<nettime> In Gold We Trust, part 1

[Keith Hart <HART_KEITH@compuserve.com>]

Thanks to Julian Dibbell for a fascinating case study which is, of course,
much more than that.

>Are they all just fetishists of the token of exchange (as Doug Henwood
would have it) or are they on to something?<

Fetishism is a religious concept: it concerns our attributing agency to a
spirit at the expense of recognizing human agency. In Marx's hands, the
spirit became a thing, money, and fetishism concerned the attribution of
life to all the things, commodities, deriving their exchange-value from
money. He thought that this was an improvoment over religious alienation,
since it was more likely to dawn on us that we make the things and indeed
the money also.

E-gold and LETS both focus on the money form. There has to be some point of
entry and why not money? One could equally choose to approach the modren
economy by writing about Wall Street. Or Capital. But the two differ
markedly on the issue of human agency. 

Gold is the archetypal commodity money whose acceptability is its real
asset value, not any political authority (although, as Keynes pointed out)
such authority has been linked to the standard value of gold for thousands
of years). the idea is to trust the object not the person, to get people
and especially politicians out of the picture as far as possible. This in
itself is not fetishism, but the idea that gold is as solid a basis for
value as an ingot is fetishistic. For the gold price is a function of human
agency: the propensity of Indian peasants to hoard gold rather than sell
it; the level of goldmine production; the number of people who want gold
for whatever purpose; whather states choose to back a gold standard or not.
If Keynes wanted to break the gold standard, it was not just because having
this one source of money stifled liquidity, but rather because he wanted
human beings and their governments to take responsibility for making their
own money, instead of abandoning it in favour of a fetishised object. One
good send-up of gold fetishism is B. Traven's Treasure of the Sierra Madre,
but the best is Fank Baum's Populist allegory, The Wonderful Wizard of Oz.

It should be clear from several recent postings that open money or LETS is
not just about community currencies, but the many forms of exchange circuit
that might be built using them. It has hitherto been understood that they
normally function as small-scale local networks, but this is an
unnecessarily restrictive form and we are now exploring others. This is a
broad church and experimental project that is open to learning from or
combining with  any contemporary money system, whether state money, Paypal,
hawala, commercial barter or social credit. Our emphasis is on the people
who make the money they use for exchange. Community cirrencies are issued
by all members whenever any of them goes into a negative balance. The
promise to pay is made by each of them, unlike a single issuer currency
(whether state or private). We believe that these forms are inherently more
robust becaiuse they are democratic and multiple. The default of some
members does not limit the ability of the others to trade. LETS systems
cannot suffer from a run on the bank, although they may experience
difficulty in recruiting individuals willing to trade.

In the course of our work, we often run up against money experts who insist
that state money is the only feasible kind and who have a potted history of
money in their heads that justifies this assumption. They are usually, but
not always, academics. I ask nettimers to judge which is the greater fetish
-- to worship one of two eternal verities, gold or the state, or to try to
develop forms of money issued by the people themselves?

Keith Hart

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