The Global Delusion: Money As Savior

The one dollar bill.

What is it?

Once you strip away everything you’ve been taught by your culture about the nature of money and the value it represents, what are you left holding?

The one dollar bill in your hand is a piece of paper.  Nothing more.  The value it represents within society is no longer backed up by a tangible commodity.  The gold standard was abandoned by the United States in 1933.  The question is, if paper promissory notes no longer represent the inherent value of a tangible commodity (such as gold), how does it continue to represent real-world value? 

Many recent documentaries and thinkers erroneously suggest that the value a one dollar bill represents within society is backed up by our collective imagination.  In other words, blind faith in the system acts as the sole perpetuating force behind monetary value.  While this perspective certainly wields shock value, it completely overlooks the oldest commodity of civilization: The Human Hours Commodity (HHC) or, simply put, human labor. 

Human labor is a real world commodity.  In the same way that the power in falling water can be harnessed by turbines in a dam to produce electricity, a human being’s time can be harnessed to produce a wide range of valuable resources.  In this way, the Human Hours Commodity (HHC) is the same as any other natural resource on the planet; it has inherent value.  When a human being enters a contract with an employer, they are agreeing to exchange HHC for a fixed dollar amount measured either in hours or successfully achieving the goals of an ongoing position.  It is this act, the free will exchange of HHC for money, that fuels the value of the dollar.  How?  Because HHC is a real world commodity, a natural resource no different than gold itself, HHC has become the new “gold standard”.  In other words, HHC serves as a tool for measuring the value of the dollar in much the same way that gold did in the past.

Unfortunately, this transition to HHC as the new gold standard has created a highly destructive paradox with only one outcome: Total system failure.

First, we must recognize that our leaders had no choice in terms of abandoning the gold standard.  It is possible that it could have been postponed, but there was always going to come a day when more money was needed circulating in the global money-market than the gold standard could represent.  In a system that requires perpetual growth to survive, a finite resource like gold will inevitably be exhausted as a measuring stick for value.  In order to create infinite growth potential, the money-market economy requires a tool for measuring value that is equally infinite.  The human population itself (and the HHC it stands for) is the only commodity with infinite growth potential (at least so long as the Earth can sustain such shortsighted growth). 

HHC can initially be viewed as the savior of the global monetary system.  On the surface, it is difficult to argue with.  The more people who agree to exchange HHC for money, the more it bolsters the notion that money has real world value.  Why else would a human being sacrifice their life hours for paper money?  If a real world commodity (HHC) is being traded for money, that money must have value.  The more total human hours worked, the more value the dollar holds in the collective trust.  More jobs, more hours, more value in the dollar… at the outset you could almost believe that the infinite growth potential of this new gold standard could eradicate poverty and usher in an era of prosperity for all. 

Sadly, not only is our for profit monetary system failing to bring prosperity to the majority of human beings alive today, it is aggressively creating poverty in order to sustain itself.

It is difficult to grasp the correlation between HHC and the value of the dollar when looking at the intricacy of the global system as a whole.  Let’s break it down into its simplest form using manageable numbers (NOTE: The thought experiment below is in no way meant to emulate the complexity of the current economy.  It merely illustrates, using basic math, why universal equality is impossible within any for profit monetary system):

Thought Experiment: The Price of Goods

Let’s set our total human population at 110.

For the sake of this thought experiment, we’ll use the price of a loaf of bread as a reference point.

Model #1

10 people earn $100 an hour.

100 people earn $1 an hour.

The price of a loaf of bread: Must remain affordable enough for the people receiving $1 an hour. In this model, a loaf of bread might cost $0.50 - $1.  To keep things simple, we'll use $1 (1 hour of work for the bottom paid 100 people who make up the vast majority of the total population).  While 10 people could buy 100 loaves for 1 hour of work, the majority (100 people) can only buy one loaf for 1 hour of work.  This balances out the equation and enables the business of selling bread to remain profitable.  Further, this model allows for a small number of the population to possess extraordinary buying power within the system.  Because the vast majority make far less then they do (broken down as an hourly average), their surplus of money still retains its value.  Take note that the only reason the top 10 people being paid more actually have greater buying power is because the bottom 100 are paid so much less by comparison, which keeps the price of goods down.

Model #2

110 people earn $100 an hour.

The price of a loaf of bread: If the entire population earned $100 an hour, the price of bread must reflect that.  If bread were to cost only $1 per loaf as it did in model #1, every individual could buy 100 loaves for every 1 hour worked.  In other words, there would be no profit in producing and selling bread for $1 a loaf (because the human hours of labor needed to produce it would cost more than the product is being sold for).  In this model, bread would need to cost $50 - $100 per loaf.  Anything less, and the business of selling bread becomes insolvent.  Ultimately, because the price of bread must rise to reflect the universal hourly income of the entire population, NONE of the people would benefit from the wage increase.  All goods, whether needed for survival or desired for enjoyment, would become far more expensive in relation to the universal hourly wage.  In a for profit monetary system in which true equality existed between all participants, no matter how large an amount each individual received in exchange for HHC, poverty (rather than wealth) would be universal. 

Conclusion

Even if it is only at a subconscious level, each and every one of us trapped in the money system knows that we cannot universally earn $100 per hour (Or whatever arbitrary amount you want to assign as being a large “improvement” over current wages).  The moment every worker in the world earned $100 per hour minimum wage, the price of goods would rise to balance out that universal gain in hourly income.  There is no other way for the monetary system to perpetuate but to continuously raise the price of goods to balance with the global average income.  

Understand that this is the paradox we have unleashed (or, more concisely, the paradox that has naturally emerged as a mathematical certainty within the for profit monetary system). 

Human beings are in a constant tug of war with ourselves.  We are collectively fighting against our own forward momentum, killing ourselves and our planet in the process.  Once you understand that the Human Hours Commodity (HHC) is locked in a zero-gain relationship with the value of the dollar, you become fully aware that poverty is not an avoidable byproduct of the monetary system, it is a vital pillar holding up an unsustainable model for civilization. 

The only means the dollar has of maintaining meaningful value is by forcing a large percentage of the population to work for as little as possible.  In other words, the actual goal of the dollar is to pay as little as possible for HHC in order to buoy the value of the dollar.  For this reason, American companies outsourcing jobs to countries with vastly lower hourly wage requirements is not merely a scheme to increase profits, it is a necessary component for maintaining the dollar’s value.  If outsourcing jobs hurt the dollar’s value rather than bolster it, politicians would already have passed concrete laws against the practice.   

Just as the thought experiment above showed, the price of bread can only remain low when the vast majority of the population earns a low hourly wage.  Broken down in this way, it becomes a matter of simple mathematics.  The global monetary system, by its very nature, can only sustain a small number of highly prosperous individuals.  The moment too many individuals within the system become highly prosperous, prosperity itself is devalued.  Is it not clear that humanity has entered itself into a highly destructive feedback loop by submitting to such a self-defeating system?

There will never be enough human hours to sustain the debt created by the financial machine.  Entire countries are collapsing beneath the weight of debt.  Debt is not money.  Now that computer networks have become the standard for the banking sector, most money in circulation is no longer printed, it is merely a number on a screen; nothing more than information fabricated at will.  This means that money is twice separated from the “real world” (in which value is measured by actual commodities with inherent value).  The first separation is 1. the printed dollar which is only a representation of real-world value (typically HHC) and 2. the digital dollar which is only a representation of a printed promissory note. 

Every dollar created by our current system represents a dollar of debt and, remember, the debt owed is in human hours (HHC), not money.  The real world commodity backing the entire system is HHC.  Our trillions of dollars of debt represents human labor, human labor for generations of people not yet born.  Are we really going to ride this train to its final stop?  Are human beings going to allow our own invented system of money to dictate the course of our evolution as a species?  We truly are a snake eating its own tail.

The Rise of Automation

As a species, we have placed all of our eggs into the for-profit-monetary-system-basket.  Our future as human beings is currently locked into a relationship with a system that produces extreme inequality by default, which in turn creates tremendous instability (conflict) between individuals, groups, and countries. 

The advent of automation via technological advances has already impacted the global job market, and this sector is still in its infancy.  The truth is, 80% of all current jobs available to human beings could be successfully automated via computers and machines.  Take a moment to absorb that fact.  80% of all jobs earning individuals an hourly wage could be fully automated using today’s technology, and that technology is advancing rapidly. 

From a wholly rational (scientific) perspective, automation is beneficial in every way.  It greatly reduces waste within the production process of goods, lowers the chance of error to nearly zero, and removes human beings from positions that are highly tedious, unfulfilling, and/or unsafe.  As an example, let’s analyze the construction process for homes today.  Despite incredible advances in technology, human beings are still constructing modern homes using nails and hammers.  This is an archaic approach given available technology.  40% of the materials used in traditional construction work winds up as throw-away waste.  Construction’s carbon footprint is massive in the United States, making up a third of the country’s total footprint.  This includes the production of raw materials used, the transportation of those materials, the machines and tools needed to manipulate those materials, the waste inherent in the process, etc.  For an extremely detailed look at construction’s carbon footprint, read “Efficiency and Equity Implications of Carbon Tax in the Construction Industry” (PDF).

Nearly 6 million Americans work in the construction industry and the average pay is roughly $40,000 a year.  Where does automation fit in?  3D printing may be viewed by many as a novelty suitable for nothing more than producing simple trinkets using a small desktop printing device.  However, there is an incredibly strong push to leverage 3D printing for the construction of ultra-modern buildings.  There are countless benefits at all levels when creating a home as a single molded piece using a 3D printer as opposed to the ancient methods and tools being utilized today.  3D printing, by default, creates zero waste.  In a world of finite resources, reducing construction waste to 0% from 40% is a huge step forward in efficiency.  Designs can be much more organic, functional, and pleasing… not to mention far more safe (100% fire retardant materials can be used, no sharp edges, stronger, more weather resistant, etc.).

There are countless articles available regarding the move toward 3D printing in construction.  Below are only a couple:

Printing 3D Buildings: Five tenets of a new kind of architecture

Dutch architect to build house with 3D printer

The question is, when (not if) 3D printing takes over the industry of construction, how do you replace the 6 million jobs that will be lost?  Keep in mind, those 6 million jobs only represent individuals who work directly at construction sites.  This does not reflect the jobs that would be lost across other reliant sectors, like the production of raw materials (lumber, concrete, nails, hammers, etc.), the transportation of those materials, and the hauling away of waste leftover from tradition construction techniques.  How many millions of relatively high paying jobs will be liquidated by this move toward automation in construction?  Where will these millions find work?  How much less will they earn on average for their hours worked?  Additionally, 3D printing technology is poised to impact many industries in a similar way.

The Inevitable Decline in the Inherent Value of HHC

When it comes to automation and the for profit monetary system, it must be recognized that the value of HHC (Human Hours Commodity) is being directly threatened.  If 80% of all existing jobs can already be automated by current technologies, are we not moving toward a time when HHC’s inherent value may cease to exist at all?  There will (likely) always need to be some measure of human involvement overseeing any automated system, but the number of people required for such a task is completely irrelevant when compared to the jobs lost by automating an industry.  

The truly disturbing thing to understand is that the monetary system itself views any decrease of value in HHC as a positive outcome.  Why?  As the value of HHC decreases (as human beings are paid lower hourly wages), the value of the dollar is actually bolstered because the price of goods decrease.  This of course means that the number of people near or below the poverty line increases (as HHC is devalued) while the buying power of those already wealthy greatly increases. 

Our for profit monetary system leverages HHC to drive the value of the dollar.  As entire sectors transition toward automation, the demand for HHC goes down and this works to degrade the inherent value of HHC as a whole.  In a world in which human hours of labor or less and less vital to the production of goods, it is a mathematical certainty that the value of human labor will fall dramatically.  Given this truth, is it not clear that human beings have anchored themselves to a system that is rapidly rendering human involvement and compensation obsolete?   

Automation should be viewed as a giant step forward for humanity.  It reduces waste, removes human beings from tedious and/or unsafe tasks, lowers the price of goods (both in the real-world sense of fewer commodities being used and in the monetary sense), and increases efficiency across the board.  And yet, because humanity has locked itself in a relationship with the monetary system, automation is largely seen as “the enemy” by the average worker because it threatens jobs and will ultimately render HHC valueless.  This is a contradiction that we can no longer afford to ignore.

Ending the Global Delusion of Money as Savior

While our scientific knowledge and technologies have advanced greatly and continue to do so, our social systems remain absurdly archaic.  If we fail to bring our governing systems into alignment with reality, the world will become increasingly unstable and it will require an unsustainable expenditure of resources to uphold our civilization.  In contrast, once we transition to a scientifically grounded system (such as a Resource-based economy being developed by The Venus Project), the advancements made in technology would become beneficial to all humankind rather than representing a threat to an antiquated system.

We are quickly moving toward a future in which the Human Hours Commodity will cease to have any value within our monetary system.  If we insist on clinging to such a system, we are literally fueling our own obsolescence (which will result in human suffering on a massive scale).

We no longer have the luxury of planning a lengthy transition to a new system.   If we are to avoid the inevitable planetary genocide our current money-market system is racing toward, we must take immediate action.  At some point, a large percentage of the world’s population must stand and reject money as a viable form of exchange.  The monetary system is clearly working against human progress on many levels, and that truth has never been more apparent than it is now. 

Human history is at a crossroads and the choices you make today will determine which road we travel.  Each and every one of us is responsible for our own complicity with a highly destructive monetary system.  In our defense, no alternatives exist within our culture.  Survival and also individual success can only be obtained by way of earning money in our current system.  This fact does nothing to change the reality of the situation, however.  If we are to transcend the self-destructive certainty of the for profit monetary system, many of us are going to have to sacrifice the lives we know in order to bring about a cultural shift in ideology.