the cow, many needs have been met, and nothing has been lost. Even if all the money goes back to the investor, at least no money has left the village.

If the loan bears interest, it is a different story entirely. Making an interest-bearing loan to this woman is tantamount to extracting money from her village. Imagine thinking, “Ah, in this village there is wealth that has not yet been converted into money. I am going to take some of it! I am going to make them my debt slaves.” Not a very charitable impulse.

One of the key attractions of local currencies is that they ensure that money stays in the community. An interest-bearing loan of internationally convertible currency does the opposite—it sucks money out of the community. The woman sells the milk to a local cheese maker, who sells cheese to a carpenter, who builds a cow shed for the woman, and so on. The money circulates and circulates, but it cannot stay in the community forever because the debt must be repaid. As for the interest, that can only be paid if local people sell something to the outside world. The pressure on the woman to pay interest is passed on to the community in the form
of milk prices. This is the pressure that drives people in poor countries to work in factories and plantations. In a monetized economy, where the original gift networks have collapsed, you need money to live. You will sell whatever you can—your labor, your time, your environment—in order to get it.

Economists will tell you that as long as the local economy is growing faster than the interest rate on the milch cow loan (or actually, the totality of loans issued to the village), the village can pay off the principal and interest and still grow wealthier. In other words, if the whole village, like the woman with the cow, sells new goods and services at a higher rate than the interest rate, it will be able to make its payments and prosper. But now the same question repeats itself: where does the money come from? On a global level, interest-based investing compels competition and the endless depletion of the social, natural, cultural, and spiritual commons—the conversion of the gift economy into a money economy.
²

How obvious it is that sacred investing has little to do with turning a profit. If you want to help the village, then give a woman a cow. Or if her dignity demands it, lend the money at zero interest (which is a gift of the use of money). If you care more about increasing your monetary wealth instead, then do that instead and forget the pretense. The saying is true: you cannot serve two masters. In both the examples I gave, at some point the conflicting agendas come to the surface, and one must choose: to serve God or Mammon. But this choice will no longer pertain in a sacred economy.
The two will be united—part of a more general reunion of opposites that motivates the phrase the Age of Reunion to describe the coming time.

Socially conscious investments that promise a good rate of return are “robbing Peter to pay Paul”—with a commission on the transaction for oneself. I hope the foregoing explanation was unnecessary to most of my readers. After all, basic common sense tells us that there is a problem with the idea of good works motivated by profit. Profit might sometimes happen incidentally, but a gift that comes with a coerced demand for a greater gift in return is not a gift at all, but a ruse or a plunder.

Is that really who you are, to enforce a coldhearted separation in your life between business and other human relationships? When you invest money at interest, you are indirectly participating in telling some poor chap, “I don’t care what you have to do to get it—give me the money!” Your certificate of deposit is someone else’s foreclosure threat. You may not be acting like Ebenezer Scrooge, but you are paying someone else to.

If interest-generating investments are fundamentally unethical, contributing to the despoliation of the natural and social commons, then obviously we should not invest money at interest. The same goes for any investment that drives the expansion of the realm of goods and services. As socially conscious investors, you don’t want to contribute to the monetization of life and nature.

There is no escape from this principle. Occasionally I receive emails from people in the financial industry who read my work and describe their ideas on socially or environmentally conscious investment. I then propose my own idea: an investment fund that has, as an explicit goal, a zero return on investment. For some reason, none of the financial professionals to whom I suggested this has ever
contacted me again! In a negative-interest economy, though, a zero return on investment would be considered quite good.