Index

Book review

Life, Money and Illusion

Living on Earth as if we want to stay.

by Mike Nickerson

Richard Priestman

 

[A summary of the book is at www.SustainWellBeing.net/LMI/lmisummary.html]

Life, Money & Illusion is available for $30 (price includes postage and handling). Cash, cheques made out to the "Sustainability Project," and most credit cards are accepted. Send orders to Sustainability Project – 7th Generation Initiative, 2799 McDonald’s Corners Road, RR 3 Lanark, Ontario K0G 1K0, or order by phone at (613) 259-9988. Email: [email protected].]

"Money is to civilization what blood is to an individual. Money connects billions of people in mutual provision in the same way that blood connects billions of cells toward the same end." Mike Nickerson

"Money is the life blood of civilization. Without money it would be very difficult for any but small communities to work together in mutual provision. By enabling millions of people to cooperate, money provides a great service. With this service, however, comes danger. Money gathers and flows in economic streams. The greater these flows, the greater the temptation to tap in and drink deeply."

Mike Nickerson’s thesis is that the capitalist, market economic system has been very successful at producing goods which people need or want, but has done so at the expense of depleting natural resources, destroying or polluting the environment, and people who are living in poverty. Wealth, as measured in money or possessions, is plentiful, but wealth, as measured by the well-being of people, is lacking. The economic system uses Adam Smith’s recognition that self-interest provides the incentive for individuals to find better ways to produce things, and thereby create more wealth for themselves and their community, but has forgotten that Smith’s philosophy also recognized a free and open market – not one where prices are distorted by very large players – and that "the wealth of nations is measured by the welfare of the people." A system which leaves many in abject poverty while accumulating vast wealth for a few cannot be considered successful when measured by the yardstick of "the welfare of the people."

The book explains in a very convincing way why we (western, developed societies in particular) must change our economic system from one based on growth to one based on sustainability. Nickerson’s 10 years of research is very apparent as he relates this theme over and over again to historical data. Nations became addicted to "growth" because it produced wealth, because they have been able to push external environmental and human costs "under the carpet," and because money, as a measure of growth, was so easily created. By the 1970s the dangers of continuous growth were broadly understood, culminating in the 1983 UN resolution creating the World Commission on Environment and Development. Its report in 1987 (Our Common Future) confirmed that "we are indeed faced with a crisis of proportions unparalleled in recorded history" – that what is needed is "sustainable development" to meet the needs of the present without compromising the needs of future generations – but business as usual has continued. The rational question raised by the book is, why? What are the forces maintaining the status quo?

Those who are benefiting the most from the present system deny the facts because to accept them would lead to a major change in their life styles – and they have the wealth and the power to resist such changes. Add to this the millions of people who have been led to believe that economic growth is necessary, and the inertia becomes almost impossible to overcome. Conventional economics has become the religion of the modern world, and to question economic growth has become heresy. "Traditional economics accounts only for the interactions between people. We need to expand economic accounts to include interactions with our ecological foundations."

The book provides a brief history of the development of "money, markets and an orderly world." Money not only facilitates trade, but also division of labour, production and development. With increased trade, markets developed and became an efficient mechanism for balancing supply, demand and price, providing the market remained free of manipulation. Today, much market activity is manipulated to increase demand in order to keep the economy growing. People are encouraged to keep buying even if it means going into debt, and debt adds another incentive to produce in order to get out of debt.

While money has made the market system workable, money itself is a major problem because it is created as debt (primarily by private banks) and the money created is only for the principal; it does not include the interest. Therefore, the economy must grow in order to create additional money to pay the interest. Trading in debt instruments and other financial paper now comprises the greatest volume of market transactions. The private banking system is immensely powerful and remains so because governments have given them the privilege of creating money (and then paying interest to them) instead of creating it themselves at cost. Monetary reform is urgently needed. Nickerson discusses several examples of currencies not dependent on money created as debt.

Having outlined the problems of our runaway economic and monetary systems, we are faced with the question of what to do about it. It would be helpful to have a means of measuring well-being – social, environmental and economic – rather than just economic conditions. Measuring the wealth of a nation by its GDP is much easier than measuring its well-being, and fits in with the current economic system, but making decisions based only on how much money is being made and ignoring social and environmental factors often leads to disasters. An instrument to measure well-being has been developed called the Genuine Progress Index (GPI). Those promoting this concept are members of groups such as GPI Atlantic, Alberta GPI and the Canadian Policy Research Networks, and other individuals including the author. With the help of Joe Jordan, MP, a Private Member’s Motion was passed on June 3, 2003, stating that "the government should develop and report annually on a set of social, environmental and economic indicators of the health and well-being of people, communities and ecosystems in Canada."

Obstacles to Change

"An economy based on sustainability makes sense when people think about it, but it’s not a possibility that gets much exposure through conventional channels. It will take widespread popular assertion before sustainability is adopted as society’s goal. Material expansion presently brings great wealth to those with fortunes to invest. They secure their fortunes by controlling the commercial media and, thereby, how most people view the world." Nickerson says it is a "Question of Direction." "Should our goals be based on the life perspective, or the money perspective?" While the life process cannot be changed, the economic system is adjustable. The huge impulse toward economic expansion has yet to recognize that today’s biggest problems result from its success.

"Anyone who thinks that an economy can be expanded forever, within the confines of a finite planet, is either a madman or an economist." Kenneth Boulding, Economist

We must decide if we wish to continue as we are, or change direction and follow the path of sustainability.

My gut reaction to "Life, Money and Illusion" is: this is fascinating; it’s an eye-opener; it grasps the essence of life and human society. In particular, it speaks in easily understood terms about people working together, trading their skills and knowledge to satisfy needs, and the importance of money in facilitating this trade. From the perspective of monetary reform, it shows how money has been used and misused, how its misuse has contributed to the concept of perpetual growth and why we must, as a community, take control over money creation and its use if we are to change from a growth dominated society – which will eventually collapse – to a sustainable one. These ideas should be discussed in our schools from about Grade 7 and up! The book is well indexed with 115 references.

Richard Priestman

– from Economic Reform, September 2006

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