Friday, December 13, 2013

Greed - a natural consequence of Scarcity


Excerpt from Charles Eisenstein's book "Sacred Economics", CHAPTER 2 : THE ILLUSION OF SCARCITY

Greed makes sense in a context of scarcity. Our reigning ideology assumes it: it is built in to our Story of Self. The separate self in a universe governed by hostile or indifferent forces is always at the edge of extinction, and secure only to the extent that it can control these forces. Cast into an objective universe external to ourselves, we must compete with each other for limited resources. Based on the story of the separate self, both biology and economics have therefore written greed into their basic axioms. In biology it is the gene seeking to maximize reproductive self-interest; in economics it is the rational actor seeking to maximize financial self-interest. But what if the assumption of scarcity is false—a projection of our ideology, and not the ultimate reality? If so, then greed is not written into our biology but is a mere symptom of the perception of scarcity.

An indication that greed reflects the perception rather than the reality of scarcity is that rich people tend to be less generous than poor people. In my experience, poor people quite often lend or give each other small sums that, proportionally speaking, would be the equivalent of half a rich person’s net worth. Extensive research backs up this observation. A large 2002 survey by Independent Sector, a nonprofit research organization, found that Americans making less than $25,000 gave 4.2 percent of their income to charity, as opposed to 2.7 percent for people making over $100,000. More recently, Paul Piff, a social psychologist at University of California–Berkeley, found that “lower-income people were more generous, charitable, trusting and helpful to others than were those with more wealth.” Piff found that when research subjects were given money to anonymously distribute between themselves and a partner (who would never know their identity), their generosity correlated inversely to their socioeconomic status.

While it is tempting to conclude from this that greedy people become wealthy, an equally plausible interpretation is that wealth makes people greedy. Why would this be? In a context of abundance greed is silly; only in a context of scarcity is it rational. The wealthy perceive scarcity where there is none. They also worry more than anybody else about money. Could it be that money itself causes the perception of scarcity? Could it be that money, nearly synonymous with security, ironically brings the opposite? The answer to both these questions is yes. On the individual level, rich people have a lot more “invested” in their money and are less able to let go of it. (To let go easily reflects an attitude of abundance.) On the systemic level, as we shall see, scarcity is also built in to money, a direct result of the way it is created and circulated.

The assumption of scarcity is one of the two central axioms of economics. (The second is that people naturally seek to maximize their rational self-interest.) Both are false; or, more precisely, they are true only within a narrow realm, a realm that we, the frog at the bottom of the well, mistake for the whole of reality. As is so often the case, what we take to be objective truth is actually a projection of our own condition onto the “objective” world. So immersed in scarcity are we that we take it to be the nature of reality. But in fact, we live in a world of abundance. The omnipresent scarcity we experience is an artifact: of our money system, of our politics, and of our perceptions.

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Obviously there's a lot before and after this that will answer most doubts that may come up. I recommend you read the book. http://www.sacred-economics.com

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