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Weekly Edition 048: Saturday 26th January 2002

<< Island Ecology by José P Ribas

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An Anthropological View
by Kirk W Huffman

Thinking About Money - Part Two

Things seem to be progressing quite well with the changeover to the Euro in Eivissa/Ibiza, at least so far. Not so in Italy, which seems to be a disaster, but then this may possibly be a 'disaster on purpose'. Italy's present Prime Minister, Berlusconi (bear in mind that Italy has had over 50 different governments since the end of World War II), has never really been, it seems, that keen on the more legislative aspects of the EU. It is reported that he refused Italy's support recently for a proposed EU-wide law that would facilitate EU law enforcement officers in following up fraud cases across EU member's borders. Italy seems to have made rather minimal preparations for the changeover to the Euro at the beginning of January, or at least seems to have made preparations that may have made this rather difficult. Italy's Minister for External Affairs, the one Minister in Berlusconi's government who was overtly sympathetic to new developments in the EU, threatened to resign, trying - some say - to get the government to admit that it has no real interest in certain external developments that may affect the 'status quo' in Italy. It had been rumoured that he was only appointed temporarily anyway as a figurehead to make Brussels think that Italy was really supportive of new developments. Berlusconi called his bluff, saying the country did not really need a separate Minister for External Affairs, and took the portfolio for himself into the Prime Minister's already massive pile of portfolios. In any other country than Italy, this would be rather scandalous news, but then Italian governments have always seemed to function as participants in a soap opera and life goes on as normal. One well-briefed individual has hinted that one of the possible reasons for Italy's slow start with the Euro is that the amounts of 'black money' in the country to be 'cleaned' by being changed into Euros may be so vast that extra time is needed. Well, every country or area has its own style - there was even a massive burst of extra building last year here on Eivissa done, some say, for the same reasons (but with distinctly less style than in Italy).

Traditionally, Ibicenco peasants had few money problems, except for their major one, which was that there was a distinct lack of it within their rural orbits. And when I say 'distinct lack of money', that is putting it mildly. But many could live on an absolute minimum of money, as they were almost completely self-sufficient, even to the extent of making their own clothes. So although poor in financial terms, they were not necessarily poor in heart, life, or culture. Ibicenco peasant society could function very well - and happily - on an absolute minimum of what seems to obsess most people today - money. As my friend JosÚ P Ribas, your environmental correspondent, has told me several times, 'modern' people on the island spend more in just going to the toilet (toilet paper, water, soap) in the morning than his grandfather would spend in a week or a month or more. Think about that and its implications. I remember when the first (and still only) rudimentary public toilets were opened in the south Pacific capital of Vanuatu, Port Vila, nearly 30 years ago (the country was called the New Hebrides then). It created a certain amount of fear in the outer islands of the country. Isolated islanders who were wont to come to the capital by trading vessel now had another problem awaiting them there; "Pisspiss sixpens mo shitshit wan shilling"(in Bislama language, the local form of Pidgin English) was the feared phrase on many peoples lips. Some took it, as an ominous warning that there would be nothing in the modern world that was free. To all extents and purposes, they were basically right.

Modern economists viewing a hypothetical self-sufficient society with no money would probably naturally assume that the members of that society were 'poor'. They would see that as a 'problem' and then possibly try and devise ways of introducing some sort of work that would bring a financial reward. Even if the work involved was almost like slave labour and the wages involved were minimal they would still see that as an improvement over the previous situation. The people involved might not, though. 'Work' for 'wages' is a cultural concept that, although it has a long history in our modern society and many others, is not universal. We tend to think it is normal, but then most people in our 'modern' society have a very narrow and shallow view of what the world is really like. In 1998 I gave an illustrated private lecture about traditional cultures of Vanuatu and other areas of the world to a group of Wall Street bankers in New York whilst I was a Visiting Fellow at the Metropolitan Museum there. I was emphasizing the self-sufficiency and the richness of these cultures. At one point one of the bankers shouted out, "Gosh, I didn't realize that people like this still existed"! I gulped, paused and then replied, "Well, I think I can safely say that they don't realize that people like you exist. If Wall Street suddenly disappeared tomorrow in some form of disaster, it would not affect these people at all. Bear in mind that what you are doing as your work is possibly running the world's biggest gambling casino and much of the modern world unfortunately relies on that. Those societies that are actually outside the modern economic situation are actually probably the lucky ones". I wonder whether any of those bankers have thought back to that lecture after the events of September 11th.

Money, as a concept and in numerous forms, has been around for thousands of years. But our 'modern Euro-American' form of economy, with paper money, business ventures, financial and stock exchanges and so on is really only a couple of centuries old. It is rather interesting that this modern system owes much of its beginnings to a rather charismatic young gambler and 'man-about town' with a brilliant flair for mathematics, the Scotsman, John Law. Escaping from London in 1695 after killing a man in a duel there the previous year, Law made his home and further fortunes gambling on the Continent. Fascinated by the nature and theory of finance, he tried to develop a scheme to restore the fortunes of impoverished France under the rule of Louis XIV. France's major problem was the lack of available money. It took Law years to convince those in power in Paris that money could be lent in the form of paper notes, backed by assets, and could repeatedly be lent and re-lent. If all had confidence in the system, then the system would work. He was finally given the OK and in 1716 opened the first French bank to issue paper currency (this became the Banque Royale in 1718). He founded a trading company, the Mississippi Company (dealing with nebulous French territories in what is now the southern part of the United States), with fabulous stories of untapped wealth to enrich the shareholders. He began the world's first stock-market boom and the word 'millionaire' was invented to describe those that made such great fortunes in the speculation. Law believed, like certain economists today - and those dealing with 'globalization' - that markets should be left to develop freely: 'Constraint is contrary to the principles upon which credit must be built', he had written when all was going well. When problems began to arise, his attitude changed: 'Despotic power, to which we are beholden for it (the system), will also sustain it'. Both Law's empire (and the British South Seas Company) collapsed in 1720, and the new French financial system with it. But basically the system remains the same today around the modern world: credit, speculation and a race for profits. Many major companies then (and today) hide their actual financial situation from their stockholders. As we can see, there is nothing really new in the world: a couple of years ago, who would have suspected the collapse of the US energy giant Enron? Is there something wrong with the system or is there something wrong with modern humans? Probably both.

(For those interested in John Law's contribution to our modern world, I would recommend you read Janet Gleeson's The Moneymaker, originally published in London (Bantam Press) in 1999 and reprinted by Bantam books in paperback in 2000 (ISBN 0-553-81247-5).).

As in the days of the Mississippi Company and its British counterpart, the South Seas Company, financial speculation can reach a fever point, but the 'bubble' usually eventually bursts. And it still does so today. But some countries or areas get into a fever pitch about money itself, particularly if and when it is something relatively new. In Eivissa/Ibiza money was mostly in the hands of a small number of interlinked families in Ibiza town (the famous 'senyors de vila') and a scattering of priests. The arrival of tourism changed that, making access to money possible for sections of the population who had had almost no access to it before. A 'money fever' hit the island in various areas from the 1960s onwards, and continues to this day. Parts of Eivissa today have become a microcosm of much of the western world so aptly described in the following quote from John Grisham's The Testament (1999, page 253):"It's a sad culture. People live in frenzy. They work all the time to make money to buy things to impress other people. They're measured by what they own". But Ibiza always has its own twist on things, even in the modern world. The rest of Euro-America might be living in frenzy, but at least on this island the frenzy only lasts the four months or so of the tourism summer, and then after that the island returns to relative normality. But money now rules here and not always in the best way. The days are long gone when, in 1962, a sympathetic and adventurous English couple on a country walk visited peasant household two kilometres down the hill from my house here. The men were out in the fields, but the lady of the house was in and kindly welcomed the travellers. The couple eventually left, with a wonderful souvenir, one of the massive ancient family heirloom emprendade gold chains (part of a woman's dowry), for which they had paid 5000 pesetas. They assuredly believed they had 'made a killing', and they had: the ancient gold chains are incredibly valuable. Wealth, however, is relative. They were not to know that immediately after their departure the peasant wife rushed out into the fields with the money clutched in her right fist to find her husband to tell him the good news. As she ran, she shouted "Sous del Rey! Sous del Rey!" (the equivalent of  "A King's ransom! A King's ransom!"). Which just goes to show that a little money can make some people very happy. A lot of money here has not necessarily made people happier, as islanders are wont to point out (bearing particular well-known local individuals in mind).

Kirk W Huffman

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