Money
Money (Photo credit: Tax Credits)

In recent CPCs, we’ve explored how whatever future we collectively want, we have to deal with a present in which over-consumption and economic inequality go hand in hand. In particular, the role of the monetary system in shaping how society is organised and in determining whose priorities are supported and promoted has been discussed receently. The function of debt (mortgages, consumer credit, student and business loans and so on) not only in managing economic activity but also in shaping power relationships has been the focus of broader interest in recent years. The effective creation of money by commercial banks in making loans, in particular, has been presented by movements like Positive Money as a central stumbling block to democratic reform, given the ways in which the power of banks allows them to direct resources in particular (and often environmentally and socially damaging) directions.

One radical proposal for addressing all these factors is to change the very basis on which resources are allocated, moving from an economy that uses money as a means of allocating resources and coordinating desires with goods to a ‘resource-based economy’. Various ways of interpreting this concept exist. At last night’s CPC, Dan Lloyd set out some of the ideas that are central to one of these interpretations, promoted by the Zeitgeist movement. Dan argued that there are four interlinked problems which global society faces.

  1. Money as debt. The creation of debt has a destabilising effect, as not only does it encourage questionable priorities and create power inequalities between lenders and borrowers, but thanks to compound interest it leads to a situation where debts cannot be paid off, and indeed if they were, disaster would follow. The pursuit of profit based on credit is inherently inefficient as well: for example, it is more profitable to degrade resources than to manage them for the long-term, as the creation of scarcity makes remaining resources more valuable.
  2. Overconsumption. The ‘growth imperative’ leads to ecocidal pollution, and amplifies human-created scarcity of resources. Continued compound growth will mean we require the equivalent resources of 2 planets by 2030, and over 20 planets by 2050.
  3. Technological unemployment. Successive waves of automation and technologically-enhanced productivity have led to increased unemployment as blue-collar manufacturing jobs have been replaced. Now, we are experiencing a further wave, in which service sector and white-collar jobs will be replaced (from the supermarket self-service checkout to the automated customer service line).
  4. The energy crisis. We remain wedded to overuse of fossil fuels, when advances in the use of renewable energy sources should be accelerated.

Dan suggested that, at the level of the money system, it will be necessary to move away from a price system as a way of allocating resources and coordinating production to meet needs and desires. Instead, he proposed a global, open-source based system of coordination, using networked information technology to coordinate how resources are used and what for in order to rationally and efficiently assess and meet needs. A future in which such a system existed would be one in which trade does not exist, and one in which all natural resources are managed as a commons. Our relationship to work would also change. Without the pressure to work for a living, motivations for engaging in work which microeconomic and psychological research suggests are genuinely powerful ones (like the ability to direct one’s own efforts, mastery of skills, and making a contribution to society) could be allowed to flourish. Cooperation, Dan suggested, is a more fundamental human impulse than competition, and structuring work so that it incentivises autonomy, mastery and the urge to contribute creates an environment in which cooperative impulses can emerge.

Emerging technologies are capable of creating abundance rather than scarcity, and their potential must be urgently explored. One further consequence of a move in the direction of a resource- rather than money-based economy would be that ‘real democracy’ would be possible. This, Dan suggested, would revolve around decision making based on the expertise necessary to solve particular problems, rather than relying on either representative or direct democracy as traditionally conceived. A kind of technocracy would result, but not one which arguably exists now, where the same kind of expertise (e.g. a particular kind of economic expertise) is applied to every problem – creating a situation where, to paraphrase Abraham Maslow, if the only tool you have is a hammer, everything starts to look like a nail.

In discussion, audience members shared experiences of crisis situations in which cooperative impulses have been evident, such as in Greece during the aftermath of recent austerity measures, in which the cooperative sharing of resources and skills replaced market exchange as a way of ensuring that needs were met. The degree to which ‘human nature’ is plastic and malleable was also much discussed, with the influence of economic systems (and particularly ones which rely on debt and/or imperialism of various kinds) being seen as a major influence. Do we need a crisis (that everyone agrees is a crisis) before any radical change is genuinely possible?

Two key (and interlinked) issues which emerged were the nature and possibility of abundance, on the one hand, and the issue of coordination of production and consumption, on the other. To what extent is resource abundance, in complex technological societies, possible? Does prophesying abundance mean that we cede too much agency to those involved in developing new technologies, and in speculating about possibilities, place ourselves in a position where we are forced to wait for technologies to arrive (or not)? If abundance is as much a problem of coordinating what people need with what is being produced as a question of production alone, then the question of what kinds of expertise and technological capacity are needed to manage a non-price-based system is an urgent one. How far can the kinds of modelling that scientific knowledge makes possible predict an intrinsically uncertain future, for example? These issues have long been the subject of discussion between advocates of planned economies of various kinds and defenders of markets as information processing mechanisms that allocate resources – as in the ‘socialist calculation’ debate in the 1920s, for example, and as dealt with in Francis Spufford‘s ‘faction’ novel, Red Plenty, at the heart of which is a Soviet cybernetician’s attempts in the 1950s and 60s to create a networked, computerised system for coordinating production and consumption resource across the whole USSR.

Dan’s talk was well-received as an example of using big and radical ideas to open up a space for debate, counteracting the closing off of options that the introduction of austerity has enforced. Where do you stand on the ideas central to the concept of a resource based economy?

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