By now, at least most of us would agree that "growth mania" - the obsession with infinite economic growth - is one of the root causes of environmental destruction. So, to truly achieve sustainability, humanity as a whole would have to stabilize itself at a condition which ecological economists term as the "steady state" economy. However, I've always wondered: can we really discard our addiction to economic growth, even if we want to?
No, it's not that I lack faith in human determination to reign in our recklessly consumptive and environmentally unsustainable lifestyle. After all, at the individual level, I believe it fair to say that nobody consciously sets out to "degrade the environment" by working, buying things, traveling and well, just doing all those things that are necessary in a typical life. Yet, how did we, through our collective actions carried out in the name of ‘daily life', end up unleashing a bustling ‘economy' that seems bent on self-destruction, like a cancerous plague?
My guess was, it has to be something bigger than the individual, something so large, pervasive and taken for granted that no one really bothers about it. Culture, politics, etc.; the usual suspects crossed my mind, but it was only after learning economics that I chanced upon something deeper - that is, money.
Let's now examine the economic ‘rules of the game' in our modern economy. To survive, everyone needs money, but why? Because in a highly specialized society like ours, we depend on others to provide us with the basic necessities that we value highly such as food, shelter, education, entertainment, healthcare. You get the idea. The more developed the economy, the higher this dependence.
To ‘get' these things, we basically need to exchange what we have with the goods and services offered by others. Once upon a time, when there was no ‘money', people just went to the neighborhood market and exchanged fish for cow milk, chicken eggs for cows and so on, (i.e. they bartered), but it doesn't take much imagination to realize how slow and inefficient this was. Naturally, in our quest towards progress (which necessitates a much larger variety of things to change hands more quickly), this gave rise to the sophisticated market system we have today, with money as the medium of exchange and measure of value - which makes creating and exchanging goods and services so terribly quick and effortless.
Money, whether in coins or note or as numbers in the bank, has no real worth by itself, except for the trust people place on it (enforced by governments) to exchange it for something else we really value. The reliability of money, in combination with the price-setting mechanism of the market system, provided a ‘system' for modern societies to become highly productive and materially prosperous.
But here's Problem Number One - apparently the system worked too well, but with some flaws. With such ease in mobilizing production to fulfill all of our unlimited wants and needs, we launched into a self-gratification overdrive, overlooking the fact that we're outstripping the natural resources and services that support the production of all goods and services at a rate that goes against the rules of nature's game. This is actually nothing new, of course. Historically, when environmental thresholds were exceeded, human civilizations crashed and disintegrated, as in the cases of the Mayan, Greenland Viking and Easter Island societies highlighted by Jared Diamond in his book "Collapse: How Nations Fail or Succeed". The same trend is happening now, just at a global scale.
In the modern context, the use of money goes hand in hand with our environmental impact - the more money we have, the more ‘empowered' we are to degrade our economy's environmental base. That's why the carbon footprint of developed countries is far larger than that of poorer countries. Therefore, if we are to avoid past mistakes and strive for the ‘steady state' economy, where the amount of goods and services are being produced at a constant and environmentally sustainable rate (not to be confused with an amount which is stagnant, meaning no new stuff is being produced), the supply of money will also have to conform to this ‘constancy rule'.
Which leads us to Problem Number Two: the way our banking system is designed, our current money is generated based on a formula of never-ending expansion of debt that is absolutely dependent on the premise of unlimited economic growth. Simply said, more money is being created as loans are given out to people to buy things. But since we need to pay back more than we borrowed (principal plus interest), we always need more money than we started out with. So banks are compelled to give out more loans to create the money to pay back the earlier loans and the cycle repeats itself forever... unless we keep on taking more loans to buy more stuff, the system collapses.
To illustrate, Paul Grignon has produced an eye-opening video (below), "Money as Debt' which explains the troubling flaws behind our money system that has largely gone unquestioned through the years. The video sheds light on such complex subjects as usury and the fractional reserve system, as well as how they undermine the ecological logic of the natural world.
As with any controversial theories, some points in Grignon's video may not be above criticism, but I do think the fundamental idea is sound. If you have 47 minutes to spare, I highly recommend that you get yourself acquainted with the facts of the case and make your own conclusion. My own reaction was: if we are serious about reaching ‘steady state', we had better pay much more attention to monetary reform, even though it may seem nearly impossible, considering how tough it is already to topple the vested interests in our current fight against another deeply-entrenched system: fossil-fuel addiction. Whatever it is, after this you'll probably never look at money the same way again.