Charles Eisenstein Interview

1. You say that money needs a transformation with a profound effect from profanity to sacredness. What’s behind the concept of Sacred Economics?

The book starts with the observation that money is not aligned with what is becoming sacred to us, for example ecological healing and social justice. In the past, we have just taken that opposition for granted. We assumed that goodness, sacredness, and so forth were outside the money realm, that holy people don't have much to do with money. But this is no longer sustainable, because the behavior that money drives is destroying the planet. We need to change the nature of money, so that it is no longer the enemy of sustainability, not to mention the sacred. The book describes how we got to our current state of a crisis that won't quite go away, and how we can change the money system and the economy that embeds it. It also explores the personal and community dimensions of this transition.

2. What is the Gift economy and how can it help a community grow and develop?

The gift economy includes the totality of interactions where people meet each other's needs without money. For example, a mother cooking food for her children is doing that as part of the gift economy, as no one is paying her for food preparation. Neighbors helping neighbors with projects, watching each other's kids, helping each other during a natural disaster, all of these are examples of gift economy. Things like couchsurfing, internet-based sharing, and open source software are also in the gift economy.

Community is woven from gift relationships. If you pay for everything you need, then you don't need the people around you, and you have no community. But if you live among people who meet each other's needs in some way, then you look around you and you know, "I need these people. We need each other." You may have noticed that in times of economic crisis, people form tighter communities, because they have to rely on each other again when they can no longer rely on money.

3. What are the core features of the economics of Separation that have been haunting the humanity and our planet for ages?

The core features are competition, anxiety, scarcity, and endless growth. Of course, some degree of competition and scarcity is unavoidable, but our system creates far more than necessary. Consider for example the question of leisure. Since the dawn of the industrial revolution, futurists have been predicting an imminent age of leisure, in which people don't have to work very much in order to be comfortable. As recently as the 1980s, Alvin Toffler was predicting 25-hour workweeks and 150 vacation days. But instead, we have always chosen to consume more instead of working less, and that choice has been thrust upon us by our economic system. To make matters worse, a lot of the consumption is being done by fewer and fewer people. So much of it does nothing for the well-being of the many, and certainly not for the well-being of the planet. One of the core themes of the book is why this is happening. It isn't "greed" that is the culprit. You can get people angry at the greedy rich, but really greed is built into the system too. The culprit is deeper, it is systemic. I won't go through the whole argument here, but essentially a money system based on interest-bearing debt will always necessitate growth; in the absence of growth, such a system will concentrate wealth instead. That is what is happening today.

4. In the book, you write about the economics of Reunion. Can you tell us its main points?

The main points are reclaiming the commons, negative-interest currency, shifting taxation away from sales and income and onto pollution and resource extraction, partial economic relocalization, peer-to-peer economics, universal basic income, and gift economics. None can stand alone; each is synergistic with the others.

5. One of the core subjects of your book is transforming money, no to abolish it. Do you think there could be an economic currency that would work? It doesn’t have to be a physical coin per se, could be a mix of various manifestations (coin, digital, part gift based…). How would you name it?

Yes. It needn't be physical coin or anything physical. It could be electronic (as most money is today) or a mix. Electronic money is the wave of the future, but it involves political questions since it allows the government to monitor all transactions. I think ultimately we are moving in that direction, and besides, even cash isn't as anonymous as libertarians would like to think as more and more of it gets embedded with RFID chips. Anyway, the question is what do you mean by "a currency that would work"? "Work" in what sense? For me, "work" has to include that it doesn't encourage the degradation of the biosphere.

6. What are the main inconveniences of the Economies of scarcity in the long term?

It is more than an inconvenience. People are starving on this planet even though global food production could easily feed everyone. The food is there; they are starving because of lack of money. Elsewhere, people are devoting their entire lives to the servicing of debt.

7. What’s the philosophy behind the artificial scarcity? Who are most interested in sticking to it?

I don't think anyone consciously decided to create artificial scarcity. It is built into our economic system and, even deeper than that, it is built into our basic world view, the mythology of civilization and even our concept of self. On the economic level, scarcity is inherent in a system like ours where there is always more debt than there is money. That is built in to the money creation process. Scarcity is also built in to a world view that says we are separate individuals in a universe of "other". When we are separate from each other, then more for you is less for me. When we are separate from nature, we are always at war with nature, seeking to extract benefits from this indifferent or hostile universe. Furthermore, this ideology of separateness cuts us off from our true, extended being that is enriched with intimate relationships of community and with nature. When we are cut off like that, when for example we don't know the faces around us, don't know their stories, don't know the names of the trees and hills and plants around us, then we feel alone in the world. We feel like we don't belong. That is a primal form of scarcity. Consumerism is one way people respond to that cutoff.

8. Can you give us some examples of an increase of employment and productivity far from the scarcity policies?

Well, the extreme of a scarcity policy is what is known as "austerity." It is obvious in Europe that austerity causes even more scarcity, more unemployment, and less productivity. We can see that countries that have refused austerity are doing much better economically. However, the kind of monetary and fiscal stimulus used today is still only a tiny step toward true abundance policies. I could give you a few historical examples, but there are not many.

9. In your book you expose very interesting subjects or ideas, could you explain them in a couple of short sentences?

Negative-interest currencies

This is to be implemented as a liquidity tax on bank reserves. Basically, if a bank keeps the money parked at the ECB or the Fed, not only does it receive no interest, but it must pay a penalty of perhaps 5%. That creates an incentive to lend at very low interest, even at zero interest. It allows debtors and debtor nations to refinance their debt at perhaps zero percent. It also means that if you have a lot of money, you won't be able to count on living from the interest. Wealth will not be any longer a matter of simply owning a lot and automatically getting richer.

Impulse of local currencies

Local currencies insulate local economies from global finance, so long as there even is a local economy. Local currencies can help connect resources and needs locally when national money is in short supply. However, today many local economies have already been destroyed, so the potential for local currencies is small. When things really fall apart though, local currencies emerge spontaneously. It happened in Argentina in 2001-2; it happened all over during the Great Depression.

Resource-based economics

This is a concept from the Zeitgeist Movement. I don't especially endorse the idea, which basically says we should let computers figure out how to allocate resources, instead of money-mediated demand. Ultimately, if we tried to implement such a system, we would find that the interactive data-gathering function that would be needed to allocate resources would itself constitute something very similar to money.

The restoration of the commons

The commons refers to what should be public property, owned by everyone and no one. Originally, for example, land was not subject to private ownership. Through a long historical process, it was gradually carved up and privatized. Many thinkers have found this to be unjust. After all, no one created the land -- why should anyone have more exclusive right to it than anyone else? The same thinking applies to the "cultural commons" of ideas, songs, images, inventions, and so on. Even if some of them are original, they still draw on a cultural environment, and therefore still owe something to the creative work of hundreds of generations.

A body of economic theory has arisen out of this understanding. It says that you shouldn't be able to profit by merely owning land, patents, money, etc., but only by using it in a way that benefits society. So, land and other rent-bearing assets should be taxed at a rate that counterbalances that portion of the rent that arises from merely owning a scarce resource.

Degrowth activism

It is obvious that economic growth is killing the planet. We need to have a system that allows us to grow in other ways besides the amount of resources we extract and convert into goods and services. In our current system, chopping down a forest and drilling for oil counts as economic growth, while preserving it or restoring it does not. But we need more of the latter, less of the former. That means we need to develop an economic system that allows people to thrive even without growth in total consumption.

For many people, the word "thrive" or "abundance" implies consuming more and more, but there are other visions of thriving. For example, we could have a society where we have more leisure time, more hand-made things, smaller and more beautiful houses, more biking and less driving, more sharing with the neighbors and less basements full of unused stuff. All these changes would mean lower GDP, but richer lives in every meaningful way. Degrowth doesn't mean stagnation. It is a shift of priorities away from more and more of the quantifiable.

10. In the current state of society, more connected than ever and with less information barriers, how would you spread the concepts explained in the last question? Who do you think would be more interested in shutting the message down?

The key to spreading these ideas is to disrupt what I call "the story of normal." People think there is no alternative. People think nothing can ever change. People think that politics as we know it, and money as we know it, can be no other way. In a moment of people power though, everything can change. I think one of the most important things we can do right now is to prepare for that moment. When a million people are in the streets and realize their power, what will they do with it? So far, even when they have brought down a government, they end up merely installing a new one that implements more or less the same policies.

11. What do you think about the current state of worldwide economy? Do you think has it reached its peak or could it be even worse?

Things will get much worse before they get better. The political system works to ensure that debtors keep paying, and the banks and bondholders keep receiving, as long as possible. So, as long as there are any public assets or social wealth that can be sold off, it will be. You can see it happening in Spain right now. In order to satisfy creditors, everything is stripped away: public pensions, natural assets, social services... and the money goes to the bondholders. The last thing to be stripped away is the country's youth -- when there are no opportunities for young people, they will move away to Germany or somewhere else.

12. Do you think there’s been any period where mankind has had a fair –or barely- economic system for everyone involved?

Certainly. Hunter-gatherer societies were highly egalitarian. Many matrifocal peasant societies were quite egalitarian as well. The European social welfare societies weren't too bad either in terms of concentration of wealth. There is nothing, however, that I would uphold as an pre-existing example for a modern society.