Transition Edge - Taking a look at MONEY

Published: Thu, 10/21/21

Transition Edge

October 2021 - Year two of the disrupted decade

PERSPECTIVES ON MONEY

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I’m Grant Symons. I convene Transition Edge to help us understand how we can transition to a low carbon sustainable world using leading thinking and practices.

Money is everywhere. It is part of virtually everything we do, directly or indirectly. And it has been around for so long that the totality of its function is assumed. It is invisible.

This week's article provides some perspectives that might get you thinking about this phenomenon we call money - how it is useful, harmful, when is ‘too much’?...and perhaps what next?

MONEY AS WATER

Imagine you are a fish in a bowl. You don’t notice the water. Yet it is the very thing that keeps you alive...it is your world.

Like water, money circulates. It can flow to any part of the globe and it can cause things to happen when it gets applied. Political influence, a new mine, food production or new infrastructure.
It can be stored or dammed to the point that the flow is reduced to a trickle and there are downstream consequences.
And possibly, most important of all, it can flood! Perhaps the current flood of money is the most serious one we humans have ever experienced or will ever experience?
According to Mauldin Economics, 23% of all the money ever created by the USA was created in 2020. Most other developed economies have followed suit, to some extent, to help deal with the consequences of Covid.
This flood has inundated previously stable political, economic, and social systems, which are now trying to adapt. How will the water recede and where will it go?

MONEY AS FIRE

Imagine your economy is floundering, with no growth and slowing consumption…things are grinding to a halt. The only thing that works when you are trying to set fire to damp wood, is adding an accelerator.

Pouring on large amounts of money is going to get things moving, it unleashes resources and energy.
It speeds up activity, trade, and consumption.
It fires up expansion and extraction and potentially burns beyond what was intended, into resources that should be saved for the future?
In a sense, the current wildfire has burned unconstrained since the 1970’s, when the creation of money was decoupled from the physical world (Gold standard).

MONEY AS A LEVER

Leverage this, leverage that…deleverage when the risk is getting acute. With the flood and fire mentioned above, financial leverage has given anyone with enough credit, the ability to do things or have things that would have seemed unbelievable a few decades ago. And the providers of this leverage have done well too, as they have used multiplication to grow their assets and influence.

Somehow, we came to believe that perhaps we could never become over-leveraged, or that such a huge leverage could shift the whole bio-sphere to the point that humans now have more impact than nature itself.

MONEY AS A WEDGE

The leverage, the flood and the fire bring great wealth and power to some nations and some individuals. We know that this has come at a cost to the planet, to people alive today and to future generations.

Records show that since the early 1970’s the financial sector and those associated with it have grown their wealth enormously, while those that work on wages or those that depend on welfare or other help, have been disadvantaged, as have minority groups and countries that were not included in the game.

The wedge drives further division today. Those that have more are getting more, those that are at the bottom are increasingly vulnerable.
The wedge was helped along by computing, globalisation and exploitation of the natural world, and seems to be stuck in place.
The wedge creates a confused space in which the Government, NGO's and volunteer organisations exist and are expected to help society.

MONEY AS AN ILLUSION

We use less and less physical money. And by the way, what is the paper worth in the first place? What is money now?... we know it starts as digits, created on a ledger, in a computer somewhere.

Your money can be worth something today and a different value next year (probably less) – how would you know how or why that is happening?
How much of this invisible thing do you need to be happy, feel secure or powerful?
And where does it all go when there is a stock market or housing market crash?

In wrapping up

It is clear that modern money has and continues to have an extraordinary impact on the planet and our lives. Things we are capable of beyond money include:

Family and friendship
Care of land and nature
Community, connection and collaboration
Physical and collective action
Care of others
Spiritual and religious beliefs
Music and art and crafts
Growth, learning, teaching and mentoring
Resilience building and self care

If you have a crystal ball and can tell the rest of us what happens next with money, we would love to hear from you!

And if you have plenty of it, maybe you could take the opportunity to think about what it could be best applied to. This is not as straight-forward a suggestion as it might seem. If you would like our thoughts please contact us.

This weeks quote

He who is not contented with what he has, would not be contented with what he would like to have

- Socrates

Grant Symons - The Transition Guy

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