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Jason Hine - 05 Apr 2020

0's time to realise we could create something Jupiterian and beautiful, a regenerative steady state abundance based money system, on the other side of this process...

There is a lot of talk at the moment about the risk of an economic depression at the time of the Covid-19 crisis. Some politicians have even been considering the idea of letting millions die in order to keep economic growth going.

Clearly a more egalitarian and less genocidal way would be to redistribute wealth to workers, self employed and vulnerable people who need it, and also redirect industry towards producing medical equipment and other essential supplies, which, in the context of the current system, would also stimulate the economy by increase liquidity and increasing the velocity of circulation of money.

More ecologically minded folks have been contemplating how the ecological gains created by thousands of metric tons of carbon emissions being reduced by the lockdown, can be made more long term and how the crisis could be an opportunity to bring in innovative ideas like a basic income

Another major economic innovation that might really help at the moment is if governments switched to printing a limited amount of money by fiat or spending it into existence, instead of money being created as interest bearing debt when someone takes out a loan, as it is at the moment.

It is a radical idea but would be particularly valuable at this time as it would allow the economy to temporarily shrink, WITHOUT going into a depression. Ordinarily a growth based economy is kept in a precarious balance between depression and inflation through the mechanism of raising and lowering interest rates.

If money were spent into existence the money supply would not contract, risking a depression, if growth slowed and less borrowing were undertaken and less investment carried out. We could transition out of industrial growth without a catastrophic crash and burn that harms humans and harms the earth.

In a steady state or degrowth economy where money is not created through people taking out loans and interest based debt, there isn't a need for this precarious balance between deflation and inflation: an economy can shrink, or even grow, depending on ecological needs, or at a time of crisis, without going into depression.

In this case a deep listening economic function is needed, like a heartbeat, which listens and regulates how much blood to pump; a deep listening function is needed to know how much money to create at a time. Various economic indicators and feedback mechanisms can be used for this.

In a debt based system the fact there is always more debt than money in the system means the system is in a sense "scarcity ruled"; everyone is incentivised to compete with everyone else, and everyone is incentivised to convert the commons or ecosystems into money to pay off debt, including even governments.

Obviously we can't just spend into existence an unlimited amount of money: the money supply needs to be limited in some way. And the best way to limit it is to limited by the capacity of the earth, bring in this errant and bizarre son of humanity, namely money, back into the cycle of natural limits, without a catastrophic crash.

Perhaps an ideal system would be for the money supply to be "backed" by resources in the ground or perhaps it could be backed by carbon in the ground. We would decide how many of every type of "resources" we draw from nature or how much carbon we emit and limit the money supply accordingly.

This creates an incentive to keep resources where they are, in the ground, and puts an absolute mathematical limit on the money supply, which is exactly equivalent to a sustainable level of resource use.

In that sense the economy and money supply would become limited and boundaried like everything else in nature, rather than growing potentially infinitely as it does now.

All this is not to be confused with for example, the libertarian plan return to the gold standard, which would just create an incentive to hoard gold! It would be much more efficacious to limit the money supply through ecological considerations.

Crises don't always lead to a better world: the 2008 financial crisis lead to bank bailouts and austerity, setting the ground for the leveraging of folk's scarcity fears against scapegoats and the election of populist leaders who ignored climate agreements. That is a downward spiral that increases entropy through "positive" (meaning deviation amplifying) feedback loops.

If we want to create negentropy and to spiral us upwards out of crisis into a more regenerative abundant world, a new form of money creation is a very helpful, and perhaps essential, piece of the puzzle.

As the Plutonic gods of destruction traverse through our economic system, it's time to realise we could create something Jupiterian and beautiful, a regenerative steady state abundance based money system, on the other side of this process

Although the term win-win gets bandied around a little too much these days, an ecological or non debt based money system would be a rare thing, a threefold win for the economy, for human communities and for the earth. It would end this phase of history, and bring the endless growth of industrial growth culture back into a natural steady-state.

 "the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our planets; it measures everything, in short, except that which makes life worthwhile "-
senator Robert F. Kennedy speaking in 1968


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