The Community Economy Needs Its Own Money by Charles Hugh Smith for Of Two Minds
The solutions will come not from those profiting from inequality and scarcity but from relocalizing “money” and production to create degrowth community economies.
We think we understand “money”–we don’t. We think the current versions of “money” are the final versions–they aren’t.
Understanding “money” requires some heavy-lifting, but it’s important, so let’s dig in.
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The most accurate description of “money” (in quotes because it’s not what we think it is) is Art Berman’s shorthand:
Energy is the economy.
Money is a call on energy, the capacity to do work.
Debt is a lien on future energy.
We think that creating more “money” can solve all problems. It can’t. Creating more “money” only adds another crisis to the fundamental crisis, a scarcity of affordable energy and resources.
In my new book, Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States, I identify the two problems neither nation-states nor global markets can resolve:
1) Soaring inequality caused by the concentration of capital, power and agency in the hands of the few and the resulting decapitalization and powerlessness of the many.
2) Scarcity of the essential resources that are the foundation of the globalized industrial economy.
The primacy of “money” (finance) is evidenced by the proposed solutions to inequality and scarcity, all of which are financial in nature: Universal Basic Income (UBI) / Modern Monetary Theory (MMT) and other schemes of creating “money” out of thin air and distributing it to those whom the system has failed, i.e. the bottom 90%, to stave off social unrest.
New Finance’s menu of decentralized finance (DiFi), blockchain, cryptocurrencies and Web3 is also entirely financial: the core innovation is a new method of creating and tracking “money.”
The problems that need to be solved are:
1) the fair distribution of essential resources, capital and agency.
2) protecting the systemic sources of dynamic stability: transparency, competition, accountability, variability and dissent.
