December 14th, 2001

Why Money and Markets are Obsolete

Arthur Noll

Money and markets do have fundamental flaws that are at the root of societal problems. Markets are good at measuring the scarcity of things. If things are abundant, the market measure says, “cheap”. Simple. This matches energy economics, too, abundant things are easy to get.

But people are wasteful of cheap things. They use them freely, with no thought of conservation, no thought to keep that resource abundant and cheap. Worse, people reproduce and grow the population on abundant and cheap resources, still not looking ahead. All eyes are glued to the price of things of the moment. The result is that things do not stay abundant, and do not stay cheap. If prices rise as something gets scarce, that is still not necessarily a signal to conserve. It could be a signal to get out there and get the last bits, because people will pay for the effort.

The market is a formula for extinction, and it has worked that way many times. It has been said that if people own something, they will take care of it, like land. But market forces do not allow this. If farmer A is exploiting his land and producing more and cheaper as a result than farmer B, then farmer B must do the same or lose his land.

Virtually all the farmland in the world is now dependent on synthetic fertilizer, the product of mining operations, obviously not sustainable. It didn’t get that way because all the millions of individual owners were conserving. Can one raise taxes on something and make people conserve? I don’t think so. Increased prices will temporarily slow down the use of something vital and wanted. But gradually, people raise prices throughout the system to include the price increase, and when enough people have done this, the effect of the increase is reduced, and use takes off again. The oil “shocks” in the 70s raised prices like this on oil, use fell, then as people adjusted their prices, use took off again.

Money is so rubbery, you cannot control markets for any length of time. Rationing has been tried, the enforcement is difficult, black markets spring up. Markets cause severe difficulties for a society besides this. Money makes people into pseudo independent agents. Biologically, we are interdependent, not independent. We live as a team or not at all.

Dividing the team up to act as independent agents is not energy efficient in many cases. People with abundant talents are considered cheap and expendable, yet they are still vital members of the team. It is as if you considered your digits expendable because you have ten of them. In fact, they are more expendable than other parts of your body, but it is not a lightly made decision at all to lose one. Yet this market society, based on independence, cuts people loose with hardly a second thought. You might get charity, you might not.

In a monetary society, people are in charge just because they have money. Their fitness to be in charge may not be real at all, money can be inherited, stolen. It may have been gotten by expertise in one area, which doesn’t demonstrate fitness for other areas, yet they are still in charge. Certainly people can lose their wealth by not being qualified to be in charge of something, but the damage done can be severe.

Wealthy people make laws to favor themselves, they control mass communications, control information, largely control education.

Money is not usually accumulated by paying attention to sustainability, so a blind eye is cast to the issue. I do not see that proposed solutions of the past have been any real solution to these problems. All the various forms of communism, socialism, have still tried to have markets, have tried to control them, and failed.

My solution? People are interdependent, we must live as a team. The most energy efficient team would work as a single body, this is the form that has been selected by evolution. The various parts of your body freely give and take nutrients and products. I think the ideal society would collectively figure the most energy efficient and sustainable actions for the group as a whole, not for any individual, and would freely give and take within those limits. They would work with energy economics, not markets and money. I don’t think that most people have the mental capacity to want to behave like this. They prefer to grasp at straws to make the present system continue working. Survival is of the fittest, though, and since no individual, or couple, is fit to survive alone, only the fittest groups will survive severe stresses brought on by the current flawed measuring system of markets. Life is all about energy efficiency and sustainability.


Principles of Human Interdependence

1. People are interdependent to the point that we die without each other. We all have the naked body to test this observation.

2. Since we must have a society, that society should be efficient and sustainable. There are two basic patterns of society, that of fixed hierarchy, and that of partnership. Usually these patterns are combined to some degree. The latter can be shown to be inherently more efficient than the former. Voluntary behavior is more efficient than coerced behavior, and one person will seldom always be in charge without some coercion. Reason for voluntary behavior is shifting mastery of issues, one person is master of this issue, another person is master of a different issue. Limited competition can set acceptance of mastery of different issues.

3. Efficiency should be measured in terms of energy, not money. Using money mixes units of measure, since money is always measuring energy issues. We pay for food, fuel, clothes, shelter, all energy issues, either directly or indirectly. Money is also a flawed measure in that it measures scarcity, but encourages waste and discourages conservation by labeling abundant resources as cheap, and accumulates in ways that energy doesn’t. Money also makes people into pseudo independent agents, and this makes society inefficient. In a monetary society, those with the most money become masters even if they are not qualified in other respects, this is often very inefficient.

4. Sustainability should be measured by balance of resources. People should not use resources faster than they renew, whether it is oil, soil, trees, etc. nor should they produce pollutants at greater than the rate at which pollutants break down. Too much energy used taking resources tips the balance away from sustainability, i.e., resources are used faster than they renew. Too little energy used will also not be sustainable, as people will not get enough to live on.

5. As an interdependent species, reproduction of humans should not be the private decision of individuals or couples, but a consensus decision of society, based on collectively gathered information about the balance of resources. It takes a village to raise a child, it should be a village decision about how many children are born. When an organism overpopulates, the most efficient are favored for survival, and putting less energy into reproduction is one way to be more efficient at getting the more immediate necessities of living. We see this in animal populations, where predators put much less energy into reproduction than do prey animals, the eagle has one chick a season, the chicken may hatch out twenty. The lion may have a litter of cubs, but very few survive, the lioness doesn’t put enough energy into caring for them and most of them die.

6. Ignoring or being unaware of basic principles can bring weakness, instability, confusion, and death. Survival in humans is of the fittest society, as no individual human or couple is fit to survive. People have instincts that often instruct actions different from reason, but instinct is blind to changed conditions, and can cause extinction of species that cannot adapt. A partial list of the instincts that cause us trouble:

7.  People have instincts of a warm-blooded creature, to take more than is needed at the moment, and store it as fat or extra resources for the future. People have predatory instinct, to not give up, they are often persistent about goals, whether the goal is rational or not. People have instincts for deception, for lies. Stalking an animal, setting traps, are exercises in deceptive behavior that has a very long successful history. When people start acting as independent agents, such deceptive behavior comes very quickly to bear on each other and can be very bad for society. People have instincts for status, to be in charge. When combined with instincts for deception and predatory instinct and the desire to please everyone, this can cause great difficulty.

People have instincts for reproductive privacy, as well as generally strong reproductive instincts. The instinct for privacy makes people reluctant to make objective public decisions about population. People instinctively practice eugenics, they look for the smartest and healthiest people they can attract, to have children with. There is no trouble with this instinct, but in a society based on pseudo independence, individuals often do not have the ability to be objective about practicing eugenics in other areas, on how the sick and/or old are treated, and this causes large amounts of confusion and waste of resources. People have instincts for energy efficiency, this can cause trouble when people work as independent agents, what is energy efficient for the individual doing as little as possible for the greatest return- may cause inefficiencies for society, as well as ignoring the balance of nature. Related to this, we have instincts for technology, we are naked, and relatively slow and weak. Technology gives us the ability to cope. But it is often accepted too readily, without concern for sustainability or for the actual amount of work being saved by society.

People have instincts for their interdependence, too. Stage fright is a good example, most people are terrified to be judged by a group of people, there is instinctive awareness of the power groups have over the individual, and the absolute need to be accepted somewhere. People will often, “go with the group”, and not stand up for things that the group is ignoring. Leaving the group is a terrifying prospect, banishment has always been functionally a death sentence. Joining a new group, with new values, goes into the unknown, unknowns are very frightening to all organisms. If we can see ahead a little, conquer the instinctive fears and attractions also driving us, we will be able to leave present circumstances and form a new society, with new measures, new values.

The most efficient structure for society would be modeled on the individual body, where the different organs are like the individuals in society. You figure the energy efficiency and sustainability of your actions, and freely share the resources brought in by those actions. The social groups that do this the best are the fittest, and will survive.

Read more by Arthur Noll

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