The destructive power of wealth accumulation

The amount of money in circulation – cash as opposed to credit – must be sufficient to allow all transactions that demand that form of payment to take place. As the volume and value of exchanges grows, so must the amount of circulating money. However, the speed at which money circulates is also a factor. The same money can change hands in quick succession, but it may also be hoarded for months or years. If there is more money than is needed, prices tend to rise. And if there is less than needed, prices will tend to fall. The persistence of price inflation, whether high or low, seems to signify that circulating money always increases faster than exchanges, that there is always a bit more cash around than the goods and services on offer. But, of course, cash is not the only form of payment that fuels demand. An ever growing amount of credit exists alongside it.

Credit is granted by the seller or, more usually, by an intermediary such as a bank. It must pay interest, hence costing more than a cash payment, and is returned either by instalments or as a lump sum. There are also revolving credits that are constantly renewed at term and only interest is paid. Credit can be used to buy just about anything, and in that aspect resembles a cash payment. But cash symbolises a past income, whereas credit is the promise of a future income. One represents something that has happened, the other represents something that should happen at a later date. Granting credit has a risk factor that is proportionally or excessively compensated by interest. It is profitable for the lender and useful for the borrower, but its consequence is that future incomes have been spent and cannot be spent again. More spending today means less spending tomorrow, unless that spending is on an investment that generates an income and pays itself back. Though the interest on the credit means the investment must return more than has been spent. Consumer credit reduces future consumption, unless incomes are rising, in which case it merely reduces that growth. Invested credit must get more out of the market than has been put in.

Money mediates transactions, selling the produce of labour to buy the produce of some other, different labour. But, very early on, people realised that if selling to buy was possible, then buying to sell was also a possibility. Selling to buy is an exchange of use values, and the intermediary money gives them a similar exchange value. Money is a token of value that changes hands and facilitates the exchange of use values. Buying to sell is a very different process. Here use value is the intermediary, and the exchange is money for more money. Between the two transactions the use value has acquired extra exchange value. Either it has been bought for less than its exchange value, or it is sold for more than its exchange value. The original seller, the final buyer, or both are being cheated (1). This getting more for less accumulated wealth and allowed the rise and fall of many splendid merchant cities along maritime and caravan routes. It would lay the foundations of profit capitalism.

Credit preceded coins and bullion by a few thousand years (2). But it still needed a standard measure of value. This was often a certain measure of locally grown cereals that could be stored and kept, and represented wealth. And, being food, it was also a measure of labour time, which in turn compared the relative values of exchanges. Before the minting of money and its general usage, payments were promises. Going farther back in time, early societies practised a system of gifts and returned gifts. The returned gift being equal or exceeding the one received. This may have been the case with the early forms of credit. It certainly was later on, when merchants became bankers and demanded interest on credit and loans of money. The gift system tended to accumulate wealth at the top of the social hierarchy, but a periodic potlatch would redistribute or destroy it. The early credit system tended to accumulate debts, but they would be remitted periodically. Coins and bullion, however, cannot be written off, and their metals are all but indestructible. When precious metals became the standard measure of value and coins the means of exchange, wealth accumulation acquired new, much vaster dimensions.

Money and its debt companion rule the world. Wealth buys the support it deems necessary and reduces the rest to debt serfdom. Voluntary servitude or forced labour seem to be humanity's only destiny. The volunteers have the illusion of free choice, the rest knows only compulsion. The incentive for compliance is moving up the ranks and getting more of the crumbs. And it is instilled in childhood by the bells and rules of education, where submission brings praise and prizes, and rebels are no-future outcasts. Cash and credit have all the planet under their yoke, and their need of always more is their undoing. Getting more out of the market than is put in means looting the environment and spending future incomes. Both sources of profit are on the verge of collapsing and are already in intensive care, with money transfusions and frequent organic emergencies. The system is moribund, but it is still capable of killing the planet before it dies.

1. The environment almost systematically gets less than the value it produces.

2. See David Graeber's masterful book, Debt: The first 5,000 years