Report On Conference at Schumacher College 2011
There is no doubt that money is one of the most remarkable inventions of humankind. As inventions go, it is up there with bread, the wheel and writing. It shares similar misty beginnings and yet is so fundamental to the development of human civilisation that we can't imagine life without it. It is a tool with the unique distinction of simultaneously being a metaphysical ideality and a material reality and considering the closeness of human psychology, susceptible to all the poisons of fear and greed and attachment to all things material no wonder the management of money causes so many problems.
Will the ongoing financial crisis cause people everywhere to reflect on their lifestyles and their relationship with money, or are we all simply seeing this as another blip? Do we think that once the "experts" and politicians have sorted out their deals, we can all get back to the warm glow of watching our house prices rise?
There's no doubt that the relatively recent financial crisis of 2008 has brought to the attention of ordinary people more than ever the hitherto subtle and hidden subsidisation of the private monetary system by the pubic purse and raised the subject of money back to the fore of public debate. Of course, we've been here before. As HG Wells commented, writing in 1932, "Circumstances have recently stirred up in the general intelligence to the main factors of the currency situation. It has never hitherto been a fascinating subject. People have avoided it if possible because it made them feel slightly uncomfortable and had an air of being highly technical and inconclusive. It was at once as intimate and as unconvincing as talk about one's liver - and general discussion has been further burked by dubbing anyone who raised the question a "Currency Crank". Still, there may come a time when a man will be obliged to look his doctors in the face and consider the state of his liver, and the time has certainly come for humankind at large to consider the working of its monetary organisation".
The London Times writes that 80% of the UK population is worried about their finances. One can't help wondering if this is the same 80% of the population who own only 5% of the countries financial wealth. Yes, let us not kid ourselves that the modern monetary system is spreading the wealth around, and by some magical process, the wealth "trickles down" from the extremely wealthy to the poorest. It doesn't. The only people who will tell you it does are rich, and the message seems a tad hollow.
Without any practical alternative to our current financial system (yet), we're now even in danger of bankrupting entire nations due to trying to keep the system afloat as indebtedness reaches unsustainable levels. It seems the very system itself is at risk of losing all credibility. Clearly, if what the world owes cannot be paid, then what the world says it is worth cannot be true either.
Regulatory frameworks are patently failing to keep up with the insatiable drive for profiteering from a new world of financial "investments". This new world of such painful sounding terms as "Credit Default Swaps" and "Naked Short Selling" comprises an incredible range of new investments obscured by a language only a rarefied elite understand and even they often struggle. But was this "a crisis cooked up in trading rooms where not just a few, but many people earned annual bonuses equal to a lifetime's earnings of some of those now suffering the consequences" as argued by Lord Adair Turner, Chair of the Financial Services Authority, UK, or do we all have a part to play in this? Can we be hopeful there is a way out and save what has been such a fundamental part of human civilisation?
As Einstein famously said, "We cannot solve our problems with the same thinking we used when we created them." Where better, then, find a hope-filled wise and intelligent rethink of the global financial system than Schumacher College in Devon?
The College is named after the famous economist E.F Schumacher, who wrote his seminal book "Small Is Beautiful" in 1973. He argued for an economy based on a small scale, labour intensive, energy-efficient, environmentally sound, and locally controlled technologies. When the leaders of large centralised systems in finance, media, and politics demonstrate a failure of integrity and incapability of managing their global empires, the spirit and ideas of E F Schumacher seem more relevant than ever.
In July of 2011, a team of leading thinkers, activists and academics, ethical bankers and community currency organisers gathered with participants from around the world at Schumacher College to "Rethink Finance". They deep dived into the fundamentals of our relationship with money, the technical aspects of its creation and management, and the psychology of the people whom we are entrusting to use it wisely on our behalf. What emerged was a calm conviction that there is light at the end of this tunnel. This was no place for pessimists, but one where the Schumacher spirit of a profound belief in the power of conscious evolution shines through and one is left feeling deeply inspired about the future.
Should we be spending our way out of this or tightening our belts? Is it a question of regulation? Is there something so fundamentally wrong with the way money and credit is created and lent into society that it is time for a major rethink? Where does human creativity in managing money give way to the greed of the worst kind?
The solutions we discovered lie in the evolution in consciousness of our relationship with money and essential systemic changes, but the tipping point for this transition is nearing, and perhaps these crises are even a necessary nudge! We were even left questioning if there was a crisis at all! As Satish Kumar – co-founder of Schumacher College commented, the fundamental problem is that money has assumed overriding importance to all human beings beyond people and nature. As Satish Kumar comments, "Have the olive trees of Greece stopped producing olives? Have the chefs of Greece forgotten how to make Moussaka? Has the sea of Greece denied people the ability to bathe in it? Yet we see people rioting and killing each other over money… the original meaning of the word Economy to which we now need to return was 'to manage one's home' (from the Greek "Ecos" – "Home" and "Nomos" – "Manage").
Instead, in the modern world, economy is all too often about one thing – money." We should remember it takes many things to make a thriving economy – land, people and money and money is there to serve the other two. When we realise that ecological and human values are the only actual values worth holding, we will begin to permanently solve the financial crises of our times.
Guest lecturer and world-renowned academic futurist, systems thinker and activist and founder of Ethical Markets Media, Dr Hazel Henderson, pointed out that money in the modern world is primarily information (98% of all "money" is digital). Information is information fundamentally abundant and not scarce. Hazel goes on to expound a hope-filled vision that we are in a significant economic transition from the old industrial, fossil fuel-driven economy towards an ecologically sustainable solar age where energy is drawn directly from the sun and other renewable and non-toxic sources. The world is in a transition of consciousness and technology, and the tipping point is upon us. However, the old power processes are still distorting the inherent abundance of the financial system for their ends at the expense of the majority. Like a gut with indigestion, the consciousness driving the current economic crisis is limited. Its intelligence is skewed and the focus too narrow. We find that the highly-trained specialists who run the system have an extremely narrow worldview. Although often hand-picked from the world's top universities, they have little or no knowledge of the planet's natural ecological and social systems that the monetary system was fundamentally created to support.
Guest Lecturer Nathalie Buschor, a senior coach and consultant to banks, graphically explained the very human realities of intense recruitment and training policies of the big investment banks, who, through detailed psychological profiling and relentless pressure to win or be fired, succeeds in breeding a select group of (mainly men) to whom financial gain is virtually the only meaning to life. Like Steinbeck comments in the Grapes of Wrath, "They breathe profits; they eat the interest on money. If they don't get it, they die the way you die without air."
However, as Hazel Henderson points out, the global financial system is a truly remarkable global commons increasingly harnessed for good. A fact attested to by the new scorecard invented by Hazel that measures the growth of green investment worldwide is called the "Green Transition Score Card". Such an economy is an intrinsically decentralised community based and democratic – by definition—more along the lines of what Schumacher would have approved.
Confirming this transition, "It is amazing how business has woken up to sustainability", commented Tessa Tenant, a global expert in Socially Responsible Investment, also lecturing on the course. But undeniably and in common with all the speakers, Tessa argues that the banking system has to reform, which is now holding up the green transition. Regarding the reality of this reform, Tessa comments, "it is tough to get rules agreed and also many are constantly trying to break the rules that do exist. They have forgotten they are looking after our money!" What is required, Tessa goes on to argue, is far more transparency. Transparency is the basis of fair capitalism. Undeniably rethinking finance is not for the faint-hearted, but thanks to leaders in the field like Tessa Tenant, we see now massive growth in socially responsible investment, and the trends are clear. The key areas she identifies that need more work are communication of complex financial issues to ordinary people, correct governance of funds and greater employee engagement within the fund management teams.
Ann Pettifor, director of PRIME (Policy Research in Macro Economics), also points out that the banking system has been a significant civilising advance that had fundamentally served us well when the system was managed more in the interests of public than private sources. At these times, it generally had much greater regulation and generally lower and stable interest rates. Unrestricted capital mobility and highly fluctuating interest rates have mainly caused problems and need to be reined in. Ann's words echoed those of George Bernard Shaw when he wrote in 1907, "The universal regard for money is the one helpful fact in our civilisation, the one good spot in our social conscience… Only when it is cheapened to worthlessness for some and made impossibly dear to others does it become a curse. In short, it is a curse only in such foolish social conditions that life itself is a curse… The first duty of every citizen is to insist on having money on reasonable terms, and this demand is not complied with by giving four men three shillings each for ten or twelve hours drudgery and one man a thousand pounds for nothing. The crying need of the nation is not for better morals, cheaper bread, temperance, liberty, culture, the redemption of falling sisters and erring brothers, nor the grace, love and fellowship of the Trinity, but simply for enough money."
Just being at Schumacher college is an education. It is an environment where love for nature and appreciation and respect for ecology is built into the very fabric of the College. One cannot help but feel a natural uplift of the spirit, inspiration and joy and the spontaneous determination and wish to try to live the rest of your life with a little more balance, creativity and sustainably than before. In Schumacher College, I suspect, one can find a vital ingredient to the successful transition of our society. All participants were united by a common desire for change and varying discomfort with the status quo, and the experience of being there visibly moved all.
This College's heart is Satish Kumar, a man whose passion for peace and ecological harmony burns brightly. A more joyful, intelligent, compassionate and wise human being is rare to come across. But most of all, he is courageous. The serene, calm and beautiful experience that is Schumacher College comes from profound courage. We live in a society of "timid people", according to Satish. He reminded us that significant change is born of such courage, and thankfully, courage is something we don't need money to cultivate.
