The Mystery of Money © Bernard Lietaer 2002 Published in German and 7 other languages under the title: Mysterium Geld: Emotionale Bedeutung und Wirkungsweise eines Tabus (Munich: Riemann Verlag, 2000) Please do not reproduce more than three copies without permission from the author at [email protected]. The Mystery of Money Beyond Greed and Scarcity Copyright B. Lietaer email: [email protected] The Mystery of Money 2 © Bernard Lietaer October 2000 About the Author Bernard Lietaer, one of the original architects of the European single currency, wrote “The Future of Money” and “The Mystery of Money” while a Fellow at the Center for Sustainable Resources at the University of California at Berkeley and a Visiting Professor in Archetypal Psychology at Sonoma State University, California. He has been active in the domain of money systems for a period of 25 years in an unusual variety of functions. His first book (MIT Press 1969) developed new technologies for multinational corporations to manage multiple currency environments. He then moved to the other end of the spectrum by consulting to developing countries on how to improve their hard currency earnings. Subsequently he became Professor of International Finance at the University of Louvain, the oldest university in his native Belgium, before moving on to become the top executive in charge of the Organization and Computer Departments at the Central Bank in Belgium. His first project in this capacity was to design and implement the single European currency system. During that period, he also served as President of Belgium’s Electronic Payment System, credited as the most comprehensive and cost effective payment system in the world. Before starting work on his current book, Bernard co-founded one of the largest and most successful off-shore currency funds becoming its General Manager and Currency Trader. Business Week identified him as “the world’s top currency trader” in 1992. The Mystery of Money 3 © Bernard Lietaer October 2000 Table of Contents INTRODUCTION 8 PART ONE: ARCHETYPES AND MONEY 13 Plan of Part One 13 Core Ideas of Part One 13 CHAPTER 1: THE LANGUAGE OF ARCHETYPES 16 Some Concepts of Collective Psychology 17 Archetypes 18 Shadows 20 Yin, Yang and Jung 21 The Shadow is not the enemy 25 A Map of the Human Psyche 26 CHAPTER 2: THE CASE OF THE MISSING ARCHETYPE 31 The Great Mother 32 The Great Mother Archetype and Early Money Systems 37 Defining Money 37 Cattle: the first working-capital asset 38 The ubiquitous Cowrie 42 Other “Primitive” Money 44 Some Early Coins 46 The Repression of the Great Mother 49 Indo-European Invasions 53 Mesopotamian Civilization 54 Greek Civilization 55 Judaism 56 Christianity 59 Protestantism 64 Male Heroism and the Repression of Feminine 64 Exceptions: Pockets of Historical Survival of the Great Mother cults 67 Monetary Consequences of the Repression of the Great Mother Archetype 69 CHAPTER 3: THE ARCHETYPAL HUMAN 71 Gender and Yin-Yang energies 72 The Mystery of Money 4 © Bernard Lietaer October 2000 The Archetypal Human and the Material World 76 Archetypal Five 78 The Shadows of the Archetypal Human 79 Shadow Resonance 81 Fear as common denominator 82 Conclusion 82 Testing the Map 83 PART TWO: EXPLORING MONEY SYSTEMS WITH ARCHETYPES 84 Plan of Part Two 84 CHAPTER 4: EXPLORING BOOMS AND BUSTS WITH THE MAGICIAN 91 The Boom-Bust phenomenon 92 Reactions by Authorities 95 Reactions by Economists 96 Economic Man 97 Denial 97 Economic Explanations 98 An Archetypal Approach 102 The Meaning of Myths 102 The Apollo-Dionysus Pair 103 The Relevance of the Apollo-Dionysus Myth for Today 113 CHAPTER 5: CASE STUDY OF THE CENTRAL MIDDLE AGES 116 A Money Connection 117 Medieval Demurrage 118 Egyptian Demurrage 120 So What? 122 The Trail of the Black Madonna 122 Why does She matter to us Today? 123 Esoterism vs. Exoterism 125 Why is She Black? 129 The Egyptian Connection 137 Economic Results in Medieval Europe 139 Europe’s First Renaissance 139 Demurrage-charged Money: the Invisible Engine? 144 The Mystery of Money 5 © Bernard Lietaer October 2000 Economic Expansion 147 Prosperity For All 148 A Renaissance for the People, by the People? 152 A Half-Renaissance for Women 154 The time of the Cathedrals 162 How the Music Stopped 167 The Backlash of 1300 168 Population impact 171 Demurrage Systems Abused 173 Centralized Authority 174 War and the Gunpowder Revolution 176 How Money Scarcity was created 178 Conclusion on An Unconscious Monetary Experiment 179 CHAPTER 6: CASE STUDY OF EGYPT 180 Egyptian demurrage 180 Egyptian Economy 182 The Isis Cult 187 Return to Our Core Thesis 189 The Status of Women in Egyptian Society 190 Marriage “Contracts” 191 Women’s Legal Status 192 Women’s Work 193 Women Rulers 195 A Greco-Roman Ending 197 Looking Back for what is Common between the two civilizations using demurrage currency 199 Relevance for Gender Relations 200 Relevance for Money Systems 201 Relevance for Today 201 An Agenda for Research 202 PART THREE: WHY NOW? 204 A Synthesis of the Relevant Concepts from “The Future of Money” 205 CHAPTER 7: EXPLORING CONTEMPORARY MONEY WITH THE GREAT MOTHER208 A Short History of “Yang” Money Evolution 208 The Mystery of Money 6 © Bernard Lietaer October 2000 Commodity money: 209 Authority-Issued Standardized Coinage 209 “Fiat” Currency 210 Monetary Evolution on the Archetypal Map 210 The Archetypal Human and the National Money System 213 The National Money System as a Strong Yang construct 214 Consequences of the Repression of the Great Mother Archetype 214 Yang Shadow Resonance 214 Historical Origins: The Dark Middle Ages as an Emotional Imprint? 215 What kinds of emotional shifts are most relevant? 216 Calling Huizinga to the Witness Stand 217 Money as Information Replicator 228 Some Positive Effects 229 Some Pathological Consequences 229 Role of Money Systems in shaping societies 232 Back to the Future? 234 CHAPTER 8: WHERE ARE WE NOW? 239 Consciousness Evolution 240 Jean Gebser’s Work 240 Integrating Gebser into Archetypal Evolution 243 A Lesson from 30,000 years of Archetypal History 245 Where are We Now? 250 The Traditionalists 252 The Modernists 252 The Cultural Creative Subculture 254 The Cultural Creatives: A Global Shift? 258 Archetypal Mapping of the Subcultures 261 Recent Challenges to Modernism 263 Back to Money 265 The Meaning of Our Crisis 269 CHAPTER 9: OUR FUTURE, OUR MONEY 270 Updating the Archetypal Vocabulary 272 Holding Paradoxes 273 Money Outlook 273 The Mystery of Money 7 © Bernard Lietaer October 2000 EPILOGUE: A FUTURE TALE 275 APPENDIX A: A BRIEF GLOSSARY 283 The Mystery of Money 8 © Bernard Lietaer October 2000 Introduction Why has money become such an influential force in the world today? Why does it generate such powerful and polarized emotions in most individuals? Collectively, why do supposedly rational financial markets periodically suffer from extraordinary irrational and destructive manias and crises? The journey to which this book invites you will provide the key to understanding the core emotions that are implanted in our money system, and make it such a powerful compulsion in our societies. It is a journey inside our own heads, bringing to conscious awareness one of the last taboos of Western society: our money. Talking about a taboo is hazardous. Pointing to a society’s shadows is, by definition, risking to upset many people. Talking about emotions and archetypes in a book on money is unconventional. So why this book that deals with the taboo of money by exploring the collective emotions it generates? To truly understand how money shapes society “out there”, we need to complete the circle and bring into the light how it connects “in here”, inside our own psyche. After all, that is where the engine that is driving it all is hiding. In a previous book, The Future of Money1, I made the forecast that the Information Age is fundamentally changing not only the form of money (e.g. e-cash, smartcards, etc.), its geographical spread (the Euro), but also our very concept of money (who issues it, for what purposes, what emotional patterns it generates and what social behaviors it encourages). In fact, this has already started to happen, as over 4000 communities around the world have started creating their own local currency systems. These systems act not as a replacement, but as a complement to the conventional national currencies. People use them to address problems that conventional money has proven unsuccessful at resolving. Issues like community healing, creation of meaningful work, ecological sustainability, or elderly care in a rapidly graying society. I concluded that - if the best models were implemented systematically - such monetary innovations could make “Sustainable Abundance” a reality within one generation on this planet. Sustainable Abundance was defined as a process that would provide humanity with the ability to flourish and grow materially, emotionally, and spiritually without squandering resources from the future. All the relevant concepts from The Future of Money will be synthesized later in the current book (introduction to Part Three). However, one core question that remained open is: should these on-going monetary innovations be dismissed as a short-term fad, or are they early signs of a fundamental shift in the nature of money? Why could we expect an essential change to occur now in the nature of money? The claim that the nature of money is radically changing may appear at first sight quite preposterous. After all, our money system has not undergone a fundamental change in many centuries. 1 Future of Money (London: Random House, 2000) The Mystery of Money 9 © Bernard Lietaer October 2000 Indeed, every modern society - independently of its cultural or political background - has accepted the current money system as self-evident. When the French or Russian Revolution overthrew the established order in their countries respectively in 1697 and 1917, they changed just about everything—but not the money system. Both societies completely rebuilt their legal systems. The French overhauled the entire measuring system (the metric system dates from then), and even tried to change the calendar. The Russians threw out the very concept of private ownership, and they nationalized the banks. Both issued currency engraved with new mottoes and different heroes. But the currency remained - exactly as before and now - artificially scarcity-based, issued via bank debt, and centrally controlled. When Mao’s communist takeover occurred in China, or when one hundred developing countries gained their independence over the past half-century, exactly the same thing happened. In assessing fundamental change in our money system, we need to address some other pertinent questions first, such as: • Where is the desire or need for this kind of money system Sidebars and Images coming from? Sidebar boxes like this one will be used to • Are greed and scarcity, as is explicitly assumed in all our provide additional insights or remarkable economic theory and most of our conventional wisdom, an anecdotes relating to the material where they appear. For a reader in a hurry, they indelible reflection of human nature and material reality? can be skipped without loss of Or could it be that it is the current money system itself that understanding of the main arguments. constantly creates and re-enforces those specific collective This book is also abundantly illustrated emotions of greed and fear of scarcity? with images, which provide a parallel comment to the text. The reason is that • Why is money a taboo topic? the language that will be used to describe • In short, what is the origin and mechanism of the collective emotions is the one of emotional dimension of money? archetypes, and that archetypes are primarily images. This association of images and text also practices what is being proposed here: to integrate the I have come to the conclusion that it is only if we become information of the left and right brain, our aware of the way whereby money systems shape our two complementary information systems. collective emotions - or better still, how collective emotions shape our choice in money systems - that we can make a conscious choice in money systems. As Europe moves into its next monetary experiment with the Euro, as monetary crises topple the economies of entire continents, as our fixation with short-term financial results may threaten our very survival, the stakes for making conscious money choices have never been as high. * * * One of the contributions of the American philosopher Ken Wilber has been to provide a simple but powerful framework to classify all forms of knowledge.2 This framework can also provide us with a very compact way to clarify what is - and what is not - dealt with in the books “The Future of Money” and “The Mystery of Money”. Wilber structures fields of knowledge in four quadrants in 2 The most synthetic of his books that describes this claissification is: Wilber, Ken A brief history of everything (Boston: Shambhala, 1998). The Mystery of Money 10 © Bernard Lietaer October 2000 which the two distinguishing dimensions are on the one side the Interior (the domains where the aim is the interpretation of meaning) vs. the Exterior (where the purpose is description of behavior); and on the other the Individual-Collective (see Figure I.1). For instance, physics, biology, and all behavioral and empirical sciences correspond to the upper right quadrant (Exterior-Individual domains). In contrast, the domains explored by Aurobindo, Plotinus, Buddha and all other spiritual traditions fall into the upper left quadrant; as do the theories of Freud, Piaget and others focusing on individual psychology (they all correspond to Individual-Interior concerns). Similarly, systems theory, economics, political economy or the study of social systems fall in the lower right quadrant (Exterior-Collective). Finally, Cultural History, Collective Psychology or Evolutionary Psychology would fall into the lower left quadrant (Interior-Collective). Individual Spirituality Physics Individual Psychology Biology Empiricism Behaviorism Interior Exterior (Interpretation of Meaning) (Description of Behavior) Cultural History Systems Theory Collective Psychology Economics Evolutionary Psychology Political Economy Social Systems Collective Figure I.1 Ken Wilber’s Four Quadrants Classifying Fields of Knowledge3 The same four quadrants can also describe all our ways of knowing about the money phenomenon (see Figure I.2). For instance, the upper-right quadrant (Individual-Exterior) deals with how individuals can earn more money, spend or invest their money. This is the one quadrant that will be left out in my work. Not because it lacks interest, but because there are already thousands of books available which address these issues. So I have focused instead on the less frequently visited other three quadrants. My previous book “The Future of Money” dealt with the social dimensions of money - i.e. the lower right quadrant (or Exterior-Collective) - and used whole systems theory as its main approach. The current “Mystery of Money” deals with the two left-side quadrants: the individual and the collective Interior dimensions, and uses archetypal psychology as its key investigative tool. This book has been titled the “Mystery of Money” because it covers the whole range of issues of the left side of Figure 3 Wilber, Ken: A Brief History of Everything (Boston: Shambala Publications, 1996) adapted from pg 71 and 84.