Mediation and memory in the theory of money via The Memory Bank by keith on 9/10/09 According to Spengler, the West had exhausted the historical impulse given by its modern version of economic life (featuring money and machines) and a new phase, based on politics, national religion and war, was about to take over. This was not a bad prediction, but Spengler’s interest for us lies in how he conceived of the relationship between money and other universals.
Following Goethe, Spengler made a contrast between history (becoming) and nature (what has become). The counterpart of longing, of the desire to move forward that is becoming, is the dread of having become, of finality or death; and this pair together drive cultural creativity.
‘Life, perpetually fulfilling itself as an element of becoming, is what we call ‘the present’, and it possesses that mysterious property of ‘direction’, which men have tried to rationalize by means of the enigmatic word ‘time’.’
On the one hand, there is measurement of time as duration; but the idea of history as becoming, as irreversible direction, is particular to the West. Number belongs to nature as the chief sign of completed demarcation, of all things that have become themselves.
‘Mathematical number contains in its very essence the notion of a mechanical demarcation, number being in that respect akin to word, which…fences off world-impressions.’
Spengler identifies a break between classical antiquity and the modern West. For the Greeks, number is magnitude, the essence of all things perceptible to the senses. Mathematics for them was thus concerned with measurement in the here and now, visible and tangible. ‘Numbers are symbols of the mortal’. All this changed with Descartes whose new number-idea was function – a world of relations between points in abstract space. Whereas the Greeks sought perfection within the concrete limits of nature and society as they experienced them, now a passionate Faustian tendency towards the infinite took hold, married to abstract mathematical forms that increasingly freed themselves from concrete reality in order better to control that reality. The new mathematics was thus immaterial, resting on abstract analysis, dissociated from magnitude and transferred to a transcendental relational world, a process culminating in ‘victory over the popular and sensuous number-feeling in us all’.
‘The nexus of magnitudes is proportion, that of relations is function…All proportion assumes the constancy, all transformation the variability of the constituents…Every construction affirms, and every operation denies appearances, in that one works out what is optically given and the other dissolves it….The classical mathematic of small things deals with the concrete individual instance and produces a once-for-all construction, while the mathematic of the infinite handles whole classes of formal possibilities, groups of functions, operations, equations, curves…There has been growing up the idea of a general morphology of mathematical operations.’
Western mathematics is ‘the copy and the purest expression of the idea of the Faustian soul’. This leap from a geometry of the concretely real to a world of pure relations was mediated by the algebra of the ‘Magian’ Arabs (and, we may add, by the Indian discovery of the number zero).
Spengler returns to this theme when considering ‘the form-world of economic life’. Economics is British, materialistic and has no room in it for a notion of the national soul. There has been a shift, parallel to that in mathematics, from thinking in terms of goods to thinking in terms of money.
A form of limit-defining is abstracted from the visible objects of economics just as mathematical thought abstracts something from the mechanistically conceived environment. Abstract money corresponds exactly to abstract number. Both are entirely inorganic. The economic picture is reduced exclusively to quantities, whereas the important point about ‘goods’ has been their quality.
He points to the widespread confusion between pieces of money, the value-token, and money as a category of thought. In fact, tangible property has been replaced by fortune, a purely numerical quantum of money that is mobile and undefined. The middle-man elevates mediation between producer and consumer to the level of monopoly and ultimately primacy. ‘He who commands this mode of thinking is the master of money’. The result, citing G. B. Shaw, is that money and life ‘…are inseparable: money is the counter that enables life to be distributed socially: it is life…Every idea, to be actualized, has to be put into terms of money’.
The Apollonian idea of money as magnitude (which is classical) and the Faustian conception of money as function are opposites. ‘Classical man saw the world surrounding him as a sum of bodies; money is also a body’ (talents, coins). With the rise of double-entry book-keeping, economic function became not even the ledger entry, but the act of writing it. When a businessman signs a piece of paper to mobilize remote forces, this gesture stands in an abstract relationship to the power of labor, machinery etc. which only takes the form of money numbers in a retrospective accountancy process. In this way, western economic life was progressively emancipated from the notion of magnitude. Modern money is the result of creative thinking, mentally devised as an instrument of Faustian life. Thinking in money generates money. It turns the world into subjects and objects, consisting of a few executives and the many who follow them. Each individual is either a part of the money force or just a mass.
‘And so they created the idea of the machine as a small cosmos obeying the will of man alone.’
Spengler concludes with a prophecy that the world of money and machine-industry will be overthrown by ‘blood’ as the dominant life-principle; and at this point we leave him. But his framework contains much of value for an analysis of the conscious and unconscious influence of money on our actions today.
Spengler points to the important relationship of money to time, specifically as a promise to pay in future. This obligation, as is well-known, is of uncertain value. It therefore requires belief for the promise to work; and this may take the form of faith, trust or confidence. The degree of our emotional attachment to a belief is inversely related to the empirical evidence for holding it, strong in the case of ‘blind faith’, weak for ‘open-eyed confidence’, with ‘trust’ somewhere in between. Money therefore always exists in time as something apparently certain, yet deeply uncertain. It appears in society temporally both as ‘work’, a tangible principle of scarcity (magnitude), and as a principle of virtual increase, ‘interest’ (function). The payment of money, like words and numbers, fixes the transience of life and lends it a certain finality. But, in the historical form of modern capitalism, money also makes a break with the object-world and becomes the aspiration to infinite growth. The power of money to mobilize resources at distance is commanded by only a few — once the ‘captains of industry’, now in the age of finance ‘masters of the universe’ — while the masses experience money mainly as the immediate consequences of an anonymous force organizing their lives.
Spengler’s argument that magnitude was replaced by function in Western history would serve our purposes better if conceived of as an ongoing dialectical relationship. In this context, we must also acknowledge the machine revolution of the last two centuries, the latest stage of which involves perhaps the most dramatic transformation of money to date, its digital separation from material existence (from atoms to bits) as a virtual artefact of the internet. Paper presented at the workshop ‘On either side of the economic science of money’, Université de Paris X, Nanterre, 18-19th September 2009 2:21 PM