Money has been dematerializing since first adopted to facilitate barter. From cowry shells and gold trinkets to coins to paper money to digital currencies, there’s a historical progression of dematerializing, to where credit card and other digital transactions merely change account balances without physically moving any currency. Traditionally, money has served 3 functions: medium of exchange, store of value, and unit of account. Digital currencies now serve all three functions immaterially, with the dollar or other unit of account defined nationally. Until not long ago currency was backed by convertibility into gold and silver, but that has been jettisoned and currencies are now essentially virtual. Paper currency is still widely used where credit card accounts are unavailable, and the dollar is used overseas as a store of value in countries whose currency lacks faith. And as convertibility disappears, money becomes entirely virtual and immaterial.
Will money someday be thought of in terms of time instead of material equivalence? It’s our time that is most precious, given the limited lifespan we’re each given, whereas money and material wealth is essentially unbounded. The thoughtful approach to money therefore is to value it in terms of time, and currency is therefore valuable only insofar as it saves or enhances our scarce hours on earth. Taking hours and time as the unit of account by which we track our path on this planet leaves us living in the moment more, less spending our hours as means to consumption in the end, and more valuing each moment as precious in itself. Will we collectively as society come to make this change as a part of societal adolescence? There is already evidence that new generations are valuing experiences more than things, collecting the one rather than the other. They are valuing their time above material goods.
Will capital itself undergo a similar diametric redirection as owners of capital awake the proper full role of capital in society, beyond mere profit maximization and accumulation as ends in themselves. Left to itself, capital seeks material accumulation and gravitates to those owners of capital who make it accumulate. Left unchecked, capital will draw human society toward material growth and economic inequality, but properly directed, capital can be a vehicle to realize society’s material objectives and non-material objectives as well. But will the owners of capital, i.e. human beings, awake to the uses of capital to further societal development, e.g. societal well-being broadly defined? Awake capital would serve not only the capital owner’s interest in maximum accumulation, but also the needs of all stakeholders involved, i.e. consumers, employees, the natural environment, etc., as the case may be. Both capitalists and government share responsibility to oversee the deployment of capital in service of humanity’s greatest good, most broadly conceived, and if they fail to embrace this responsibility, the danger is that capital co-opts the agenda with purely materialistic values and material inequalities in furtherance of its own growth and accumulation objectives. Government plays a role insofar as it may oversee and incentivize respect and acknowledgment of these other stakeholder needs. Capital is owned by individuals and governed by laws and regulations, and a task of adolescent restructuring is to take back the lowest denominator tendency of capital to accumulate in fewer and fewer owners, as Thomas Piketty* wrote, and to direct capital consciously to where it will do the most good for collective society. We human beings in collective society, can wrest control of capital from its subconscious tendency to accumulate among fewer and fewer owners and to single-mindedly gravitate toward profit to the exclusion of all other considerations, but this will require an awakening of consciousness, a central aspect of societal adolescence.
Thus responsibility for the metamorphosis of money and capital must occur at multiple levels, from that of the individual owners and users of capital, to that of the institutions that employ capital, to the regulatory level of governing institutions that set the incentives in which individuals and institutions manage the money and capital that passes through them.
We are seeing signs of this transformation. The social investment movement, adding a moral dimension to investing, took prominence with the divest in South Africa movement in the 1960’s. But the moral dimension appears already in the old testament and in Islamic texts. And since the 1960’s the social investment movement has grown to where now xxx is invested with some ESG screening.
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* Thomas Pickety, “Capital in the Twenty-First Century”.