Riding the Dragon We Hatched

Human societies are addicted to their ruling ideas and their received way of life, and they are fanatical in their defence. Hence they are extraordinarily reluctant to reform. “To admit error and cut losses,” said [Barbara] Tuchman, “is rare among individuals, unknown among states.” Instead of changing their minds, leaders redouble their efforts to do what no longer works, wooden-headedly persisting in error until the bitter end.

William Ophuls, 2012

I saw the above quote at Naked Capitalism the other day, was struck by it and am now reading the book it is taken from (Immoderate Greatness: Why Civilizations Fail). The quote struck me because it echoes my thinking on the state.  As such I felt inspired to repeat myself here in a new-ish formulation, suspecting – for a change – that my Cassandra Compulsion to share with anyone who’ll listen is not the deluded raving of a loon. Ah, sweet, brief relief.

(A quick note on terminology: where Ophuls uses “civilisation” I use “state” or the more generic “system”. For my purposes here, these terms are sufficiently interchangeable. I see the dynamic they designate as a manifestation or surface presentation of Eisensteinian Ascent, or better, a vehicle/vessel for its manifestation and development.)

Civilisation’s “leaders redouble their efforts to do what no longer works” – Einstein’s definition of madness. We should expect nothing less during collapse; how could leaders lead a system and also purposefully and publically bring about its demise? The danger for humanity today is that civilisation – composed of the nation state and corporation as value-extracting dynamics – has become truly global. It has crushed perceived threats wherever they emerged. If a group were able to get a tentative alternative up and running – as visibly as possible so as to attract more people to their cause – the current system would annihilate that alternative with violent thoroughness, as it has done across the centuries of its ascent and now as zenith has tipped into collapse. The more viable, the more hopeful the alternative to it, the more violent is the system’s opposition. It sees alternatives as viruses that could spread if left unchecked. (Don’t we all?)

Once we have woken up to this, we appear to be confronted with an unpalatable, binary choice: 1. Try to survive and develop alternatives with others on behalf of humanity and risk social exclusion or even annihilation. 2. Stay in lockstep with the mainstream and knowingly participate in the self-wrought extinction of our species.

Is there a middle way? Yes and no. Let’s start by grubbing around in some dark stuff:

1. Living systems – humans, rabbits, spiders, coral reefs, political parties, football clubs, states and so on – are characterised in part by some sort of ‘will’ to survive, however this manifests (living systems theory). A living system like the nation state (which we are concerned with here), with its subsidiary the corporation and its current flavour, capitalism, is no exception. It will therefore do what it must to survive. That its continued survival is a threat to its survival cannot compute.
2. Leaders are representatives, promoters and defenders of the system they lead. They are thus ‘congenitally’ constrained to act in the interests of that system come what may. If they fail to do so, the system will replace them with someone more loyal. All sorts of gymnastic rationalising is performed to justify whatever behaviours are adopted (mainstream media and academia), something humans do very well indeed, individually and collectively, deliberately and autonomically. Leaders’ lack of freedom in this regard is clearer during times of collapse when decadence and criminality run wild. Even ‘good’ leaders fall in line as wiggle-room evaporates.
3. Nation states plus corporations etc. represent a global system. One of this system’s defining characteristics is perpetual economic growth, which is perhaps the main reason this system is global; it can’t stop growing. As a defining characteristic, it cannot be relinquished without causing the death of the system. This is a controversial point, but I’m fairly convinced by it. “As a process, civilization resembles a long-running economic bubble. Civilizations convert found (or conquered) ecological wealth into economic goods and population growth.” (W. Ophuls, 2012.) This dynamic is a positive feedback loop. I repeat, its continued survival is a threat to its survival. Quite the Catch 22.
4. Nation states plus corporations etc. also comprise all those humans born and living in them. In other words, you, me, and almost everyone else on earth are part of the problem, are necessarily dependent on the survival of that which threatens our survival. Our habits of thought and living have been shaped and are sustained by the system we/they constitute.
5. There is no thus escape. On the one hand, we cannot escape ourselves; wherever we go to conduct experiments in establishing new systems, we bring our habits of thought and living with us. Starting from scratch is impossible. On the other hand and as mentioned above, where radical and successful alternatives do start to bloom despite the odds against them, they can only be perceived as threats to the current dominant system, which has the power to crush them. Lastly, even collapse is not escape. Collapse is terrible and cannot wipe the slate of our conditioning completely clean. The new always emerges from the old. This time, that emergence looks like being very painful and troubled indeed, due to the global nature of the crises.
6. Because the system is global, its collapse is global too. How rapid it becomes is anyone’s guess, but what is important to bear in mind is how devastating – psychically, physically, spiritually, environmentally and emotionally – it must be. Cultural disorientation will pervade. Indeed, we see it more and more today.
7. Taken together, all of the above means that present cultural denial about impending or currently unravelling collapse will be / is especially visceral and determined. Expect no meaningful change at all from appointed leaders or from the moral majority any time soon.

But I write none of this to spread despair. We cannot durably prepare ourselves for what is upon us (or rather, what we are generating) unless we appreciate some of the scale of the challenge; knowing all effects is impossible. Hopefulness is important, even naïve hopefulness, as stories like Hans im Glück or those involving an ingénue or fool tell us. Indeed, many groups are ‘foolishly’ engaged in building different aspects of the new and are doing sterling work. Velcrow Ripper even talks of the emergence of a movement of movements and has traced its contours in his wonderful films (I know of and recommend Occupy Love and Fierce Light).

Personally, I do not write this stuff in the belief that all hope is lost. I passionately believe that those of us who see various aspects of the end of this version of civilisation are obliged to add their perspective to the mix. However, this cannot be an act that seeks fame and fortune, in any of their guises. It is an act of service which cannot know what good it is sowing, or what harm.

We will despair. Much of what we attempt, as individuals and groups, will ‘fail’. We cannot know fully what is bathwater and what is baby, nor which parts of what we think we are cutting out are being reintroduced in our shadows, nor the long term effects of our continual experimentation. But a mature approach to this work of renewal should, I feel, keep firmly in mind the points I’ve listed above (and others). To allow a radically different system to emerge from the fertile soil of the old requires, paradoxically, that its very newness be a bloom on the old. Of course, the old must first become fecund ruin for this to happen, but that’s ok: “Systems prepare their own overthrow by a preliminary period of petrification.”  (R. H. Tawney, Religion and the Rise of Capitalism.)

Know thine enemy. Know thyself. It’s not about you. Out of the very contradiction of this trinity, the middle way begins.

Technological unemployment: a genuine threat, a great opportunity

Below is my attempt at a journalistic-like article which aims to shift people's thinking about money, cost, value, wealth, work and resources (I know, foolishly ambitious). I sent it to some newspapers, magazines and journalists, but have excited no interest with it. My intention is to broaden the debate, but to do so the ideas the article contains need a better distribution outlet than this humble blog. I strongly believe the broader public is now ready for this debate, and thus that something as simple as this article is appropriate at this time. So, in the absence of anything else, I am using this platform to at least have this formulation out there. Do with it as you will. It is not standard Econosophy format, but it is standard Econosophy argumentation. There's nothing new in it for frequent visitors of this site.

[Edited on 25 October 2014 to improve logical flow]

Recent months have seen many articles tackling the Luddite bugbear of technological unemployment – automation replacing jobs. I welcome this attention. Not because I welcome increased suffering, nor because I see no way out. No, I strongly believe technological unemployment is and always has been an inspiring challenge to humanity’s ideas about work, value and societal contribution. In this challenge I see great opportunity.

However, my impression from these articles and from reader responses to them is that we are not taking Einstein’s famous admonition sufficiently to heart: “We can’t solve problems by using the same kind of thinking we used when we created them.” Robots taking our jobs is only a problem if we fail to think outside the box in which it must remain a problem.

(Three points undergird this article: firstly, we are not in pursuit of Utopia; there can be no such thing. Secondly, we must ask the right questions to see intractable challenges from fresh perspectives. Thirdly, let’s not lose sight of the kind of world we want to live in.)

Currently, if the economy isn’t growing, it’s collapsing. Wages fall, unemployment rises, hope fades, the chance of war increases. This sad historical correlation lies behind President Obama’s recent characterisation of economic growth as an “imperative”. But even though it is a systemic requirement, perpetual economic growth is impossible. If we want to survive as a species, our relationships with GDP growth and orthodox economics must change, not to usher in Utopia, but to adjust intelligently to new knowledge and circumstances.

Why is the impossible an imperative?

For two main reasons. Firstly, the way money is designed requires growth; money is created as interest-bearing debt, and compound interest is exponential growth. Our system is wired to grow exponentially. Secondly, redirecting the economy from the growth track requires radical change, change that vested interests do not want. Nevertheless, either we push on with the impossible, or we do something different.

Something different would be an economy as happy with growth as with de-growth (steady-state). This only sounds crazy because de-growth currently causes social distress. Space does not allow an exploration of the many proposals for alternative money systems currently being discussed, but this is a technical challenge humanity can solve.

A steady-state economy powered by an appropriate money system would not cause social distress, it would free us to enjoy a healthy work-life balance. Think about it: what is economic growth? Ever more economic activity. What is economic activity? Production, buying and selling. Are these the source of all human happiness? We do more of them today than ever before. Are we happier than ever before? Most of us realise rampant consumerism is bad for environment and community alike, so not only is perpetual economic growth unsustainable, we don’t actually want it. It's a cultural addiction, not a genetic requirement.

How does this relate to technological unemployment? Well, we don’t need ourselves economically as we once did. When we contemplate economic de-growth exacerbated by technological unemployment, we see an ever-diminishing role for humanity, we fear “robot overlords”. But a dystopian future only awaits us if we refuse to accept that unpaid work can be more valuable to society than paid work. What does society value more: good parenting or investment banking? If money is our guide, the latter. Otherwise, the former (and similar social contributions). We need new money and money-distribution mechanisms that honour the former. With such systems in place, we would welcome technological developments that free us from boring jobs.

Looked at coldly, wages are a mechanism for distributing money to people. Wages imply that the work they reward is good for society, but this may only sometimes be true and then only partly. We also value contributions to society that cannot be remunerated by the market. In light of technological advances and the need to de-grow our economy, we should implement a Basic Income Guarantee (“BIG”), a new mechanism for getting money to people. To want to do this, we must first re-envision money as a public utility that both frees us to contribute meaningfully to society and rewards us for work the market deems valuable.

If you believe we cannot afford a BIG, you probably think it is money that affords. Resources and know-how afford (what is money without natural resources?). Let’s say we need 30% of the adult population to produce enough to keep everyone housed, warmed, fed and clothed. I.e., there’s enough of the basics, but not enough jobs. In this narrow example, market mechanisms must fail to provide everyone with purchasing power. Abundant supply meets impotent demand. Here the market is the problem, not ‘lazy’ people.

Just because we no longer need people economically does not mean we cannot learn to value what they might contribute when freed to do so by a BIG. Nor does it mean that giving money away must lead to inflation; the need for a BIG arises from the fact of what I’ve termed “impotent demand”.

Technological unemployment is real because production can exceed consumption. The “lump of labour fallacy” rightly argues there is no fixed amount of economic work for humans to do. Correct. It can shrink. Or it can be forced to grow against our better judgement; we neither want nor can the environment afford perpetual economic growth. The lump of labour ‘fallacy’ is thus a red herring. Far more important is redefining our cultural definitions of work, value and reward, and how we design and distribute money.

The cultural habits ingrained in us over recent centuries have dangerously narrowed our thinking. There are good alternatives to ever more jobs. BIG is perhaps the best of them, though just a first step. We have come to mistake money for wealth, and are having a hard time accepting that we can indeed afford to de-grow, that consumerism does not create health and happiness, that economic activity is not a panacea. If we automate more, consume less, move to renewable energies, set up a more appropriate money system, our work-life balance will improve. Indeed, work would become more and more pleasant, until our work becomes our passion, our life.

This is the potential of technological unemployment. From employment in meaningless, environmentally-damaging jobs, to meaningful work for society. To seize this opportunity, we must heed Einstein and transcend the thinking that got us into this mess.


Addendum, 25.02.2013:

Anyone seeking an insight into this would do well to consult a terrific report by Sarah O'Connor, the Financial Times's economics correspondent. She visited Amazon's vast distribution centre at Rugeley in Staffordshire and her account of what she found there makes sobering reading.

She saw hundreds of people in orange vests pushing trolleys around a space the size of nine football pitches, glancing down at the screens of their handheld satnav computers for directions on where to walk next and what to pick up when they get there. They do not dawdle because "the devices in their hands are also measuring their productivity in real time". They walk between seven and 15 miles a day and everything they do is determined by Amazon's software. "You're sort of like a robot, but in human form," one manager told Ms O'Connor. "It's human automation, if you like."

Source

Anyone seeking to understand what technological unemployment (and underemployment) is about, ought to think deeply about what these two quoted paragraphs are telling us. In short: money is more important than both humanity and environment in this system. Until we address this, this tightly controlled, robotic insanity is going to get worse and worse, simply to sustain consumerism and perpetual economic growth, both of which are unsustainable.

Changing Direction

[Edited for flow and a touch more humility, 16.01.15]

There is something frantic eating away the heart of modern societies. My intuition tells me it is speeding up, fear tells me there’s no escape. Not only are those in employment often asked to do more and more for less and less, even those out of work are faced with falling wages for the job offers they might get, or no opportunities at all. The void they are left in is far from immune to the acceleration I’m describing, which works on them like ever-thinning air. School children feel the pressure. Full-time mothers and fathers feel it too. Teachers, police, health care workers, business people, professionals, with a few exceptions, are very aware of this increasingly frantic scrabble to maintain what I think of as our crumbling culture. And the third world is suffering terribly to keep us lucky ones distracted by gadgets and cheap stuff so we don’t notice how untenable the situation is.

The Tower of Babel is falling, obviously so, and yet, because of the ‘forward’ momentum of our frantic efforts, of our stampede, we still need to tell ourselves the tower can be restored; with just a little more effort, a little harder work, more efficiency and ingenuity, we’ll soon continue our ascent. We cannot accept, in sufficient numbers, how wrong we are.

So we are wholly occupied by unending, desperate activities which are, taken together, damaging an environment now increasingly incapable of supporting us. The total effort is itself debilitating, utterly non-replenishing and vacuous, and on top of its fundamental absurdity the massive effort we exert actually worsens our situation, requiring yet more effort, more acceleration. A cultural death spiral.

We are driving ourselves insane. Ascent, in the manner we have been pursuing for centuries, is not coming back, and we are going crazy in our valiant refusal to acknowledge this.

Of course I am saying nothing new and have borrowed heavily from Charles Eisenstein. But that’s ok, culture is like that. I didn’t invent the English language either, nor any of my philosophies. Again, nothing new there. But this perspective needs to be laid out by as many of us as possible, as clearly as possible, from as many angles as possible. Together we bring into focus a sound perspective of where we are, how we got here, where we’re headed, and how to change direction if we agree such is necessary.

Changing direction is not easy, especially when billions are heavily invested in the current course. It’s all we know, how we grew up, and enough stuff is working just about well enough to sustain the illusion that normal is just around the corner. And the state, the market, our obsession with numerical values as wealth with final control of all variables just within reach ... this paradigm is so uniformly pervasive, so globally successful, there is now no Getting Away From It All, though some try. My own efforts have proven too little too late. Once you have a family, you have debt, even if you have no monetary debt. You have a debt to your family’s habits, friends, to the roots of your slowly built-up life. One’s life is a momentum that has a will of its own. It cannot just be stopped in its tracks and repositioned somewhere more sensible, less stressful, less environmentally damaging. We are each of us part of the system, steeped in it, coloured by it, made of it. We take it with us wherever we go, and besides, it’s there waiting for us when we arrive. And the token things we can do locally to Make a Difference (recycling, fair trade) are very far from satisfying.

As if in stampede, we are in this together. If you don’t stampede with the rest, chances are you’ll get trampled. Culturally, this adds up to a seemingly unstoppable momentum. We are not going to choose to try and change course prior to a mighty slap in the face, an enormous collective wake-up call.

Here’s my summary of where we are and why we’re in lockstep.

Growth. First but by no means most importantly, our money system requires constant growth to work, by design. If the economy is not growing, it is collapsing.

This unhappy design flaw has its far-distant roots, in my view, in the larger-scale state project (a.k.a hierarchical civilisation, thousands of years in the making). What I call the state project began innocently with farming. Farming stems, crudely speaking, from the domestication of plants and beasts, and ourselves. This experimentation set up a rift with (or even created) a very distinct Other, creating for the first time the two realms of Tamed and Wild, where Tamed is good and Wild is bad. Tamed begets Home and Hearth, which begets private property to be protected against the vagaries of the Wild at all costs, eventually as enshrined by law and the state, and sustained as a social dynamic by money, market and price. The Wild finally becomes ‘idle resources’ to be turned into economic goods and services, which transformation is endlessly accomplished by Hard Work (see below). By way of confirmation, I offer the fact that economics text books show nature (a.k.a. the wild universe) as a subset of the economy. Ah, sweet hubris.

Within this basic paradigm, once you start purposefully manipulating your (now enemy) environment to improve your situation, you can’t stop tinkering. With the beginning of the perception of problems-to-be-solved in a threatening world of Other, the unending journey (Ascent) can be begun. Tinkering to solve problems always creates new, unanticipated problems. So, solve them, create unintended and even newer problems ... rinse and repeat forever. It starts with the human ability to perceive certain situations as solvable problems (a far-from-obvious perception), then builds on or accrues to itself in the form of increasing cultural wisdom, aided and abetted by the spoken then written word, essential as recording mechanisms for handing knowledge down across generations. This dynamic, couched in the Tamed/Wild split, has slowly but surely led us into our perpetual growth cul-de-sac, because we came, in our naïve hubris, to see ourselves as somehow above nature, a view reinforced by the fact that we have been very ‘successful’ in our endeavours at this Progress thing. Also, and not unimportantly, because we have such strong emotions we’re not prepared to kill our young, say, as rabbits do.We’re not fond of resets. We establish dynasties, legacies, etc.

Thus the (now money-driven) growth/progress habit is very old and hard to break. It is civilisation’s deepest and most entrenched back story. (This dynamic also, in a way, describes evolution generally, but this is a short essay, so space does not allow me to develop this aspect fully here, nor address the distinctions. Let me just finally add that I am not at all against tinkering or progress! Indeed, we have to tinker to change course.)

Dualism. Secondly and for less time, we have been more or less convinced that reality is made of matter, that the immaterial realm is mere illusion, or at best something distinct and fundamentally separate. Either there is no spirit, there is no god, no heaven above, no hell below, and consciousness is an illusory epiphenomenon of the material brain, or the ‘religious’ among us represent a set of beliefs that relegate the immaterial realm to the afterlife, to some fully separated dominion beyond us and belonging wholly to God. The ‘physical’ universe is here and now, is thus our domain, and we are its religious and secular masters. This perceived separation informs our strong cultural conviction that Out There is a complex machine we can master and improve, an Alien Other to be tamed, perfected. With time, this attitude promises, we will master everything there is

Of course, the materialist position, a child of dualism, leads not only to scientific positivism, it can also give rise to primitivism, or the idea that nature is a certain way, that man should not tinker with it, that civilisation was a wrong turn. I subscribe fully to neither mindset, and see merits and flaws in both views. I also happen to believe both are flawed by their dualist roots, the philosophical dead end of Mind versus Matter brought into cultural focus by Rene Descartes. To put my cards on the table, I’m a systems theorist with a strong ‘spiritual’ bent (i.e., consciousness (whatever that is) is the ground of all interbeing (whatever that is)). In my view, there is no static reality Out There to be learned and thus mastered. Reality changes constantly as we do; we are of it. There is no separation, only one endlessly unfolding story created and sustained by unimaginable diversity. Nature is change, and ‘spirit’ is ‘matter’ is ‘spirit’. In sum, I assert that our cultural sense of reality as a (very complex) machine is wrong, but that unlearning this habit of perception is very, very hard.

Work. Thirdly, we also have extremely outdated beliefs in productivity and Hard Work, which arise directly from our sense of reality as a machine to be mastered and conquered in a threatening universe. We must grow forever, are Evolution’s/God’s chosen creatures with a Special Destiny, and if we don’t all work harder and harder the whole thing breaks down. It would be a secular and religious sin to flunk that destiny. Laziness is therefore Evil. If you’re not productive, you are of no use to society, and that which qualifies as productive is described entirely within the framework of the points touched on above, i.e., it earns money.

Taken together, this coarsely presented trio of memes means it is specifically and only economically valuable work that counts, that delivers the goods. It is the economic sphere that must grow. It is not more and more play, nor more and more rest, nor more and more family time or time with friends the infamous System demands. No, it is Hard Work we need to perform to sustain The Project, the glorious growth of the human species. Paradoxically, this means we are culturally driven to create ever more economic work for everyone, even though we don’t remotely need it, even though our frantic efforts in this direction are producing less and less real wealth. Our vaunted inventiveness has been automating production for centuries, and we’re getting ever better at making human labour redundant. Furthermore, and worse than not needing more economic work for humans, we happen to live on a finite planet. Consumerism is killing us. Why should we whip ourselves into a frenzy to sustain it? Better the devil you know.

Economic work—activity characterised by monetary exchange or barter—never has been and never will be a priori superior to other kinds of work. This Holy Cow is a mere assertion and has no basis whatsoever in reality, other than in a cultural misperception, however understandable. The rigid conviction that paid work is better than unpaid paiwork must be honestly examined. There’s far more to reality than money. Surely it’s ok to accept that machines can do much work for us. Let’s take this wee gem on the chin and learn to relax a bit, eh? Stop shouting at the ‘lazy’ unemployed and take a fresh look at this issue, shall we? Slow down a tad, stop consuming as if gadgets were the be all and end all. It’s a thought.

To recap: money is wealth because numbers are control because control is good because look at all these gadgets and their price tags so lets do more and more of that. The universe is a machine, therefore we can, and should, master it. Evolution/God gave birth to us, we are history’s zenith, we thus own the whole shebang and are alone in the universe, which thus belongs to us by default because we are so very intelligent. Would you like to buy a piece of the moon?

We have built machines that can create the goods, and the accelerating consumerism stampede does not make us, or the environment, healthy. We all know this. So, while we can explain why we believe Growth is God, that does not mean Growth is God. Look around you; it’s good that things mature, stop growing, and perish.

To repeat, economic activity is merely one kind of activity. It is not the best of all possible activities simply because it causes money to change hands, simply because we can ‘objectively’ measure its value, or believe we can measure its value (how much is the moon worth?). We don’t have to grow economically for biological or spiritual reasons, there just happens to be a design flaw in the money system, as understandable as that flaw is, historically speaking. Let’s change the money system to suit reality instead of fighting reality to suit the money system.

While we stampede towards the edge of the cliff, hope for humanity’s future lies in our ability to recognise where we’re headed and work out how to change direction. Sustainability is part of this, renewable energies are part of this, humility is part of this, a revolution in farming is part of this, guaranteed income is part of this, love is part of this, revolution in education is part of this, a new money system is part of this, direct democracy is part of this, as are many other bits and pieces, not one of them a silver bullet. And we are all of us parts of this. We need to get better at talking this out, and remembering where true wealth lies: in time, in health, in soil, in community, trust, inventiveness, work, joy, meaning, exploration, accomplishment, sharing, competing, cooperating, and so on. Let’s get on with that.

W = R&D

A short post for you after the recent long post. I work as a translator now, so am reading material I ordinarily would not read. Everything is food for thought, and one set of documents for chemical giant BASF’s R&D labs got me thinking about research and development as a metaphor for social welfare (W).

To stay viable over the long term, a corporation or other large enterprise must reinvest some portion of its profits (surplus) into R&D. If it does not, it risks being left behind by either other large companies who do have sufficient capacities for R&D, or innovative start-ups eating up their market share.

But R&D is risky. You simply cannot know in advance which money-pit is going to produce the next new wonder product the whole world can’t do without. So it takes courage and faith to invest in this area. Nowadays, the big boys often save on R&D and just buy out successful start-ups, ‘out-sourcing’ R&D costs to pioneers and society generally. But for a socioeconomic system to have sufficient surplus to fund sufficient numbers of pioneers for keeping society ‘modern’ and ‘competitive’, there must be high and well-paid employment, sufficient free time, a good welfare safety-net, and good education. So, we can see that surplus, or excess, or fat, is essential for development of the new.

This is true across nature generally. The number of seeds an apple tree produces every year would be far in excess of requirements if every single seed took root and grew into a mature and productive apple tree. The number of sperm a fertile man can produce far exceeds the number of children he can help to raise, ditto the number of eggs a woman can produce. The examples are endless. Excess is ‘natural’. And you cannot know in advance which seed, which new idea, which egg is going to produce the wonder X the world didn’t know it was waiting for, nor can you know what the ‘negative’ consequences brought into being by product/offspring X are going to be. Uncertainty is inescapable (and beautiful). Not being able to predict and control all outcomes is what makes life worth living.

What is clear, is that evolution/change/innovation/development requires excess, or surplus, or fat. Efficiency is a useful skill or modality, and successful living systems are most often efficient users of energy, for example. But if razor-sharp efficiency is all you have, if you are an efficiency one-trick pony, you spend your entire life merely surviving, until some New Kid On The Block knocks you over with its new tricks.

In this light, social welfare can be thought of as cultural R&D. We cannot know which of the millions of artists, inventors, musicians, writers, poets, philosophers, piss artists, ‘good-for-nothings’, lost souls, etc., are going to be ‘useful’ to society, today or tomorrow, nor what ‘usefulness’ really is, especially over the long term, but we can know, or assert, that a vibrant culture – one not geared to 100% efficiency and capable only of taking care of immediate, day-to-day needs – must take a risk and invest constantly in that which may never produce anything ‘useful’. Cultural vibrancy is the overarching ‘meta-useful’ product of welfare.

And the metaphor I’ve just presented does not consider the perhaps more important factor of morality; what does it mean to judge, either by majority or dictator or monarch, what is valuable to society, and what is not? There can be no list, no top ten or hundred Valuable Things a society should nurture and protect, where everything lower down on the list can just be wiped out.

Then there is the matter of Dignity of Interbeing, which means we should be very careful about consigning anything to the trash heap just because we can detect no immediate use for it. We are not so all-knowing that we can be sure we know what we’re doing. Humility is vital to long term survival and health.

So, things like a guaranteed income, the slowing down of the rat race – which Just Knows that more More MORE! is what life is all about –, the steady demotion of money and the careful promotion of real wealth, are in fact sensible, pragmatic proposals, wise R&D investments back into culture we will bitterly regret not risking, should we fail to do so. And while we suffer the nightmare of Money=Wealth, and insist on using this terrible equation as sole determinant of all society should value, we continue to impoverish ourselves in pursuit of a ballooning vapour-wealth which is destined to vanish anyway.

The State Can Wait

Food production forces property relations on the species, because it is based on resource utilization of longer duration than human lifespans, while simultaneously providing advantage to larger local property-owning groups. In evolutionary terms these bedrock correlates of food production are a constant basis for inequality within and between polities. Unequal access to resources is therefore an unalterable and inevitable accompaniment of mankind’s adaptation to food production, especially agriculture.
Ronald Cohen

There seems to be no objection to the view that one of the characteristics of the state—and perhaps the most important one—is the existence of classes.

Henri Claessen and Peter Skalnik

The state can wait. Never were truer words spoken. Yet never were those true words more conditional than now.

The state is very old. We can trace its ancestry over perhaps five millennia, though its current national form (western version) is a mere baby, clocking in at around one hundred years old (depending on whom you ask). The ‘well-trained’ (indoctrinated) modern western mind reflexively thinks of The State (in contradistinction to “the state” of this article) in terms of taxation, welfare and democracy, but these are merely its latest fashion accessories and have altered next to nothing of its core extractive dynamic (more on which below). The state has only recently been able to afford these Luxuries of the People thanks to two things; cheap oil and modern technology. As cheap oil dwindles, and as Economic Growth and debt-money evaporate in front of our media’s mostly blinkered eyes, so the ‘real’ state increasingly reveals its spots. First casualties of this latest financial debacle are, or course, democracy, education and health care, peripheral elements. Protected at all costs are the core elements; money-system control, debt obligations to the owners of capital, and state force (armies and police). In other words, the tools that sustain elitism.

(By the way, when I say “the state”, I refer to that dynamic concealed behind the infamous The State vs. The Market Show most left/right wing loyalists and ideologues get so hot and bothered about. I think of that dynamic as elitist exploitation of the majority, as hinted at above.)

The state can wait, yes indeed. It controls both money and force and has exquisite propaganda and monitoring technologies at its disposal. It has guaranteed our meek conformity through its money and mind-numbing education systems, alongside a few carefully nurtured legacy religious platitudes (work before pleasure, work is not fun). It is prepared to torture and kill, lie, cheat and steal to stay alive and kicking. It will take your property from you, impoverish and imprison you, rob you and throw you in jail for the crime of being robbed, and keep on doing so for as long as it takes. 

The state can wait. While we protest and chat, bicker and squabble, strike, foment and pontificate, the state just waits. It knows full well hippies become dentists, radicals die off, that fringe thinkers are ignored. The state grinds on.

But it cannot be forever. The state is mortal, is subject to change, just as is the sun. 

Firstly, dearest ladies and gentlemen, we are it. We daily co-create the state through our interwoven interbeing. State arises from us like heat from fire. It is made of us, we of it. We are the state prisons of our minds. Therefore, when we change, so too must the state, but the change must be profound and broad indeed for the state’s fundamental elitist dynamic to change. This simple truth is both a liberating and bitterly sobering reality, for until we want deep change and know how to effect it, we cannot help but perpetuate the very dynamic which is killing us.

And besides the state’s all-too-human fabric and its subjectivity to change, there are the not inconsiderable matters of the perverse fantasy of Perpetual Growth, and the game-changing issue of technological unemployment. The state cannot wisely and humanely deal with these because it is (we are) too elitist, too hierarchical to react intelligently, wisely. This rigid hierarchical structure means state needs (we need), by definition, a large pool of poorly paid grunts to exploit, to ride atop, to do better than, to donate clothes to, to rape, belittle and abuse over time. And the inverse; leaders to look up to, to be guided and instructed by. From rigid, class-based elitism only this structure, this dynamic can emerge. A fundamentally elitist dynamic can give rise to society of no other shape.

And we have to Grow, forever transform ‘idle’ resources into all important Money and Jobs, more and more, faster and faster! The entire universe is a mere sector of the economy, it says so in state-sanctioned economics text books. Only now there are too few idle resources to exploit, and there appears to be no new economic domain left to expand into. We are learning (state is learning) resources are not truly idle, that forests do useful things like provide oxygen and process our waste, that fish feed us, that soil fertility must be protected and nourished, and so on.

And do we (The People, the state) truly want absolutely everything we do to be governed by the economic domain, by market forces? Absolutely everything? If economic growth is not allowed to stop, will we one day pay cash for every breath we take? Every friend we make? Our very biology makes wanting this bizarre outcome impossible, ladies and gentlemen, for, more than we need iPods and sneakers, we need friendship, trust, community, love and respect to be real. Paid for, they can only be cheap imitations of their real selves. Seen from this perspective, we see that money impoverishes. Economics must be released from modern money’s grip, challenged to rethink it.

So let’s step back a little and look at how we got here, short form. It all ‘starts’ before the state, which means before the beginnings of the institutionalised hierarchical management of society and economic production. Following Charles Eisenstein’s analysis (which I find very sound), humans got the hierarchical ball rolling by acting on the idea of causing to grow in their preferred local vicinity the fruit and veg they liked, and domesticating animals most useful to them (a.k.a. farming). This sets up the ‘controlled’ home domain which must then be protected from the ravages of the ‘wild’. It brings into being the data and technology needed to begin to perceive ourselves as ‘masters of nature’, to control variables, to encourage the wanted and discourage the unwanted (progress). This is the ‘origin’ of the split of Universe into clearly demarcated Good and Evil, Us and Them domains. From this co-created situation, the fiercely egalitarian mode of the hunter gatherer steadily diminishes in efficacy. Instead of storing our meat in the bellies of our brothers (sharing), we hoard (in ‘defiance’ of nature’s rhythms) in clay pots, barns, salt, store rooms, fridges, made by our own hand or purchased with money we earned. Instead of being jacks-of-all-trades, specialisation starts to make more sense, and out of this new soil, this new social weave, enabled and freed up by the new circumstances, alpha-male types now find lasting purchase and become chieftains, fighter-types become specialised soldiers dependent on the chief for their special positions. That is, where before too egotistical an attitude could get you killed for putting yourself before the group, it is now a ticket to ‘riches’ in the new social arrangement. Animist ‘superstition’ becomes religion, religion becomes specialised, produces its own hierarchies of priestly classes, which join forces with the military hierarchies, and thus emerges the early state.

What earlier was unquestioning faith in nature’s bounty (and capriciousness, to stretch the metaphor to breaking), morphs into ‘state’ manipulated dogma which must be adhered to. The pyramidal structure stratifies into classes, with power and control increasingly concentrated to the upper class, the elite. The state takes centuries to find its feet, but its groping experimentation is always about improving control and effectively controlling needed expansion, since ‘out there’ are weird enemies who will kill us and take our stuff if we don’t get them first. And because population control is not something humans do willingly, and because the founding paradigm is increasingly competent technological ‘mastery’ of nature, as population grows, so the expanse of the state’s domain must grow to please that population, keep them healthy enough to provide the soldiers, farmers, scientists and artists the elite exploit in the name of the state. Hence wars of conquest and expansion. Hence perpetual growth as a necessary function, an inescapable emergent property of the dynamic of ‘mastering nature’ via farming and property as they give rise to specialisation and state.

The money system currently dominant across the planet is a growth-backed money system, which is hardly surprising given the above analysis, since it serves the state’s dynamic so neatly. To create money ‘from nothing’ as an interest bearing loan (P < P+I – or, Principle is less than Principle+Interest) is to set up the dynamic of a Ponzi scheme, a money-growth whirlwind which collapses if it is not growing. When there are too few people willing to co-create new money (with the banks) by going into debt, which new money can then pay off the interest owed on existing debts after filtering through the economy as wages and purchasing power, then the ongoing repayment of old debts becomes the too-quick shrinking of the money supply. If not checked, this initiates a positive feedback loop of fear and hoarding, fearful sentiment spreads and the problem gets worse, as taking on debt (money creation) is taking on risk. Debt-repayment is money destruction, as it is designed to be: the loaned principle is fully expunged upon repayment, and only the interest ‘earned’ by the lender remains in circulation. Thus only a small fraction of the loaned (created) money remains, i.e., a shrinking money supply. So when no one is borrowing in an interest-bearing debt-money system, the economy stops functioning as the (credit) money supply starts shrinking. Economic growth is thus the very air of our money system, its gold. If it is not growing, it is collapsing.

But we have to grow. We don’t want to die. We don’t want to decay. We want to win, control all variables, stay forever young, do more and more faster and faster, never grow old, never give in, never surrender. So we want the state. We are the state. We fear loss of control, are now stiff with fear, pyramids of calcified fear unable to let go and accept our mortality. In our paralysis we can imagine no other way; growth or death.

The state cannot wait. It has to grow and grow and grow, it may not sit idly and enjoy the view…

But into which new space can it grow, what energy and resources should it manufacture into More State, and inspired by what vision? What is your vision of a happy/healthy/good-enough life? Bigger Better Faster 4Ever? Or something less frantic? What would your answer have been ten years ago?

The state can envision only increasing control and expansion, since that is its core operating dynamic. It fears loss of control, fears anarchy (its shadow-self), fears ‘the wild’, demonises weeds, sloth, the ‘unearned’ and ‘simple’ pleasure of just being. Were it possible for the state project to ‘succeed’ as it envisages, it would produce the nightmare of an even more atomised society in which each atom-citizen can take no step, draw no breath, make no friend without first filling out a form and then parting with money for the privilege of living. Dystopia is State-Money-Economics everywhere, as far as the eye can see.  Cynicism, suspicion, and fear fill every heart.

If the wasteland of total state victory I sketch, if the prospect of fascism or some other dread dictatorship crushes your hope, this is proof of the state’s necessary transformation, since you and I are the state. It is proof we the state want change, deep and broad. The right questions will put us on our preferred path, the right perspective of what we are and what makes us healthy will generate change. The right questions will reveal to us the possible imminence of a new way forward, a new way of (inter)being society, of co-creating a sustainable domain as a dynamic and emergent partnership between all social and environmental forces (which must include friction for there to be creation, but more sensibly and maturely than our current state of affairs).

That said, I ought to point out that some remnant of the state will always be with us, some set of institutions and mechanisms for managing the commons, though we might choose to call that Democracy or something else when the time comes. However, in some fashion, state-like apparatuses will always exist. Just as there is nothing ‘wrong’ with anarchy, so there is nothing ‘wrong’ with hierarchy. New perspectives of each are emerging simply because change is the only constant, but the global paradigm change currently being born through us is unprecedentedly difficult and will be very rocky indeed. So I would say we are going through the pain of birthing some new hybrid, not a return to some romantically imagined idyll. It will help to remember that our only enemy is our very human tendency not to see when we are projecting unresolved internal immaturities ‘out’ onto ‘alien’ others (onto the ‘elite’ for example).

So, because you despair and fear state dystopia, there is hope. Darkness engenders light engenders dark. Horribly, many are suffering and can see no way out. Horribly, there is much tragedy and destruction to come. Because we are the state, we think in state terms, imagine in its language and imagery, are afraid of the dark spaces we do not quite know how to light up (e.g. anarchy and direct democracy, peer-to-peer networks, flat power distribution, local currencies, the ‘poverty’ of steady-state and de-growth economics), so must be awoken and driven to new creativity and experimentation by deep shock. That shock is happening now, rapidly in historical terms, though in modern media terms almost imperceptibly, in that the state/money system itself is not questioned, and radical ideas are given no space in its outlets (though even this is changing, as we change and want to learn). The state is/we are in fact unravelling very rapidly, and newly rich soil is being created by that ‘decay’. From it we will emerge into and become The New.

'Financing' Guaranteed Income

Fixed-field grain agriculture has been promoted by the state and has been, historically, the foundation of its power. In turn, sedentary agriculture leads to property rights in land, the patriarchal family enterprise, and an emphasis, also encouraged by the state, on large families. Grain farming is, in this respect, inherently expansionary, generating, when not checked by disease or famine, a surplus population, which is obliged to move and colonize new lands. By any long-run perspective, then, it is grain agriculture that is “nomadic” and aggressive, constantly reproducing copies of itself, while, as Hugh Brody notes, foragers and hunters, relying on a single area and demographically far more stable, seem by comparison “profoundly settled."
James C Scott

My last three (full) posts looked closely at Ralph Boes’ efforts in the twinned battlefields of Hartz IV (unemployment benefit in Germany) and guaranteed income. The third tackled the surprisingly subtle question of what it is to work, concluding there is nothing which is not work. This is a controversial position, since it implies ‘Money For Nothing’ would be a social good, if set up wisely. However, despite my best efforts, mainstream culture appears still to be many leagues from wanting to implement such a system. Resolutely ignoring the mainstream’s resolute refusal to be imaginative, this post looks briefly at how guaranteed income (GI) might be ‘financed’.

As our cultural, ‘spiritual’ and scientific relationships with and understandings of the nature of Universe change at the fringes and begin to penetrate the core, we are simultaneously presented with systemic and resource-related challenges we seem doomed to respond to inappropriately. Our great machinery cannot respond flexibly enough. We necessarily lack the institutional wisdom required to produce ‘solutions’ to these challenges. The wisdom contained in existing institutions and habits of thought is itself generating the breakdown. As R. H. Tawney put it, “Systems prepare their own overthrow by a preliminary period of petrification.” We are stiffening towards collapse.

We face profound and widespread difficulties today because of the seemingly unstoppable, machine-like momentum of our broader system, a system which evolved, as naturally as any other, in response to a set of circumstances which no longer applies. Because of their make-up, our governing institutions, as well as our almost worldwide cultural attitudes to value, dessert, earning and money, are now in open breakdown. They can never again be as helpful or pragmatically constructive as they once were, unless they are revolutionised. Scarcity is a foundational cornerstone of our system, but it is crumbling (not only because of digital technologies); as are our notions of “red in tooth and claw” or “selfish gene” competition; as is dualism in its now creaking manifestations as nature-nurture, mind-body, heaven-earth, good-evil, and so on. Multiple core beliefs are breaking down simultaneously, can no longer provide the solid ground on which a culture can thrive, but are the foundational beliefs of the institutions tasked with guiding civilisation through these stormy seas. And while the mainstream surely accepts Eisntein’s maxim, that a problem cannot be solved with the thinking which created it, it is ‘congenitally’ and constitutionally incapable of radical thinking. Yet it is exactly radical thinking we need to be able to see that GI income is financeable, indeed, that “financeable” isn’t really the right word.

Happily, we also seem compelled to transcend the old wisdom (not completely, but significantly) and fumble forwards towards the slow creation of new systems. But new ideas will of course produce errors and tragedies, new visions will be greeted with suspicion and fear. It must be so, since we will remain profoundly invested on multiple levels in the old for any number of reasons. ‘Twas ever thus. There can be no clean cut either, no Day 1 of the New, no Final Sunset for the old. Life is seamless; the ‘new’ emerges from and is sustained by the soil of the ‘old’. And two opposites are true, depending on your perspective; nothing new under the sun, and, change is the only constant.

A long aside on scarcity before we begin in earnest: Scarcity is not a Bad Thing, just as abundance is not a Good Thing. Different circumstances and attitudes can turn either state of affairs into a disaster or a blessing. What I see happening now is a quickening (and very challenging) switch from supply-side to demand-side scarcity. More exactly, there is a scarcity of attention emerging (which happens to be exposing our immaturity and narcissism, but that’s another topic) in the face of an oceanic over-abundance of digital produce to be consumed (as well as an overabundance of material goods such as houses and cars). Practically speaking, we need each other economically ever less, humanly ever more. We’re very out of practice with the latter, far too reliant on the former.

Money – a technology evolved (in part and in its later history) for dealing with the challenges of supply-side scarcity – has been our master and guide for too long. I assert it is out of date in its current form, and that we don’t yet know how to move on. The problem is that we have been using economic activity to grease society’s wheels for millennia, and it’s a hard habit to break. Economic exchange (market activity) apportions societal value, distributes the scarce fruits of society’s economic efforts. So for a very long time, possessing and earning money (we can think of money as value commoditised) has been our most visible and readily understandable proof of positive economic contribution (value) to society, while money has also been almost the sole embodiment of purchasing power. Money is thus a very powerful and deeply embedded cultural technology, and GI flies in its face.

Nevertheless, two things must hold for money in its current form (commoditized and quantified value possessing purchasing power) to be an on-going social good:

1. The economy must require a sufficient proportion of human labour relative to population for the production of goods and services, such that labour can be the primary mechanism for distributing purchasing power and a sense of self-worth (value); and
2.  Supply-side scarcity, which means demand must predominantly exceed supply over time.

When there’s more than enough stuff to go around, as Consumerism’s grip on cultural imagination fades, when automation becomes so sophisticated there are “lights-out” factories which need no humans at all on the factory floor, as population growth slows and the earth’s carrying capacity is stressed to breaking point by human greed and productive might, and when people look to become writers or painters or photographers or editors or film makers or musicians (what’s left for humans economically are creative pursuits) at a time when the product of these efforts is increasingly digitisable and thus endlessly reproducible at almost no cost, money loses its utility. Not completely – this is a transition period – but sufficiently to produce the crises we see around us. If what producers of stories, songs, film, art etc., need is an audience, and the audience is scarce while the product is abundant, what cannot square that circle of scarcity is money. I don’t see how paying someone to consume your product can work. Attention paid for cannot be satisfying, replenishing, or inspiring; if attention comes with a price tag, it is not genuine. And the math of buying consumers does not suggest a functioning exchange-based economy.

On the one hand, at least we can say it is clear where new growth is coming from! What is not clear is how to build an old-fashioned market around that growth; the growth of the scarcity of meaningful consumers. In the meantime, buying and selling remains essential, hence purchasing power remains a vital quality sellers require of their potential customers. This is of course a perennial problem of capitalism, but This Time It’s Different. This time, the growth area cannot be sufficiently monetized on a waged-labour basis to equip sufficient numbers of people with sufficient purchasing power to keep society together in its current form. Put crudely, we are suffering societal breakdown for want of a new mechanism for furnishing people with sufficient purchasing power.

Hence guaranteed income (“GI”) is essential, not as a silver bullet, not as a permanent solution, not as the introduction of nirvana, but rather for buying us some cultural breathing space, as a period of relatively safe experimentation in which we teach ourselves new relationships with money and value. But, however and wherever GI first emerges, it needs to be financed.

Before I look at numbers, I must point out that when we talk of financing GI, money must come second in our consideration to goods and services. We are not asking if there is enough money (which is in fact a stupid question; it implies you can eat or drink money, or grow food out of it, etc.), we are asking if there are enough goods and services to go around. Money is a mere agreement which happens to have the very demanding job of both measuring and storing value (being both measure and store is impossible; think of meters or grams), while functioning as society’s primary ‘medium’ of exchange (as a commodity, money cannot be a medium, but that’s the topic of other posts). GI necessarily demotes money’s societal importance, moves human dignity to the centre of societal concern where it belongs, and demands a very different state apparatus; a far simpler and more elegant state, should GI be implemented properly. In short, imagining GI working, tossing around possible mechanisms for bringing it to sustained working life, demands we think outside the box. Remember, money is not now, nor can it ever be wealth. The fable of King Midas is a powerful reminder of this simple truth.

Finally, and despite the above paragraph, money remains the key. We need the correct money system and a more mature and relaxed relationship with the utility value of monetary ‘wealth’ for GI to function, to be welcomed, to be wanted. For such a systemic cultural transformation to emerge, we need the right institutions in place, an evolution which further requires the right political (I don’t mean party political) and business will, a well-informed public, a revolution in education, and so on. Again, this is not an easy task, just an extremely important one. 

And that was the longest introduction to a blog post I have ever written.

On now to some scene-setting numbers I’ve drawn from German sources. Germany has around 80,000,000 souls. I’m going to use Götz Werner’s proposed monthly GI amounts of 1,000€ for adults, and 500€ for children (say to 18 yrs). Something like 18,000,000 Germans are under 18, so we have a very rough annual ‘bill’ of 852€bn. To put that into perspective, Wolfgang Schäuble said in a recent interview (German) that the yearly cost of Germany’s many social systems is a little over 1tn€, or over 12,000€ per year per head. Thus, even within today’s money system and money-centric notions of financing and value, there appears to be ‘enough’ money to finance GI. There’s far more subtlety to it than this crude representation allows, but such numbers at least give us a sense of the scale of the monetary task, that GI is not idle fantasy – it is the cultural, I would say visceral objection to ‘Money for Nothing’ which is our main problem, as is our cultural conviction that money is wealth.

The general challenge we explore here, regardless of numbers, is to withdraw sufficient money from the system, smoothly and fairly, then pump it back in without causing inflation, in a dynamic loop. The amount pumped back to each citizen must ensure a decent shot at dignity (dignity cannot be guaranteed), and also enshrine the right to ‘laziness’; the financial security from which to say "No" to poorly paid work in poor working conditions.

The first of the three options we look at is financing GI via one tax, a flat sales tax set at the current equivalent of all taxes in Germany (Götz Werner’s proposed solution). The single sales tax would be close to 50% and inescapable when buying and selling. Gone would be all other taxation.

To most non-Europeans, 50% must seem brutal, but the point is not that the state is too costly or interfering, rather that money itself is not our focus; I repeat, money is not wealth, cannot store value, should not be hoarded at the cost of all else. Dignity in a social system encouraging cooperation and trust is our goal, a focus which should do a far better job of ‘storing’ value than fearfully or greedily hoarding money is supposed to do. An elegantly financed GI would actually mean far less Big Brother, less Nanny State, and encourage (even require) more trust in our fellow human beings. And no more accountants, no tax loopholes, no monolithic and labyrinthine state apparatus no one understands. I suspect also that education and health would become increasingly ‘privatised’, with a renaissance in both towards openness and excellence, away from dogma, subterfuge, and compulsion. This applies generally to all GI models (at least potentially), but I make the point here to emphasise that despite what might appear like an eye-wateringly high sales tax, this is not about growing the state. It would shrink the state and demote money. Those two processes go hand in hand.

A GI income would grow into, not on top of existing salary levels. For those earning less than 1,000€/month, new deals would have to be drawn up, better working conditions offered, fewer hours, etc. For those earning more, their employer would be paying them 1,000€ less a month, but their overall income would remain the same. Some will be tempted to other careers, or to a period of re-education, and thereby open up their positions to others. I suspect such jostling and settling in would initiate a revolution in employment law, employment contracts, working conditions, office politics, hierarchical structures, the way freelancing works, etc. And the base security GI provides would revolutionise insurance, particularly health insurance and pensions. This would likely take a lot of the charisma out of the stock markets too!

‘Financing’ GI through a flat sales tax has one distinct advantage; it would require no adjustments to the money system. This advantage is why I don’t support it. I fear GI financed this way would fail (it relies on economic activity for its funding and does not cure us of our systemic addiction to growth), and thus risk jeopardising the deeper reforms society so dearly needs. On the other hand, this solution presents less change for the public to swallow in one mouthful, and that is not something to dismiss lightly. If there were to be a multiphase easing into The New along a path of successive and interrelated reforms, this first proposal might be the way to get the ball rolling, gently introduce the mainstream to the radical new. Implemented in isolation, without any concrete action taken in other critical areas, I fear this could do more harm than good.

The second financing option is via negative interest. Conceptually, negative interest is not as offensive a proposal as its moniker at first suggests. Because we all Just Know money should grow, should ‘work’ for us, should not lie idle, the idea of it shrinking by design, see it rotting like so many uneaten apples, seems like theft. Money offers us security against all sorts of things; apples rotting in a bowl do not. If money rots, what is there that can ensure the security we reflexively hunger for? Well, nothing (property, land and other ‘stores’ of value would have to be taxed or rented to individuals from the commons, since they come from the commons and cannot rightly belong to an individual  – a topic for other posts). But so what? There never has been certain security, only the short term illusion of it, brought about (in recent decades) by cheap energy, massive improvements in hygiene and our ballooning productive might. Far better than money (other things properly in place) at helping to deliver security are: healthy soil well-tended and treated, clean air, clean water, and a society in which trust can thrive. It is likely negative interest money would encourage us to invest in such things, help shift our focus from the false security of money and private property, to the truer security of investing in nourishing and maintaining those networked systems we emerge from and are sustained by.

Imagine negative interest as a constant shrinkage of the money supply. GI is then that shrinkage pumped back in. Money out (negative interest), money in (guaranteed income); the economy as lungs breathing automatically. Financed thus, it is not a sales tax dependent on economic activity which keeps the system working, but the functioning of the money system itself. The GI amount pumped back in would likely be half as much as in the flat sales tax proposal, but this is not a problem. Rico Albrecht of Wissensmanufaktur and co-architect of Plan B has calculated that the amount of money transferred yearly in Germany as a direct consequence of interest is 450€bn; a little more than half the amount mentioned above.  But goods and services would be roughly half as expensive, since usury is a hidden tax in all prices which would disappear in a negative interest money system. There would also be no sales tax, and no income tax, and this would deflate prices too. Only things like environmentally damaging activity and private property need be taxed, and this ‘income’ would be added to the GI pot.

I’ve favoured the negative interest solution for some time now, but am beginning to see flaws in it. The first is credit creation, and funding small and large scale business ideas. We don’t want to have a system which stifles the entrepreneurial spirit, so need market suppleness at the local and international level. In “Sacred Economics”, Charles Eisenstein, a keen proponent of negative interest, suggests commercial banks would loan out (and thus create new) money as they do now, only at e.g. -1% or 0% interest, with the base rate at something like -5%. The differential generates their profits. However, wouldn’t this create the exact same systemic addiction to growth we have now? For it is the difference between the amount owed and the amount available which generates the systemic shortage in the money supply, not the + or – sign in front of the interest rate. If banks accrue interest-based profits by extending credit-money more expensive than non-credit money, we have the growth problem, the rat race, the game of musical chairs, all over again, since the amount of debt owed is necessarily more than the amount of money in existence (P < P+I). But, having institutions or businesses with wisdom in the area of funding new ideas is an important societal function we ought not to lose. If we have negative interest money and wanted to enable a steady-state economy, we would need a credit-extension mechanism in which banks could not create new money for interest-based profit. I will not make any detailed suggestions here (this post is already too long), but simply leave this issue out there. 100% reserve banking is one idea that could be coupled with negative interest, or some variant of Islamic banking. The ideas are there, I’m just not sure which would be best.

The third and last financing option we look at is that proposed by Franz Hörmann. Hörmann’s is the most revolutionary, and thus the idea least likely to meet with a sympathetic mainstream ear. This does not bother him, however, since he is now investing his energies in building on-the-ground social networks capable of introducing the required changes without the permission of the state or major corporations. If he gets his (and his compatriots’) ideas up and running, the proof will be in the pudding, so to speak, and people can join in as they choose, iron out the kinks, and generally get the ball rolling. Democracy in action.

As background to Hörmann’s proposal, I should point out that he envisions separate monetary circuits for each distinct economic process, i.e. raw material extraction would require its own accountancy records, processing and production its own, then retail, then GI, and perhaps others depending on what works best. Hörmann also proposes money creation by individuals directly for the purposes of buying and selling services (a little like time dollars or LETS), but this as a separate and supplemental monetary circuit to GI and the others.

In Hörmann’s proposal, GI would flow from a democratic and fully transparent ‘central bank’ directly to people’s ‘accounts’ (uniquely identified ‘repositories’ which stay with people from birth to death), whereupon the ‘money’ subsequently used to buy basics such as food, clothes, local travel etc., returns directly to the ‘central bank’ whence it came, and promptly disappears. ‘Money’ earned by those working some number of hours to provide services (such as selling food or clothing or local transport) is generated on top of the GI and likewise issues from the ‘central bank’ whither it returns once spent, again to disappear. No interest rates, no debt to be repaid, no storing of value; money becomes a pure function, a temporary voucher created automatically for enabling economic transactions, and cannot itself be a commodity anyone can profit from. What such a system would foster, inescapably, is a totally new relationship with money and value. Services would become the focus of human-to-human economic exchange, not property and commodity ownership and profiting therefrom, and could be conducted in an almost endless variety of ways, with all sorts of money-types enabling all sorts of economic activity as required, or people could do things for each other 'for free', as mood and desire determined.

Common to the latter two proposals is the demotion of money as a store of value. I see this as essential to a new money system, and hope our reflexive need to protect ourselves from the vagaries of life with non-rotting, perpetually growing money can be transcended. For it is decay cooperating with growth which generates cycles which enable life and therefore wealth. Without sufficiently deep and integral decay and recycling woven into the fabric of our money system, we have a cancerous situation tending powerfully to gross imbalances over time, which then cause unnecessarily violent re-balancing upheavals. The current system of credit-creation at interest does include the destruction of money, as does the issuance of government debt, does include economic cycles (though the systemic emphasis is absolutely on perpetual growth), but cannot be as robust or adaptive as now required to avoid catastrophe this century. While money strains but must fail to be both measure and store of value, falsely claims to be a medium of exchange while also being a commodity which can self-multiply ‘magically’ to produce ever-expanding ‘wealth’ for those possessing enough of it, it cannot support and foster a society with human dignity and environmental concern as its focus.

In conclusion, I turn to the quote which opens this post. I suspect many will not have discerned its relevance. It is this: the state is a growth machine whose core dynamic is the exploitation of the ruled in favour of the rulers. Its cultural momentum, its myth-based sense of itself (e.g. as golden vessel of the glorious arc of human progress) infuses everything we state-citizens do, from economics to religion to science to parenthood etc. GI and the required attendant changes to the money system end the state project in its current form. This does not mean the end of hierarchy and the joyous rebirth of egalitarianism or anarchy, but rather, in my opinion, a new fusion of the two, with an emphasis on the latter due to the open nature of information access and the demotion of money as a store of wealth. Money storing wealth cements hierarchical class divisions in place, enables dynasties, corporations in their current form, and all other multigenerational transmissions of power. Putting an end to that puts an end to the state. But my position is not that ‘primitivism’ is better (or worse) than 'cultured' civilisation, but that new circumstances demand adaption, that today’s circumstances are pushing us, perhaps inexorably, towards open society, open money, open education, a far broader distribution of power and wealth than before, as well as a new sense of what wealth is and what generates it. The state – either as a living system or self-sustaining dynamic – must resist the changes I believe are unstoppable. Resisting as mightily as the state can, it causes much destruction and suffering. As a direct consequence of this, we are living through very difficult and precarious times, so I close with one of my favourite Charles Eisenstein quotes:

The more beautiful world our heart tells us is possible is inevitable. It is going to happen. 100% sure. And it will only happen through the exertion of our full efforts and the application of all of our gifts. If you don’t apply all of your gifts to this, then it’s not going to happen. Yet it is inevitable that it will happen.