The exception to scarcity in the productive community is that companies and industries that are tied in with the FIRE community, and/or politicians, are receiving funds while minority and many small businesses are being left out.
The major reason we have not had a breakdown currently is that essentially all of the added money created to maintain exponential money-supply growth to keep the system from breaking down has been directed to the financial community, which itself has to grow to prevent its breakdown.
Conclusions
The way out of this conundrum, in the eyes of this writer, requires a total revamp of the economy in a number of ways. This may seem impossible, not feasible. However in the face of major breakdown there may well be no alternative, except the drive for fascism, which is not compatible with the value of provisioning assumed at the beginning of this presentation.
First, because of the fact that the financial community is taking care of itself at the expense of the productive economy, the only really good alternative is to turn off the spigot to the FIRE community and allow it to go bankrupt, which it will do without continued injections of money. Much of its money has been accumulated through bets on situations that they have manipulated to guarantee income for themselves, so their loss will not necessarily be a killer to the operation of the economy even though there will be major disruption. This is the way to most effectively arrange the necessary debt jubilee promoted by Michael Hudson.
Then those institutions will have to be taken over by the people, who will have to pick up the pieces and start over again. Whether this can be done by the government is currently up in the air, as many parts of it are currently bought and paid for by the same powers that are driving continuation of the current system.
One issue is clear. The institution of interest needs to be done away with. It is the major driver of the individual accumulation of money, which is ultimately the driver of inequality. Banking services that are still necessary will have to depend on demurrage and competitive fees for service.
We need to democratize the creation and group use of money. Mutual money can aid in the creation process, moving decision-making to the lowest level consistent with the use of money. Democratizing the levying of taxes is another area that needs attention.
On the other side of taxation, participatory budgeting can democratize the group spending process. Part of the budgeting process will necessarily be decision making concerning how much money needs to be raised through taxes to cover necessary community needs, from education to health to other social services, as well as building and maintenance of necessary physical-community infrastructure.
Communities can learn to take care of local needs, and decide what exports are possible and imports necessary. Community-managed money will give a measure to make sure that each community balances local imports and exports.
Banking needs to be reinforced at the local level, with democratic decision making in its operation. Credit unions have a place in this, as well as the possibility of postal bank offices that have the power to create local money with the democratic supervision of their users.
A system of nested money institutions, as suggested by the work of Elinor Ostrom, needs to be considered. Money and banking needs to be seen as a commons, which her work explores.
One of the characteristics of the present system is that it promotes a mine/use/throw-away economy. Developing an economy and money system that instead reinforces a circular economy is an integral part of the task before us.
Provisioning rather than profit must be the primary directive.
The down side to this analysis, if it is one, is that it depends on we the people learning to work together to figure out how to take care of each other as well as the earth and its great variety of life that supports us.
Democracy requires democratic institutions as well as democratic citizens that operate them. Without either one, the overall system will fail.
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