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 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