David Bollier

Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation.  In one of the most successful enclosures of the commons in our time, commercial finance institutions have captured the power to create most new money through their discretionary lending.  This power has become so normalized and pervasive that hardly anyone acknowledges the startling fact that commercial lending accounts for more than 95% of “new money” created.  Government has in effect surrendered its enormous power to use its money-creating authority for the public good.

Perhaps the leading champion for reforming the current money system is Mary Mellor, emeritus professor at Northumbria University in the UK and author of the recently published, eye-opening book Debt or Democracy:  Public Money for Sustainability and Social Justice (Pluto Press, 2015, distributed in the US by University of Chicago Press Books). 

Mellor recently published an oped piece in The Independent, the British newspaper, that summarizes some of the key themes in her book. Her essay focuses on the “myth of handbag economics” – the idea that government budgets are comparable to household budgets.  This distorts our understanding of how the money supply works, says Mellor, and inexorably leads governments to adopt fiscal austerity policies. 

The critical political question that is rarely asked, said Mellor at a policy workshop last September, is: Who controls the creation and circulation of money?

She notes that the government, as the sovereign, has the authority to issue new money – an ancient authority known as seignorage.  But in practice, governments have surrendered this authority to the commercial banking sector, whose lending creates nearly all of the money in circulation as debt. 

Banks create money out of thin air by issuing new loans.  They need not have those specific sums of money on hand, in a vault. They need have only a small fraction of reserves of the total sum lent, as required by “reserve banking” standards. In this way, bank lending quite literally introduces new supplies of money into the economy based on strictly private, commercial standards – i.e., banks' assessments of borrowers’ ability to repay the debt with interest.

Mellor believes that we need to recover the power of public currency to meet public needs.   By “public currency,” she means “the generally recognized and authorized public currency created through a public money circuit that originates in central banks and government spending.”  Privately created currency is money designated as public currency that is issued through the banking sector as loans.  It is the fact that bankers are creating the public currency when they make loans that makes the state liable to honor that money when banks go into crisis.

As healthcare insurance prices in the US have skyrocketed, despite passage of President Obama’s Affordable Care Act in 2010, many Americans are turning to a new/old solution:  mutualized self-help.  As reported in the New York Times, many Christian groups in the US are forming their own unregulated insurance pools to pay the medical bills of their members. Nearly 200,000 people in 58,000 households are now paying their medical expenses in this fashion, to the tune of over $20 million a month. They constitute self-organized financial commons for healthcare.

This trend raises some fascinating questions about state/corporate bureaucracies vs. social commons:  Which offers the better value?  Which is more reliable and satisfying?  Could social commons help bring down the cost of conventional insurance while introducing a more human, caring dimension to healthcare?

Reporter Abby Goodnough tells the story of a family that was priced out of the insurance market, and so decided to cover their potential medical bills through a “sharing ministry.”  Instead of paying $600 per month for insurance with a $10,000 family deductible, the Doyle family in San Antonio, Texas, now pays $405 per month.  They also pay the first $300 for any medical bill they receive, and there is a spending cap of $250,000 for any illness or injury.

When I met biologist and ecophilosopher Andreas Weber several years ago, I was amazed at his audacity in challenging the orthodoxies of Darwinism. He proposes that science study a very radical yet unexplained phenomenon -- aliveness!  He rejects the neoDarwinian account of life as a collection of sophisticated, evolving machines, each relentlessly competing with maximum efficiency for supremacy in the laissez-faire market of nature.  (See Weber's fantastic essay on “Enlivenment” for more on this theme.) 

Drawing upon a rich body of scientific research, Weber outlines a different story of evolution, one in which living organisms are inherently expressive and creative in a struggle to both compete and cooperate. The heart of the evolutionary drama, Weber insists, is the quest of all living systems to express what they feel and experience, and adapt to the world -- and change it! -- as they develop their identities.

Except for a few essays and public talks, most of Weber’s writings are available only in his native German.  So it is a thrill that some of his core ideas have now been published in English. Check out his lyrical yet scientifically rigorous book, Biology of Wonder:  Aliveness, Consciousness and the Metamorophosis of Science, just published by New Society Publishers.  (Full disclosure requires me to mention my modest role in helping Andreas improve the “natural English” of his translation of his original German writings.)

Future historians will look back on this book as a landmark that consolidates and explains paradigm-shifting theories and research in the biological sciences. Biology of Wonder explains how political thinkers like Locke, Hobbes and Adam Smith have provided a cultural framework that has affected biological inquiry, and how the standard Darwinian biological narrative, for its part, has projected its ideas about natural selection and organisms-as-machines on to our understanding of human societies.  Darwinism and "free markets" have grown up together.

This is now changing, as Weber explains:

Biology, which has made so many efforts to chase emotions from nature since the 19th century, is rediscovering feeling as the foundation of life. Until now researchers, eager to discover the structure and behavior of organisms, had glossed over the problem of an organism’s interior reality. Today, however, biologists are learning innumerable new details about how an organism brings forth itself and its experiences, and are trying not only to dissect but to reimagine developmental pathways. They realize that the more technology allows us to study life on a micro-level, the stronger the evidence of life’s complexity and intelligence becomes.  Organisms are not clocks assembled from discrete, mechanical pieces; rather, they are unities held together by a mighty force: feeling what is good or bad for them.

In the grand narrative of evolution, the idea that feeling, emotions, morality and even spirituality might be consequential has long been dismissed.  Such experiences are generally regarded as trivial sideshows to the main act of the cosmos:  nasty, brutish competition as the inexorable vehicle of evolutionary progress.  Indeed, modern times have virtually combined the idea of "survival of the fittest" with our cultural ideas about the "free market economy." 

The backlash to the corporate “sharing economy” is gaining momentum, and one key player is the movement to develop “platform cooperativism.”  The New York Office of Rosa Luxemburg Stiftung has released a report critiquing the “sharing economy” and describing the alternatives.  It’s called “Platform Cooperativism:  Challenging the Corporate Sharing Economy” (pdf file).  and it’s written by Trebor Scholz, an associate professor at the New School. 

Scholz and journalist Nathan Schneider were co-organizers of a November 2015 conference that served as an historic flashpoint on this topic.  People are starting to realize the many anti-social effects of the “gig economy,” as typified by Uber, Airbnb, TaskRabbit and Mechanical Turk, but the development of workable alternatives is barely underway.

The first half of the report addresses the many deficiencies of the so-called sharing economy.  First of all, it’s not about sharing at all. It’s an “on-demand service economy” that relies on the same exploitative techniques of conventional capitalism, but with powerful tech enhancements. 

While the system delivers amazing convenience and efficiencies, it also preys upon those who cannot obtain good-paying stable jobs with benefits.  It re-introduces piecework on a massive scale, this time with sophisticated computer algorithms to ratchet down wages to below minimum wage.  Since everyone is nominally considered an independent contractor, corporate platforms can shrug and exonerate themselves by saying that everyone is “free to choose” their working circumstances, in Milton Friedman’s classic phrase. 

But as more jobs are sent abroad to countries that pay lower wages and have few worker protections, workers are in many cases victimized by a global race to the bottom.  Corporate platforms act as lucrative intermediaries that shed the costs of conventional businesses – the capital infrastructure, regular paychecks and employee benefits.