What the economy has not realised is that from the era of shortage we have inconspicuously entered the era of abundance, that the industrial capitalism which has become a financial and speculative hybrid is changing in front of our eyes into informative capitalism. This third wave of civilisation requires a new economic science with completely new tools and a completely new aim.
The aim of the economy – economic growth – needs to change. The fact that the economic growth is seen as the priority has led to creating consumption, planned ageing of products, wasteful management of natural resources and degradation of the environment by changing our planet into one big garbage dump. Instead, this aim should be a stronger sense of well-being of individuals, societies, nations and, finally, the entire humanity. The tools and mechanisms of the new science will be developed on the basis of new priorities. Science needs to redefine such concepts as money, work, profit, pension and dividend.
Abundance means that the essential multipliable commodities occur in the economy in such an amount that they can meet the needs of all the people. All the people who live on the Earth.
A person starving in front of a market stall heavy with a pile of rotting bananas is an image which demonstrates the system’s inefficiency but also shows that the science is not effective any more.
What is missing in this image? Money.
The entire generations worked, created and acted in order to liberate us from hard work. We have been replaced by machines. Instead of a town of shoemakers and craftsmen we have a shoe factory. Shoemakers do not work anymore. Who will buy shoes manufactured in the factory? Everybody is unemployed.
What is missing in this image? Money.
Once progress has liberated us from the pressure to work, we long for work as never before.
Therefore, the task of the new science is to overcome these absurdities. We have to follow the path indicated by Douglas and other unorthodox creators of the new thought.
- Money as a sign, a symbol, a document which proves that a commodity or service of a given value was supplied to the market, cannot be the object of trade. Money is not and cannot be a commodity.
We have to forget all about precious metals, the history of money; money must be based on the purchasing power and trust put in the issuer. Money can appear and disappear once the circle of exchange of goods ends. Money cannot be bought or sold. Currencies can be exchanged only into their equivalents. The effect of the new approach to money is disappearance of the financial markets, of interest in its present form, of debt securities and speculations.
- In the era of abundance the law of demand and supply, characteristic of the times of shortage, does not apply anymore.
Possession of money needs to be ascribed to a consumer, and a consumer is not an employee, each of us is a consumer. The future of the new science is the theory of social loan by Douglas, after taking into account the changes which have occurred in the economy since the theory was created.
- Money must obtain a measure, the same for all the currencies: local, national and barter.
The measure – a model unit – should be based on the purchasing power, i.e. on the market basket. And I mean essential commodities (e.g. minimum subsistence level). Whether the basket will be universal or whether the minimum levels will be different for various countries is of secondary importance. Let me use an example: in Poland the minimum is PLN 500.00. This PLN 500.00 corresponds to 30 units of OM (objective measure). In India the minimum is 200.00 rupees. The OM has a geographic dimension (if I exchange PLN 500.00, i.e. 30 OM, into 200 rupees, I also get 30 OM) and historic (if I borrow PLN 500.00, i.e. 30 OM, and in 2 years I pay back PLN 600.00, also corresponding to 30 OM).
- The accumulative function of money must be separated from its function as an exchange intermediary. The circulating money must “burn” so that its storage is unprofitable.
- The role of currency issuer needs to change from supervisory into subservient. We have to cut free from the dictatorship of money issuers.
The 5 basic desiderata regarding the new economy are:
- Money is not a commodity.
- Money is the attribute of a consumer. Every person is a consumer.
- Money has a measure based on a universal model.
- The circulating money is not subject to accumulation.
- The issuer plays a subservient role towards the society.