What is wealth?
THERE IS NO WEALTH BUT LIFE. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest number of noble and happy human beings; that man is richest who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others. – John Ruskin
At the root of all the economic problems is money or perceived lack thereof. We have forgotten that money is a token, a symbol of wealth that has no intrinsic value. So the entire fate of the world hinges on an empty conceit. In the 21st century when we have manipulated genes, explored outer space and have instant access to more information than we know what to do with, surely we can figure out a system of accounting to replace the clearly broken system that has been in place for the last ten thousand years.
It is difficult to displace such an entrenched paradigm, so entrenched that most people cannot even conceive that there could be an alternative. The term economy is conflated with the monetary system. The most radical reforms put forward remain unaware, like the frog in slowly heating water, mired in the monetary morass. The collective delusion I have dubbed moneytheism, a belief in only one way to think of economics. The silver lining to the current economic crisis could be that people will be forced, perhaps for the first time, to examine their unconscious assumptions and stretch their cognitive range to allow for a different approach.
Only a crisis—actual or perceived––produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around… That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable. – Milton Friedman
One can only hope that after a probable gigantic catastrophe provoked by the insistence of more of the same, a dramatic cultural shift may occur, that leads us from an anthropocentric world of greed, competition and accumulation; to a biocentric world of solidarity, cooperation and compassion with all forms of life. – Max-Neef (2010)
The prevailing idea of wealth is based on material considerations centered on the production, consumption and accumulation of goods and services. Oil- and mineral-rich nations, for example, are afforded an enviable advantage derived purely from the accident of their geology. No account is taken of the destruction of the environment caused by the extraction process and disposal of toxic waste. Money, originally a token symbol to facilitate trading, has become itself a commodity, the supply of which has been made scarce, depriving billions of access to essentials and condemning them to a meager subsistence.
A prevalent definition of economics is the optimum allocation of scarce resources following patterns of rational behavior and limitless growth.1 The patent limitation of this materialist and anthropocentric view is hardly questioned. Corporations whose sole responsibility is to make a profit, speculate on perturbations to the system like disasters, weather events and crop failures which affect supply, inflating prices out of the reach of the poor. A perception of scarcity and limited resources, whether real or induced, creates fear, leading to greed, strife and cut-throat competition. It is a zero-sum game, winner-take-all, a volatility exemplified in cycles of boom and bust. The free market is much touted for its efficiency but is this any way to run an economy? It is akin to a householder betting their wages on the horses and the ruinous effect that has on the family. Yet the more races run and money bet, the better is the economy, by conventional wisdom.
In the end, those gambling in Las Vegas lose more than they gain. As a society, we are gambling – with our big banks, with our nuclear power facilities, with our planet. As in Las Vegas, the lucky few – the bankers that put our economy at risk and the owners of energy companies that put our planet at risk – may walk off with a mint. But on average and almost certainly, we as a society, like all gamblers, will lose. – Joseph Stiglitz2
While material wealth contributes to a high standard of living for some, there are other elements necessary for a good life, some tangible, others not. These might include clean air and water, adequate healthcare, political agency, access to information and freedom of expression. A way to measure these and assign some relative value to each would seem to generate a more accurate indication of prosperity. Material-based wealth is limited, finite and one day will run out. The supply of precious metals is not enough on which a world economy can be built. The real, and acknowledged, scarcity puts an arbitrary cap on global prosperity leading governments to abandon first the gold then the silver standards in favor of fiat currency. But then paper currency has its own limitations.
Harking back to bygone days when bartering was replaced by the more convenient and fungible form of tokens that became money, economic reformers have put forward many proposals to adjust currency systems to reflect more equitable trade-offs. We have long passed the stage where our needs were simple, supplied by our immediate environment or met by itinerant traders. Our supply chains have become immensely complex and the monetary system behind it even more so to the point where the commodity that money itself has become is sliced, diced and packaged for different markets. The money traders have become too clever by half and have rendered money meaningless, devoid of any connection to real value, ergo the current economic collapse.
The current economic structures are based on a wrong assumption. Wealth is not created; wealth is. Monetary systems do not create wealth but exist solely to control it. A new way has to be found to count wealth and manage it where it is not detrimentally accumulated at the expense of the environment which gave rise to it and of many who have to go without.
We have discovered that it is highly feasible for all human passengers aboard Spaceship Earth to enjoy the whole ship without any individual interfering with another and without any individual being advanced at the expense of another, providing that we are not so foolish as to burn up our ship and its operating equipment by powering our prime operations exclusively on atomic reactor generated energy. The too-shortsighted and debilitating exploitation of fossil fuel and atomic energy are similar to running our automobiles only on the self-starters and batteries… – Fuller (1969, 111–112)
Although the market economy is founded upon material wealth, there are unspoken values that come into play. Unfortunately, these are mostly negative, disruptive and inimical to the common good. Greed, acquisitiveness, selfishness, callousness, accumulation, one-upmanship, and smarts at someone else’s expense are the hidden fear-based values at the center. The Dow Jones Industrial Average and similar indices derive more from investors’ perceptions than from actual economic performance. What currently obtains then is a value-based economy, but a negative one. Why should we not replace implicit negative values with explicit positive ones? These negative values are the only real cost, to the environment and to human well-being.
1 “It is disturbing that the economy that is still being taught in most Universities represents a system closed into itself that has no relations with any other system. It is just a flow of goods and services, through the market, between firms and families, expressed in monetary terms, that has no relations with the environment, and ignores the physical impacts and consequences of economic activity.” – Max-Neef, 2010
2 “Gambling with the Planet,” Project Syndicate http://www.project-syndicate.org/commentary/stiglitz137/English