Institutionalized Status Quo
Sometime during the 18th and the 19th centuries, a decision was made that the monopoly of a single currency issued through bank debt should be institutionalized. The particular body charged with that role in each country is its own central bank, with the IMF and the World Bank each added to the panoply following ratification of the Bretton Woods agreement in 1945. These institutions have important and useful tasks in preserving the integrity of the overall financial system. They are also the guardians of the prevailing monetary orthodoxy and its core tenet—that achieving the objective of monetary stability requires safeguarding the monopoly of the existing money creation process as well as that of a single national currency, one in each country or group of countries. Though created to safeguard the economy, these institutions are nonetheless afflicted by the same collective blindness regarding money. Thus, they preserve the very orthodoxy that has gotten us in trouble time and again, which spawns and then protects banks that can become too big to fail, and which dispels any action to review and amend our monetary and banking systems. This institutionalized status quo serves to insulate us not from harm but from detection and amendment of our collective blind spot regarding money. Consequently, the ongoing industrial-age paradigm continues to reign unquestioned.
Challenging the status quo in any field is always a daunting business, and is particularly so with the monetary paradigm given the influence of money and the collective lack of understanding regarding it nature. But it is precisely because of its unique influence as well as its inherent potential for improvement to our world that we must endeavour to better understand and make greater use of this singular human-made creation—money.
CLOSING THOUGHTS
From its very inception, traditional economics has suffered from a blind spot with regard to money. This failing is attested to by the fact that, while the vast majority of economists universally regard monopolies as destructive, the monopoly of one type of money has continued unchallenged from Adam Smith onward. This collective blindness with regard to money, shared by layperson and expert alike, is the source of a number of concerns and consequences, catalogued in this Part I.
Our money journey continues in Part II with a look at some of the many monetary tools that are readily available to address important issues of our day, and the pragmatic possibilities that exist to create a better world, made possible by rethinking money.
As it happens, growing numbers of communities from around the world are rethinking money. Their efforts are helping to show us innovative, pragmatic ways and means by which to match unmet needs with unused resources.
PART II - NEW MONEY
Society will, only a few generations from now,
be as different from modern industrial society
as that is from a society in the Middle Ages.
~WILLIS HARMAN
CHAPTER ELEVEN - Great Change
Every few hundred years in Western history, there occurs a sharp transformation. Within a few short decades, society—its worldview, its basic values, its social and political structures, its arts, its key institutions—rearranges itself…We are currently living through such a time.
~PETER DRUCKER
In 1900, there was not a single airport, television set, or credit card. There was no theory of relativity, no quantum mechanics, and no GDP. Genetics, immunology, and endocrinology did not yet exist, and hormone was not even a word. Hollywood was a bunch of farms and the sun never set on the British Empire. The life expectancy was 47.6 years for Caucasian-Americans, while for African-Americans it was a mere 33.0 years.172 The world’s 1.7 billion people lived and worked mostly in rural surroundings,173 and the overwhelming majority of women around the world could not vote.
A generation or so ago, there was no e-mail, no laptops, or DVDs; no ATMs, subprime mortgages, or euro. China’s economy was mostly agricultural, Eastern Europe was under the grip of the Soviet Union, and apartheid continued its reign in South Africa. There was not yet a single reported case of AIDS, the concepts of sustainability and climate change were first beginning to enter mainstream awareness, and the world’s population had more than doubled since 1900.174
In early 2007, Japan’s industrial output reached an all-time high,175 Lehman Brothers was the fourth-largest U.S. investment bank,176 and for the first time ever, a woman led in an American presidential primary. By late 2008, Japanese output sank to its lowest level on record, Lehman Brothers was bankrupt,177 and the U.S. presidential elections made history.
Other milestones in 2008 included: the worst quarterly losses by one corporation ($61.7 billion by AIG),178 the greatest annual earnings by another corporation ($45 billion by Exxon Mobil),179 tens of millions of job losses, the lowest interest rates by the Bank of England since its founding in 1694,180 and the most dire warnings to date regarding climate change.181 In early 2009, a century or so after the first Wright Brothers flight of 120 feet in 12 seconds, NASA launched the Kepler Mission in search of other habitable planets in our galaxy, while here on Earth, President Obama took office, inherited the worst economy since the 1930s, and signed off on the largest stimulus bill in history.182
As 2012 approached, political, social, and economic tensions mounted around the world. Regime changes swept across the Middle East and North Africa as part of the so-called ‘Arab Spring.’ Austerity measures aimed at dealing with the growing debt crisis led to protests in Greece and other parts of Europe. The Indignants Movement in Spain called for radical economic and political reform. The ongoing Occupy Movement, which began in Kuala Lumpur on July 30, 2011, with Occupy Dataran, spread to Wall Street and by November, 2011, to more than 2,300 towns and cities across the globe. And the world’s population had more than quadruppled since 1900 to 7 billion.
We are living in a time of epic transformation. Though extraordinary in its breadth, scope, and potential, many of the undercurrents of societal change have happened before. Such shifts, referred to as Big Change, are described by systems scientist and nonlinear dynamicist Sally Goerner as “like a seventh wave swollen with streams from many directions, sweeping away the social reality and worldview that was, leaving new ones in their wake.”183 Former instances of Big Change include the fall of the Roman Empire, the rise and fall of the Central Middle Ages, and the Age of Enlightenment.
As in the 1700s, many entrenched ways of being and doing are increasingly in conflict with the realities and requirements of our time. This is particularly the case with our industrial-age economic tenets, financial institutions, business practices, and banking and monetary paradigms. As in the past, there are mounting calls for reform and change.
But what types of reforms? What manner of change?
Though there is growing recognition that we are in the midst of a postindustrial shift, many questions remain about what this will mean in practice. Consensus on how to tackle the issues of our day is also lacking. Whatever measures are taken must speak to a number of inconvenient truths.
Author and educator Duane Elgin notes:
Never before has humanity been on the verge of devastating the Earth’s biosphere and crippling its ecological foundations for countless generations to come. Never before has the entire human family been required to work together to build a sustainable and meaningful future. Never before have so many people been called to make such sweeping changes in so little time.184
In addition, history cautions us that societal transformations are often associated with tumult and loss. The philosopher Alfred North Whitehead observed that, “it is the first step in sociological wisdom to recognize that the major advances in civilization are processes which all but wreck the society in which they occur.”185 Though accurate, Whitehead’s reflection is not uniform and applies mainly to those who still cling to former belief structures. The shift into the Central Middle Ages, for example, appears to have been a mostly peaceful, constructive process that improved conditions on a broad scale. A similar prospect exists in our time.
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Notwithstanding the enormity of the task before us, there are whispers of cautious optimism by a small-but-growing body of respected scientists, sociologists, economists, and others. Each has identified in today’s shift the potential not only to address our many concerns, but to realize vast improvements for the whole of humanity. It is one of today’s many great ironies that at the very moment we find ourselves confronted by a host of unparalleled challenges, there is concurrently the potential for the greatest positive transformation in all of recorded history. The key word, however, is potential. A better future is not assured us but will depend heavily upon an informed general public and leadership that together make informed decisions.
In Part II, we look at some of the many obvious and not-so- obvious reasons for hope in our time. We will focus on insights and strategies, particularly within the monetary and economic arenas, that can help bring about significant revitalization. We will also examine some of the many reasons why the current societal shift is the first instance in recorded history of a phenomenon referred to as Great Change.186
TOWARDS GREAT CHANGE
Today’s shift distinguishes itself from others in myriad ways, including its extent and impact. Its epicenter is not restricted to any one people or region but is instead erupting in many places at once, influencing the full spectrum of human and natural habitats, from Wall Street, Main Street, and the remote villages of the developing world to virtually every living system on Earth. Everyone and everything is affected.
This shift is accompanied as well by an epic progression in perceptions. As noted, our seemingly vast and ever-abundant planet, whose great mysteries were once explained by myth and dogma, was widely held to be the center of the universe. Scientific inquiry and a new modernist worldview came into being and transformed many things: from our understanding of planetary orbits, governance, and economics to humanity’s place in the cosmic order.
As yet another perspective takes hold, today, change is upon us once again. With many times more people, greenhouse gases, peak oil, shrinking forests, and other diminishing resources, our world appears far more finite, vulnerable, and complex. Physicists are now seriously postulating an intricate, quantum multiverse, composed of infinitesimal strings, space, and energy, with many more than three dimensions. We are discovering that biological systems, humans included, are governed not only by DNA but by a genetic setting that includes billions of microbes and trillions of viruses living in symbiosis within each of us, “all working together in ways that leave our mind mysteriously free to focus on getting our bodies to the office and wondering what’s for lunch.”187 Additionally, we are discovering that human biology is governed not only by inherited genetics but by attitudes and lifestyle choices, as revealed by the newly-named discipline of epigenetics.
In short, we are living with multiple potential realities simultaneously coexisting at the same point in time. This changes many things, including a new multidimensionality and framework in the acquisition of knowledge. Systems analyst Jamshid Gharajedaghi writes:
There is a shift in our understanding of the nature of the beast from a mindless mechanical system to a multi-minded socio-cultural system…[and] in our way of knowing: from analytical thinking, the science of dealing with independent sets of variables, to systems thinking, the art and science of handling interdependent sets of variables.188
In a radical departure from Modernism, with its dismissal of entire realms of inquiry, a new, greatly expanded and dynamic framework is emerging. This new inquiry retains the rigor and empiricism of modern science while greatly expanding and enhancing the picture. It allows one to go into almost any field of inquiry and organize “outlier insights” that include and integrate information from a much broader range of sources: past as well as present; Eastern as well as Western; traditional as well as contemporary; intuitive and experiential as well as empirical and mathematical; interdisciplinary, multidisciplinary, and transdisciplinary as well as conventional areas of inquiry. Whereas modern science has been built around materialism, reductionism, linear causality, and disorder, “new science” is oriented towards energy flow, inclusion, complex causality, and “systemic patterns that hide beneath the chaos of local vicissitudes.”189 Hardly anything appears quite the same.
The medical realm is one example, and helps to illustrate the broader shift now taking place.
Integrative Medicine
Modern medicine views patients, illness, and disease in material terms, with emphasis on the physical body separate from the mind and spirit. It directs treatment accordingly around surgery, pharmaceuticals, and germicides. Its orientation is analytical, mechanistic, and reductionist, not systemic. As a result, modern medicine has not been very successful in dealing with system-based diseases, including three of the leading causes of death: cancer, diabetes, and heart disease.
Integrative medical programs instead complement conventional techniques with alternative therapies such as acupuncture, Ayurveda, biofeedback, chiropractic, yoga, and diet-based therapies, each of which conceptualizes the body as matter/energy/flow systems. This new framework takes a holistic, systems approach toward the understanding, treatment, and prevention of illness and disease.
Decades ago, few patients or practitioners in the West knew much about nontraditional therapies. This is no longer the case. In Britain, 42 percent of all physicians now routinely make referrals to homeopaths.190 Most European pharmacies dedicate more shelf space to herbal medicines than to pharmaceutical drugs. In America, there are more visits to unconventional therapy providers than to primary care physicians.191
John Astin of Stanford University’s School of Medicine offers the following interpretation for this shift:
Users of alternative health care are more likely to report having had a transformational experience that changed the way they saw the world…They find in [alternative therapies] an acknowledgment of the importance of treating illness within a larger context of spirituality and life meaning… The use of alternative care is part of a broader value orientation and set of cultural beliefs, one that embraces a holistic, spiritual orientation to life.192
It should be noted that this shift away from strict reliance on conventional medicine hinged on robust empirical evidence that predated its general acceptance by decades. The grassroots movement toward holistic medicine began in the face of once considerable opposition to alternative methodologies by conventional medicine. A similar phenomenon is occurring presently in the monetary and economic realms.
Monetary, Economic, and Social Change
For years preceding the global financial crisis, Wall Street enjoyed stunning windfall profits, seemingly affirming the logic of the reigning neoclassical orthodoxy. Yet, despite boom numbers, soaring indicators such as the GDP, and the certitudes of an impressive list of free market adherents, a groundswell of disenchantment grew in opposition to the direction of the economy, as smaller players, developing countries, and the environment struggled. One expression of the growing divide was a grassroots explosion of complementary currency initiatives, from a mere handful in the 1980s to thousands today in diverse communities globally. With regard to current economic policies and direction, dissatisfaction appears to be at a record high. In late 2009, twenty years after the fall of the Berlin Wall, a BBC poll was conducted across 27 countries from around the world. Only 11 percent of those questioned said that the dominant economic framework was working well.193 Though these opinions were very likely influenced by the then-current economic downturn, discontent with the economic order has been mounting steadily for decades.
In the largest survey of its kind ever undertaken, with cumulative surveys involving 100,000 adult Americans and 500 focus groups conducted over a 13-year period, a significant portion of the U.S. population was found to hold views that diverged from mainstream thought and the economic status quo. Unlike the aforementioned BBC poll, this study was conducted years prior to the recession, during a period of relative stability (1
987 to 1999). As reported by researchers Paul Ray and Sherry Anderson in The Cultural Creatives: How 50 Million People Are Changing the World,194 the findings indicated that the value orientation of tens of millions of Americans was not adequately reflected in mainstream business, finance, politics, and culture. The many issues cited included:
concerns with big business and the means used to generate profits;
practices that exploited resources and poorer countries;
the effects of globalization;
the lack of meaningful work;
mass consumption;
materialism;
women’s issues in business and other realms;
and a number of quality-of-life concerns.
There was a willingness to pay higher taxes for improvements and a desire that government spend more money on education, community programs, and support for a more ecologically sustainable future. Political affiliations varied, but many of those surveyed considered themselves independents, not aligned with any political party.
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