The Great Reset – what is it, really? | By Ernst Wolff

Over the last six months, the world has undergone historical changes. For the first time in its history, the global economy has been intentionally brought to an almost total standstill, an act whose consequences will soon surpass anything humanity has experienced in peace time.

But this appears to be just the beginning. Signs are gathering that what we now face is not a course correction; rather, we will see this course continue and even intensify. The alliance established half a year ago between scientists, media and politicians that brought about the lockdown is currently using every conceivable opportunity to create the pandemic’s “second wave” – even though the first never attained the horrors predicted but kept well within the territory of previous influenza pandemics.

Because we have not once, even in the case of previous far more dangerous outbreaks, come close to initiating such comprehensive measures to control a disease as we have for Covid19, it is hard not to suspect that behind the apparent concerns about the public’s health lie quite different motives.

Indeed, there is a large amount of data, facts and developments that not only support this supposition, but make it seem extremely probable. You could express it with a single phrase: “The Great Reset”. It certainly seems the world’s financial and political elites see it as necessary. Their lead representatives are to gather under this phrase in Davos at the World Economic Forum (WEF) in January 2021, having declared The Great Reset the theme for the coming times.

And it’s true – an all-encompassing reset is due for two reasons: the first is that the global financial sector is no longer fit for purpose in its current form, the second is a global economy teetering on the brink of the greatest collapse in its history.

These are the details:

The global financial system has been kept alive artificially by central banks since the financial crisis of 2007/08 by the continual lowering of interest rates and money creation ex nihilo.

The first lever is now more or less exhausted in that interest rates have reached zero almost everywhere. Further reductions into negative-interest territory would turn the money-lending business into a money-losing business and the banking sector would collapse from within.

The central banks are thus forced to reach for the second lever: money creation. But this has further inflated already gigantic financial-market bubbles through the trillions created so far during the corona crisis. Continuing with this lever risks destroying the purchasing power of the planet’s major currencies.

Because there is no other lever the central banks can use to keep the system alive means the present money system now finds itself in its final days.

The real economy looks to be facing even more drastic challenges. It is currently experiencing the greatest upheaval in human history at the hands of the digital revolution.

The use of artificial intelligence and robots to replace human labour will have far greater consequences than did the industrial revolution 250 years ago. Corporations and state-owned enterprises will make enormous numbers of people redundant through digitalisation. Products of every type – from replacement teeth to electric cars to finished houses – can already be printed anywhere in the world from a 3-D printer. Huge numbers of factories are therefore going to close, and road, sea and air logistics will become superfluous to a large extent. On top of that, home-office and home schooling will be part of the new normal, as will telemedicine and cryptocurrencies. 

These developments will destroy hundreds of millions of jobs worldwide and with them the means of existence for an equally large number of people. This in turn brings grave consequences in its wake because these people will no longer be able to buy goods and services – the fuel of any trade-based economy – nor will they be tax payers.

Because the previous money system was based on value creation through human labour, artificial intelligence and robot automation take the ground out from under it. But instead of disassembling the current money system – made redundant by these recent developments – and erecting a new one in its place, those who benefit most from the present system are doing everything  they can to keep it working to their benefit.

But this ambition confronts them with a very difficult problem: a gradual transformation of extant society into the “new normal” would meet with growing resistance from within the population, very likely to social unrest and possibly popular uprisings and even civil war. The elites therefore have to come up with a different strategy, which is exactly what they have been doing, with great dedication, for the last few years. The result of their efforts is captured in the coming WEF summit’s title: “The Great Reset”.

This reset is nothing other than a form of shock therapy; the changes will be rolled out at high speed, not gradually. And to this end, the elites have obviously found a perfect partner: the new corona virus.

They have used it to create a scape goat they will blame for everything – from the lockdown and its massive layoffs to the forced wearing of masks, closed borders and the steady disappearance of cash. Officially, then, it is not elite selfishness that has brought about the changes and restrictions, it is their concern for the wellbeing of the people – an absurd reversal of the facts that is currently accepted by a majority.

What does all this mean for our future?

Because up to now only a part of the changes has been implemented and we therefore find ourselves in the initial phase of the Great Reset, it is almost certain that further intensification of the measures enacted thus far awaits us. And this is exactly the role to be played by the second wave in stoking fear and panic. If this proves insufficient, state-appointed virologists will wheel out other threats, such as the recent outbreak of bubonic plague in China.

That large companies are being used to conjure up infection “hotspots” and different smaller, regional locations are being ordered into lockdown should not be seen as happenstance. These measures, as well as capturing biometric data from people, serve the targeted monitoring of potential trouble spots and will play a very significant role in the coming phase in terms of sustaining state regulations.

This development will be accompanied by an ideological campaign whose building blocks can be marvelled at on the WEF homepage, and elsewhere. Factory closures and the collapse of the logistics sector will be sold to us as “climate protection” due to the reduction in emissions. The helicopter money required by the millions of unemployed, which will serve purely and simply to stimulate demand, will be sold to the public as an “unconditional basic income”. And the digitisation of the middle classes will be idealised as the path to a more just future, even though the process will be nothing other than the subjugation of medium-sized businesses to internet platforms whose market power is already reaching the immeasurable.

All of this sounds extremely depressing and demonstrates that the financial elite – roughly 0.001 percent of the world population – is engaged in a process of leading the rest of humanity into a sort of digital dictatorship. Particularly depressing is that the vast majority of humanity has not yet begun to resist.

But this may well change profoundly in coming weeks and months. The effects of the lockdown and other measures to flatten the second wave will wreak such monstrous social and economic damage, that many of those untouched so far will increasingly find themselves in opposition to the system through their own experiences.

Precisely this conflict, which will impact millions of people, should be seen by us all as a positive challenge; it offers a unique opportunity to explain to a great number of the uninformed that the Great Reset is nothing other than an attempt to perpetuate a system that history wants to move beyond. Perpetuating it serves only a tiny minority while leading the majority into a future resembling a digital prison in which an individual’s personal development is determined by algorithms, in which social life is monitored and controlled, and democratic freedoms will only be granted insofar as they do not get in the way of high-powered computers.

[Original article here]

Guaranteed Income, or Something Else?

This and my next few posts are going to be somewhat news-houndy. I’m going to select a few ‘mainstream’ articles and highlight what I see as deficient in their reasoning. In a few weeks’ time, subsequent posts will lay out what I believe to be the best alternative to the current money system, an idea – Infomoney – that would require and encourage sufficiently deep change. Absent a sufficiently deep, broad and loving – not fearful – revolution, things will continue to slip away towards the abyss, no matter how well-meaning any particular proposal that only tweaks the status quo.

In a recent post, Yves Smith of Naked Capitalism analyses what she calls a past guaranteed income scheme that failed horribly: the Speenhamland System of the late 18^th and early 19^th centuries. I had not heard of the scheme, so was interested to read about it. The point of her article is to dissuade readers from supporting the guaranteed income idea, and promote her preferred alternative, a job guarantee programme. This post is my response to her analysis.

It is also intriguing that this historical precedent is likely to resemble a contemporary version of a basic income guarantee. Even though some readers call for a stipend to everyone, that simply is not going to happen, at least in terms of net results. It is massively inflationary, since most of it would fuel consumption.

This is a pragmatic argument, at least on the surface. All we can realistically expect, Yves Smith reasons, is some watered-down “version” of a guaranteed income, which is what Speenhamland was. In other words, not a guaranteed income worthy of the name, but a tweaked welfare scheme that favours existing power structures and vested interests. The powers that be are, after all, very powerful, and will only allow to come to fruition that which serves their interests. Therefore, a guaranteed income scheme worthy of the idea “simply is not going to happen”. Further, the more genuine the guaranteed income, the more it will fuel consumption and thus spur on environmental damage, and nobody wants that.

This is a fair argument if we don’t think outside the box and if we want to accept things are more-or-less fine as they are (as the elite would have us believe). But the faux pragmatism on display above sidesteps what I see as the whole raison d’être of a guaranteed income, which I expand on below. Basically, this opening gambit renders the rest of her critique superfluous. By its logic, there can be no guaranteed income realistically speaking, so don’t want one. Why there can’t be is not addressed in any detail, so we have to take it on faith. My sense is that Yves Smith believes the money system can’t accommodate it. For example, “Taxes would therefore need to be increased to offset those [inflationary] effects.” The strong implication is that this “is not going to happen” either.

Indeed, taxes would have to be increased to ‘fund’ any basic income guarantee worth its salt, particularly if we don’t revolutionise other key institutions like the money system, Big Government, property law, education, agriculture, etc. Anything less will be an insufficiently deep revolution – if a revolution at all – and would fail to introduce and sustain steady-state economics, a vitally needed change if we are to end our systemic addiction to perpetual economic growth. Perpetual economic growth is in my opinion the most pragmatic consideration we face, far more so than (apparently) having to accept the money system as it currently stands. Such argumentation betrays real wishful thinking: the money system is the main driver of perpetual growth (more below), an impossibility on a finite planet.

The justices of Berkshire decided to offer income support to supplement wages, with the amount set in relation to the price of bread and the number of children in the household, so that the destitute would have a minimum income no matter what they earned.

Speenhamland was a means-tested supplement to wages and was about preventing outright destitution and starvation. It was not about freeing people to contribute to society from their passions, nor was it about dissolving class divisions based on money-wealth. The article is thus comparing apples and oranges while insisting a genuine guaranteed income ain’t gonna happen anyway. A guaranteed income would be guaranteed, or unconditional, and would enable all its recipients to refuse shitty jobs. Arguing that something Speenhamland-like is all we can expect is, in essence, a strawman argument. It is also defeatist in that it echoes elitist TINA reasoning, thus (unwittingly?) arguing for the very system Yves Smith purports to challenge at her blog. Indeed, the whiff of elitism is detectable throughout the article, e.g.:

People need a sense of purpose and social engagement. Employment provides that. [... snip …] Too many of the fantasies about a basic income guarantee seem to revolve around a tiny minority, like the individual who will write a great novel on his stipend. Let’s be real: the overwhelming majority of people who think they might like to write a book don’t have the self-discipline to do so in the absence of external pressure.

Note the judgmental language rooted in elitist ideas about value. Is the insufficient self-discipline alluded to a result of ‘human nature’ and thus insoluble? Are humans ‘lazy by nature’ after all? Yves Smith appears to be propagating an elitist point of view here, siding with Hobbes’ observation that nothing gets done unless the Iron Hand of Big Government or The State is there to threaten the masses to coordinated action. Implied in this argument too is that the only value (a vital word in all of this) in e.g. writing a novel lies in its greatness. Does this mean that we should prevent people from writing unless they produce a Great Work? And who judges greatness? Those academic experts who Know What They’re Talking About? This rhetoric applies to all forms of artistic expression of course. And what of more ‘lowly’ ambitions like learning languages, gardening, permaculture, musical instruments, dancing, etc.? Is all of that a waste of everybody’s time unless ‘greatness’ is produced, or widgets for sale? And are the current delusions of grandeur of a “tiny minority” really an argument against guaranteed income? Surely they are the result of a broadly defunct social system, the very system Naked Capitalism purports to challenge and expose.

Not only “employment” provides a sense of purpose (I’d say employment-as-job distracts from the deep and abiding absence of purpose most strive to ignore until retirement finally exposes it). Passionate interest provides a robust sense of purpose when it emerges from our inner being, and also gives rise to heartfelt social engagement as a calling. To get people in touch with their passions, their loves, to foster durable confidence in them and thus in their calling, we need a deep revolution in education, in city design, in distribution systems, in government, etc. Basically, any sufficiently radical change in one area requires correspondingly radical change everywhere else. Hence a guaranteed income scheme worthy of the idea can only work alongside other fundamental changes. Plopping a scheme of whatever shade onto society as it currently stands will not work, just as Speenhamland did not.

Yves Smith argues for a job guarantee. I’m wary of this idea because I’m wary of the centralised decision making it would require. Further, I could (disingenuously) argue that we tried a job guaranteed programme already. It was called state communism and didn’t work out. Modern proponents of a job guarantee argue that local government would decide what jobs are created based on local needs (a good thing), but where would their budget come from? I assume central government combined with local taxes (a bad thing), otherwise there’d be autonomous local money systems, something I don’t see proposed. If it’s the money system that is doing the ultimate affording, decision making about state-funded jobs will be centralised to a significant degree.

Also, absent other changes, a job guarantee would increase consumption and perpetuate economic growth, as Yves Smith argues of ‘guaranteed income’. In other words, whatever change we introduce, be it a new welfare system or a job guarantee programme or guaranteed income, unless we also end our addiction to perpetual growth we’ll just be rearranging deck chairs on the titanic. Indeed, we’ll probably accelerate towards the iceberg if all we do is give more people more spending power. As William Ophuls argues in Immoderate Greatness, “As a process, civilization resembles a long-running economic bubble. Civilizations convert found or conquered ecological wealth into economic wealth and population growth.” I fail to see how this core, destructive civilizational pattern can be ended unless the money system is revolutionized (alongside other changes). The best alternative I have seen is Franz Hörmann’s Infomoney, and I’ll be laying it out here at Econosophy in a few weeks’ time.

In conclusion, the arguments levelled by Naked Capitalism at guaranteed income (or some roughly similar scheme) can be levelled at all similar proposals. My point here is that there is no silver bullet. The deep driver of perpetual growth – the elephant in the room that Yves Smith, to give her her due, is prepared to address from time to time – is the underlying money system as the expression or sustainer of the state (civilization) project. If money continues to be created as interest-bearing debt that is extinguished from the economy upon repayment (debt-money must thus be continually issued to ensure a sufficient supply into the economy, exponentially more than was initially created to cover interest owed and prevent deflation); if, further, money and money equivalents are viewed at the cultural level as wealth and stores of value that earn interest (grow exponentially); if, in sum, being money-rich is better than being money-poor as a defining property of the system, then we have a system that cannot help but require perpetual economic growth if it is not to collapse. Changing this system fundamentally such that it no longer drives growth requires correspondingly fundamental changes to private property (which undergirds the money system in the form of collateral), to the state itself (which protects private property) and by extension to state institutions like education, law and the market (what is market without private property). Calling for such radical change is only unrealistic and thus pointless if infinite growth is possible on a finite planet.

A guaranteed income fits well into the radical changes I touch on above. It trusts people to make the best choices regarding how they, as individuals, keep society going (we need love-based not fear-based solutions, i.e. people are lazy and have to be controlled or everything will just rot). It would help demote money from its current too-lofty position as primary indicator of social rank, and help shift focus to actual accomplishments that would be valued in more nuanced and humane ways. As such, guaranteed income marries up well with the Demote money, promote wealth direction that, in my opinion, resource-based economics would be. Until we are able to establish cultural institutions, myths, and systems that have as their focus ecological and human health, we will likely allow ourselves to be guided by abstractions thereof, which historically have had to do with simplistic numerical measurements (e.g. GDP, price) of subjective but central concepts like value and wealth. These deep social concepts are pivotal issues in this broad debate, for we cannot be guided by mere numbers towards the richly nuanced and healthy relationships with Self and Other a humane and sustainable future surely requires.

On Productivity

This post is of course tightly linked with work (and wages as reward/payment for productive work), but warrants its own entry in Econosophy’s annals, such as they are.

One of the thought-avenues that has been catching my attention of late is productivity. I’ve explored work’s two apparently separate domains – economic and non-economic as we currently envision them – but my explorations remain incomplete without a similar exploration of productivity. When I draw the distinction between economic and non-economic, the word ‘productive’ is loud and bright in my mind. It’s a positive word; it’s a Good Thing to be productive. Non-productive work is a Waste of Time. From this (protestant) vantage, we can despair of the non-productive, lazy South. We can say “Work before pleasure” and mean the former is productive while the latter is not. We can split work and pleasure and not think twice about it. We can feel guilty for being paid to do something we enjoy. None of this represents profound insight on my part, but the negative effects of this antiquated mind-set are now rising to the cultural surface, even in Germany.

I strongly suspect this love affair with productivity is a primary emergent property or network effect of Eisensteinian Ascent: ever-increasing ‘control’ of Enemy Nature in pursuit of Progress. Productivity and Progress can be thought of as the twinned offspring of Adam and Eve’s mythical ejection from Eden. We could even say rewards. Once we were naked savages rutting, burping and lazing our way through subsistence existence, now we have progressed to civilised productivity. Behold! Skyscrapers, streets, automobiles, cities and electric light, conjured into existence by State-Money-Market, now reign where once idle jungle and ocean blindly recycled stuff for no apparent reason.

From this self-aggrandising perspective it is easy to believe that cleaning your own house is not as productive as being paid to clean someone else’s. Staying at home to raise your kids is not as productive as being paid to raise someone else’s. In short, work is productive if and only if its product causes money to change hands. (I exaggerate, but only a little.)

Why are money and productivity now so inextricably intertwined? Perhaps because the work that produces the stuff that characterises civilisation is mostly unpleasant. Its unpleasantness is a consequence of its machine-like anonymity, and must thus be explicitly rewarded. Perhaps, too, because waged work replaces the land as the soil from which the stuff of survival, money, grows. Obviously it is a mix of these and other factors. I happen to believe that capitalism is largely responsible for this process, is this process, though it too has its own deep roots of course, with sweat-of-thy-brow Protestantism no innocent bystander.

Capitalism began, in part, by cutting people from land and self-sufficiency (enclosures), people who were then ‘free’ to work for money to survive (I am not saying that being tied to the land is more or less free than being tied to waged work, only that freedom is a difficult word to define). The entrepreneur’s ‘rational’ pursuit of profit must mean poor working conditions, typically speaking. Work is unpleasant. It must be rewarded. Work is unavoidable. It must be rewarded. Without payment, you cannot survive. Work has thus become intertwined with money, where money is now the one conduit to survival; specialisation has come to mean dependence on anonymous others to produce that which we do not and cannot.

After a few centuries of this, we can today boast that subsistence is no longer subsistence because of Flat Screen TVs, Entertainment, Shopping etc., which are apparently more important than health and contentment. If you doubt this, ask yourself which set produces more profit.

Anyway, over time our sense of productivity has been boiled down by the heat of economic progress to mean economic work judged valuable by the Invisible Hand (where “economic” narrowly means exchange of goods and services for money).

But ecosystems! Ecosystems pay for our ride, and yet we have not been all that aware of their needs or our total dependency on them these last few hundred years. To grow the economy forever so as to increase productivity and human productive work forever requires enabling systems (the environment) that allow this. Infinitely forgiving and generous environmental support systems do not and cannot exist.

But automation! Automation is becoming ever more sophisticated. Machines and computers are now responsible for most ‘productive’ work. But because productive work is Good while non-productive work is Bad, by definition, we must find ‘productive’ work for everyone. If you don’t work, you should earn no money. Why should someone receive money for doing nothing? Doing nothing is not productive. It should be punished, not rewarded. We must find productive work for everyone, even though doing so makes no real sense under current cultural definitions.

This is a circle that cannot be squared, but few want to accept this. Consumerism plus infinite growth plus automation cannot be sustained. By extension, our cultural sense of productivity cannot be sustained. It is wildly out of date, far too narrow. While we cling to it, we wring our hands and hold futile discussions on what is to be done to perpetuate the system, we castigate scroungers and prescribe Austerity, we reject ideas that come from outside the dominant paradigm while paying lip service to Change, then recycle defunct solutions to ‘solve’ the crises generated by repeated application of those solutions.

And what is nothing, exactly? There is certainly no action which consists of nothing. Our frantic system of economic growth ad nauseum cannot alter this fact, even though it has engendered stubborn cultural perceptions that insist sleep, rest, spending time with friends, travel, etc. – all activities requiring energy exchange – are somehow non-productive, somehow constitute Doing Nothing. We fear breakdown if we relax our grip on proceedings, if we enjoy ourselves too much or yield to our ‘bestial’ nature. If we ease up even a little, everyone would decide to laze around or collapse into pointless warring (Human Nature), harvests would fail, factories would lie idle, productivity would cease. Civilisation would go to seed: a fear as old as civilisation, as old as elitism. Until now, civilisation’s engine has been precisely this control-based fear. And I am as riddled with it as the next guy.

Consequently, recuperation, pleasure and adventure have no economic value (unless they are causing or will directly cause money to change hands). Surely we can enshrine their obvious value in a new economics? Surely we can at least agree that there is intellectual and practical room for manoeuvre in this area, that our attitudes must change, that our survival depends on new thinking? Must we always see pleasure as ‘reward’ for ‘productive’ work? Must one always precede the other? What would need to change to allow their merging? If we need distinctions between forms of work, what mix of ‘economic’ and ‘non-economic’ makes sense? How dynamic and flexible should this mix be?

Questions, questions…

Can we begin to imagine other ways of socially valuing each other and our work?

Can we imagine agreeing on a larger definition of work, of productivity?

Dare we imagine that we don’t have to ‘earn a living’ anymore? Of course we will always have to earn respect and admiration and other effects of social standing, but there is far more to this than measuring and rewarding successful work via price and money and calling only that work productive. In other words, if the economic system must change deeply for humanity to have a shot of outliving this century, we need not fear that respect and admiration will be rendered impossible should we embark on a path of radical change. We need not be paralysed by fear of collapse into chaos, into Hobbes’ Warre. Indeed, they are upon us because we lack the courage, compassion and imagination to change.

As I see it, changing our cultural attitude to productivity can only happen as part of a larger process of changing our cultural attitude to value and measuring value (if the latter is at all possible). A simple observation to make, a mighty challenge to overcome. Together, we are the system in which social value is measured almost exclusively via money, price and market exchange. While we do not need to and cannot change in lockstep, social change cannot be other than a collective effort, the sweat of the brow of the global mind. Though perhaps effort is the wrong word. How easily ‘work before pleasure’ slips through into our analysis, even when arguing against it!

Courage, compassion and imagination are called for. Maybe one day the right mix of these will produce a social form which lauds and rewards ‘non-economic’ work as wisely as it lauds and rewards ‘economic’ work, assuming such a distinction remains valid.

All work is productive by definition, since work is necessarily any action which causes change to happen, any action which produces a discernible effect, as all action must. The trick is reaching dynamic, flexible and durable societal consensus on how to value work’s produce. Money and price in their current form can no longer fulfil this function constructively, because state, paid work and infinite economic growth are inescapably interdependent and thus required in their current forms for today’s money to be beneficial to society. Joined at the hip, all three are quickly going the way of the Dodo at the hands of constant change.Their joint crumbling is highly disruptive.

Of course it would be infantile to demand a society in which each individual spontaneously obeys every single urge then unilaterally declares its outcome productive. There will always be creative (though upsetting) tension between a person’s particular desires, evaluations and needs, and what their friends, family and society perceive and want. Tension is good, the grain of sand in the oyster. Work is good. Work is inescapable. Even resisting work is work. What is needed is a new relationship with and understanding of productivity (as one of many other things).

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.

Ralph Boes Update Plus

This is a translation of the beginning of an email I received recently from Ralph Boes:

“Berlin, 26th October, 2012

Dear friends,

It has happened at last.

After challenging the Hartz IV system via my Brandbrief, and after those I challenged tried for a long time to ignore me, I am now to be harshly sanctioned.

For starters, a mere 90% reduction of the absolute minimum needed to live! That works out to a princely 37.40€ (instead of 374.00€) per month to live from.

The punishment can, however, be made harsher still. A 100% cut, plus loss of health insurance and home, is in their power.”

Of course, this is what Ralph Boes wanted to bring about, yet I fear for him. He begins his political, public and state-imposed starvation on 1^st November, when the sanctioning takes effect (he asserts it is not a hunger strike, but a public demonstration of the violence of Hartz IV). He hopes to attract media attention. I wonder if he will get it, and what quality it might have should the media pay attention.

Should the authorities escalate and stop paying his rent too (as is their ‘right’), should they stop paying his health insurance, he would be as the other homeless of Germany, unable to get a job for lack of an address, with no right to any medical care whatsoever, and with the payments still owed monthly for health insurance now amassing an enormous debt to be repaid should they ever find work again. A 100% sanctioning is thus, more or less, a death sentence, an eviction from society (if you have no one around to look after you). 

Boes is a brave man. His fight to expose and right the injustices of this inhuman and unconstitutional system is noble. I hope he and his lawyers can take this battle all the way, and win.

Boes is at pains to point out that his punishment does not represent the will of employment agency employees, and calls for his supporters not to be angry with them. This is the machination of a system unable to adjust intelligently to new realities, primary among which is the cold fact that there is not enough work to employ sufficient numbers of people at a decent wage. If we are to live sustainably, efficiently and intelligently, we must first accept that our obsession with wages for labour, any old labour regardless of its consequences, is doing more harm than good. Again, it is not that there is no work to be done, but that there is less and less paid word to be done. Were the tax, benefits and money systems to be made sensible, transparent and simple, there would be even less paid work. However, what today constitutes paid work in this money system within the context of complex and obtuse tax law, and what may well become paid work in an updated system, is another matter.
 

My own interest remains transition to a resource-based economy, whatever that turns out to be. My definition of that transition is the concerted and purposeful demotion of money and promotion of wealth. Such a transition will require and generate new definitions of money and thus societal value, definitions we can only crudely sketch out at this distance. Today, in the UK, around 20% of employed people earn less than a living wage. Spain has reached 25% unemployment in its official statistics, with youth unemployment at around 50%. Greece is in free fall. Italy is teetering on the brink, ditto Portugal. Germany is not anywhere near as robust as its surface reputation would have you believe, and France is hardly problem free. Elsewhere in the world, the story is similar, with very few exceptions. Perpetual economic growth, which is basically the conversion of ecosystems and society into goods and services, is impossible on a finite planet. Debt-based, usury-based money systems require perpetual economic growth to function; if they are not expanding, they are collapsing, and that is a deadly design flaw. Add to this rapidly increasingly technological innovations (today only 163 million of the planet’s 7 billion humans are employed in factories worldwide, and this number is shrinking fast), the need for radical change is immediately apparent. (Did I mention peak everything?)

Many know it. The Pirate Party in Germany (Die Piraten) have accepted the need for a guaranteed income. Mainstream parties are in consultation with them or have their own proposals. The Vatican is seeking to become the first country to initiate a guaranteed income. Radical change is in the air, and yet resistance to new ideas is still strong. As I have argued in these pages before, we are the system. We are blocking ourselves, frightened of the unknown. We demand a perfect alternative, and failing perfection assert there is no alternative. But I have wittered on and on about this, and frankly, I am beginning to bore myself. Either we make it, or we don’t.

About five years ago, I posted on The Guardian’s website that we need a new cultural understanding of wealth. This was before I had heard anything of The Venus Project or a resource-based economy. My position has not changed. We still confuse money for wealth, at ‘best’ seeing money as an accurate—thanks to the divine magic of the free market price system—representation of societal consensus on where value lies, and how society should motivate itself and make decisions on what should get done. To survive the next few decades (time is really running out), we must redefine wealth via new money systems, new money distribution mechanisms, and a fundamentally different relationship with this beautiful planet. As New York drowns, as Spain and Greece burn with others waiting to join them in the fire, as the US wastes resources on yet another razzmatazz election, as billions struggle with hunger and deprivation and further billions live lives of horrible indignity and meek desperation, and as a shrinking few cannot decide whether to party like its 1999 or Do Something, we are in the middle of the very difficult challenge of profoundly changing how we live, what we want, and what we understand. Somehow we must develop new understandings and want something very different, something which allows diversity to thrive and be celebrated, while engendering cooperation and cohesion on an unprecedented scale. 

It isn’t going to be easy. No one has all the answers. Indeed, there is no Solution, no Silver Bullet, only the recognition that a new direction must be trod, almost blindly. But it is not the destination that matters—there is none—, rather the manner and steel of our departure.

Of Turbulence and See-Saws

It’s been settling down for me, turbulently, while ‘out there’ in the rest of the human world turbulence spreads like a cancer, warped and guided by the anomalies of the Olympics, politics as usual, media as usual, tragedy, terror, war, miracle, humdrum etc. As I repeatedly say, This Time It’s Different, and more than the usual grade of difference too. This is a personal impression I can unscientifically validate by looking for good news and bad news on alternate days to set up the see-saw of turbulence I experience internally, but I suspect a power struggle within the status quo is indeed raging, one which threatens (This Time It’s Different) to cut to the very core of the status quo, and rip it apart. The attempt to rescue the core elitist extractive dynamic (a.k.a. the state) via ‘reform’ risks breaking that project. Yet riskier still is blind adherence to the thinking which has generated this mess; the sociopathic pursuit of monetary profit and power for its own sake, an addiction to hollow control and self-aggrandisement I see as a cultural sickness clearly manifested in our politics, business and consumerist culture.

Events see-saw back and forth. The status quo farts out some new spin, some new fear mongering (sustaining an atmosphere of pervasive fear is so very important) to supress the surging emergence of the new paradigm, while within the strongholds of that very status quo, cracks appear. Articles in The Economist, The Financial Times, The Independent, The Guardian and a white paper from the IMF have identified the debt-based, high powered money/credit money system as responsible for our global financial woes, as calls for a guaranteed income find friends within the status quo in increasing numbers. This amounts to an identification of commercial banks as the primary ‘cause’ (let’s say outlet) of the financial crisis, and an acknowledgement that there is not enough ‘economic’ work for all, that technological unemployment is indeed one of our era’s key challenges. Radical is the new normal.

Recently, the CDU (Germany’s conservative/right wing political party) released a paper proclaiming a guaranteed income cheaper than the current social welfare system. The party’s Thüringen president, Dieter Althaus, is calling for 800€ per month per citizen. In Holland, a new party (Soeverein Onafhankelijke Pioniers Nederland, SOPN, “Sovereign Independent Pioneers of the Netherlands”) has formed to fight the upcoming elections on the 12^th September, and they have guaranteed income as their central policy. In Germany, The Pirates have fully adopted the idea, while the left’s traditional opposition appears to be softening. Ralph Boes (who is about to go on hunger strike in Berlin after being sanctioned 60% of his welfare, starting September) had a conversation with one of the left’s more prominent and powerful politicians for whom he laid out the VAT flat tax proposal as a means of financing a guaranteed income. The politician had never heard of the idea, and was apparently very excited about it. The left worships labour, and thus has traditionally been opposed to guaranteed income, until now. Brazil already has a guaranteed income enshrined in its constitution, is only lacking the legal and financial apparatus to implement it (a pilot study has shown amazing results). Across the political spectrum the idea is increasingly seen as the only way of saving the system. Which is dangerous.

Deep reform of the money system must, in my view, accompany a guaranteed income, as well as a very broad and open debate on the shallowness of consumerism. Not only is economic growth ad nauseum deadly, even if it were possible (as we culturally envision it: gadgets for all forever in ever growing quantities), it would destroy community and commons everywhere. Our current money system collapses if the economy is not growing, which is a terrible design flaw. But one of the many things that is changing, is our cultural relationship with consumption (in the US for example (2010 data), over 750,000 people live off-grid, a huge number). I believe more and more of us recognise the counterproductive addiction inherent in distracting ourselves with Entertainment and Gadgetry from the hollowness of our seemingly pointless lives. While we cannot know what the new vision/story will look like, we are surely looking for it, fumbling to define it, to bring it into being. So the danger of the misplaced and short sighted desire to reignite growth is perhaps not grave, yet we should stay alert to it.

And growing local food is finding strong support in ventures like Incredible Edible (spreading across the world as I write), which I find very exciting. A town in the Rheinland area in Germany (Andernach) has called itself the Edible Town (Die essbare Stadt (YouTube, German)). Fruit, vegetables and herbs in great variety grow all over the town, and anyone can harvest whatever they like. The entire project is sustained locally, with a mixture of volunteer work, 1€ jobs and local governmental funding. What I find most warming about such stories, is that the anticipated vandalism and other cynical abuse of the gesture (essentially free food for all) has not materialised. This is, for me, a reminder that people respond positively to generosity, to well-planned and well-executed endeavours to replenish the commons and strengthen community. Despite decades of community erosion, it is as if something in us is ready to take this idea up and run with it.

There are so many other positive things happening ‘out there’, but, like I said, this is a see-saw. What is dying (calcified elitism and exploitation as a perpetual growth dynamic) does not want to die, and will lash out, defend itself, attack all perceived threats as brutally as is required. And there are ecological and other environmental disasters awaiting us too. All is far from rosy, as a look at the world’s trouble spots will tell you. As I argued a while ago, the state can wait, while not being able to wait, which I see as an explosive tension. Yet it is the positive which inspires us towards new work, and from what I can see, the urge to the new is only growing. The cynical voices sound shriller and shriller, their arguments less convincing, die-hards are softening. A few weeks ago, Franz Hörmann (who’s star is on the rise again) addressed a conference of some 160 bankers, laying out his vision for a moneyless future, in which banks would act as repositories of business wisdom, working in partnership with the community to do what is best for the whole community. Hörmann said their response was enthusiastic. (And yes, business can be conducted without money as we know it. Business is simply about organising projects and harnessing human abilities into constructive action. A root and branch re-understanding of profit would go a long way in this department!)

Many in ‘power’ know this system is broken, and millions of ‘ordinary’ others too. A survey conducted by Die Zeit (a German newspaper, text in German) found roughly 80% of Germans want a new economics, principally one which needs no growth. Approximately 66% of Germans no longer trust market mechanisms to solve economic and financial problems. This is a sea change. What is needed, therefore, are practical and sensible steps out of this quagmire of self-annihilation towards a very different social agreement, vision, mode. Whatever ‘starts’ this change, will need to be quickly accompanied by other ideas. If ‘revolution’ indeed begins with a guaranteed income, it is up to us to press for deeper reform/revolution. One of the things a guaranteed income does give us, is time. Today, that is a precious resource. Imagine what Occupy could accomplish if they did not have to worry about money and jobs! Imagine what movements like Incredible Edible could accomplish. Imagine what types of volunteer work could flourish. 

There is no silver bullet, but I believe a guaranteed income is a very good ‘starting’ point. Accompanied by a revolution in the money system and attendant deep changes in our habits of consumption, this would indeed be, at least potentially, a set of measures to put us, culturally, on a path leading to a resource-based economics.