The definitive guide to Britain's success in the twenty-first century
CST believes money is misunderstood. Money is a tool just like a stone handaxe, the plough, a hammer, a train or smartphone. We humans created money to do a particular job - trading goods and services between people and groups of people. Money is simply the go-between to allow us to exchange what we have for something else. As such, it was and is an amazingly powerful tool. It initially allowed individuals, families and groups to make, hunt or grow particular items and exchange them for other important items and allowed humans to specialise. This trade specialisation created a leap forward for humans as the efficiency and effectiveness of work increased significantly.
So far, so good. Money was clearly an inevitable tool along the path of human ascent. It was certain to happen, perhaps many times over during the course of our many civilisations in the last ten thousand years. Initially money was based upon a valuable substance, ‘salary’ comes from the Latin for salt as a valued commodity. Now we create money with something of no intrinsic value, (pieces of paper with the ‘promise to pay’). And more recently money that is completely virtual, digital currencies that exist only within a computer memory.
The move to a money system of no intrinsic value has created a world-wide money circulation that is uncontrollable. When you borrow from a bank, the bank just creates the money out of nothing. Many people do not know this fact. So the banks create more and more money simply by deciding that they wish to lend to someone. We understand that this is ridiculous, and we can also see the effects - most of the economic booms and recessions in the modern world.
The economists, (of course), pretend they understand this money creation process and say it is necessary for keeping the world economy growing. However, we currently have a total world debt that continues to grow, with the USA having more than 22 trillion dollars of debt in 2019. To put this in context, if we put dollar bills one on top of another – one trillion dollars reach to a height of 67 thousand miles – this is a quarter of the way to the moon. So 22 trillion dollars would go to the moon and back five and one half times. Anyone with any sense knows that this amount of debt is ridiculous. It is 26 thousand dollars for each person in the USA. It will never be repaid.
What does this really mean? The debt does not exist physically. It just represents the amount of money created from nothing. For individuals this can be a real physical issue as the ‘bank’ will force someone to sell what they own to pay off their debt, or, a person may pay more than they can afford as interest. The banks of course are happy as they collect the interest and make (easy) profits from this silly system. But the debt itself does not reflect anything physical, it is after all ‘made up’.
So debt as a whole is meaningless except as a means of creating profit for someone else. At some point in the future, the US debt will cease to exists as ‘the international money markets’ will decide it cannot be repaid and everyone’s dollar -in their pocket or bank - will be devalued. We have seen many economies go through this ‘restructuring’. So this money debt is all a sham. The reason it continues is twofold. Firstly the money brokers (banks et al) make massive profits and secondly, governments pretend that it is not a problem for their administrations, (slaves to their inevitable short term policies).
Strangely enough CST has long argued that this overall debt is not a long-term issue. It does not represent real physical resources nor the ability to create wealth. The real value within each economy, (or the world economy as a whole), are the tools, factories, services, food production systems, power production, infrastructure, housing, transportation, etc, etc. This does not in any way depend upon the money system, or indeed on the value of the total debt.
We could at any moment decide to create a completely new money system, one that allows the world to continue to trade, (the original point of money as a tool), and based on a value that could not be corrupted. it could be organised so that it represented the increasing wealth that all our activity creates. The debt based on the old money system would be irrelevant. This of course needs a new central political structure and, this is very unlikely to happen in our current world or within the foreseeable future. But let us not confuse what is theoretically possible with what cannot be politically achieved today.
So humans have created a money tool that has effectively enslaved us. We are living in a silly, run-away money system and there is no clear politically way we can extricate ourselves from it. Money ten, humans zero.
CST has the answer. The reason that CST insists that the debt is not worth worrying about is due to the fact that we are soon to enter a new paradigm of wealth creation. One not built upon capital and the ability of individuals to apply their time to create work outputs, but one based on automation in its many forms.
We continue to think in the short term. Necessarily, we worry about day to day issues and have great difficulty in seeing what the future will usher in within the next generation or two. The world will continue to change and this change is becoming quicker for every generation. Just ten or so years ago the iphone ushered in a new way for us to do many things – communication, research, organisation, health – it changed the very fabric of societies across the world. We have already got used to these changes, and the next likely change will be increasing automation. But this change CST has argued will change the fundamental fabric and economics of the wealth creation process. Capital will not need to be owned in future as it will be self-creating - challenge your own thinking - see: John's got a new motor.
Economic theory will be forced to change from the existing capital and work basis to one of resources. Unfortunately, many of the richest and most powerful within our societies rely on the capital based wealth process to give them their influence.
At some point in the future, people will become aware that in this new age of automation, this capital and work economic theory is defunct. People will realise (as it will be obvious) that they do not need to work to create plentiful wealth for the society as a whole. The really important issue will be who has access to the wider resources.
At this point in time it will also become crystal clear that the debt, (all of it everywhere), is meaningless - as it cannot affect the creation of future wealth. The only thing that will affect future wealth creation is the efficient application of resources. This will be difficult for many people to visualise. We are so used to considering value in terms of money and capital, and we are so used to considering our own potential and wellbeing in terms of work output. We are unable to visualise that current economic theories will become completely defunct within just a few future generations, or less.
But economic theory will change to meet the new fundamentals. And we need to use this fact today. Why worry about the future debt when in just a few decades it will become irrelevant? This fact can allow us today to harness more of our current resources – including that of current work output – to provide for a quicker transition to the automated future. For instance, we can employ more people doing more things to ensure improvements in future infrastructure, future health, improved education outputs, and improved research and technology.
So who cares if the current debt increases in the medium term, it is unpayable already. Knowing that we are moving to an era where it will be irrelevant means we do not have to consider the long-term consequences. This may sound irresponsible, but it is not.
This increase of debt is a practical way forward and one which gets us to the future quicker. It is also the way we should create the necessary change processes to get us from here to the automated future (job losses etc). We temper this with commonsense, the debt in the short-term must seem reasonable or the 'markets', (these we have no control of), as it could cause issues of confidence. But there is scope to create more 'money' sensibly over the medium-term to get the investments we need, (infrastrucure, education, research and development), to improve the future quicker.
So how is this possible - it seems like a magic trick. Consider what is actually happening. If we have unused resources, (eg people, factories, tools, power, transport, research capabilities), then by employing and using these to take up the slack, we can produce more. Such output needs to be useful to the future of wealth creation. This includes specific infrastructure such as solar, wind and hydrogen power facilities, improved transport systems, education and better long-term health outcomes.
Perversely, if any of the current political entities provided this new way of looking to the future, one based on long-term thinking and a hopeful vision for the next generations, they could lever this coming change for everyone’s best interests. But where are these new parties? All we get is increasing populism along with inward looking entrenchment or an idealistic future based on reducing energy consumption - which is the last thing we should do if we wish to enable future technical success and automation.
Are there any economists or governments putting this case forward? CST has not heard of any. We do not think that many people have yet understood how the real basis of money, capital and work will change once automation gets properly underway. Perhaps there are some clever people out there that know the future. CST is more concerned that the entrenched power systems, (banks, governments, affluent power brokers), will see the future before the rest of the people and make sure that they force a new type of money control on to the majority of people.
The creation of digital money and pervasive surveillance allows this complete control to happen very easily. This will enable governments, along with the wealthy power brokers to keep their political power over the main population and share out the resources under the guise of a new economic system that keeps the people happy.
Has it not always been thus? It was never fair to enslave people, or to make children work in terrible factory conditions or to have a society where a just a few held the means to all wealth creation. The levers of this coercion have changed throughout the ages - from swords, guns and policing systems to the coming centralised digital surveillance and control.
But, it is likely, that unless people open their eyes to their future quickly, the current power brokers will find a way to enslave the majority of the population and keep the largest proportion of world resources for themselves. If you are one of the rich and powerful, then please take a bow along with a wry smile and start thinking of how you may achieve your new enslavement regime for the rest of us.
...CST Ideas for New Fairer Social and Business Structures, See:
Integrated Innovation
What’s the next big thing
Building new homes
A new type of organisation
Thank You,
CST
and - will it in the future?
August 2019
Money is the root of all evil. We look at why this really is and provide a new way of thinking about the future - with money and it's current economic theories taking centre stage....