Wednesday, September 9, 2015

What Is Wealth?

Wealth is what makes us well in the world. It is the existential necessities of food and shelter followed closely by community. We are social animals and life means little without the sharing we do with family, friends and society. Even less without food and shelter. In the urban world most of us now inhabit these existential necessities are entirely or largely mediated by money: we live in a market society where the means of subsistence are accessed only indirectly, through a complex and stratified division of labor bequeathed by industrialization. Even our private lives have become monetized with our parents in assisted living and our children in day care. Ever more of our existence is mediated by the division of labor and channeled through markets by the psychological pull of money.

Money looks like wealth because we can exchange it for necessities as well as luxuries. That money makes no distinction between the two highlights its amorality. Money is morally neutral, real wealth is not. In fact, I'll argue here that real wealth is necessarily moral as it is what makes life good, it provides moral value. Money is a tool that like all others lacks moral agency: it is neither good nor bad on its own and achieves what moral meaning it can only through the agency of the people that use it. Real wealth is existential goods that propagate our genes into the future. Wealth is what is necessary for the long term prosperity both of ourselves individually, and our species. Where it fails on either count, it is not real wealth, at best it is extraction which can parade as wealth only to the extent it escapes scrutiny while it wastes what is real beyond view.

Most economic activity is purely extractive and cannot earn the moral appellation, wealth. This activity and its product is none the less commonly considered wealth despite its destruction of individual and species wide futures through its waste of what is real, living and valuable. This destructiveness usually happens beyond the immediate environment where money falsely parades as wealth. How and why is this self destructive delusion sustained? And how does money maintain the penumbra of wealth's positive association despite its destructive effects?

This is tied up in the illusory value of money where we let it stand in metaphorically for wealth. It is an artifact of our fast, heuristic thinking eliding the complex meanings of the systems we have built, stretching them over emotional templates evolved for an environment these systems have replaced. We elide our existential dependence on life, the ecology from which we actually feed, and seize the abstraction at hand, money that delivers it to our table. To understand how and why this happens wherever civilization obtains lets look at the usage of the word "wealth".

From Merriam-Webster on line:

WEALTH, noun \'welth also 'weltth\:
  1. a large amount of money and possessions
  2. the value of all the property, possessions, and money that someone or something has
  3. a large amount or number
Full Definition of wealth:
  1. obsolete: Weal, Welfare
  2. abundance of valuable material possessions or resources
  3. abundant supply: profusion 
  4. a.  all property that has a money value or an exchange value, b. all material objects that have economic utility; especially: the stock of useful goods having economic value in existence at any one time
Lets flesh these out:

  1. a large amount of money and possessions: This is the practical day to day usage to which civilization puts the word. A large amount of money or possessions is what we think of when we hear the word and underlying questions of what value is and why don't enter out thoughts. As supported by the institutions of a money issuing central bank, courts and their executive agencies, governance and the resulting markets that call forth what goods and services we need as we need them, this definition is a good short hand for those who have wealth and deploy it into civilizations infrastructures. 
  2. the value of all the property, possessions, and money that someone or something has: Is our next most common usage, essentially a summary of an individuals or institution's endowment of 1. above.
  3. a large amount or number: Having taken the implicit value of the two definitions above at their face, a large quantity of anything is by virtue of its number alone, "wealth".
Full Definition of wealth:
  1. obsolete: Weal, Welfare: Now things get interesting. Again from Merriam-Webster, weal is a sound, healthy or prosperous state: well-being. Quite different this, nothing about money at all. Further, as a second meaning, now doubly obsolete: body politic, commonweal. Then, welfare, the state of doing well especially in respect to good fortune, happiness, well-being, or prosperity. 
  2. abundance of valuable material possessions or resources: in the above context, this would be shelter and food, of the healthy, sustainable variety. This is the very essence of real wealth, where an individual can command it in security or where for collective security it is commanded by a society, an amalgam of our fellow beasts for which we are obviously socially evolved despite our selfish predilections otherwise.
  3. abundant supply: profusion: This abundant supply or profusion becomes a commutative part of the word usage, porting the idea elsewhere as metaphor.
  4. a.  all property that has a money value or an exchange value, b. all material objects that have economic utility; especially: the stock of useful goods having economic value in existence at any one time wealth: And finally we collapse back into our habitual, civilized usage: money and other "values" as measured by money. 
Our caloric weal is the most useful entry point into understanding what real wealth is. We all need around 2,000 calories a day of food. Within that, there needs to be a particular distribution of nutrients. The calories alone aren't enough, it is the balance of nutrients that make a diet healthy, which is, from
the point of view of the individual beast, sustainable. "Nutrients" is an over civilized word to describe the biochemistry of life as we consume it in our food. This is the stuff that life is made of, but more than that it is in living form: we eat life. The chemistry is useless without the biology, we cannot live off the constituent minerals and elements of the organic molecules of life, we must live off of life itself. Life comes from life, as in birth, so in diet. 

A living cell of chlorophyll takes energy from the sun and uses it to combine carbon with hydrogen. This process releases oxygen which we breath and produces a hydrocarbon we call sugar which we eat. This basic biochemistry is the progenitor to all oxygen based life of which we, humanity, are now a large part. Likewise it is the progenitor of all the fossil stored energy and animal energy in our world. Our weal at its root remains entirely dependent on this basic and ancient living process. Our human biochemistry is a much newer and more complex evolution of the same original life that led earlier along another path to chlorophyll and our oxygenated environment. Life is all connected and feeds on itself.

Our nutritive needs are a path dependent result of the particular evolution our ancestors wandered through leaving us dependent for survival on the integrated ecology of a biosphere in which we co-evolved with every other living thing in our world.  Evolution diversifies, life integrates: earths biosphere makes no waste, it continually transforms matter through the processes of life. We live off this diverse ecology without understanding more than a fraction of its interdependencies. Real wealth creation occurs where we collaborate with the living processes that produce our food to concentrate, replenish and grow them. The greatest real wealth is the wealth of possibilities in robust symbiotic organic systems. We cannot live without it.

Compounding Wealth vs Extractive "Wealth"

Real wealth is sustainable food and shelter. The larger the community for which it is provided, the wealthier that community. And to my mind, the notion of wealth only has a communal meaning: what good is all the worlds wealth if alone? But the inclusion of sustainability in this definition is the astringent that melts away civilizations lens and clarifies the real lack of value that money has: money is a means to measure according to norms some of the properties of real wealth that make it valuable. In no way can money be said to fully describe what is valuable about wealth. Real wealth is an existential good: where an individual is engaged with it, that individual needs not worry for food and shelter except when threatened by others who might take it. Communities endowed with real wealth have greater force with which to defend their claim on existential security, and if we are part of such a community we are wealthy. Likewise communities have greater resources, human ingenuity and energy, with which to improve what real wealth they control, to compound it. 

It is the existential nature of real wealth that binds to it meanings vastly beyond what money can quantify. It is our existential dependence on it that has focused our minds on compounding it. In South America a thousand years ago a civilization was actually built around this conception of real wealth. The terra preta of the Amazon basin is a six foot deep layer of black, rich topsoil that was manufactured over a four hundred year period by a now extinct nation that may have numbered eight million when first visited by Francesco de Orellana in 1540. Soil was a technology for these people that turned charcoal, organic material and pottery into a living, compounding layer that became thicker and richer reaching its ultimate thickness even as the culture that created it was devastated to extinction by a small pox epidemic.

This manufactured organic layer supported a form of permaculture that fed a dense population without the land clearing, runoff and mono-cultures intrinsic to agriculture. By blending multiple, symbiotic and self reinforcing species into an integrated ecosystem tailored to the needs of high density human consumption, the rain and sun of the Amazon basin fueled a living ecology for people where the riches expanded into a compounding depth of top soil over hundreds of years. These organic technologies are revealing their living secretes to researchers today who are experimenting in different climates around the world with similar ideas about integrated ecologies of which we can remain a beneficial part.

Agricultural civilization has, on the other hand, repeatedly exhausted the ecosystems on which it has depended. This happened in what was known as "the Fertile Crescent", now a region of desert wastes. The gardens of ancient Greece and Rome are now desiccated landscapes of rocks with olive trees the last stubborn remnants of former riches. Most of the Central American Indian civilizations and even the Cahokia civilization near present day St Louis exhausted the carrying capacity of their agricultural systems. The structures that aggregate the wealth of civilization, once a certain scale is achieved, conceal from their beneficiaries the extractive nature of the acquisition. Wherever agriculture has been drawn into the sustenance of a growing civilization, it has become extractive, even where it had been sustainable for generations. There are plenty of examples of sustainable, non-extractive agriculture, but whenever a great civilization depends on it, the pressures to produce more than the ecology can sustain always overwhelm the farmers intuitive conservation of resources.

Our industrial civilization has exponentially grown this historical, extractive tendency. The use of fossil fuels really can't be considered anything but extractive: we have done nothing to create this "wealth" of high potency energy and damn little to integrate its application into a sustainable human ecology. Like the ancient Babylonians or the Greeks and Romans we have simply expanded an extractive anti-ecology by increasing its physical foot print. The results have been to run out of world into which to expand and accelerating degradation of the atmosphere from which this moribund ecology breaths. And because this reality is masked behind the delivery of our necessities at the call of our cash, we think of money as wealth even as our economic system extinguishes the real thing.

Real wealth is the living breathing habitat we rely on despite the pretenses of our new urban existence. All the convenience and conviviality our man made urban habitat affords us, it does at the expense of a finite biosphere now stressed to collapse by our cavalier engagement with it. We are taking what we want without regard for what the consequences are. This is extraction. We have seen before and now know many ways to take what we need in such a way as to leave more for the future rather than less. This would be the compounding of real wealth. I suspect that all we would have to give up of our magnificent urban artifact in order to make it truly sustainable would amount to ending those things we hate most about it: the rush, the congestion, the insecurity and the material inequality.

The compromise of scale

Successful civilizations grow, they compound in scale because the real wealth husbanded in larger units has exponentially larger pay offs. Sustainable societies tend to be overrun by civilizations and particularly by extractive ones. This is one of the inherent compromises of civilization. That the operations of the overall unit are so differentiated through the division of labor that no one has an overall perspective, and that the ecological affects play out on a time frame longer than any individual ruler's life. This leaves no one incentivized to be aware of or responsible for the long term sustainability of overall ecological functioning. The great leaders of history have been the ones with some intuition or insight into this fundamental problem of complex systems. They have understood in some way that the unit is ultimately only as strong as its weakest link and complexity makes that link impossible to identify. This encourages a conservation of what has worked with all its redundancies.

While it is important for economic efficiencies to operate in a civilization, it is equally important to understand the limits of the applicability of economic logic. History shows we are unlikely to know or recognize in advance our economic failure points. Economic efficiency is about resource allocation and where applied to mechanical processes is productive. Where the notion is applied to living systems it can not be anything but a statement of ignorance: life and its evolutionary contingencies are more complex than anything we can hope to understand and to suppose we can mold them into the mechanics of economic systems is a delusion that is poisoning the ecology of the world.

With industrialization we have seen a roll back of all the ancient prohibitions on usury. An important and little understood consequence has been that in the industrial era there has been a sustained monetary pressure for growth regardless of consequences that is a corollary of the need to support fixed interest contracts. This is an economic logic imposed over wealth creation where habits of real conservation come into direct conflict with money values. These forces, when applied to an agricultural base that already tends toward extraction, virtually require extraction as the money value of the inputs are converted directly to profits while the degradation of the ecosystem is externalized into a future where real productivity will collapse. The ecology dies, but the money remains in the hands of whoever extracted the real wealth and monetized it.

So, for  tremendous numbers of people, modern industrial civilization at the moment provides economic "wealth" unprecedented in human history. But at the cost of a global, blind experiment on the impact of new chemicals, compounds and biological forms unleashed by the fossil fuel industries and now playing out in our ecology and atmosphere. In addition, all the living systems engaged with our economies are under the sustained and relentless pressure of interest bearing contracts, whether for mortgages, for capital, for inputs, for labor or simply for rent. Thus scale has compounded ever expanding extraction, first of high energy fossil fuels and now in our primary and secondary food supplies: our grain production destroys the soil and rivers; our meat production destroys the atmosphere and seas. We can not long do without these, we can only fake it a bit longer, but because of the scale of our institutions and the monetary incentives that guide them, these institutions lack the capacity to even recognize what is obviously happening, what they are obviously contributing to.

Money, power and wealth

These institutions were all created to make the world better, no one gets out of bed saying "today I'll make the world worse!" Once made they all provide incentives, mostly in the form of money or access to it, to their human administrators to preserve the supposed benefit of the institution. As we entered into the era of fossil fuels these institutions all became subject to a radically new reality: the underlying productive capacity they were built over was no longer necessarily sustainable. When the power of industry was water, wind or the muscles of man and beast, production remained tethered to real living wealth. Where new resources can simply be mined, drilled or harvested rather than husbanded across generations, the machine of economic organization reaps greater profits from simple extraction than it can from sustainable practice. Interest on money encourages that it do so.

The abundance of fuel in the ground and unexploited ecology above it two hundred years ago set the institutional growth of our civilization onto a path that, at the scale of human lifespan, appeared to be one of unending material and technological progress. It is a period that has seen the species go from just under a billion to nearly eight billion souls. At the same time, the worlds store of resources not engaged with the economic machine has dwindled to something beyond none. And the bad extractive habits of civilization found no disincentive in this new extractive environment, in fact the interest bearing contract that drives modern finance all but requires accelerating extraction.

While two hundred years is ten generations, ecologically it is the blink of an eye. Our institutions are built at the scale of our individual perceptions and function at the pace of human life, but the environmental impacts of institutions unconcerned with the ecology of real wealth on a finite planet have pushed industrial civilization up against the hard limits of that real wealth. The market economy that has come into being in the machine age concomitant with industrialization has been a system to push real resources into the machine of economics to support the material needs of an exponentially growing human population and to pay interest, money profit, to the creditors who fund the system. It has been, in this brief period, the ambition for money profits that has driven the economic machine. After ten generations of success, these ambitions can see no fault in the riches the system has showered on them and have formed for themselves the most sophisticated systems of communication to propagandize the glory of their success even as the economic load on all the ecological systems obviously overshoots any semblance of carrying capacity, even as the extermination of the real wealth of our biosphere accelerates.

Incentives of money within institutions built for exponential growth bias those involved against nurturing real wealth. Profit has no patience for the time living systems require to make real and compounding wealth, in fact the interest service requirements of modern finance predisposes us to see such nurturing as redundant and inefficient because it cuts into money returns now. Systems that incentivize wealth production with money profits will necessarily be biased to extractive "wealth" consumption. Rather than compounding wealth creation, so long as existing systems that ignore ecology are rewarded monetarily for extraction, extraction will proceed. And the confusion of values between money and wealth cause this process to go well beyond any conception of sustainability. Because the value of money is numeric it abstracts out any moral meaning to accumulation. It does this even as interest bearing contracts require service with money regardless of real world consequences. There is a  growing moral price to pay for this. Money and power in their own terms have no need for real wealth as they can always command the extractive kind to their own benefit, the rest of us are not so lucky and bear that moral burden as increasing resource competition for a dwindling rather than growing pool of real resources.

Money confusion

And thus money confuses us to the brink of our own extinction. Money doesn't grow on trees, but real wealth does. When we cut down those trees for a quick profit, while we may make some money, we are destroying wealth. When we drain our aquifers to grow our citrus, we may make some money but we are destroying wealth. When we burn fossil fuel to drive the engine of economics even as the carbon output of that combustion degrades our atmosphere and disrupts the weather that brings rain to our crops, some of us may make tons of money, but we are destroying real wealth. We do all of this for money and those who make money from it in our system as it is currently configured make insane, immoral amounts of it even as they destroy the wealth of the world. 

No comments: