Eisenstein’s Sacred Economics

See HERE for the provisional contents page of the study,

which gives you a proper chronology of sections.

Note: the content below is all in first draft format. It will change considerably during the time it takes for the study to be completed (especially by way of more academic support, generally). I post now ‘for interest’s sake’.


Charles Eisensteins’ Sacred Economics: Money, Gift and Society in the Age of Transition (2011)[1] embodies the perspective of a writer who has thoroughly adopted an Orphic paradigm, a perspective with important implications for what an ‘alternative’ economy would look like in comparison to the debt-based monetary system of advanced competitive consumer capitalist industrial democratic society (ACID). The importance of envisioning an alternative economy is explained by Baer (2012: 202):

While the powers that be around the world are seeking to address climate change within the parameters of global capitalism, as Simms (2009:184) observes, “global warming probably means the death of capitalism as the dominant organising framework for the global economy.” Thus, it is imperative to think outside the box and construct an alternative to global capitalism as the ultimate climate change mitigation strategy, even though it will not be achieved any time, if indeed ever.

Eisenstein’s use of the word ‘sacred’ in the book’s title is an immediate hint that he advocates an alternative economy; there is nothing sacred about global capitalism’s debt- and growth-based economy, as evidenced by its ubiquitous negative ecological impact (See Chapters 1 – 3). Eisenstein states early on in the text that the purpose of the book is “to make money and human economy as sacred as everything else in the universe.” (.pdf pg. 5) This clearly implies that Eisenstein views the universe and its content as ‘sacred’, something that is completely incompatible with the materialist, reductionist, and consumer capitalist characteristics (as well as all the other Promethean characteristics) explored in Chapter 3 above. His opposition to Promethean characteristics can be seen in the following quote, as well as what he means by the word ‘sacred’, and further what kind of economic system he raises issue with; he writes (.pdf pg. 9) that ‘the sacred’ is

the gateway to the underlying unity of all things, [and] 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 reductionist 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.

The reference to reductionist science speaks for itself; the view of the world as something consisting of “generic building blocks” is synonymous with Heidegger’s analysis of technology (and by association, capitalism) reducing ‘nature’ to a ‘standing reserve’ of ‘resources’ (see Chapter 3); the economic system referred to is the debt-based fiat currency monetary system, a central globalized mechanism that drives the ecological crisis, as explored in Chapters 2 and 3 above[2]. Eisenstein therefore can be said to be motivated by similar issues to those that were explored in at least the first three chapters of this study, and the analysis conducted in Sacred Economics leads to several intriguing approaches that are useful for what can loosely be called the furthering of the ‘eco-friendly’ Orphic agenda. Eisenstein summarises several of these approaches in Chapter 17 of Sacred Economics[3] (.pdf pp. 228 – 237): 1. negative-interest currency; 2. elimination of economic rents, and compensation for depletion of the commons; 3. internalisation of social and environmental costs; 4. economic and monetary localisation; 5. the social dividend; 6. economic degrowth; 7. gift-culture and P2P economics. He (.pdf pg. 237) points out that “all of the seven elements I have described are tightly synergistic. Indeed, none can stand on its own”. Nevertheless, due partly to its direct relevance to the focus on ecology that pervades this study, and mainly due to space constraints, only one of these seven ‘elements’ will be looked at in some depth in this sub-section, element number three, which will then be linked to a selection of relevant pertinent ideas explored by Eisenstein.

The notion of internalizing of costs will here be approached by first considering its opposite, namely the externalizing of costs. Externalized costs are ones “that someone else pays” (.pdf pg. 195):

For example, one reason vegetables from California’s Central Valley are cheaper to buy in Pennsylvania than local produce is that they don’t reflect their full cost. Since producers are not liable to pay the current and future costs of aquifer depletion, pesticide poisoning, soil salinization, and other effects of their farming methods, these costs do not contribute to the price of a head of lettuce. Moreover, the cost of trucking produce across the continent is also highly subsidized. The price of a tank of fuel doesn’t include the cost of the pollution it generates, nor the cost of the wars fought to secure it, nor the cost of oil spills. Transport costs don’t reflect the construction and maintenance of highways. If all these costs were embodied in a head of lettuce, California lettuce would be prohibitively expensive in Pennsylvania. We would buy only very special things from faraway places. (Ibid)

This illustration refers to numerous ecological issues that were explored previously in this study – water issues, soil issues, pesticide poisoning, pollution, and transport systems. Eisenstein is making the direct link between an economic approach, namely capitalism’s externalization of costs, and the kinds of ecological issues already looked at. One could call the results of such externalization of costs ‘ecological debts’; this is unsurprising, considering that the monetary system that has historically accompanied such externalization is a debt-based system, as explored at the end of Chapter 2. As explored in that chapter and in Chapter 3, Capitalist fiat currency is a purely quantitative index, and is linked to the reduction of nature into a standing reserve of resources to be extracted for anthropocentric purposes (á la Heidegger). One can literally put a quantitative fiscal price on the ‘resources’, but such a figure is inherently divorced from the wider ecological impact that the ‘resource’ extraction entails. Eisenstein is accordingly a harsh critic of the dominant debt-based fiscal monetary system, and spends the first section of his book exploring various problematic features thereof.

Eisenstein describes the obvious alternative to externalizing costs: the internalization of costs. The “internalization of all costs is simply the economic embodiment of that principle of interbeingness: ‘As I do unto others, so I do unto myself.’” (.pdf pg. 126). Kovel (2007:16) puts this idea into the broader context of ‘nature’: “It is the essential nature of ecosystems for each to be bounded and internally related, on the one hand, and connected to all other ecosystems, on the other. Thus nature, which we read at this end, may be defined as the integral of all ecosystems.” The internalization of costs is one characteristic of a sacred economy – a sacred economy “is an extension of the ecology and obeys all of its rules, among them the law of return” (.pdf pg. 124). Eisenstein (Ibid) describes the law of return as follows:

In an ecology, no species creates waste that other species cannot use – hence the maxim, “Waste is food.” No other species creates growing amounts of substances that are toxic to the rest of life, such as dioxin, PCBs, and radioactive waste. Our linear/exponential growth economy manifestly violates nature’s law of return, the cycling of resources.

In the example above of the Californian lettuce in Pennsylvania, application of the internalization of costs principle would quite simply mean that one would eat local organic lettuce rather than the one trucked in from afar. In the debt-based money system, this may mean initially paying more for the local organic lettuce. However, Eisenstein states in Sacred Economics that the debt-based Promethean monetary system is reaching its end[4], and offers numerous alternative means of economic interaction. These alternatives cannot be explored here, but the following from Eisenstein (.pdf pp. 132 – 133) will be offered in order to convey the Orphic character of his approach; here he is describing the notion of a commons-backed currency:

Once we have decided how much of each commons should be made available for use, we can issue money “backed” by it. For example, we might decide that the atmosphere can sustain total sulfur dioxide emissions of two million tons a year. We can then use the emissions rights as a currency backing. The same goes for the rest of the commons. The result would be a long list comprising all the elements of the commons we agree to use for economic purposes. Conceptually, it might look something like this: Our money derives its value from the right to harvest 300,000 tons of cod from the Newfoundland cod fishery, the right to draw 30 million gallons of water monthly from the Ogallala Aquifer, the right to emit 10 billion tons of CO2, the right to pump 2 billion barrels of oil from the ground, the use of the X-microhertz band of the electromagnetic spectrum …

The above extract is an illustration of a commons-backed currency at work, and is notably unlike purely quantitative debt-based currency familiar in Promethean worldviews where nature is reduced to a standing reserve of resources. A commons-backed currency is determined not by the value of resource extraction, but rather by prioritizing the quantitative and qualitative well-being of nature as something with which human beings commune. The latter worldview holds that nature offers gifts to human beings, gifts that human beings can accept only with a strong sense of responsibility. Eisenstein frequently mentions a ‘gift culture’; some of its characteristics can be discerned below (.pdf pf. 126), where the relevance of the internalization of costs is again touched upon:

Internalizing costs also reflects the perceptions of a gift culture. In the circle of the gift, your good fortune is my good fortune, and your loss is my loss[5], because you will have correspondingly more or less to give. From that worldview, it is a matter of common sense to include damage to society or nature on the balance sheet. If I depend on you for the gifts you give me, then it is illogical to enrich myself by impoverishing you. In such a world, the best business decision is the one that enriches everybody: society and the planet. A sacred economy must embody this principle, aligning profit with the common weal.

Eisenstein’s vision of what a sacred gift economy looks like is well illustrated in his Sacred Economics, and all of its 300+ pages need to be considered for any justice to be done when discussing what a sacred economy entails. Eisenstein (.pdf. pg. 132) does offer a glimpse of his vision in the following; note that this extract addresses the role of government in a Sacred Economy, a role that seems fitting for government considering the issues raised with it in Chapter 4:

Ultimately, I envision decentralized, self-organizing, emergent, peer-to-peer, ecologically integrated expressions of political will. Parallel to this, I envision an ecology of money as well, an economic system with many complementary modes of circulation and exchange. Among them will be new extensions of the gift, freeing work from compulsion and guaranteeing the necessities of life to all. Whatever form it takes, an essential purpose of government — maybe the essential purpose of government — is to serve as the trustee of the commons. The commons includes the surface of the earth, the minerals under the earth, the water on and under the ground, the richness of the soil, the electromagnetic spectrum, the planetary genome, the biota of local and global ecosystems, the atmosphere, the centuries-long accumulation of human knowledge and technology, and the artistic, musical, and literary treasures of our ancestors.

[1] Note that the free online (.pdf format) version of the book will be used in this sub-section. This seems more in keeping with the spirit of Eisenstein’s general analysis, which will be explored here. Source: http://sacred-economics.com/wp-content/uploads/2012/01/sacred-economics-book-text.pdf accessed 22 June 2015

[2] Chapter two dealt with fiat money in section 2.9. Chapter 3 touches on the subject of money again in 3.5.

[3] The different approaches are each extensively explored in earlier chapters of the book.

[4] “Today, it seems, we are reaching the limits of growth, and therefore the end of humanity’s childhood.” (.pdf pg. 68) “What we see with alarm as an exponential growth curve is actually part of a phase transition curve.” (.pdf pg. 175)

[5] As a side note, these words – “your good fortune is my good fortune, and your loss is my loss” – are frequently used when talking about African Ubuntu.

Leave a Reply