by Noah Bonn, Contributor
For those of you who have seen the movie Speed, starring Keanu Reeves and Sandra Bullock, the bomb on the city bus serves as an excellent analogy for our current model of monetary economics.
SPOILER ALERT: if you are planning on watching this 1994 classic anytime soon, do not read on.
Okay, here we go:
In Speed, an eccentric villain straps a bomb to the underside of a city bus, which will explode if the speed of the vehicle ever drops below 50 miles per hour, once it has reach that point.
Keanu (an LA cop) learns of the event, but not until the bus is already on the highway, moving over 50 mph. Nonetheless, the unshakable Keanu fearlessly boards the moving bus, where he meets Sandra Bulluck- a bus passenger so hot you’ll say, “oh yeah, I’m watching a movie.”
Keanu’s first plan is to get to the airport, where they can drive in circles without risk of traffic slowing them down. Then, after reaching the airport, they confuse the terrorist by creating a loop for the surveillance camera he is using to watch them. All the passengers except Sandra and Keanu get into a van that pulls up along side them. Keanu then rigs up a device to keep the accelerator depressed, and he and Sandra jump out of the door and slide away- wrapped in each other’s arms on a metal surfboard.
After sliding to a halt (actual dialogue):
Sandra: “You’re not going to get mushy on me, are you?“
Keanu: “Maybe… I might.”
Sandra: “I hope not, ’cause you know, relationships that start under intense circumstances- they never last.“
Keanu: (looks at camera) “Oh yeah?“
If this movie doesn’t get you, I don’t know what will.
But how does it relate to our Economy?
Well, like almost every country in the world, the US dollar (aka Federal Reserve Note) is issued by a private (read: for-profit) central bank. This means that all money is created out of interest-bearing loans. In order to keep money in circulation, new loans must always be made to cover the principle on the loans coming out of circulation, and BIGGER loans must always be made to account for the interest- hence the mandate for infinite growth.
If at any point our rate of growth of real goods and services fails to keep pace with the rate of interest on the circulating money (which is inevitable on a planet of finite resources), then there is a brief period where those in debt must draw into their savings to make payments, as economic growth can no longer cover the interest. Once that savings dries up (otherwise known as the erosion of the middle class), those who are in debt simply begin to miss payments. When enough people are simultaneously missing payments, we have a “credit crisis.” This results in banks refusing to issue new money, which causes a recession of GDP, and finally we find ourselves in a shortage of the real goods and services needed to meet our basic needs. In simple terms, if we do not continue to grow at pace, the bus blows up.
Now, Keanu handled the situation perfectly. He made a quick decision that bought them some time, then immediately turned his attention to how to get everyone safely off the bus.
Our political arena faces the identical situation. We can buy ourselves some time in the short term, but what we really have to do is find a way off the bus for the long term. This elucidates a major point that goes unrecognized in our world today: Keanu was just an action hero- you do NOT need a PhD in macroeconomics to see the fundamental problem with our current system. Infinite exponential growth on a finite planet is utterly incompatible with sustainability. Oh, and an economy based on debt makes citizens into slaves… but that’s beside the point.
There is no question that our economic system is unsustainable, however our politicians, mainstream media, and even most academic institutions act as though this is not the case- that a growth-necessitating system can last forever. This would be analogous to Keanu handling the situation in the following way:
Keanu: “we just need to get to the airport, then we’re golden.”
Sandra: “But Keanu, what about when we run out of fuel?”
Keanu: “we’ve got plenty of fuel!”
Sandra: “so you just want stay on the bus and drive in circles till it blows up?”
Keanu: “what, you want to get off the bus?”
Sandra: “actually yes, I would very much like to get off the bus.”
Keanu: “well you can’t, that’s unrealistic and utopian, and has no place in our discussion of pragmatic issues.”
Of course, Keanu would never do that. But politicians today make the case for themselves by claiming that they can make the bus run faster than their opponent (aka create more economic growth). No concern is ever raised for running out of fuel (“peak oil” or “peak growth”) whatsoever.
Wouldn’t it makes sense though for a politician to propose the idea that maybe- just maybe- we should look for a way to remove the speedometer-bomb from the underside of the bus? Wouldn’t that just make all of our lives a whole lot easier?
This is the concept behind monetary reform and ending the Federal Reserve- a private institution that can only issue money if interest rates are above the zero percent lower-bound. This is what creates the unsustainable mandate for eternal growth, and this is the issue that is getting no attention in mainstream politics.
Without a doubt, basing the economic model of a planet with finite resources on a system that requires infinite exponential growth will be looked back on as one of the most foolish practices in the history of our species- right along with slavery, nuclear weapons, and Four Loko.
Luckily, alternative systems do exist.
1) Our currency could be issued by a Public Central Bank instead of a Private one, and spent directly into circulation by the government. This practice combined with the outlawing of fractional reserve would decouple money from debt (erasing the growth imperative), and make the concept of “taxation” obsolete, as the government could simply print its own money. Any inflation created through this spending would function as an indirect tax on all holdings. To prevent “menu costs” and other inflation-related problems, the currency could be set to a “demurrage rate,” causing each dollar to decay at a rate determined by the central bank to prevent inflation. Like inflation, a demurrage tax falls on holdings, rather than income, shifting the burden to those who HAVE the most, and away from those who CONTRIBUTE the most.
To study the finer workings of this proposed system, check out Charles Eisenstein’s book, Sacred Economics.
2) We could begin using P2P cryptographic currencies like BitCoins. This currency is “mined” into circulation algorithmically in proportion to a user’s contribution carrying out of the infrastructural logistics of transactions between other users. All BitBoins transactions are completely transparent, and by their nature are completely incompatible with fractional reserve and the growth imperative.
3) Eventually we can explore more complex money-less systems such as Jacque Fresco’s Resourced-Based Economic Model, utilizing the technological understanding we already have to feed, clothe and shelter all people on our planet, without the need for full time “jobs.”
4) We can simply address the root-issues behind economic concerns at a community level. For example:
“what is the best way to feed everyone in this community? Should we ship all our food in from 2,000+ miles away, or should we simply start building gardens in our own homes and neighborhoods?”
I think people would be surprised how unhelpful the concepts of “ownership exchange,” and “centralized control,” are when you really get down to what it is you’re trying to accomplish.
Obviously there are multitudes of other proposed concepts such as currencies backed by precious metals, a nationalized banking system, time banks, mutual credit systems, and more. I shared the four that most resonate with me, but it is very likely that the understandings behind each will play some role our liberation. The point is not to discourage alternatives other than your own, but to be as resourceful as possible in our ascension. That, to me, is what economics is really about.
But until that time… drive fast, my friends
Noah Bonn is a writer and grass roots activist from Seattle, Washington. His areas of focus include health and wellness, sustainability and spiritual awakening. He can be found at his blog, NoahBonn.com
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