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Explore the origins of money and its role in society, from the family meal to the invention of writing and minted currency. Discover the ecological and economic aspects of money and the importance of balanced energy exchange in the economy.
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Topic Covered • Historical and Spiritual Overview of Money • World History of Money • The Eco Model • Economic Imbalances • The Economic Time Dimension • The Western Eco/House • An Alternative Perspective • Jainism • The Open Eco in Financial Planning
Historical and Spiritual Overview of Money World History of Money • The origin of money stems from satisfying several non-economic needs. The first form of money was most likely the family meal (Desmonde 1962). • In this exchange, food and community were the rewards for fulfilling familial duties. Failures to fulfill these obligations often meant the community would ostracize the useless member and thereby cause death by starvation. • Between 9,000 and 6,000 BCE, people used livestock, particularly cattle, as money in many different societies (Davies and Davies 1996). • The domestication of animals preceded agriculture; using cattle as a medium of exchange was already in place by the time crops were cultivated. Using cattle as money was so pervasive that several modern terms pertaining to monetary matters originate from using cattle as a unit of value.
Cont. • For example, the term feeis derived from the Gothic failhi, which means cattle. The Indian rupee stems from the Sanskrit word for cattle. The word capital and the legal word chattel also stem from capitale, which originally denoted cattle counted by the head (Desmonde 1962). • Between 6,000 and 3,100 BCE, writing was invented in Mesopotamia, born out of the necessity to keep accounts (Davies and Davies 1996). • Much later, around 1,200 BCE, the Chinese invented the first money minted to serve as a medium of exchange (Crawford 1994). • Interestingly, this money took the shape of miniatures of commonly used tools rather than cattle or other animals. This is an important departure because a tool is a device that facilitates work or the expenditure of energy. • By shaping their money in the form of a tool, the Chinese implied that the miniature represented a store of effort or work. Thus, currency, another term for money, also denotes the flow of energy (Butterworth 2001).
Cont. The Eco Model • Having established money as a representation or store of energy, the need arose to examine its role within the economy. • Interestingly, economy and ecology share the common prefix, Eco. Eco comes from the Latin word oecoand means household (Merriam-Webster’s Collegiate Dictionary1993). • Economics concerns itself with household management, while ecology refers to household relationships. Therefore, ecology originally enlisted the environmental aspect of Eco while economics took on a managerial aspect.
Cont. • Economics’ original definition as household management later broadened into the management of resources and as a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services. • Simultaneously, ecology, which originally meant house habitation, became known as the science or study of the interrelationships between organisms and their environment. • Exhibit 14.2 illustrates the harmonious balance of ecology and economics or relationships and management. • In this model, the ecological interrelationship is exemplified by the philosopher Martin Buber, who differentiated relationships into two types: I-You (Thou) and I-It (Buber 1970).
Cont. • I-You encounters occur when beings exchange holistic reverence for one another. In contrast, I-It meetings entail objectification of the other. Buber believed this objectification of another or the self, while necessary to live in the world, should never exist on its own. As Buber (p. 68) notes: “You must become an It in our world. However exclusively present it may have been in the direct relationship—as soon as the relationship has run its course or is permeated by means, the You becomes an object among objects, possibly the noblest one and yet one of them, assigned its measure and boundary.” • The I-You establishes the world of relation that forms the ecological container of life. The most important question to ask when considering the Eco is, “Who is in the household?” or in Buber’s terminology, “Who is a You (Thou)?” One of the consequences of capitalism is the commoditization of beings where most relationships are permeated by means, or profit at the expense of strong interrelationship.
Cont. Economic Imbalances • The deeper the ecology, the longer energy imbalances can persist in the economy. • Large outstanding loans between family members may carry on for years while small loans between acquaintances require immediate repayment. • When a person obtains money in ways other than by work, such as by inheritance, gifts, or luck, an energy imbalance exists. • Psychologists have termed the phenomenon of receiving windfalls the sudden money syndrome, characterized by feelings of disorientation, paranoia, and guilt (Phelan 2001).
Cont. • The reality of the dream of unlimited wealth turns out less promising than imagined. A 2009 study by Scherer and Bloomgarden-Smoke (2012) reveals winning the Mega Millions Lottery merely serves to postpone bankruptcy for three to five years for lottery winners in dire straits before winning. • Energy imbalance also plays an important role in gambling addiction and crime. Gambling addicts often describe obsessive and materialistic thought patterns that take over their minds (Lin et al. 2010).
Cont. The Economic Time Dimension • Money not only represents a store of energy but also contains a time element. • In September 1958, Bank of America mass-mailed to every resident of Fresno, California the first credit card, called BankAmericard, and the era of credit card debt began (May 2008). • By the second quarter of 2008, revolving debt in the United States had reached $969.9 billion. • As May (2008) notes, in 2007, just before the collapse of the world economy, Americans spent $1.22 for every dollar they earned. No longer limited by cash on hand or in the bank, the financial realities of consumers’ lives stand in the distance.
Cont. • Returning to the definition of money as a store of energy, Americans’ negative savings rate represents an energy drain on the population. • Part of mindfulness practice, a component of transpersonal therapy, requires a full and focused awareness to the present moment (Kasser and Sheldon 2009). • As applied to transpersonal economics, most energy should be expended to satisfy present needs with smaller portions to diminish debts and save for the future. • Just as future concerns over outliving wealth create anxiety, debt oppresses mindfulness as it directs the flow of energy backward, to the past, when people purchased goods based on future energy expenditure.
Cont. • When the consumer debt reaches a high enough level, most work-related efforts go to meet past debt rather than current lifestyle needs. Similar to rehashing painful childhood memories, this financial living in the past can lead to depression. • On the other end of the spectrum, anxiety, worry, or fear about future events commonly leads to hoarding • Anxiety often propels people to seek out financial planners to provide reassurance, while depression diminishes the desire to take action and thereby contributes to the downward economic spiral
The Western Eco/House • Two major forces help to explain the foundation of the narrow entryway into the Western house: Aristotle and the Bible. These forces limited household members to men, usually white men. • Aristotle granted all living organisms souls and divided these among nutritive (vegetative) pertaining to plants, perceptive (sensitive) pertaining to animals, and intellectual (rational) pertaining to human beings (Del Rio and White 2012). • The telos of the rational soul was to seek the divine. Because humans were the only organisms with a rational soul, they were the only organisms with a link to the divine. • To further narrow the doorway into the Western house, Aristotle (1946, p. 16) said “the male is by nature superior, and the female inferior; and the one rules and the other is ruled.” • According to Armstrong (2006), Aristotle believed that although women had rational souls, they were primarily governed by their emotions and thereby unable to access their rationality.
Cont. • The Abrahamic traditions, Judaism, Christianity, and Islam, the primary religions of the West, stem from the Old Testament of the Bible. The book of Genesis directs humankind to: “Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth. (The Holy Bible: King James Version, Genesis, 1973, 1:28).” • This directive established a fissure between human beings and other living creatures that persists to this day, where humans consider themselves to have been made in the image of God and the rest of creation placed on earth for their use. • St. Thomas Aquinas brought together the divergent streams of Aristotelian logic and Biblical faith into a unified theory called the Medieval Synthesis (Armstrong 1993). Under the hierarchy of the Medieval Synthesis human beings straddled between the angelic realm and the animalistic realm. Of the beings on earth, humans alone possessed divine powers of reason, imagination, and spiritual essence (Lovejoy 1964)
Cont. • As Weber (1992) illustrated, humanity’s religious paradigms play a large role in the economy. • Weber’s work is relevant to the Western Eco in two main respects. First, it demonstrates the power of religion in the economy, and second, it reveals how the Western identity of the individual self was shaped. • In 1904, Weber published his famous book, The Protestant Ethic and the Spirit of Capitalism(Weber 1992). • In this work, Weber put forward the thesis that Calvinist ethic and ideas influenced the development of capitalism. • Weber relied heavily on the statistics from the era, which indicated a predominance of Protestants among the wealthy, industrial, and technical classes relative to Catholics.
Cont. • Weber demonstrated that the capitalistic spirit arose from psychological tensions that Calvinist theological commitments tended to trigger in the minds of followers, most notably tensions caused by rationalism and predestination (Novak 2005). • Originally, those operating under the Protestant Work Ethic were ascetic and saved most of what they earned. Later, when the masses of Protestants lost touch with their Calvinistic roots, wealth shifted from being a natural byproduct to being an end in itself. • Marx (1983) predicted this shift when he claimed that capitalism would eventually grow into hedonism as the capitalistic machine creates artificial desires to keep demand high. Capitalism, according to Marx, demands that a consumer society be created and enlarged
An Alternative Perspective • After this thorough exploration of the Western Eco, with its economic prosperity leading to ecologic poverty, we investigate an alternative perspective of wealth that may offer a solution to rein in the adverse consequences of unbridled capitalism. • The wisdom tradition of Jainism predates the Abrahamic traditions and arose in India thousands of years ago as referenced in the Vedic Scriptures (Dundas 1992). • This tradition holds a vastly different approach to the Eco due to the doctrines of karma and interconnection of all beings—concepts foreign to individualistic Western economic philosophy. • It differs from religions that regard humankind to have been created by God in his divine image by its focus on life rather than the human person. Jainism gives reverence to all life, irrespective of its place in the biological hierarchy. • In other words, in Jainism the pathway to the Eco’s ecology is wider than the West’s and allows veneration of all types of living organisms
Cont. Jainism • Unlike Buddhism, Jainism has not spread much beyond India, its country of origin, for several reasons. • First, Jainism is decidedly ascetic; the discipline required for householders is the equivalent of that required for renunciants in other traditions (Carrithers and Humphrey 1991). • Second, the Jain philosophy that knocks down the door of the Eco by granting sentience, the defining characteristic of the soul, even to microscopic beings creates an ethical dilemma to human reproduction (Tatia 1994). • Third, the central philosophy of Jainism is ahimsa, which means non harming, limits the mobility of adherents.
Cont. • Traditionally, Jains abstained from travel during the rainy season in order to protect the lives of creatures, such as worms, that may be inadvertently stepped on in walking (Dundas 1992). • Today, this restriction has been relaxed but still Jains take extraordinary measures to prevent harming other organisms. • Jainism is one of the world’s oldest shramanic, or ascetic, religions. Both ascetics and lay people practice the same five vows, only to different degrees. • The five vows practiced stringently by ascetics are known as the great vows and the five vows practiced by householders with leniency are known as the lesser vows. • The five vows, in order of importance, are abstinence from violence (ahimsa), falsehood, stealing, carnality, and possessiveness (Tatia 1994)
Cont. • Jain monks and nuns believe they have a duty to teach the laity; simply working on personal enlightenment is unacceptable. • Jain ascetics insist that teaching the laity is a central part of their dharma (life path), a form of religious study, and thus, one of the internal forms of asceticism. • Jains are strongly encouraged to follow professions with the least potential for violence. • Therefore, the practice of ahimsa has led to the exclusion of the Jains from all industrial trades endangering life: trades that use fire, involve work with sharp instruments, masonry, the majority of industrial and agricultural occupations, as well as the entire military industry (Nevaskar 1971
Cont. • Furthermore, the vow to abstain from falsehood requires Jains to practice absolute honesty in business. • All maya (illusion) is prohibited, including dishonest gain through smuggling, bribery, and any sort of disreputable financial practice. Therefore, Nevaskar notes that Jains have stayed away from government jobs in India, where bribery is commonplace. • Like the ascetics, Jain laymen hope someday to achieve liberation. The lesser vows taken by Jain householders either partially eliminate or attract beneficial karma. • As a result of their preoccupation with enlightenment, Jains give generously to charitable causes in hopes of receiving spiritual merit.
Cont. • The most famous Jain manual that focuses solely on business ethics, RatnasekharaSuri’s Light on Purity of Business Activity, composed in the early fifteenth century, provides Jains with clear instruction on proper business activities. “The omniscient Jina states that purity of business activity is the basis of dharma. Purity of money in worldly existence comes about from pure business activity; through pure money there comes pure food; through pure food comes purity of body in worldly existence; with a pure body one becomes suitable for dharma. Whatever action he performs yields fruit in worldly existence. (Chapple 2002, p. 104)” • With its high level of personal responsibility and severe asceticism, the fact that Jainism has been unable to flourish like less stringent traditions is not surprising. Jainism shares the West’s philosophy of free will and capital accumulation yet does so through a sustainable and compassionate lens.
The Open Eco in Financial Planning • Beginning in 2008, the decline in client portfolios due to the financial crisis affected virtually all levels of the financial advisory community by damaging relationships and eroding trust. • Clients became enraged and fearful as their futures became uncertain. With institutional failures, scandals, and bursting economic bubbles, investors turned into irrational clients unwilling to show patience and hope for a future market upturn. • These dire circumstances and emotional, limbic system reactions required financial planners who had the appropriate skills to manage the situation. • Planners needed to reestablish trust and confidence in the face of uncertainty.
Cont. • A set of transpersonal practices provides the framework for an advisor to work through emotionally challenging issues. The framework also enables clients to reevaluate their roles and responsibilities in the current situation. • Optimal client engagement and progress are achieved when elements of transpersonal psychology and supplemental coaching skills are a part of the advisor’s approach. • This includes understanding how client identification with wealth leads to emotional reactions and developing enhanced listening skills. • Other skills consist of: avoiding defensiveness when the client seeks to place blame; generating a sense of greater control in the client’s mind; encouraging positivity and hope during challenging periods; facilitating a redefinition or reframe of the situation; establishing more frequent communication either in person or electronically; focusing on building or rebuilding trust; and adapting a communication style similar to the client’s (Gounaris and Prout 2009)
