Module 2
Money and its logic

2.How the Logic of Money Works

The understanding of the logic of money presented here is based on the theories and explanations in Eske Bockelmann’s book about money from 2020 called Das Geld. Was es ist, das uns beherrscht (English translation pending). Bockelmann emphasizes that the economy’s need to grow is grounded in money itself, and he urges us to focus on this when analyzing and criticizing the system of capitalism.

Bockelmann regards money as something that evolved historically. In Module 1, we demonstrated how people in earlier times were integrated into networks of mutual dependency. In Europe, these could be found in feudal social structures. Markets were only a marginal phenomenon and were always strictly limited in terms of their duration and the commodities they offered. In the course of the sixteenth and seventeenth centuries, fundamental changes regarding how people provided for themselves occurred. At the markets, which began to take place more often in booming towns, inhabitants exchanged commodities more and more with each other through buying and selling to acquire living necessities. For this, they needed coins, for example, which were usually made of silver. In addition to their temporary function as a medium of exchange, coins could be used for other things. Different things were thus exchanged for other things. As trade and the dependency of the entire community on buying and selling grew, the demand for coins rapidly increased. Where they were scarce, loans were used. Between individuals, oral agreements became the dominant form of credit, while in trade, it was promissory notes. Both of these were uncoupled from the material of which the original coins were made. In this sense, money was purely a means to an end and was no longer a thing with properties that could also be used for other purposes (like a silver coin could).

The complete dependence on money as the one universal medium of exchange developed, and people began to need to own it and use it every single day. All over the world, our livelihood still depends on money today. There is nothing that cannot be exchanged for this pure medium of exchange that has no substance itself. This means that money must always be related to the commodities for which it is exchanged. The equation that takes place here is based on two completely different situations: On the one side, we have things that exist independently and that, according to the logic of money, only temporarily carry an exchange value, and on the other side, we have money, which is an artificial and empty reference system. According to Bockelmann, the notion of value emerges through this abstract equation, and for this equation to work, we must ascribe value to things in the form of a price. Because money is a pure quantum, it must continuously be exchanged for goods, so that it can fulfill its purpose in this dynamic. This necessity requires things in this world to be permanently and indefinitely transformed into value and hence turned into commodities.

These acts of equivalent exchange mean that money is always paid not just for something, but also to someone. Money thus introduces an artificial third element to the interpersonal relationship between those who give and those who take.

According to this logic, people must possess either money or commodities to be able to interact as owners in a specific buying/selling situation. In this situation, the logic of money automatically sets mechanisms of exclusion in motion. Money always serves as a barrier.

This is how things can exist without money, while also being unavailable—to the extent that commodities that have no buyers are rather destroyed than distributed for free. The result is an overabundance and a shortage at the same time.

While this may not affect money’s logic of empty reference, it certainly affects us humans, some of whom live under extremely precarious conditions. It affects the world with its finite resources. Our dependence on money, which nation states have established as the universal means of satisfying needs with no alternative, forces us to serve this logic. In order to acquire money, we must let others have control over our lives and work, so that we can use this money to control the lives and work of others. At the end of a transaction or at the end of month, this exchange must necessarily result in having more money, so that everything that is needed or desired can be bought. Competition becomes systematically embedded because buyers and sellers must enforce their opposing interests on the so-called market. Buyers try to acquire a commodity for as little money as possible, while sellers attempt to get as much money for it as they can. This is because if a transaction does not yield a profit, it cannot be done. In other words, money in its entirety is never money once and for all. Instead, it must always assert itself as money by being used in a way that yields more money. The greater the amount of money grows, the more each amount of value increases that must, in turn, materialize in the form of something. This means that the chain of purchases cannot be allowed to stop. In an economy organized around money, growth is therefore not the result of greed; it is a necessity that is inherent to money itself.

To be able to survive within this logic, we are expected to behave like a homo economicus. This means that individualizing, functional, and competitive behavior tends to be regarded as more important than any other criteria of social interaction. Money uncouples all things from their contexts by abstracting them, while letting people’s immediate needs take a backseat.

In his book Das letzte Tabu. Ruchlose Gedanken aus der Intimsphäre des Geldes (2011), Aldo Haesler talks about how, within the logic of money, people are connected through fragile money relationships. These relationships are fragile because they only exist as long as a specific function is performed in exchange for money. These are liquidating acts of exchange (Znoj 1995), which are characterized by the termination of their mutual obligation once money has been exchanged for a commodity.

Haesler emphasizes in his book Gelddenker: 50 Porträts (2019) that the systemic necessity for us to compete with each other, which is inherent to the logic of money, leads to social isolation, which he regards as a fundamental phenomenon of our time. We tend to try to counteract the resulting loneliness and insecurity we feel through money instead of solid relationships. However, money and its emptiness cannot replace human relationships, and a vicious cycle of fear can evolve.

People think that the money-mediated way we interact is natural, when in fact it artificially maintains a world of illusion. This tendency is exacerbated by money’s function as a structural barrier that leads to the systematic social exclusion already mentioned. We thus have power (or agency) and privileges on the one side, and the structural tendency to oppress and marginalize on the other. The leaning toward exploitation and the existence of social inequality are thus structurally rooted in the prevailing logic of money (Bockelmann 2020).

If we were to overlook the systemic characteristics of money, we might assume that money could be transformed into money that does not need to yield profit, money that accommodates fair distribution, or simply money that does only good things because it is used only for good purposes. It is therefore essential that we recognize and understand the structures of the dominant logic of money today if we are to change it. For it is precisely by not denying these connections, but rather completely understand them and, whenever possible, using them as a basis for transformation by changing our ways of interacting and organizing that we can become open to new possibilities.