The Analogy with Process Ecology applied to Monetary Economics

The analogy between process ecology and monetary economics will give those required underpinnings for allowing a smooth monetary shift from a mature industry society to a new post-industrial one through the definition of new kinds of agreement, which will
complement the conventional one. Indeed, by the endorsement of newtonian physical determinism, industrial society stood on the assumption that the world is predictable and, therefore, information for its management has to be centrally administered by ‘experts’.

By contrast,  Lietaer argues that

“in an era characterized by uncertainty it is necessary to consider the re-formulation of organizational assumptions.”

(Lietaer 2001: 288)

And, as for DYNDY approach, in the direction of a monetary system managed and organized by prosumers (rather than experts).

In process ecology Total System Throughput quantifies in a single metric the throughput efficiency of a natural network of transfer of material and energy. In an analogous way, national Gross Domestic Product  – the total value of goods produced and services provided in a country during one year – is the correlative element in economics. Indeed, orthodoxy prescribes exclusively quantitative measurements for assessing an economic system. Such state of affairs makes the system prone to poor performance with concerns toward systemic resilience and sustainability.

Thus, on the one hand reality offers uncountable examples of natural ecosystems that have been successfully enduring in the long run with both efficiency and resilience steadily in the value range of the window of viability. On the other hand, artificial systems such as conventional monetary systems show simultaneously high efficiency, but very low levels of resilience because the latter is not included as a valuable parameter in orthodox monetary theory for systems design:

“GDP and TST, however, are both poor measures of sustainable viability because they ignore network structure. They cannot, for example, distinguish between a resilient economy and a bubble that is doomed to burst.”

(Lietaer, Ulanowicz et al., 2010: 7)

The analogy is further developed by arguing that

money “is to the real economy like biomass in an ecosystem”.

(Ibid.)

However, speaking of an analogy is reductive. Indeed, by applying information theory to the study of ecosystems, there is the mathematical demonstration that monetary systems – in order to be sustainable – must mimic Nature’s parametric values relating to efficiency and resilience/interconnectivity.

An exclusive focus on systemic efficiency will irremediably lead to the creation of the kind of boom-and-bust economy that the exclusive implementation of modern bank money brings about. In fact, the primary importance that orthodox economists accord to the efficiency of the monetary system is expressed also through the adoption of a single type of money, namely modern bank money in the form of conventional national currencies. Accordingly, monetary orthodoxy focuses on the ‘node to node pathway steps’ of the network resembling the monetary system, while there is an underestimation of the importance to have the sufficient amount of ‘links per node’ for a sustainable complex flow system to obtain. The result is that low diversity of moneys is the catalyst for high efficiency at the expense of an optimal level of resilience.

Thereby, the only rational movement is a backward one in the direction of more resilience in order to keep the system as whole steady in the range of the “window of viability”. At a glance, the term ‘backward’ may seem reactionary, but in our case  the meaning of the term acquires a fully purposeful semantic: a move backward means firstly to take the pace toward reaching optimal levels of sustainability through the enhancement of systemic resilience by the implementation of agreements emerging from discursive practices other than the conventional one.

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