This essay was previously published as episode #28 on Mind the Shift podcast
These are strange times, but they will eventually prove to have taught us a number of things. I want to point out five less-than-natural features of our society and system that the pandemic has shed some light on:
Most of us realize that money isn’t a zero-sum game, the idea that there is a finite amount that constantly changes hands as it is distributed and redistributed among us (unevenly so). Most of us know that it grows. New money is constantly created.
How do you picture that creation? Through production, work, improved services, innovations and discoveries, right? Largely, it’s true. I’ve always had a hard time understanding why people complain that some construction project is getting more expensive than planned. ”It’s a waste of money”, some say. Waste of what money? Aren’t we talking of fresh money being sucked into the general economic dance party? (Yes, I know there is taxpayers’ money and private money and all that, but basically it all merges.)
So money kind of rises up from production, like a fermenting dough. That’s odd enough, but it’s not the whole story.
These days, money seems to be created out of nothing, and what’s happened during the pandemic emphasizes that.
Six or seven months ago, all of a sudden every government and central bank began promising credits and allowances to save struggling companies and jobs, credits that would have seemed completely insane just a few months earlier. The Swedish central bank guaranteed rescue credits worth a tenth of the country’s entire GDP. ”Money will not be a problem”, said the Swedish minister of finance.
In January 2021, the American president-elect Joe Biden proposed an economic rescue package worth a staggering 1,9 trillion US dollars.
It’s been a long time since the funds of central banks corresponded to a certain amount of gold, and even then it was of course illusory, because the value of gold was decided on other grounds than its practical use.
Today, with the disappearance of physical money, it has never been more obvious that money is a flimsy concept, numbers on displays that grow or shrink with clicks on links.
When you take up a mortgage loan for your new house, the money the bank lends you doesn’t exist at first, it is created the moment you sign the mortgage papers.
Money is a trust game. It is an evaluation of the amount of trust we have in someone’s goods, ability to serve or ability to repay for such goods or services.
It can be described either as a brilliant solution to solve a real problem or as a brilliantly intricate way of fooling us that a made-up problem is real.
Perhaps money, the middleman lubricant in our society, is best described as energy, positional energy. When you have it and don’t use it, it’s in practice worthless. When you use it, it rolls down the hill with the help of gravity and is able to change things — whether for the benefit or the detriment of humankind is up to you.
Things happen faster and faster. Many of us will experience a number of economic crises or even crashes during our lifetimes. We already have, which makes it possible for us to subsequently assess what has happened.
We have seen that, by and large, things work pretty okay surprisingly soon after the crash. Life goes on. Most of those who lost their jobs are back in the workforce after a few years. What was the point of it all? How real was the collapse?
If the nature of the monetary system is illusory at its core, then economic crises ought to be, largely, something that primarily goes on in our minds. This means that if fewer and fewer economic actors accept that there is a crisis, it subsides. The crisis then appears to be no more than a way of looking at the situation.
The fact that credit money is created the moment a loan deal is clinched might scare some. But think of it this way: it shows that money is an illusion that needs to be upheld at any cost, as it were, in order for it to survive. It shows that what is needed in that situation isn’t actually money. Someone needs a house or a car or to start a business, that’s all. And the bank? The bank needs the illusion to survive. Without it, the banking system collapses, of course.
After all, what we all want is to do things; create, produce, entertain. And that is also what we all do when no other idea or mental concept stops us.
”This is bonkers”, say those who have a degree in economics, and quite a few others. If it were as simple as that, just create money out of thin air, then no one would be poor, of course. Every poor country could just decide how much money they needed.
Well, no, and — in the very long run — yes. As I mentioned, the monetary system evaluates trust. It says on British and older American bills that the receiver ”will” or ”promises to pay the bearer on demand”.
The South African writer Michael Tellinger has been able to settle a large debt to a bank by issuing his own ”promissory note”, where it says that he promises to pay a certain amount of money.
The US seems to be able to amass an indefinitely large government debt without any detrimental effect on the dollar, because the rest of the world still trusts that the US economy will keep on steaming and delivering goods and services.
Money is, in short, a belief system, as David Amerland says in a brilliant little article on Medium.
Should many of us lose trust in the money system, nationally or globally, and start using something different as a proxy for trade, or nothing, in small communities like Tellinger’s ”One small town” project, the system would most likely start to first transform and eventually dissolve.
The problem for poor countries, as things stand, is that few trust their productive abilities. If they print more money, the value of that money, in the eyes of others, collapses.
This goes both ways, not unlike what is also true on the individual level: when nobody confides in you, you develop low self-confidence.
But even actors in a poor country with sound self-confidence and who see through the system can eventually break free. But the steps towards liberation must at first be taken completely independently, from the spark through the creative process it ignites.
Six months ago, I was worried that all these harsh measures to combat the pandemic would crush economies and people’s livelihoods for a long time, especially in poor countries that aren’t even severely affected by the virus. Now I’m not so sure. I think I, like most others, allowed myself to think inside those old mental boxes of crisis and scarcity.
I must admit that I am not an economic expert, although I have written quite a lot about these things as a journalist. I am not stating as a fact that the monetary system is heading for self-dissolvement. But I am sure that if most of us start seeing clearly what money really is (a belief) and what it isn’t (real), we may see some very interesting shifts. And the fiscal showers during this virus-induced slump have been telling.
2 The workplace
Tens of millions of people have been forced to work from home since March. And for the most part it’s worked out fine. Thousands of old-style physical meetings have been scrapped, and thousands of those that have taken place have been held online.
This rapid, radical transformation of the way we work has shown us with crisp clarity that this idea that we must ”work” eight hours a day and physically go to a ”workplace” to do it, is an idea created for the benefit of the manufacturing industry in the 18th and 19th centuries.
Of course we don’t have to do that. We need to get things done, and some of these things take hundreds of hours to do, while others can be done in a fraction of a traditional ”work day”. As long as we use money to pay for those things, or to be paid for them, some kind of accountability is needed, but those transactions can be organized without this huge overarching structure of employers and employees.
A lot has been said about the negative psychological effects on people when they are not able to visit their workplace and see their colleagues and have a chat with them over a lunch or a coffee.
But less has been said about the positive side of the exact same situation: the relief of not having to get up in the dark wee hours and not having to squeeze oneself into a jam-packed subway train or get stuck in a traffic jam for hours in order to commute to that workplace.
Changing the workplace from fixed to flexible in time and space means trusting the worker to take full personal responsibility for the task they’ve been assigned to do — which they’ve always had the ability to do but never have been given the chance to show.
That means personal growth.
3 Fear and authority
In the bizarre world we all suddenly and shockingly found ourselves living in from March 2020, all kinds of strange things have happened and all kinds of decisions have been taken about new strange rules and laws. But there has been one common currency, all over the globe: fear.
I happen to live in one of the few countries that hasn’t, at least not as yet, engaged in a full lockdown, which means that politicians haven’t fully exploited fear in practice, thankfully. But in principle I believe the same forces are at play everywhere, no matter what policy has been pursued:
The pandemic has shown unequivocally that some people are more prone than others to letting themselves be steered by their fears and also more willing to give away their inherent power to authorities.
These submissive people are a minority in most places, but a politically significant minority, since leaders have a hard time playing down these people’s fears, even if the leaders themselves aren’t that scared (and in some cases, oddly enough, not that keen on relying on authorities). Why? Firstly, because doing so would appear cynical. That is how it would be described by the media. Secondly, because having to do with submissive people is irresistible for the ruling elite (even though it’s out of the question for any of its representatives to put it that way).
I want to point out that the fear these people experience, and the trust they have in authoritarian figures, is to them totally relevant and true. It’s their reality. Everybody has their unique perspective on reality. However, that perspective is possible to change.
4 Knowledge and science
So many differing statements have been made, so many experts have been saying different things, so many strategies have been rolled out without a proper evidence base.
Perhaps it took an unknown virus, creating this very expected and yet shockingly surprising pandemic, to show us that there is no clear-cut division between ”real” science and ”pseudoscience”.
What do I mean by that? ”Clear-cut” is a crucial word here, because of course there are charlatans. But there is also bad science.
From time to time, intelligent people with good judgment operating outside of the scientific community have made discoveries that have at first been presented as some kind of infotainment but have later been absorbed and embraced by the scientific mainstream. The same goes for maverick scientists who initially have been ridiculed for their findings but later acknowledged. When it comes to the greatest discoveries, this is rather the rule.
(I recommend a wonderful graphic listing many of these mavericks throughout history on the website informationisbeautiful.net.)
The true nature of Covid-19 has so far eluded the medical and epidemiological expertise. How does it operate? How contagious is it? How lethal is it? How does it affect humans?
In the beginning (it seems like years but it was just a few months ago), there were countless more or less fantastical accounts about the devilishness of this unseen submicroscopic infectious agent. The paper that probably had the largest impact was an infamous study from Imperial College in London. It affected national policies in both the UK and the US. The study made dramatic assumptions about how many would die if communities were not locked down. These calculations showed to be completely off the track, which epidemiologist Sunetra Gupta made clear in her talk with Mind the Shift back in July and Dr Martin Kulldorff in his talk with me on the podcast in November.
However, debunking that study did not seem to have much effect on policies.
Some weeks later, a fierce debate about the pros and cons of wearing face masks took off, which is still ongoing. There is no robust scientific evidence that shows that wearing them helps mitigate the spreading of the virus more than marginally. But that doesn’t seem to impress leaders much either.
Having to keep distance from fellow humans is a pretty large infringement on civil liberties as it is, and mandatory facemasks is a measure that pushes society even closer to authoritarianism. When we can’t touch each other, we should at least be able to read each other’s facial expressions, one might think. With masks, we can’t even do that.
5 Global coordination
”It’s impossible.” ”It will never happen.”
Thus the mainstream forecasts that are often made about parts of the gigantic mental construct that constitutes our societal matrix. Like some of the phenomena I’ve been talking about here.
”People can’t change that much. Leaders won’t change that much.”
But they can, and they will. They just did.
I don’t know when the world, practically the whole world, made such a concerted effort this fast, if ever before.
In a matter of a few weeks countries on every continent locked down their societies, hard-hit as well as not-yet-affected countries. Almost 200 nations mimicked each other.
What happened rebutted the ”impossible” forecasts both in terms of the global coordination and in terms of how far-reaching the measures were.
- Dozens of countries reintroduced scrapped border controls and introduced quarantine requirements.
- Billions stopped flying immediately. Aviation plummeted to a tenth of what it was. Years of climate alarms have had no success in achieving that. A virus had.
- And, as mentioned, money, created out of thin air, was poured over the kick-stopped economy.
It will be hard for the cynics to again state that ”true global coordination will never happen”.
The pandemic will pass, eventually. But things won’t go back to exactly where they were.
Nothing ever does, by the way.