Theology of Money – 5. Theology of Money

I apologize for the possibly excessive length of this summary, but I found it to be exceptionally dense.

Accounting

This chapter investigates money “in relation to its mode of representation and the belief that this inspires” (165), beginning with the question of what counts as money. The impossibility of answering this question definitively “testifies to an underlying philosophical problem that emerges from the nature of representation as such” (165), a problem that stems from the fact that money is actually nothing but its own representation. The value money supposedly represent does not exist outside its representation in exchange. There is no outside standard of value, only the constant flux of representations: “Each act of pricing is a guess, an estimate or approximation. Since there is nothing to which it approximates, then pricing is always an act of faith. It is inherently theological” (166).

Pricing is always ultimately arbitrary. The agreed price reflects only the fact that some determinate agreement has been reached and executed; the quoted price “reflects hopes and expectations, uncertainties and strategies” (166). The same goes for contracts as for quoted prices: “While a price quoted depends on the credibility of the one who makes an offer, a contract depends on the credibility of public contracts within society” (166). This credibility can only stem from particular institutions, such as bank; it’s impossible for money or contracts to reflect the efforts of society as a whole because economic activity never forms a complete system. Economic activity is governed by interlocking contracts among particular people and institutions, and “money is merely the public accounting of contracts” (167).

Money is a shared fiction, which concretely exists only in banks’ record books. These books are a self-referential system; contracts represent links between different sets of books. While these books are made up of representations of contracts, their balance is significantly different from a contract insofar as a balance represents all transactions as being complete: “Account books assume that contracts will be honored and debts and credits will be paid in full, even if those who use them do not. Account books designate possible futures as if they had already occurred” (168).

Account books do not tell us about some external reality; instead, accounting represents a system of ethics and law, directing economic behavior. The moral principles of accounting are as follows:

1. Income and spending have to balance over the long term, “according to the model of a circular flow” (168).
2. Accounts are a system of “mak[ing] economic conduct visible” (169) in order to demonstrate that one is worthy of trust/credit.
3. Accounts promote self-discipline: “An enterprise maintains public credibility only if it maintains private self-discipline” (169).

In short, accounting is a fundamentally social and moral phenomenon, rather than being an objective record.

The shared fiction of accounting, which treats all contracts as if they had already been fulfilled, allows money to multiply. In the time it takes for a contract to be fulfilled, the money it represents could have been spent multiple times in multiple ways — effectively, accounts create money. While common sense objects that fiat currency is not backed up by any real value, the true illusion is the idea that there could be a substantial value (on the model of gold) to back it up. In reality, money can “be in two places at once” and serve as a reserve for itself (170). Specifically, Goodchild seems to be saying that the most important “two places” are the past and future: “Money exists only in memory or anticipation as a record in account books” (170). Money always does its work elsewhere, and allowing money and accounts to handle contracts is a way of “outsourcing” our attention. Once we agree to a contract, it can be taken for granted, leaving us free to seek out further beneficial contracts.

In sum, “accounting measures that which no longer demands attention” (170). Yet paradoxically, a profit-driven society directs its attention precisely to accounting, believing that it measures something worthwhile in itself. A mechanism that should free our attention for what matters becomes a distraction that ultimately leaves no time for what matters.

Since there’s nothing external that accounting actually measures, “all that matters is that such records are not seriously disputed” and accounting can serve as “the basis for credibility and credit” (171). Yet in that role, accounting is deceptive, because it only tells the story of the firm’s supposed self-mastery and prudence, obscuring the reality of its interconnection with others. What’s more, it ignores externalities.

Morals of Accounting

Overall, this narrowing of focus makes accounting a dangerous moral system. For instance, it ignores the fact that not everyone can be a rich capitalist and that every firm requires people to be available for work. In addition, the supposed self-mastery provided by accounting covers up the fact that contracts are binding once entered into and that the “free” decision to enter into the contract is constrained by a wide range of external factors. The fact that accounting obscures these very important facts undermines its claim of self-mastery.

Accounting also constrains freedom simply in itself, by guiding people into particular patterns of behavior. It is guided by “the utopian ideal of determinate prices as an ideal frame of reference,” an ideal that flies in the face of the reality of continual negotiation (174). The overwhelming focus on saving time produces “a world without the experience of time or social relation” (175). By short-circuiting the difference between already realized outcomes and expectations, it fails to respect the “difference between a monetary value and the value of a monetary evaluation” — whatever evaluations have been made are taken as infallible (175). The supposed mastery accounting provides leads to the attempt to bring all of reality under its sway by giving everything a price, which leads one to think of all of reality as potentially lost, broken, or substituted for. Its function is similar to that of a sacrifice and is not much more effective as a way of diverting destructive forces.

Money and contracts are analogous to writing, in the sense of being de-contextualizable and thus able to take on new meanings at the same time as they represent a dead authority that can’t be challenged or changed once agreed on. In a sense, then, money is the ultimate form of writing, infinitely transferable and flexible, possessing its own authority (insofar as it takes away the authority of the person who tries to use its power), and proving its own value through profit. In the full Zizekian sense, money works even if you don’t believe in it.

Overall, accounting serves the function of bringing all of reality under money’s sway, submitting everything to definitive evaluation that then serves as the basis for technical rationality. It poses as neutral, yet it imposes the moral standard of making a profit as the highest possible goal. It attempts to efface the dual nature of money as a promise and a threat by keeping assets and pawning off liabilities on someone else. It sets up a system where everyone is assumed to be a fully responsible sovereign individual, meaning that success in navigating the system provides evidence of moral worth and financial failure implies moral failure. “The culture of modernity is one of universal threat” — freedom is continually threatened by obligation, which one must continually try to push onto someone else (180).

A Revaluation of Value

If we want to pursue a revaluation of values, then Goodchild proposes that we should begin by changing accounting practices. Since money exists as accounting records, new forms of accounting would lead to new forms of money. A new system would have to make up for the serious problems with actual existing accounting: the lack of attention to externalities, the treatment of contracts as completed transactions rather than “enduring relations” (181), and its failure to acknowledge the broader social context that underwrites the credibility of money. It’s not simply a matter of coming up with ways to count or measure life or capital, because they escape valuation: “Instead, it is necessary to discover a temporal and relational mode of evaluation, where value is not encountered within either object or subject but in a relation that exceeds the bounds of mastery of the evaluating subject” (181).

Money is not valuable, insofar as it does not reliably point toward what matters. Yet it has managed to defeat every other mode of evaluation, and a new system must find a way to make use of this power instead of being enslaved to it. This new use of money must begin by clearing away money’s false claims to be a store of value, a unit of account, or a medium of exchange. All these claims rely on an obsfuscation of the social and temporal reality in which money is embedded; a new method of evaluation would take that reality seriously. Once we get past the simple identification of money with value, we can see that value arises from a convergence of “capital, which arises from the production of order; demand, which arises from the experience of time; and credit, which arises from a determinate theology of evaluation” (183).

Accounting leads to the paradox of the representation of evaluation (money) taking the place of evaluation itself, and a new accounting system must start from the premise that “true value resists accounting” (183). We must deal with “that which cannot be evaluated yet demands to be evaluated” (183), namely, all those economic opportunities that arise outside the already existing market relations represented by price. Instead of encouraging competition for the single resource of money, a new mode of accounting would have to promote cooperation, which is the path to true wealth.

What is necessary is a separation of value and price: “Value is that which is not yet represented in a price” (185). True value can only be observed indirectly through price movements that react to news, emerging tendencies, etc. The market really is guided by an “invisible hand,” which is the force of external events that cause a shift in prices. This invisible hand always works inefficiently and unjustly, meaning that the ideals of prudence, self-mastery, and the utopia of market equilibrium all prove to be illusory. We need to recognize that none of these ideals are desirable because they cover over the deeply social basis of the production of wealth and that true economic value is produced only through the unpredictability of economic opportunity. A perfect invisible hand would lead to stasis — it is only the injustice and inefficiency of the invisible hand that drives economic development.

Speculative traders provide us a way of monitoring the movements of the invisible hand by monitoring shifts in confidence as represented by prices. Though speculative markets have a certain degree of autonomy from external forces, they still need some form of real economy to operate on — that is, it needs something to pay attention to. A new form of evaluation will need to find ways to direct attention to what truly matters, a task that is even more urgent given that the current system may be actively undermining our sensitivity to what matters.

Credit

Accounting is narrowly focused on price alone, with no real concern for the product or how it was produced. It thinks atemporally, solely in terms of substitution or substitutibility. From this perspective, ongoing obligations in terms of land, labor, and capital are a drain on value insofar as they are a drain on time and so most economic activity is oriented toward saving time, since saving time is easier than inventing new ways to produce capital: “Indeed, such a large proportion of economic activity and innovation is geared toward saving time that one may wonder whether more time is spent on saving time than time is saved” (188). This is a consequence of a system that makes the generation of profit the highest value.

What goes unexamined is the process of spending time. This is a result of the focus on the management rather than the labor perspective, because the contracts that allow management to save time/attention subject the workers to a certain experience of time that tends to be more and more impoverished. A system that wants to cultivate the most valuable uses and experience of time will have to reverse its perspective. To do that, we need to develop new fictions that are responsive to a wider range of reality.

The current system values things only in terms of money, which means profitability. This blinkering effect means that value is continually being overlooked or wasted. Entropy of value in itself isn’t necessarily a bad thing, though, because it spurs economic activity as a negentropic process. Yet the market equilibrium that the current system tends toward as its regulatory ideal would be “a kind of moral heat death” — not a point of balance but a point of the gradual eradication of information about the prior states that led to the equilibrium: “The marketization of society effects the progressive annihilation of history, culture, and value” (190). True value requires more than profit-seeking, because it is a fight against entropy that is prompted by the natural tendency toward entropy, creating desire that motivates the production of order. Rather than being a point of perfect balance, the production of true value thrives on a dual excess: “an excess of potential ordering and its correspondence to desire, as well as an excess of desire beyond what can be ordered” (191). In addition, a third element is necessary: credit, which treats an economic opportunity as valuable and so provides the conditions for it to prove itself. This means that the production of value is not a matter of measurement, knowledge, or certainty but rather of risk: “value derives from speculation” (192).

The credit necessary to take advantage of economic opportunity requires contracts with three parties: “sellers of time, buyers of nutrition, and those who give credit to the contract” (192). Since opportunity can never be proven to be such qua opportunity — once it is proven, it’s no longer an opportunity — the discipline appropriate to credit is not science but theology. Such a theology of credit must look beyond profitability:

The production of value is most valuable either when it contributes to the formation of physical, human, and social capital or when it contributes to the quality of experience. The true value of an economic opportunity, then, rests in its ultimate implications for the production of capital, for meeting desire, and for enhancing credit. The highest form of value to be produced is the capacity to evaluate economic opportunity. (192)

To get to such a new form of evaluation, we have to discard the notion of money as embodying exchange value, because money can ultimately only be exchanged for money: “the veil of perpetual substitution has at last to be discarded, leaving money in its naked state as promise, liability, and reserve” (193). The goal of credit isn’t to obtain the collateral; that’s just a consolation prize if the venture goes wrong. In reality, “no determinate value can … be substituted for credit,” because the referent of credit is economic opportunity rather than future value (194). Because of this, there can be no public standard for credit — economic opportunities are intrinsically not publicly known qua opportunities. A new system of credit would give more credit to new opportunities than to existing methods of production, because it is disequilibrium and unintended consequence that truly drives economic activity.

Evaluation

Ultimately, we need to find a way to evaluate desire itself as that which gives value to capital. This means that an economic system that generates true wealth must go beyond producing capital and produce true values, which don’t need to be reflected in exchange value but do need to “orient desire and production” (195). Though true values can’t be known objectively, it is possible to track them down through a system of divination: “What is necessary for the divination of value is some kind of supple, imaginative body that is capable of being affected by and indicating the potency of forces of evaluation. What is also required for the verification of such divinations is an experimental method for the realization of value” (195). [I’m really not sure exactly what he’s saying in this paragraph.]

While the market has hegemonized the process of evaluation, we need to find some way to “invest in values apart from a market system for their verification” (196). Such a method cannot repeat money’s mistake of diverting attention away from the investments themselves: investments productive of true wealth require more attention, not less.

Money creates the illusion that all liabilities can be expressed by some universal equivalent, but in fact liabilities are always specific liabilities of specific institutions denominated in specific currencies. This specificity tells us that there is in principle no limit to the types of liabilities that could be created. If money “indicates the effective desire attached to a contract,” some other indicator is necessary to tell us the “effective value attached to a contract.” It’s not enough for the two signatories to a contract to agree on that value, because contracts affect all of society. In general, it seems appropriate for the state to enforce contracts because in general it’s beneficial for contracts to be honored — yet not all contracts are good for society, i.e., productive of true value. Evaluation must accompany demand and production: “Just as there are enterprises for the production of order to meet demand, in a healthy economy there also need to be enterprises for the evaluation of contracts that assess demand” (197). Money does not suffice for this function, and in fact it actively undermines alternative forms of evaluation through its domination of the mass media, which in theory seems like it could help to educate people in true evaluation. Democratic institutions are undermined in turn by the failure to cultivate the public’s capacity for genuine evaluation. Faced with this unpromising situation, Goodchild concludes as follows:

The short circuit between desire, money, and evaluation must be cut in order to liberate attention to the crediting, critique, and creation of effective evaluations. In short, the ethical economy that coexists with the economy of order requires its own distinctive isntitutions whose primary purpose is evaluation, not production or profit. The creation, critique, and crediting of evaluation is the theological activity that guides the economic order. (198)

Response and Questions

When I first read this book, this chapter was the one that most stood out to me, but rereading it to do the summary, I realized how much I missed. Where before I was mainly caught by the fact that accounting is a moral system rather than a system of measurement, I didn’t see clearly how that fit into the broader argument. Now it’s clear to me that this is a kind of lynchpin of the book, consolidating his critique of money and laying the groundwork for his positive proposal, which — spoiler alert! — involves thinking through how to develop institutions focused on evaluation.

I’m still digesting this myself, but I suppose one idea we might discuss is where this chapter fits into the contemporary theological dialogue that attempts to imagine “the church” as a site of authentic moral formation, etc. — a project that I would support in principle but that all too often performs a short circuit between this imaginary “church” and the actual existing institutions that claim to represent Christ.

There is perhaps a deeper problem with such discourses, though, which is that they tend to be very individualistic or at best communitarian, without really envisioning how a good type of moral formation could take place at the level of society as a whole. Moral formation of individuals or of determinate communities may well prove to be illusory insofar as the broader society renders impossible the types of moral activities that such formation promotes (this would be the situation faced by the narrator of Romans 7, at least in Ted Jennings’ reading). To quote the band Silver Mt. Zion: “When the world is sick, can no one be well?” The challenge is to find some way to intervene on the same level of universality as the sickness itself. The fact that Goodchild takes on this challenge is the true measure of his ambition in this book.