[P2P-F] Fwd: Money for the People (GTN Discussion)

Michel Bauwens michelsub2004 at gmail.com
Tue Jul 11 16:37:10 CEST 2017

an important insight in this one:

---------- Forwarded message ----------
From: Great Transition Network <gtnetwork at greattransition.org>
Date: Tue, Jul 11, 2017 at 8:44 PM
Subject: Money for the People (GTN Discussion)
To: michelsub2004 at gmail.com

>From Alf Hornborg <alf.hornborg at hek.lu.se>

Comment on Mary Mellor’s essay “Money for the People”

Mary Mellor is absolutely right that we need to understand that money is
both a social construct and an active force, which means that it can be
redesigned so as to promote quite different social and ecological processes
than those generated by the current money system. She is justified in
proposing that the creation of money should be democratically controlled
through the state, and that this would make it possible not only to
liberate us from the exigencies of debt and the compulsion to achieve
economic growth, but also, for instance, to provide all the inhabitants of
a nation with a basic income. Beyond the conceptual constraints of
conventional economics, this perspective allows us to see that the rules of
the economic game are as arbitrary and potentially mutable as the rules of
any other game designed by humans.

Nevertheless, I would like to complement Mellor’s crucial insights and
proposals in a few ways. First, her assertion that it is not “money itself”
that fuels exploitation and environmental destruction needs to be modified.
As long as we are referring to what in economic anthropology is called
“general-purpose money” (money that can be used to purchase virtually
anything), money *itself* does indeed fuel exploitation and environmental
destruction. If there are no constraints on what we can buy with our money,
we shall naturally be looking for the best deals, which usually means the
lowest-paid labor and the lowest-priced resources. The globalized
capitalist market is an expression of the inherent logic of general-purpose
money. This logic is the same regardless of whether such money is created
by banks or states, and even regardless of the existence of interest.

Mellor writes that “some form of money has been around in almost all human
societies.” Yes, but not the particular form of money that developed in
colonial Europe. The destructive implications of general-purpose money were
evident to critics of market economies from Marx to Polanyi. [1] The logic
of such money is distinctly different from the “special-purpose money” that
was identified, for example, among the Tiv people of Nigeria. Precolonial
Tiv, like most traditional cultures, recognized more than one sphere of
value. [2] Whatever kind of money that existed, it could not readily buy
*everything*. When Mellor writes that it is difficult to envisage societies
without “some mechanism to facilitate comparisons of value,” she does not
reckon with the possibility of recognizing such cultural limitations of

Mellor’s point that money is a social construct means that it is
potentially possible to democratically design a money system that
recognizes limits to commensurability. To take a couple of drastic
examples, it would be possible to decide that rainforests are not
exchangeable on the same market as Coca-Cola, or that food in the global
South is not purchased with the same kind of money as is used for financial
speculation on Wall Street. A system of separate currencies for basic needs
versus global markets would insulate values pertaining to sustainability
and survival from the abstract capital flows of the world-system. It could
thus serve to check exploitation and environmental destruction.

Second, I find it problematic to speak, as Mellor does, of things with “use
value,” “social value,” or “little or no value.” Value is always in the eye
of the beholder. We need to clearly distinguish between the biophysical
properties of a given item, on the one hand, and its value for specific
humans, on the other. There is no universal standard for judging whether a
particular item has “use value,” “social value,” or no value at all. Value
is a thoroughly cultural phenomenon. This means that we need to think about
economy and ecology as analytically separate, even though we know that they
interact in practice. In doing so, for example, we can see that we tend to
value things higher the less of the original energy that is left in a set
of resources transformed in production. [3]

Mellor is definitely on the right track. The planet will not be saved by
trying to get the colonial outlook of mainstream economics to somehow
accommodate the Second Law of Thermodynamics. [4] Nor will it be saved by a
socialist revolution that collectivizes ownership but continues to think in
terms of money and exchange value. Money is not just a reflection of the
relations of production but an artifact that operates as an active force in
organizing such relations. To change the logic of the global economic game,
we must change money itself.

My third point, then, is that the basic income to which all of should have
a right should not be paid in general-purpose money, because that would
simply keep us buying the products of the lowest-paid labor and the most
degraded landscapes. [5] It should be paid in a special-purpose,
complementary currency that can only be used to buy products and services
produced within a specified radius of the point of purchase. This is not
“local money” in the sense of geographically restricted currencies, but one
single, national currency – issued by the state – that is only for local
use. There is no space here for listing the many social and ecological
benefits of such a reform, but it would be quite in line with Mellor’s
general understanding of money as our main – perhaps only – chance of
achieving sustainability, justice, and resilience. [6]

[1] In his book “The Great Transformation” (1944), Karl Polanyi argued that
the idea of the self-regulating market, unless checked by society, would
logically lead to increasing exploitation, environmental degradation, and
economic instability.

[2] The economic anthropologist Paul Bohannan in the 1950s showed that the
Tiv economy was organized around three separate “spheres of exchange,” and
that some conversions between separate spheres of value were morally

[3] This was pointed out by Nicholas Georgescu-Roegen in his 1971 book “The
Entropy Law and the Economic Process.”

[4] The Second Law of Thermodynamics, also called the Entropy Law, states
that the energy and matter of an isolated system will become more
disordered over time. As Georgescu-Roegen showed, this implies that an
economic production process will simultaneously increase economic value and
physical disorder.

[5] In choosing the least expensive products, consumers inadvertently
encourage production processes that show the least concern for the
environment, which often means the most lax environmental legislation.

[6] I have elaborated this proposal in an article called “How to Turn an
Ocean Liner,” in volume 24 of the Journal of Political Ecology (2017).

Professor Alf Hornborg
Human Ecology Division, Lund University
+46 222 3113
+46 708 122433


Från: Great Transition Network
Skickat: den 11 juli 2017 01:03
Till: Alf Hornborg
Ämne: Money for the People (GTN Discussion)

>From Gwendolyn Hallsmith

Report from the Front Lines of Monetary Democracy

Thank you for the opportunity to comment on Mary Mellor’s thoughtful essay
about Money for the People. Her call for public money and robust,
democratic, transparent money issuance can be seen as what Star Trek refers
to as “the final frontier” in our efforts to create a resilient,
sustainable world. I wholeheartedly agree with her public money solution,
yet sadly lack her confidence in centralized, party-driven, representative
global governance. I imagine she might be a Star Trek fan, with a secret
hope that the Federation can save the day.

I have to confess that I was immediately on guard with her abstract’s first
sentence, which relegated “local initiatives” to the sidelines, claiming
that they can only lead to modest gains, not large-scale transformation.
Why are we so enamored with large scale in the first place? I have begun to
see anything larger than human scale as part of the problem, not part of
the solution. Particularly when it comes to democracy. (I am writing from
the U.S., where we are suffering from extreme inequality’s impact on
large-scale democracy – and the best government our corrupt and debt based
money can buy).

Beyond the initial assumption about local initiatives, she actually doesn’t
talk at all about why large scale is needed, even in the quest for public
money – she seems to conflate “public” with large, central states. Public
comes in many flavors, after all, and the Sparkasse public banks in Germany
have demonstrated that some level of public money is possible at a small
scale – there is no town too small in Germany to host one of these
independent, networked public banks. Here in bucolic Vermont, we have been
working with some success to get a Vermont State Bank, which would wrest a
portion of the money issuance authority from the large, private banks.

My experience here, however, has shown me that the large powers – the
globalized corporations, their partners in globalized banks, and their
hapless cronies in neoliberal academia – have set numerous obstacles on the
road to Money for the People, and these obstacles need to either be
overcome or rendered obsolete before a large-scale transformation is
possible. Overcoming them is nearly impossible – they control the media,
the money supply, the armies, navies, courts, and legislatures. The rewards
they offer their adherents – unlimited wealth, power, and privilege - is
too strong a potion, even if it is only a pipe dream.

Three years ago, 20 towns and cities in Vermont voted to direct the state
legislature to establish a Vermont State Bank. Our towns and cities make
decisions using the closest thing to direct democracy, where every
registered voter has a right to vote on budgets, laws, and other
propositions. Did the legislature take this democratic input and act? Not
really. We still do not have a state bank, even though they threw us a bone
where 10% of the money in the big banks is now loaned directly into the
Vermont economy. This year, when we went to the legislature with the
successful (and profitable) experience of that program as the wind at our
backs, we ran into a stone wall.

This is precisely because in addition to the growth imperative and
inequality machine the current monetary system imposes, as Mellor very
carefully and accurately documents, the artificial scarcity and hoarding
the system requires pits the “haves” against the “have-nots” and the people
in power – the elite – know on which side of the toast their bread is
buttered, and do not lift a finger to help us, even when their political
party has public banking as a plank in their platform. My faith in parties
has died with my faith in large-scale democracy, I’m afraid. They are not
public, they are not democratic, and they need to die a rapid and final

Lest you imagine that my despair at the progress on the road to Money for
the People has left me bereft, take heart. I believe we are on the cusp of
the old system being rendered obsolete, much, much easier on some levels
than overcoming the powers by fighting them directly through democratic
organizing and legislative action. I am not giving up on that; just saying
it is necessary but not sufficient.

I have seen the future, and it is block chaining its way into the heart of
the human value system, where things with true meaning and value can thrive
again. The advent of new value-embedding technologies is something that
Mellor does not even mention. While they are encrypted now in the
labyrinthine interwebs, their principles and practices can apply
universally, and I would argue even without the complex and sometimes
impenetrable technology.

My prediction: these systems will restore sovereignty to human-scale
communities once again, and we will be free from large-scale totalitarian
domination and impoverishment. They can be at once both private and public
– the new transparency makes it possible to keep watch on their
“amplification” and development. The distributed ledger is at once both
local and global. Local iterations can spring into existence using highly
democratic and time-tested issuance and conflict management practices.
Their identity certification and transaction transparency can pave the way
for direct, not party, democracy at all scales. The UN has just issued
payments in a refugee camp in Ehters, for example, demonstrating that
global and local can work together directly and effectively for the common

Public, private, global, local, large and small – all of these demand
definition and rethinking if we are to transcend the bitter and outdated
paradigm that is driving the planet toward rapid human extinction.
Neoliberal economics and their elitist partner in representative democracy
are well past their shelf life – let’s bring on the new day already. Beam
me up, Scotty.

Gwen Hallsmith


On Sat, Jul 1, 2017 at 9:31 AM, Great Transition Network wrote:
>From Paul Raskin
Dear GTN,

The old proverb—money is the root of all evil—may overstate the case, but
money is, indeed, implicated in the iniquitous debt/growth spiral now
degrading Earthland.

Mary Mellor explains in her new GTI essay, “Money for the People,” that it
needn’t be so. The modern money system is a social construct that evolved
to spur capital accumulation, but lingers on in an era needing, instead, to
throttle consumerism, debt, and the economic growth machine. Rather than
creating money privately through bank lending, as the current system does,
an alternative approach—public money—can undergird an economy oriented
toward people and use value, not profit and exchange value.

I think you’ll find Mary’s vision of a critical institutional pillar of a
Great Transition economy illuminating, intriguing, and inspiring. Please
read it at
www.greattransition.org/publication/money-for-the-people, and let the
comments and questions begin! How would public money work in practice? How
would it interface with the market? How might its pursuit contribute to
strategies for system change?

Comments are welcome through JULY 31.

Looking forward,
Paul Raskin
GTI Director

Odd-numbered months are for internal GT Network discussions; even-numbered
months are for public dissemination. You will receive all comments via
email, and can review the entire thread online at
www.greattransition.org/forum/gti-forum. The essay will be published
alongside a “Roundtable,” comprised of selected comments from the GTN
discussion and a response from the author.

Hit reply to post a message
Or see thread and reply online at

Need help? Email jcohn at tellus.org

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