Books and documents:
Agustí Chalaux de Subirà, Brauli Tamarit Tamarit.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Magdalena Grau, Agustí Chalaux.
Martí Olivella has written an important book. He has entered
a territory economists normally do not dare enter, and not because they
are angels, as the saying goes. Money, money as such. He has given his
analysis, his forecasts and proposals for remedies. They are radical social
innovations, and will not easily be accepted, as he points out himself.
But the very least that should happen is a social debate on one of the
most important phenomena of our time, the massive transition from paper
and coin money to plastic money.
Every day the media brings us news about the power of money in the world
economy. On the one hand we have the creation of value, of goods and services,
even if there are always some aspects of bads and disservices hidden in
their production, distribution or consumption, in addition to hidden positive
side-effects. The externalities, in other words. Let us call the real
economy, R. And then there is another economy, F, the finance
economy, consisting of all kinds of finance instruments, among them money.
There are stocks and flows in R and in F, with F flowing
in the opposite direction or R, supposedly paying for R goods
and services. Watch the counter in any shop and you watch the R
flow from the shelves to the customer and the F flow from customer
to the cashier. Of course, the customer can also pay in R, no absolute
need to go via money. Barter, after all, is still very important, perhaps
more in services than goods. «I do something for you, you do something
And then there is the third possibility: intra-F exchanges; a
finance economy, buying and selling finance instruments, detached from
the real economy. It is easily seen that if R is in bad shape because
little is produced in terms of goods and services or what is produced is
of bad quality, then a dynamic finance economy may help: some credit here
and there, money on consumer hands to facilitate buying and selling that
in turn may yield profits that may be invested in more and better production.
But a highly dynamic finance economy carries a great temptation in its
wake: making money by buying and selling finance instruments, driving up
their prices, including the price of money over time (interest rates) and
across space (exchange rates), and the price of stocks and bonds (rates,
in general). Speculation, in other words. If R follows suite and
is equally dynamic there may be no problem. If R lags hopelessly
behind then F no longer mirrors R. And the result may be
a crash in the stock exchange or at least a very uneasy economy, with inflation
and other phenomena difficult to control.
This is problematic enough. But Olivella brings up another aspect: anonymous
versus identifiable finance instruments. Look at coins or bank notes: what
a story they can tell, particularly in societies with rapid money circulation.
But there they are, leaving no footprints behind, nor are there footprints
on them. Well, sometimes fingerprints are useful for detectives, and the
numbers, particularly when consecutive, carry some information. Hence the
need to «launder» money to wash away the few traces. But in
principle money carries no history having no memory, starting each deal
fresh as if used for the first time.
Not so with plastic money. Not only the who and to whom
and for what can be registered with the clarity of the monthly accounting
sheet from Diner's Club, Eurocard, American Express and Visa, but also
the when and the where. The only item missing is the why,
in other words the motivation behind the deal. But this can usually be
inferred relatively well from all the other data, making it possible to
develop consumer profiles (I left some of these companies when it was discovered
that they sold consumer profiles to others for their marketing efforts!).
And this is where the terrifying ambiguity of plastic money enters.
The deal becomes historic. The evidence of the transaction is there; after
all, what is needed is to make the buyer pay, whether the plastic is a
bank card or a credit card. In principle this should heighten the sense
of responsibility when a deal is made, if for no other reason for fear
of being found out (like paying for illicit sexual services with credit
cards). On the other hand the historicity of the deal also increases the
control over the holder of the card. Not only will Capital have its ways
of getting paid, the State has ways of supervising all transactions. For
good (detecting frauds), and for bad (steering and manipulating the general
and F flow in society without any dialogue). In other words, the
transition to plastic money should stimulate more Self-control, but also
This is the problem Olivella is analyzing. His remedies are interesting,
and certainly worth discussing as one way out of Max Webers' iron cage.
Barter is another: direct, personal relations and responsibilities. Like
the «deal» between Olivella and the reader, hereby very much
recommended. Go ahead, learn, discuss!.
For this book is also a fascinating piece of macro-history. The reader
will learn to see history through the transformations in the money system:
clay-based, metal-based, paper-based, electronic-based (the plastic is
only there to get access to the electronic circuits). Each phase ushers
in new opportunities and new problems. But money is somehow taken for granted,
and there is far from enough debate going on.
In this there is a message to social movements. Most of them, almost
all, are focused on R, the real economy. What should be the priorities?
(like production for the satisfaction of the basic needs of those most
in need). And externalities, including an equitable, socially just, perhaps
more egalitarian distribution and consumption? Money is then used as something
to be taxed and redistributed; as a means rather than an end, for accumulation.
This is good, but the social functions of different types of money systems
are not incorporated in the debates, nor in the agendas of the social movements.
Olivella's highly constructive efforts, coming out of his empirical
guides to the reader and his criticism should also inspire others to look
at money. Sooner or later we are going to get a (Western) European unitary
currency. There are advantages, such as reduced (or partly eliminated)
exchange costs. There are disadvantages: liquid, non earmarked money will
flow to the center, increasing the power of the center to send earmarked
money with decisions clipped onto them back to the periphery. People may
react by printing local credit-vouchers, etc. In short, a very dynamic
period where money is concerned. And we can be grateful to Olivella for
being one of our guides.
Versonnex, July 27th 1993.
Galtung, Professor of Peace Studies, University of Witten-Herdecke, University