We know that during the usage of commodity currencies, the scarcity of metals like gold and silver narrowed the money supply and did not allow economies to grow out of a specific natural capacity by forcing depressions that happened due to the lack of a medium of exchange and in turn, the economic incentives for production.
Fiat standard, however, allows the central banks to affect the GDP as they see fit; they might choose monetary policies that cause the enlargement of the economy, oblivious to the environmental capacity of their countries; this has, of course, resulted in a population boom during the past century but also caused problems within the environment.
Technology has increased our productivity and helped us dodge the Malthusian trap, but even if we look at Technology as a scarce accumulative resource that also takes time and energy to be amassed (unlike Fiat money), is it possible to blame Fiat Standard as a contributor to Humanity's environmental predicaments?
I'd say that it has definitely contributed to out of bound growth, and thus to a negative impact on our environment. The current, debt-based, fiat system needs growth in order to avoid unpayable debts (Article Interest-bearing loans and unpayable debts in slow-growing e...
andArticle Risk and Financial Management Computational Analysis of the ...
). The financial stress it inherently creates has also made the accumulation of money a goal in itself, with all the detrimental effects that come along with it (extreme inequality, greed, greenwashing, corruption, ...). As Silvio Gesell pointed out in his work "The national economic order", once someone has acquired all the physical goods they need, money (and its derivatives) becomes the most valued asset because they do not rot, break down, or need maintenance. An alternative monetary system based on this work is currently the focus of my research (Preprint An alternative general-purpose money supply model for a futu...
)There is currently a lack of research that ties behaviour, monetary systems, and overall business practices and governance together. Although there has been some research on how people behave after handling (the current type of) money (https://linkinghub.elsevier.com/retrieve/pii/S1053535713001352, https://web.archive.org/web/20200923080007/https://osjournal.org/ojs/index.php/OSJ/article/view/2200), or when dealing with complementary currencies (Chapter Social Mechanisms Influenced by Sardex
).More research on this is warranted.
Stef Kuypers
Thank you for your great insights; your research looks captivating.
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