Don,
A spot on and logically focused article. I've been castigating various entrants for their 'out in space' entries and so it is nice to have such a well centered and reasonable one. I think though, that the possibility exists to be far more radical than you might think possible. Significant change is only possible when the old order breaks down, but right now the current status quo is coalescing in upon itself and only re-enforcing its own increasingly disfunctional methods. So all the various sectors of society mostly seek to hold onto what they have and further antagonize other parts of society. In this situation, even your reasonable proposals would meet considerable resistance from those who are more focused on holding onto what they have, than gambling on a better outcome.
The result would normally be a state of slow stagnation and increasingly stratified and compartmentalized future society. Yet I think that the monumental nature of these issues provides a potential relief.
The enormous tumor of financial excess can only keep growing at this exponential rate and will blow up when it reaches some totally unsustainable level. The result will be the equivalent of a massive heart attack on society, as the economic circulation system siezes up. While this will be potentially catastrophic in some quarters, it is not as though monetary regimes haven't collapsed before and had forms of local exchange rise in their place.
My proposal is that we begin treating money as the contract which it is, rather than the commodity we have been led to believe it is. While this might seem a minor conceptual issue, it has the potential to change the paradigm by which society functions.
Any society above a few hundred people needs a medium of exchange. If there is not some readily available commodity with universal applications, such as gold, silver, salt, grain, etc. then a debt based monetary system is quite effective. Yet we forget it is essentially a form of public utility and social contract, not private property. We no more own those bills in our pockets, than we own the section of road we happen to be driving on, yet it is very much in the interest of those controlling this system for us to believe that it is personal property, much as it is in the fisherman's interest for the fish to think that worm belongs to it. This way, every aspect of exchange becomes denominated in this medium and everyone wants as much as possible, further empowering those controlling it.
Money functions like blood in the economy and as such it needs to keep flowing. Since everyone wishes to obtain as much as possible, this naturally creates excess. If we simply take it out of circulation and store it, it means more must be issued and then there becomes more than necessary, so that if the value started to go down, people would try dumping these stores, further decreasing the value.
Otherwise it must be invested, ie. loaned to someone else who can effectively spend it in ways to make even more and then pay off the debt and still earn enough to make the effort worthwhile. The fact is there are far fewer of these opportunities, then there is money seeking worthwhile investments.
This then leads to various unsustainable feedback loops, such as that once speculative investing, ie. greater fool systems, start, it can quickly become possible that money can be borrowed into existence cheaper than these bubbles grow and thus building on theselves, as is currently happening in much of the investment world
There is also the need to create ever more debt to feed the production of this capital and so lending standards fall. Not to mention the innumerable ways further leverage is added.
Now if people wish to gamble, this should be perfectly legal, with the understanding that it is gambling, not disguised as safe investment.
So in reality money is a form of debt. One person's asset is another person's obligation. When those with large piles of these surplus bills gain functional control over the government, then they can effectively have the government, ie. the public, buy this notational wealth as public debt and so sustain its value, since the public is required to pay it back, with interest. Then this money has to be spent and often it is in ways which further enrich those in control.
Now if we were to begin to understand that money functions as a necessary social contract and we don't actually own it, then most people will start to be far more careful how much they are willing to pull value out of personal and social relations, as well as environmental resources. This would then make the community and the environment natural stores of wealth, not just resources to be mined for value, in order to compete and gamble in the financial system.
Since stores of currency would be recognized as potentially unhealthy to the system, methods would be devised to reduce them. Most people store wealth for such needs as elder and youth care, education, housing and other large expenses. Now if we started storing value within our communities and relations, the normal, organic systems of exchange and reciprocity would emerge. We would start caring for the old folks and kids like nature intended, as part of life, not just services bought and sold. Much of primary education could also naturally fall into this system and more naturally integrated systems of secondary eduction might evolve as well. Then there could be forms of mutual building societies, much as the Amish do.
This is not to say a normal and extensive monetary, or even various overlapping monetary ststems wouldn't still function, but they would be built with full understandings of how they best function and for more liquid forms of exchange. Then local public banks would use their profits to fund services and projects within the communities that produced those profits. They would then serve as shareholders in regional systems, in a bottom up system.
Much as the body has both a heart and a head, society would naturally keep this function of circulation of wealth somewhat distinct from its public management, as a natural distribution and separation of power.
So this is how I think humanity should be steered; When this current financial system does break down, which seems imminent, but has been for a few decades, but they keep patching with ever more public debt and the resulting surplus credit, we simply have to open our eyes and understand this stuff called money is not, in and of itself, a form of commodity, but a contract which a community is making with its members and those caught abusing this system will naturally have their benefits penalized, not be allowed to profit from this abuse.
We need to educate people how it all works!!!!
Regards,
John Merryman
