Our Money System - Quo Vadis?

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Downrange
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Our Money System - Quo Vadis?

I composed this in reflection last night in response to an ongoing debate elsewhere on the 'net about money and likely courses that will be taken.  I decided to post it here instead of there, in hopes it will engender some constructive discussion.

----

 Money is part of the "social agreement."  Inasmuch as we have a fiat, interest-bearing debt currency system, backed by nothing but the promise to create more of it as needed (to pay down debt and to accomodate expanding real activity), we are faced with the inevitability that money must grow "exponentially" to accomodate a system of endless growth.  Because there are physical limits to growth (as Chris Martenson so well outlined in Crash Course), the end result would seem to be (eventual) collapse and reset of some kind.  The manner in which that occurs, or is managed, seems to be a key component of the critical path we are approaching.

Because the dollar is the alpha currency, if you will, (and I don't entertain any illusions about another one replacing it - it can't, for the reason that we (the West) are the center of "consumption" and the largest planetary repository of real wealth) all global fiscal entities will find it in their best interest to work to keep the present system going as long as possible.  End game (and a potential renaissance) happens when the limits of life on a spherical planet, fueled by a nuclear furnace 93 million miles away, and a dwindling natural resource base and expanding population, are finally realized by all.  We are very close to that point.  Lessons are being hammered home daily.
All that said, there is a lot that can and, I think, will occur as "final options" are played out in the intermediate term.  War is possible, but I do not think particularly likely, at least not on the global scale witnessed in the twentieth century, if for no other reason than no one can afford war anymore.  There is simply no enormous supply of surplus energy available to power them.  Oh, we can hurl a few nukes around, but what's the point of that?  You cannot occupy and profitably hold a city that is now in cinders.  The "war answer" is the fitful tantrum of the child who must put away childish things now.  It's part of the old paradigm which must be replaced by new thinking.
What I'm coming to believe probable is that we will emerge from the immediate economic crash as, first, a forced reflation of the first world, powered by the rapid build-up of the former second and current third world.  We are already seeing this.  This movement preserves for a while the existing order between "producers and consumers." But the Limits to Growth are already becoming painfully apparent to both.  So, in a way it's a kind of race - a sprint to the finish line with China leading the pack as the bottom two tiers/worlds rush to implement modern societies with their accompanying middle class structures before the "supplies" to do so run out.
Peak theories (oil, copper, water, you name it) come into play, BUT, and this is key, we have achieved notable efficiencies in recent decades that can mitigate some of the effects of peaks.  As Bucky Fuller wrote, we are in an age characterized by "ephemeralization," or doing more and more with less.  He wrote that the planet could comfortably sustain 11 billion using all renewable systems, although I have not personally verified his calculations, and I also do not know whether I would enjoy living on such a crowded planet, but there it is.  We are more than half way there. 
The coming economic "solution," if one can stretch the term to fit what is really a temporary stop-gap, will be funneling more surplus energy towards the hungry wanna-be nations through continuing the "global supply side economics" that has made possible the current wealth concentration in the West.  The West can sustain its standard of living only by benefiting from the ephemeralization that is well established (and which by the way looks a lot like one of those exponential curves - think computer technology, for example).  For this to succeed, though, SIGNIFICANT restructuring of our resource utilization will absolutely have to occur first.
One of the largest changes that will be mandated by the emerging reality will be the final transition towards what Toffler imperfectly described as the "information age."  Simply put, we've progressed through an early agricultural age, transited through a heavy industrial age, and have entered a new age that is characterized by new technologies, fueled by Bucky's ephemeralization and manifesting all around us in an explosion of technology.  Yet, we lag 40-80 years behind in our social contracts, still daily sending hundreds of millions of people dozens of miles from "suburbs" into urban work centers, to sit at desks in large buildings and mostly push paper around, the sedentary evolution of the work they did during the industrial age, where trading one's time for money became the established model, and vast hordes of "workers" were needed to accomplish anything.
All - this - must - change.  The planet cannot afford the old industrial economic models.  Paraphrasing Bucky, better to pay most of these people a decent salary to sit home and surf the internet all day.  Future productivity will be based upon valuations of one's contribution to global sustainability, with all bearing some responsibility for the true cost of their existence (rather than a relative few enjoying enormous surplus wealth while most struggle for subsistence).  A certain "guaranteed minimum income" will be available to all (it is already, as any astute observer of the Western scene can attest - it's just masked as social programs and "redistribution of (middle class) wealth" through onerous taxes).  Infrastructure support will be characterized by massive decentralization.  Let me say that again - DECENTRALIZATION.  The key to surviving the resource crunch will be local networking, linked globally.  (The new Hyperion Nuclear Batteries are an example - google it.)  Yet people will perceive themselves more than ever to be part of a global community.
Getting from here to there will involve all who are alive today, along with many unborn, and will represent, I think, the great drama of the next 100 years.  Our entire system of "compensation," and the relative perception of individual, family, and national wealth and worth will evolve away from a model of competition based on scarcity to one of cooperation based upon successful integration and individual responsibility within the now-recognized solar economy.  This is NOT socialism (which steals from the productive to feed the indolent), nor is it capitalism (which is a zero-sum game like "Monopoly" where someone ends up with all the deeds and money); actually the fact is that we are all already billionaires in terms of the daily solar capital already bestowed upon the planet - we're just lacking in the needed design revolution to transform everything (that's Bucky's, not my description).
The old world can be seen to be in the early throes of a massive transformation that will seem like death to many, but from which the only real (mathematically and cosmically-supportable) solutions can emerge.  There will be conflict and suffering, especially as extremist religionists flail around, trying to preserve or destroy their perceived existing orders.  But I think we'll come through it.  If you ever watched the "Next Generation" version of the Gene Roddenberry series, you might have caught an imperfect vignette of how such a society might be ordered in some of the plots that "revisited Earth."  Prophetic and insighful fellow, that Roddenberry.  This is what's coming, I think, because, in the end, people usually choose to live, even when it means a lot of change.
So, to sum up, near term, there will be an effort to reflate, re-firing the consumption model to enable additional build-out of the global infrastructure into places that are "becoming."  This will manifest as Dow 20K sometime in the next few years.  Housing will begin to re-ascend from lows recorded in 2008 and 2009.  Emerging markets will be re-energized.  The national industrial base will get a shot in the arm with the planned infrastructure rebuild.  We've probably got five to ten years of a relative hiatus in the descending storm, and perhaps another ten years beyond that to begin serious change that embraces totally new models.  I probably won't see it, but my kids, and certainly their kids, should see the dawning of a true economic "new world order," which is sorely needed.

 

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Re: Our Money System - Quo Vadis?

Very interesting reflection. Very high expectations for the reflate effort.

The Hyperion Nuclear Battery
(http://thefutureofthings.com/news/1079/hyperion-nuclear-batteries.html)
is a very interesting development. That sort of technology could lead
mankind to return to smaller, self-sufficient communities and,
hopefully, get us away from the mega-cities of today along with
catastrophic failures in our current electrical grid that can take out
huge swaths of the country.

I hope the pain in getting from here to there is not as severe as some predict.

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Re: Our Money System - Quo Vadis?

Ray Hewitt brought this one up a while ago.

http://www.peakprosperity.com/forum/solution/8420

I had a quick look and love the way its considered "extremely safe". Only wipes out small populations at a time.

Don

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Re: Our Money System - Quo Vadis?

The irrational fear of nuclear energy and all things "radioactive" is one of the luxuries of ignorance we will not be able to afford in the coming milieu.

People continue to smugly throw out their little quips, expecting everyone to follow the old meme established by Hollywood and (I'm not Fonda) Jane in "The China Syndrome."  The days of being able to wallow in such "feel good" blanket condemnation of an entire technology and transformation process and continue in denial about relative risk and the need for nuclear power to expand in a really big way are nearly over, to be ended by the harsh dawn of energy economic reality.  Enjoy them while you can.

I'm surprised we haven't had more comments yet about the rest of the initial post.  Thanks SamLinder for his, but isn't there anyone else with anything to add to this?  I threw a lot out there (maybe too much!), and was hoping there would be more to talk about than the well-worn chestnut of nuclear power, which is really a tiny part of the issues at hand.

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Re: Our Money System - Quo Vadis?

To be frank DownRange it is too long, too complex and too much about money alone for me. If it needs so many densely packed words I am uninclined to engage. Try an executive summary? Can it be explained in less words?Your comment about real wealth threw me off immediately. I regard culture as real wealth and the US as culturally poor. 

Not sure that you would find agreement in your position on Nuclear energy around Chenobyl (sp?). I see that Dmitry Orlov attributes the collapse of the soviet union at least in significant part to this disaster. Now that is nuclear power.

Don

________________________________________

Diversity is our greatest strength, complacency our greatest weakness

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Re: Our Money System - Quo Vadis?
pir8don wrote:

If it needs so many densely packed words I am uninclined to engage. Try an executive summary? Can it be explained in less words?

Don

DownRange,

I agree with Don regarding the "densely packed words". I had to really work at it to read through the whole thing. Breaking it up into smaller paragraphs would certainly be a big help as far as readibility. Don's suggestions are also good to consider.

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Re: Our Money System - Quo Vadis?

Thanks for the feedback.  There is something about the software that doesn't accept paragraph breaks using standard carriage returns.  I tried twice to edit it, but it just doesn't see them.

First, Chernobyl.  If you don't understand why Chernobyl happened, and why it can't happen in most of the world that uses nuclear power, I suggest you study the event more.  This is exactly the kind of knee-jerk reflex thinking I was talking about in my first reply.

Second, to really explain the post would take more words, not less, and perhaps graphics and a delivery like Chris's crash course.  No time for that now, maybe later.  If it can't be parsed, so be it.  Consider the thread a less than fully successful experiment.  Back to the drawing board.

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Re: Our Money System - Quo Vadis?

Oh yeah, "culture is real wealth" and we don't have much - that threw me off, big time.  I don't think the gap between that kind of thinking and mine will be bridged easily.  I'm reminded of Hunter S. Thompson who said, "when I hear the word "culture" I reach for my gun."

Maybe this forum isn't worth the effort.  I've stayed away because, frankly, I don't have time to tilt against windmills or fight recurring misinformation.  That's what I admire most about the Crash Course.  It just lays it out there - no political angles - all facts, clearly stated, and either you follow or you don't.  Maybe I'll try something like that someday when I have the time.  Good luck.

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Re: Our Money System - Quo Vadis?

I think we should consider sometime soon, ending the Monetary system (sounds radical but just listen).  If we look at all the problems that occur in society, the majority of them all come from a money system.  Ex, war, crime, poverty, recessions, depressions, booms, busts, corruption, and so on, but what is the one thing that makes our lives easier and more efficient?  It's technology, technology and the intelligent use of resources is what makes our lives better.  False ideas such as money, religion, or other have never truly Solved our problems in society only create them.  Most of the bad behavior that we see in society are all connected to the money system.  If we provide the necessities in life through the intelligent use of technology and resources, society would behave in a very different manner.  Our human behavior will never change in a monetary system.  Think about how much further advanced our civilian technology would help out society if all the time, energy, human capital, resources were used in the best interest of society instead of nuclear bombs, and other counterproductive measures.  What I am implying is a resource based economy.  If anyone if familiar with Jacque Fresco then you will understand.  Of course going from a money based system to a resource based system would not be easy.  It would have to be done in stages, such as an energy stage, food, then housing, or in whatever order seems to benefit society.  Watching the news, or coming on these forums just really paints more of how primitive we really are.  You're probably wondering about incentive, since money (fiat) is our only incentive that we are aware of, I'll give you an incentive.  It's pretty simple.  If you create the necessities in life on a upgraded scale for society then, your everyday bank robber, or crook would not really be.  Due to the fact a bank robber can't rob a bank cause there is no bank.  Or, no need for selling street drugs, because no profit would come from it.  We can go on and on with a list of benefits, but the end picture is the better we make our society the better your life will be and the better future generations will be, and will live without the threat of loosing ones job, recessions, or nuclear war.  Our money system, keep us using materials and resources in a poor way.  True, we enjoy many things in society in our current system, but when you look at domestic poverty and world wide poverty, we truly not using our resources and technology very wise at all.  A money system can also paralyze technology, just think about what is not being told to us when it comes to abundance on the issue of food and energy.  Even our current obesity problems in america can be linked to the money system, think about it.  Companies need to save money, so they use unhealthy foods and chemicals and pump out some marketing jingle to get everyone to eat there, only to become obese, or get some other health related problem all in the name of profit.  

Well I would write more but time for bed, hope to get some responses, maybe I can answer them.  I probably can. 

 

Do this little experiment, next time you watch the news, tv show, or movie think about how and what problems occur and see how it can be linked to the monetary system.  Then realize we need to change our way of thinking.  

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Re: Our Money System - Quo Vadis?

Response to JK121:

 Your whole post is based on the incorrect assumption that money is an ends in itself. Government officials or corporate CEOs don't take bribes so that they can put the money in an offshore bank account, never to be touched. Robbers don't rob banks so that they can take the money and bury the money, or hide it somewhere, just to have it. The reason money is valued is because of its function as a means - most basically, a means of facilitating the transaction of resources. 

I take issue with your labeling of  money and religion as "false ideas". How can you have an idea characterized as false, or true?

"It's technology, technology and the intelligent use of resources is
what makes our lives better.  False ideas such as money, religion, or
other have never truly Solved our problems in society only create them."

 That implies somehow that technology only solves our problems and never creates them. I can think of quite a few people who would disagree with your assertion that technology is some benign force that always helps us. Hiroshima and Nagasaki? Treblinka, Buchenwald, and Auschwitz? Were these the results of monetary policy or religion? Were they not accomplished by the use of technology, your god? 

"Our human behavior will never change in a monetary system." But our human behaviour will somehow change in another system? Our survivalist instincts for self-preservation and self-interest will, in some other system, be diminshed? To me, the most successful system for achieving that ends would be religion. If the threat of eternal damnation and punishment isn't going to change "human behaviour", than what will? Also, I'd like to ask where your assumption comes from that a monetary system ought to change human behaviour? 

As a spike to anyone who would challenge any lack of incentive in your system, you write:

"If you create the necessities in life on a upgraded scale for society
then, your everyday bank robber, or crook would not really be.  Due to
the fact a bank robber can't rob a bank cause there is no bank.  Or, no
need for selling street drugs, because no profit would come from it."

First of all, i'm not really sure what it means to create the necessities in life on a [sic] upgraded scale for society" means. Even with that confusion, you're totally right. A bank robber cannot rob a bank because there is no bank. That's great. Unfortunately for us, bank robbers are a very specific subset of a more general category of criminal: robbers. While your elimination of banks will eliminate bank robbers, what's to stop someone from riding over to your farm and stealing your chickens? Your corn? Your lumber? Or any other resource you might have? Like I said before, money is only valuable in that we can exchange it for goods and services. Remove the money, and people will just steal the goods themselves, and get the services by force. The reasons robbers generally rob banks for money instead of farms for cows is that money is easier to transport, and more convenient to purchase. If robbers were to steal cows, they'd have to find someone willing to take a cow as payment for whatever it is the robber wants.

No profit from selling drugs? Well, how about your neighborhood cocaine dealer charges something like a barrel of grain for a gram of coke, as opposed to an amount of money? If I were a cocaine dealer, and money were abolished, I'd be more than willing to give my resource (cocain) in exchange for another resource,  such as water or electricity.

 I will agree that we aren't using our  resources and technology as wisely as we could be. However, I find no reason to blame the existence of money.

Your last reason is basically a jab at fast food companies. However, I don't see why this "evil" is a function of money. The reason they use unhealthy foods is because they're cheaper, in that they require less energy to create, and place little demand on more valuable resources, while still providing the daily sustenance we need.  None of that would change by abolishing money.

 In summary, I feel like you're just frustrated with human nature. The reason we have corruption and greed and competition isn't because we have money. It's because we're humans! We aren't perfect! We care for ourselves more than others, we want to be better off than others, we want to look better, eat better, live easier, and work less than our fellow man. Humans are inherently selfish. Sure, that is manifested in the monetary system. But it's not a flaw of the monetary system. All you're going to do is have robbers stealing resources themselves, wars fought for resource control, and drugs traded for resources. You will never be able to completely eliminate human greed and selfishness. Money itself makes no difference.

-Chris

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A couple of interesting posts - thanks

I fall back here on Bucky.  He wrote about the needed transformation from a society/structure based on the perception of scarcity and competition for resources to one based on the recognition that our "solar income" is sufficient for us all to have everything we need, through a design revolution that is in reach now due to technological innovations of the past thirty years or so (Critical Path, written in the eighties, iirc).  He also wrote about the need to move from power structures based on weaponry to "livingry," which echoes JK121's points, I think.  Also, moving from "consuming" to "prosuming."  An example would be devoting time to the proper and healthy raising of a child, something that is not normally regarded as an activity worthy of "monetary" remuneration.

The present state of the world can be seen to be an evolution from original nation-states to an internationalist conglomerate made up of big corporations without much in the way of allegiances to nations.  The force-based system of weaponry and deployable force is a "realpolitik" response to what has gone before.  In many ways it has been completely outmoded by asymmetical warfare (9 /11) and the permeability of society engendered by the communications revolution that is ongoing, and characterized by the widespread availability of internet and other new forms of communications technology.  Borders are not what they used to be, and the perception of "us vs. them" is changing at a grass roots level.

For me, it's hard to imagine how we get from here to there, though.  There's just so much human nature and "history," well-worn knee-jerk reactionism, if you will, that it seems an uphill battle.  I am reminded however that time has a way of working these kinds of seemingly impossible challenges out - even as we find most of such movement to be invisible due to its complexity and extension beyond our immediate perception. 

Certain other of Bucky's ideas give me pause, I must add, such as his idea of the need for a central, one-world government to replace the buzz of competing nation-states.  I always thought he underestimated both the challenge of putting that in place and the nearly certain threat of tyranny represented by the concentration of power in such an assembly of power yielding individuals.  Still, if we move to a model of plenty, rather than one of scarcity and necessary competition, I can imagine a way it might be done.  The whole point is we have this multi-millenia-long history of competition, conflict, and hoarding of the planet's wealth, based on this perception of scarcity and "taking care of oneself, first."

I wonder if any of our forum members have read much of Fuller's works.  It's kind of hard to discuss all this and relate it to my set of ideas without a shared background in the material, but it hasn't stopped me from trying!

 

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Re: Our Money System - Quo Vadis?

Interesting take Chris, but still many social problems are a result of money.  Money is used due to Scarcity among other things.  When abundance is met and necessities in life are provided human behavior will change on a massive scale.  And yes Money does not, and cannot solve human problems.  You cannot eat or start your car with money, it's the technology that makes your life easier than previous generations.  Money is just the overall paralyzing element in the equation that can prevent a certain technology from happening.  Money is also a thing that makes people in poverty  act in a negative way, it's not entirely their fault, they are just doing what they need to survive.  Like I said before we are using our resources in a poor way.  Then when someone acts in a negative way on society we pass a law, for laws are a result of insufficiency.  Or we elect people in high office to solve problems, politicians can't solve human problems either.  It's the engineers, technicians, people with a real skill that gave you all the technology and ideas to solve the problems humanity faces.  Politicians can only pass budgets, declare war, and make more laws.  They give you this falso idea that they do solve problems through hypnotically repeating freedom, democracy or other catchy slogans to get people to vote for staus quo B.S.  We can already see obama doing that.  I hope Obama knows you cannot print or tax to growth. 

 

We may also forget that, one main reason why people even have jobs is because the job has not become automated yet.  Just think about over the last 100 yrs how many jobs have been taken over by technology.  This is where we are headed.  When intelligent technology and use of resources becomes the number one priority for society then most of the scarcity and old jobs of the past will be gone.  If you and I talked to people 100 years ago and told them all the things we have today such as e-mail, cell phones, laptops, better farming equipment, they would call us crazy!  Now if people only 50 years from now came and talked to you and I and they told us what is to become of society through technology, we both probably would be in shock as well.  

 

what's to stop someone from riding over to your farm and stealing your chickens? Your corn? Your lumber? Or any other resource you might have? 

When technology and automation are updated to satisfy the needs of society, no one will have any reason to steal chicken.  We also forget farming is down big time in this country.  American really needs to increase farming and actually make something again.  Over population is not the problems either. 

 It's going to take a total financial collapse for people to realize that we need to change our way of thinking and how we use our resources and technology.  Under a resource based economy many of the pointless professions, such as bankers, advertisers, insurance, accounting would be gone, and the resources used for those industries would be applied to the upkeep of society.  We waste a lot of resources for all those industries.  

 

Think about this before I go,  If you and 10 other people we stuck on an island and you needed to survive, all of you had $100 in your pocket.  Stop and ask, is it this paper money that would help all 10 of us survive or is it the human capital and intelligence that will help make the necessities we need to survive?   You may use the money to help start a fire.  Just remember we are on an island a big one Earth, the point is lets not screw it up, because were doing a hell of a job doing it.  

 

~Joe 

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Re: Our Money System - Quo Vadis?

 Your whole post is based on the incorrect assumption that money is an ends in itself. Government officials or corporate CEOs don't take bribes so that they can put the money in an offshore bank account, never to be touched

 

Not sure how you came to that conclusion.  Many money systems have failed so Yes they are an ends to itself.  And saying that Ceo's or government do not take bribes is just down right ridiculous.  

 

I think you would have a better chance making people believe that man can walk on water or virgins can give birth.  

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