Sacred Economy




[Paul] Volcker is right. The collateralized debt obligations, collateralized mortgage-backed

securities, and other computer-spawned complexities and playthings were not the solutions to

basic needs in the economy, but to unslaked greed on Wall Street. Without them, banks would

have had no choice but to continue to devote their capital and talents to meeting real needs

from businesses and consumers, and there would have been no crisis, no crash, and no




The last hundred years have increasingly been an era of unbacked currency, and also an era

where nothing is sacred.


It will restore the mentality of the gift to our vocations and economic life.

It will reverse the money-induced homogenization and depersonalization of society.

It will be an extension of the ecosystem, not a violation of it.

It will promote local economies and revive community.

It will encourage initiative and reward entrepreneurship.

It will be consistent with zero growth, yet foster the continued development of our uniquely human


It will promote an equitable distribution of wealth.

It will promote a new materialism that treats the world as sacred.

It will be aligned with political egalitarianism and people power and will not induce more centralized


It will restore lost realms of natural, social, cultural, and spiritual capital.

And, most importantly, it is something that we can start creating right no



Why do I call such an economy “sacred” rather than natural or ecological? It is because of the

sacredness of gifts. To obey the law of return is to honor the spirit of the Gift because we receive what

has been given us, and from that gift, we give in turn. Gifts are meant to be passed on. Either we hold

onto them for a while and then give them forward, or we use them, digest them, integrate them, and

pass them on in altered form. That this is a sacred responsibility is apparent from both a theistic and

an atheistic perspective


On a very practical level, this vision of sacred economy requires eliminating what economists

refer to as “externalities.” Externalized costs are costs of production that someone else pays. For

example, one reason vegetables from California’s Central Valley are cheaper to buy in Pennsylvania

than local produce is that they don’t reflect their full cost. Since producers are not liable to pay the

current and future costs of aquifer depletion, pesticide poisoning, soil salinization, and other effects of

their farming methods, these costs do not contribute to the price of a head of lettuce. Moreover, the

cost of trucking produce across the continent is also highly subsidized. The price of a tank of fuel

doesn’t include the cost of the pollution it generates, nor the cost of the wars fought to secure it, nor

the cost of oil spills. Transport costs don’t reflect the construction and maintenance of highways. If all

these costs were embodied in a head of lettuce, California lettuce would be prohibitively expensive in

Pennsylvania. We would buy only very special things from faraway places    125



Since the days of ancient Greece, money has always embodied an agreement. Usually,

though, the agreement has been an unintentional one. People believed gold was valuable, rarely

stopping to think that this value was conventional. Later, fiat paper currencies were obviously

conventional, yet as far as I know no one ever designed their issue with a specific social purpose in

mind beyond providing a medium of exchange. Never has it been asked, “What story of the world are

we creating, and what kind of money will embody and reinforce that story?” No one decided to create

a fractional-reserve banking system with the conscious purpose of impelling the expansion of the

human realm. Today, for the first time, we have the opportunity to infuse some consciousness into our

choice of money. It is time to ask ourselves what collective story we wish to enact upon this earth,

and to choose a money system aligned with that story.


It will restore the mentality of the gift to our vocations and economic life.

It will reverse the money-induced homogenization and depersonalization of society.

It will be an extension of the ecosystem, not a violation of it.

It will promote local economies and revive community.

It will encourage initiative and reward entrepreneurship.

It will be consistent with zero growth, yet foster the continued development of our uniquely human


It will promote an equitable distribution of wealth.

It will promote a new materialism that treats the world as sacred.

It will be aligned with political egalitarianism and people power and will not induce more centralized


It will restore lost realms of natural, social, cultural, and spiritual capital.

And, most importantly, it is something that we can start creating right now


Here is a certainty: the linear conversion of resources into waste is unsustainable on a finite planet.



A sacred economy is an extension of the ecology and obeys all of its rules, among them the

law of return. Specifically, that means that every substance produced through industrial processes or

other human activities is either used in some other human activity or, ultimately, returned to the

ecology in a form, and at a rate, that other beings can process.7 It means there is no such thing as

industrial waste. Everything cycles back to its source. As in the rest of nature, our waste becomes

another’s food.


From an atheistic perspective, a zero-waste economy is the economic realization of the

interconnectedness of all beings. It embodies the truth that as I do unto the other, so I do unto myself.

To the extent that we realize oneness, we desire to pass our gifts forward, to do no harm, and to love

others as we love our selves.



Many industries today can only operate because their costs are externalized


“I keep the income, and someone else pays the costs” reflects the mind-set of the separate

self, in which your well-being is fundamentally disconnected from mine. What does it matter what

happens to you? If you are poor, or sick, or in prison, what does that matter to me, as long as I

sufficiently insulate myself from the social and environmental toxicity out there? What does it matter

to me if the Gulf of Mexico is dying under an oil slick? I’ll just live somewhere else. What does itmatter to me that there is a thousand-mile-wide gyre of plastic in the Pacific Ocean?


Internalizing costs also reflects the perceptions of a gift culture. In the circle of the gift, your good fortune is my good fortune, and your loss is my loss, because you will have correspondingly

more or less to give



If I depend on you for the gifts you give me, then it is illogical

to enrich myself by impoverishing you. In such a world, the best business decision is the one that enriches everybody: society and the planet. A sacred economy must embody this principle, aligning profit with the common wealth


However it is accomplished, when the costs of pollution are internalized, the best business decision comes into alignment with the best environmental decision. Suppose you are an inventor and you come up with a great idea for a factory to cut pollution by 90 percent with no loss of productivity. Today, that factory has no incentive to implement your idea because it doesn’t pay the costs of that pollution. If, however, the cost of pollution were internalized, your invention would be a

hot item. A whole new set of economic incentives emerges from the internalization of costs. The goodness of our hearts, which want to cut pollution even if it isn’t economic, would no longer have to do battle with the pressures of money.


We want to become givers and not just takers in our relationship to Earth. With that in mind, I will touch upon one more aspect of the law of return and the cosmic unity of giving and receiving. It would seem that there is a flagrant exception to the law of return in nature, something that ecosystems do not recycle, something that enters constantly anew and exits always as waste


I am not surprised that ancient people worshiped the sun, the only thing we know that giveswithout expectation or even possibility of return. The sun is generosity manifest


Today, access to money, via credit, goes to those who are likely to expand the realm of goods and services. In a sacred economy, it will go to those who contribute to a more beautiful world


Our money derives its value from the right to harvest 300,000 tons of cod from the

Newfoundland cod fishery, the right to draw 30 million gallons of water monthly from the Ogallala Aquifer, the right to emit 10 billion tons of CO2, the right to pump 2 billion barrels of oil from the ground, the use of the X-microhertz band of the electromagnetic spectrum


When gold is money, we mine more gold, beyond any practical need for it. In

societies where cattle are money, people keep herds beyond what they need The kind of taxes, the means of levying contributions to the common good, that we have today

are nearly the opposite of what we want to create in our world

We can take from the commons—that

which no one should own—without paying for it, yet the one thing we can be said to own—our own productive labor—is subject to taxation in the form of income tax. Meanwhile, we are forced to pay atax on the circulation of goods—a sales tax—while there is no tax on the accumulation of wealth not used for exchange. We have it backward. The money system I am describing in this chapter reverses income tax, shifting taxes away from what you earn and onto what you take. The next chapter describes a similar reversal of sales tax, shifting costs away from spending and onto hoarding


The most important item of the commonwealth is undoubtedly the land itself, the subject of the original criticisms of the institution of property.



Earth belongs to everyone.18 That means that no one should be allowed to benefit financially from owning the land.

The same goes for the electromagnetic spectrum, the minerals under the earth, the genome,and the accumulated fund of human knowledge.

These should be available for rent, not ownership,and the rents should go to the public.


The reason is quite simple: much of the natural commonwealth that is used as the basis for private creditcreation today would become public.


Because of today’s concentrated private ownership of the commonwealth, the profits that come

through mere ownership are also highly concentrated


Another consequence of commons-based currency is that we would pay a lot more for many

things that are cheap today because their prices would embody costs that we now pass on to other

people or future generations Gone would be the present financial incentive for planned obsolescence. A new business model (emerging already in some industries) would blossom: extremely durable, easily repairable machines that are leased rather than sold to consumers.


Ecological disasters will relentlessly direct our attention to the urgent need to heal the forests,

wetlands, oceans, atmosphere, and every other ecosystem from the devastation wrought in the

industrial era. The urgency of this need will shift our energy away from consumption and war


In a world where the things we need and use go bad, sharing comes naturally. The hoarder

ends up sitting alone atop a pile of stale bread, rusty tools, and spoiled fruit, and no one wants to help

him, for he has helped no one.



The solution for at least twenty years has been, in effect, to import growth from developing countries by using the monetization of their social and natural commons to prop up our own debt pyramid. This can take several forms: debt slavery,where a nation is forced to convert from subsistence production and self-sufficiency to commodity production to make payments on foreign loans; or dollar hegemony, in which highly productive countries like China have no alternative but to finance U.S. private and public debt. In a negative-interest reserve system, banks would be anxious not to keep reserves


Revolutionaries past, recognizing that illegitimacy of most accumulations of wealth, sought to

sweep the slate clean through confiscation and redistribution. free-money will have profound effects on human economy and psychology. We have gotten so used to the world of usury-money that we

mistake many of its effects for basic laws of economics or human nature


The cult of money has its asceticism, its self-denial, its self-sacrifice—economy and frugality,

contempt for mundane, temporal, and fleeting pleasures; the chase after the eternal treasure.

Hence the connection between English Puritanism, or also Dutch Protestantism, and moneymaking.


This mentality pervades our culture. You must delay gratification. You must restrain your

desires with the thought of future rewards. Pain now is gain later. Do your homework for the grade.

Go to work for the salary. Do the workout to be healthy. Go on a diet to be thin. Devote your life to

something that pays well, even if it isn’t your passion, so that you can have an enjoyable retirement


Whereas security in an interest-based system comes from accumulating money, in a demurrage

system it comes from having productive channels through which to direct it—that is, to become

a nexus of the flow of wealth and not a point for its accumulation. In other words, it puts the

focus on relationships, not on “having.” It accords with a different sense of self, affirmed not by

enclosing more and more of the world within the confines of me and mine, but by developing

and deepening relationships with others. It encourages reciprocation, sharing, and the rapid

circulation of wealth.


Disintermediation and open source software are both part of a more general phenomenon: the

peer-to-peer (P2P) revolution. The older hierarchical and centralized structures of distribution,

circulation, and production required a lot of money and human effort to administer. Moreover, their

very nature isolated people from each other within narrow specialties, making gift exchange


Disintermediation is even affecting the credit system and subverting banks’ traditional role as

financial intermediaries connecting investors and borrowers.


The internet is a participatory gift economy, a P2P network in which there is no consistent

distinction between a producer and a consumer. When we share news, product recommendations,

songs, and so forth with our online networks, we do not charge anyone for our “information services.”

It is a gift economy. The content of most websites is free as well.


I foresee a degrowth rate of around 2 percent, so that our use of raw materials, our pollution

of the air and water, and our time spent working for money not love falls by about half with each

generation, until eventually the pace of degrowth slows as the economy approaches an equilibrium

relationship with the planet a couple hundred years from now.


Economic Consequences of the Peace:

On the one hand the laboring classes accepted … a situation in which they could call their own

very little of the cake that they and Nature and the capitalists were co-operating to produce. And

on the other hand the capitalist classes were allowed to call the best part of the cake theirs and

were theoretically free to consume it, on the tacit underlying condition that they consumed very

little of it in practice. The duty of “saving” became nine-tenths of virtue and the growth of the

cake the object of true religion. There grew round the nonconsumption of the cake all those

instincts of puritanism which in other ages has withdrawn itself from the world and has

neglected the arts of production as well as those of enjoyment. And so the cake increased; but

to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain

as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or

for your children; but this was only in theory—the virtue of the cake was that it was never to be

consumed, neither by you nor by your children after you.70

On the collective level, not consuming the cake means choosing growth over leisure



The leisure-and-redistribution alternative to growth is gaining credibility as the economic

downturn persists


“It is time to find your true work: that through which you can apply your gifts toward something meaningful.” A finite need—calories, shelter, clothing, and so on—is a quantifiable need and thus fits

naturally into the realm of commodity and therefore of money. We meet them easily, and indeed,

thanks to technology, more and more easily.


I have a more selfish motive, too, for not wanting to live in a slave world: the products of slave labor

embody the spirit that goes into them. Who but a conscript would produce the crappy, dispirited, toxic,

ugly, cheap objects and buildings that surround us today? Who but a slave would be so resentful and

unpleasant in providing services?78 The vast majority of our “goods and services” are made by people

who only do so for the money, who only do their work because they “have to.” I want to live in a world

of beautiful things created by people who love what they do.


The money system described so far in this book removes many of the barriers to local

economic sovereignty and weakens the pressure toward globalization. Here are three ways:


  1. Much global trade is only economic because of hidden social and ecological subsidies, which

would be eliminated by the internalization of costs.

  1. Commons-backed currency relocalizes economic power since many of the commons are local

or bioregional in nature.

  1. Negative-interest money removes the pressure to maintain growth through the conversion of

the unique, local relationships and natural wealth of other lands into commodities. Ultimately, local

difference stands in the way of commoditization and therefore of growth




1-It encourages people to shop at local businesses since only they are willing to accept and use

local currency.

  1. It increases the local money supply, which increases demand and stimulates local production

and employment.

  1. It keeps money within the community since it cannot be extracted to distant corporations.
  2. It allows individuals and businesses to bypass conventional credit channels and thus offers an

alternative source of capital for which the interest (if any) will circulate back to the community.

  1. It facilitates the circulation of goods and services among people who may not have sufficient

access to national currency but who may have time and skills to offer.



Each aspect of the monetary evolution described in this book imbues money with the

properties of gift:

  1. Over time, giving and receiving must be in balance. The internalization of ecological costs

ensures that we will take no more from earth than we can give.

  1. The source of a gift is to be acknowledged. The restoration of the commons means that any

use of what belongs to all is acknowledged by a payment that goes to all.

  1. Gifts circulate rather than accumulate. Decaying currency ensures that wealth remains a

function of flow rather than of owning.

  1. Gifts flow toward the greatest need. A social dividend ensures that the basic survival needs of every person are met.



The gift model comes especially naturally for professions in which the value delivered is something  intangible. Musicians, artists, prostitutes, healers, counselors, and teachers all offer gifts that are debased when we assign them a price sacred?

 It is grown by someone who cares deeply about its nourishing and aesthetic qualities.It is grown in a way that enriches the ecosystem, soil, water, and life in general.Its production and processing contribute to a healthy society.




Neither is sufficient to create community unless, in the first instance, the recipient actually needs money. Thus it is that poor people develop much stronger

communities than rich people do. They have more unmet needs


When I realized that the dissolution of community comes from the monetization of functions

that were once part of the gift network, I could at first see no other way to recover community than to abandon the money economy and, by extension, the economic and industrial system of mass production. I could see no other way to reestablish community than to resume doing things “the hard  way” again: doing things without machines. If community dies when strangers make all the things we need, then to restore it, I thought, we must return to local, and necessarily lower-tech, production—production not requiring a global division of labor.



We are born creators, here to achieve the exuberant expression of our gifts



Another basic feature of money as we have known it is its homogeneity: any dollar is the same as any other dollar. Thus money has no history, no story attached to it. In addition to homogenizing all it touches, this feature of money also disconnects it from the material and social world. In former times, though, gifts were unique objects that carried stories. In gift-giving ceremonies, often the entire history of a gift would be recounted (we still do this today, acting on a primal urge; we want to tell

about where we bought it, or how Grandma received it as a wedding present). Money’s homogeneity and anonymity (my dollars are the same as yours) therefore make it incompatible with gift principles and with the two features of sacredness I described in the introduction: uniqueness and connectedness.

abundance has always been available to us. It is our perceptions, and not our means




The “social function” I describe doesn’t dictate to whom it goes; it merely sets the conditions so that it will be most likely to go to a certain area that represents the social consensus of good use. This function can be adjusted, just as a pinhole slit can be made larger or smaller, to “diffract” the creation of money over a larger or smaller domain


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