Recommending the book Diagrams & Dollars

I recently read a book I recommend.


Although this short book is little more than an essay, it rocked my world, turned my thinking upside down, and caused me to question several basic economic assumptions I have held for a long time.

Could student loans be offered interest free? Can the national debt grow without limits or consequences? Can we eliminate taxes? Can the Federal Government readily provide each of us with a generous citizen’s dividend? Could we end poverty with a few pen strokes? Is this all too good to be true?

Enjoy an hour reading this short, clearly written, and thought provoking Introduction to Modern Money Theory and decide for yourself if there is any hope for the ideas it presents.


The Story of Debt

As long as we continue to create money as interest bearing debt, we have little choice but to accept bankruptcy as inevitable, or continue to grow the economy without limit.


Many of the grand challenges we face today are symptoms of this underlying cause. Enough people need to understand this to allow our politicians to speak out against economic growth.

How can we make this message more understandable and actionable?

The Cost of Violence Containment

The Institute for Economics and Peace has published a recent report “The Cost of Violence Containment.”  After defining violence containment spending as “economic activity related to the consequences or prevention of violence where the violence is directed against people or property” they calculate the global cost at $9.46 trillion. The report goes on to state: “The old idea of war being good for the economy has been thoroughly debunked and the economic benefits of encouraging peace are increasingly being recognised.”

Genesis of Debt

In the beginning the earth formed, and people arose upon the earth, and it was good.

The people hunted and gathered food to feed their families. They built shelters and tools, and they sang, and danced, and worked and played together in small groups, tribes, and villages, and it was good.

Some groups had plenty, others suffered shortages, so the people were happy to share and help one another. Everyone could remember a time when they had suffered shortages and others generously shared, and it was good.

Some people were naturally better at hunting, some better at gathering, some better at making tools, and still others better at using tools. They were happy to share among each other, and it was good.

Great explorers brought back stories of other people, living in strange and distant lands, with their own ways and their own skills and their own things. The adventuresome and the curious visited. We gave them our gifts, and they gave us their gifts. Culture flourished, and it was good.

As the territory expanded the exchanges became too many to remember, so they began a tally to record each gift. Some used small stones, others gathered distinctive shells, some used beads, and still others recoded the tally as notches carved on animal bones. These records helped the people remember each exchange, and it was good.

Exchanges of food, clothing, tools, trinkets, materials, and help among people became more important as the culture became more enriched, skills specialized, and people became more interdependent, and it was good.

Eventually various signed notes were accepted in exchange for food, clothing, and other goods to record the agreement to repay later with something similarly valuable. The notes recorded the agreement to repay and after a timethe notes themselves became recognized within the community as representing value. These promissory notes were valuable because they made exchanges so much easier, and it was good.

In some villages an elder would make several distinctive metal disks decorated with various noble symbols. The elder wouldexchange these tokens at a standard rate for genuine notes signed by trustworthy villagers. The tokens were more durable, had a standard value, were recognizable, and were easier to exchange. Because they were trusted and accepted as readily as the signed promissory notes, they became widely used, and it was good.

Sometimes a family was unsuccessful in hunting and gathering; they needed food, and had no tokens. Other people were fortunate in having enough food and also had tokens they could share. The people with tokens to spare were generous in lending tokens to those in need. A record was made of this loan, backed by an earnest promise to repay the loan as soon as the misfortune passed. Conditions eventually improved, hunting became successful, food was exchanged for tokens, and the loan was repaid. This happened often enough that certain people became skilled in the exchange of tokens and recording loans. They became known as bankers, named for the benches where they worked counting tokens, and it was good.

Of course the people who worked as bankers also needed food, clothing, and shelter. What they had to offer in exchange were tokens. So it soon became the custom to lend ten tokens today for an agreement to return eleven tokens one year later. The eleventh token paid to feed, clothe, and shelter the bankers. It was called interest and this seemed fair.

One year ten hungry villagers each borrowed ten tokens with the promise to each repay the banker with eleven tokens next year.  They used the tokens to buy food for their families. Throughout the year they worked hard, their crops were successful, and they ate well. They even grew enough food to sell some surplus in exchange for tokens.  But only 100 tokens were available throughout the entire village while 110 tokens were owed to the bank, and it was not good.

Share the Fracking Wealth


We must carefully understand and balance the effects of fracking on the economy, society, and the environment for all time.

Thousands of trillions of cubic feet of natural gas that has accumulated over millions of years can now be extracted using recently improved hydraulic fracturing technologies. Heated debates rage in town hall meetings and statehouses as some fight to allow fracking and others fight to ban it.  The debate is often framed as a false choice between jobs and energy independence on one hand, and safety and environmental protection on the other hand.

We can resolve this conflict by agreeing to share the fracking wealth. We can recognize that the natural gas that has been accumulating since life began on earth is owned by all of humanity. We can afford to extract it safely and to share its bounty among the extraction companies, energy users, today’s citizens, and future citizens. The Alaska Permanent Fund and the Law of the Sea can guide us. The “Common heritage of mankind” can inspire us. Closing the Halliburton Loophole and removing other exemptions from federal environmental law can be the first steps in proceeding safely.

Here is the broad outline of a plan. Begin by requiring permits for extracting natural gas. These can be created by the State as “Carbon Certificates” each authorizing extraction of 1,000 cubic feet of natural gas. Designing these to have similar characteristics to Silver Certificates and backing them by the guarantee “in natural gas rights payable on demand” can help us regain some of the security and stability provided by a currency backed by a tangible and valuable asset.

The price of these certificates is set by a citizen-advised agency that works to balance the needs of the economy and the environment now and in the future. Certificates can be resold on the open market. The price could begin at zero for limited time to allow for a smooth transition.

Revenue from the original sale of these certificates goes into a trust fund administered by the State to create a Citizen’s Dividend. These funds are used to:  1) pay a direct dividend to current citizens, 2) offset State budget deficits, reduce taxes, fund environmental conservation, improve government services, and 3) accumulate for the benefit of future State residents. The allocation of funds to these various purposes is directed by a citizen-advised administrator.

Years ago as our nation was being formed Thomas Paine recognized that “Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds.” No doubt Thomas Paine would be pleased to see us sharing the fracking wealth. It is only common sense.

When we decide to share the wealth fracking proceeds safely and the ancient bounty now released by modern technology is shared fairly among citizens for the long term. We all benefit.


Bringing wisdom to life requires such a profound transformation it is difficult to know where to begin. Economic concerns are so pervasive, so influential, and our economic systems contain so many faults that perhaps an economic transformation can ignite a broader transformation toward wisdom.

The book Sacred Economics: Money, Gift, and Society in the Age of Transition, by Charles Eisenstein, presents a plan for a bold economic transformation. The book is offered as a gift online, a short video introduces several ideas, and my recent review of the book is now available on-line and as a pdf file. I have also created a compact Problem-Solution Matrix of the book’s essential ideas.

Perhaps a transformation toward a more sacred economic system can help us all lead wiser lives. This book provides a starting point and roadmap for such a transformation.

An Unlikely Tale

Once upon a time the people of a great land were troubled and deeply divided by two difficult problems. Government throughout the land was nearly deadlocked. The Red team was certain the biggest problem was the growing national deficit. It was presently more than $17 trillion and growing quickly. The Blue team was unconcerned with the national debt and instead was focused on global warming, caused primarily by carbon dioxide emissions. Currently more than 5 billion tonnes of carbon dioxide is emitted into the atmosphere each year by fuels burned in the land. These issues caused a growing rift between the Red and Blue teams as each denied not only the importance, but the very existence of the problem the other team was focused on. The land was sharply divided and people were pessimistic.

Then a wise man suggested a solution. If we agree to sell the right to emit carbon dioxide and use the money to pay down the national debt, perhaps we can solve both problems at the same time.

Protests erupted far and wide. Why do we in this land have to pay for emissions that are dispersed globally and are free in other lands? How will we measure emissions and ensure each emitter is paying their fair share? How can we create such enormous value from almost nothing? Why do I have to pay to solve a problem that I do not even acknowledge exists?

Rare acts of remarkable statesmanship allowed the plan to move forward even as news programs continued to intensify the conflict and controversy. Issues large and small were hotly debated. The plan that was finally agreed to set the price of carbon dioxide emissions at zero for the first three years. This cost increased gradually each year and was set at levels designed to repay the national debt completely over a period of fifty years. Promising results eventually flabbergasted the naysayers. It was working. The deficits and emissions were both decreasing. Other lands followed the example and eventually a carbon dioxide based currency emerged world wide.

They lived happily ever after.


Reproductive success is the primary mechanism shaping life on earth for more than three billion years. Organisms that successfully reproduce the most offspring become most abundant within an ecosystem. Ultimately, what matters is total lifetime reproduction of the organism. Reproductive success has been a spectacularly successful pinnacle—an ultimate goal or final cause—leading to millions of distinct species, and billions of individual living organisms.

What does it take to succeed at reproduction? Bacteria only need nutrients, a non-lethal environment and a short time to grow until they divide asexually via binary fission. Bacterial populations can double as quickly as ten minutes. This is so successful that there may be billions of bacteria species. Insects reproduce sexually and the majority of insects hatch from eggs. This also seems to work well, resulting in about one million described insect species with estimates of perhaps five million species yet to be discovered and described. Increasingly complex organisms have evolved through speciation. Today there are nearly 65,000 described chordate species, including more than 5,000 described mammal species.

Animals, including humans, reproduce by surviving to sexual maturity and mating, followed by conception, gestation, and birth. This leads to the development of many of the most esteemed human traits. Survival requires successful strategies for obtaining food, shelter, and safety including protection from disease, injury, toxins, and predators.  Physical strength, mobility, hunting and gathering skills, appraisal of resources, and alertness to dangers, assessment of risks and benefits, planning, disease immunity, healing strategies, and endurance all develop as a result of the need to survive. But more is needed to mate successfully. Coercive approaches to mating rely on dominance—the threat of harm. Dominance is often obtained through a combination of physical size, physical strength, aggression, and fighting ability. The importance of dominance in mating leads to increases in these traits.

Rather than relying on coercion, modern humans increasingly attract mates through some combination of beauty, charm, wit, talent, and practical benefits such as being a good provider. Increases in intelligence, knowledge, humor, cleverness, boldness, charisma, resourcefulness, and other valued human traits are the result.

Mating only results in reproduction if both the male and female are fertile. Fertility requires good health, adequate nutrition, and other conditions. These favorable traits are also promoted to attain successful reproduction.

Placing reproductive success at the pinnacle of life has worked very well, steering human development in many beneficial ways. It has also brought us cockroaches, bacteria, mosquitos, overpopulation, and societal collapse. While reproductive success promotes flourishing as number of offspring, it ignores limits to growth, as it selects for mating success.

Mating also helped to popularize conquest as violent behavior could lead to reproductive benefits. As one famous example, consider Genghis Khan, who started the Mongol invasions that resulted in the conquest of most of Eurasia. These campaigns were often accompanied by wholesale massacres of the civilian populations. Genghis Khan was one of the most powerful warlords during his reign; as a result the harem that he kept was of enormous size.

Perhaps this orgy of fornicating and fighting, raping and pillaging, helped religion to elevate salvation to the pinnacle. The promise was simple and compelling. Follow the divine teachings of your chosen religion and you will enjoy eternal life in paradise. Anger a god or disobey a true prophet, and you will burn in hell.

This was certainly a profound advancement. Often beginning with beliefs about the cosmos and human nature, religions derive morality, ethics, religious laws or a preferred lifestyle. Religion provides a clear understanding of what is good, and can guide humanity toward that good. Religion also answers those nagging questions about life, death, and the origins of the universe.

With salvation at the pinnacle, magnificent places of worship were built, fabulous art work depicting significant people and events in the religious narrative were created, sacred music was written, performed and enjoyed. Study of sacred texts, notably the Gutenberg Bible, served to increase literacy throughout the populace. Codes of moral behavior such as the Ten Commandments, the Talmud, the Noble Eightfold Path, dharma, and sharia all guide the faithful in their daily lives. Flourishing took the form of the pious life.

But religious belief relies on faith, and the dogma preached by the various religions is inherently incompatible. Each distinct religion has its own origin myth, deities, sacred texts, prophets, leaders, beliefs, rules, and customs. Certain beliefs of one religion conflict with beliefs of other religions. This conflict often leads to discord, including religious violence.

Faith can become strained, especially when it is contradicted by empirical evidence. This famously happened when Galileo Galilei came into conflict with the Catholic Church over his support of Copernican astronomy. More recently, modern theories on the formation of the universe and the evolution of life challenge religious origin stories. As explorations continued and worldviews expanded toward a global perspective, the conflicts inherent in the various faiths became obvious.

If faith is not the ultimate answer, then perhaps we need to look toward reason and place Truth at the pinnacle. The age of enlightenment challenged ideas grounded in tradition and faith and began to reform society using reason, and advance knowledge through the scientific method. It promoted scientific thought, skepticism, and intellectual interchange.

And there were always bills to be paid, so it was not long before Adam Smith began to think about economics. In 1776 he published his landmark book An Inquiry into the Nature and Causes of the Wealth of Nations. Wealth became the pinnacle, as we learned how division of labor and free markets guided by the invisible hand formed the foundations of capitalism.

With Truth, science, and capitalism all unleashed, the industrial revolution was roaring ahead. This resulted in major technological developments in textile manufacture, metallurgy, mining, steam power, chemicals, machine tools, gas lighting, glass making, paper machine, and agriculture along with advances in transportation systems including, canals, roads, and railways. Material abundance was increasing almost as fast as knowledge. Flourishing took the shape of more. Prosperity was measured in material possessions and knowledge acquisition.

Driven by wealth at the pinnacle, technology advances continued through the second industrial revolution, the atomic age, the jet age, the space age, the digital revolution, and the information age. Progress has been astounding.  The measure of “Gross world product”—the combined gross national product of all the countries in the world—is one estimate of economic productivity. This has grown from approximately $128 billion in 1750—just prior to the industrial revolution—to approximately $71,830 billion in 2012. This represents an increase in production by a factor of more than 560 times over that time period.

Yet the world faces grand challenges, including inadequate access to safe drinking water, inadequate sanitation, and malnutrition for millions of people. Obesity, disease, substance abuse, poor physical fitness, and unreliable access to health care services affect billions of people. Many manifestations of poor mental health bring misery to so many people. Poverty, income inequality, homelessness, inadequate education, unemployment, oppression, and discrimination cause great suffering. Various forms of violence, including homicide, terrorism, child abuse, domestic violence, and sexual abuse cause billions of people to live in constant fear. Crimes including gang violence, gun violence, organized crime, human trafficking, hate crimes, and bullying disrupt our lives. Divorce, unintended pregnancies, incarceration, vandalism, and natural disasters upset many lives. Environmental degradation accelerates as we continue to ignore limits to growth. Global warming, destruction of natural habitats, depletion of natural resources, unusually intense natural disasters, accelerated extinction of species, and deforestation continue as we consume the very planet we live on.  Ineffective governments contribute to genocide, war, and other assaults on human rights.

Wealth at the pinnacle has exposed many economic faults that contribute to these problems. While so many of us are busy accumulating wealth and gaining knowledge, we seem to be lacking the wisdom we need to live better lives.

The pinnacle establishes a filter, drawing in resources that advance toward the pinnacle and screening out the rest. We were told that “the best things in life are free” but because economic models don’t assign value to so many valuable things, we are missing out on many of the best things in life. The pinnacle creates a sort of super organism that aligns the activities of isolated individuals in such a way that the pinnacle emerges almost unknowingly. Think of thousands of ants instinctively creating an ant hill, or busy bees unknowingly creating the bee hive. Wealth at the pinnacle has aligned us all in creating material wealth for those at the top, while it acts to suppress all else.  Knowledge is valued only to the extent it can help create wealth, while ignoring the wisdom that could help us all benefit from a deeper understanding.

We need a broader, more inclusive pinnacle that will help us focus on what matters and draw in clean fresh air, peace of mind, integrity, tranquility, quiet, clean water, the beauty of nature, a healthy environment to enjoy now and sustain for the future, awe, family, friendships, community, safety, stability, trust, leisure time, joyful play, meaningful work, authentic experiences, human virtue,  respect, good health, reduced stress, ongoing education, creativity, curiosity, exploration, discovery, deeper understanding and appreciation, enjoyment of the arts, transcendence, and making significant contributions that help others, while it filters out folly and misery. Can we place wisdom itself at the pinnacle?

There are many definitions of wisdom we could choose. I suggest focusing on the simple and practical definition of wisdom as “pursuit of well-being” as a working definition that can have broad appeal. People can easily conceive of well-being as the statement: “all things considered, I am pleased with my life.”  Each of us, all of us, can then do whatever improves our own well-being, without jeopardizing the well-being of others. Whenever it becomes possible to improve the well-being of others, we take the opportunity to do so. First, do no harm; reduce the folly. This is essential wisdom.

Well-being is a broader concept than wealth or knowledge, or even happiness. Too little research on well-being has been completed, but some results are available.  The book Wellbeing—The Five Essential Elements, by Tom Rath and Jim Harter, identifies these five components of well-being:

  • Career or occupational Well-being: how people occupy their time during the day and whether it is fulfilling. Do you like what you do each day?
  • Social Well-being: the quality of relationships in people’s lives
  • Financial Well-being: the degree of financial security people have
  • Physical Well-being: the extent to which people can do what they want to free of pain
  • Community Well-being: the extent to which people feel safe and are involved in giving to their community

The concept of flourishing, as explored recently by positive psychology, is “to live within an optimal range of human functioning, one that connotes goodness, generativity, growth, and resilience.” With that definition flourishing now becomes the pursuit of well-being.

Each of us can achieve well-being by focusing on what matters and applying wisdom as we live each day. There are so many things each person can do to live more wisely.


As history continues to unfold and our perspective broadens we can look back and see that each peak thought of at the time as an ultimate pinnacle is simply another foothill along the path to progress. Let’s work to make wisdom the next pinnacle. Imagine, describe, and help build the wise world we need and want. Pursue well-being. You can bring wisdom to life.