April 15th is Tax Day for the United States. In most years taxes are due on this date, though exceptions are made for weekends and recently COVID seems to have added on extra days. In 2023, individual tax returns must be filed by Tuesday, April 18th. I don’t know anyone who puts it off that late because the penalties for missing the due date are sufficiently dire to discourage even chronic procrastinators. Most years, I have mine filed by the middle of March, though if I’m expecting a refund I will file as soon as I can gather the paperwork.
I willingly pay my taxes. I like things like smooth roads and well-funded libraries. I am less fond of military expenditures and wish I could earmark my tax dollars to go to supporting life rather than destroying it. But I will continue to pay taxes as long as there are governments that can organize public expenditures. I’m not sure how long that will last in the world at large, though I suspect Vermont will be collecting tax money in some form for a long while, and very likely will mutate to public service in lieu of money when money falls apart. There are plenty of people in this state who foresee that happening in their lifetime. Some of those people are older than me.
I don’t know how likely it is that our economic systems will collapse in the near term, but that collapse is definitely coming. Our casino-economy, as Patrick Noble named it, is showing its weaknesses. Really, it’s rather amazing that it’s held out for so long, even with the vast resources we’ve blown through to create and maintain this economic nightmare. Because there are two fatal flaws built into our monetary system.
First, banks more or less create money through loans. (This is a simplification, but it is true enough as a gross working model of our monetary system.) For this to work, for money to exist, there need to be opportunities for profit, for interest, for more money paid back than loaned out. Therefore, the investment banking system only works in the context of growth. This is equally true of all finance. Any investment that is made with the hopes of profit requires growth — you get no dividends on your stocks if the business does not generate more money than it spends, if it does not create profits. As energy and other resources dwindle, there will be fewer paths to profits, therefore less reason to invest, and therefore eventually collapse of the whole system, probably quite rapidly as people realize that they are losing not only potential profits but also what money they invested. This has happened many times in history, but this time there will not be new pools of resources and labor — and most recently, tax moneys — to pull us out of the economic dive.
Lest you think that this dive can be avoided, note that much of the investment world already produces no profit for most investors. Everything from crypto-currency to shale oil is being sustained almost purely by belief. This is why Noble named it the casino-economy. Much like any other form of gambling, people keep feeding money into the machine hoping for a ‘free’ windfall of dividends. As this foundational belief is eroded by experiential evidence, the system breaks down. This is already happening. It is a primary feature of late capitalism and is regularly featured in headlines these days.
I am not convinced that the collapse of the casino-economy will have noticeable effects on daily life for most people. Most people have nothing invested in it and derive livelihoods and goods from it only tangentially. It is where most of the monetary wealth in the world lives, but since the last decade it is increasingly self-contained. Finance has very little to do with real life. To be sure, our economy will tank when finance implodes, but the real world economy will likely carry on more or less uninterrupted. And, yes, this includes elements like trade, money, and banking. However, there is another, fatal problem with our monetary system.
For lending to work, there need to be entities that have the credit and capacity to borrow. Even non-profit credit unions need loans to be repaid. However, the number of businesses that can repay loans is steadily shrinking, and there are nearly zero people under 35 who can repay borrowed money. Many are already saddled with education debts that they will never be able to pay off. Lending to people who can’t repay, gambling on their change in prospects, is what led to the housing crash. Those future prospects are even less likely today to change in favor of credit-worthiness.
Even where young people stand to inherit, few will inherit anything that can be exchanged for either value or credit. They may inherit stocks, but few stocks will be worth much and many will be worth less than the initial investment as profits dwindle due to increased resource costs. Some may inherit property. Of these, some may be inheriting something of real value that likely needs only minimal investment — mostly labor — to turn into a resource stream. However, it’s rather less likely that they’ll be borrowing so much that they sustain a monetary system — because they won’t need money. They’ll be producing their needs for themselves.
If all the property they inherit is a house, well, they’ll be lucky if that home is paid off — or is at least not worth less than the remaining mortgage on the property. But if an heir manages to turn a house owned outright into their home (yeah, good luck with those negotiations in multi-heir families!), then they are actually dropping out of the system. They don’t need more money except to maintain the house and translate 19th and 20th century infrastructure into something sustainable into the 21st. Their primary expense, that which most people need the most money for, is eliminated when they have a debt-free roof over their heads. They are not going to be part of a money trading economy. This suggests that millennials and all those younger folks are not going to be a credit market. Today, they have nothing but unsecured debt, and they have no obvious paths to changing that. In fact, this generation’s penury is the logical conclusion to monetary wealth concentration and resource depletion.
It does not matter what our monetary system is. Any economic structure that is dependent on growth will collapse with the dwindling of material resources. But money is a luxury, not a necessity, and it primarily serves as a means to acquire more wealth. Trade works quite well without money as long as the scale of trade is needs-based and fairly local. Trade that goes beyond meeting localized needs is less about meeting needs than it is about generating wealth… and is therefore not terribly necessary.
However, I suspect money will continue to exist in some form, probably localized as it was in the past. This is to the advantage of local communities. Local currency supports local economic activity. It stays within the community. It sustains the community. It also is an effective tool to protect small, local producers from outsiders, no import taxes needed. But there will be less money when there is less profit-seeking. There is just less need for money when the goal of economic activity is to meet needs. Money does not provide for any needs. It is not real wealth. It does not sustain anything. It just smooths exchange.
So even though I think money will exist, I’m not sure it will exist everywhere and there may be many regions where it vanishes entirely. In places where most people can meet most of their own needs, there is no need for exchange and therefore no need for money. Most of the world already lives with very little money. However, true poverty, an inability to meet needs, is only associated with cultures that rely on money to acquire necessities.
Money represents plenty in our culture, however the opposite is true. Money is not abundance. Money is not even real wealth. Wealth is, at minimum, actual resources, and probably is more accurately measured by including intangible relationships to the world, like love and happiness and a sense of safety. But money is just the arbitrarily agreed upon potential to buy bodily needs — and only those bodily needs that are available for purchase. It is a symbol of the possibility of met needs and, at the same time, the restriction upon that capacity. Money represents the polar opposite of abundance. It is scarcity. It is lack. It is deprivation and limitation. It is privation as the default state. In this culture, you must earn money to meet your needs; you do not have that natural right.
Because they are filtered through money, health and well-being are contingent. In a money-centered culture, you do not live in a world that will nurture your body merely because your body grew in this place and requires nothing but this place, as is actually true. You live in a world of want because money has come between life and its necessary web of support. Money has created poverty.
This is true even for those who have money — because the body has more needs than food and shelter, and even those physical needs are not best met through market exchange. You can’t actually buy a fresh-picked and well-ripened peach. Oh, you might be able to pay for something close, but you will never get the same experience of peachiness that comes when you stand under a tree on a sunny August morning, inhaling the sweet scent of maturity, and gently slide the soft fruit into your hand and then bite into its flesh, letting its juices run down your arm and chin. This is not an experience that can be bought, and the more money you throw at trying to simulate this simple pleasure, the less likely you are of having it. Yet it is a need. We evolved to experience this joy in eating nutritious food. And the peach exists merely to fill that need. We made it so… and now money stands in the way.
Same goes for shelter. I am quite sure that a hut made of sticks and leaves, yet filled with trusted loved ones and warm fire and memory, is far better at creating security and refuge from the hard world than all the walls and weapons ever devised. The more money one has, the greater is the sense of danger and potential threat or loss. Money creates the opposite of safety. It creates strife and anxiety that no monetary exchange could ever allay. Money destroys trust and connection, and those are essential to shelter.
So what then is abundance? I would say that it is the actual natural state of the world. It is the world that created and nurtured us. It is all our needs satisfied and no more beyond that to fret over. It is the time and the place of contentment, of delight, of communion and interdependence. It is the flow of happiness between beings. It is life. And it is all around us on this life-sustaining planet. Abundance is the world without money.
I believe we are careening toward a biophysical and cultural crisis that will very likely destroy money — along with a great many other things. But I also believe that we are falling toward abundance again. We will not have many of the things we possess now. We will not do many of the things we do now. Some of us will lose vast fortunes. But all of us will enter a world that sustains life, nurtures relationship, meets needs. We will live in a world of abundance. This is something to hope for on Tax Day… because when that time comes, there will be no more need for taxes…