Sacred Economics: Money, Gift, and Society in the Age of Transition (26 page)

Today, access to money, via credit, goes to those who are likely to expand the realm of goods and services. In a sacred economy, it will go to those who contribute to a more beautiful world. While we may not all agree on what that world looks like, many important common values are emerging in our time. I have been gratified to discover, in my interaction with people from all parts of the political spectrum, a near-universal reverence for community, for nature, and for the beautiful products of human culture. Around these common values, which political language tends to obfuscate by superimposing divisions atop our common humanity, the currency of sacred economy will emerge.

In this chapter I will refer to “government” in the context of currency issue, but keep in mind that like all of our institutions, government is going to change dramatically in coming years. Ultimately, I envision decentralized, self-organizing, emergent, peer-to-peer, ecologically integrated expressions of political will. Parallel to this, I envision an ecology of money as well, an economic system with many complementary modes of circulation and exchange. Among them will be new extensions of the gift, freeing work from compulsion and guaranteeing the necessities of life to all.

Whatever form it takes, an essential purpose of government—maybe
the
essential purpose of government—is to serve as the trustee of the commons. The commons includes the surface of the earth, the minerals under the earth, the water on and under the ground, the richness of the soil, the electromagnetic spectrum, the planetary genome, the biota of local and global ecosystems, the atmosphere, the centuries-long accumulation of human knowledge and technology, and the artistic, musical, and literary treasures of our ancestors. As social reformers have observed for over two thousand years, no single person can make rightful claim to any of these things.

In the past, I might have said that the purpose of government is to administer these treasures for the benefit of all people. That’s a good start, but today, as we step into the relationship of Lover Earth, I say instead that government embodies our collective stewardship of these treasures on behalf of earth itself, which includes humanity as its newest organ. We can no longer look upon humanity as just another life-form on the planet because we have the power to alter or even destroy the planet as no other species ever has before.

What could be a better basis for a money system—the story of value—than these things that are so precious, so sacred, so
valuable?
Accordingly, part of a sacred money supply will be “backed” by those things of which we are collective stewards. Here is one way it could work: first, we reach a collective, politically mediated agreement on the right amount of nature to turn toward human purposes: how much of the produce of the sea, how much of the soil, the water; how much of the capacity of the atmosphere to absorb and transform waste; how much of the land’s ability to recover from the scars of mineral extraction; how much of the gift of fossil fuels, metal ores, and other wealth; how much of nature’s quiet to give over to machine noises; how much of the dark night sky to give to city lights. These decisions often require scientific understanding, but just as often they embody value judgments. Both contribute to our collective agreement on how much natural capital to consume.

Such a decision is something new on the face of the earth. To be sure, governments today use regulations and taxes to halt or slow the consumption of certain parts of the commons, but never yet have we gotten together to ask, “How much is enough?” Ancient villages protected their commons through tradition, custom, and social pressure (the “tragedy of the commons” is largely a myth
²
), but on the scale of society today, we need to engage a political process to reach and implement a consensus. This process would consider the scientific consensus about what use of the commons is sustainable, as well as the social consensus about the relative importance of, say, the labor-saving convenience of internal combustion engines versus the pleasures of a quiet autumn day.

Once we have decided how much of each commons should be made available for use, we can issue money “backed” by it. For example, we might decide that the atmosphere can sustain total sulfur dioxide emissions of two million tons a year. We can then use the emissions rights as a currency backing. The same goes for the rest of the commons. The result would be a long list comprising all the elements of the commons we agree to use for economic purposes. Conceptually, it might look something like this:

How to implement this in practice? One way would be for the government to simply create money and spend it into the economy in the way governments spend tax revenues today. The money would circulate through the economy and eventually back to the government when producers redeem it for the backing items. This could happen through auction, or relative prices for the backing items could be set in advance and then adjusted each year according to actual prices on the secondary market. Either way, the redemption of money for backing items would function just like a tax on resources and pollution.

Let’s look at a concrete example of how it might work. A local government issues salaries to police, firefighters, and the local ecological cleanup crew. One of them spends her salary on food, electricity, and a new transmission for her car. The food comes from a local farm, which spends part of the money for the right to pump
300,000 gallons of water a year from the local aquifer. This payment goes to the local government, which is the steward of that part of the commons.

Meanwhile, part of the money for the transmission goes to a factory somewhere, which pays part of that for pollution credits needed to operate. That cost is embodied in the price of the transmission, which also reflects the pollution credits for the gasoline used to transport it, the mineral rights for the iron ore used to make the steel, and so forth. These payments go to various stewards of the commons, some local, some regional, some national or global. Any factory that figures out a way to use less of the commons—for example, to make less pollution, or to use recycled metal from old junkyards—will be able to reduce its costs and earn a higher profit. The profit motive thereby becomes the ally, not the enemy, of our desire to heal the earth.

Remember the principle that whatever commodity we use as money becomes valuable, so that we seek more of it. When gold is money, we mine more gold, beyond any practical need for it. In societies where cattle are money, people keep herds beyond what they need. If we use oil or energy as a currency backing, as some propose, then we will try to produce and hoard more oil. But what if we use oil still in the ground, gold still under the mountain, and forests still in their pristine state as currency backing? Won’t we then elevate their value, too, and seek to create more and more of them? The mechanism is not at all mysterious. If you have to pay the full environmental costs of oil extraction, you will diligently find ways to keep it in the ground. If you have to pay for each unit of pollution, you will strive to pollute less.

An alternative means to the same end would be for the government to create credit-money by borrowing from the central bank
at zero interest and repaying the loans with money from the sale of the items of the commons it holds in trust. The government could also issue bonds to investors and the central bank exercise monetary policy as it does today by purchasing or selling varying amounts of these bonds on the open market. It is crucial that these bonds bear zero (or negative) interest, a possibility I will explain in the next two chapters. Otherwise, a need for perpetual growth in the use of the commons would be created.

Either way, producers would have a financial incentive to minimize their use of the commons. No such incentive exists today, or if it does, it exists only haphazardly. This system would fully internalize social and ecological costs. Today, when a mining company drains an aquifer or a trawling fleet depletes a fishery, the costs to society and the planet are external to the producer’s own balance sheet. With this system, that is no longer true. Since these costs would be passed onto downstream industries and eventually to consumers, consumers would no longer face today’s dilemma that the cheapest products are those that cause the most social and environmental damage, while the fair-trade and eco-friendly products are way more expensive. Instead, products that avoided pollution in their manufacture would be cheaper because pollution quotas would cost a lot of money. Products would be more expensive in proportion to the amount of the natural commons consumed in their production.

Some might object that this system would necessitate a lot of bureaucracy and paperwork, since it requires keeping track of every pollutant and social cost generated in the process of production. My answer to that is twofold. First, this system embodies the new attitude of environmental responsibility that
wants
to know and take responsibility for the effects of our actions on other beings.
Look what happens to the earth, when we are oblivious to the risk of oil spills and nuclear disasters. Increasingly, we want to know what we are doing, we want to know all the effects of our actions, and we want to take responsibility for them. This attitude is quite natural for the connected self that knows, “As I do unto the other, so I do unto myself.”

Secondly, what I have described is actually much less complicated than today’s byzantine and uneconomic system of regulation, which puts environmental responsibility and financial profit in opposition. From the user’s perspective, it is nothing more than a shift of taxation away from sales and income and toward raw materials and pollution. Private producers would have to pay for things that are now “free”—free to them at least. You might see this as a form of indirect taxation, but another way to look at it is that producers are simply paying for the things they take from the commons, the things they take from us all. It is only fair. We might say that such taxation is simply the enactment of the principle that “those who benefit from the larger community of life must also contribute to the larger community of life.” Those who take from the commonwealth must contribute to the common good in equal measure.

The kind of taxes, the means of levying contributions to the common good, that we have today are nearly the opposite of what we want to create in our world. We can take from the commons—that which no one should own—without paying for it, yet the one thing we can be said to own—our own productive labor—is subject to taxation in the form of income tax. Meanwhile, we are forced to pay a tax on the circulation of goods—a sales tax—while there is no tax on the accumulation of wealth not used for exchange. We have it backward. The money system I am describing in this chapter reverses income tax, shifting taxes away from what you earn and
onto what you take. The next chapter describes a similar reversal of sales tax, shifting costs away from spending and onto hoarding.

Despite my upbringing in a politically liberal household that justifies income taxes on the grounds that they put more of the tax burden on those most able to pay, I always felt a kind of primal indignation about income tax. It seems unfair. Why should the most productive or hardworking people pay more? It makes much more sense to make people pay for what they are actually taking.

For the reader unfamiliar with unorthodox economic thought, I want to emphasize that this proposal fits into a respectable historical context. It is a synthesis of several elements. The idea of shifting taxes onto polluters and resource consumption was developed by A. C. Pigou in the early twentieth century and carried forward by such people as Herman Daly, Paul Hawken, and numerous environmentalists. The idea of eliminating profit from the ownership of the commons goes back to the tradition of Henry George that I discussed in
Chapter 4
.
³
Numerous recent thinkers have suggested backing currency with such things as energy and other resources (though as far as I know they haven’t considered backing it with energy and resources still in the ground). What I am describing in this chapter is the natural extension of the ideas of Henry George and Silvio Gesell into the ecological age, firmly grounded in two or three converging traditions of thought.

The most important item of the commonwealth is undoubtedly the land itself, the subject of the original criticisms of the institution of property. The proposals of George and Gesell that arise from this criticism fit seamlessly into the monetary system I
have described. For what is George’s “single tax” but a fee paid for the right to use the commons (of land)? This tax, which applies to the underlying value of land independent of any improvements upon it,
⁴
could also take the form of a lease or a right-to-use payment. Obviously, since improvements to land are immobile and often require years or decades to build, lessees would have to enjoy the first right to renew. Many gradual and gentle ways have been proposed to realize the reclamation of the land commons for the public; there is no need to confiscate existing real estate holdings, but only to enact the principle that the earth belongs to everyone.
⁵
That means that no one should be allowed to benefit financially from owning the land.

The same goes for the electromagnetic spectrum, the minerals under the earth, the genome, and the accumulated fund of human knowledge. These should be available for rent, not ownership, and the rents should go to the public. Presumably, those who can put these assets to best use would be the most eager to rent them. There would still be room for entrepreneurship—even more so than today since access to resources would be based not on prior ownership but on most effective use. There would be no more profiting from “I own and you don’t.”