Neal Cresswell/The Globe and Mail
"The moment I cross the threshold of a bank and attempt to transact business there, I become an irresponsible idiot." So confides the rattled narrator of Stephen Leacock's little bit of whimsy My Financial Career .
Readers of the story will recall that the sight of the bank's accountant – "a tall, cool devil" with a "sepulchral" voice – so unsettles the client that he asks to see the bank manager – alone.
This arouses suspicion that he is a Pinkertons operative. When it transpires that he merely wants to take out $6, the banker turns so cold that the man is unnerved yet again and writes $56 on the slip, draining his account.
"An idiot hope struck me that they might think something had insulted me …," he tells us. "I made a wretched attempt to look like a man with a fearfully quick temper."
Nobody is fooled; he's just another punter put off his stroke by dealing with money and its institutions. Nowadays, of course, you needn't enter any bricks-and-mortar edifice, or deal with humans at all, to execute your banking needs. But the costs of our spectral economy – from online banking and digital stock trading to virtual currencies such as Bitcoin, the anonymous, peer-to-peer payment system now in the news – may outstrip the benefits, at least when it comes to understanding what's going on.
On the opening page of Das Kapital , Marx remarks that a commodity is "a very queer thing, abounding in metaphysical subtleties and theological niceties." He was not the first to recognize that a "commodity" is not a thing, but a relationship. Once in a system of monetized production and consumption, an object (Marx's example is a table) acquires – or loses – value in a way almost entirely unhinged from its material reality. A commodity doesn't even need to retain material reality. The metaphysical subtleties do not end there.
Marx would hasten to add, correctly, that "money" is not another word for value, but for trust. Because the price of a commodity is just a matter of what a market will bear, the currency used to make a transaction is a matter of pure convention. Paper will do as well as coins, playing cards as well as pound notes, and binary data sequences as well as numbers pencilled into a ledger.
These facts should never be far from view, but it is a pertinent aspect of the human character that we tend to relapse into crude materialism at just those moments when we should remember how finely spun is the web of the world of money. The market's most recent swings, with Bitcoin bubbling and gold crashing, simply remind us that value, in this context, is a matter of collective delusion. Necessary delusion, but delusion all the same.
Gold going bearish was arguably more rattling than the speculation on Bitcoin. The latter is, after all, just the most technically clever of the many alternative currencies on offer. Most take the form of either community chests, one step up from barter systems (Calgary Dollars or Toronto Dollars), or libertarian tax-evasion mechanisms (Liberty Dollars). Some, such as Second Life's Linden Dollars, are just as virtual as Bitcoin.
It's true that many libertarians jumped on the Bitcoin wagon, some viewing it as the first step in their political champion Ron Paul's alternative future of competing non-governmental currencies, others looking for a haven from what looks, still, like the imminent collapse of the euro, if not the greenback. Critics have retorted that Bitcoin is no more than a cyberpunk update on the Ponzi scheme, liable to collapse sooner or later into so much valueless electronic pelf.
Some of those same libertarians are among the gold bugs who have watched in dismay as the once rock-solid metal has gone into free fall. Ever since the U.S. dollar was taken off the gold standard in 1933, it has seemed as if national currencies were as variable as weather. Who can forget those images of German workers carting huge piles of inflated deutsche marks around and film clips of treasury presses printing sheet after sheet of dollars?
Gold appeals to the residual child in all of us – in awe of the weird magic that made a mere piece of paper exchangeable for cheeseburgers or a baseball cap and crushed to find that the local bank branch does not contain every single one of our savings-account dollars.
That same kid, a little older, could likewise appreciate the evil genius of Auric Goldfinger's scheme not to steal the gold in Fort Knox, but to nuke it – and so corner the market with his own uncontaminated horde.
But if gold is fluctuating like a currency, what's going on? There was a flurry of conspiracy theories – was this a plot against freedom?
No, the real lesson of gold's drop is that there is no market value for anything divorced from market forces – and those forces blow like the wind.
One can understand, if maybe not approve, the desire to protect personal wealth from government taxation – that, after all, is the American Dream. But the background assumptions about the nature of property and money are naive. There is no wealth apart from what is recognized by others, and, like it or not, there is no enforceable form of property without government.
Yes, this is just another version of Obama-style "you didn't build that" socialism, but the U.S. President is right: There is no possibility of personal success without infrastructure, whether it be the physical stuff only governments can build effectively, such as highways and petroleum-delivery systems, or such non-physical stuff as websites and software (which still depend far more than people like to admit on the physical things that house IP servers and search engines).
Hence the two-step self-deceptions of those who would deny the role of government in markets and money. If materialist assumptions are too prevalent when it comes to thinking about wealth and property – this is mine and the government can't have it! – they are not nearly prevalent enough when it comes to thinking about online economies.
Republican Mitt Romney may rationalize his "success" as a matter of personal industry, but he should perhaps concede that private equity is the most spectral form of wealth creation, and would not be possible without tamed, complicit regulation.
The problem goes deeper, however. One could argue that it also has a cognitive dimension, in that whole sections of our thinking have been colonized by bad ideas about wealth and money – colonized and domesticated, so that the world of ideas, which once stood as a bulwark against the depredations of runaway markets, is now just one specialized form of capital.
This is not merely a matter of monetizing intellectual activity, which is just the cost of existing in a capitalist world. (I, for example, perform my own version of such transactions every payday.) It's the reverse transaction that should worry us, the one whereby the moneyed interest corners the market in ideas. Witness the virtually unquestioned conviction that everything is a transaction .
Evidence for this form of intellectual dominance is mainly negative, as when my Harvard colleague Michael Sandel felt he had to argue, in his 2012 book What Money Can't Buy , that some things – democracy, education – should not be monetized. Professor Sandel makes the point that, despite what economists may say, markets are no more neutral than technologies are. The notion of an unregulated market is a fiction; it's always a matter of who controls the regulation, and who benefits from it.
I was glad, but also somewhat depressed, to see that this book was a bestseller. These things need saying? Yes, they do.
People are still jumping queues, purchasing elite status, passing on legacy status to their children (hello, Harvard!). The assumptions that made the argument necessary are the very ones that prevent the argument from gaining traction.
Setting some things off from the market only underlines how far it reaches, and may invite hidden profit-making gestures: such as greenwashing an industry to increase its products' market value, or offsetting bad publicity by making a charitable donation. These are just transactions by other means.
Maybe a better strategy would be this: Instead of insisting that some things are not markets, emphasize that markets themselves are a kind of gift.
Traditionally, accounts of gift economies – Lewis Hyde's 1983 book The Gift is a classic of the genre – emphasize how such an economy must resist being defined by transactions. Thus, a work of art may have a price, if it is purchased in a gallery, but its true value can never be reduced to that price. What the work of art gives, it gives freely and endlessly to anyone who can see it. (Gating access to art creates another price, of course.)
In this view, a gift is something freely bestowed, without expectation of recompense – unlike most of what we know as gift-giving, as in the excesses of Christmas. In economic terms, a pure gift is a deadweight loss, because it incurs a marginal cost without a marginal benefit. But what that really means is that the benefit is passed forward, or generalized. Economically, this is inefficient but even hardened economists would accept that gifts are part of the interpersonal glue that holds societies together.
But now suppose that, instead of running alongside transactional economies, a gift economy was the condition of transaction. I mean, the constant gifts of reciprocity and trust that are enablers of currency exchange, respect for property and everyday production and consumption. It is not really the authority of a government that makes a currency functional; it is, rather, the value given to that currency by its users.
That gift lies beneath, and beyond, the reach of the transactions themselves – not as a marginal alternative scheme of value, pretty to think of, but as the very condition of any market economy's possibility. If the Bitcoin bubble and gold slump teach us anything, it should be that.
The deeper lesson is that the ultimate gift economy is democracy itself: not the buying and selling of influence that attends the electoral cycles, but the idea of being an individual with rights and responsibilities, together in our shared experience. This, too, is a form of mutual recognition that lies beneath and beyond the pathologies of the market that often pass for politics.
You may think that this is all so much eyewash, the wishful thinking of a not-so-worldly philosopher. If so, let me refer you to the wisdom of Brad Pitt's character Jackie Cogan in Killing Them Softly, last year's film adaptation of George V. Higgins's 1974 novel, Cogan's Trade (updated for the post-crash economy of 2008).
Cogan is a cool professional killer who must cope with an incompetent partner and squeamish bosses. But his real ire is reserved for the corporate lackey who tries to shortchange him on a hit.
"This guy wants to tell me we're living in a community?" he says, referring to President Barack Obama speaking on television in the background. "Don't make me laugh. I'm living in America, and in America you're on your own. America's not a country. It's just a business. Now … pay me."
Or what, Cogan – you'll kill him? You can't kill them all, and even if you could, who would be left to pay you? The demand to have a transaction honoured makes sense only if you are living in a community. 'Tis a gift to be in business at all.
Now, let's talk about the fact that business is illegal, and evil.
Mark Kingwell teaches philosophy at the University of Toronto; his most recent book is Unruly Voices (Biblioasis).