Money is part and parcel of the technosphere. This includes the financial sector. Financial technology is all technical devices that manage financial objects aka assets. In old times, these were metal coins, gold and other valuables, and the means to store and transport them. Today, financial technology is mostly digital. Following social sciences approaches to technology, we should also include all kinds of rules and practices that govern the uses and manipulations of financial objects. Financial objects are pure artefacts that represent monetary value. This artefactual nature is most salient when it comes to constructs such as futures. But the same is true for all kinds of ‘assetification’, which means relating a financial object with another object that is real. This operation connects current uses of the real object with the future monetary yield, that means future income streams generated from the real object and its future monetary value on the markets where this is traded.
The most important asset to be considered in technosphere analysis is land (including water areas) because land is where technosphere and biosphere directly compete: The ongoing loss of biodiversity results from human claims on land driven by implementing technology, and the indirect impacts of human-induced climate change and other externalities on land that is not directly claimed (in most general sense, ‘sinks’). This creates what I call the ‘iron triangle’ of technosphere, finance and land. At the core we find the modern institutions of land ownership that emerged when capitalism overcame feudalism in Europe. These are of deep significance for understanding the relationship between technosphere, economy and ecology because the institutions of land ownership were the template for modern conceptions of property.
The key aspect is that property institutions evolved according to the interests of finance and more specifically, the interests of creditors and investors. This reflects the role of property as collateral and as the ultimate means to enforce claims by foreclosure. There are certain institutional conditions for enabling this function of property, most basically, tradability of the object and valuation on markets. In this regard, the evolution of pawnshops in the 19th century is most interesting, as increasingly people became dependent on credit in their everyday lives, which required ownership of objects that have a market value and can be easily traded. One conspicuous example is the pocket watch, which became an asset even for the poor, and was not just owned for knowing the time.
The most significant asset was land, and in many ways, this remains true today (just think of the pivotal role of real estate in the Chinese economy). Land was at the centre of the institutional transformations induced by capitalism. In principle, land became like a pocket watch, or, in abstract terms, a financial object. For this, clear property rights were created that are enshrined in land registers and deeds. These are financial objects that can be traded and priced, thus meeting the functional requirements of finance.
As we know (and the Chinese learned recently with great pain), this system is brittle and vulnerable. We meet a Marxian contradiction between use vale and exchange value: The actual uses of land eventually determine the economic value, and this can diverge substantially from financial values. Since land is a key collateral in finance, we often observe real estate bubbles and crises: The economist Edward Leamer is often cited stating that real estate simply is the business cycle. In China, land is deeply enmeshed in real estate business and local public finance, and declining land prices wreak havoc on companies, local governments and banks – well, and finally, the people pay the price.
This tension reaches tragic format when we consider the ecological dimension of land: Just think of Darwin’s ‘entangled bank’ projected on a land register and being owned by someone who uses this as collateral for getting a loan. The feudal system of ownership and all indigenous conceptions of land never developed the idea that land could be held as a private property of a single owner: This requirement only emerged when finance entered the scene. In other words, the institutions of land ownership are deriving from and are being sustained by financial capitalism. In this sense, a critique of capitalism focusing on property is partly misguided: The deeper structural factor is money and finance.
This issue has been recognized by many thinkers for long, just to name Thomas Paine and Henry George. In recent times, I want to mention Franklin Obeng-Odoom. They believed what is taken for granted by indigenous worldviews: Land is nature, and nature cannot be object of human property. Within human society, appropriating land creates land rents, and these are literally the oil of finance, if we include all kinds of natural resources tied to land. Hence, breaking the iron triangle is the condition for taming the expansion of the technosphere and preventing planetary collapse. Here, Marx was partly right in demanding a revolution of property. But as I argued in recent posts, this cannot just redistribute property among humans or innovate human property relations. All human and non-human members of the ‘entangled bank’ must be recognized in sharing ownership of the bank. Indigenous worldviews mostly took this for granted, resulting in arrangements of land use that constrained human appropriation, as was the case in European commons before the advent of capitalism. In this sense, revolution means reinventing these ways of life in our modern societies.