psychegram
The Living Force
Enmeshed as we are in the pyramidal feeding hierarchy that is the modern economy, it's hard not to identify modern economics as one of the most - if not the most - STS-oriented system in the world today. Those on the top fixate on profit, while those on the bottom scramble to survive, both strongly STS activities. The key problem, it seems to me, is usury: charging interest for the use of money - whether that created by central banks or loaned out by those further down the chain - inevitably creates conditions whereby all participants are forced into acting out of greed, becoming the Homo economicus of economists' lore. It's not hard to see why this happens: if money is created at interest (ie created as debt), then at any given time there is less money in existence than money owing. Either the economy has to grow, or some people will inevitably have to go bankrupt. Either way, wealth ultimately can flow in only one direction: upwards, towards the top of the pyramid. I don't think I have to spend much more time on this; I imagine everyone here already has a pretty good grasp of this dynamic.
There are, however, other ways of doing things.
About a hundred years ago, the economist Silvio Gesell saw this dynamic, and suggested that it could be reversed by, in essence, reversing the equation that created it. He proposed using demurrage rather than interest: money would be created free of charge, and then over time it would lose value at a steady, pre-determined rate. This would discourage hoarding (ie saving), for there would be little point in simply holding on to one's money when it would be worth less tomorrow than today; instead, it would encourage people to either spend their money, or to simply give it away.
Here's a link to Gesell's book, The Natural Economic Order:
_http://www.utopie.it/pubblicazioni/gesell.htm
His ideas were put into action in the midst of the Great Depression, in the town of Wörgl. Austria. The town prospered, though economists of course debate as to whether the demurrage feature was a crucial part of this prosperity.
More recently, the philosopher Charles Eisenstein has revived the idea, discussing it at some length in his online book The Ascent of Humanity, as well as in a number of articles. His most succinct treatment of the idea - much more detailed and eloquent than I can give - can be found here:
_http://realitysandwich.com/money_a_new_beginning_part_2
Some of my own thoughts, on how to deploy a free currency in the modern environment, are online here:
_http://frecu.wetpaint.com/
Now, obviously a free currency would not in and of itself be sufficient to switch the economy - and society - to an STO orientation. Quite a bit more would have to change than that. It would, however, be a big step, removing one of the larger obstacles that stands in the way of STO behaviour on the part of ordinary people.
There are, however, other ways of doing things.
About a hundred years ago, the economist Silvio Gesell saw this dynamic, and suggested that it could be reversed by, in essence, reversing the equation that created it. He proposed using demurrage rather than interest: money would be created free of charge, and then over time it would lose value at a steady, pre-determined rate. This would discourage hoarding (ie saving), for there would be little point in simply holding on to one's money when it would be worth less tomorrow than today; instead, it would encourage people to either spend their money, or to simply give it away.
Here's a link to Gesell's book, The Natural Economic Order:
_http://www.utopie.it/pubblicazioni/gesell.htm
His ideas were put into action in the midst of the Great Depression, in the town of Wörgl. Austria. The town prospered, though economists of course debate as to whether the demurrage feature was a crucial part of this prosperity.
More recently, the philosopher Charles Eisenstein has revived the idea, discussing it at some length in his online book The Ascent of Humanity, as well as in a number of articles. His most succinct treatment of the idea - much more detailed and eloquent than I can give - can be found here:
_http://realitysandwich.com/money_a_new_beginning_part_2
Whereas interest tends to concentrate wealth, demurrage promotes its distribution. In any economy with a specialization of labor beyond the family level, human beings need to perform exchanges in order to thrive. Both interest and demurrage represent a fee for the use of money, but the key difference is that in the former system, the fee accrues to those who already have money, while in the latter system it is levied upon them. Wealth comes with a high maintenance cost, thereby recreating the dynamics that governed hunter-gatherer attitudes toward accumulations of possessions.
Whereas security in an interest-based system comes from accumulating money, in a demurrage system it comes from having productive channels through which to direct it – that is, to become a nexus of the flow of wealth and not a point for its accumulation. In other words, it puts the focus on relationships, not on "having". The demurrage system accords with a different sense of self, affirmed not by enclosing more and more of the world within the confines of me and mine, but by developing and deepening relationships with others. It encourages reciprocation, sharing, and the rapid circulation of wealth.
Some of my own thoughts, on how to deploy a free currency in the modern environment, are online here:
_http://frecu.wetpaint.com/
Now, obviously a free currency would not in and of itself be sufficient to switch the economy - and society - to an STO orientation. Quite a bit more would have to change than that. It would, however, be a big step, removing one of the larger obstacles that stands in the way of STO behaviour on the part of ordinary people.