In the beginning was

the Word, and the Word was

with God and the word was God...

And the Word was made flesh and dwelt

among us... (John 1:1-14)

In God We Trust- The American Dollar



The Word Made Flesh: Money and the Language of Wealth and Poverty

By

Heidi Nelson Hochenedel

Since the dawn of civilization, people have been slaves to limitations on natural resources, wealth, and money. As long as people have been living in groups they have been exchanging one commodity for another. If one person raised chickens and another cows, they might exchange eggs for milk, for example. If there was an abundance of eggs and a shortage of milk, a chicken farmer might expect to get less milk for her eggs. This primitive form of commodity exchange still exists today in many parts of the world, but a key technology changed all of this for most people on this planet- a system that represented the value of any given commodity - money. In this paper, we shall explore some of our social discourses about money and attempt to debunk some of the myths by considering money as both a form of language and technology.

In the Beginning...

The first coins were minted in Lydia, in ancient Anatolia, a state which flourished around 640 B.C.(1) These coins were made out of a mixture of gold and silver and stamped with a lion's head to ensure authenticity. This new technology opened up many new doors for commerce. The notion that an object with little or no use-value of its own could represent the value of any commodity, was revolutionary. For the first time, value could be abstracted from commodities and represented physically in the form of gold and silver coins.

Money as Language and Technology

Money is both a revolutionary technology and a tactile language, one that describes value and which allows the translation of one commodity into another. The word "technology" refers to a method for handling a specific technical problem, while the word "language" means any system of communication. Money as a specialized form of communication is a technology that handles the technical problem of translating the value of work into that of other commodities. Because money is a system of communication, it is also a language. In the same way, written and spoken languages (including language components like the alphabet) can be thought of as technologies for handling the technical problem of interpersonal communication. (Language is a form of technology, but technology is not necessarily language.) As is the case for any language, the relevant interpretative community attributes value to it, which changes over time. Marshall McLuhan writes:

"Money talks" because money is a metaphor, a transfer, and a bridge. Like words and language, money is a storehouse of communally achieved work, skill, and experience. Money, however, is also a specialist technology like writing; and as writing intensifies the visual aspect of speech and order, and as the clock visually separates time from space, so money separates work from the other social functions. Even today, money is a language for translating the work of the farmer into the work of the barber, doctor, engineer, or plumber....In a highly literate, fragmented society, "time is money," and money is the store of other people's time and effort.(2)

For McLuhan, technology and media do not merely facilitate our tasks, they determine which tasks we undertake, thus totally transforming our environment. The technology of money has had a profound effect on human life and has become so second nature that we have forgotten that the god we worship and who commands our lives is the fruit of our imagination, created long ago for our convenience. The technology which was invented to translate the value of one commodity into another has become the most precious commodity, the accumulation of which defines our very value as human beings. The unintended consequence of money is materialism, or, in the worst case, untrammeled greed. Until we understand that money is a technology, which was designed to be used for the service of human beings, we will keep failing to control its effects, and it will continue to dominate our lives in unintended and unforseen ways.

For millennia, the flow of money out of some pockets and into others has caused tremendous wealth as well as devastation, poverty, and starvation. By studying money as a technology and as a language, it may be possible to suggest ways in which people can regain control over the child that threatens to swallow the parent whole. As Foucault has noted, reality is not represented by language, it is created by it.(3) Power produces knowledge, and money, the most powerful language in the modern economy, has produced a series of discourses about its own functioning in the world. In a very literal way, the technology and language of money has created a specific reality and is the site of an unequal relationship between the powerful and the powerless. These "discourses" about money that our culture speaks, can also be described as myths that should be reworked and re-described for the greater good. In this essay I will evaluate the myths about money by briefly looking at its history, sorting out what wealth is, and showing how poverty is the result of the very technology that some say (e.g. neo-conservatives) was designed to alleviate it. Perhaps by reevaluating our current discourses on money, we can ameliorate a reality that has become unacceptable for so many.

 

Myth One: Money can only represent value.

One of the reasons that the invention of money was so revolutionary was that it quickly became not only a representation of value, but a valuable commodity in its own right, which led to the creation of banks and currency trading. Money is the word made flesh because it not only represents value, it is value. Accumulation of money led to increased purchasing power and to a retail market to meet the new demands of the moneyed masses. One of the most important effects of the new technology of money was that it created opportunities to acquire surplus wealth (i.e. purchasing power or access to commodities necessary for survival), allowing people the luxury of leisure time. Jack Weatherford describes the impact of this new technology:

After thousands of years of empires throughout the world, the marketplace emerged during the Greek era and changed history. Every great civilization prior to Greece had been based on political union and force backed by military might. Greece, which by then was unified, arose from the marketplace and commerce. Greece had created a whole new civilization. The wealth generated by this commerce expanded the leisure time of the Greek elite, thus allowing the opportunity to create a rich civic life and to pursue social luxuries like politics, philosophy, sports, the arts. (4)

There can be little doubt that the technology of money is responsible for the emergence of professional classes, whose main occupation lies outside of producing food and basic goods.(5) Intellectuals, teachers, artists, scholars, and students have the technology of money to thank for the leisure time they enjoy to pursue activities inessential to the maintenance of life. In the privileged economic environment of university students, who, while not wealthy, rarely go hungry (or thirsty for that matter), the so-called Left can afford to ignore the only discipline that studies the very life-blood of civilization. The mainstream discourses about money and economics are so powerful in the U.S. that there is an almost total lack of political opposition to them. As a result of ignorance encouraged by the success of the American economy, which has brainwashed most people into identifying themselves more as consumers than as citizens, there is no viable Left political party in the U.S. Both Democrats and Republicans support the business-oriented policies of GATT, NAFTA, the WTO, and the IMF. There is no political party which represents the interests of labor, the poor, and the middle class in the U.S., let alone one that opposes the economic practices that further poverty, disease, and hunger in the Third World.

 

Myth Two: Poverty and starvation result from a lack of food and resources.

Today, in a world dominated by the flow of money, we are forced to grapple with the realities of poverty and starvation in countries that are net exporters of food and of luxury items like coffee and Nike shoes. People today starve and freeze, not for a lack of food or shelter but for a lack of money. Few people recognize the simple fact that people all over the world may starve to death while living in the midst of a surplus of food. The American Association for the Advancement of Science has found that 78% of all malnourished children under five in the developing world live in countries with food surpluses. (6) Most affluent citizens of the First World, dreaming a Malthusian nightmare that should have vanished a century ago, blame over-population, natural disasters, and scarcity of food on the plight of starving masses in Africa, Asia, and Central and South America. Surprisingly, most of these hungry countries are actually net-exporters of food, exporting many more agricultural products than they import.(7) Moreover, because of gross inequalities in land distribution, many countries can't realize their full food-production potential. Frances Moore Lappe, Joseph Collins, and Peter Rosset, in their book World Hunger, say that "abundance, not scarcity best describes the supply of food in the world today."(8) The green revolution, begun in the 1970's, drastically increased the supply of grains. Between the years 1970-1990 the total food available in the world, per person, rose by 11%. Yet in these same decades the number of hungry people (except those living in China, in which a major economic revolution had taken place) increased. In South Asia, there was 9% more food available, but also a 9% increase in the number of hungry people(9). Clearly, greater availability of food does not ensure a decrease in hunger. The only thing that can guarantee this is a fairer distribution of purchasing power. The November 6, 1994 issue of Business Week describes the wealth of the green revolution in India as being fairly useless to the hungry. Lappe, Collins, and Rosset quote this issue:

"Even though Indian granaries are overflowing now," thanks to the Green Revolution in raising rice and wheat yields, "5000 children die each day of malnutrition. One third of India's 900 million people are poverty stricken." Since the poor can't afford to buy what is produced, "the government is left trying to store millions of tons of food. Some is rotting and there is concern that rotten grain will find its way to public markets." The article concludes that the Green Revolution may have reduced India's grain imports substantially, but did not have a similar impact on hunger.(10)

Economic and political systems, not scarcity and natural disasters, are to be blamed for the plight of the poor around the world. In Africa, the colonial land-grabs of a century or more ago is to blame for the fact that the vast majority of Africans are either land-less or owners of low-quality land. To echo Marx, they have been expropriated from their means of production (of something as basic as food) by rich colonialists and corporations, who buy up land for cash crops intended for export. Cash crops must be exported from the Third World because the local citizenry are kept so poor that they cannot provide local markets for goods and crops. Moreover, available credit is channeled away from local food crops to cash-crops for export for the simple reason that these endeavors are more profitable. Those who can still produce food on decent land are forced out of business by local governments and their Western masters who, in the name of charity, dump subsidized, cheap surplus food products at artificially low prices on local markets. These "well intended" food donations keep African wages low, ensuring greater profits for agricultural exporters. Structural adjustment policies imposed on the Third World by the World Bank, the International Monetary Fund, and the World Trade Organization have meant that the Third World has lost its right to impose tariffs on foreign goods or to subsidize local goods, thereby protecting local businesses. These policies are obviously good for multi-national corporations, export-crop land-owners, and for Western countries in general. But they are devastating to local concerns in the Third World. When foreign goods undersell local goods, local businesses fail, and unemployment rises, thereby creating a desperate population even more ripe for multi-national corporate exploitation. Restructuring policies have had the predictable effect of driving labor wages down in the Third World. Not surprisingly, wages in Northern countries have followed suit as the result of the necessity for First-World workers to compete with cheap labor in the Third World.

 

Myth Three: Sticks and stones can break my bones, but words can never hurt me.

(The Semiotics of Poverty and Starvation)

How can world hunger be the result of a lack of money/ purchasing power rather than a lack of available food? As we shall see, money is a means of conferring purchasing power on people by defining the value of their work. By undervaluing the labor and products of the Third World, the First World keeps the vast majority of people in the Third World poor (and in some cases, starving.)

Money is a technology designed to mediate the value of different commodities. A commodity is simply any "useful" object produced for exchange. Money is a meta-commodity, one of representation, that intervenes in the exchange of all commodities. Marx distinguished between "use value" and "exchange value." An object's use-value is determined by how physically useful it is, while its exchange value is defined by what one can get for it in the marketplace. Paper money has no use-value other than its combustibility; but it does have exchange value. Value of all kinds is socially constructed, variable, and determined by supply, demand, desire, and faith. Value is linguistic, like the meaning of words, it is attributed to objects by an interpretive community. When products (including labor-power) can be exchanged for very little money, they are described through the medium of money as relatively valueless to consumers.

Obviously value is not an objective and measurable quality. It is NOT the case, for example, that labor in the Third World is inherently worth less than labor in the First. Labor in the Third World has been defined as being worth-less largely because of political structures that prevent workers from organizing and opposing employers. Money is the language that describes the value of commodities, including labor- power and other goods for which it can be exchanged. In countries where workers do not have the liberty to unite against businesses, their value is defined as that which allows them to survive well enough to come to work the next day. Wages are not merely money paid out to workers for their labor-power; they are also a social description of the value of a person's time or of a person as a person. Those who earn higher wages over any given period of time are described through the medium of money as more valuable than those who receive lower wages. Multinational corporations, which pay their workers subsistence wages define the worth and value of the time of the people they employ as very low, their time being defined as much less valuable than that of people performing the same tasks in the First World. They do so, not because they are racist or nationalist, but because profits rise when labor costs are low. Since the motives for this discrimination are economic rather than racial, the global community has not seriously taken issue with it. This description of the value of Third World labor makes it very profitable for international business to settle there.

As Marx famously noted, under capitalism workers produce products of greater value than that provided by their wages. Profit is only possible when enterprises can extract surplus value from workers. In fact, this economic structure is not rigorously distinguishable from slavery. Slave owners also had to feed and house their slaves so that they could return to work the next day. Indeed, after emancipation in the U.S. in 1865, many slaves went to the North, only to find themselves economically compromised. If they were lucky, they found menial jobs, at low pay, and lived in slums. Paid labor contributes to the illusion that workers are paid for their time, when in reality they are paid for just a percentage of it. The rest of their time goes to creating surplus value for employers. Likewise, slavery creates the illusion that slaves are not paid for their time, when in fact they are fed, clothed, and housed, which in some cases is better recompense than that received by Third World workers. Subsistence salaries are a thinly disguised form of slavery, especially when alternative work opportunities do not exist, i.e. when workers are forced to work for low wages or starve. Poverty, like slavery, is both the result of greed and the theorization of the valuelessness of those who work for wages. Poverty is not merely a condition of the poor, it is a hateful description of the "other."

 

Myth Four: The First World does not benefit from the fact of poverty in the Third World.

The fact that Northern consumers depend on cheap Third World labor to produce inexpensive products for export to enhance our purchasing power, is often overlooked or ignored. Many in the North fail to understand that our standard of living is directly linked to the fact of poverty in the Third World. Cheap clothing and food on Northern markets would not be available at these prices if the labor and products of the working poor in the Third World were not defined as relatively less valuable. (Prices could, in theory, remain low if business shared its profits more equitably with its workers, but this will never happen without international legislation.) It is in our financial interest to keep the poor desperate enough to work for any wage and tyrannized sufficiently to resist unionization. Moreover, it is in Northern consumers' best interests to keep the Third World from consuming its fair share of basic commodities like food and clothing because if commodities were scarcer, prices would rise, decreasing our purchasing power. Our government has been working for U.S. businesses (who want access to ultra-cheap labor) AND for Northern consumers, who want food and clothing prices to remain low, which increases our individual and national wealth. It has been working against U.S. labor, which wants to keep wages at a relatively high level, and against the working and starving poor of the Third World.

 

Myth Five: Money is identical to purchasing power.

Money is language, and like a verbal or written language, it is used to represent or a describe reality. The truth or validity of this representation, like that of any other, is always open to question and subject to change. Money is also a commodity. It not only represents (describes) value: it is value. Without money, it is impossible to acquire goods necessary for survival in the modern economy. Money is the word made flesh, but it does more than talk: it COMMANDS, conferring power on the possessor. But if money itself is only symbolic of purchasing power (in the same way that words are symbolic of concepts), what is purchasing power? Obviously, it is nothing that exists independently in the world as a concrete object. Purchasing power is a social construct, which is to say that it is an idea that an entire society buys into. Purchasing power, like political power, requires the cooperation and complicity of the powerless. What makes a king a king? It takes everybody respecting his status as king, especially his knights. This is true even if he owns the whole world. If most people (or only the knights) stop respecting his status as king for whatever reason, he ceases to be a king. If he is redefined (say somebody finds out he is not the "real" king, but an imposter), everything changes. His royal position is semiotic. Power is both a linguistic and social contract, which can be (although not easily) redefined. There is nothing about what a king HAS that gives him power. His power is a function of how his person is READ by the public. In the same way, there is nothing about what wealthy people HAVE that gives them purchasing power. Money alone has no use-value, only exchange value. The power of money lies in a public agreement to honor its value. When people lose faith in its value (as happens quite often, resulting in inflation), it ceases to represent purchasing power, becoming devalued or valueless.

Ironically, it is the powerless who confer power on the powerful by attributing value to them. (By honoring the value of money, they likewise honor the value of those with the most purchasing power.) Likewise, the powerful confer powerlessness on the masses by defining their valuelessness, creating a caste or class system. This whole system could fall apart as easily as the stock market in 1929- all it takes is a lack of faith, and a revolution.

 

Myth Six: You can never have too much money.

Purchasing power is a description by one's interpretive community of one's high worth combined with the availability of useful commodities for purchase. Historically, purchasing power has been strongly linked to the gold standard. Gold, a rare and precious yet useful metal, was (and still is) equated with value in the abstract. The values of all commodities could be translated into gold. Faith in gold as the absolute incarnation of value works rather well if there is a limited but sufficient supply of both gold and commodities. If commodities disappear, however, it becomes devalued, which is to say that it takes more gold to purchase scarcer commodities. Gold, like any other form of money, both represents the abstract value of commodities and is the incarnation of value: the word made flesh. But, as we have seen, the value of gold or of any other medium of exchange is subject to change. During the colonial period, beginning in about 1500, the mercantilists failed to understand this rather simple notion. They believed that there was a one to one relationship between gold and wealth, which resulted from their failure to associate wealth with access to commodities. The Spanish fetishized gold to such an extent that they failed to understand that gold is only a means to acquire commodities, and that commodities make life pleasant and comfortable, not gold. They believed that the goal of any monarch should be to accumulate as much gold as possible because they foolishly thought that gold equaled wealth (or purchasing power).

When the New World was discovered and gold was pillaged from Central and South America, vast quantities of it were imported into Spain and subsequently distributed throughout Europe. The result was not an increase in wealth, but an increase of gold in circulation and therefore a net decrease in the purchasing power of gold, which accompanied a decrease in the availability of commodities. Greater supplies of gold meant a greater demand for goods. Demand increased, while supply decreased, resulting in an inflation rate of over 400% between 1500 and 1600. Jack Weatherford writes:

The wealth proved to be a mixed blessing for the governments of peoples of Spain and Portugal. It caused tremendous inflation - the more silver people had, the more goods they wanted to buy, and the more people who wanted to buy the goods, the higher the prices charged for them. The quantity of goods produced could not keep up with the volume of silver shipped from America; consequently inflation increased, thus eating away at the value of silver and gold...It is estimated that between 1500 and 1600, the first century of Spanish colonization of the Americas, prices in Spain rose by 400 percent, and for this reason these great changes are known as the price revolution.(11)

Purchasing power, then, cannot be equated with possession of any given medium of exchange, like gold; it is a function of a whole social system. Sufficient quantities of desirable commodities must be available for purchase, and sufficient quantities of money (the medium of exchange) must be distributed throughout the population for purchasing power to exist. When this delicate balance is disturbed, the system collapses, and purchasing power disappears.

As countries like Japan and Hong Kong have shown, a well run economic system allows a country to become and remain wealthy without the benefit of natural resources. The exchange of commodities (including money) beyond borders can be manipulated such that a nation that enjoys little in the way of natural resources, can have sufficient purchasing power to buy enough commodities for a comfortable life. Economic systems which provide a good balance of commodities and media of exchange (money), and which distribute the media of exchange more or less equitably (or equitably enough such that most people can afford food, shelter, and medical care), are those that have a high standard of living. Such systems create markets for their own products, and do not need to look (exclusively) abroad for markets to sell most of their locally produced wares. One of the big reasons that the Third World sells so much food for export while its people starve is that their populations are so impoverished that they cannot provide local markets for these goods. The creation of local markets for goods requires that wages remain relatively high across the board so that citizens can afford to buy commodities to make their lives reasonably comfortable. Land owners in the Third World have determined that it is more profitable to sell goods abroad because these markets can pay more for goods than local ones. The result is that the Third World has little to offer to their local economies AND the local people have no purchasing power to buy whatever goods might be available for the local elite, who can afford to buy expensive gourmet foods and luxury items from abroad.

We have seen that purchasing power is the result of an entire system, not the possession of a single valuable commodity such as money. In fact too much money in the system drives prices up, severely decreasing the purchasing power of money-holders within a given community. Typically, when too much money is introduced into the system, it is concentrated in only a few hands. While prices rise because of increasing demand, the money is not evenly distributed throughout the population, and only a few citizens can afford to pay the inflated prices, while the others are locked out. Wages almost never keep pace with inflation. Introduction of too much money within a system is a tax on those who save money because the value of what they save is decreased. The wealthy, who invest in land, business, or other solid commodities, stand to gain by inflation because they can now sell these products at higher prices than those at which they were purchased. Alleviation of poverty in the Third World would require that workers be valued more by employers AND sufficient commodities such as food become available for local markets and not exported to the First World. Merely increasing wages WOULD NOT alleviate poverty in the Third World unless more goods became available for purchase on local markets. An increase in wages would, in the short run, result in inflation. (On the other hand, increased wages might also attract businesses by creating local markets that could afford to pay for goods.)

While too much money in an economic system is devastating, so is too little. After the stock market crashed in 1929, people ran to the banks to redeem their paper money for gold, essentially shutting down the banking system. Banks in turn stopped lending to businesses and caused wide-spread unemployment and poverty in the U.S. and Canada. At that point the dollar was on a gold standard, which limited the amount of money that could be lent and spent. In an effort to pull the country out of depression in the 1930's, Roosevelt took the dollar off the gold standard. Roosevelt's New Deal came about as the result of the advice from world renowned economist, John Maynard Keynes, who argued that if incomes rise, spending increases, thus pulling economies out of depression. He believed that when an economy cannot reach full employment, government spending can stimulate it to create more jobs and increase well-being. For Keynes, worrying about deficits during recession was irrational. This policy did in fact pull the U.S. out of depression. Social programs employed people while giving financial respite to the poor, which in turn increased spending. Increased wealth provided new markets for business, who were then able to begin employing more people. Surprisingly, the International Monetary Fund (IMF) enforces the exact opposite policies on depressed Third World economies. Structural adjustments required by the IMF on the Third World as conditions for receiving badly needed loans include slashing state programs on health, education, and social services, as well as requiring the removal of barriers for imports. As a result of these policies, poverty has escalated in the Third World over the last 20 years.(12)

In 1971, gold became totally disassociated with the U.S. dollar when Nixon closed the "gold window": the dollar was no longer fixed to gold, but floated relative to other currencies. According to Jack Weatherford, author of The History of Money, Nixon's decision ended the period of the greatest strength and prosperity for the American dollar. Because nothing backs the U.S. dollar except faith, international confidence in the dollar has not been the same since the closure of the gold window. This would seem to imply that the entire economy of the world, which, since the Bretton Woods agreement of 1944, has linked currencies to the U.S. dollar, rests on nothing but confidence in the strength of the U.S. government and economy:

Between Franklin Roosevelt's decrees in 1933 and Richard Nixon's actions in 1971, the United States went from a dollar standard based on (a) precious metal to one based solely on government regulation. Today's American dollar is merely fiat money, backed by the order of government and by people's faith in that order and nothing more. The gold notes and silver certificate dollars long ago gave way to the Federal Reserve Note. The phrase "Payable to the Bearer upon Demand" has been replaced by "In God we Trust."(13)

Myth Seven: Our money represents something real. (In God we Trust.)

Given the fact that U.S. money is based on absolutely nothing but faith in the U.S. government, its artificial nature is clear. Money is the language of purchasing power and a description of the relative value of human beings. Currency is not backed by gold or any other useful commodity. The world's supply of money is not limited: it can be produced at will by governments for the purposes of paying for defense, social, or other programs. It is not amassed through hard work, or by producing useful items, or by possessing abundant natural resources. It is accumulated by owning the means of production, i.e. variable capital (employees) and constant capital (land and machinery). Those who work the hardest, providing services that many people would refuse to furnish, are often those with the least money and purchasing power. Occupations that pay the best are often the most competitive, e.g. there is an over-supply of people qualified to fill well-paid positions. Salaries are not determined by supply and demand, but by the value that businesses place on any given occupation. Money is a powerful and useful idea. But like the idea of God, it is an abstraction: once one loses faith, the system upon which it is founded crumbles, as we saw in 1929 crash. We trust in money as we trust in God; but our trust is based on faith alone, and is backed by nothing solid, like gold. Most money in the world today is virtual, existing only on computer screens; like God, it has lost its corporeal nature. Given this fact, it should not be surprising that the single most profitable market in the world is the currency exchange. Huge sums of money are made by speculating on the rising or declining values of currencies in this market. The currency market is different from any other because no goods or services are involved. In this market one abstraction (the money of one country) is exchanged for that of another.

The currency market is today the largest market in the world. The money exchanged on the currency market surpasses the gross national product of the world's major economies for an entire year. In a year a single trading center such as the Chicago Mercantile Exchange oversees currency trading the value of which surpasses that of the combined gross national product of the whole world.(14)

Not surprisingly, the value of a given currency has very little to do with actual economic statistics or indicators:

Much of the rapid currency movement is based on intangible moods, intuitions, and prejudices. Such moves often reflect the trust that investors have in the leaders of a country at any particular moment. They trusted Ronald Reagan to act the way Ronald Reagan acted, and consequently the dollar traded at higher levels during his presidency than the economic data would otherwise have warranted. Investors lacked that kind of confidence in George Bush and Bill Clinton, causing the dollar to fall. Such intangible factors as these probably account for 75% of the currency fluctuations, while only about 25% can be correlated with actual quantified economic factors and statistical indicators.(15)

Given the fact that all money in the world is fiat money (i.e. that it is issued at will by legal authority), and that the relative values of world currencies are determined mostly by emotion and intuition, this suggests that money is best understood as a language used by currency traders to describe knee jerk reactions and gut feelings about the perceived effectiveness of leaders and economies. It also assesses the general value of a nation's commodities, including the labor-power of human beings. Language is often used to benefit those in power at the expense of the vulnerable. Just as whites have described blacks as shiftless, lazy, and not fully human, so have the Northern countries described the currencies of the Third World as essentially worthless. The only reason that the American dollar is preferred over the Ecuadorian sucre, for example, is because currency traders have faith in the stability of the American government and economy. If that same degree of confidence stood behind the sucre, the Ecuadorian economy might look very different. But in fact, Ecuador, along with the other countries of Central and South America, has been described as economically impotent, and so it is. The result is that people who earn U.S. dollars (or who can buy them for a reasonable price) can purchase goods in Ecuador for much less than they are valued in the North, whereas most people who have sucres couldn't afford to buy a cup of Starbucks coffee (grown and roasted in Ecuador). This is a form of economic rape. The poverty of the Third World is due, in part, to the value that currency traders attribute to their commodities, including human labor-power.

 

Myth Eight: Free markets are good for all economies.

One of the greatest problems for the Third World is the First World's relentless faith in the capacity of the free market to fix all economic ills. We tend to think of the Third World as going through "growing pains" that will eventually be assuaged by Adam Smith's invisible hand, as they were in the First World. Yet history teaches us that the free market has never created wealth for burgeoning economies: it is only profitable for strong and mature economies, especially if they are in a position to exploit weaker ones. The United States did not become wealthy as the result of free market policies. To the contrary: it remained protectionist until very recently. Noam Chomsky writes:

Let's turn to a second question: How did Europe and those who escaped control succeed in developing? Part of the answer seems clear: by radically violating approved free-market doctrine. That conclusion holds from England to the East Asian growth area today, surely including the United States, the leader in protectionism from its origins.(16)

Moreover, there was no self-correcting feature of the free market that adjusted for the kind of cruel exploitation that took place during and after the Industrial Revolution in the U.S. and Europe. While we commonly credit the Industrial Revolution as the source of our current wealth, children during the Industrial Revolution as young as 7 or 8 years of age were made to work from sunup to sundown 7 days a week, including holidays, in atrocious work-environments. In spite of working longer, harder hours, living conditions actually deteriorated during the Industrial Revolution to below what they had been 25 years earlier. (17) Since these conditions represented the greatest profit margins for companies, they would have persisted had it not been for the labor movement, which, at great personal sacrifice, unionized to oppose business. The gift of the labor movement to the First World was that it created a work-force with enough purchasing power to create markets for its own products. Wide-spread prosperity is only a recent reality, arriving in the mid-twentieth century. John Ralston Saul writes:

The public demands for change came in many forms. Sometimes the need for reform was expressed from above, sometimes it showed itself in blind fury in the street....Most of the reforms that brought prosperity were the result not of self-interested action but of disinterested action- citizens committing themselves beyond their personal interests in order to widen the public good. There is absolutely no indication that the Industrial Revolution in balance had a self-rectifying mechanism to achieve any social balance - by which I mean reasonably shared prosperity. It was the citizenry and democracy that forced the economic mechanism into a socially acceptable and reasonably stable shape; what I would call the shape of a civilization.(18)


Myth Nine: Poverty is unrelated to fascism.

A big reason for which the Third World cannot achieve a reasonable level of prosperity is due to the lack of stable democracies there. Repressive dictatorships give the citizenry no voice to protest abuses, yet it is precisely the freedom to organize and unionize that promises a decent living standard. Certainly the U.S. has done its part to quash democratically elected governments there if it appeared that the privileges of U.S. businesses might be compromised. Yet in working for the best interest of U.S. businesses and consumers, the U.S. and the First World have failed to recognize their own responsibilities to the global community. Free market policies cannot create prosperity in the Third World for any but those who own the means of production. They will not share their purchasing power unless they are forced to do so. This force can only be applied by a dedicated and disinterested global citizenry. In the age of the global village, it is time to reassess our allegiances. Do we remain allied with businesses and wealthy consumers, or do we choose to side with world labor and the hungry? The choice is ours to make. By the lights of any reasonable standard, our current course of action is deeply immoral.

 

Conclusion

As concerned liberal citizens of the First World, we need to recognize what money is, what wealth is, what the free market can and cannot do, and what our responsibilities are. Do we want to continue to get fat at the expense of the starving? If not, then it is time to question the practices of businesses and governments who define the workers and products of the Third World as almost valueless. To pay people in the Third World so much less for the same labor that people are paid in the First World, is simply a form of discrimination, and in the worst cases, a disguised form of slavery, the result of which has been the systematic strangulation of the Third World economy. We should support international legislation which would outlaw the devaluation of Third World labor and products. "Equal pay for equal work" should be the slogan of fair-minded people everywhere. Submitting to fair trade regulations should not be the option of magnanimous companies like Star Bucks, it should be international trade policy.

Obviously, we need to support international policies that put the hungry back in possession of their means of production to produce products for local consumption, not foreign markets, regardless of whether or not profit margins will be reduced for wealthy land owners and corporations. Products must be made available for local consumption on Third World markets if people in the Third World are to enjoy enough purchasing power to acquire an adequate standard of living. We need to understand the limits of free-market dogma by noting that free market policies benefit very few people in the Third World (those who own the means of production and exercise political control of governments), but are detrimental to the vast majority of people there.

Most importantly, we need to recognize that money is a technology and a language that is used to describe value, and that we use money to attribute value to commodities, including human labor-power. Money is not wealth: it is a technology that defines worth. It is also a technology intended to distribute commodities. This technology is not working well in the Third World because it has been manipulated in a racist and discriminatory fashion by free-market business leaders and politicians, who define the worth of work, based on the color of people's skin and passports. It is important that we regain control of our technology: to use it for our good and for our convenience, not to continue to fetishize it and remain slaves to it. In its present state, the technology of money is being used to describe the labor-power and products of the Third World as essentially valueless. This description is a very powerful one because, like the word made flesh, language has become reality.

In our society, the single greatest health risk is heart disease, which results from obesity, inactivity, and smoking. We are literally dying from over-consumption, while millions starve. In a world of plenty it is time to reassess the distribution of commodities like food. Money is no longer the word made flesh: it is the word made fat. We are so wealthy while others are so poor, it is no wonder that we have placed our trust in God, the American dollar.

 

ENDNOTES

1. Glyn Davies A History of Money: From Ancient Times to the Present Day (Cardiff: University of Whales, 1994), pg. 63.

2. Marshall McLuhan Understanding Media: The Extensions of Man (New York: New American Library, 1964) pg. 127.

3. Michel Foucault, Discipline and Punish: The Birth of the Prison. Alan Sheridan, trans. (New York: Pantheon, 1977).

4. Jack Weatherford, The History of Money: From Sandstone to Cyberspace (New York: Three Rivers Press, 1997) pp 37-38.

5. Georg Simmel, The Philosophy of Money (Routeledge and Kegan Paul, 1978), pg. 152.

6. Lisa C. Smith, Science, Engineering and Diplomacy Fellow, American Association for the Advancement of Science, The FAO Measure of Chronic Undernourishment: What is it Really Measuring? (Washington D.C.: U.S. Agency for International Development, Office of Population, Health, and Human Development, June 1997), 6-7.

7. Francis Moore Lappe, Joseph Collins, and Peter Rosset, World Hunger: Twelve Myths 2nd edition, (New York: Grove Press, 1998).

8. Ibid. pg. 8.

9. The Action Against Hunger website distinguishes between famine and malnutrition. "Hungry people" here refers to those suffering from malnutrition. They write: "Famine is a state of acute hunger, with the total lack of food supplies for entire populations which will inevitably result in death if nothing is done to help them. Famine affects people whose only 'wrong' is to find themselves involved in conflicts where hunger is increasingly being used as a political weapon.
Somalia, Ethiopia, Liberia, Sierra Leone, Mozambique, Angola, South Sudan, Great Lakes regions……the famines in all these countries in the last decade have been the result of violent conflicts, with thousands of refugees or displaced persons who are always the first victims of hunger. Malnutrition, by comparison, is "silent hunger". It is possible to be malnourished without feeling hungry , if one's food supply is poorly balanced both in terms of quantity and quality and prevents normal activities. Although they do have food to eat, millions of human beings suffering from malnutrition are deprived of certain vitamins and substances which are vital for their development. Although malnutrition is a phenomenon which is widespread in the Third World, its consequences are not as dramatic as those of a famine. It can be combated by development programs, aimed at increasing agricultural production and at improving health and eating habits."
http://www.acf-fr.org/

10. John E. Pluenneke and Sharon Moshavi, "A Revolution Comes Home to Roost...Leaving Hunger in the Midst of Plenty," Business Week, Nov. 6, 1994. Cited in World Hunger.

11. Jack Weatherford The History of Money pg., 101.

12. Lappe, Collins, and Rosset, pg. 103.

13. Weatherford, pg. 185.

14. Weatherford, pg. 254.

15. Weatherford, pg. 257.

16. Noam Chomsky, Profit Over People (New York: Seven Stories Press, 1999) pg. 30.

17. John Ralston Saul The Unconscious Civilization (The Free Press: New York, 1996) pg. 115.

18. Saul, pp117-118.