The quickest way to kill the debt monster would be to create a source of “New Value” and inject it into the monster’s head.

Let me explain:

Suppose someone discovers a new form of energy that is free for all to use with no negative environmental impact. Suppose that another person creates a device that allows people to communicate telepathically. Suppose someone discovers an anti-gravity machine that can transport people and objects cheaply and rapidly. Suppose someone invents high-yield perennial food crops that don’t need to be replanted every year.

Each would deposit huge amounts of economic value while simultaneously wrecking havoc on the financial system. Oil companies would go out of business, telecoms would go bust, transportation industries would cease, and agribusiness would fail, etc.  Millions would lose their jobs and mortgages would collapse, etc.

The New Value Movement

But that is exactly what may be happening with the introduction of vast new sources of value playing out in the voices and actions of people around the world.  However, this New Value is only now being articulated as such.

For example:

  • Mary Adams at I-Capital Advisors calculates that huge stores of intangible value – as much as 70% of GDP – may be unaccounted for on the corporate balance sheets.
  • The Metacurrency Project from Art Brock suggests that there are many dimensions of value intrinsic to economic activity that money fails to articulate.
  • The sustainability movement,  Greg Wendt, [posits that] “the biosphere must be regarded as the meta economy from which all others are derived”.
  • The Symbionomics Project by Alan Rosenblith and Jay Standish demonstrates that cooperation is the dominant economic mechanism in natural systems, not necessarily competition.
  • The collaborative consumption movement being applied by award winning start-ups like Neighborgoods, demonstrates how people sharing an asset would seek to preserve the asset rather than consume it, thereby multiplying the utility of resources.

The Monetization Paradox

Each one of these movements, and undoubtedly there are many more, have the potential to introduce extraordinary amounts of New Value to an economic system – most likely exceeding the value of the monetary economy many time over.  However, such value acts against the very system that is required to bring them to wide scale markets.  In fact, the act of “going to market” can often negate the value that these innovations create.

But ‘ders Gold in ‘dem Hills

In the old days, gold was carried around in sacks for exchange for goods and services. Soon the gold was replaced with a pieces of paper that “represented” the gold, but was not actually made of gold.   After a while, it was no longer necessary to use gold as the medium of exchange because everyone carried around the pieces of paper.  Soon, paper currency was divorced entirely from the gold standard.  Yet, money can still be buy gold and vice versa.

Likewise, The New Value movement could be represented by dollars, but not actually be made of dollars. Eventually, people would not necessarily need to use actual dollars because the New Value currency adequately represents dollars.  As soon as the New Value currency can be divorced from dollars, so goes the debt monster. Of course, New Value Currency should be able to be exchanged for dollars and vice versa, as needed.

So here comes the tricky part: how do you inject the debt monster in the head with New Value without messing everything else up?  Hint: stop whacking it in the foot

See my next post for more clues.