In Future Money, James Robertson, the well-known independent thinker on economic and social issues, lays out, in clear, non-technical language, a compelling case for a total overhaul of how we create and use money. His key point is that the money system as it now stands motivates people to live in some ways rather than others, and that these ways are destructive of both human communities and ecological systems. The money system is therefore structured in direct opposition to the efforts of civil society to tackle some of the most urgent problems now facing humanity – worldwide poverty, ecological destruction, social injustice, financial corruption, and political unrest and violence. The need for reform is therefore great and urgent.
Robertson shows that the money system, i.e. the way in which governments and their agencies now carry out the three main money functions of providing the official money supply, raising public revenue, and spending it to meet public needs, has evolved in a rather piecemeal fashion over history, and it is now badly out-of-step with the needs of the 21st century. As a basis for reform, humanity has to review what the purposes and principles of the money system should be as a whole. Robertson proposes that the central purpose should be to motivate us and enable us to organise our personal and collective lives in ways which will lead to the survival and well-being of humankind and all life on Earth. Unfortunately, he notes that a major obstacle to making this change is that few, if any, of the world’s financial professionals and policy makers are interested in the purposes of how the money system works, or even whether it has any purposes. He suggests that informed public opinion and action, coupled with constructive leadership focused on the practical measures needed for reform, will be required to convince the politicians and financiers of the need for change.
Robertson delves into the history of money to show how the unspoken purposes of the current money system have evolved, and lays out the main reforms which are necessary for national, international and local parts of the system. Since the national part is the most developed, it is here that he devotes the main focus of his attention. Among his recommendations, the main one is that the creation of the national money supply should be transferred from commercial banks to the central bank. He also proposes that the burden of taxation should shift from income to consumption, since it is consumption which creates pollution; and that part of these taxes should be used to fund a Citizen’s Income, in place of the complex system of benefits which currently exists. On the international stage, Robertson proposes broadly similar reforms, with the creation of a new International Currency which would operate in parallel with national currencies; and the development of arrangements for international revenue collection by taxing the use of global common resources such as ocean fishing, flight lanes and outer space, and also activities which cause cross-border pollution, using the funds to meet the costs of the UN and its agencies and possibly also to provide a global component of the Citizen’s Income. Noting that the regeneration of more self-reliant local economies is also essential, he calls for local government to be actively involved, and for a much bigger place to be given to independent community currencies, local co-operatives, credit unions and development banks.
While Future Money is not a long book, it is evident that it is the fruit of decades of research and contemplation of the major issues around money. Robertson also provides a wealth of references for those who want to examine the issues in more detail. By distilling these complex matters into a clear agenda for urgent action, Robertson has produced a book of great value for all people who are seeking to usher in a better future for humanity.
On April 2nd 2012, the Royal Government of Bhutan hosted a high-level meeting at UN Headquarters in New York, entitled, “Wellbeing & Happiness: Defining a New Economic Paradigm”. For many years now, Bhutan has been developing techniques for measuring “Gross National Happiness” (GNH). Marking a growing dissatisfaction with the standard measure used by governments, Gross Domestic Product (GDP), other groups are also attempting to develop new ways of measuring quality of life.
Commissioned to coincide with the meeting, the first World Happiness Report was issued on April 2nd. Published by the Earth Institute of Columbia University, and co-edited by its director, Jeffrey Sachs, in collaboration with John Helliwell and Richard Layard, the report reflects the new worldwide demand for more attention to happiness and absence of misery as criteria for government policy. It reviews the state of happiness in the world today and shows how the new science of happiness explains personal and national variations in happiness. In his introduction, Sachs notes that in impoverished societies, the quest for improvements in material well-being make much sense, as rising incomes deliver basic improvements in nutrition, schooling and health. However, research has shown that in richer countries, continued increases in income past a certain point do not seem to deliver increased happiness. He cites a number of reasons for this surprising result: people tend to compare their level of wealth with others; rising wealth in a society may be distributed unequally; other factors, such as insecurity or lack of social trust, may erode benefits felt from rising incomes; the fact that while higher income may raise happiness to some extent, the quest for higher income may reduce happiness; and the continual manufacture of new desires by advertising.
Sachs points out that the simplified economic view of people as rational consumers (implicit in GDP) needs to give way to a richer model of humanity which recognises the complex interplay of emotions and thought in our decision-making, and acknowledges our deep need for social connection and community. He notes that the idea that societies ought to foster happiness in their citizens is uncontroversial, but that one objection is that it is too vague and subjective a quality to inform the policies of governments. He points out that there are many dimensions of happiness which psychologists, economists, pollsters and sociologists have shown can be measured, analysed and related to the characteristics of the individual and their society. This is the emerging science of happiness, which the rest of the report explores in more detail. Sachs concludes the introduction by praising the pioneering work on GNH by Bhutan, and suggesting that the successors to the Millennium Development Goals, the Sustainable Development Goals (SDGs), ought to include a specific commitment to measuring happiness.
In Part I of the report, Chapter 2 looks at some of the happiness measures currently in use, such as the Gallup World Poll and the European Social Survey. The results suggest that regular large-scale collection of happiness data can improve macroeconomic policy-making and inform the delivery of social services. Chapter 3 examines the causes of happiness, both external (e.g. income, work, governance, values) and personal (health, family life, education, age), and concludes that while absolute income is important in poor countries, in richer countries, comparative income is probably the most important, and that many other factors exert a powerful effect, such as social trust, quality of work, and political participation. Chapter 4 looks at some of the policy implications of these findings, and finds that while basic living standards are essential for happiness, after the baseline has been met, happiness is more dependent on the quality of human relationships than income. Therefore, policies should be designed which can strengthen human relationships, e.g. supporting family life through decent work-life balance, and providing suitable education for all.
Part II of the report present three case studies, beginning with the case of Bhutan. The authors note the multidimensional nature of GNH, and quote Jigme Thinley, the Prime Minister of Bhutan, who says that “true abiding happiness…comes only from serving others, living in harmony with nature, and realizing our innate wisdom”. The GNH Index is composed of thirty-three separate indicators, ranged across the nine domains of education, health, ecological diversity and resilience, good governance, time use (work and sleep), cultural diversity and resilience, community vitality, psychological well-being, and living standards, and the authors describe each indicator in detail, as well as the way in which they are combined. They provide their most recent results, and give examples to show how different groups – literate or illiterate, urban or rural, young or old, monk, farmer or businessman, can all be identified as happy using this model. Finally, they remark that GNH is very much a living experiment, and stress that the purpose of the GNH Index is to provide an incentive to people from every walk of life to increase happiness within society.
The second case study reports on the work of the UK Office for National Statistics in its recent efforts to measure subjective well-being. The author of this case study reflects on the initial efforts to include four experimental questions regarding subjective well-being in their survey work, and concludes that subjective measures and objective measures can complement one another in assessing national well-being.
The final case study outlines the recent work of the Organisation for Economic Development (OECD) in setting out guidelines on the measurement of subjective well-being for national statistical offices. This effort is intended to help standardise the measurement of subjective well-being, to allow comparisons between regions and between nations, and it is envisaged that the guidelines will be published towards the end of 2012.
The existence of the World Happiness Report is heartening, as it shows that even hard-headed economists and statisticians are now willing to accept the need to include more subjective dimensions in their assessments. Subjective well-being or happiness is itself not easy to define, but it is interesting to note the emphasis placed on improving relationships which comes from the report. The achievement of right human relationships through applied goodwill is a major theme within Alice Bailey’s writings. “Right” and “good” are two more ideas which humanity has long struggled to embody, and understanding and expressing them requires not just clear reasoning, but also the fiery compassion of the heart. The heart is the custodian of conscience, and when the reins of control are passed from the busy chatter of the mind to the “still small voice”, then there is a natural tendency to think and act in terms of the good of the whole. Then indeed, as proposed by Jigme Thinley, true abiding happiness can emerge, through service to our fellow humans and all the kingdoms of nature, and the loving wisdom of the heart can become the lodestone of society.