The economic system, that is, the actual production and distribution of goods and services, is one thing; the financial system that controls it is quite another.
Unfortunately, the two concepts have become conflated under the single rubric of “economics.”
Contributing to the conflation is the practice of economists to pontificate about finance rather than economics.
They don’t talk much about agricultural challenges or construction methods or manufacturing practices or distribution networks beyond their possible impact on the financial system.
It would be better if they called themselves financialists.
An unfortunate consequence of this conflation is its contribution to the widespread belief that the two are so intertwined that we can’t have one without the other.
However, imagining an economic system free of the constraints of finance quickly reveals enormous positive potential, while at the same time casting a spotlight on the role being played by the financial system as the primary source of economic dysfunction and social chaos.
There is little doubt that, with our understanding of the physical, chemical, biological, and electromagnetic forces operating on this planet, we have the potential for implementing an ecologically and environmentally sustainable economic system capable of providing every individual on the planet with all of life’s essentials.What is also clear is that we will never have a universally accessible economic system, as desirable as that may be, as long as the financial system remains in control.
The financial system, which prides itself as the lifeblood of the economy, is revealed as the inhibitor rather than the facilitator of economic activity when an abundance of human and natural resources is available to be applied against severe humanitarian needs but cannot be moved for lack of available funds.
In the 1960s, R. Buckminster Fuller, the brilliant futurist whose many designs included the geodesic dome and who understood early on that we are all passengers and crew members alike aboard Spaceship Earth, estimated that 60 percent of the jobs in the United States produced nothing of life-sustaining value.
Fifty years later, it feels like 80 percent.
With non-productive finance system workers (bankers, lawyers, accountants, etc.) and their support staff (cashiers, meter maids, bill collectors, etc.) outnumbering the productive economic system workers (farmers, carpenters, doctors, etc.) by a ratio of four-to-one, or more, the world’s largest and most advanced economy is responsible for an enormous waste of human and natural resources.
The envy of the developed world and the role model for the developing world, the gold standard of financial control, is a control system that is itself out of control.
Sooner, better than later, we will have to confront the fact that the financial system is not the solution to our problems; the financial system is the problem.