It is one of the main dilemmas of our time. Economic growth is seen by governments and people as essential. If the economy falters then there is unrest and governments get thrown out.
Yet economic growth is creating unsustainable demands on the ecosystem – pollution, global warming, resource depletion, and so on. The two do not appear to be reconcilable. We know all this.
There has to come a solution. If we leave it to the earth’s natural systems, we may well not like the result. We are getting a taste, as extreme weather events become more common, plastic pollution becomes increasingly pervasive, species extinctions accelerate. Refugee crises, population migrations and epidemics are likely to get much worse.
So it’s important to consider possible solutions. One is put forward by Positive Money in their excellent research paper Escaping Growth Dependency, just published. They argue that the debt-based money system is a major factor driving the growth imperative, and reform of this money system is essential as part of the solution.
They propose adding a new tool to the Central Bank’s toolkit: ‘sovereign money creation’, and preventing banks from creating money altogether. Thus money as means of payment is decoupled from money as a source of credit.
The paper suggests that such a change could ‘open the door to a transition to a sustainable economy’. I’m all for that!