The Semiotic Theory of Money (3)

Article by Chris Waller 2012
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Prologue

The Book of Genesis warns of the dire consequences of ineffective communication. Saussure identified language as a social and cultural resource. Language is the medium for the exercise of power, and money has its dialects. Imperial China had its formal 'Great Tradition' and its vernacular 'Little Tradition' - the economy is splitting along the same lines.


To begin this third easy in the series I draw once again on the Bible, specifically, the first nine verses of the eleventh chapter of Genesis. I will not repeat the actual verses here but ask that you read them for yourself.

This story is commonly known as the myth of the Tower of Babel and is said to account for the multiplicity of languages spoken on Earth. However, for me, this story has a much deeper significance and I interpret it as a powerful and profound critique of the problems of urban civilisation.

The story has a basis in fact and concerns the building of the Great Ziggurat of Babylon. In the story, Nimrod the Hunter leads his people to the Land of Shinar and sees that it is enormously fertile. He sees that it would be possible for his people to settle here permanently and leave their nomadic past in favour of the security of urban living. Nimrod's people settled and built their city and so successful was the enterprise that they believed that there was now nothing which they could not achieve, if they were to set their minds to it. Thus, they agreed that, rather than taking the normal route, they would build a tower "whose top may reach unto Heaven". When God saw this he realised the power that they had acquired by virtue of their common language. He therefore decided to confound their schemes by destroying their means of communication.

The story relates to that period of history, probably about seven or eight thousand years ago, when the formerly nomadic peoples of the Middle East began to settle in the river valleys of the lower Tigris and Euphrates, and to build their first cities. This necessitated a fundamental change in the attitudes and behaviours of these peoples. Firstly, a nomadic people can accumulate little material wealth, only that which can be transported. Secondly, each member of the social group must acquire the full range of skills and knowledge required to survive in what is a very hostile environment. Though there is social grouping, there is little if any division of labour and each person, or family, must be capable of self-sufficiency.

The move to urban civilisation brought with it a new social structure whereby specialists were now required. Urban living, even at this primitive stage, is a whole order of magnitude more complex and necessitates the division of labour in order to function. This state of affairs further requires that people should have to communicate with each other to ensure the efficient functioning of the whole, yet dictated that each group of specialists spoke its own language - its 'jargon'- which militated against this very need.

Today, one of the major problems confronting Western technological civilisation is that of communication - C P Snow spoke of the 'two cultures, that is, the sciences and the arts. It is ironic that in this age of digital technology, wherein we are surrounded by a plethora of media designed for the express purpose of speaking to each other, we are unable to communicate. The scientist cannot communicate with the artist, the administrator cannot communicate with the entrepreneur, the financier cannot communicate with the engineer. During the Carter-Brezhnev era of the Cold War, there was a red telephone on each of their respective desks and an inappropriately-named 'hot-line'; between them. Yet even had there been a thousand telephones there could never have been any communication since they were not 'of one speech and one language'. But what relevance does this have to money?

With the division of labour within the proto-urban society came the need to facilitate the exchange of value between the members of that society. Such a situation had never arisen in the primitive nomadic society since each member created and consumed his own wealth. One can imagine that it would not have been long after the introduction of money into the frame that one would have heard the first arguments about hourly rates and excessive profits. One might speculate that this is the real reason the Tower of Babel project came to a standstill.

These few lines from Genesis area veritable 'white dwarf' of sociological thought, awesomely powerful in concept, tantalising us with the possibilities of truly, effective communication, yet warning us of the dire consequences should we fail. In the 'developed' world we chose to begin building our Tower of Babel, and with the advent of the Industrial Revolution it must have seemed that is was well within our grasp. We have chosen to pursue our quest to achieve 'heaven on Earth' through material wealth, and money has been the language of that enterprise. But already the cracks are beginning to appear in the fabric of the tower because our language - our money- has been confounded.

At this juncture it would be worth reflecting on some of the concepts originated by the Swiss linguist, Ferdinand de Saussure, in his 'Cours de Linguistique Generale'. He distinguished, firstly, between langue (language) and parole (speech). He defined language as a social resource and a received system of units and rules, while he regarded speech as the concrete activity through which language is manifested and used by people in specific circumstances. Saussure only considered the linguistics of 'langue' in the 'Cours', while acknowledging that speech alters language systems with the passage of time.

It is interesting to consider how attitudes to language and money have shown remarkable parallels over the centuries. The medieval Church conducted its masses in Latin, the language of the priesthood, in order to deny access to the liturgy to the uneducated congregation and to hold them in its thrall. By this means the Church maintained its power over people. At this same time the Church also decreed what one could, and could not, do with money. It dictated prices for many commodities, it frowned on profit and proscribed the lending of money at interest. For speculating in currency, it demanded the severing of the hands - City currency dealers please note. (One should further note that Sharia law, the body of Islamic law, still forbids the levying of interest on loans.) In the Middle Ages, then, the Church embraced a second trinity, that of power, language and money - it wielded the first by virtue of its control over the other two.) Latin remained the language of the educated elite until as recently as the nineteenth century, while its vestiges persist even today in law, medicine and much of the ritual of the older public schools - and indeed even of the state itself. The state, and the individuals in whom the state's power was vested, reinforced their power and privilege by withdrawing behind the veil of a language which was incomprehensible to the broad mass over which they held sway. With the gradual growth of universal schooling from the late nineteenth century and the resultant increase in both literacy and numeracy, one might have supposed that there would have been a concomitant democratising of the control over wealth, but his has not been the case.

Control over money and its usage may have passed from the Church, but it now resides with another elite whose cathedrals are steel and glass towers in the City of London, the financial economy remains the domain of an elite, with its own arcane terminology replacing the Latin of priests. But, as I implied in the first essay, as there was a language of the elite and a vernacular, so there is an analogous situation in money. There is a vernacular economy, variously referred to as the 'black', 'unofficial' or 'underground' economy.

The official economy is now largely within the domain of computer systems, and by the end of this decade it is highly probable that the entire global financial system will exist only as bytes, either recorded on databases or travelling through cables. A staggering 99.6 percent of all transactions, by value, are now accounted for by computer ledger entries. The remainder, a mere 0.4 percent, are accounted for by cash. At the same time, however, it is estimated that between three and five percent of Britain's GDP is generated by the underground economy. This is the economy where the 'parole' of cash has supplanted the 'langue'. Cash is untraceable and therefore untaxable, which is why one can understand the enthusiasm of the financial institutions and the state for the universal acceptance of 'electronic' money. With the spread of Electronic Funds Transfer (EFT) and Point of Sales (POS) debiting, it will be possible within a few years to dispense with cash.

While this might at first seem very convenient, it also presents baleful possibilities. One the one hand cash - the pound in your pocket - betrays nothing of its origins. It might have been the result of perfectly laudable productive activity, or it might have been the product of crime. But this is the attraction of cash - it is anonymous. It permits the laundering of vast fortunes from the trafficking of drugs, or such similar activities, and their insinuation into the economy as a whole. The advantage - or otherwise, depending on your point of view - of the electronic economy is that every transaction could be traced, its source and destination clearly identified.

So, which is the more real form of money? Cash - ten pound notes - or bytes? Traditionally we have always trusted cash - 'hard cash'- and while the organs of state continue to function and give authority to that money, all is well. However, when the sate collapses, as we are witnessing in the former Soviet Union, cash is abandoned. In the event of a retreat from cash, those with 'electronic' bank deposits could easily move them overseas and avert the losses they would otherwise incur by holding cash. This would suggest that electronic money is more robust and substantial than cash.

During the reign of Elizabeth I, her financial advisor Thomas Gresham coined his now famous law that 'bad money drives out good'. Originally, this referred to the propensity of people to withhold from circulation coinage of high bullion content while allowing adulterated coinage to remain in circulation. One can see a perhaps unforeseen aspect of this law manifest in many of our inner city districts where the drug trade and its attendant crime have both generated and attracted 'bad' money with the consequent decline and disappearance of legitimate businesses. This is a trade which is facilitated by the anonymity of cash and whose profits are translated into BMWs and Porsches. By this means, the proceeds of crime find their way into the legitimate economy, yet must corrupt it in some measure. But how may car salesmen would query the source of their customers' money, even if they could? There is an interesting ethical question here. Given the present volume of crime, it is quite likely that some of the value represented by the money which we, as individuals, have in our pockets is the result of criminal activity. How should we feel about that?

During the last decade we have seen a number of 'ethical' companies and investment funds arise. By investing in these, people can assure themselves that their money is being put to good use ('good' in the sense of 'morally desirable'). Through the use of electronic money and a sufficiently rigorous audit provisions it would become possible to assess any company in the extent to which the sources, uses and destinations of its money correspond to one's ethical stance. The elimination of cash could devastate the inner-city drugs trade, silencing it by removing the language through which it is articulated. In such vestigial from as it might survive, it would be relegated to a barter economy, thus excommunicating it from the 'legitimate' economy, and denying it the channels through which it can make its profits appear respectable.

The obverse of this is that all electronic money would be open to examination, and while it could - and I am sure will- be argued that this is a price worth paying, it would also deliver into the hands of the sate an awesome power of scrutiny. Already, marketing analysts use profiles of people derived from computer files - their spending habits, to which organisations and magazines they subscribe, where and how they travel. Universal electronic money would allow the state to 'eavesdrop' on every financial 'conversation', liquid assets could be seized at the press of a button. Are we prepared for this?

Even now, around Britain, there are about twenty local currency initiatives. The 'Stroud pound' scheme has been functioning now on my doorstep for several years. These schemes are an attempt to protect the vernacular values of a local economy against the ravages of the broader, destructive trends in the mainstream economy. The currency has no value to people other than those participating in the scheme, its being simply a deferred barter system in which an exchange is agreed in an amount of goods or services. No interest is therefore payable. Here is an example which, on a small scale, shows people seeking to assert their power and articulate their values through their own commercial language. It is the financial analogue of a dialect or patois, incomprehensible and therefore valueless to an outsider. Though it might have been hoped, once upon a time, that money would be the great liberator, so corrosive have been its worst effects that people are now seeking to reassert the financial equivalent of the village culture.

In the final analysis then, for money to fulfil adequately its purpose it is necessary that it should be capable of not only expressing material value but also moral and cultural values.

References

Saussure, Ferdinand de
Cours de Linguistique Generale.

Part 1  Part 1b  Part 2  Part 3  Part 4

 

Chris Waller - Permission granted to freely distribute this article for non-commercial purposes if attributed to Chris Waller, unnedited and copied in full, including this notice.

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