Welcome to the Matrix of materialism

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A visitor from before the 20th century would be stunned to see the extent to which the world is now dominated by materialism. It has many dimensions.

Keanu Reeves in The MatrixOne is scientific materialism — considering everything, including the human mind, to be just matter. Another is financial materialism, assuming money to be what defines everything else.

That visitor from an earlier time would be stunned to see how much we understand the world using monetary measures. Finance has come to be considered the first reality, not defined by, or reflecting, reality. The cart has been put before the horse.

To see how this creates distortions, consider the measure Gross Domestic Product (GDP) which is taken to be a reliable measure of national wellbeing. GDP is a measure of transactions, how fast money changes hands. It is not a measure of quality of life. For instance, there tends to be an increase in GDP whenever there is a natural disaster because more money changes hands to pay for repairing the damage. A disaster does not improve quality of life.

GDP does not address health, crime, poverty, family breakdown, the state of the environment or the state of civil society. It also does not measure the effect of technological innovation, which is what has the greatest impact on quality of life.

Some of the technology now available in a car, for instance, would have been extremely expensive 30 years ago, if it was even available. That technological advance does not appear in the price, however, because the car companies absorb any cost because it is the price of being in business. It means the technical advance does not appear in the monetary exchanges.

The massive efficiencies produced by technology over the last few decades tend not to be measured in the monetary system. For example, in the 1950s, to be a poor child often meant your parents could not afford to buy you shoes. To be poor now rarely means that, because, as with most consumer goods, the cost of production has plummeted. Those efficiency gains are not evident in the transactions.

 

"We are being imprisoned by our own creation, and those who control the system, financiers, increasingly rule us."

 

Another instance of how financial materialism distorts our view of the world is the claim that the poor in some countries live on less than five dollars a day. What this indicates is that the poor in these countries are outside the monetary system; in a developed country it would be impossible to live on such a small income. In less developed countries, much of the economic activity does not appear as a transaction. That does not mean it does not exist.

The situation in developing economies would be closer to the experience of our visitor from another century. Most of the economic activities that our time traveller would have seen would not have been subject to transactions.

According to Geoff Mulgan in Connexity, at the end of the 20th century, 90 per cent of the world's population lived within a market system, compared with only 40 per cent in the 1970s and ten to 15 per cent at the end of the 19th century. In Japan in the 1860s only five per cent of the population was engaged in wage employment; now the majority of the working population conducts its activities within the transactional system.

Rampant financial materialism has not just led to a distorted and unhealthy view of what is valuable and what matters in society. It is leading us into a trap of our own making. The financial system is a human creation, artifice. By allowing the artifice to be considered reality and relegating actual reality to a subordinate position, a situation not unlike that depicted in the film The Matrix is being created. We are being imprisoned by our own creation, and those who control the system, financiers, increasingly rule us.

There also is a crossover with scientific materialism. Finance is based on mathematics, which is becoming dizzingly complex. From the 1990s it was the mathematics of risk pricing, which led to the creation of a massive pool of derivatives (US$700 trillion of money 'derived' from conventional transactions) and the global financial crisis.

The next step has been the complex mathematics that underpins Bitcoin. It has meant that finance increasingly looks like physics — another illusion because human behaviour is never as predictable as the physical universe.

The result is that we are mired in a matrix of materialism. One is reminded of Morpheus' line: 'The Matrix is everywhere. It is all around us. Even now, in this very room ... It is the world that has been pulled over your eyes to blind you from the truth.'

 

 

David JamesDavid James is the managing editor of businessadvantagepng.com. He has a PhD in English Literature and is author of the musical comedy The Bard Bites Back, which is about Shakespeare's ghost.

Topic tags: David James, materialism, The Matrix

 

 

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Existing comments

Back in the mid-70's of (so) last century, I'm sure a number of ES readers would have watched "The Good Life", a British TV comedy series about a man undergoing a mid-life crisis who decides to live off the grid. He and his wife turn their backyard into a farm and barter for their needs. It was a funny, heart-warming story. But more than that, we saw how rich they were. It is not necessarily a poor life in third-world countries. Of course, the struggle for food and shelter is never a comedy but there can be a dignity we in the wealthy West have lost.
Pam | 28 January 2018


As a new report from Oxfam Australia shows, we have become one of the least equal nations in the developed world. The wealthiest 1% of Australians own 22.9% of our country's wealth - more than that held by the bottom 70% of Australians. Our Governments have in recent years even reduced overseas aid, preferrering to help our budget bottom line at the expense of the world's poorest people. Integrity is at a low ebb in our national parliament! Just look at the cruelty metered out to asylum seekers. When you vote, try to find politicians who have concern for the poor, for the environment and for a more equal socity. You will find some who do fit that description, but many who don't.
Grant Allen | 29 January 2018


David James has raised some very important issues in his article. One of the major reasons why the price of many commodities that we purchase for daily life (clothing, footwear, tools, cutlery, crockery etc.) is that they are now mostly produced in developing countries. In the past 50 years, many of the large corporations have gone off-shore to establish their manufacturing . The reason is that they are able to get away with exploiting their workforce and the environment of the countries where they have their operations. These corporations generally pay their workers a pittance m a pittance and are not hampered in their profit making with laws that protect the health and safety and workers'compensation of the employees (ie those generating the profits) or the environment. It was the introduction of such laws in developed countries that led to many manufacturers transferring their operations in developing countries. To ensure that there is wage justice and fair working conditions for all and responsible care for the environment means that greater strides have to be taken internationally to achieve these ends.
Andrew (Andy) Alcock | 29 January 2018


Always interesting what you write David - thanks
Steve Sinn | 29 January 2018


And is my understanding correct that the energy consumption of the computers which underpin bitcoin is so massive as to be environmentally unsustainable, particularly if dependent on the burning of fossil fuel. Will this illusion be resolved by the development of the quantum computer?
Denis Quinn | 29 January 2018


"Some of the technology now available in a car [...] does not appear in the price, however, because the car companies absorb any cost". NO. It is because the material cost has become incidental once the electronics and software have been developed. There was a large initial investment, recouped from early adopters, but eventually duplication of hardware and software dominates, which is as cheap as chips. Otherwise, I agree that putting a price on everything means we know the value of nothing.
Peter Horan | 29 January 2018


In response to the inequality of wealth mentioned by Grant Allen, I have recently read a book "Success and Luck" by Robert Frank. It is worth reading. It is a fascinating commentary on the role luck plays in our lives. Regardless of how smart one is or how hard one works, someone at the "top" has been lucky - picked out of a field of contenders for the top job, for example. The others, equally qualified, were the unlucky ones. As a result of his musings, Frank proposes a progressive tax on consumption above some exempt level to replace income tax. In this way, the rich would pay tax on things less necessary and make the drive for excess less attractive.
Peter Horan | 29 January 2018


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