[27.0] our money! it’s broken! (part 1)
the stupid little economy
Those with a passion for the history of centrism may hold the adage “It’s the economy, stupid!” near and dear to their hearts. Coined by James Carville, who advised Bill Clinton’s run for U.S. President in 1992, the term defined a campaign strategy wherein Clinton emphasized George H.W. Bush’s economic shortcomings over other points of contention.
In 2021, as our hyper-decentralized global economy panics when big boats take teeny naps in the Suez Canal and shallow concern over fuel prices takes precedence over our long-term wellbeing, I humbly suggest we rearrange some of the words in Carville’s mantra. The economy—it’s stupid! The cold hard truth. Someone had to say it!
However, I’m not the first to say so, and I probably won’t be the last. The economy has been stupid for over a century according to Howard Scott, an engineer and the founder of the Technocracy movement. In fact, as he wrote for Harper’s in 1933, the U.S. national economy is more than just nonsensical. It’s deadly:
Seven per cent of the available energy is used in the provision of food. The other 93 per cent goes to keep our society going. A close calculation estimates that if we shut off our coal, oil, electric, and water power a large percentage of us would be dead in twenty days or thereabouts. So highly integrated a mechanism has our country become with its very life dependent upon the smooth and continuous operation of electricity, steam, and water power, our coal, oil, and gas, that the blunderings of an Insull, the clumsy smashings of bankers are little short of murderous.
As much as the expenditure being poured into the sustenance of our rat race was a problem to Scott, he didn’t attribute our social ills to energy consumption per se, as much as its affixion to a price:
A chemist in the laboratory of an oil company can examine the sample of a certain grade of gasoline and tell you in figures that will never change exactly the maximum number of heat units that can ever be extracted from that grade. He can measure exactly, and that exact measurement is absolutely necessary in running our system. But can the sales manager in the office next to the laboratory tell you the exact price of gas next month, next year, or ten years hence? It is absolutely impossible and because it is impossible we are playing with dynamite when we attempt to harness the system to price.
It’s the money, stupid!
Scott identified an apocalypse in the arrival of the machine. (His Harper’s article was titled “Technology Smashes the Price System.” Subtle!) Premodern times, he argued, involved human beings and their animals as the sole producers of goods and services. Economies were limited by human populations, which in turn were determined by natural resources. The prices of goods were related to the amount of hours, and therefore units of energy, that went into the production of a good or service. People were paid accordingly, creating a relatively balanced system in which price made some sense.
With the onset of machines powered by steam or gas or electricity, the monetary value of a good was no longer relative to the energy input. Many human beings were outcast from the economic system through mechanization and subsequent structural unemployment. Via pell-mell vectors of debt and credit, money flows grew more unequal and tied to speculation rather than materials, which channelled surplus money into the automated production of goods.
The overproduction of goods meant objects were no longer created for use but for sale. With workers’ diminishing purchasing power, these goods were sold at crashing prices to reach a market somehow. Factory owners slashed labor even more, then, to boost profits. The price system became increasingly volatile, with the money corresponding to goods and services not reflecting the actual value of the thing being offered, but rather the atrophied, thirsty system undergirding it. Writing in the midst of the Great Depression, Scott observed:
In the end one sees the producers, fewer and fewer in number, engulfed in goods which they can neither sell nor use, bowed down with interest and dividend debts which they cannot pay. Beside them is the little concentrated band of owners, swamped in money for which there is no use. Opposed to them is a vast army, laborers, white-collars, professionals, and all with neither food nor clothing nor the money to pay for them. Spread out before all three groups is the spectacle of a gutted continent, its resources wasted and flung away in the crazy race for the profit that strangled the system.
To make things explicitly spiritual and white supremacist, Scott then likened contemporary monetary systems to “primitive” superstitions:
Much has been written about the powers of superstitions and how great their influence has been. In a day when man is the sole engine for work, a social system can get along somehow with superstitions and not go under; but any system of society whose life depends on a steady distribution of its energy resources—and our society at present is so dependent—is risking destruction by a belief in superstition. Would we tolerate as rulers a collection of medicine men from the Congo who attempted to run our system by the use of charms and by the beating of tom-toms? That is exactly what we have been doing and what we are doing now. The bankers in this technological day and age are medicine men and nothing else.
Scott’s screed lies within a ghoulish political tradition: agendas solving for economic progress cleansed of their social influence are invariably racist. The dialect of their injustice may vary—from the imagined “invasion” of Congolese clergy to the punishment of “welfare queens”—but the roots and results converge. Clinton preached tough-on-crime bullshit, DJT was criticized by establishment Republicans for not touting his economic record enough, and Biden’s latest sale of shale oil reserves will worsen climate change’s racialized effects. Practicing “agnostic” money worship necessitates insiders and outsiders; boogeymen assume archetypal and discriminatory forms.
Several questions remain: who the fuck was Howard Scott, who did he think he was, and did people really listen to him?
In Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency, media theorist Finn Brunton describes Scott as a sort of scam artist. He “wore two costumes” over the course of his life: first as a hokey engineering cosplayer in Greenwich Village and then as a Smart Man in a tailored suit and blue tie. “This was the uniform of the new technoculture, the vivid industrial fantasy he was about to tap with his political movement: Technocracy Inc.,” Brunton writes.
Scott may have approached technology as a death knell for the monetary system du jour, but he also believed it could bring us to greener pastures. A novel form of currency, he believed, could be a cornerstone to a new civilizational structure. Its value would be tied to units of energy—to ergs—rather than to human speculation; the new money would also expire within two years if not transacted as a way to prevent hoarding. Through those two tweaks, Scott believed, the economy would once more make sense and reflect material reality.
The worldbuilding that surrounded Scott’s new currency shifted power away from the existing price system, but it hoarded influence and arguably exacerbated inequalities through the Technocrats’ desired political structure. Brunton notes:
Their vision was a postscarcity command economy called the Technate that would include the United States, Canada, and (in some drafts) Mexico, run by autocratic master engineers. All activities they considered nonessential—political, artistic, ethical, social, intellectual, fun—would be curtailed, or eliminated altogether.
The movement took off. At its peak, Technocracy Inc. boasted more than half a million members. Card-carrying apostles saw proof of work as a surefire way to create a more lucid economic hierarchy. New technology wasn’t the problem—our social hardware was obsolete and needed to be scrapped. Core Technocratic tenets rhyme uncannily with contemporary cryptoculture.
If we’ve kinda been here before, though, why haven’t we heard more about Scott? What does the demise of Technocracy portend for Blockchain-contingent futures?
Find out in part 2! It’s the cliffhanger, stupid :)
Divine Innovation is a somewhat cheeky newsletter on spirituality and technology. Published once every three weeks, it’s written by Adam Willems and edited by Vanessa Rae Haughton. Find the full archive here.