OUR SYSTEM

The supply of money is intrinsically linked to assets and capital, revenue and expenditure, due to the requirements of solvency and a balanced balance sheet for banks and all organisations, including government. When money is lent to entities on the basis of their future revenue and asset values (whether to government, organisations or individuals) then levels of risk and predictability are involved. The greater the risk taken in lending, the greater the money supply. Whether price inflation results depends on what borrowings are spent on and what prices are measured. In the lead up to the 2008/2009 financial crisis the money supply increase was ‘invested’ in houses, stocks and derivatives (unproductive assets) and this is where the price inflation took place (so, except for houses, much of it did not figure directly in the consumer price index measure of inflation). Unfortunately, many householders were lent more than their predictable net worth over the period and could not pay back....

What follows is a response (actually mine) concerning 'a shared base income' (given in a 21st Century LinkedIn discussion on 'Where To Begin? ') that I think is useful to replicate here, as it addresses the fundamental issue of changing the incentive of our system from financial accumulation to fulfilling our potential by making our best contribution (according to who we are and where we see the need). An incentive change that at the same time frees us to be ourselves. "Yes, I think it is up to indigenous societies how they wish to adopt and adapt technology, just as it is up to all of us what technology and learning we wish to adopt and adapt to ourselves. I imagine, however, that if we are responsible we will adapt and use that technology to help ourselves grow and further develop, not recklessly abuse it to exploit our natural resources for, ultimately, limited material gain. However, this form of gain is incentivised by the 1st world economies most of the world...

We don’t have to have the system we do. We can change our system from one that sustains and increases inequities to one that shares opportunity so we can all contribute in the way that best suits us. We need to recognise the intended or unintended purpose of our system, and think outside of this, to a system that enables us to live how we want to live, without harm. Our system is not so complicated it can’t be comprehended, though it may appear so from the jargon and rhetoric academics continually build around it. Money is the oil in our system, but should not be the purpose of it. Money allows our system to function. It enables trade and the allocation of resources without premeditated control. But the market is not perfect. Money tends to pool, and in our system at the moment these pools are protected, damaging the rest of the system. Fortunately, the nature of money, unlike resources, means it can be constantly distributed so we all have enough to make our best contribution accordin...