What Happens When I Burn Money?
By: Jonathan Harris
Tags: Money, Activism, Economics, Art, Spirituality

I think the Economic Explanation is the most easily comprehended result. Within its own logic and its conception of money — as outlined by Poitras and Landsburg earlier — it’s coherent. Just to be completely clear, arguing that the explanation is coherent within its own terms is not the same as saying it’s true.

The Accounting Explanation is a little trickier to get your head around. Within this view money is — as far as I can see — essentially reduced to ‘points’ awarded by ‘an authority’. Wolfgang Theil illustrates this rather delightfully in his twitter thread (above) with a typo which substitutes ‘points’ for ‘pounds’.

[ —Here and elsewhere I have argued that adopting a basic psychoanalytic framework would help us gain a better understanding of money. So, where Wolfgang sees a typo, I see a ‘Freudian slip’. — ]

Money conceptualised (or at least analogised) as ‘points awarded’ is made explicit though, in this twitter thread by Stephanie Kelton. She imagines the Government as a ‘scorekeeper’ and US dollars as ‘points’ awarded in a baseball game. So how should I conceptualise ‘burning points’ within an Accounting Logic? Certainly there is the implication that burning money has no ‘real’ effect. My negation of awarded points doesn’t change the score in the game. I guess it may change the way I play, though.

The Accounting Logic seems to suggest that what happens to me when I burn money is that I am putting myself under an unnecessary, self-imposed constraint while still competing in the economic game. Perhaps, rather than generously giving my burned £20 to everyone else as the Economic Logic suggests, I’ve actually diminished my personal productive capacity (and my ability to compete) and so my sacrifice has impacted negatively on the rest of society, as well as myself?

I’m least certain of all about what the Financial Logic suggests. Perhaps this is because burning money is so completely anathema to the praxis of finance that the action cannot be meaningfully assimilated into its logic? The reason d’etre of the Finance and Payments industries is the sustenance and growth of money. My action is therefore fundamentally incompatible with it. Of course — as I have argued above — I regard the Financial Logic as incoherent. It is no surprise that the ‘result’ I suggest in the table — of money burning being both nothing and something — is nonsensical.

However, in my explanatory metaphor I tried to give some linguistic expression to the tautology that masquerades as the logic’s axiom i.e. that money is any object that is generally accepted as payment for goods and services. The metaphor seems to suggest that for Financial Logic, matter becomes part of a flow of something fundamentally non-material — desires, wishes, wants, needs etc — that are seeking satisfaction through a process of exchange. For me, this offers some insight. I’m not sure it’s grounded enough for the pragmatists in Finance and Payments. But it does maybe point toward why, despite the incoherence of their logic (which I suspect many practitioners may be aware of), the praxis of finance circumambulates something which, however vaguely it is seen (or maybe because it is vaguely seen), is actually a truth about the nature of money.

[ — The provocation is over. I’m going to drop the inline code thing now! — ]

Money as a Medium of Exchange (Again)

Now I’m going to consider the medium of exchange function more deeply. I think it’s important to do this in order to understand a different aspect of what happens when I burn money. The Economic and Accounting Logics point toward the effects of money burning that occur (or not) within their own areas. The problems I’ve outlined with Financial Logics prevent us from properly assessing what it means to burn money when its primary function is as a ‘medium of exchange’. So if we could find a coherent way to conceptualise money as a medium of exchange primarily and/or axiomatically and/or foundationally, then this might help us work out what happened, say, when I burned EC56 496932 (£20).

So you might be relieved to hear that now we’re going to move away from the Economic, Accounting and Financial Logics. I will maintain — for the moment — an Explicitist mode of thinking. I’ll get into magical thinking later on.

Essentially, what we have to do in order to avoid the errors and fudges of Financial Logic is to emphasise medium over exchange. In other words, we must take seriously the ontology of media, itself. We have to think about what being a medium actually means. Scott Ferguson describes two contrasting views of media; the correlational approach where mediums are treated as “relatively neutral conduits that either succeed or fail to convey extant phenomena” and the constitutive approach which insists that any medium “actively shapes social reality, heterogeneously organizing and participating in worldly phenomena from within”. He also goes on to say — and this is important because it prefigures the argument I’ll make about magical thinking — on the constitutive view, media makes the world legible in ways that are always opaque and incomplete.

Ferguson bemoans the fact that while academics in the humanities and social sciences readily adopt a constitutive view of media in general, when it comes to money they seem stuck in a view that is correlational. In other words, they tend to see money as neutral, in much the same way that mainstream economics does.

Lana Swartz in her latest book New Money: How Payment Became Social Media thinks about money as a “communication medium dependent on particular technologies”. In line with Ferguson’s insistence on the constitutive view of money as media Swartz argues that “communication doesn’t just document the world and share documentation of the world; it is [the] process through which the world is constructed.”

So within both Ferguson and Swartz’s view — and within the constitutive approach to media generally — burning money must have some meaning. It must impact on the creation of social reality, surely? This doesn’t seem an outrageous claim for such a symbolically powerful act. I would guess that Ferguson views the negation of money as speaking directly to relations of credit and debt. Ferguson rejects the view that money is primarily a medium of exchange, claiming inline with his commitment to Modern Monetary Theory that it is a medium of credit and debt.

It’s trickier to get a handle on what Swartz’s view might be about the meaning of money burning. A substantive difference between her and Ferguson is that whereas for Swartz money is one of many media — as stated she tends to subsume money under a generalized notion of ‘communication’ — for Ferguson the medium of money is special; “money operates as a preeminent medium that mediates the myriad media that shape the world’” Ferguson’s view is much more in line with my own. For me Swartz’s view of money — whilst it opens a powerful perspective — can be subject to the same critique as was made of Viviana Zelizer’s seminal work The Social Meaning of Money. Swartz and Zelizer seem to want to deny that there is something essential and ever-present across all forms of money. Zelizer argued that the idea of ‘money in general’ was invalid. This seems to imply that what happens when I burn money, will depend upon the meaning I attribute to it. I’ve already said that is very much the case. But it is not wholly so. Money is able to answer back with its own distinct and clear voice.

Whilst Zelizer’s provocation served to broaden the academic appreciation of the cultures of money and the importance of behaviours like ‘earmarking’ — where money is differentiated by being given different meanings — it denied that there is any universal experience to money. Quite what it is that is common to ‘money in general’ may be tricky or even (as I think) impossible to unpick. But the ‘feeling’ that there is ‘something’ there — that there is some element of money that is the same today as it was to my parents and their parents as I claimed earlier — cannot be shaken off that easily. Ferguson’s view of money as media, which draws on theological considerations of our relations with God, seems to point towards something more permanent and universal as being present within the money form. And despite not agreeing with his disavowal of exchange, I think his description of the medium of money is highly insightful.

Tony Lawson, a colleague of Geoffrey Ingham at Cambridge, has proposed a ‘social positioning theory of money’. It is a theory that directly engages with the ontology of money. Lawson says that social positioning is “the process whereby, through general acceptance throughout a community, human individuals, things or other phenomena become incorporated as components of these emergent totalities.” In this view money becomes a ‘positioned’ phenomena; the capacity of a disc of gold to act as money is ‘harnessed’ so it serves the needs of ‘the overall embedding system’. Importantly, Lawson’s view holds a presupposition that money does not reduce to ‘what money does’ — in other words, it cannot (as I argued earlier) be reduced to its functions. The functions required of money emanate from a ‘position’ that is determined by the community that brings it into being. While a money object may have certain capacities, its functions aren’t inherent but rather are constituted by its occupation of the position of money.

Whilst Lawson’s theory is not concerned specifically with money as media I do see correspondences between his insights into the ontology of money and Ferguson’s into the ontology of media. Each provides a perspective on the relation between social reality and money. As stated, Ferguson is an adherent of Modern Monetary Theory. Lawson addresses MMT directly in his paper Money’s relation to debt: some problems with MMT’s Conception of Money. His critique engages with the view held by Ferguson that money is a medium of credit and debt. Lawson argues that credit and debt are two aspects of the same social relation. And this captures my confusion over Ferguson’s claim. I’m not sure what it means to say that something is a medium of a particular and specified social relation. It seems too closed off. I’m unsure as to how money’s universality (a quality which Ferguson seems happy with) could arise from this specified relation. Whereas the proposal that money is a medium of exchange offers something that is inherently more generalised and so offers a greater capacity for universality.

I’ll come to Simmel shortly, but it’s worth stating now that his notion of ‘exchange’ was not at all limited to ‘economic’ exchange. I posted In Defense of Simmel back in 2014 to try and make the point that Simmel’s use of ‘exchange’ as fundamental to his understanding of money should not be understood as tacitly supporting free market neoliberalism. As Simmel himself says:

‘The concept of exchange is often misconceived, as though it were a relationship existing outside the elements to which it refers. But it signifies only a condition or change within the related subjects, not something that exists between them in the sense in which an object might be spatially located between two other objects.” (Philosophy of Money p.83)

So in this understanding of exchange, Ferguson’s credit and debt relation becomes a description of particular changes ‘within the related subjects’. As such credit and debt relations are one aspect of exchange relations. Simmel’s definition of exchange points toward something much more universal. He says:

It should be recognized that most relationships between people can be interpreted as forms of exchange. Exchange is the purest and most developed kind of interaction, which shapes human life when it seeks to acquire substance and content. Every interaction has to be regarded as an exchange: every conversation, every affection (even if it is rejected), every game, every glance at another person. (Philosophy of Money p.82)

However, while I think conceiving of money as a ‘medium of (a broadly defined) exchange’ is better way to think about money than as a ‘medium of credit and debt’ — not least as it allows for a deep connection between money and sex (I’ll come back to that at the end of the essay) — I do prefer Ferguson’s conception of money as a ‘meta-medium, wherein many additional media become nested’. In Lawson’s conception, money is just not that special. It is merely a particular instance of social positioning. Important of course, but unique only in so far as that, by their nature, every ‘position’ constituted within social reality is also unique. This troubles me.

There are many diverse aspects to my social reality. But every aspect seems in some way related to either sex or money or both of them. In terms of that which directs my material life, money and sex seem to occupy uniquely powerful positions. I’m suspicious of any theory of money (or sex for that matter) which disavows its uniqueness as a phenomena or underplays its constitutive role in my lived experience. I have a little history with Lawson and his underplaying of money.

Twenty years ago, I ventured outside my normally strict focus on money itself to read his then recently published Economics and Reality (1997). It superbly deconstructs and critiques the Hayekian influenced economics which were so dominant at the time and introduced me to the work of Roy Bhaskar. There is much to admire and be thankful for. However, there is not one mention of money in the entire 364 pages of Economics and Reality. For me the omission was indefensible. I did buy Lawson’s Reorienting Economics (2003) but haven’t been able to get over my objection. I checked the index, saw that ‘money’ wasn’t listed and it’s just stayed on my bookshelf unread ever since. So then finding out that in recent years Lawson had begun to address the absence of money in his work was great news. Social Positioning seemed to hold real promise as a way to break out of the impasse in the arguments about this or that function of money being primary, axiomatic or foundational. But then he has to go and say this:

“Many observers, of course, interpret the noted markers or tokens of money as money itself. However, cash and electronic entries are not money, at least as I am using the term, and nor is (any form of) bank debt per se. Rather money, currently, is any appropriately positioned form of bank debt that the cash and electronic entries serve to mark.” (link)

Ignoring the complexities of what precisely is and is not money according to Lawson’s theory, the takeaway point for me is that when I burn £20 (Lawson says) I’m not even burning money at all. And to me this is truly absurd.

If we have reached the point in our current attempts to explicate the nature of money, where the theories of the brightest and best of our scholars conclude, that what appears to every individual as our most money-like object is, in fact, not money at all, then we may have hit the limit of possibilities for these modes of Explicitist thinking.

One thing that immediately endeared me to Georges Bataille’s The Accursed Share was when he said in the preface ‘he would not have written [The Accursed Share] if he’d followed its lessons to the letter’. He says his ‘research aimed at the acquisition of a knowledge; it demanded a coldness and calculation, but the knowledge acquired was that of an error, an error implied in the coldness that is inherent in all calculation.’ (p.11) I argue that here he is recognising and (paradoxically) revealing something of the ‘general movement’ (a term which I have stolen from Bataille) that I have tried to capture in this term ‘Explicitism’.

And like Bataille, if I adhere to my recognition, that failure to meaningfully understand the nature of money is inherent to the Explicitist mode of thinking, then I should end this essay now. I should perhaps simply reiterate that ‘meaning comes from doing’ and abandon Eplicitism in favour of Mysticism and/or (my preferred) Magical Thinking. But I can’t let go quite that easily. I need to finish things off, return to those disagreements with Ingham about the unit of account function of money and explain why, despite agreeing with the view of my progressive (& MMT) friends about the primary function of money, I don’t think it needs ‘an authority’ (as Ingham suggests) nor is any explanation of money’s nature (that proceeds along the lines of Searle’s ‘collective intentionality’) sufficient, without reference to and the inclusion of the unconscious.

For Ingham, who draws on Richard Searle, collective intentionality might be seen as something of a misnomer (most especially if one associates the term with something like Jung’s collective unconscious). Searle’s definition of ‘collective’ doesn’t suppose any magical blending of consciousness or social substrata of intuition but instead insists that ‘collective’ intentionality has to exist inside individuals’ heads. There, it takes the form of ‘we’ statements. So by imagining ‘we think Gold is money’, Gold becomes money. The ‘we’ element (as it exists in individual minds) is therefore what constitutes a joint action and is the core characteristic of cooperation.

By adopting Searle’s idea, Ingham can safely keep money in a box, locked in not just by a rigorous Explicitism, but also by a reductionist, materialistic, atomistic Logic. There is no need for magic, at all. Or an unconscious. This is a problem. A totalising theory of the nature of money must contain the possibility of alterity. Ingham sees puzzles where there are mysteries.

Let’s briefly explore this in relation to gold and silver. Between 1999 and 2002 the UK Treasury sold over half its stock of Gold. The value of Gold had been rationalised away. The belief that a shiny yellow metal could act as a store of value had been exposed as primitive and irrational. Gold was history and its sale signalled faith in the rule of reason and modernity’s understanding of money and economy. The sale netted around £3.5 billion. Today you’d get around £12 billion. The incoherence of Financial Logic and the pragmatism that it afforded the Bank of England lent them an almost divinatory power. They weren’t keen on the sale and counselled the Treasury against it. But different logics ruled in Westminster and the sale was pushed through, anyway.

Even though the Treasury’s logic may have been correct and coherent within its own terms, it was wrong when applied rigorously to the praxis of finance. What it failed to factor in — what got written out in their rigor — is that Gold is of the Sun and Silver is of the Moon. Whether this is literally, materially or logically true is beside the point. It has been the story for every human being across time. It is an ancient truth, nested in our unconscious. Keynes told us that Gold was originally stationed in heaven with his consort silver, as Sun and Moon. Failure to take the unconscious seriously causes grave and costly errors — £8.5 billion’s worth to be precise.

I disagree with Ingham’s proposal that the unit of account function requires ‘an authority’ to establish it. I don’t deny that ‘an authority’ would help. However, I agree with Simmel’s view that the unit of account function actually arises from an unconscious equivalence of absolutes. Note here that Simmel’s view roots money in the unconscious — a space that is by its definition not directly accessible to the conscious mind — and by doing so presupposes and manifests an alterity at the heart of money.

Simmel’s idea is pretty weird to be fair. The headline version of it is that the unit of account function arises from an unconscious equivalence between the total amount of money and the total amount of goods. In my Barefoot in Bollingen piece I explain that it took me many years to assimilate this. It’s like one of those uncomfortable ‘truths’ Freud told us about 120 years ago. Rejection is part of the process of acceptance. And like Freud’s ideas, Simmel’s notion of how the unit of account function is established is more palatable if you think about it abstractly. There is no ‘equivalence’ between God and the Universe. God is all things and all things are within God. Likewise, the Universe is all things and all things are within the Universe. Both are conceptions of the absolute. And, in this sense of them both being absolutes therefore, they cannot exist simultaneously and so there can be no equivalence between them. And yet there is. In the act of perceiving both we create the equivalence between them. We do so not in the rational mind (which denies that any such equivalence can exist) but rather at an irrational and unconscious level.

[ — It seems obvious but also worth noting, that our two most significant celestial bodies who we would have worshipped as a God and Goddess for the majority of humankind’s existence are Father and Mother to Gold and Silver, respectively. The idea then, that the unit of account function of money stemmed in the first instance from this relation, parsed through to our relative valuation of gold to silver, would seem to me a reasonable explanatory proposition for how money as currency secured and expanded its role in social reality. — ]

So then, when I burn money in Ritual I believe that I’m talking to the irrational and unconscious part of our psyches that has a capacity to manifest the fundamental equivalence that underpins money and our financial lives. I’m not 100% sure what I’m saying to it, nor what its response is. But I suspect — and hope — that some form of ‘resetting’ or ‘realignment’ takes place so that the measure of money — and the logics that arise from it — might no longer subjugate themselves so wholeheartedly to the accumulation of wealth and power. And that maybe our behaviour around and relationship with money might flourish to open up possibilities for new ways of being.