digital state/private CBDC crypto > Roadmap to utopia https://blog.trakx.io/roadmap-to-utopia/
happonomy.org 2019 Sustainable Money System (SuMSy) – a design for the future
SuMSy is a theoretical monetary model which has the assumed capacity to change the shape of the economic ecosystem in such a way that it puts the wellbeing of people and the planet at its core. We acknowledge that this model has not yet been tested in real life situations and that all the claims which are made in relationship to SuMSy are assumptions until further research has been carried out. However, he assumptions made are extrapolated from related and peer reviewed research and research-based literature.
The core claims we make are as follows:
The way in which money is brought into and taken out of circulation has an influence on the behaviour of the people using it and it nudges them in predictable ways. Built in mechanics can nudge people further towards predictable behaviours. It is our responsibility that these nudges serve the common good.
Implementing SuMSy would install a form of ‘governance by incentive’ and would require less rules and regulations to keep excesses in check. It would cause a rise in the wellbeing of both people and the planet, while at the same time creating a stable, sustainable economy.
The model has been inspired by both the story of Wörgl in Austria in the early 1930’s and by the basic income movement and the various basic income experiments that have been implemented. The initiative in Wörgl and the experiments with a basic income both had positive impacts on the communities in which they were active.
The following list identifies the challenges SuMSy which aims to tackle:
- Building a stable economic system that is not prone to failing due to an economic slowdown
- Ensuring that basic qualitative social services such as education, healthcare, environmental care, etc. remain in place
- Making sustainable business models economically more attractive
- Liberating intellectual and other potential from purely profit oriented activities to enlist them for value oriented activities
- Moving towards a more collaborative economy
- Diminishing income gaps and eradicate poverty
- Freeing up mental bandwidth for everyone to create time for a reflection on life, building meaningful relationships with others and pursuing meaningful objectives.
>degrowth – money -Monetary theory – Ecological economics – Ecofeminism -State theory – Credit theory – Nature of money – dualism – monetary policy
The third of the #NoBackToNormal #degrowthtalks series on how to transform the monetary system with Mary Mellor, Joseph Ament, Louison Cahen-Fourot and Julio Linares. See below for bios and suggested readings.
Mary Mellor is Emeritus Professor at Northumbria University, UK, where she was founding Chair of the University’s Sustainable Cities Research Institute. She has published extensively on alternative economics integrating socialist, feminist and green perspectives.
Louison Cahen-Fourot is a post-doc researcher and assistant professor at the Institute for Ecological Economics at the WU Vienna University of Economics and Business. His research is in ecological macroeconomics and the political economy of capitalism and the environment.
Joe Ament completed his PhD at the University of Vermont where he studied with Josh Farley and researched monetary theory and policy in the context of social and ecological equity. His work currently looks at public banking at the national and local levels as well as central banking policy for combating climate change and income inequality.
Julio Linares is an economic anthropologist and social outreach for the Basic Income Earth Network. He holds an Msc from the Anthropology department at the London School of Economics. He is based in Berlin, where he is organising a basic income currency project called Circles, exploring practical ways of democratising the economy from below.
Moderators: Oxana Lopatina (on screen) and Lorenzo Velotti (off screen)
RESOURCES Ament J (2019). Toward an ecological monetary theory. Available at https://www.mdpi.com/2071-1050/11/3/923 Ament J (2020). An ecological monetary theory. Available at https://www.sciencedirect.com/science… Ament J (2020). Public money for environmental justice. Available at http://unevenearth.org/2020/01/public… Cahen-Fourot L & Lavoie M (2016). Ecological monetary economics: A post-Keynesian critique. Available at https://www.sciencedirect.com/science… Linares & Cabaña – Degrowth Money: https://www.degrowth.info/en/2020/05/… Mellor M (2017). Money for the people. Available at https://greattransition.org/publicati… Mellor M (2020) – short video on The London Economic: https://www.facebook.com/TheLondonEco…
youtube 2015 Richard Werner – Cooperative banks for the social economy
neweconomics.org/pdf 2013 Energising Money An introduction to energy currencies and accounting – by Josh Ryan Collins, Ludwig Schuster and Tony Greenham
The world is facing an ecological crisis. Our economic system fails to properly account for the natural resources on which human prosperity depends. But attempts to remedy the problem, for example through environmental taxation, fail to address an elephant lurking in the room: the monetary system. Energy-related money offers a means to improve the qualities of the monetary system, while also stimulating the low-carbon energy transition we urgently need.
sciencedirect.com/ 2016 Ecological monetary economics: A post-Keynesian critique – by Louison Cahen Fouro, Marc Lavoie
Abstract – The monetary analysis of some ecological economists currently appears to be mostly articulated around the following core: a stationary economy (and a fortiori a degrowth economy) is incompatible with a system in which money is created as interest-bearing debt. To question the relevance of the debt-money/positive interest rate/output growth nexus, this paper adopts a critical stance towards the currently emerging ecological monetary economics from the standpoint of another strand of heterodox economics – the post-Keynesian approach. In its current state, ecological monetary economics is at odds with post-Keynesian economics in its analysis of the money–growth relationship. This will be shown using the theory of endogenous money and a simple Cambridgian–Kaleckian model where debt-money and a positive interest rate are compatible with a full stationary economy.
degrowth.info 2021 Degrowth Money By: Gabriela Cabaña, Julio Linares
“The following text is an excerpt from “Towards an Ecology of Care: Basic Income Beyond the Nation-state (unpublished). Even though the degrowth movement has shown the limits of our civillization’s obsession with growth, and has promoted and proposed complementary currencies, the degrowth critique has yet to consider the role that money/credit creation plays more explicitly. Ecological economics has still to develop a monetary theory of its own, as well Our call for an ecology of care aims at outlining the relationship between growth and monetary creation, and to lay the foundation of what we call degrowth money. We argue that money’s ‘nature’ itself also has to be changed and expanded in order to avoid the growth imperative from destroying the diversity of the world’s ecosystems. Silvio Gesell is considered to be the first person in the modern era to develop the idea of free money (freigeld), where money would “rot like potatoes, rust like iron and evaporate like ether”. The notion of a rotting money or to “make money worse as a commodity if we wish to make it better as a medium of exchange” was later termed demurrage. Embedding Gesell’s decaying free-money within the degrowth framework, we argue that a degrowth money can help us solve our current economic, social and ecological crisis for the following four reasons: …”…
degrowth.info 2020 Julio Linares and Gabriela Cabaña – demurrage by
The following text is an excerpt from “Towards an Ecology of Care: Basic Income Beyond the Nation-state (unpublished).
Even though the degrowth movement has shown the limits of our civillization’s obsession with growth, and has promoted and proposed complementary currencies, the degrowth critique has yet to consider the role that money/credit creation plays more explicitly. Ecological economics has still to develop a monetary theory of its own, as well
Our call for an ecology of care aims at outlining the relationship between growth and monetary creation, and to lay the foundation of what we call degrowth money. We argue that money’s ‘nature’ itself also has to be changed and expanded in order to avoid the growth imperative from destroying the diversity of the world’s ecosystems.
Silvio Gesell is considered to be the first person in the modern era to develop the idea of free money (freigeld), where money would “rot like potatoes, rust like iron and evaporate like ether”. The notion of a rotting money or to “make money worse as a commodity if we wish to make it better as a medium of exchange” was later termed demurrage. Embedding Gesell’s decaying free-money within the degrowth framework, we argue that a degrowth money can help us solve our current economic, social and ecological crisis for the following four reasons:
1. Time Horizon: The way the money system works today affects our time horizon, as the short term is valued over the long term. Any investment which provides profit faster is given priority over long term production and planning. Because money today is made scarce through the production of credit, people have to compete over the interest in labor markets, making humanity’s time on earth an endless cycle of debt. In contrast, demurrage or degrowth money incentivizes long term decision making via discounted cash flows. Demurrage is a way of going slow, valuing the long term present value of things over the short term. Using the words of an economist, we have a situation where money has a negative interest rate embedded in its design.
2. Liquidity Trap: Modern central banks are theoretically responsible for setting interest rates and managing the supply of money, in order to control inflation. These are the initial conditions which private banks use to issue credit to people. But as it is widely known, capitalism is prone to boom and bust cycles. A liquidity trap is a term economists use to describe the situation when money in an economy stops circulating regardless of the actions of central banks to increase the supply of money and affect interest rates. As trust in the economy disappears and a financial crisis starts, people start to hoard any money they can get their hands on. Degrowth money solves the liquidity trap by putting a limit on the amount of time that money can carry value. As complementary currency expert Bernard Lietaer put it, it is like charging ‘a parking fee on money’. Because people do not want their money to decay, they start to circulate it, as the many historical experiences during the Great Depression demonstrate.
3. Integrating Entropy: We know from thermodynamics that energy can neither be created nor destroyed, just transformed. Degrowth money integrates the second law of thermodynamics into monetary theory by designing a money that is meant for circulation rather than accumulation. Money today expands through bank credit creation. Debt produces a vacuum for the extraction of value which sucks wealth back into the hands of the lender at the expense of the planet’s resources and most of humanity’s labor power. The accumulation of wealth made by our current systems of production implies the production of a lot of waste, or energy that irreversibly increases the total level of entropy of the planet. Increasing levels of (compounded) interest in money thus increase the entropy levels of the planet, which in turn lead to an overshooting of our planetary boundaries and the useful energy needed to reproduce life. Put more simply, wealth is waste. By making the value of money have a life-span, a degrowth money system has the potential to change the way energy is distributed and reintroduced within the system (and hence reduce its waste). This not only increases perceived wealth due to the higher velocity of money in circulation but also makes the deterioration of the quality of energy (entropy) slow down.
4. Ending the Material Growth Imperative: The way money is designed today favors money lenders and money holders. Positive interest on credit creation necessarily leads to more economic growth. A degrowth of money would stop the imperative to increase our material output as the effective interest rate on a yearly basis is zero or negative in comparison to previous years, instead allowing for qualitative growth in individuals and communities alike. As Gesell himself put it: “Supply is something detached from the will of owners of goods, so demand must become something detached from the will of owners of money”. Detaching demand from the owners of money allows for complementary monies to be used for investment in local infrastructure, basic services, health and education. Degrowth money is fundamentally a different type of money which has the potential to make our human ecosystem more resilient as a whole through the introduction of monetary diversity, separating money’s functions in multiple money forms.
As social ecologists remind us, the very notion that men can dominate nature is rooted in the real domination of men over other men and over women. While the planet’s biosphere might recover without us as a species, we will not recover without the biosphere. The extraction of nature’s resources for the sake of short term profit and people’s capacity to reproduce and produce their life is organized by how money works.
The ecology of money today is thus one of a monoculture, where we use the same type of money to arrange everything in our lives, from education to housing to the marketplace. While it might be efficient, a money system without a break or escape valve is dangerous as it makes the system in which we live very rigid and fragile.
Just like red blood cells which are created in the bone marrow with the purpose of supplying the entire body with nutrients, which then die and are discharged with time, so should money also help to nurture people’s social reproduction and decay when not in use.
Instead of private banks creating most of the money supply as an interest-bearing monoculture which extracts the yield of living ecosystems, we should think of money’s transformation in holistic ways. We should embed the principles of localism, self-sustainability, decentralization and confederation into our systems of production, distribution and the democratic organization of the institutions that take care of life.
The ecology of care thus aims at people-powered-money, issued unconditionally with the goal that income is divorced from work and people do not have to rely solely on a wage in order to get what they need to reproduce their daily life. This Basic Income is distributed as a share of the yield of the wealth held in common. The issuance level necessary for people to have self-reliance should be decided democratically and it should be equivalent to the cost of the material conditions needed to meet and complement people’s basic needs in their region.
Making money alive through demurrage means that money will also gradually die when not in use. Degrowth money allows us to limit the extent to which accumulation can take place in the system and instead foster circulation and exchange within the values of the commons. Like this, both the issuance and the decay of money take place constantly and adapt to the seasonal needs of people who govern it, following the principles of the commons outlined by Östrom and others.
A currency that decays requires us to rethink the whole structure of the interdependent social relations which keep the economic, biophysical, and social systems together. The ideas of the degrowth literature share an expansive notion of care, in the sense that the provision of social care cannot be detached from the care of nature and its regenerative limits.
Degrowth requires the care of our environment in harmony with the care of people; to go beyond ‘the illusion of an independent human existence’, both independent of other people and of the worlds we form part of. This intertwined human condition becomes clear when we try to figure out how to take care of people at a practical level: we understand that no care is possible in a destroyed, biodiversity poor and polluted environment. People are, after all, part of their ecosystems.
We suggest a degrowth money to move towards this utopia.Julio Linares holds an Msc. from the Anthropology department at the London School of Economics and Political Science. His research explores the relationship between economic democracy, anarchism and basic income. Originally from Guatemala, he is currently based in Berlin where he explores these topics at length with a community cryptocurrency called Circles UBI. He also serves as Social Outreach for the Basic Income Earth Network. Twitter: @Julio_Linares_ More at laborislove.se Gabriela is an anthropology PhD researcher at the London School of Economics and Political Science. She is now undertaking ethnographic fieldwork on energy transitions in the context of ecological breakdown in the south of Chile. Her research interests are on energy, the state, bureaucracy, economic and social policy, feminist critiques to the economy, degrowth, and Basic Income. She participates in the Basic Income Earth Network (BIEN) and the Chilean Network of Basic Income and is part of the Centre of Socio-Environmental Analysis – CASA. Twitter: @gabi_cabana
This is a challenge to conventional thinking around money and the ‘debt crisis’. By re-evaluating the source of money, Mary Mellor presents a radical alternative to austerity and privatisation: public wealth, or, money used for sustainability, sufficiency and social justice.
Debt or Democracy debunks the received lessons of the financial crisis of 2007. Political elites shout about a house whose finances are in disarray; a ‘yawning deficit’ created by reckless spending in a bloated public sector. The answer to this ‘debt crisis’ has been harsh austerity measures – but this is a dangerously deceptive discourse.
Turning against the prevalent narrative, with its language of ‘debt’ and ‘deficit’, Mellor takes on the familiar question – ‘where does money come from?’. The real solution is a return to the notion of public wealth and the public economy; of a monetary system owned by, and operated in the interests of, the majority.
greattransition.org/ 2017 Money for the People – by Mary Mellor
Local initiatives can lead to modest gains in sustainability, but not the large-scale transformation we need. Meeting that challenge will require, among other critical factors, substantial changes in how we create and use money. As its history demonstrates, money is a social and political construct. It is the privatization of money—and not money itself—that has fueled social exploitation and environmental destruction. Money could, by contrast, help advance a Great Transition—but only if it is reclaimed for the public. Contrary to neoliberal assertions, the state can create money free of the debt that drives destructive growth and fosters inequality. Such public money can facilitate the provision of economic security and sustainable livelihoods for all. But for such a system of public money to work, there must be robust democratic control over monetary decision-making along with vigorous oversight of its implementation.
Money: Myths, Truths and Alternatives (21st Century Standpoints) – by Mary Mellor
What does money mean? Where does it come from and how does it work? In this highly topical book, Mary Mellor, an expert on money, examines money’s social, political and commercial histories to debunk longstanding myths such as money being in short supply and needing to come from somewhere. Arguing that money’s immense social value means that its creation and circulation should be a matter of democratic choice, she sets out a new finance system, based on green and feminist concerns, to bring radical change for social good.