Exposing Mammon: Devotion to Money in a Market Society (Philip Goodchild)

7/27/2019 Exposing Mammon: Devotion to Money in a Market Society (Philip Goodchild)

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Exposing Mammon: Devotion to Money in a Market Society Philip Goodchild 47

Exposing Mammon: Devotion to

Money in a Market SocietyBy Philip Goodchild

Abstract: The recent financial crisis has exposed the extent to which the contemporary global economy isdriven by credit. Yet credit is the obverse of debt, and where overspending threatens instability throughan increasing debt spiral, austerity measures also threaten instability through reducing growth, also leadingto an increasing debt spiral. Humanity is increasingly exposed to the force of money, which is createdas debt with a given expiration date. Yet to place our credit or faith in the power of debt itself is toplace faith in a world of shadows, in estimations of the value of things as perceived by others or marketprices. Redemption from debt involves a restoration of our capacity to judge intrinsic values rather than

mere prices.

Key Terms: money, credit, debt, sin, redemption

A parable: Have you not heard of that mad-man who took a bar of gold into an elec-tronic exchange, ran onto the trading floor,and cried incessantly, I seek Mammon! Iseek Mammon!As many of those peoplewho do not believe in Mammon were stand-ing around just then, he provoked much

laughter. Has he been sold? asked one.Has he gone bankrupt? asked another. Ishe in the bar? Is he in the gentlemans club?Has he gone to China? An offshore taxhaven?Thus they yelled and laughed.

The madman jumped into their midstand pierced them with his eyes. Whitheris Mammon? he cried. I will tell you. Wehave killed himyou and I. All of us are hismurderers. But how did we do this? Howcould we drink up the great sea of wealth?Who gave us the sponge to wipe clean all

the ledgers? What were we doing when weunchained these liabilities from their assets?Whither are we seeking now? Away fromall assets? Are we not plunging continually?

Philip Goodchild is Professor of Religion and Philosophy in the Department of Theology and Religious Studies, University of Nottingham,U.K. He is the author of Gilles Deleuze and the Question of Philosophy (1996), Deleuze and Guattari: An Introduction to the Politics of Desire(1996), Capitalism and Religion: The Price of Piety (2002), and Theology of Money (2009). He is also currently a Senior Fellow of the RethinkingCapitalism Initiative at the University of California Santa Cruz.

Backward, sideward, forward, in all direc-tions? Is there still any profit and loss? Arewe not straying as through an infinite noth-ing? Do we not feel the breath of poverty?Have we not become poorer? Is not depres-sion continually closing in on us?

The Mysterious Ways of theGod of Wealth

The modern world has seen an unparalleled trans-formation of the global environment, human so-ciety and the human psyche through the develop-ment of powers and capacities of which our fore-bears had barely dreamed. Yet the global financialcrisis of 20072008 and its ongoing aftermath of

sovereign debt crises show humanity exposed oncemore to purely economic forces that it cannot con-trol. Even with near-universal agreement on the

C 2013 Wiley Periodicals and Dialog, Inc.


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48 Dialog: A Journal of Theology Volume 52, Number 1 Spring 2013 March

benefits of cooperation and wealth creation, con-straints remain that are more than simply phys-ical or technical: when everyone wants to create

wealth, what immaterial net holds back our pro-

ductive potential? Has humanity taken a wrongturn beyond the orders of nature and freedom intosome unknown viscous element? Such constraintsare normally considered in purely economic termsas debt; yet this may be only part of the story,for to whom is all this debt owed?

The contours of such constraints may be dis-closed by exploring four contemporary problemsthat situate economic life, following the crisis,

within ethical life: the nature of political respon-sibility for the future, the nature of the justice ofthe market, the nature of economic value, and thenature of wealth. A fresh perspective may be gen-erated by inquiring after the flows of money itself,rather than the economic value it is supposed tomeasure. Such considerations will expose economicperspectives on debt as a form of transcendentalillusion, but an illusion that has dramatic conse-quences for peoples lives, at times liberating andat times devastating. Each of these problems sug-gests that there is more to our situation than meetsthe eye: far from wealth being subject to rationalmanagement, the god of wealth moves in mysteri-

ous ways. Could it be possible that money is notmerely a tool, not merely a servant, but also a hid-den master and a jealous god? Could it be possiblethat in each of these problems we see the shadowof Mammon?

The Problem of PoliticalResponsibility under theShadow of Mammon

Problem one: Why are enormous sums of moneyavailable for fighting wars and economic bailouts,

while austerity measures are deemed necessary inplace of programs that guarantee health, education,

well-being, productivity, and environmental secu-rity?

Duties to Future Generations

What kind of world do we wish to leave to ourchildren, to future generations, or even our future

selves a few years from now? On the negative side,there are many future scenarios one might wish toavoid: a world of environmental catastrophe, socialbreakdown, global conflict, poverty, and ignorance.Equally, one might wish to avoid passing on ex-cessive debts, whether private mortgages, studentloans, pension obligations, or government borrow-ing requirements. On the positive side, there aremany claims on the investment of our time, re-sources, energy, and money. There are many in-vestments that can be made now to prevent greater

costs in the future: providing effective environmen-tal protection, developing alternative energy sources,extending the reach of education, offering rehabil-itative social provision, or even investing in pro-ductive infrastructure projects. Equally, one can in-vest in paying down debts through current austerityso that future generations have greater freedom tospend.

In any case, the relative merits of various du-ties to future generations are not immediately ob-vious. Which should take priority: investment in a

viable, sustainable society, or investment in reduc-ing the debt burden? Which is more fundamental:investment in the real productive economy of re-sources, machines, educated workers, and commu-nicational infrastructure, or investment in monetaryprofits? The argument can be put both ways: it isnecessary to reduce the national debt first so thatmore money is available later to invest in society;it is necessary to invest in society first to preventthe debt from spiralling out of control later. Yetboth arguments appeal to the same danger: whether

through overspending or excessive austerity, a na-tion may find itself on the precipice of a debt spi-ral, sooner or later, for despite all the economicadvances, a modern economy remains radicallyinsecure.

When funds are instantly directed toward war-fare, economic bailout, or debt reduction, it is be-cause of an immediate threat to our way of life:


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political preferences are put aside in the face ofan urgent danger. For if one responds immediately

with foresight, courage, and prudence, then onehopes future economic growth might restore some

stability. And yet such hopes for stability throughgrowth fly in the face of recent evidence: after aprolonged period of stable growth, the world isnow in a position of prolonged instability; and theeffects of prosperity, whether increased longevity orincreased consumption, place a far greater strainon limited productive resources. The medicine of

wealth-creation seems to be the principal cause ofthe disease of instability.

Political alternatives therefore seem to be re-stricted by two specifically economic imperatives:first, growth is imperative to generate the prof-its that will pay back debts and restore stabilityeven if such profits are achieved by depleting ourresources and consuming our productive capacity;second, repayment of debt is imperative to avoiddefault, inflation, and loss of confidenceeven ifsuch debts have to be repaid by further borrowingfor productive investment. In this cycle, instabilityand debt are ratcheted up further, only postpon-ing a longer-term crisis. Under such imperatives,the economy is no longer made for humanity, buthumanity is made for money. This macroeconomic

predicament has its correlate at the microeconomiclevel: the priority of seeking money is felt as a dailyimperative throughout private businesses, public in-stitutions, the voluntary sector, and individual lives.

Why is there such an emphasis on money, whenthe ends that give life satisfaction are widely rec-ognized to lie elsewhere? Money is the meansby which all goods are obtained, all investmentsare made, all conduct is regulated, all welfare isachieved, and all charity is given. Whatever onecares about, one must value money first as the

means toward all ends involving cooperation withothers. As the universal means, the acquisition ofmoney has become an end in itself. Whateverone cares about, one must care first and mostabout money. Here one encounters the divinity ofMammon: money, as both a measure of prices anda means of payment, is the supreme value, thevalue against which all other values are measuredand through which they may be obtained. In mod-

ern economic life, money is the condition for thecreation of value.1

The Problem of Market Justiceunder the Shadow of Mammon

Problem two: Why do governments transfer wealthfrom the majority of voters to the wealthy fewthrough economic bailouts, tax cuts, and austeritymeasures?

Clumsy Behavior and Extortion

In a recent televised interview, Paul Tucker, DeputyGovernor of the Bank of England, with specificresponsibility for banking regulation, said: If wehave a system where banks take the upside, but thetaxpayer takes the downside, something has gone

wrong with capitalism, with the very heart of cap-italism and we need to repair this.2 In the after-math of the global financial crisis of 20072008,it soon became evident that while financial institu-tions have taken foolish risks and squandered their

wealth, governments have been forced to offer a

free insurance policy to underwrite bad debts so asto avoid instant economic catastrophe. The addi-tional money printed to restore economic growthhas been used to stabilize financial institutions, butultimately has fed into leverage in financial spec-ulation rather than offering credit to business. Asa consequence of the fall in tax income, govern-ments face a crisis in their public finances. Auster-ity measures are necessary to stabilize governmentfinances and satisfy the financial institutions wholend to governments and who are intimately linked

to those who have indirectly received the benefits ofthe bailout. The net consequence, then, is simply atransfer of wealth from the poor to the richnotas a direct result of any inherent productive capac-ity, but as a result of clumsy behavior that has theeffect of extortion.

What, then, has gone wrong, and is the errorpurely technical (e.g., mispricing of risk3) or moral?It seems to me that Tuckers comment appeals


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to the justice of Adam Smiths invisible hand thatoperates through the logic of the market: profitsshould reward moral behavior such as prudence,innovation, efficiency, and hard work, while pun-

ishing through losses excessive risk-taking, stagna-tion, waste, and idleness. The economic downturndid not enact its corrections entirely fairly: in some

way, profit and risk have been separated, and thisis nowhere more evident than in the massive publicspending cuts in the name of deficit reduction pur-sued in many of the worlds most developed states.It has become more urgent to satisfy the demandsof finance capital than to satisfy the demands of thepeople, because without investment in governmentbonds there will be no economy for the people.Finance capital takes the upside, and the taxpayerthe downside.

The Unfair Burden of Risk

Yet such a separation of upside (in other words,profit) from downside (in other words, risk) is norare accident in a market society: it is the essenceof the insurance contract as well as of the use ofderivatives. One party pays another to bear its risks;the other actively seeks out risk as an opportunityfor profit, but only because it can pass the costson to others. As a result of the extensive trade inderivatives, risk is spread throughout the economicsystem as a whole, including states, taxpayers, andpublic sector workers, as well as anyone whose em-ployment is at stake in a downturn. Yet only thefinancial elite can take the upside, and the intel-ligent elite gain even from a downturn by short-selling at the right time: hedge funds may gain aspension funds lose. In a similar way, the shiftingof risks onto others is evident in employment con-

tracts and their rapid termination, in selling sharesand treasury bonds, and, at the international level,in denomination of loans in strong currencies. Ifprofit increases over the short-term with increasedrisk, and such risk can then be shifted onto oth-ers, then the law of competitive advantage suggeststhat such risks will be taken to outstrip competi-tors, and increased until the inevitable outcome isrealized.

This is only one case of the flow of money fromthe poor to the rich. For each time an ordinaryperson buys a product supplied by a multinationalcorporation, the money is taken out of the local

economy and transferred to international flows oftrade and investment; each time international in-vestment is made in a local economy, resourcesand the products of labor are taken out of thelocal economy and transferred to the internationalmarket; each time a loan is made, from the largestbond acquisition of the largest states and corpora-tions to the smallest microcredit transaction, moremoney must eventually be returned through inter-est to whence it came; each time such money recir-culates to ordinary people through welfare, wages,investment, and loans, and subsequently is spent,a cut is taken by the financial intermediaries andredirected for speculation in financial assets so thatan ever-increasing proportion of the worlds liquidassets gravitates towards the extremely wealthy.

Growing inequality, the transfer of wealth fromthe poor to the rich, is not only to be found inausterity measures and structural adjustment pro-grams that respond to crisesit is the general normin a market society.4 If the invisible hand of themarket is essentially unjust, this is because wealthbrings power, opportunity, privilege, and the abil-

ity to shift risks onto others. Here we encounter asecond feature of the divinity of Mammon: he wor-ships only himself. For the value of assets is givenby an anticipated rate of return, a rate of profit,and the value of money is ultimately determinedby money itself. Money only values money, and soit attracts money back to itself.

The Problem of Economic Valueunder the Shadow of Mammon

Problem three: Where did the money go?

Whence the Credit Crisis?

The most obvious cause of the financial crisiswas excessive borrowing, whether on the part of


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individuals, businesses, financial institutions, orgovernments. Those who were over-stretched andunable to meet their obligations suffered the most,

while even those who lived within their means

found their opportunities for profit vanishing dueto lack of demand. Yet there is a conceptual prob-lem here: if the excess borrowing of financial in-stitutions, governments, and consumers already hasbeen spent, then that money should be sitting insomeones bank account somewhere, and the banks

who take these deposits should have no shortage ofdeposits to underwrite their loans: why then wasthere ever a credit crisis?

The explanation comes in two parts: first, it isnecessary to observe that the value of debts is fixedat the time of issuing contracts, while the value ofthe corresponding assetsthe asset of having issuedthat loan and expecting return of the principal withinterestfluctuates in relation to perceived risk. Forthis reason, if confidence drops, so does the valueof assets, and so does the overall level of wealth thatacts as a security against the loans that have beenmade. Just as there can be speculative rises in assetprices based on anticipations of future rises, therecan be a systemic overhang of debt based on anincrease in perceived risk. This overhang casts theshadow of a debt that cannot be repaid: all lever-

aged financial institutions end up with unpayabledebts in a crash.5 Nevertheless, it is clear that suchan explanation of our indebtedness is incomplete,since loans are largely made in the form of money,and money recirculates and is stored in banks. Theamount of money that was originally loaned shouldbe present somewhere in someones bank account,functioning as a deposit against which further loanscan be made. If all this money were to retrace itssteps, then all loans could theoretically be repaid.

The second part of the explanation arises when

one starts to consider how debt affects the nature ofmoney itself, and consequently economic behavior.For it is in the influence that debt has on economicchoices and conduct that one discerns the shadowof Mammon. Debts are usually repaid these days inthe form of money, and since financial institutions,governments, businesses, and individuals are oftenin debt, there is a demand for money throughout

the financial system. Where does money come fromto meet this demand? Money is initially created bycentral banks, either by printing or by creditingtheir own accounts. What is important to note here

is that there is no need for this new money tocorrespond to gold reserves. It is a liability withouta corresponding asset. It is a speculative gamble,made in the hope that payment for such liabilities

will not be required.Yet one reason why central banks remain secure

is that this money never leaves: in the purchaseof Treasury Bonds, for example, the newly createdmoney is credited to the reserve account of thecommercial bank from which the bonds are pur-chased. It may subsequently move from the reserveaccount of one commercial bank to another, butit never leaves the clearing system within the cen-tral bank itself. This is how it was possible for theFederal Reserve Bank to create $16 trillion duringthe crisis from 2007 to 2010, a sum greater thantotal U.S. gross domestic product, and for nearlythe entire total to be repaid, without putting theFederal Reserve Bank at risk.6 The dollar in a re-serve account at the Federal Reserve is not the samedollar as in a retail bank account because the twoare strictly inconvertible.

Creative Accounting

Most money, therefore, is created by other banksin the form of loans.7 Commercial banks can lendon the basis of their capital, yet the newly createdliabilities of having made loans correspond exactlyto newly created assets of being owed these loans.Large banks do not need to wait until they re-ceive fresh deposits to make their loans, as is oftenstated in economics textbooks.8 When a bank cre-

ates credit and extends a loan, it writes that amountinto the borrowers bank account, as if pretendingthat the borrower had made a deposit. What makesthis creative accounting possible is the role of banksas the clearing house or bookkeeping center for theentire economic system:9 the borrower will spendthe money, which would then need to be trans-ferred to another bank, yet in a large economy


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where many such loans are taking place simultane-ously, the vast majority of such transactions cancelout. Reserves are only required for the differenceafter cancellations, and even if they are lacking,

they can be borrowed from other clearing banks towhom the surplus is owed at the overnight rate.The key requirement with such lending, as JohnMaynard Keynes pointed out, is that the banks ad-vance together and in step.10 It is only when abank tries to expand through excessive lending thatit has to make up the shortfall on the internationalmoney markets.

In practice, then, money itself is created as adebt overhang in excess of corresponding assets.In a growing economy, the creation of credit isthe motor of growth through effective demand.11

Should there be defaults at any stage, such moneycan never be repaid without debt cancellation orinflation. So the creation of money itself leads toa growing shadow of debt. There is a perpetualdemand for money in the economy, not only toservice exchange or to provide liquidity, but alsoto service debts. When one obtains money throughtrade in order to pay back debts, this money also issupplied elsewhere in the form of new debts. Underthis system, the shadow perpetually grows. Humaneconomic activity is constrained by the shadow of

debt, a debt which has to be repaid or else thefragile system will collapse. The shadow of debt isthe obligation to seek money. It is the imperativefor economic growth. In economic life, when alleconomic values are priced in terms of money, theyare priced in terms of debt as their ability to repaydebt.

The Problem of Wealth underthe Shadow of Mammon

Problem four: Real wealth is a capacity to produce,including resources, skills, machines, infrastructure,educated workers, and money. Following the finan-cial crisis of 20072008, the global economy suf-fered no immediate shortage of these. Why, then,did the world become poorer?

A Lack of Faith

Why did so many productive enterprises have to bedismantled? If the role of finance is simply inter-

mediation of the real economy to make it functionmore efficiently, then is the world not as wealthyas it has ever been? What, then, is the suddenimperative for austerity?

There is an element of wealth that has beenlacking following the crisis: credit. Although thesame resources, skills, infrastructure, and potentialdemand are present in the economy, there is a lackof faith. Fewer are willing to borrow and fewer are

willing to lend. The money that exists in the econ-omy, which is already credit, starts to expireit

has a due date for repayment. It has to be re-paid, but if there is a shortage of new loans en-tering the economy, there is a shortage of money

with which to repay loans. Credit suddenly convertsfrom the source of wealth that drives the economyinto the obligation of debt that impoverishes all.Repayment of debt becomes urgent because debtscome due and can no longer be rolled over. Faced

with a choice between increasing austerity or fail-ing to honor debts, then the loss of credit con-sequent upon default or bankruptcy overrides all

other considerations, for without credit one cannotenter any economic transactions. Yet as each eco-nomic agent seeks to repay its debts, at the sametime as banks seek to increase their capital ratios,there is no longer any source of credit in the widereconomy that can fund the repayment of debt.

Under current global economic policy, sovereigndebt default and another credit crisis worse thanthat of 2008, followed by a great depression, wouldbe inevitablewere it not for the intervention ofcentral banks. Nevertheless, the policy of quanti-

tative easing has limited effectiveness: the moneyinjected by central banks may support financial in-stitutions, and consequently stock markets, and sooverall it keeps the global economy out of a de-flationary spiral, yet it does not extend into the

wider economy as effective demand that stimulatesconfidence.

Financial crises are crises of confidence or credit.Whatever the moral integrity, industriousness, and


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success of those with whom one does business, anelement of doubt creeps in: can they pay up ontime? Are they perhaps exposed, if not directly byinvesting in sub-prime mortgage lending, at least

indirectly by depending on customers whose ownincome is itself dependent on healthy investmentor government taxation? Is it safe to extend themany more credit?

Perceptions of risk limit economic activity, andconfidence is the perception that risks are worthtaking, whether this estimation is arrived at throughcareful analysis or gut instinct. Moreover, since alleconomic agents are exposed to the creditworthinessof others, then no knowledge can be absolute, andconfidence is not merely individual but social. If allare confident, then economic activity takes place,most are successful, and confidence is apparently

well-placedwhich means that it is profitable totake risks, more risks are taken to achieve betterprofits than competitors, and the level of risk in thesystem as a whole increases. If, by contrast, all lackconfidence, then risks are realized in a self-fulfillingprophecy.12 True wealth is grounded in faith.

Four Shadows that CompriseEconomic Certainties

What we share, despite differences in personal atti-tudes, is a collective measure of confidence: credit-

worthiness is judged on the basis of wealth, prof-itability, efficiency, and money. This may be pru-dent at a microeconomic level, but at a systemiclevel, what is required for confidence should bestability, resources, utilization of potential, distri-bution of wealth, inclusion, and justice. Somehow,

our collective faith has been placed in the wronggod. Placing faith in the world, in economic valuespriced by the perceptions of others, economic lifeloses all moral grounding in intrinsic values. As aresult, the so-called real world of economic cer-tainties is composed of nothing but shadows. Letme sum up:

1. Since money is the value through which allother values are measured for the sake of agree-

ment and contract, it becomes the basis for ac-counting or evaluation. Values are measured interms of prices, so they are measured in termsof costs of replacement or substitution, even

though many things in life cannot be substi-tuted for or replaced. We do not count thingsthemselves, but only money, projecting the shad-ows of our own collective desiresa shadow ofobjectivity.

2. Since money is required to repay debts and meetall other obligations, it becomes that which ismost in demand, the supreme value through

which all other values may be obtained, theprinciple guiding practical conduct. Values aremeasured in terms of money to be spent, sothey are measured from the point of view ofone who has money to spend, as if he procures

whatever he wants or needs by spending, eventhough the goods and services will in fact beprovided by othersa shadow of liberty.

3. Since securities, financial derivatives, and evenmoney itself are created as debts, then each as-set is someone elses liability. Even investmentassets, such as land, commodities, property, andshares, are priced by speculation, so that theirvalue is supported by the amount of debt peopleare willing to undertake for them. Asset values

are measured by an anticipated rate of return,an increase in the liabilities of others, even ifthis involves consuming the basis of materialproductiona shadow of wealth.

4. Such economic behavior is constrained by com-petitive selection, so that only those who profitby living out of the preceding illusions in acave of shadows prosper and grow. It is nolonger tyranny that rules the people, but anautonomous, self-positing system of evaluation.Since money is created as debt, and debt must

be repaid in the form of money or more debt,and debt becomes the supreme principle of the-oretical knowledge, practical conduct, and mu-tual trust, then this perspective of evaluationis not chosen but imposes itselfa shadow of reality.

In short, debt money, the condition of possibil-ity of the expansion of markets and production for


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the sake of profit, has indeed replaced the theoreti-cal, practical, and social functions of God. It is thefoundation of the modern world, the basis for per-ceptions of objectivity, liberty, wealth, and reality.

This is the shadow of money, a spirit in which wecan discern the demonic form of Mammon. Mam-mon is a way of seeing and valuing; it seduces us

with a promise of wealth and a threat of impover-ishment; worship is an obligation laid upon us ina market society, overpowering us with its service-ability as well as its fragility. Mammon has ruledthe world for little more than three centuries, andhas ruled the majority of it for just a few post-wardecades. Yet guided by shadows we eventually shallstumble across harsh realities.

Paths to Redemption

Most attempts to address the alienating conse-quences of financial abstraction seek a return toreal economic life: the life-economy,13 or thelocal economy,14 perhaps through a return to 100percent reserve banking.15 If the global economyhas failed to operate according to common-senseviews of production and cooperation, or according

to the model of the market described in economicstextbooks, then it must be disciplined and regu-lated to behave like a market once more. There ismuch to be said for such attempts to renew the or-dinary, human dimensions of economic life. Thereare, however, significant difficulties to be faced.

A first problem is that the predominantly urbanpopulation of the contemporary world is supportedby the modern global economy at a level far inexcess of what was possible prior to modern indus-trialization and the agricultural revolution. A return

to traditional, local economies would require a vastredistribution of the means of production and sub-sistence. A second problem is that the positive ac-tion of production is driven by a merely abstractrepresentation of need, or effective demand. Onecannot have a thriving, productive economy with-out some kind of abstract representation of theneeds that are to be fulfilled. In this respect, somekind of money-based economy seems essential.

A third problem is that most current investmentand production has been undertaken on the expec-tation of a future increase in wealth: if enterprisesmerely redistribute pre-existing money in costs to

suppliers, salaries to workers, rent to owners, taxesto governments, dividends to investors, and inter-est to creditors, then where is the additional moneyto come from in an economic system to purchasethe additionally produced goods?16 A fourth prob-lem is that all long-distance trade and investmentin production takes place on the basis of creditsome measure of debt is necessary and healthy ina market economy. In this respect, the moral no-tion of living within ones meansunderstood asnot taking on debts in advance of the capacity topayis a straightforward denial of economic reality.Credit is a fact of life for temporal creatures whomake promises, enter contracts, and place trust inothers. On the contrary, the common sense per-spective that considers people as individual produc-ers, performing daily labor, and balancing out theiraccount books is a fantastic illusion insofar as itneglects the temporal dimensions of personal de-velopment, promise, risk, and opportunity.

Credit, Confidence, and Faith

Credit, confidence, and faith always have beenessential to economic life. The vast weight of evi-dence of ancient history and modern anthropologyis that most societies have operated on the basis ofgenerosity, hospitality, mutual favors, sharing, pa-tronage, and tribute, without reciprocity, barter, ex-change, or money, except perhaps between strangersand enemies: credit, in its original sense, precedesmoney.17 Even as late as seventeenth-century Eng-land, David Graeber reports that money was rarelyused for transactions in between local villagers:

Most money literally was trust, since mostcredit arrangements were handshake deals.When people used the word credit, theyreferred above all to a reputation for hon-esty and integrity; and a man or womanshonor, virtue, and respectability, but also,reputation for generosity, decency, and good-natured sociability, were at least as important


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considerations when deciding whether tomake a loan as net income.18

A person with good credit may easily mobilizefavors from others to fulfil obligations: here, credit

is not a matter of having done the most favorsfor others, but a matter of having the highest de-gree of reputation, integrity, and sociability. Whileit was possible to have an annual day of reckoningin a village to record all transactions and cancelout mutual debts, societies that work on the basisof trust work most effectively when favors are notreciprocal, when debts do not exactly cancel eachother out, for then each member of the commu-nity remains obliged to all others to offer furtherfavors. We owe almost everything we are to oth-

ers, but it is difficult to imagine what it mightmean to pay back our parents or become squarewith humanity.19 The normal principle of socialinteraction is mutual credit rather than reciprocity,and this remains true at an interpersonal level eventoday.

When Debt Replaced Credit

A significant transformation occurred when credit

was replaced by debt. Debts are conceived whenrelations of credit are given precise measurement,in terms of money, as well as a precise period forrepayment. In any debt-relation, there is a combi-nation of credit, a long-term relationship of mu-tual trust, the threat of injustice, whether defaulton the loan or using predatory rates of interest,and the promise of reciprocal exchange, for once adebt has been repaid it will have proven to havebeen a simple exchange when the elements of trustand risk are forgotten. Any long-term economic

activity involving interaction between strangers in-volves debt. In a capitalist economy, where profitsare planned over the course of time, some kindof debt is necessary, healthy, and essential: it isthe requirement of non-simultaneous exchangeand since so few exchanges are simultaneous, it maybe fruitful to regard them as a special case of mu-tually cancelling debts rather understanding debtsas exchanges. Debt is a measure of confidence in

ourselves, in each other, and in the wider econ-omy. Yet debt only appears as exchange with antic-ipated hindsight; while underway and under risk,its reality is more than can be counted in terms of

money. Yet if debt is not purely an economic issue,but an issue of morality, politics, philosophy, andeven theology, it is in regard to this question: isour confidence misplaced? What kind of economicconduct is worthy of confidence?

The recent economic crisis is a story of the mis-allocation of credit: most obviously, this is evidentin sub-prime lending to those who had neither ca-pacity nor opportunity to repay. Yet it also involveda misallocation of credit to respectable financial in-stitutions that failed to ensure their own stability.It involved a misallocation of credit to governmentsthat seemed to be too big to fail. Beneath these,however, there was a misallocation of credit to aglobal financial system that in practice generates in-creasing inequality. It was a misallocation of creditto an economic science that only measures andmodels objective illusions. Above all, it was a mis-allocation of credit to a money system that seemedto be under control, while it actually determinedpeoples choices.

Once credit is conceived as the obverse of debt,to be repaid in a certain amount by a certain time,

then the temporal reality of peoples changing livesand expectations is replaced by the collective fictionof an unchanging debt. In a society organized fortrade in terms of money, justice is simply con-ceived as to speak the truth and to repay onesdebts.20 Such a notion of justice lacks a theo-logical understanding of sin: it names not simplyan individual error or misdeed, but an entire per-spective that possesses us and blinds us to what istrue.21

Wolfhart Pannenberg, in summing up Protestant

conceptions of sin, notes that we engage in sinbecause it deceives us: All of us sin because wethink we can attain a full and true life thereby.22

To sin is to be deceived about the true nature ofwealth. For human choices, economic or otherwise,are limited by the things present to consciousness,yet we struggle to bring everything to consciousnessso as to make it an object of choice. As Pannenbergputs it:


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All that we can choose is the way in whichwe will be ourselves, at least within limits,and mostly indirectly by way of the objectsand activities to which we devote ourselves,and always in admixture with illusions be-

cause we never have ourselves before us asobjects, except partially.23

Justice

A theological conception of justice, by contrast, in-volves redemption from debt slavery and its consti-tutive illusions: a change of perspectiveof heartand mindmakes possible a change in how peo-ple allocate their time, resources, and commit-

ments. Above all, it involves a change in whatis noticed, what is counted as significant, what isrecorded, trusted, and becomes an object of atten-tion. On that basis, forgiveness of foolish debtsresulting from a misallocation of credit may be in-timately linked to a transformation of perspectiveabout what really matters in life. It is perhaps onlythrough some form of debt forgiveness and trans-formation, rather than the austerities of economiclife, that the true productive potential of a moderneconomy can be restored.

Mammon Exposed

What, then, is the theological significance of theglobal financial crisis? Mammon has been exposedand killed. Never again can the quest for wealthform the basis of global cooperation. In an econ-omy where long-term growth is impossiblethereare finite and increasingly stretched resources offossil fuels, fresh water, forests, essential minerals,

and fertile soilwe have no compass and are com-pletely at sea: there is no longer any basis for eval-uation. There is no longer any shared perspectiveof understanding. We have wiped clean the hori-zon, drunk up the sea, unchained this earth fromits sun. Mammon is dead and will remain so. Yetit will take decades for this event to reach our ears,even though we have done it ourselves, for we con-tinue to live and worship as though Mammon were

alive and well and could still save us from poverty.Nevertheless, the harsh dualism proclaimed by Jesushas proven to be prophetic:

No one can serve two masters; for a slave

will either hate the one and love the other,or be devoted to the one and despise theother. You cannot serve God and wealth (Mt6.1924).

Endnotes

1. See further Philip Goodchild, Theology of Money (Durham N.C.:Duke University Press, 2009).

2. BBC interview with Robert Peston, Britains Banks: Too Big

to Save? January 2011. Reported at http://www.thisismoney.co.uk/money/news/article-1711127/Let-banks-fail-says-Bank-of-England.html(accessed November 6, 2012).

3. This being Alan Greenspans account of the cause of the crisisbased on a fundamental belief in the justice of the market: a mispricingof risk worldwide.

4. For a sample of diverse arguments to this effect, see ElmarAltvater, The Future of the Market, trans. Patrick Camiller (London: Verso,1993); Michel Chossudovsky, The Globalization of Poverty (Penang: Third

World Network, 1997); Klaus Nurnberger, Prosperity, Poverty and Pollu-tion (London: Zed Books, 1999); Martin Khor, Rethinking Globalization(London: Zed Books, 2001); and Kamran Mofid, Globalisation for theCommon Good (London: Shepheard-Walwyn, 2002).

5. See Philip Coggan, Paper Promises: Money, Debt and the New WorldOrder (London: Allen Lane, 2011), 134135.

6. United States Government Accountability Office report, Fed-eral Reserve System: Opportunities Exist to Strengthen Policies and Pro-cesses for Managing Emergency Assistance, July 2011, available at:http://www.gao.gov/assets/330/321506.pdf (accessed November 6, 2012).

7. For a detailed account of such money creation in the U.K., basedon Bank of England reports, see Josh Ryan-Collins, Tony Greenham,Richard Werner, and Andrew Jackson, Where Does Money Come From? AGuide to the UK Monetary and Banking System (London: New EconomicsFoundation, 2011).

8. E.g., Lawrence S. Ritter, William L. Silber and Gregory F. Udell,Principles of Money, Banking and Financial Markets, 11th ed. (Boston:Pearson, 2004), 357359.

9. Richard Werner, New Paradigm in Macroeconomics (Basingstoke:Palgrave Macmillan, 2005), 161, 179.

10. John Maynard Keynes, A Treatise on Money, vol. 1 (London:Macmillan, 1930), 26.

11. For this point of view and its roots in Schumpeter, see GeoffreyIngham, The Nature of Money (Cambridge: Polity Press, 2002).

12. For an economic model of this process, see Steve Keen, De-bunking Economics, revised and expanded edition (London: Zed Books,2011).

13. John McMurtry, Value Wars: The Global Market versus the Life Econ-omy (London: Pluto Press, 2002).

14. David Boyle and Andrew Simms, The New Economics (London:Earthscan, 2009).


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15. This is the basis of the Positive Money campaign. Seewww.positivemoney.org.uk.

16. This is the fundamental insight of Clifford Hugh Douglas, thefounder of the Social Credit Movement. See Frances Hutchinson andBrian Burkitt, The Political Economy of Social Credit and Guild Socialism(London: Routledge, 1997).

17. See David Graeber, Debt:The First 5000Years(New York: MelvillePublishing, 2011), 29.

18. Ibid., 328.

19. Ibid., 62.

20. This is the first conception of justice considered Platos Republic,Book 1.

21. Sin precedes all human acts as a power that dwells in us, thatpossesses us like our own subjectivity as it overpowers us. See Wolfhart

Pannenberg, Systematic Theology, vol. 2, trans. Geoffrey W. Bromiley(Edinburgh: T & T Clark, 1994), 262.

22. Ibid., 263.

23. Ibid., 260.

Documents

Exposing Mammon: Devotion to Money in a Market Society (Philip Goodchild)