Energy-Backed Currency

The Evolutionary Advantages of an Energy-Backed Currency
The Evolutionary Advantages of an…

Energy-Backed Currency


The problem with money

The problem with money is that it either has to have intrinsic value in itself, like gold, or it has to be backed by or exchangeable for something that has intrinsic value. The abandonment of this principle, and the worldwide move to fiat currency, money freely printed and backed only by the soundness of the country or bank that issued it, has been brought the world’s economies to the verge of collapse in short order.

The world needs to return to the sound money policy of backed currencies, currencies that either have intrinsic value in themselves or are readily exchangeable for something that has intrinsic value. In addition, this move has to be worldwide. In other words whatever the currency is, whether it is Dollars, Euros or Pounds, for maximum exchangeability, it has to be backed by the same commodity or basket of commodities.

For thousands of years money has been literally either gold or silver coinage.  Then, with the advent of paper money or currency, it became redeemable in either gold or silver. Although various countries played games with the price of gold, it was not until the Nixon administration that the US abandoned the gold standard entirely, and the other countries of the world, promptly followed suit.  This unbacked currency is called fiat currency.

Fiat currency, because it is only back by the financial stability of the issuing country, has numerous advantages and disadvantages. Basically however they all can be reduced to the ability of national banks (in the United States the Fed) to print as much currency as they feel the need to and then make up a fitting rationale for doing so. The problem with doing so arrives when the net worth of the country (GNP) in question has no relationship to its currency, or worse yet, an inverse relationship.  In these cases, as more and more currency is printed, its value is diluted and its buying power goes down.  This turn raises interest rates, decreases the value of savings and pension plans, penalizes those living on fixed incomes, impoverishes the many and concentrates all wealth into the hands of the few.  Clearly this system is not sustainable.

We need to go back to backed money, but what to back it with?

Many people think that getting rid of money altogether is the solution.  But this is a “throwing out the baby with the bathwater” solution that will not really solve anything. Instead it will leave us without a universal medium of exchange and set us back to a very primitive, barter economy. Sort of like going back to the horse and buggy because the internal combustion engine creates air pollution, instead of going forward to non-polluting fuels. So getting rid of money is the last thing that we want to do. Instead we need to return to a backed currency, and a universally backed one at that, but the problem is what to back it with.

We could return to the gold standard, a solution that has many adherents, but also many drawbacks. One of these drawbacks is that gold, aside from its scarcity, has not much intrinsic value in itself. There is not a lot you can do with it except admire it, hoard it and make jewelry from it. But the biggest of these drawbacks is its scarcity itself. It means that we have both a scarcity-backed currency and a scarcity based economy – the disastrous situation that has been dominating human affairs since the dawn of civilization. In addition, both feedback to support the survival consciousness * that created the system in the first place.

* Survival consciousness is the belief that there are not sufficient resources to support everyone; therefore one has to strive and compete, both individually and as a group, in order to be sure of getting their share.

Don’t get me wrong, this is not a condemnation of survival consciousness, for it is survival consciousness that has been the primary engine of evolution, not only human evolution but the evolution of all life.  It is as simple as this… forms of life that do not strive to survive, don’t survive.  It is not only the survival of the fittest that counts, it is the survival of the most competitive.

Although as the engine of evolution, scarcity-based survival consciousness is eminently necessary, in humans, it breeds separation, conflict, greed, envy, competition and all of the other, interrelated ills of modern society, and has brought us to the brink of collapse, not only as a nation but as a world. Of course it is still needed and always will be, but it is necessary to balance it with something more positive, something that promotes harmony and cooperation, something that doesn’t de-motivate individuals to compete, create and innovate but rather redirects that evolutionary flow to more constructive goals. We need to balance scarcity-based survival consciousness with a consciousness that is abundance based, let’s call it abundance consciousness.

There are currently many proposals on the table for this shift, most of them well-meaning and many of them exemplary, but they all share one problem. They butt heads with the one system that, more than any other, dominates the human consciousness  (at least in the first world). That is the economic system itself, which I call Econocracy.* Every proposal, every innovation, every initiative for reform is ultimately weakened if not totally defeated on the economic level. This is nowhere more true than in the proposals to make business and corporations more conscious, for conscious businesses, (i.e. those incorporating humanistic principles) despite some exceptions, incur restraints and expenses, which make them less competitive and therefore less likely to survive.

The only way around this problem is to redefine profitability itself.  The only way to do that is to move from a scarcity-based economy to an abundance based economy. And the only way to do that is for the world to abandon fiat currency. However this does not necessarily mean returning to the gold standard, which would be returning to a scarcity backed currency.  Instead we need to advance to an abundance backed currency.

Let’s start by backing our currency with the calorie or erg *

I am proposing then, that we measure and reward those enterprises and actions that come out of a specific kind of consciousness of – the consciousness I call enlightened self-interest.  These would be any enterprises and actions that make a positive contribution to the humansphere (as opposed to those enterprises and actions that impact the humansphere negatively).

This is redefining profit, but it is redefining profit through shifting currency from the present scarcity base to an abundance base. We could begin this endeavor by backing the present fiat currency, not with gold (the ultimate unit of scarcity) but with a unit of potential abundance, a unit of energy, the calorie or the erg.

*An erg is the unit of energy and mechanical work in the centimetre-gram-second (CGS) system of units, symbol “erg”. Its name is derived from the Greek ergon, meaning “work”.[1]

An erg is the amount of work done by a force of one dyne exerted for a distance of one centimeter. In the CGS base units, it is equal to one gram centimeter-squared per second-squared (g·cm2/s2). It is thus equal to 10−7 joules or 100 nanojoules (nJ) in SI units.

What makes the calorie or erg a unit of abundance?

Energy, like consciousness itself, is infinite. It cannot be created or destroyed, only transformed or transferred. On a practical level a calorie or erg-based currency would nudge human consciousness towards the abundance consciousness of enlightened self-interest. I say this because as advances in technology create alternative sources of energy which are greener, less invasive and more abundant, energy becomes less and less expensive, which means that humanity becomes richer in it, and therefore richer in general. One practical consequence of this advance towards cheaper energy is that as energy becomes more abundant, countries could print more money without diluting its value. The present reliance on fossil fuels is almost completely a result of manipulation by energy and mining companies to keep the economy in a scarcity mode.

Abundant and inexpensive energy is not only a primary component of prosperity itself, but it frees humanity to move from scarcity-survival consciousness to abundance consciousness, which in turn throws open the doors to connection, collectivity, love and unity.

Calorie or erg backed currency is just a start

Calorie or erg backed currency, the redefinition of profitability from consumption to contribution and the accompanying creation of abundance, is just a start. In time we could back the currency with a basket of commodities, beginning with the calorie or erg but going on to other units of positive energy like electricity and horsepower.  Then as the refinement of measurement capabilities advances, we could go on to all sorts of indices of “positive energy” like water, food, and essential services like medical care. In a positive, abundance and human value based economy; virtually the whole GNP (gross national product) could back the currency.  Of course that is a distant goal, but it could and should start with a move to the calorie/erg backed currency.

Dr. Jeffrey Eisen

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About Dr. Jeffrey Eisen, Ph.D.

The creation of PsychoNoetics is the life's work of Dr. Jeffrey S. Eisen, an academically trained psychologist and psychotherapist. Dr. Eisen's discoveries brought him to a breakthrough expansion of Freud's id, ego and super-ego structural model of the psyche called the Enoe, and a revolutionary vision of the Self-Illuminated Human. Dr. Eisen is a gifted speaker, facilitator and author of hundreds of unpublished essays, four books, and a forthcoming one titled The De-Programmed Human. Playing 20 Questions With God, An Introduction to the Clearing Path of PsychoNoetics is both an engaging overview of the development of PsychoNoetics, and a comprehensive guide to applying it to your life. Oneness Perceived, A Window Into Enlightenment is a monumental body of work that attempts a unified field theory from the viewpoint of nonduality with academic precision and rigor, and stands to become a key reference within the alternative scientific community. He has appeared in an EnlightenNext webinar with Ken Wilber, Deepak Chopra, Barbara Marx Hubbard, Brian Robertson, and Andrew Cohen, recorded online interviews with EnlightenNext Magazine, and collaborated with the first director of the Institute of Noetic Science (IONS) who inspired the name PsychoNoetics.
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18 Responses to Energy-Backed Currency

  1. Pingback: Objective Money Solution | Jeff Eisen, Ph.D.

  2. Peter Rae says:

    Thank you for so readily embracing the core idea and representing it so much more elegantly. A small correction, while indeed a former banker, I cannot claim to be an ‘economist’ as understood in the conventional way. I would not want anybody to accept any of my ideas under the assumption that I speak as an economist! You know the story of the argument over whose profession was the oldest, with the architects claiming that theirs was ‘as they had brought structure to chaos – until the economist present quietly interjected ‘and where do you think chaos came from’. Warm greetings

  3. david says:

    Nice work. However, I do an observation. If energy is plentyfull, and we back currency with it. I see two things happening, the first is that the value of the currency would be extremely cheap since it would be deluted due to a high amount of energy available. Second, would the energy plants become like central banks? Having the power to increase or decrease the power supply?
    There are many question that come to my mind. I do think we have to go away from fiat money, I love to hear alternatives such as yours.

    • dear David,
      thank you for your comments and questions. For the first, if energy is plentiful and we back the currency with it, I think the opposite would happen. Wealth would increase and with it the value of the currency, because real wealth would increase as the energy supply increased. Second, if the sources of energy chose to increase or decrease the power supply to manipulate the economy, that could well happen. However by creating many sources of energy we create competition, and competition drives down prices. Thanks again, good questions.
      Jeff

      • An energy company cannot try to cause deliberate deflation of the currency because that would involve them intentionally decreasing energy supply under the demand, which competitors could easily take their market share.

        They would not able to deliberately cause inflation because in general, people only pay for energy(in the form of electricity) at the point of usage. If they increase energy supply by producing more than the demand, unlike Fiat Currency, cannot be used unless people really need them. So they are bound by the Laws of Supply & Demand to not produce less, and not produce more, and be at the optimal ratio of energy supply to energy demand, which is 1:1.

        The “energy-currency” would virtually be stable indefinitely because as society progresses, the demand of energy increases… at first that would mean rising prices, but energy companies will always try to achieve that 1:1 ratio for optimal profit.

  4. Brian says:

    Dr. Eisen,

    Thank you for this. I am a college student and am very concerned about the monetary issues facing the world today. Often when getting into discussions with friends, we end up at the fact that as long as the world continues to accept the US dollar, the fiat currency facade will continue. Then we get to the question, what happens when the world stops accepting it, and the dollar (followed by other interconnected world currencies) collapses? We get to this point and we honestly don’t know what would happen – “hopefully not world war 3” we say.

    Your article is the closest I have come to finding a “solution” in my research on the internet. Your analysis of the scarcity based survival consciousness is spot on. Transitioning to an energy backed currency would establish and engrain in people’s mind the truth – that money and purchasing power is created and sustained by people and their work, not by governments, printing presses, and central banks. Moreover, as new, abundant sources of energy are created and the money supply increased, each unit of currency would gain purchasing power (rather than lose it as it is now with inflation) and rather than suppress the poor here and abroad, their very existence (amount of calories) would become more “valuable.” The system basically turns every exchange of money into a type of integrative bargaining rather than distributive bargaining – brilliant.

    The questions I have after reading your article is this:

    Is it possible to create a standardized monetary unit (purchasing power defined in energy or a basket of commodities) that works for the global community?

    Would this type of system give entities like OPEC the ability to regulate the value of the currency? If the idea is to stabilize the value of the currency instead of let it be debased to no end, does this system accomplish its goal, or would it make the value of the currency as volatile as the price of energy is now?

    I would love to speak with you further on this topic if you can find any time, even if just for email correspondence. Thanks again, it’s good to know that there are smart people working out this problem even if our government’s are incapable or unwilling to do so.

    Brian Bloch

    • dear Brian,

      some answers to your questions

      OPEC will not be able to regulate the value of the currency, because it will be based not only on oil but on all alternative and green sources of energy.

      It will be difficult to create a Global and standard money unit based on energy, but considering the other, direr possibilities and the increasing globalization of the world, plus the importance and ubiquitous of energy,it seems inevitable in the not so far off future.

      I get in touch with you via your e-mail soon

      Jeff

  5. Jeremy says:

    “the biggest of these drawbacks [of the gold standard] is its scarcity…”

    This is actually gold’s greatest strength as a money! An abundant supply of currency is what we have today. Albeit, fiat currency is ultimately infinite whereas an energy based currency is not. In any case, a lack of scarcity is a positive characteristic for a money, not a negative.

    “It means that we have both a scarcity-backed currency and a scarcity based economy – the disastrous situation that has been dominating human affairs since the dawn of civilization.”

    Really? Can you elaborate? What is disastrous about a scarcity-backed currency? More currency does not mean more goods and services. More currency does not mean a better standard of living.

    What do I care if my loaf of bread costs 1 DPU instead of 1,000,000 HFU if 1 DPU = 1,000,000 HFU? Money–and its proxy, currency–is a unit of account and a medium of exchange, nothing more. Don’t confuse it for real wealth.

    • Dear Jeremy,
      It is you who is confused. Real wealth, real value is neither units of currency, nor the units of currency are backed with if they are hoarded. Real wealth is the total production all of a society, and sustainable and renewable energy, not fossil fuels, is a large part of that production.
      Dr. Jeff Eisen

  6. Joseph says:

    Energy backing is not a bad idea in itself.
    Please consider unintended consequences. I look forward to the insights and development of the concept.
    Are all forms of energy equivalent without regard to the generation?
    Is there increased risk of tragedy of the commons?
    What entity can serve as the “honest broker” for the differences in energy generation public costs and by ceding such power to an entity, what other powers must accompany it and what costs to liberty are incurred?
    Storage of energy, losses in storing, losses in retrieving from storage? How effective is energy as a store of value.
    Transactions of energy? what is sent is not what is received, the medium used also has costs (wires, pipelines, etc) Distance from source incurs costs. So by receiving a payment in energy in one place and redeeming it in another, there may be unequal trade, how to address these?

    • Dear Joseph,
      of course these all have to be worked out, but the working out is no more complex than the elaborate machinations attendant on the debt-based, fiat currency that we have now. Also, other people are working at it. I call your attention to the Telsa conference just held in Split, at which I had the honor of presenting.
      Jeff Eisen,PhD

  7. J Public says:

    Appreciate the article, Yes future of Money is energy based currency system.

    “For thousands of years money has been literally either gold or silver coinage”
    The above statement is false propaganda by banksters, in last 50 years.

    The reality is most commonly used currency in the world were food grains like rice, wheat and cattle etc – stuff with intrinsic energy value. Common means of exchange should have intrinsic energy value was no-brainer for even primitive people, isn’t it?

  8. I really loved this sir. I’m a college student who’s interested in economics, Free Markets, and Libertarianism. This is a very great idea, and I can actually see how this work in the future. It actually sounds practical, and I think more effective than Gold. Thanks for this, this is the first time I heard of it.

  9. Sam Pobst says:

    Excuse me if if misconstrued the intent of this post, but it seems to me that energy should be used as a unit of measurement for currency, not as a backing for currency. Energy as a currency backer would place an inordinate amount of power in those who control sources of energy. Using a unit of energy as a measure for a global currency is equivalent to the development of the metric system.

    The most intuitive unit of energy measurement would be the calorie. It is universally understood by everyone from physicists to students of diet plans. Everything we produce can be measured in terms of the units of energy that it takes to manufacture and bring it to market. This “embodied energy”, includes all of the energy inputs to extract, fabricate, transport (and market) to the consumer.

    Some of the implications might include:
    – The elimination of currency manipulation between foreign powers by being more quantifiable.
    – Societal revaluation of all goods and services as the real cost of energy is compared to other objects we value. One gallon of gas is equivalent to 28,728,000 calories of energy. A bunch of celery might take an eighth of a gallon of gas to plant, harvest, process, ship, and market. A pound of beef takes over ten times that amount based on the amount of feed it consumes.
    – The incentive to produce more energy efficient or alternative energy vehicles would soar.
    – The food industry would look to reduce caloric content in their products to be competitive.
    – Agricultural land might be valued on it’s capacity to produce calories.
    – Individual performance, real estate, and art are still valued by supply and demand

  10. Reno Gamble says:

    Thank you for posting this article on this topic. Something that I believe has to happen for the ‘energy-backed currency’ to be successful, the availability of the technology to the masses. Also, would not the ‘honest brokers’ of the energy supply basically be the public more so than the power companies? I love the concept and believe it can take place but I would suggest promoting this concept in poorer communities. Trying to convince the powers that be of this concept is basically an antelope convincing a lion to go vegetarian.

  11. would Bitcoins count as an abundance-based currency? …since they can, at-least in theory, be mined to an infinite amount, albeit with an exponential and ever-increasing difficulty.

  12. Soul says:

    This is the answer!!!

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