Sustainable Money

I listened during my commute today to an interview of Jay Hanson of and, in which he talks about the inherent limits to our economic growth, sure nuclear holocaust if we stay the current course and societal changes that may save us.

I know some of you may discard the above as scaremongering socialist progaganda, but Jay actually describes himself as a succesful computer engineer who loved capitalism, but got to realize its inherent limits and decided to study the problem in details and try to come up with a practical solution.

I took a lot of notes, but the first basic idea is that capitalism, and in particular our money system, is incompatible with a sustainable society. The money we use, fiat money, is by definition infinite, but it is a claim/promise on resources that are finite, so sooner or later we hit a wall: our money claims a smaller stake over the available resources and we get poorer. The U.S. founding fathers used economic growth as a tool to solve problem, but today, our economical growth IS the problem, so we can’t find a solution for it via economic growth. “We’re stuck”.

The second basic idea is that we compete to accumulate much more money (as claim on resources) than we really need because as social animals, we desperatly seek status. It’s not the $500M we want, it’s the largest sailboat in the world. We won’t be able to change the fact that humans want status and would kill for it, but we can possibly change the kind of status we strive for itself, through cultural evolution.

A development on his conclusion is that we need two kinds of money:

  • One that is essentially a rationing on remaining resources. In his ideal society, 5% of the population would work 2 years in their life to produce all the food, housing, healthcare and clothing, which would be allocated in equal ways to each person in the population, would expire and would not be exchangeable.
  • One that is the status money. Since most of our time could be spent playing, studying, creating art, etc. we could be rewarded for it via the status we would earn from it.

The similarity of this second money to the Whuffie concept is quite stricking. In many ways, the Web is where we spend more and more of our time creating digital artifacts. The resources there are close to infinite. If we could build a way of measuring our status there, we would have something similar to what Jay proposes.