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Can New Money and Good Accounting Save the Planet from Human Induced

Ecosystem Service and Social Degradation (Climate Change, Famine, War, etc.) and
Bring Health, Wealth and Happiness to All?

Introduction
As our species Homo sapiens enters its tenth millennium as a settled, farmer civilisation
we know that the Earth is in crisis and that human activity is the cause. The adoption 250
years ago, of fossil carbon as the energy source in our economy led to massive increases in
human population, per-capita natural resource consumption and personal wealth. The
intensity of this 'economic' activity is degrading the capacity of Earth's biosphere to
provide ecosystem services on which life on Earth depends, threatening our human future.
The crisis has been a long time coming. For 90,000 years humans lived mostly in small
bands dispersed across habitable landscapes. Their nomadic civilisations were sustained by
natural and social wealth generated and sustained by ecocentric economic systems that
valued knowledge, kin and country more than things. In the settled feudal and market
economies of the last 10,000 years only things that can be owned (chattels) are valued.
Knowledge, kin and country are now public goods to be freely exploited for money wealth.
The causes of human induced ecosystem and social degradation are embedded in our
modern anthropocentric (human centred) economies, particularly the free market economy
that has brought such productivity and wealth to the nations that adopted it. We have long
know that this market economy is inherently unstable because of its booms and busts. We
now know it is also inherently unsustainable, because it promotes consumption of natural
and social resources (eg fossil fuel, civic trust) without accounting for or paying the costs.
Piecemeal actions will not fix this. It will be necessary to transform our whole economic
system in a way that fully accounts for and internalises these costs. How is this to be done?
Sustainable Economies
In their book 'The Climate Change Challenge and the Failure of Democracy', (Præger,
2007)[1] David Shearman and Joseph Wayne Smith argue that the global market economy is
as instrumental as carbon effluent in the impending collapse of Earth's ecosystem services.
They find that human induced ecosystem degradation (Climate Change, etc.) and the rapid
rise in wealth of the liberal democratic economies, are closely related. Both are a product
of the 'individual freedom' granted in liberal market economies to plunder natural and
social resources for profit without accounting for or paying the real costs. They conclude
that a different political economy is needed if humanity is to end excessive natural resource
consumption and remediate the lost ecosystem services on which all life on Earth depends.
Shearman and Smith find (p.71) that humanity has three options for sustainable economies:
● a 'free market' liberal democracy with refinement (monetary valuation of
ecosystem services, commons trading, green accounting, etc., etc.). They find this
inadequate since 'freedom to plunder' is the cause, and a refinement is not enough.
● an 'ecocentric' liberal democracy (balanced values, 'fair play' rules, nomadic).
They find this would work, but would entail a revolution in knowledge, science and
human value systems, and would be resisted by vested interests, so that no existing
democracy would freely chose this option. They dismiss it as unrealistic.
● an authoritarian government with strict enforcement of ecological protection
(dictatorship of the wise) They conclude that since the Earth's capacity to provide
ecological services will be extinguished without strict control of all human activity
affecting the environment 'this may be the only solution for humanity'.

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The stark options Shearman and Smith identify highlight the tough choices we will face, as
the impending collapse of Earth's ecosystem services is better understood by people
everywhere. Nonetheless, their assessment of authoritarian environmental regulation as the
obvious and only way forward may underestimate humanity's willingness to 'play fair'
when the game is fun and the rules are seen to be in everybody's best interest. The 'freedom
to plunder' market economy that is causing ecosystem degradation is just a set of
accounting rules freely adopted in the past. We can adopt other rules if we agree to do so.
Since that book was published the link between unfettered money power in the
international market economy and the degradation of human social capital (trust) has been
clearly demonstrated, by a collapse of chattel values and business confidence everywhere.
The rise of money market economies
The money market economy began to emerge about 500 years ago when the economies of
Western European nations (particularly Britain) began their transformation from feudal,
land based monarchies to mercantile, money based liberal parliamentary democracies.
During the 1600's and 1700's CE European world trade expanded. New manufacturing and
naval technologies and corporate finance systems enabled European merchants to amass
great 'money' wealth in new and ingenious ways. These included the Triangular Trade in
which European manufactured goods were sold for slaves in Africa; slaves transported and
sold for plantation produce in America and produce sold for profit in Europe. The money
wealth amassed by then 'disenfranchised' merchants created a political power imbalance in
European feudal economies. It was resolved (one way or another) by the transfer of power
from Kings to Parliaments. The parliaments then sanctioned fiat money power; allowed the
sale of Estates without stewardship obligations; and, allowed money owners to form
business corporations to combine and magnify the impact of their profit making activity.
The industrial revolution this soon unleashed caused social disruption for many, both at
home and in the colonial lands that were exploited for their natural resources, labour and
markets, and it caused increased ecosystem degradation (forest clearing, etc.) everywhere.
For all their failings the feudal Barons had understood that their rights to control and profit
from Estates were balanced by duties of stewardship and fealty: to sustain the land; to
maintain civic order; to provide for defence of the Kingdom; and, to care for the commons.
The merchants buying those Estates acquired the land rights but few of the duties. Those
duties are essential services. Some persisted as social norms and some others have been
taken up by government. The public service systems of hygiene and safety, roads,
education, welfare, community infrastructure, police and military forces are a modern
means of delivering feudal 'stewardship' obligations (the duty of the wealthy to sustain the
commons). In money market economies, stewardship obligations that formerly attached to
the ownership of land and natural resources are not recognised, except in a limited way
though property taxation (rates, land tax, etc.). They are mostly paid for by taxing workers.
The transforming role of money
Money played a crucial role in all the wealthy world civilisations of the common era (CE).
Money is a social relationship, not a thing. It is an agreement between people in a
community to use a token as a means of payment. [2] Both nomadic and farmer-settler
societies used chattel money for 'local' trade in produce, goods and services. Modern
examples of traditional chattel money include 'frequent flyer' loyalty points and 'shell'
money used in Papua New Guinea. However land and landed enterprise (natural resources)
were not normally bought and sold for money. Estates in land were allocated by a King.

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The form of money adopted to drive the transformation of Western European economies
was fiat chattel money. Fiat money is authorised by the government of an area for use as a
universal token of value for exchange within that area. Fiat money is issued by
governments but is also generated by banks and merchants when they make loans or
extend credit beyond the money value of their owned assets. The value of fiat money is
relative to the value of things (chattels) that can be owned and exchanged for that money.
The civilisations of SE Asia toyed with fiat chattel money but they did it at home (without
colonies) and soon saw the risks of accelerating the degradation of their ecosystem services
and social wealth. They were more cautious - though not cautious enough to save Angkor.
In a free market economy business enterprises are bound to seek to maximise shareholders'
returns by using their money power to gain control of key natural resources, knowledge
and labour and by producing products and services that can then be sold for more than the
money cost of producing them. The market sets prices so there is a strong incentive to
avoid or minimise money costs. The free market economy allows costs to be minimised in
many ways - particularly by allowing businesses and consumers to treat common costs
borne by nature or society at large as 'externalities' – someone else's problem. Only money
related costs and wealth (things owned) are accounted for. The value of natural and social
wealth (Earth's ecosystem services and human societies) is only vaguely known and costs
are not managed or accounted for, though we now know this is the real wealth of nations.
In the past we have assumed that the stock of our common wealth (God's Earth and human
society) was so vast and our human endeavours so puny, that there was no need to measure
or account for our impact on it. When we started 'farming' we saw the need for
stewardship. For another 9,500 years the ecological footprint of our feudal farming
economies was moderate (forest clearing, desertification and species loss concentrated in
in India, SE Asia, the Middle East and the Mediterranean regions of Africa and Europe).
That all changed 500 years ago when the peoples of Western Europe began a great
experiment with money power. It changed even more dramatically when 250 years ago the
same peoples began using 'chartered' corporations and fossil fuel engines to vastly magnify
the range and impact of their business activities on and across the Earth. The impact has so
reduced the value of our natural and social wealth that our human future is threatened by
the resulting collapse of Earth's ecosystem services, climate change, famine and disease.
New money and good accounting
Money itself is not the problem. It is the use of fiat money power to exploit natural and
social wealth (the commons) without counting or paying the costs that is problematic.
People often say that we would be better off if money was not the only incentive for
business; if money was not the only means of accessing limited resources and services;
and, if money was not the main determinant of public policy in democratic economies. But
it is useful to remember that money is just a token of value that we agree to use and that the
free market economy is just an experiment with money that we agree to participate in. The
parliaments wanted to transform their economies, as we do, and they used money to do it.
In the same way that emerging parliaments used fiat chattel money to transform their
economies and generate chattel wealth and power, modern states can use fiat natural and
social money to drive natural and social wealth economies that will surely be needed to
compliment the failing chattel economy and to focus vast resources, skill and energy to
restore Earth's ecosystem services and human social self reliance as fast as we can.
A carbon tax or emission cap is a form of 'natural' wealth money token. It is not beyond

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the ability of governments applying market based schemes to reduce carbon emissions to
start to keep proper accounts of natural and social wealth and to create new markets for
environmental and social benefits and services using fiat natural and social money tokens.
Just as the value of chattel money is relative to all the chattels that money can buy, natural
money is relative to our common natural wealth (the utility of Earth's ecosystem services)
and social money is relative to our common cultural wealth (the utility of art, language,
nurturing and knowledge). This is the basis of a 'fair play' harmonious growth economy[3].
Chattel wealth is different from natural and social wealth. Chattel wealth is owned by
individuals or corporations (including governments) and is enjoyed by excluding others
from access to it. Natural and social wealth is 'common' wealth, owned and enjoyed by all.
Consequently common wealth is unpriced wealth. But it can be assessed, measured and
accounted for by the government of the people of an area. The basic knowledge and
capacity to do this already exists within natural resource and social services bureaucracies.
Accounting for the social and natural wealth of nations (assessing the flux and stocks of
'value' over time) and sustaining new wealth generating natural and social wealth
economies will require new civic leadership, new economics, new science, new laws, new
accounting systems and new forms of marketing, employment and government services (at
least until an harmonious and balanced 'fair play' economy is established).
Only chattel money costs are counted and paid for in a 'free' market economy. In a 'fair
play' market economy natural and social costs would be accounted for (as best we can) and
paid for in new natural and social money tokens. Removing natural and social cost
subsidies for business will mean that businesses that are highly dependent on uncosted
externalities (eg the fossil fuel industry) will be stressed and some will fail. But most
businesses will quickly respond to new markets for trade in sustainable products and
services. Activity in 'fair play' markets will be stimulated by dampening demand for
'pricey' things with high natural and social cost components and by increasing demand for
more 'affordable' ecologically and socially sustainable ones.
In a 'fair play' market economy all prices will include components for natural, social and
chattel costs. Chattel costs will still be denominated in chattel money; natural costs in
natural money and social costs in social money tokens. Natural and social money costs and
incomes will reflect measured changes in the common stock of natural and social capital.
Correct accounting for natural and social capital will sustain trust in the value of natural
and social currencies. But unlike chattel money, natural and social currencies will not be
hoarded but will be circulated in 'fair play' markets generating strong multiplier effects.
Each new fiat natural and social currency will be exchanged at bounded market rates just
as we do our national fiat chattel currencies. The systematic removal of social and natural
cost subsidies will reduce the 'freedom to plunder' element of the economy and put chattel
money in its place as a human servant, not the boss. This will leave humans with lots of
new 'fair play' economies to generate balanced natural, social and chattel wealth in, and
allow all Earth's creatures (humans included) to live healthier, wealthier and happier lives.
If we can revitalise the 'dollar' as a useful medium of chattel exchange and unleash the
sustainable wealth creating opportunities that new natural and social money (more money)
will enable, such a transition may be possible. The money market economy has generated
the wealth to transform our anthropocentric economies into balanced ecocentric economies
that enable harmonious natural, social and chattel wealth (real wealth) generation.

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Understanding Australia's Aboriginal civilisations
In Australia the ecocentric economies and skilled governance of diverse Aboriginal nations
enabled their civilisations to nurture and care for this country and so prosper in all parts of
this continent for over 60,000 years[4]. We are now beginning to see how a different sort of
political economy sustained the health, wealth and happiness of Aboriginal people at levels
equal or superior to even the European merchant classes around 1750. We don't know how
they did it but we do know their laws required everyone to care for kin and country first.
The transplantation of a fully developed version of the 'free market' economy to Australia
from about 1840 allowed the immediate and unfettered exploitation of natural resources for
profit, a process that took over a century in Europe. In less than 200 years this resulted in
the destruction of the Earth's oldest human civilisation; the dispossession, impoverishment
and death of up to one million Aboriginal people; the genocide of hundreds of Aboriginal
nations; and, the degradation of ecosystem services and biodiversity everywhere.
Since the Australian High Court 'Mabo' decision (June 1992) the Australian law has
recognised that at the time of British settlement in 1788 Australia was governed by
sovereign Aboriginal nations and the land was owned by Aboriginal people. The Court did
not find the act of dispossession wrong, they found it happened. The decision means that
Australian land not yet alienated from the Crown at that date may be claimed by an
Aboriginal person and that 'native title' may be granted, provided their succession in title
under Aboriginal law, over many generations, can be demonstrated in the Australian Court.
The value of this Aboriginal land was so great that in the 1858's the British colony of South
Australia devised and implemented the Torrens title land tenure system to speed up the
subdivision and sale of land at minimal cost. For 100 years the sale of Crown land was the
main source of Australian government revenues. The 'royalties' paid on mineral wealth
continue to sustained Australian Governments. Torrens title has been adopted worldwide.
In Australia talking with Aboriginal Australians has begun. A first 'sorry' has been said. But
real talking will require Ngiyambalgarra (a Wiradjuiri word, thought to mean: 'fearless
speaking together')[5] about the ecocentric economies that sustained a vital and diverse
civilization across all regions of Australia for the past 60,000 years, ie 60% of our total
existence on Earth as the species 'Homo sapiens' (knowing humans) .
Perhaps we can talk 'fearlessly together' about the possibility of a 'fair play' economy that
correctly values and accounts for our common natural and social wealth just as well as we
value and account for our chattels, the things we own. A true Commonwealth of Australia.
We may choose to keep our dollar Bill $ and take up Rainbow R and Eora [6] E as our fiat
natural and social money tokens. The price of the international reference 'product' (aka Big
Mac) would then be listed as $2R12E6, paid in either $ R or E at 'fair play' exchange rates.
Small devices will calculate payments in any mix of currencies and register the exchange.
Conclusion
Calibrating and managing the transition to an harmonious growth economy will need a
'social' revolution. But money is magic (as we know so well) and with good will, wise
work and Ngiyambalgarra it is possible that this can be done. New money and good
accounting might save the planet and bring health, wealth and happiness to all beings.
Misunderstanding money caused it, but humans did the damage and its up to us to fix it.
We are stewards of the Earth, the source of all life – to care for together, or lose forever.
- - -

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Author
Robert MacLean Irvine
Box 112, PO ENMORE NSW 2042 AUSTRALIA
Email: irvine.r@optusnet.com.au
© Copyright 2008 CCZ (Creative Commons Zero)

Acknowledgements
Thanks to David Shearman and Joseph Wayne Smith for their fine book and good scholarship. Thanks also to Nicholas
Georgescu-Roegen for describing the economy of nature and to Bernard Lietaer for describing the nature of money.

Notes in the text


[Note 1] David Shearman and Joseph Wayne Smith, The Climate Change Challenge and the Failure of Democracy, Præger,
2007. (Philip Adams interviewed David Shearman on ABC-RN on Wednesday, 20th February 2008.)
[Note 2] Bernard Lietaer, The Future of Money: Creating new wealth, work and a wiser world, Century, London. 2001 p. 41.
[Note 3] A musical triad - harmony happens when 3 musical notes play felicitously together.
[Note 4] See relevant literature on Aboriginal civilisations and political economies, including Donald F. Thomson Economic
Structure and the Ceremonial Exchange Cycle in Arnhem Land, Macmillan & Co. Limited, 1949; Nao Nakanishi,
Towards Sustainable Development with Indigenous Australians, White Lotus, Bankock, 2008; Sven Lindqvist, Terra
Nullius, A Journey through No One's Land, Granta Books, London, 2007 Horton, D (ed) Encyclopaedia of Aboriginal
Australia, Aboriginal Studies Press, 1994; nb. Trade occurred across the continent. The drug Pituri is thought to have
been used by some Aboriginal economies as a form of money.
[Note 5] Ngiyambalgarra - Wiradjuiri word thought to mean: 'fearless speaking together'. (Authority: Muurrbay Aboriginal
Language & Culture Co-operative, Source: URL: http://www.muurrbay.org.au/ngaawa_garay.html
[Note 6] 'Eora' is thought to mean 'people from this place' in the language of the Cadi'gal nation (South Sydney). This is the
response reportedly given when the British asked them: “What people are you?”
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