by Enrique Lescure
“EOS is a group that aims to build a post-monetary [originally “moneyless”] sustainable Terran civilisation based on science. We want to build things, test things and show the world that we can live well in balance with nature and without money.”
I would argue that sentence serves to create confusion. While probably a majority of the Earth’s population has a relationship with money characterised by a sense of anxiety and dread for when the bills are due, there is another – significant – minority that are neutrally or positively disposed towards the concept.
For them, and also for many others – who too well are reacting with dread when hearing the term “moneyless” (since they are accustomed to a moneyless existence in a world where you need money to survive) – the message outlined in the quote above is not evoking positive reactions.
Ultimately however, we as a movement need to use language in a very precise and consistent manner, and having too much of a focus on money without properly defining money is a strategy that can lead to us being misconstrued or being interpreted as out of touch with reality.
Ultimately, the biggest problem with money today, from an ideological and political perspective, is that the general public does not know what money is.
- Money was originally an organic invention born out of trade exchanges.
- Nowadays, money is created through the issue of debt, which requires constant exponential growth.
- That leads to the destruction of the Earth’s biosphere.
- The EOS has devised an alternate system where we are basing the value of our currency on energy instead of market demand.
- We intend to test that model, not implement it immediately.
Money as a result of barter
One of the most irritating misunderstandings an EOS lecturer could endure is when – after they have gone through the trouble of explaining Energy Accounting – parts of the public still imagine that we want to go back to barter. Therefore, it is important that the lecturer tries to explain our stance that we do not wish to return to a pre-monetary system but go forward to a post-monetary one.
Some people may even think that barter is better than using money, most likely out of aesthetic or cultural reasons (especially those who find Gift Economics to be a good idea). However, money arose already before minted coins, and before anyone called it money.
The problem with barter is that the sheer amount of goods tend to make trade very complicated. If individual A desires good X in return for good Y, but individual B (who possesses good X) doesn’t want good Y but good Z, individual A has to go to individual C who has good Z and desires good Y. Eventually, such organic markets tend to centre around a “key good”, either an actual good (like dried fish in medieval Sweden), or a symbolic token (like colourful pearls as in some Caribbean cultures) which by unwritten agreement and cultural norms become the good that is used as a currency to gain access to the other goods. Often, there were several currencies in operation at once in such systems, and they tended to vary regionally.
Money did not arise with coinage, but grew organically from society.
The reasons why kingdoms and city-states started to mint coins was to be able to pay armies and establish control over trade flows, in order both to be able to raise revenue to protect the population and to wage wars against neighbouring political entities. Another good thing with metal-based currencies (from the perspective of the monarchies) was that they were naturally scarce (unlike sea-shells) and did not decay over time (like dried fish and eggs).
The main problem with metal-based currencies during the medieval age, was that they were deflationary, meaning that money had a tendency to accumulate in the hands of major land-owners that provided the cities with food necessary for survival, creating enormous inequality and hampering trade. To counter that, kingdoms and city-states generally issued coins during festival years to stimulate trade periodically.
Money as debt
Fiat money gradually evolved since the late 14th century, originally born amongst Italian banker families in the wealthy city-states of the Po Valley. It largely co-existed with metal (gold and silver) as an insurance security for centuries, until it finally started to stand on its own legs in 1971, following the abandonment of the Bretton Woods system.
I have explained in detail earlier about how this system is operating, so let me just reiterate it in a very short summary.
Banks operating globally, nationally, regionally and locally, are today providing credit to companies and consumers alike. These credits are actually multiplied from the banks reserves – meaning that the banks are actually lending out more capital than they have. Capital that must be paid back at interest.
This credit-based system demands constant economic growth, since money that is issued at must be paid back. Since you cannot create value out of thin air, economic production needs to grow to ensure the ability to repay loans. Of course, new loans are being issued continuously, guaranteeing that the total gross domestic debt of humanity always is larger than our gross domestic product, bonding us to exponential growth forever.
Since economic production has to grow exponentially, that means that our collective effect on the Earth’s life-supporting systems have started to make said systems decay and degenerate at an accelerating pace. The climate is disturbed, the oceans are dying, soils and freshwater reserves are depleted and land-based eco-systems are being replaced and outcrowded by destructive mono-cultures.
This is not only a question of continuous destruction, but also of the creeping realisation that we’re causing a sixth mass extinction. At the current rate, we will move towards a global biosphere collapse by the end of the 21st century.
The Earth Organisation for Sustainability needs to be able to explain why the current system is deeply problematic and how it destroys the life support systems of the Earth. We are moving in the right direction, but overally, most people still believe that the current fiat-based growth-dependent monetary system is sound and see it as as natural as breathing air or drinking water.
The challenge must be to systematically educate the public about the facts of how the current system both has created the modern western civilization, and is about to destroy it. To create an environment where the system is no longer seen as accepted or natural or “the best possible system”, but as something artificial that has been imposed over us and which is not stable nor sustainable.
The current fiat system needs to be delegitimised, but it also needs to be explained.
If we just attack “money” as a concept, we will mainly attract moralists and technological luddites. Therefore, instead of stating that we want to abolish money, we should state as it is – that we want to explore the potential for an energy-based currency based around the capacity of the planet to provide for our needs.
We must be precise when we use language.