Money

Details

Published on Sunday, 18 December 2011 23:53

Written by Bram Meulenbeld

 What I just don't get is that so many people miss out on causality. What is  actually wrong with the financial sector? Why is it so unsustainable? Lies the problem in the fact that it's unsustainable in itself? Because it's a root cause for unsustainability as a whole?

 Is the problem money creation? Interest? Fractional banking ? Or is it lack of diversity, a low Tier 1 or that liabilities and equities don't have the same fiscal treatment?

I will give you my view: The financial sector is, as every sector and almost every company, unsustainable in itself. Around 2 billion people are unsustainable. And not just unsustainable, but in such a way that they even unsustainalize the rest of the global population. Of course the financial sector loves to show that they have (or are planning) carbon neutralized offices and electric lease cars, an increasing percentage of women in top positions, etcetera, and they probably do. It doesn't make them sustainable though.

And, besides that, but much more important, the financial sector also accelerates unsustainability. That's because the financial sector is just the realization of our financial system which is a result of our human behavior: We just want more for less. Unfortunately we run into a boundary: Nature. And I am not only talking about climate change, global warming, deforestation, salinization, expanding desserts, extinction of species, and much much more. I am also talking about ourselves: Our internal competition often leading to specialization. We always have to outdo the other and we can be best at that fully specialized (which too often gets confused with rationality): Whether physically or mentally. One can argue that this is darwinism. Some sort of survival of the fittest.

However we, as human beings, have been blessed with intelligence. That's how we got to darwinism in the first place. We are intelligent creatures. Which means that we can also communicate in a relatively high manner, rationalize and decide. We can decide to do things. Which means we can also decide not to do things. Most of us want our own house, own car, own tools, far-away-vacations, the best healthcare, the best education, re-furnishing, re-painting, lots of clothing, going out to different things, and what have you not. You cannot. Just because some of us have none of this, some of this, all of this and lots more, doesn't mean everyone can get it, eventhough marketing techniques will have you believe otherwise. It creates a rat race. A run of the means behind the median, like chasing a carrot on a stick. And you can decide whether you take part in this race. You can decide that for yourselves. Whether humanity is and should be up for that task is a big question, because we are, on the one hand, completely connected, and at the same it seems like we become a bit disconnected.

If we are, I think we also have to completely re-think our financial system, which is primarily driven by money; Money is considered to have three functionalities: exchange, save and calculate.The financial sector should solely deal with the first two and not with the latter.

Unfortunately, interest and money creation with no real value behind it, have caused pricing of money, making it a service in its own and thus making money a goal. With the genius, but completely unsustainable, of making money pure out of money. These aspects have become a valuation function directly influencing, and not just supporting, the saving and exchanging function.

Money should be a means for people to exchange goods and services because they cannot have a one on one spacial or physical delivery. This should be solved by being honest (e.g. admitting we are all the same human being) and create abundance instead of scarcity, which would lead to a moneyless society. I don't think this will work straight away and money still has its 'value', but we should understand again it's a means and not a goal.

And that should be the main driver behind every financial institution: Completely transparent facilitate money flows.