Beyond Steady State Economics: Toward a Multivariable Capitalism
First off, I’d like to say that I’m actually not sold on the idea of a steady-state economy- I don’t think its a panacea for economic reform; I do find it to be a valuable discussion that brings up a lot of important questions.
Put in currency terms, a steady-state economy would have zero growth in the money supply. In a previous post, I established that this is impossible with the current design of money: for debts to be repaid and cleared, new money needs to enter the economy through still more loans. Even if the design was tweaked a little bit so that there were a constant supply of money, this would still be a scarcity-based currency that would severely limit our ability to make the critical evolutionary leaps required of us.
Let’s suspend that frustrating fact for a moment and vision into a hypothetical economy that would have a currency system that could support a steady state economy.
Among both Democrats and Republicans, economic growth is the one thing everyone can agree is good. For years, growth has been championed as The Solution to just about every problem- from Third World Poverty to the financial crisis. However, the dark side of growth is the fact that we churn and burn natural ecosystems and human communities in the quest for dark black bottom lines. So when economic growth comes with increased destruction, it makes sense to look at creating an economy that doesn’t require growth. Recently, and MIT study found that the year 2030 is likely to be the moment at which we run out of Earth- when we will have consumed too many of our natural resources to feed our population, and population will begin to decline.
Shifting Growth to Real Forms of Capital.
Conventional economics outlines a few different forms of capital, mainly Financial, Built, Natural and Human. Ecological economics expands on this a bit to include Cultural capital. The predominant pattern of our current economy has been to consume natural and human capital through the use of built capital for the purpose of growing financial capital. (Fun fact- Even mainstream economists admit that money isn’t a true form of capital, but rather a proxy representation of actual value.) So we can still have growth, we just need to flip the equation a bit, and re-consider the variable we’re trying to grow. Instead of growing money, perhaps it would be more strategic to grow the maturity of human, or the resilience of an ecosystem. Those are two pretty huge needs in the world right now. Perhaps it looks more like using financial capital as a tool to organize and allocate built capital for the purpose of growing natural, human and cultural capital. We want to follow the rules of the universe and grow a quantity that is capable of infinity. Perhaps love fits those specifications. Lets try! I’d be part of a story of a planet of people trying to grow infinite love than a story of people trying to be clever and grow infinite abstract representations of scarcity.
Check out Herman Daly’s Ends-Means Spectrum for some insight on getting our various forms of capital into better alignment:
How Might Multi-Currencies Help us Flip the Equation?
My first guess is in the power of new currencies to enable new business models. New business models will help us create value in ways that support life rather than extract it.
Another guess might be that currencies can help us have a conversation about values, sovereignty and the path of the collective. We all want freedom and we all need community. Currencies might help us prototype and model new ways of working and living together and capture data and patterns in the process that we might not otherwise be able to observe.
Another guess is that new currencies can begin to look at not only tangible, objective stuff but subjective reality and emotions. How do we express invaluable things like love in a way such that they show up closer to infinity than to zero? Recent revelations in fields like behavioral economics expose the fallacy of purely rational decision-making and beg us to pay more attention to emotion, compassion and identity. What would a currency of emotion look like? How might a feminine, relationship-driven currency work? Some scholars suggest that goddess-worshipping cultures in the Gothic era had different currency designs that encouraged them to invest their surplus back into the community, allowing them to build the cathedrals over hundreds and hundreds of years.
As we move into an era when we can quickly be overwhelmed by the number of options available to us in life, perhaps new currencies will be less tools for allowcating scarce resources, and more for managing abundance.
Beyond Metrics, or “Its the Paradigm, Stupid!”
With all this geeky talk about currency, I’d like to just make a reminder that this conversation is not actually about numbers or economics. Its about the assumptions that create structures like money. So we can use currencies as a powerful example, but ultimately the task at hand is not to invent a new way of counting. Its about asking ourselves what we’re counting, and why. How might art be expressed in currency? Do we even need currencies? Perhaps the ultimate goal of new currencies is so help humanity mature to the point where they don’t need the crutch of an external tool to enable them to trust each other and work together.
This is the second in a series on new currencies. View the first post here.
- Flow Currencies
- Lifestyle Currencies
- Quadruple Bottom Line Accounting, New Currencies, and post-Newtonian Finance
- [Video] Sacred Economics
- The Form and the Formless: Economics and the Non-Physical World
- Research on the sharing economy, new currency and impact investing
- Freestyled prophesies on currencies
- Friends featured in Sibos video
- Clarifying my tweets on the #FutureOfMoney
- Emergent Social Venture Capitalistas