Tag: COP26

Money Makes the World Go Down – part 3 of a #RealGreenRevolution

jembendell

This is the 3rd in a 7-part essay on the type of policy innovations that would respond to the truth of the environmental predicament and, also, why most environmental professionals ignore such ideas to promote limited and limiting ideas instead. These ideas on a #RealGreenRevolution provide a contrast to current agendas, with the aim of encouraging a global environmental movement as a rights-based political force.  Having looked at taxation and market reform in the last part, here I turn to that even sexier topic of monetary reform and currency innovation, and how to transform the operating codes of our economy that to alter behaviours in fair ways.

To receive each part of the essay, subscribe to my blog, using the box on the right. To engage with other people who are responding to these ideas, either engage on the Deep Adaptation Leadership group on LinkedIn (where I will check in) or the Deep Adaptation group on Facebook, or by following the hashtag #RealGreenRevolution on twitter. The introductory Part 1 provides context.

Banking Transformation

Most people, including politicians, still do not understand that in advanced economies well over 90 percent of all our monetary transactions are not in government issued currency. Our electronic payments and the bank transfers use the private ledgers of private banks and the systems that they have established to transact between themselves. What we are paying and receiving are units of the bank’s commitment to us. The “money” that sits in our private bank accounts was not created by government but by the banks themselves when they issued loans, or (much less by comparison) took in physical cash deposits. The problem with our money supply being created by private banks is that they decide how much new credit money is created and what for. Therefore, in most countries they lend most of it for property, which warps the price of property and therefore creates a debt-enslaved ‘house owning’ group and others renting precariously month by month. In addition, because they charge interest, there is more debt in the world than money to pay it off, which means that the money must be earned, paid to service debts, then spent by the bank or its shareholders so to be earned again, in a cycle which is never perfect, especially when high levels of inequality mean that some people remove the money from circulation (by neither lending or spending it into the real economy). That means an expanding amount of loans are needed to keep the system running smoothly and avoid a scarcity of money leading to job losses, bankruptcies, loan foreclosures and house repossessions. Banks will only issue more loans for activities that they assess will generate the necessary profits to pay interest. Therefore, the economy must expand whether a government or population wishes it to, or chooses to focus on measures other than increasing GDP (gross domestic product). This compulsion to growth the money supply or risk economic instability is called a Monetary Growth Imperative.

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This is what a #RealGreenRevolution would include

jembendell6 Comments

This is the first in a 7-part essay on the type of policy innovations that would respond to the truth of the environmental predicament and, also, why most environmental professionals ignore such ideas to promote limited and limiting ideas instead. It provides a contrast to current agendas, with the aim of encouraging a global environmental movement as a rights-based political force. This introduction provides context and a #ClimatePlus framework, with the policy proposals coming in the subsequent parts.

Introduction

As humanity faces catastrophic climate change, we hear calls for ‘systemic change’, or ‘transformation’. However, the familiar policy ideas shared by politicians, business leaders, climatologists and campaigners fail to be systemic. That includes the new announcements coming from governments during COP26, on matters like forest conservation and financing coal. But it also includes many of the bolder ideas from environmental campaigners, as some uncomfortable examples will illustrate… No, banks divesting from fossil fuels is not systemic, because if it works enough to lower the share-price of international oil companies, then competitors, rich families, or sovereign wealth funds from around the world will take them over and keep the oil pumping to supply ongoing demand. That doesn’t mean that banks and pension funds are doing the right thing to invest in oil companies – they are not. But trying to change that is not a systemic aim because it won’t change humanity’s impacts at scale. Neither is calling for governments to stop focusing on GDP growth a systemic idea, if the monetary system that requires their economies to grow in order to achieve economic stability remains enthroned. Condemning the UN processes as failures as a way of calling for multi-stakeholder alliances on climate is not a transformative stance, when it ignores how corporate influence over decades destroyed the potential of those UN processes and will likewise distort the initiatives coming out of any new alliance.

So am I just being defeatist? No – otherwise I would not bother writing this 7-part essay on radical and transformative policy responses to our environmental predicament. There are many systemic policy innovations that could help humanity right now, but you won’t hear them from the professionals engaged in climate policy this month. That is because the professional classes, who are people with time to engage in the policy jamborees, have been schooled within the ideology of our time, which defers to existing power in a global capitalist system. I know because I am one of them. I lied to myself for decades as I tried to encourage significant reform through voluntary corporate sustainability initiatives. What’s worse, we professionals working on public challenges are surrounded by people with an unacknowledged narcissism, where the motivation to feel ethical, smart, and contemporary, trumps any depth of inquiry into what might be going on and might be possible. It is a strange but silver lining of the terrifying climate news that more of us are being forced out of such patterns through a dark night of the soul. It means we can consider again what might work, rather than what has been just easy stuff to tell ourselves – or our professional admirers, clients or donors.

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