Sacred Economics

1. Money's evolution: From commodity to credit-based system

Money is a system of social agreements, meanings, and symbols that develops over time. It is, in a word, a story, existing in social reality along with such things as laws, nations, institutions, calendar and clock time, religion, and science.

The nature of money has changed throughout history, evolving from physical commodities to abstract representations of value. This transformation reflects the changing relationships between individuals, communities, and the broader economy.

• Stages of money evolution:
  1. Commodity money (e.g., grain, cattle)
  2. Precious metal coins
  3. Paper currency backed by precious metals
  4. Fiat currency (government-issued, not backed by commodities)
  5. Credit-based digital currencies

As money has become increasingly abstract, it has gained power to shape social relationships and economic systems. Understanding money as a story or social agreement opens the possibility of rewriting that story to better serve humanity and the planet.

2. The illusion of scarcity in a world of abundance

We live on a naturally abundant planet, the source of life-sustaining gifts for us all.

Perceived scarcity is often artificial, created by economic systems that commodify and privatize natural resources and human relationships. This illusion drives competition, anxiety, and environmental degradation.

• Sources of perceived scarcity:
  • Privatization of common resources
  • Monetization of previously free goods and services
  • Interest-based debt systems that require perpetual growth

By recognizing the inherent abundance of nature and human creativity, we can design economic systems that foster cooperation, generosity, and sustainable use of resources. This shift in perspective is crucial for addressing global challenges such as poverty, inequality, and ecological destruction.

3. Interest: The root of economic growth and wealth concentration

Because interest-bearing debt accompanies all new money, at any given time, the amount of debt exceeds the amount of money in existence.

Interest creates a growth imperative in the economy, as more money must constantly be created to pay off existing debts plus interest. This system inevitably leads to:

• Concentration of wealth in the hands of creditors
• Pressure to convert natural and social capital into monetary wealth
• Economic instability and recurring crises

The interest-based system compels individuals and societies to prioritize short-term financial gains over long-term social and environmental well-being. Rethinking the role of interest in our economic system is crucial for creating a more equitable and sustainable world.

4. Negative interest: A tool for economic stability and degrowth

Negative interest on reserves, and a physical currency that loses value with time, reverses the effects of interest. It enables prosperity without growth, systemically encourages the equitable distribution of wealth, and ends the discounting of future cash flows so that we no longer are pressed to mortgage our future for short-term returns.

Negative interest currency could fundamentally reshape economic incentives, promoting:

• Circulation of money rather than hoarding
• Investment in long-term, socially beneficial projects
• Reduction of wealth inequality

By implementing a system where money gradually loses value over time, we can encourage spending and investment in ways that benefit society and the environment. This approach aligns economic activity with the natural cycles of decay and renewal observed in nature.

5. Reclaiming the commons: Internalizing costs and restoring public wealth

Much of the natural, social, and cultural commons is local or bioregional in character, a money system backed by the commons will naturally strengthen local political and economic sovereignty.

Internalizing external costs is crucial for creating an economy that reflects true value and protects shared resources. This involves:

• Taxing resource extraction and pollution
• Recognizing the value of ecosystem services
• Restoring public ownership of essential resources (e.g., water, air, biodiversity)

By integrating the true costs of economic activity into prices, we can create a system that naturally protects and regenerates the commons. This approach would shift economic incentives towards conservation, restoration, and sustainable use of shared resources.

6. Local economies: Strengthening communities and reducing global dependence

As community has disintegrated around the world, people yearn for a return to local economies where we know personally the people we depend on.

Localization fosters resilience and connection by:

• Reducing dependence on global supply chains
• Strengthening community ties and social capital
• Encouraging diverse, place-based economic solutions

Local currencies and community-based economic initiatives can play a crucial role in revitalizing regional economies. By shifting focus from global competition to local cooperation, we can create more stable and fulfilling economic relationships.

7. The social dividend: Ensuring basic needs and fostering meaningful work

Thousands of years of technological advances have made production of the quantifiable necessities of life extremely easy. These advances, the gift of our ancestors, should be the common property of all humanity.

A universal basic income or social dividend recognizes that:

• Basic needs can be met with minimal human labor
• Everyone deserves a share of our collective technological inheritance
• Freedom from survival anxiety allows for more creative and meaningful work

Implementing a social dividend could liberate people from unfulfilling jobs and allow them to pursue work that truly benefits society and the environment. This shift could lead to a flourishing of art, science, caregiving, and environmental stewardship.

8. Gift culture: Reviving generosity and non-accumulation

To fully receive is to willingly put yourself in a position of obligation, either to the giver or to society at large. Gratitude and obligation go hand in hand; they are two sides of the same coin.

Gift economies foster community and abundance by:

• Encouraging generosity and reciprocity
• Reducing the need for monetary transactions
• Building social ties and trust

Reviving gift culture practices can help counteract the isolating effects of the modern money economy. By embracing giving and receiving as social acts, we can create stronger communities and reduce our dependence on impersonal market transactions.

9. Sacred investing: Aligning wealth with societal and environmental good

To the holders of wealth, I invite you to think in terms of what you will create through collective human agency. Or, how can you use money in the most beautiful way?

Conscious use of wealth involves:

• Investing in projects that benefit society and the environment
• Considering long-term impacts rather than short-term profits
• Using wealth as a tool for positive transformation

By reframing investment as a means of creating beauty and fostering positive change, we can redirect financial resources towards solving global challenges and creating a more just and sustainable world.

Last updated: August 14, 2024