What is money for? The question may sound odd as it suggests that money might have a “nature,” a given essence that defines its proper use and goal. Even realists, who still think of things as having natures, would be hard-pressed to think of money this way, because money, especially paper money, only exists as part of a humanly constructed symbolic system of value and exchange. And yet both Aristotle and Aquinas imagined that money had something akin to a nature; that is, money was understood to have certain proper uses, including a telos, if we understand that broadly to mean being ordered (albeit symbolically rather than ontologically) to an end beyond itself.
In this essay I argue that a key factor in the current economic crisis is a failure to understand what money is for, a refusal to think of money as having a proper purpose, and therefore, a reduction of money to the arbitrary determinations of a voluntarist economy. I begin by contrasting a modern view of money as “flirtation,” drawing on Søren Kierkegaard’s analysis of the aesthetic, with a premodern view of money as a pragmatic tool in service of justice (as in Aristotle and Aquinas). The argument here is that money becomes both too much and too little in modern economies—too much in that it becomes a “thing,” an object of intrinsic value to buy, sell, and desire; too little in that it remains in the end only an empty symbol of a debt never paid, an abstract representation of a just exchange that never arrives. Finally, I suggest ways in which we might rethink practices of banking that reinscribe a given purpose for money in service of the common good.
Flirting with Money
We live in flirtatious times. No doubt our times are also filled with avarice, fear, contention, and increasingly a culture of no-fault risk-taking and the resulting clean-up work of crisis management. Yet, I will argue that our penchant for flirtation has contributed more to our current economic crisis than greed, self-indulgence, or failed bureaucracy. The problem is not that we want too many material things; it’s that we want the possibility of all material things without having to actualize any of them. The problem is that money has become, itself, the object of our desire, despite the fact that money is itself nothing but only a representation of the value of something else. Our desire for money, then, is a desire for flirtation.
Let me unpack this analogy. To flirt is to play with a possibility without actualizing it, to tantalize and suggest, to offer without granting. In his insightful and acerbic essay “The Present Age,” Kierkegaard writes:
What is flirtation? It is the result of doing away with the vital distinction between real love and real debauchery. Neither the real lover nor the real debauchee are guilty of flirting. A flirtation only toys with the possibility and is therefore a form of indulgence which dares to touch evil and fails to realize the good [. . . .] But in mere scope flirtation has all the advantages, for one can flirt with anything, but one can only really love one girl. From the point of view of love, properly understood any addition is really a subtraction (even though in a confused age a capricious man may be blinded by pleasure), and the more one adds the more one takes away.1
Flirtation is characteristic of the stage of life Kierkegaard calls the “aesthetic.” It describes someone who seeks to live within the realm of unactualized possibility. The character Kierkegaard creates as the embodiment of the aesthete, called simply “A” in Either/Or, gives voice to this celebration of the possible: “Pleasure disappoints, possibility never. And what wine is so sparkling, what so fragrant, what so intoxicating, as possibility!”2 Indeed, actualizing love is the real danger for the aesthete, one that must at all costs be resisted. “When two beings fall in love with one another and begin to suspect that they were made for each other,” A writes, “it is time to have the courage to break it off; for by going on they have everything to lose and nothing to gain.”3 Actuality cannot but disappoint in a way that possibility never can. Or, to put it another way, to actualize love or goodness is to commit oneself to a particular course of action (with a particular person) for which one bears responsibility and which will inevitably catch one up in moral discernments, which are precisely what the aesthete wants to avoid (the aesthetic life is for Kierkegaard, by definition, not the ethical life).
From the perspective of real love or goodness, to add is to subtract, because the moral life requires a commitment to the actual, an acceptance of a given person or action that is not infinitely interchangeable, returnable, or amenable to second-guessing. Actuality is the enemy of possibility. To be married is to give up the potentially infinite possibility of romantic partners, to assist one person is to use up resources that could possibly be used for an infinite variety of goods. The flirtatious aesthete thrives on the additive—the more possibility, the better—while avoiding the subtraction that comes with actualizing particular determinations and commitments: “The infinite possibility is precisely the interesting.”4
Money has become the way we toy with possibility and, abstracted from actuality, money has come to constitute its own meta-economy in which money purchases money, bets on money, even buys and sells money (often constituted as debt), all without actualizing itself in real investment that impacts material economy, for example, building a house or starting a business.
In a recent blog post for the Harvard Business Review, Chris Meyer and Julia Kirby write about the economic ramifications of what I have been describing as flirting with money, or as they put it, “the alienation of capital.”5 They contrast the recent (alienated) practices of the financial industry with a steadfastly non-alienated view of capital in Frank Capra’s It’s a Wonderful Life. When George Bailey’s savings and loan is threatened by a mob of investors demanding their money, he reminds them what their money is doing: “The money’s not here,” he says. “Your money’s in Joe’s house, that’s right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and, and a hundred others. Why, you’re lending them the money to build, and then, they’re going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?”6 Meyer and Kirby comment:
That’s a view of capital that is adamantly not alienated. And it wasn’t only true at the level of housing. For most of the twentieth century, financial institutions were engaged in aggregating our society’s savings to meet its own demands for productive capacity, to build the goods needed for a higher standard of living [. . . .] Now, the tail has come to wag the dog. In the United States today, the trillions of dollars of annual trading in financial assets dwarfs the market capitalization of operating companies.7
Significantly, Meyer and Kirby add, “Those profits were not primarily generated by the value-adding work of supporting investments in ‘real sector’ companies but from the zero-sum work of trading financial instruments.” Capital was no longer working to enable some kind of material good that might better a family or a community. “The result,” they argue, “is that capital has become alienated from its value and purpose. Originally intended to enable the increased productivity of the society through investment in productive capacity, it has lost its connection to value creation of any non-financial kind.” This last point is crucial. Capital that is no longer “connected to value creation of any non-financial kind” is capital that fails to actualize and so subtracts by adding; it is capital that remains, by choice, in the aesthetic netherworld of unactualized possibility and so fails to serve any material human good. The point of wealth is simply the building of wealth alienated from any larger social purpose.
The Purpose of Money
Such alienation and flirtation with money has come to seem ordinary and acceptable, but this has not always been the case. Premodern Western views on the origin and function of money owed much to Aristotle’s early articulation of a classical perspective that remained the dominant view into the Middle Ages. He discusses money in several places throughout the Nicomachean Ethics and the Politics, seeking to give an account of the rise of money as well as its purpose in a well-lived life.
In Book V of the Ethics, Aristotle reflects on the origin of money and concludes that money became necessary in order to create a “proportionate equality of goods”8 that would, in turn, facilitate just exchange (and thus facilitate human association, given that there can be no association without reciprocity). Doctors, for instance, do not generally need to exchange with other doctors but rather with farmers or shoemakers, and so they must exchange goods that are by nature unequal; yet the exchange must be made equal in order to facilitate human association. Money, then, “becomes in a sense an intermediate; for it measures all things” (Ethics, V.5). Such measure is not exact but is set by “convention,” and so Aristotle can say that money “exists not by nature but by law” or custom (nomos). Simply because money is a matter of custom, however, does not mean that it has no given purpose or constraints upon its use. Despite lacking a “nature” as such, money can be acquired and used in ways that are “natural” or “unnatural”; that is, money remains circumscribed within Aristotle’s teleologically ordered anthropology, and so the use and acquisition of money remains properly delimited by the human good.
When discussing the nature of the good life, that is, the life that seeks its highest good, Aristotle considers whether money might be that good (Ethics, I.5). He notes that the great majority of people agree that happiness is the highest good (and thus the true aim of politics), but he notes that there is no agreement about what constitutes happiness. Some identify the good or happiness with pleasure, others with honor, still others with virtue. He takes up each of these claims in turn, but he rules out immediately the claim that wealth is the highest good or that moneymaking is the life of happiness: “wealth is evidently not the good we are seeking” (Ethics, I.5). He rules it out not because he thinks it is a lesser good that falls short of the highest good (as with pleasure or honor) but because money cannot in itself be a good—“it is only good as being useful, a means to something else” (Ethics, I.5). Pleasure, honor, or virtue may be loved (agapatai) for their own sakes, but money cannot be, because it is by nature purely instrumental; it is not itself a good but only serves the pursuit of or represents the value of another good (Ethics, I.5). Aristotle sets money alongside tools and flutes (Ethics, I.7) as instruments that are always chosen for the sake of something else (unlike pleasure, honor, reason, and virtue, which can be chosen both for their own sake and for the sake of an even higher good—happiness). Happiness, or the good life, might arise out of pleasure, honor, or virtue, but it cannot arise out of money, flutes, or tools. The good of carpentry is not in the hammer, but the hammer may be needed to serve the good of carpentry. We might say that it is the nature of money to be instrumental.
To think about and use money rightly, then, is to think about and use it as an instrumental good that is always ordered to an end that is not intrinsic to itself. To pursue moneymaking as part of “household management” (oikonomia) is an admirable art for Aristotle, for it is ordered to the end of food, clothing, and other household needs and goods (Politics I.8). Moneymaking is itself an art (a techne) but not the same kind of art as household management or weaving or statuary, for it is an instrumental art. It is to household management as making shuttles is to weaving and casting bronze is to statuary (Politics I.8). Its telos is not in itself but in its efficient contribution to a higher good, or, in this case, a higher art (one that does produce a good internal to itself). Thus, in so far as moneymaking is ordered to household management, it has a fixed boundary; only when it is dislocated from this proper instrumental relation does moneymaking appear as a limitless occupation. “[A]ccumulation is the end in the one case, but there is a further end in the other” (Politics, I.9). This difference maps onto the deeper difference between those who are “intent upon living only” and those who are intent upon “living well” (Politics, I.9). When the virtues, arts, and undertakings of the good life are reordered toward the goal of creating wealth, they lose their own internal goods:
The quality of courage, for example, is not intended to make wealth, but to inspire confidence; neither is this the aim of the general’s or of the physician’s art; but the one aims at victory and the other at health. Nevertheless, some men turn every quality or art into a means of getting wealth; this they conceive to be the end, and to the promotion of the end they think all things must contribute (Politics, I.9).
We might extend this to say that professional practices such as medicine, law, divinity, and education can only be diminished by being subjected to a profit motive. But Aristotle’s point is even bigger than this. His argument is that no practice, no household, no profession, no business should have profit as its primary goal, because moneymaking should never be an end but only a means.
Aristotle concludes that moneymaking as an instrumental art in service of household management is “necessary and honorable,” whereas moneymaking as its own end is “unnatural” and “justly censored.” “The most hated sort” of this unnatural kind of moneymaking, he adds, “is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest [. . . .] Wherefore of all modes of getting wealth this [usury] is the most unnatural” (Politics, I.10). We might then argue, somewhat counterintuitively for modern people, that banking names a particular set of practices that ought not to have moneymaking as its end (I will return to this point later).
Thomas Aquinas follows Aristotle in believing that money has a given role within a well-ordered society that can serve the good only as it functions according to this role. He draws especially on Aristotle’s discussion of money in Book V of the Ethics to make the point that money exists for the purpose of commutative justice; specifically, money makes equal exchange possible and so contributes to a just society. Money exists, for Aquinas, to serve justice, to facilitate just exchange. He writes:
Nor again would there be equality of passion in voluntary commutations, were one always to exchange one’s chattel for another man’s, because it might happen that the other man’s chattel is much greater than our own: so that it becomes necessary to equalize passion and action in commutations according to a certain proportionate commensuration, for which purpose money was invented (Summa, II-II, Q.61, A.4).
By “action” and “passion” Aquinas means giving and receiving, and for the purpose of creating commensurability between the two, money was invented. It is worth noting that for Aquinas the creation of money was not simply pragmatic, allowing trade to happen across distances of time and space (though this is not unimportant), but was specifically ordered to the task of making such trades just by creating a single unit of measure. In this way Aquinas sees money as a tool for generating a just price, which in turn assures that “buying and selling [serve] the common advantage of both parties” (Summa, II-II, Q.77, A.1). He writes:
Now whatever is established for the common advantage, should not be more of a burden to one party than to another, and consequently all contracts between them should observe equality of thing and thing. Again, the quality of a thing that comes into human use is measured by the price given for it, for which purpose money was invented, as stated in Ethic. v, 5. Therefore if either the price exceed the quantity of the thing’s worth, or, conversely, the thing exceed the price, there is no longer the equality of justice: and consequently, to sell a thing for more than its worth, or to buy it for less than its worth, is in itself unjust and unlawful. (Summa, II-II, Q.77, A.1).
The tradition of thought reflected in Aristotle and Aquinas gives a certain place to money within a well-functioning human economy, but it limits money to an instrumental role. The danger lies not just in excess accumulation but in the failure to see money for what it is—an instrument of just exchange that contains no good or value in itself but only facilitates the mutually beneficial exchange of valuable goods and services. To the extent that money and our practices of moneymaking come to hinder just exchange or “common advantage,” we have not only failed in our practices but also in our thinking; that is, we have failed to understand what money is and how it can serve human good.
Banking for the Common Good
As the banking and mortgage crisis was ramping up in late 2008 (the percentage of home mortgages either delinquent or in foreclosure had risen to a record 14.4 percent by September 2008),9 NPR aired a story of a mortgage banker to the Amish (yes, the Amish take out home and farm mortgages).10 The story offered a different model of banking, created out of the necessity of working with those who do not readily accept modern ways of thinking about money and possessions. Bill O’Brien, who is not himself Amish, serves a community of Old Order Amish in Lancaster County, Pennsylvania, through Hometowne Heritage Bank. He notes that he has never lost money on an Amish loan. This is partly because the Amish live simply and spend within their means. But there is something else that makes lending to the Amish different—Hometowne Heritage has to keep all the loans it makes. They cannot “securitize” and sell their loans to larger investment banks because of a legal technicality—“homes that don’t have electric power don’t qualify for securitization. Neither do homes without traditional insurance. Amish homes are unmodernized, and the Amish use their own kind of insurance.”11 Hometowne Heritage, then, has no incentive to make subprime or risky loans because they cannot turn around and sell that loan for a quick profit that lets them off the hook if the loan is not repaid. The inability to securitize means that the relationship between lender and seller matters and will have to be sustained over many years. Both parties have a stake in making the loan work. To use Aquinas’s language, the loan must serve “the common advantage of both parties.”
Adam Davidson concludes the NPR story by noting, “This old-fashioned system works. In this year of financial crisis, of storied old banks collapsing in hours, Hometowne Heritage has had its best year ever.”12 We might add that the system “works” not because it is old-fashioned but because it uses money in accord with its proper function and so refuses to flirt with money as an abstraction from actualized value (that is, “real economy”). For banking to make use of money in a way that recognizes its nature as an instrument for the production of just exchange, it must think of investing, lending, and borrowing as mediating practices in service of common advantage.
What might Christians do today, if we seek to recapture the proper mediating role of money? First, we might become reflective about where we bank as individuals and as church communities (the “Move Your Money” campaign makes some helpful suggestions). Second, we might refuse to work for banks that see their role as creating profits for shareholders and executives (“the zero-sum work of trading financial instruments”) rather than mediating borrowing and lending for the common advantage of nameable human parties (the “value-adding work of supporting investments in ‘real sector’ companies”).13 Third, we might seek to create and support institutions for lending and borrowing that use invested money not just to enact commutative justice (mutual advantage) but distributive justice (attending to the borrowing needs of the poor through microfinance and low-interest loans—note the example of the Durham Self-Help Credit Union). Of course, all of these courses of action need to be further fleshed out, but none of this will begin to happen until we free ourselves from the illusion that money is made to flirt with.
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1. Søren Kierkegaard, The Present Age, trans. Alexander Dru (New York, NY: Harper and Row, 1962), 75-76.
2. Søren Kierkegaard, Either/Or, vol. 1, trans. David Swenson and Lillian Marvin Swenson (Princeton, NJ: Princeton University Press, 1959), 40.
3. Ibid., 294.
4. Ibid., 368.
5. Chris Meyer and Julia Kirby, “The Alienation of Capital,” Harvard Business Review, The Conversation, March 30, 2010, http://blogs.hbr.org/cs/2010/03/alienation_of_capital.html.
8. Aristotle, Nicomachean Ethics, in Introduction to Aristotle, trans. W. D. Ross (New York, NY: Random House, 1947), V.5.
9. According to the Mortgage Bankers Association National Delinquency Survey, http://www.mbaa.org/NewsandMedia/PressCenter/64769.htm.
10. Adam Davidson, “A Mortgage Banker in Amish Country,” Morning Edition, National Public Radio, December 12, 2008, http://www.npr.org/templates/story/story.php?storyId=98156907.
13. Meyer and Kirby, “The Alienation of Capital.”