"Alchemical Economics"
Herman Daly
A review of H C Binswanger's Money and Magic: A Critique of the Modern
Economy in Light of Goethe's Faust (University of Chicago Press, 1994)
H C Binswanger is founder and director of the Institute for Economics and
Ecology at the University of Saint Gallen, Switzerland. Long an important
figure in the German-speaking world, his work has been too little known
among English readers. That alone makes this little volume very welcome.
The importance of his theme, and the scholarship and insight with which he
develops it, merits the widest possible readership.
The theme of the book is that mainstream economics is alchemy carried on
by other more effective means. Perhaps ecological economists should stop
using the term "mainstream economics" and substitute "alchemical
economics" as a more descriptive name for that which we are trying to
reform. This is by no means a mere rhetorical flourish. It is historically
and logically well founded. The prince of Orleans, like other royalty,
employed court alchemists in the hope that they would produce gold, with
which he could pay off his debts. But when the prince attracted Scottish
financier John Law to his court, he promptly dismissed his alchemists
because the paper money scheme introduced by Law was a more effective way
to redeem his debts. The goal of alchemy, to turn worthless material into
gold, remained unchanged. The worthless material of paper just proved more
receptive to transmutation than lead had been. The transmutation of paper
into money remains fundamentally a "chymical wedding" of mercurial, liquid
imagination (imagining it to represent unmined gold still in the ground)
and fiery, sulfurous impression (the impressive authority of the emperor's
signature on the note). But this is getting ahead of the story and into
"technical" alchemy.
