Why Fixing Money is just as important as Fighting Global Warming

Elon Musk is a modern day hero. Instead of creating products that help humans forget about their existence, he creates ones that remind them of it. Whether through cars, solar panels, or rockets, sustainability is his goal.

But what use is a healthy planet if society has already crumbled? In my book, I describe a future where our current monetary system is no longer capable of providing full employment. I argue that sustained high unemployment will result, much like in Greece today.

It would be overly dramatic to claim that all periods of prolonged unemployment inevitably lead to the collapse of society, but what’s true is this: when it becomes clear a system isn’t working, people clamor for change. This change might be good, it might be bad, or it might be somewhere in between. There is always the chance, however, that whatever elixir they choose will prove catastrophic. And the more countries afflicted by sustained high unemployment, the more likely it is such a change happens. In light of our fragile monetary system, efforts to create a sustainable planet may well turn out to be pointless.

The central irony is this: our planet is better suited to coping with humans if our population is shrinking. Under the same conditions, however, our monetary system breaks. Due to the phenomenon known as secular stagnation, an idea most famously espoused by economist Larry Summers, it becomes incapable of providing full employment. Falling population growth leads to inadequate investment opportunities, and inadequate investment opportunities leads to excess savings at full employment. As a result, sustained full employment becomes impossible. (To gain a better understanding of secular stagnation, please see Part 1 of One-Month Money.)

It is time we feared our monetary system in the same way we fear global warming. A functioning economy is just as important to our futures as a world without fossil fuels. Humans without self-esteem are more dangerous than rising water. Fixing money, therefore, is paramount.


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