Money versus kindness

With the economy going all to pot, I have this morning joined my local credit union, so as to help keep at least a little wealth in my part of north London rather than have it sucked into the turbulent markets, and also joined one of the Local Exchange Trading Systems, or barter networks, that I've been going on about recently. This short film (below) shows why.

On top of that, I've been dipping again into the brilliantly provocative book Market, Schmarket by Green party economics speaker Molly Scott Cato. The author describes capitalism as we have known it recently as, essentially, a religion that is "communicated, maintained and elaborated through a system of mantras which... tie us into a nasty, selfish way of behaving".

If you believe there is no such thing as a free lunch, she explains, you feel like a "loser" every time you give something away, such as a lunch for your friends. Your act of generosity becomes something that requires reciprocation, and gift becomes exchange. "Kindness is lost to capitalism," she says.

To counter these mantras, she offers alternatives that I've copied below (in italics). I'm not sure that, in themselves, they are enough to get us through the turbulent times ahead, but they made me smile and seemed to contain a great deal of truth.

There is no such thing as a free lunch - Food is for sharing
Everybody has a price - Generosity is its own reward
Time is money - My time is my own
If you're so clever, how come you ain't rich? - If you're so rich, how come you ain't happy?
Nothing in life is free - The best things in life are free
Money makes the world go round - Love makes the world go round
We need to protect our wealth - We need to rely on the love of others

But something bothers me. All these points could just as easily be levelled at the LETS network I just joined. Instead of exchanging goods and services, shouldn't I just cut somebody's hair - or clean their windows, or babysit, or bake cakes - for nothing, out of loving kindness?

I put the question to Molly Scott Cato. She replied:

"First, let me say how much I like the sound of your barter network. Loving kindness is a wonderful thing, but it may be in slightly shorter supply as the recession bites and people have less actual filthy lucre! It may also be difficult to get hold of everything you want through this sort of network. Baby clothes and hedge-trimming work well on a casual basis, but what about conveyancing or fixing your plumbing?"

In her home town of Stroud, she says, there was a LETS network until a few years ago where you could get services outside the sterling economy. It helped to build community and supported people who weren't rich in terms of the national currency.    

"But LETS also have their limitations, the most important one being that you can't buy goods. In Stroud you could actually buy a meal in a cafe or organic vegetables for LETS, but the problem was that the people running those outlets couldn't pay for the things they bought with LETS. Anything that comes from the wider economy is exchanged in national currencies. So some people ended up with vast quantities of local money they couldn't spend.

"Local currencies may offer the best of both worlds, if we can make them work properly. They should encourage people to buy more things locally, and also to produce things so that they will be earning money to spend in their local economy. This sort of system grew up in Argentina when their economic system collapsed due to lack of money. That is the same sort of problem we're seeing now, because our money is based on debt, and the debt bubble has burst. In the 19th century most towns printed money which local people trusted and used. This is quite different from bank money, which relies on confidence. Given that we have all lost confidence in the official money local communities are coming up with creative solutions, like the local pounds in Totnes and Lewes."

If you want to find out more about Molly Scott Cato, see her blog.

Comments

[juls]

Oh, the freecycle community unfortunately are full of people who like being in a position of judgement - I made the mistake of offering to take an an wanted item and was disgusted by the response - basically saying that people who offer to take stuff should beg and provide a good enough sob story ! Well, I just wanted to recycle so I left

[Smiley Bob]

5 billion people who will then have more children, increasing ever exponentially, until we cannot eat any more meat and along come monsanto, with super weeds, then we all die

[Liz]

Oh dear, quite a lot of Pollyanna wiffle being spouted by the Green there. Contrary to the notion that people only act out of self-interest having been taught so by eeevil capitalism, it's fairly basic that an animal that pays little regard to its own (or genetic relatives') interests will soon disappear from the genepool. 'Nature red...' is an oversimplification, but scratch most acts of apparent altruism (in species & societies generally taken as non-capitalist) and you'll find some kind of vested interest. It's very likely that humans' unique intelligence is bound up with our ability to keep nuanced mental records of who's done what for whom.

As for LETS...well, I'm not knocking the idea of swapping stuff where it works for all concerned, but it's surely not coincidental that societies (starting c.3000 years ago) all independently developed currency once they got over a certain size/complexity. Money lets Adam's apples, Betty's bookbinding...all the way to Zak's zithers....reach each person in the quantities desired. Try to negotiate all that through barter between individuals, and the apples would be mouldy before Ken and Rachel had even opened negotiations on their koi and roofing. What's more, the assumption that transactions should be all about an exchange between individuals ironically (for a party apparently keen to see a bigger role for non-market elements) seems to exclude the public sector. As a Civil Servant (working on legislation to counter carbon dioxide emissions), how would I get paid? Finally, while no-one likes paying taxes, it's a fact that much of what gets creamed off monetary transactions in income tax, VAT etc. goes to pay for things like education and health. If a 'community' wants to boast that its members get a large proportion of their goods and services through barter, then good for them--so long as either they're somehow managing to pay for medicines, street-lighting and suchlike the same way, or their reduced contributions to the cash economy mean they're happy to have few health services, libraries shut down etc..

[Neil Pye]

hippy.

[Dave]

""But LETS also have their limitations, the most important one being that you can't buy goods. In Stroud you could actually buy a meal in a cafe or organic vegetables for LETS, but the problem was that the people running those outlets couldn't pay for the things they bought with LETS. Anything that comes from the wider economy is exchanged in national currencies. So some people ended up with vast quantities of local money they couldn't spend."

Surely the only problem is that the local currency was accepted at far too low a rate? Presumably also that people were happy to spend it, but less happy to accept it, and so they took advantage of the good-nature of a few people.

[John Savard]

While I suspect that a LETS wouldn't work for me, the principle is sound, and should be considered on a larger scale. In Adam Smith's day, pound notes were solidly backed by gold coin, so mercantilistic concern over the balance of payments was somewhat unfounded. Today, if a country can't sell as much exports as it once did, higher import duties are a better answer than throwing people out of work so they can't afford imports. We need a different system than the current one to encourage countries to accept imports that doesn't lead to forcing them to accept unemployment too.

[TO]

If you want a truly "local" economy, you must also restrict all of those things flowing in from the outside. Otherwise, you're just a poser. Also, anyone who thinks that giving away a lunch puts the lie to the expression that there is no such thing as a free lunch doesn't understand what the expression means.

[Howard Hughes]

Have I wandered onto the Guardian page by mistake?! (And it would be a HUGE mistake.)

Such bloody hypocritical whinging. You, mate, are writing for, and thus work for News International. Thus you are being paid by the firm created by that high-priest of capitalism, Rupert Murdock. Whom I happen to consider a bit of a genius. So consider the fact that capitalism, that which you smugly deride, pays your rent or mortgage. Now go away.

[Louise]

The Freecycle community is another example. When our breadmaker broke, we asked if anyone in the community had a spare - they did. When our son grew out of his child's bed, we offered it and it was collected a few days later - both good results for us.

[Sally]

"...shouldn't I just cut somebody's hair - or clean their windows, or babysit, or bake cakes - for nothing, out of loving kindness?"

If you're looking for a growing group of people who are trying to live by this philosophy, I'd suggest you check out the Freeconomy Community, via their website at www.justfortheloveofit.org/

The problem with the alternate aphorisms is that they are either untrue (Generosity is not it's own reward), asinine (whether the best things in life are free for you will depend on what you consider to be the best things in life), or accepted anyway (money doesn't buy happiness for everyone).

Local exchange trading systems are severely flawed. They limit the quality and nature of items to that which can be produced locally. They add a commercial element to relationships that would otherwise be purely social, or at least shielded behind a commercial barrier.

This sentance is absurd: " In the 19th century most towns printed money which local people trusted and used. This is quite different from bank money, which relies on confidence." - how is a system which works because people trust it different from a system which requires confidence to work?

LETS only work in primitive economies, or in dangerous times that move people to cling to the geographically convenient, regardless of its other virtues. If we are to solve the crisis of sustainability we need to find global, not local, solutions. Confusing this issue with the various other reasons why some people prefer "local" systems only clouds the issue.

[Charles]

Odd logic.

Capitalism generates altruism in the same way evolution does: because it pays.

If you want he mathematical reasoning, look at John "Beautiful Mind" Nash's work.

Adam Smith put it well when he said: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages."

Businesses MUST provide brilliant service (and sometimes, free lunches, such as the Freemium business model) or they go bust.

Benevolence pays dividends - encapsulated in the mantra "Focus on making the customer happy and the profit will follow".

I admit I haven't read Cato's book, and it may be more subtle than you imply, but it sounds like an assault on a straw man.

Smith dealt with the moral aspect of capitalism in Theory of Moral Sentiments. He was no Hobbesian reductionist.

PS: Capitalists *do not* believe there is no such thing as a free lunch. For example, if two people swap CDs they don't like for ones they do, an increase in utility is experienced - known as a pareto efficiency. Or free lunch.

[Tern]

I love meat, especially the 100% angus burgers I got on a deal from costco recently; delicious with some emmental and ketchup. yum.

[Dragon]

Ah Brien. I am allergic to Soya, and the texture of Tofu makes me gag. I am wheat intolerant and react to most grains. I have to use maize flour not wheat flour. My breakfast cereals are limited to oat based ones. Which grains do you suggest I eat? I do love Linda MacCartney's meat free pies, so I'm not quite a hopeless case!
I hatch and rear chickens for eggs. What do I do with surplus roosters? At present I free range them, then eat them. The alternative is gassing them at hatch. At least mine have a few months of natural life. You can't even give a rooster away unless they are a specialist breed. Buyers want a trio of 2 pullets to 1 rooster. Unfortunately they usually hatch 50/50, though the worst was 5 roosters to 2 pullets from one hatch. You still end up with surplus roosters.
How many rare breeds of chickens, pigs, cows and sheep would have died out if they weren't reared for meat, milk or eggs? What would you do with the surplus male animals?
Bring on the food pills so much loved in sci-fi films of the past. Maybe then you would be happy?
PS I read that plants scream when you cut them. I'd rather not think about that, or I'd starve to death.

[Brien Comerford]

A good way to share food is to stop eating meat. All the grains fed to cruelly mistreated "food animals" could be used to feed 5 billion people. Who needs meat when you can eat tofu, beans, fruits, vegetables, nuts, seeds and flax.