“MONEY IS NOT WEALTH: Cryptos v. Fiats!“
By Hazel Henderson ©2018 www.ethicalmarkets.com
Most bankers, economists and investors after a couple of drinks, will admit that money is not wealth. Money is a metric, like inches and centimeters, for tracking real wealth: human ingenuity and technological productivity interacting with natural resources and biodiversity undergirding all human societies along with the daily free photons from our Sun, as described in “Valuing Today’s Circular Services Information Economies”. So brainwashed are we by the false money meme of “money as wealth” that whenever anyone proposes needed infrastructure maintenance, better schools and healthcare or any public goods, we are intimidated by some defunct economist who says “Where’s the money coming from?” They ought to know better, since, of course money is not scarce, it’s just information as I pointed out in 2001 at the annual meeting of the Inter-American Development Bank in an invited talk “Information, The World’s Real Currency, Is Not Scarce “(see World Affairs, April-June, Vol. 5, 2001, Delhi, India).
Since the 2008 global financial meltdown and bailouts, trust is disappearing: in banks, stock markets, corporations, governments, religious institutions, experts, academia, political parties’ rhetoric and even the Internet and social media. This mistrust has fueled global populists across the political spectrum, with ubiquitous signs at their rallies, “Where’s MY Bailout?” We see the rise of cryptocurrencies becoming bubbles, as many seek alternative stores of value and mediums of exchange they hope will prove more trustworthy than central banks’ fiat currencies: dollars, yen, euros, pounds, pesos backed only by their governments’ promises.
Trust is a precious commodity which undergirds all humanity’s markets, trading and exchange. Trust does not scale easily, abiding in face-to-face, handshake interactions in humanly-scaled communities, based on common agreements, shared infrastructure, resources and culture. Trust does not reside in packages of software, apps, AI, big data or social media platforms, as we learned in 2016. So trust was sought in the blockchain platforms first developed by the mysterious computer expert, Satoshi Nakamoto in 2009 for his bitcoin. Now, over 1000 blockchain-based start-up companies and blockchains underlie the over 1,500 cryptocurrencies traded on electronic exchanges including Coinbase. These computer-based distributed ledger blockchains are designed to engender trust by allowing person-to-person ability to verify each transaction or contract with a permanent record open to all.