Category: problems

You know something’s wrong, that we have not sorted out a decent way to live together, yet. And you know that there is a better way, that we are not this stupid and blind, that we can do a better job of living together in peace with prosperity. Well, you’re right… here is why and how.

The tension in money

The search for a truly functional economic system is still going on – we haven’t got there yet. The richest societies are swimming in wealth and debt at the same time, the fastest growing countries are destroying their living environments, and the failing countries are mired in restrictive cultures. Capitalism may be the “least worst” system, but it is not good enough to sustain human life on this planet.

Marx’s critique of capitalism (that the working classes would eventually revolt against those who accumulated the capital) has turned out to be misplaced. It is more true that we are evolutionarily predisposed to the acceptance of hierarchy, even when it is dispensed from no more meritorious source than random genetics. The real failure of capitalism as a system for organising human societies is no less foundational than the failure in Marxist theory, its failure is the absurdity of placing a system of capital at the root of a system for organising humans.

Capitalism is an economic system, and not a political system. Moreover it is an economic system specifically focused on capital, and its kissing-cousin ‘money’. When capitalism is purloined to become a social system, it faces an inevitable tension that must exist in a system that recognises money as the only representation of value. In a “capitalist society” money is used in two different ways:

• a medium for transactions (including those that do not create any wealth),
• a store of wealth. 

These two roles pull in fundamentally opposing directions, and corrupt the very foundation of capital as an economic element.

In its transactional role the impetus is always to create more money, to represent a higher and higher proportion of the total activity in the system. Because if capitalism is to be the social system, then it is necessarily forced to embrace the notion that all activity can and should be represented by money.
In its role as a store of wealth, on the other hand, it is necessary to constrain the supply of money to only that amount that represents the remaining capital after transactions have been completed.

The tension between these opposing roles that money must play in a purely capitalist society, is its ultimate downfall – not the class revolution imagined by Marx.

The only thing that can be everything and special at the same time, is nothing.

21st century enlightened economics recognises a third, or middle way. It recognises capitalism as a perfectly valid mechanism for representing economic activity, and at the same time recognises that economic activity is only a subset of the total society, because the economy is a child of the society.
Once we relinquish the enslavement of capital as the sole representative of all transactions, we are freed to recognise that there are many transactions in the social sphere that are bartered for social value, and which are much better not recognised as having monetary value. 

The 20th century classroom

The 20th century was really the battleground of two 19th-century phenomena: the scientific revolution, and the pressure that revolution placed on the organisation of human societies. Developments in scientific knowledge led first to the industrial revolution, then to the electronic revolution, and lastly, but not finally, to the information revolution. In each revolution the capability to create and recognise increases in wealth grew exponentially. Each revolution also led to exponential increases in our ability to look after ourselves, to feed ourselves and provide for our health, leading to massive increases in the human population.
We stand here in the morning of the 21st century, almost exhausted by the incredible events of the last 150 years, and yet facing, with immediate significance, the challenge of bringing it all together into a sustainable mix. We must now complete the fourth revolution, the sustainability revolution, if we are to go into the afternoon of this century with anything like the population we have today.

If we could see ourselves today, we would see a person standing on the top of the globe, brandishing pieces of paper, and shouting out “This is my worth!”. And in an instant we would recognise the fallacy of ‘economics as society’. The compulsion to bring every activity into the monetary realm is a self-defeating strategy that pits credibility against the wealth it seeks to protect. As more and more of a society’s activity is turned into money, and money is used a store of security, the dragon chases its tail until it has consumed itself. This is where we are now. As our money seeks security, it is the flow of the money that defines the value of the assets, and the connection between wealth and money is loosened, until it is lost. We are there already: the price of nearly every asset is not significant of its real value, instead it is the quality of its ability to provide a secure store of money that defines it’s price.

21st-century enlightened society

21st century enlightened society is one in which a capitalist economy exists alongside, and inside, a sustainable human society. 21st-century enlightenment economics retains and nurtures the perfectly human elements of competitive resource allocation, reward for effort and innovation, and it does so without pretending to be a system for organising human society.

The organisation of large-scale human society is in every way a superior activity to that of economics. 21st-century social organisation must meld the interests of humans, with the preservation of our environment, it must acknowledge our tribal tendencies, accept our natural ambition, recognise our dependence on specialisation, and appeal to our highest callings to follow a path that is inherently sustainable and balanced.

Bad endings

There are two root causes for the failure of every large-scale human society to date: environmental destruction, and specialist denigration. Why are fascism and communism ultimately doomed to failure? Because they both fail to honour and support the specialisation necessary for complex large-scale societies. Why is capitalism doomed to failure? Because it fails to recognise environmental and social values. Why are religious societies doomed to failure? Because they do not provide the freedom necessary to allow specialisation to flourish.

Every human, even a completely solitary human, is dependent on their environment for survival.

And large-scale human societies are equally dependent on their ability to honour and nurture specialisation for their survival. Large numbers of humans require complex infrastructure and sophisticated administration to survive, and both of those are dependent on the availability of, and respect for, a wide range of specialists. Honouring specialisation has a kissing-cousin too: respecting diversity, which inevitably leads to secularism.

By learning from our history and understanding the proper role of economics, we can start to divine the threads we must weave into a path to a sustainable future: we must protect our environment, honour and nurture specialisation, and recognise our economy as a child of society.

If you are destroying your environment, denigrating the contributions of specialists, or promoting money is the only signifier of value, then you should know that you are also sowing the seeds of the destruction of your society. If you restricting individual liberty, you are restraining the unnecessary experimentation that is the heart of innovation. If everything is money, then money cannot be capital, and your capitalist economy is broken. Use a hammer to drive a screw, and you end up with nails.

Happy endings

There is a happy ending. Understanding the proper roles of money, diversity and environment leads us to a new, sustainable social structure; one that must incorporate these essential ingredients:

1. An economy that uses money for trade and commerce, and does not attempt to put a price on every activity.
2. A society that values the contribution of specialists, and protects the freedom they need to succeed.
3. A deep respect for the natural environment on which we depend.

We achieve a sustainable economy by providing the basic necessities of life to each other, without charge or condition. In this way we confine the use of money primarily to commercial transactions, and so we protect the proper role of capital, and allow it to operate usefully inside our economy. We also own our social responsibility, and make ourselves the masters of our economy, because we are not asking money to fill an unnatural role as our social security.

We create a sustainable society by recognising the value to the whole society of diversity, and the essential contribution of specialists of all kinds. Individual liberty is the foundation of successful specialisation.

We protect our environment by incorporating it is a valid priority in all our policies, and by enforcing its recognition in the pricing structures of our economy.

These are the foundations of LIFE’s policies. Grounded in a clear understanding of what is necessary to survive, we can complete the final revolution: to provide a future worth living for our children and their children.