A Living Wealth Money System
The New Economy Money Story
University economics courses teach that money is a medium of exchange, which is correct, and a storehouse of value, which may work for an individual but is a fiction for society. A society can store wealth only in real physical, social, and natural capital.
To truly understand money, it is necessary to understand it as a system of power, an accounting entry, a measure of value, and phantom wealth.
From Caring Relationships to Market Exchange
In the earliest human societies, money was unknown. People organized their lives around the relationships of family, clan, and tribe. They cared for one another and allocated resources to secure the well-being of all. Resource allocation decisions were local and based on the needs of the community.
Over several millennia, money gradually became a substitute for mutual caring as the foundation of the social, economic, and political fabric of society. This process accelerated during the latter half of the 20th century.
In contemporary 21st century societies, most of us now organize our lives around earning, spending, borrowing, and saving money. Money is our ticket to food, shelter, transportation, education, recreation, health care and nearly every other essential of daily life. This has sweeping implications for values and the distribution of power in society.
A Matter of Values and Power
We are supposed to believe that organizing a society around money and markets maximizes our individual freedom to make choices according to our personal values and interests. We are not supposed to notice that the monetization of relationships gives priority to financial values over life values and gives enormous power to those who control the creation and allocation of money.
In the United States, the structure of our money system gives this power to Wall Street institutions that seek only their own financial gain without regard to any other human or natural interest. Despite the facade of political democracy, through their control of money bankers, not people, rule the world.
We need a different approach that recognizes the structure of the money system is not a given and that the proper function of any system of money creation and allocation is to match idle real wealth resources with unmet needs of people, communities, and nature. There are money system design options that are consistent with the needs of equitable living Earth economies.
Money is essential to the function of a modern society, but the common good depends on reducing our dependence on money, restoring relationships of caring, decentralizing the power to create and allocate official money, and assuring that the exercise of this power is transparent and accountable to those who have an interest in the health and well-being of the people, community, and natural systems of the place where they live. To democratize society and the economy, we must democratize the creation and allocation of money.