Friday, July 30, 2010

Musings on Steve Meyers' Latest Report

Thanks to Jesse again for bringing this to my attention. It makes for interesting listening. I recommend all ten minutes of Steve Meyers’ jaded diatribe.

Two quick things: First it’s not really Global Perspectives, as the company hosting the analysis calls itself, but American. Without exception—and this is no surprise—nation states look to protect themselves. The institutions with which an idea like the Nation State is made manifest and functions, can of course do no other thing than protect their own operating, stay alive and perpetuate that which they are. But what they are is already broken beyond repair. Not in the sense of a broken arm or sick stomach, such things require a fix, or at worst an amputation. No, the nation state and it various constituent parts, plus the corporate structure, plus ‘free’ market economics, plus money etc., are systemically joined and broken. The paradigm which gave birth to the nation state—of control over nature—is out of creative juice, can no longer power civilization forward as it once so spectacularly did. The noises of desperation and despair emerging now from many quarters will remain desperate and despairing. No solution within the paradigm can be of any use. Too much has changed. And this is no sudden, unpredictable ailment, fallen upon us out of clear blue skies because of Wall Street, or Larry Summers, or Robert Rubin, or any other single factor. We are going through the closing phases of a process which has its origins in deepest antiquity. What we are going through is inevitable, is hard-coded into the scarcity-based thinking that got us here. Its opposite, abundance, is the way forward.

Second, I long for the day when mainstream commentators realize the above, despite what that will mean. The status quo is defunct, a zombie, a sac of poison leaking into society and bringing it to its knees. We are all infected, all sick, all more or less blind to the depth and breadth of the sick state we are in. There is no escaping this, no corner of earth, no ‘precious’ metal or other commodity in which our money can find refuge. The status quo, in its entirety, has to go before meaningful change can begin. Swapping out Larry Summers for Bill Black, for example, would have only a short term benefit. We must relearn value itself, redefine growth, initiate a deep revolution in education, labour-for-wage, politics, law, money, and even science. Western Civilization is rotten from top to bottom. We must let it down as gently as we can, rescue the good and the beautiful (a very painful process for sure) then start building the new.

Wednesday, July 21, 2010

Intrinsic Value is a Contradiction in Terms

Jesse, of Jesse’s Café Américaine, is an eloquent and persuasive writer, whose writing I admire and enjoy. His article on Jim Grant’s analysis of recent Federal Reserve nominees is no exception to his usual high quality. It caught my eye though for the quotes he chose, in particular this part:

“These are people who I think are unlikely to propose novel solutions to our fundamental monetary dilemma which is that the US dollar is a faith based currency of no intrinsic value that is manipulated by the Fed, and the consequences of the manipulation are often quite distinct, different from what was intended. That’s the problem.” [My emphasis.]


People like Jesse and Jim Grant (I respect Jesse but don’t know Jim Grant) are trying to think outside the famous box, which is good, but they don’t go far enough in my opinion. All money is faith based. Nothing has intrinsic value. Even air, water and food are ‘valuable’ as a consequence of the web of life that has emerged on this planet. It is relationships and interdependencies that give rise to notions like value. Air in and of itself has no ‘value’ as one of its properties. Some other thing, e.g. with lungs, has to need it. And money, in any form, is far less important to humans than air, and as a medium of exchange has no intrinsic value. Money can only represent value. Furthermore, even if we overlooked the fact there is no such thing as intrinsic value, a commodity like gold, which in economic myth has instrinsic value, can be manipulated, and often has been. Also, gold’s value varies relative to other commodities. In fact there is no Value Foundation Stone against which all other things can have their value measured. When is mainstream economics going to get this? Ah the folly and illusion of control!

Jesse and Jim Grant warn of the dangers of group think. But there is only group think, albeit in varying degrees. No human can grow up outside all social contact with other humans and develop language. Without language no thinking is possible. Nothing we can do can alter this logical relationship. We can at best strive to be perpetually cognisant of this ‘pitfall’ of being a highly intelligent social beast, and improve our chances of preventing the emergence of the vested interests and frozen status quos, which so bedevil us now, by taking those painful and difficult steps away from elitism and hierarchy generally, towards the new egalitarianism hinted at by Open Source Software. It is in the gentle pursual of sustainable abundance that such a change can be realized, in the slow transcendence of ownership, shallow materialism, conspicuous consumption, the nation state and so on, that a new money and consequent new economics can be born and find lasting form. In his immediately previous post, Jesse suggests the same:

“The lifting of the veil from their scheme will be like the rising of the sun, as things long hidden become known. And we will look upon money and value in fresh ways.”


I dearly hope so. The question is, how fresh?

Tuesday, July 20, 2010

Of Profit and Loss

“The true scale of the national debt is £2 trillion - more than twice the official figure, an alarming study shows.

The black hole in the public accounts equates to £78,000 for every household in the country.” Read in This Is Money (hat tip Mike Shedlock).


Here we see the standard and totally unsurprising equation of money and earnings with wealth, and consequently of debt with not-wealth. Nowhere is the nature of money creation discussed, nor is it even implicity suggested that wealth and money are not in fact joined at the hip, that the “black hole” in public accounts is a mere notion, a totalled number of other numbers we have counted over time to track things like pay and costs. Everywhere we look, money is value, money is wealth. This silly story we tell ourselves is deeply and dangerously wrong. There is indeed profligacy and useless State and Market waste across the world, but this too is part of the deeper problem of the flawed money-story this post briefly discusses.

The tight and inflexible cultural association of money with wealth is doing unknowable amounts of harm to society and the wider world. It veritably forces us to pursue those endeavours and enterprises which earn money, at the cost of pursuing those which lose money. After all, money makes the world go around, right? If you’ve got enough money, you can do anything, anything at all. Only your imagination limits you. But what exactly are ‘earning’ and ‘losing’ money, and why is the former good and the latter bad?

First a brief reminder of what I believe money is. It is a symbolic tool for distributing scarce goods and services (including land and labour) throughout a forever insatiable planetary population. It is furthermore an enabler of complex economic activity (as opposed to barter which only enables simple economic activity). It is NOT a store of value. A medium of exchange cannot store value. That’s what makes it a medium. Just like language does not contain reality but strives to represent it, so money does not contain value but strives to represent it. So, money is an abstraction of value, or wealth, for distributing scarce stuff, via price information, to and from people.

Earning money is the short or long term accrual of this representation of wealth to some part of the economy, be it an institution, a corporation, a person, or whatever. Losing money is the opposite. That this equates to good and bad in modern society (post-farming) is a function of the utility value of money. While society is capable of producing surpluses for sale, money is very handy to have. And since we have specialized labour to the extreme point of total dependency on surpluses being produced by others (typically machinery), we badly need money to survive. This societal progression deeper into the money story explains, in part, how we have come to equate money with wealth. Without it we are in deep doodoo.

But – and this is an extremely important ‘but’ – you can neither eat nor drink money; you can only spend it or save it. Of course this is a tired cliché, but that does not make it less true. As time goes on we are destroying the ecosystems and burning through the fossil fuels that make surplus possible. See ecosystems as the organisms keeping our social bodies alive, see fossil fuels as inherited savings from Mummy Earth and Daddy Sky. We are, like spoiled brats, racing through our savings to destroy our life-enabling habitat, just to perpetuate, for as long as we can, the enormous, high-paced, multi-century party we think ourselves addicted to. We call this party Perpetual Economic Growth. It is totally unsustainable, just like the tower of Babel which was supposed to reach heaven. Money (among other things) makes us do it, but money will be of no use to us whatsoever once the surpluses start running out.

That is one way in which money earnings and losses are not that important. Ecosystems and communities are important, and in a state conducive to human society.

The second is derived from a systems analysis of money’s functioning in society. Money needs to flow, to move from place to place if it is to enable trade. Money-wealth is hoarding, which is the antithesis of flow, so important to functioning economies. It follows therefore that earning and losing money are (or should be seen as) brief but necessary eddyings in the total money pool as economic activity takes place, where “brief” is the important qualifier. The more we stress ourselves culturally and politically about these poolings, the more we will tend to hoard, or stagnate economic activity. A stagnant economy is one in which wealth/debt divisions freeze in their current positions. Also problematic is the simple truth that having more and more money makes sense in this system. Being ‘rich’ is better than being ‘poor.’ (This second observation does not take growth into account, so is incomplete. It serves therefore merely to highlight the internal illogic of lauding profit and denigrating loss. Both are logically necessary qualities of flow, money-flow is vital to healthy economies.)

The third way in which profit and loss are not the sweet and bitter our incomplete money story characterises them as, relates to the different societal roles and consequences of Market and State. In an old post I describe how debt-based money becomes ‘genuine’ money in the economy via asymmetrical payback of loans. This happens in the private sector, because borrowing leads to production, buying and selling, which generates the uneven pooling I describe in the paragraph above. To my way of thinking, uneven pooling is what profit/loss is, systemically speaking, and occurs only in the private sphere. Because we have come to confuse money for wealth, this in part explains our current cultural love affair with private enterprise – it ‘earns’ money.

Modern Monetary Theory offers a model of society in which the State sector functions as provider (creator, printer) of the money the economy needs to function. To see this money-creation as somehow indebting the State is deliberately to fail to see, 1. that money is not wealth, and 2. that the State is providing a service from which economic activity can thrive. Also important is the acceptance of the necessity of non-pooling (loss making “black holes”) societal activities, such as public education, army and police, which cannot generate money profits. They do, however, generate other, more important, profits, such as a well educated (hopefully) and healthy population. To think of the State, which is society’s self-organizing element, as going into debt for maintaining (paying for) a fire brigade, a national health system, a national education system, a defense system etc., is completely to misunderstand wealth, and also the complex ways in which society stays cohesive.

I had intended to write a short blog. I failed, even without discussing taxes as government ‘earnings’. Yet even this would have been too little. All money-systems are necessarily about scarcity, and therefore encourage hoarding and fear of want by design, on a planet rich in abundance of those things we need to survive happily and healthily. If this were not true, we would not be alive (we don’t eat money), and yet this simple fact utterly eludes us at the cultural level. Planet Earth, not money, gave birth to us, is the set of systems out of which we arose and in which we are embedded. This deeper component of the money story, which most will not confront, including flawed notions of ownership, control and elitism, is the deeper root of the nonsense I quote above.

Sunday, July 18, 2010

Questions, questions...

I'm going to have some FUN now. (Not that I am not always having fun these days. Even when I clean out my refrigerator, I can have fun. That takes some... DISCIPLINE, but it is possible, I assure you...)
My husband and I are cleaning out our bedroom to do it over again after 15 years or so. (Well, yes, we are slobs, but my experience tells me these days that most people are slobs compared to what our grandparents were, so don't go self righteous on me, anybody.)
And my husband remarked on the electrical wiring in the bedroom, along the lines of "this is the most irrational wiring system I've ever seen".
The house was built in the 1960's. Its first owner was an electrician, so the guy probably did up his house with pure, amateur love (like... "amateur" has "ama" in it. Love. An amateur is somebody who truly LOVES something.). He probably had a ball putting his INDIVIDUAL imprint on HIS house, translating HIS desire into reality.
Fifty years on, his reality is a pain in the neck...
Musing on the inevitable aspect of this problem, my mind flew to all of the buildings in France that were built before electricity came on the scene...
WOW. What a casse tête, as we say here. A head buster.
HOW do you stick electricity into a building which was built during a time when NOBODY imagined that it would show up ?? (Yeah, well, thank God we are/were not such lazy louts that we dumped and demolished our old buildings over here for this reason.)
And THEN, I got thinking on Versailles, Louis XIV's little absolute monarchy dream palace...
I'm sure it must have some kind of electricity now...
And then I imagined the tomb of that (probably professional) amateur who wired Versailles.
"Here lies Jean Le Brun, who wired Versailles".
A fitting epitaph... THAT is quite an exploit.
(Geez, I'm talking a lot about tombs, and death these days, for a change, LOL.)
Morality... life is not linear, as Thai would have said. Some ideas mature faster than others, and NO "NEW" idea arrives in a vacuum, that's for sure...

In memoriam : Rachel Corrie

In Avignon for the yearly theater festival, one of the world's finest, I jumped at the chance to see Simone Bitton's documentary investigating the death of Rachel Corrie (in 2005,7 ?), a young American woman from Olympia, Washington who died at 23, in Gaza, in... troubling circumstances, shall we say...
Utopia, the independant movie theater made a political statement by deprogramming the light, Israelian comedy that was originally scheduled, to make room for the film of ANOTHER Israeli film maker. Because Simone Bitton is French AND Israeli...
This extremely SYMBOLIC gesture was greeted with the outrage that such gestures often meet. Little does it matter that Mme Bitton's film was thinly distributed in France when it came out, even in the art et essai circles it was intended for (yes, well, we don't really expect the hot buttered popcorn multiplex movie theaters to show it, now, do we ? The ones who are ONLY interested in making as many $$$$, sorry €€€€ as possible by spewing out blockbuster entertainment in one long continuous BUBBLE ? Too RISKY for them.). That this film was shown in TWO movie theaters, in Avignon, and Toulouse. No, because the business as usual accusations of antisemitism were thrown around in a heavy handed, self righteous manner. It is too bad that SOME people have not yet understood the tremendous disservice they do their OWN cause by attempting to block access to information, while making an amalgame of attacks against the Jewish people, and criticism of the state of Israel's obsession with security, and the unfortunate consequences of this policy.
Mme Bitton took INFINITE precautions in her film, though, which is structured like an inquest.
We get the official Tsahel report of the incident first, from the mouth of an army spokeswoman. According to the official report, Rachel was in an empty area that was being bulldozed as a matter of routine. She somehow managed to be crushed to death in this EMPTY area, in an accident. As irony would have it, the NAME of this area is... the axe of Philadelphia (my God, those words, can you hear them, they are incredible... I happen to know what "Philadelphia" means, because I once lived in the U.S. city of that name. It means... the city of BROTHERLY LOVE. The gods are weeping, you know...)
The Tsahel spokeswoman does NOT say that Tsahel was engaged in destroying all construction, any fields within a radius of 800 meters of the wall that Israel is busy building around its country to protect itself from terrorist activity. And that wall was built.. right smack dab in the middle of the houses and fields of Palestinian people (like you and me...).
Rachel volunteered to join an international, humanitarian peace organization whose members were recruited to serve as human shields AGAINST this destruction. Along with others who are interviewed in this film, and give THEIR eye witness accounts, she received training to deal with the potential dangers involved.
She was totally aware of the risk of her action. And felt... called upon to DO something, to ENGAGE herself in a way to protest against what was happening, the uprooting, and destruction of the homes of people who, in the short time she was IN Gaza, became her... friends.
Mme Bitton, in the course of her film gives a voice to ALL of the protagonists in Rachel's story : the Palestinians who Rachel got to know, and care for, the Israeli man charged with the official investigation into Rachel's death, the Tsahel soldiers, even... the bulldozer drivers.
What emerges is... not the TRUTH, but an extremely complex look at the context in which Rachel was killed. Was she intentionally mowed down ? Murdered ?
The film does not attempt to make a judgment on this question.
By giving a voice to EVERYONE in this story, we hear ALL sides. Including the young Tsahel soldier who admits that the Palestinians are nameless and faceless for him, and that Tsahel regularly takes potshots in the direction of the Palestinian homes. Palestinian children are regularly killed by sniper fire, and we SEE the houses riddled with bullets. (How can "the enemy" be anything BUT nameless and faceless for us ??)
And we get a feeling for how INDIVIDUALS get caught up in larger circumstances that are beyond their control, swept into a maelstrom that our ancestors used to call... destiny.
Rachel. The bulldozer driver ? Who knows ? Who can say ?
Perhaps most importantly, Mme Bitton gives Rachel HER voice in this drama, by having her parents and friends read aloud Rachel's letters and diary.
It seems to me that... Rachel went to Palestine with a desire that, in a very short time, matured into a TOTALLY (for you, Toby...) selfless act of giving HERSELF.
Sacrifice. I am VERY leery of sacrifice, as I have stated elsewhere on this blog. As a DAILY way of doing things, it is deadly. But in exceptional cases, like Rachel's, it CAN and DOES open doors, and get the ball rolling.
Let's look at it this way : Rachel's sacrifice gives ANOTHER meaning to the word... "American". A meaning that is not saturated in the well greased, smooth, American government support of the state of Israel.
In Palestine, Rachel is a... martyr for the Palestinian people, and her name is tagged on the crumbling walls that have managed to escape the bulldozers thus far. They say that she has... Palestinian blood..
Martyr ? Saint ? Terrorist ??
It depends on your point of view, now, doesn't it ??


Of Growth and Value

I feel an irresistible urge to hammer on this point, because 'out there' in the wider world, growth still seems to be The Golden Thing to end all suffering, and yet at the same time no one is really talking about value, at least not in sufficient numbers.

First a quote from an interesting article I found at Reality Sandwich:

"The consequence of all this pyramid building is that there are not enough goods and services on Earth to equal, at current prices, more than a small percentage of the face value of stocks, bonds, derivatives, and other fiscal exotica now in circulation. The vast majority of economic activity in today's world consists purely of exchanges among these representations of representations of representations of wealth. This is why the real economy of goods and services can go into a freefall like the one now under way, without having more than a modest impact so far on an increasingly hallucinatory economy of fiscal abstractions."


My reading of this is that such perverse hankering after 'wealth' is a direct consequence of a deep and pervasive cultural forgetting of where value lies. This from John McMurtry (The Cancer Stage of Capitalism, 1999, p109):

"Speculation in money value itself has become an epidemic overwhelming economics at 50 or more times greater than the value of all trade in goods and services."


From Bernard Lietaer:

"George Soros, who's made part of his living doing what I used to do - speculating in currencies - concluded, "Instability is cumulative, so that eventual breakdown of freely floating exchanges is virtually assured." Joel Kurtzman, ex-editor at the Harvard Business Review, entitles his latest book: The Death of Money and forecasts an imminent collapse due to speculative frenzy."


We are culturally insane, lost in, or given over to a blind frenzy we (often violently) hope will keep all this fictitious wealth real. If we juggle fast enough, long enough, with sufficient skill and technological glitter, the whirring house of cards we have magicked into existence will stay firm, no, become firm, become we know, deep down, it is not. It will not happen (hat tip Jesse):



Automatic Earth sums the chart up well:

"US homeowners lost more, by a factor of 26, than they "gained" through clearing mortgage debt. Thus, if we estimate that there are 75 million homeowners in America, they all, each and every one of them, lost $93,333. "


With collapse, insanity and decay in clear evidence everywhere we look, even in this time of obvious historical, even millennial significance, in the mainstream to talk of not-capitalism (capitalism being a mere few centuries old), to talk of genuine alternatives is to be a fool, ignorant. Bizarrely, capitalism remains, even among many openly discussing ways out of this mess, and certainly on the news and in the papers, efficient, free, democratic, natural, and so on. If I weren't such a placid chap I would be screaming 24/7 in amazement. This blog is my placid scream.

McMurtry again (1999, p53):

"But if this system is progressively more efficient and productive, as its essential legitimating argument claims, why must people be increasingly less free and secure the more efficient and productive it becomes?"


Why indeed.

The way out of this mess is also the end of the status quo, the end of capitalism. So much has to change, so much of what we think we know must be re-learned, and that in the true scientific light of humility and in the open spirit of 'I don't know', down to the lowest depths of every assumption that supports our human world, no matter what, change will be collapse. Change now can only be collapse, and no one in the status quo wants that. Too great a proportion of our structures -- intellectual, political, social, philosophical, mythical, psychological etc. -- are rotten to the core.

So, people, what is value, why is growth good, and what is the pursuit of perpetual growth absent value?

Wednesday, July 14, 2010

Of Growth, Debt, Interest and Abundance

“Creating money on the basis of debt, therefore, makes the economy fundamentally unstable. The system is always balanced on a knife-edge. If bank customers borrow too little, the economy moves into recession and, unless corrective action is taken, [...snip...] the positive feedbacks just discussed (such as people’s natural reluctance to borrow and spend) will kick in and produce a catastrophic depression.” “The Ecology of Money”, Douthwaite, p23.

“Another fundamental problem with the debt method of creating money is that, because interest has to be paid on almost all of it, the economy must grow continuously if it is not to collapse.” Ibid, p24.

“Continuous economic growth is impossible in a finite world. True, some people believe that growth can be made environmentally harmless (‘angelized’ to use Herman Daly’s term) by being stripped of its energy and natural resource content, [...snip...]. But this is a pipe dream. The energy and resource content of many activities can certainly be reduced so that we can do more of them without increasing our environmental impact, but that impact cannot be reduced to nothing.” Ibid, p25.


Why is growth good? Why is decline bad? Surely neither is good or bad. However, debt-money + interest = dependency on non-stop growth. Perpetual growth, as we understand it through orthodox economics, is mathematically necessitated by interest. And while this mad pursuit does indeed inspire innovation, it does so blindly, rapaciously, and is wrongly reliant on an unprovable Invisible Hand which either does not exist as conceived, or is inherently ‘co-optable,’ that is, not at all out of the reach of those who benefit greatly from manipulating it, which Adam Smith himself knew. Hence the usury model turns out to be unfair to a degree which would shame Mother Nature, famed for her inherent ‘unfairness.’
 
Economic growth of the interest-debt-money variety does not yield a sustainable relationship with the environment, finds decline to be bad, is systemically incapable of non-linear thinking, entrenches insoluble and gaping societal divisions, and prioritizes money-making above all other activities. All this encourages stifling corruption, corruption aimed both at milking and sustaining the status quo. Usury money is inescapably, mathematically the money of scarcity. A system built around the deep assumptions of scarcity necessarily encourages hoarding and fear regardless of the abundance of nature. The interest-debt-money system is a double-looped positive feedback loop (see hastily sketched graphic below), whose effects are the slow but accelerating destruction of those ecosystems which act as fuel for the process of non-stop growth. It is a fire burning itself out, its flames and heat are money and economic growth, its fuel is natural, cultural and spiritual resource. Therefore, only resource exhaustion, or, far less likely, a conscious decision, can stop it.



On the other hand, even before money and interest, there was human population growth. David Montgomery explores, on p30 of “Dirt, the Erosion of Civilizations”, competing theories of the advent of farming: oasis theory and cultural evolution theory, but is dissatisfied with both. He posits instead the idea that human population growth led to a need to get more food from settled land than jungle and wild can provide untended. Were homo sapiens sapiens not so inventive, our numbers would have stabilized. But our ancestors came up with farming, completely unaware of its long term effects.

“For over 99 percent of the last two million years, our ancestors lived off the land in small, mobile groups. While certain foods were likely to be in short supply at times, it appears that some food was available virtually all the time. Typically, hunting and gathering societies considered food to belong to all, readily shared what food they had, and did not store or hoard—egalitarian behavior indicating that shortages were rare. If more food was needed, more was found. There was plenty of time to look. Anthropologists generally contend that most hunting and gathering societies had relatively large amounts of leisure time, a problem few of us are plagued with today.” “Dirt: the Erosion of Civilizations”, Montgomery, 2007, p47.

 
Farming is hard work, radically alters one’s relationship to the land, and is uncertain in outcome – whereas hunter gathering is based on trust in nature's bounty, and 'day to day' rather than planing for the future – so needs to have been a forced decision. It must therefore have been a problem of increasing scarcity, or diminishing abundance, that forced humanity’s hand. The hunter gatherer pattern was to split a tribe that had become too big for its environment, and send one half in search of new, happy hunting-gathering grounds. Eventually this pattern hit a wall, especially when we consider glaciation and desertification over the relevant period. So Montgomery suggests food shortage forced an adaptation, forced humanity from the Eden of abundance/hunter gathering into the back-breaking world of farming and scarcity, ownership and competition, and everything else that has arisen as a consequence of that.

As time went on, the skills of hunter gathering were lost as more and more wild land was domesticated. Humanity became increasingly dependent on farming. We got better and better at it (shortsightedness to one side), and have over the millennia populated every corner of the planet with our progeny, though at great cost. Nevertheless, we are now at the curious point where scarcity-based progress is delivering a new abundance, albeit against a background of serious scarcity of fossil fuels inhibiting the perverse over-consumption we promote in the interests of economic growth. New technologies like the Internet, automation, hydroponics and permaculture tease us with abundance, whisper of a new egalitarian/high-tech combination, while the institutions we have built up over the millennia, along with our deeply held cultural expectations, ‘wisdoms,’ fears and convictions, combine to prevent us from recognizing the deeper opportunity our gifts have yielded. We can no longer carry on along the path of blind consumption-driven growth and embrace the new egalitarianism and abundance our best technologies offer us. Depletion of water, soil, ecosystems, oil, climate etc., in the interests of profit, mean we must stop growing as we have done, stop lauding growth as evidence of our superiority over, and dominance of nature (as if such a perception could ever make sense), and begin a new growth paradigm; growth of health, literacy, trust, wisdom, and so on.
 
It is not a return to primitivism I promote. While hunter gatherers were indeed embedded in nature far more than are we, they did not have sufficient global/universal awareness to expand their circles of reciprocity across the planet, let alone to other tribes – there were of course wars and other brutalities even in Eden. But time and technological developments have brought us to exactly that point, the point at which we are beginning to imagine humanity as one group. Ideas of transcending petty tribalism and the nation state are taken more and more seriously:
 
“Leaders of the world’s principal economies – both advanced and emerging – will need to reform co-operatively and deeply if the world economy is not to suffer further earthquakes in years ahead.” Martin Wolf, Financial Times, 14.07.10 [My emphasis. Hat tip Yves Smith, Naked Capitalism.]

 
A return to a co-operative, symbiotic way of life – hinted at by open-source software, Google, YouTube, permaculture etc. – one which includes as much of the universe as we can manage, is called for. This requires a totally new economics, one not attached to growth, and therefore with new ideas on both debt and interest.

So, on to my thoughts on debt and why we might do without interest. I’m coming to think of debt simply as ‘an owing.’ For example, if a friend does me a favour, I owe him one. I am in debt to him, perhaps not explicitly, and certainly not in a ledger, but in some important way. If he does me many favours and I never return them, the friendship will break down. The owing becomes too great, too one-sided. I suffer the loss from my life of the presence of a kind and generous soul, he is rid of a selfish bum who was no real friend. And note there is neither need nor room for interest, nor for a standardized accountancy, nor is any entrenched and calcifying social division possible.
 
Another example. If, as is currently possible with permaculture techniques, I set up for myself a jungle-garden – a self-sustaining ecosystem providing fruit and vegetables as jungles do, but in a garden format – and take from it the food I need to survive in robust health, do I go into debt to the jungle-garden? Does it keep score? Well, only if my taking from it is large enough to upset its ability to self-sustain. Then ‘debt’ in this example could be thought of as tipping a system into collapse. If that point is not reached, ‘taking’ is simply part of the process, the cycle of growth and decay. (I am not expert on jungle-gardens, and imagine input/tending is necessary, but the basic principle I briefly lay out here is sound. Humans had this relationship with the abundance of nature for tens of thousands of years, many still do. Did/do they know food debt? Perhaps in the form of gratitude.) Again, no interest needed, no accumulation makes sense, no scarcity or growth sought.
 
More fundamentally, is breathing monitored? Should we count breaths? For many reasons the idea is laughable. There is a co-operation, a symbiosis between oxygen-inhaling, carbon dioxide-exhaling species and their oxygen-exhaling, carbon dioxide-inhaling counterparts, that requires no accounting. To talk of debt and interest in this sphere is silly. Nature manages fine without it. It self-organizes.
 
With these three simple examples I want to point out that debt has different connotations in different contexts, plays different roles. Elsewhere in nature, food becomes waste becomes food. The process is cyclical. There is no waste systemically speaking. This is of course nothing new, and yet we so often fail to think these things through at the cultural level. Money-debt, as monitored and described by double entry bookkeeping, is linear, not cyclical. A bank loans money into existence and records the transaction as a debt/credit ‘zero’ on its books. When the last payment on the principle is made, the credit/debt entry disappears, and the bank keeps the interest. ‘Out there’ the borrower has competed for that money from the economy – which might have ‘grown’ as a consequence of this competing – by turning some raw resources into money. This ‘victory’ is matched by a corresponding scarcity in the overall money supply, though the bank experiences an increase in its reserves and can lend more. More loans are created, more resources turned into money, more scarcity, more competition, more debt, in a linear expansion onwards and upwards until collapse.

Should we cut profit-making from money-creation? Re-imagine government as the symbolic or institutional embodiment of the abundance of nature, as a jungle-garden-friend, birthed by The People, tended by The People? If not, why not? Why, as in accountancy, should a government go into debt simply for providing a medium of exchange in sufficient quantity to enable sustainable economic life? Surely only if we see money as a store of value. But money is not a store of value; you can’t eat it, drink it, or do anything with it unless all else is functioning well. Money is an abstraction or a representation of the relative value of other things. With this in mind, how can we believe we go into debt just by drawing pictures in the form of money to denote, for the use of exchange, the value of the economy generally? The economy is not made of money, economic activity is assisted by it. 
 
To carry on along MMT lines: if the money ‘printed’ or spent into existence by government enters an economic sphere built on trust and abundance at its very core, why should we need the accountancy practice of registering that spending as the ‘debt’ half of a double bookkeeping entry? Keeping track of things would require some sort of accountancy, but perhaps a new sort. In the absence of scarcity at the paradigm level, in the absence of the need for unending growth, in the absence then too of having to exchange 40+ hours labour a week to produce junk just so we can buy the things we need to live (plus more and more junk), surely the scary notion of a government printing money ‘like there’s no tomorrow’ fades to absurdity. It is the pervasive and penetrating fear of want and scarcity that forces us to think this way, to save for a rainy day, to see value magically stored in money, to compete with the other guy, to win, to accumulate, etc. This profound misperception is where the problem lies. Failing to recognise this misperception blinds us to viable, but radically different alternatives.
 
Instinctively we know there’s no such thing as a free lunch. Hence, we should not print money, or somehow spend money into existence without it costing something. Interest is both the cost of money (for borrowing) and the reward for the risk of lending it to someone. This argument makes total sense. But, implicit in it, as I point out above, is the assumption that money stores value. It does not. Real value lies in healthy soil, clean air and water, low crime rates, a relevant education and much else besides. It takes work and wisdom to create/sustain these things. If money is needed to lubricate the processes of creating/sustaining real wealth and lasting health (personally I suspect not), then so be it. But let it be a money that does so, not one that can only ‘work’ in conditions of perpetual growth, and that is created as debt.
 
I imagine debt making sense in some form (perhaps as commitment or dedication) for some areas of human existence, though not for all, perhaps making sense for some money types, though not for all, but usury making no sense anywhere. We believe usury to be essential if we are happy to pursue perpetual economic growth at any cost. When we begin questioning the validity of that model, the health and wisdom of that desire, usury makes less and less sense, until it appears we don’t need it at all. There need be no hoarding, no accumulating ‘wealth’, no pensions, no retirement, we can do with less human law and lawyers, less labour and more work, more community, open and curiosity-led education, no nation states but a rich variety of cultures bleeding into each other geographically, intellectually, artistically. We can create a very different world indeed, a progression from where we are now to something new. Perhaps the new way I imagine might be thought of as the end of elitism, as a New Egalitarianism. We have everything we need to begin this journey but the will to start.