Economania

There are parallels between the debates in economics and those in philosophy. My "money as language" thesis has its analogue in the world of philosophy which in the post-war period came to be dominated by the linguistic analysts, Wittgenstein pre-eminent among them, who argued that philosophical problems arose only because of the inadequacies of language. Wittgenstein believed that a sufficiently rigorous language would cut the Gordian knots of philosophy.

Thus, if we could devise a sufficiently rigorous money, then alll economic problems would be solved. Wittgenstein asserted in the Tractatus that the role of language was to map precisely the world it described. So, for money to function correctly, it, too, must mirror exactly the world it describes. After the Tractatus, Wittgenstein realised the flaws in his argument which led to the conclusion that, outside science, language could say nothing of value. In his later work, Philosophical Investigations, he said that language had meaning simply by virtue of the manner of its use, a position sternly criticised by Popper and Russell, this latter regarding it as a retreat from "the grave and important business of philosophy". The danger of Wittgenstein's later position is that we could find ourselves in the world of Lewis Carroll's Queen of Hearts where a word "means exactly what I want it to mean". I contend that the world of international finance is in the hands of like-minded people.

If we take it that the human race, including its proto-forms, has been around foor some 4 million years, spoken language probably arose about 100,000 years ago, meaning that we spent the better part of those 4 million years grunting or gesticulating. The success of Homo Sapiens has been attributed by some as primarily resultant upon his development of spoken language, while the decline and disappearance of Homo Neanderthalis has been said to be due to the inadequacies of its linguistic development. The development of Homo Sapiens since then has been exponential. Written language appeared about 5,500 years ago with money appearing around the same time as urban civilisation developed.

Churchill is quoted as saying that, "Democracy is the worst form of government - except for all the others", and one could say the same thing about money - but I know of no alternative. Barter was superceded by the money economy, the benefits of this latter being manifest. We chose, in devising money, to open Pandora's Box, letting out all manner of evils, but also Hope. To continue in this allegoorical vein, like Goethe's Sorcerer's Apprentice, we conjured up the spell, now we can't stop it.

We need to reconnect money to real world value, but this is a moral project, not an economic one. It is evident that the ability of the world of finance to create new instruments far exceeds the capacity of governments to regulate them, in some cases, even to understand them. Like language, there is no ultimate control over how it is used, though the French government Minister, Jacques Toubon, in 1994 passed "le Loi Toubon" to purge the French language of all foreign encroachments, particularly English ones like "le weekend". Eventually, the law applied only to government documents since the street would not be so ruled.

The problem with regulating money is that money is difficult to define. Once upon a time it all seemed so simple - money was gold. But it was soon realised that gold could be adulterated with baser metals yet still appear as gold; only a time consuming assay of coinage coululd determine whether the coinage was 100 percent gold. Today, money is not only, nor even, coins or paper; it is little more than an abstract notion.

Somehow we have to reconnect money with the real world and we could perhaps begin by reimposing restrictions on lending, the banks being allowed only to lend what they have taken in deposits. This would be the equivalent of the economy going cold turkey, its regular fix of easy credit being withdrawn. But for that to be effective it would have to be worldwide and I see no prospect of universal agreement between the world's governments on that one. And even if it were to happen, there is no way of stopping any group of people creating their own currency and using it as they please.

The problem of money is a moral one and currently what we are doing is the equivalent of putting the fox in charge of the hen-house.

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

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