How much do we have to change? Part 1, the money system

Okay, I assume that most readers of this blog are humans. If you are a cat or a rat or a dolphin or an alien, you are exempt from the following (I am still not certain if cats can read … but since Fitzwilliam, our tomcat, recently called us on our internal telephone to let us know he was locked in in the study, I am at least willing to take it into consideration).

So, if you are a human being, I assume that you, like me, do have an interest in a continuation of our species on this planet. I mean, the cynic in me still thinks that Mother Earth might be a lot better off without us, but I love life and think we do belong here and have a role to play that goes beyond being the big destroyer of everything and a disease that the planet has to get rid of as fast as possible.

We live in an economic system that has to grow to keep functioning. For an explanation why that is so, I refer you to Richard Heinberg or the first Zeitgeist movie or to Andreas Eschbach’s novel „Eine Billion Dollar“ … in a nutshell: money means credit, credit means interest, interest has to be earned somehow and the only way to earn that extra amount is to grow the economy further. But please, if this is not clear to you, do inform yourself about it, because it is important.

There are people, who believe that changing the money system is the solution to if not all then at least the most urgent of our problems. I am no economist. I find it difficult to believe that changing something as abstract as numbers in computers (which is all that money is nowadays) can actually change the way we live so fundamentally. On the other hand, money is also a story. Money only works because we all believe in it. And since I am a storyteller and I know how much power stories do have over us, I think it might be possible that by changing this one story we might change the world.

Wouldn’t that be neat? We change the money system … something that most of us really don’t think and bother about that much anyway and that some obscure „experts“ have decided about behind closed doors without our knowledge … and all our problems go away.

Well, maybe not all our problems. But changing the money system seems to be the only way to allow for a steady state economy. And that is what we need. You agree with me here, I hope. Please, tell me that you all see that a growing economy on a finite planet is a pyramid scheme and a bad idea and doomed to fail sooner or later. Every child knows this. I knew it as a child and I remember that I kept ranting about it and asking questions about it when I was ten or twelve. How can we expect the economy to grow forever? It required more than a decade of watching television to make me stop questioning that system. And then another decade or so of life away from television until I seriously started asking it again.

As I said, the money system is, at least since we gave up on the backing with precious metals, totally immaterial. (Isn’t that absurd, in a way, that something that feels as „materialistic“ as money is, in fact, merely a fiction). This also means that „we“ can change it („we“ being all of humanity, or at least the 99 % or so of us who have baught into the system in the first place). There are no physical laws or restrictions that hinder us.

The altervative could be something like LETS or other barter systems, though they are rather small scale and local in nature and are therefore hard to imagine in a globalized world. Maybe that is a good thing, since economic gloablization does come with a whole bunch of issues of its own. But storytelling or not, I find it hard to imagine a smooth, non-violent transition from a globalized market economy to purely local economies. (That said, I find it hard to imagine a smooth, non-violent transition away from the the debt based fiat currency system in any case, because those profiting from the current system the most are the people with the most guns and bombs and tanks and airplanes … but that shouldn’t stop us from at least imagening a better system).

Another interesting alternative is the Wörgl money based on the idea of economist Silvio Gesell. It is named after the Austrian town of Wörgl which adopted an experimental money system during an economic depression in the early 1930s. The general idea is that money, instead of earning interest while it does nothing, does cost the owner an additional fee if it sits around without being reinvested for too long. Since money in itself is useless and it only benefits the society if something is done with it, this seems a sensible approach. The Wörgl experiment did do exceptionally well, by the way. So well that the experiment was cancelled by the Austrian Central Bank after a little over one year, before the idea could spread and endanger the establishment.

Of course, we could also consider to go without money altogether. I mean, other species seem to do quite well without a monetary system, even those with complex social structures like bees or ants. There have been countless human societies as well that did or still do function without a money or barter based economy. Goods and services are still exchanged or rather given in those economies. They are given as gifts. This is not as far fetched or alien as it may seem. Actually, I am pretty sure most families do have a gift based economy internally. But a gift based economy only works with people you know and trust. Or with people you might not yet know, but still trust. It is a very personal and philantropic way of dealing with things. I can imagine people giving and receiving food that way, clothing, help in your garden or for building a house (and again, for many of those things, gifting is still common, even in our society), but it is difficult to imagine a gift based economy do mining, build computers or cars or anything else on that level of complexity. Which again might be a good thing … there are a whole bunch of problems coming with cars and computers and complexity. But that’s a matter for another time.