Money Systems

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  • Fri, Oct 24, 2008 - 10:18pm



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    Money Systems

Question for Chris:

We need a money system that works in a deflating economy.

As you point out, the fundamental problem is population, and as others have pointed out, the reason our population keeps growing is that we are biological organisms responding to evolutionary imperatives, and we have created an energy-intensive lifestyle that has produced a vast surplus of food. Like any biological organism in a food-rich environment, we are experiencing an exponential population boom, and are now approaching its inevitable limiting factors.

Assuming we are not "rescued" in this basic boom-and-bust cycle by some new source of energy and marvellous technology that lets us make food out of air, then as our energy budget grows tight, our population will inevitably decline. One scenario is the sudden mass death of cities, the complete collapse of the energy infrastructure, and going back to goat-herding for the relatively few survivors. Problems solved (and very quickly).

However, let’s assume that there is a creative path that lets us out of this bind more gently. One thing that would be essential to such a path is a monetary system that supports sustained deflation of the economy. The existing system won’t work at all: a sustained economic deflation (driven by a continuously declining population) will quickly bankrupt the entire system, and catastrophically. We’re seeing a preview of this with the little gap following the baby boom, so the US is in a unique position to explore this, right here and now.

Any ideas on what such a monetary system might look like?

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