Rushkoff on the economy: “let it die”

Paul Raven @ 18-03-2009

restaurant pricing - the credit crunch modelUnsurprisingly, everyone everywhere is talking about the economy. The usual twist on the topic is to ask “how can we fix it?”, but Douglas Rushkoff would like to suggest that the global financial collapse is a blessing in disguise and that we should just let it die, as it gives us a chance to reassess the assumptions that our monetary systems were built upon:

… it’s even more important for us to come to grips with the fact that the system in peril is not a natural one, or even one that we should be attempting to revive and restore. The thing that is dying—the corporatized model of commerce—has not, nor has it ever been, supportive of the real economy. It wasn’t meant to be. And before we start lamenting its demise or, worse, spending good money after bad to resuscitate it, we had better understand what it was for, how it nearly sucked us all dry, and why we should put it out of our misery.

His point is that, at every level, the system was designed to benefit those who set it up at the long-term expense of everyone else – it’s almost miraculous it’s lasted as long as it has:

An economy based on an interest-bearing centralized currency must grow to survive, and this means extracting more, producing more and consuming more. Interest-bearing currency favors the redistribution of wealth from the periphery (the people) to the center (the corporations and their owners). Just sitting on money—capital—is the most assured way of increasing wealth. By the very mechanics of the system, the rich get richer on an absolute and relative basis.

The biggest wealth generator of all was banking itself. By lending money at interest to people and businesses who had no other way to conduct transactions or make investments, banks put themselves at the center of the extraction equation. The longer the economy survived, the more money would have to be borrowed, and the more interest earned by the bank.

Just in case you think Rushkoff’s a sneaky pinko or something, it’s worth considering that he’s an advocate of local economies and currencies, and opposed to any form of centralised control; even if you don’t agree with what he has to say, he raises some talking points that we’d all do well to at least consider. As he points out, we may not get another opportunity… and you know what they say about life handing you lemons. [image by Cory Doctorow]

But what do you think? Should we build a new world where value is produced by actual effort, or can the financial system be fixed to ensure we don’t all strive for the profits of a few?

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4 Responses to “Rushkoff on the economy: “let it die””

  1. motozero says:

    Hi, I like the ideas you have here, I share them. I feel that the entire world may come to a higher level of understanding that monetary systems are developed to enslave, control, and hold down progress that promotes change. I believe a resource based economy might be our only answer to end these cycles of killing and poverty. The earth has the resources to support every human on the planet if used correctly. Every human could have food and shelter, and we should start there. Greed is to strong of an accepted force right now, and once the straw breaks the camels back, people will begin to realize that paper money is only useful as tinder to start a fire. We should give humanity much more credit to do for itself and not need to be controlled like mindless animals. My quote I’m trying to spread is “Humans don’t kill Humans” To me, we should strive to attain this.

  2. Joshua Nielson says:

    Sitting on wealth? Lose half of it in one fell swoop! There are a lot of problems with electronic capitalism in the age of exponential leveraging. Even for the wealthy money can vanish in a blink.

    You have 10% of the world preparing for the jump into the singularity, and 90% of the world watching the other 10% living well but not having any children or taking meaningful steps to protect or preserve its wealth into the future.

    The happy happy humble home mentality of the motozeros may inherit the Earth someday. In a hundred years, after all the tumult dies down, it just might.

  3. Screen Sleuth says:

    I agree with what he’s saying: if the economy of a company isn’t working, let it collapse. It’s obvious the structure of the US economy right now simply is not working, and trying something, anything, different might be the way to go.

  4. Brian Carnell says:

    “An economy based on an interest-bearing centralized currency must grow to survive, and this means extracting more, producing more and consuming more. Interest-bearing currency favors the redistribution of wealth from the periphery (the people) to the center (the corporations and their owners). Just sitting on money—capital—is the most assured way of increasing wealth. By the very mechanics of the system, the rich get richer on an absolute and relative basis.”

    Sigh. If we actually had this sort of system in, say, the 1980s, we wouldn’t have the Internet/tech explosion we have had over the past 15 years which was fueled in large measure by all of that interest-bearing currency and growth.

    I don’t think he’s a pinko, but Rushkoff is excessively romanticizing the local in a globally connected world.