A New Economy

A New Economy

Everything that happens in the world, everything that forms the realities of a person’s life, everything that we consider problems today, and everything that is an achievement has a direct impact on the economy. War, hunger, pollution, global warming - this is the economy. New promising technologies, global changes - this is the economy.

And in a philosophical and physical sense, the economy is human life on planet Earth - constant processes for the transformation of material resources and energy. It is no coincidence that the concepts of "ecosystem" and "economy" have a common Greek root.

Who controls the economy?

The economy controls people; people do not control the economy.

The economy is humanity.

Does humanity control its economy? Is humanity master of the economy?

No. The global economy does not explicitly have an owner to control it.

There are many hypotheses (including conspiracy theories) about who runs the economy. Nominally, the economy is run by the states that establish the rules of the game, the principles of mediation between the individual and the market. But if we take a closer look at the behaviour of the governments of the major countries, at the G-7 and G-20 forums, we will see that modern states are more like ships sailing on stormy seas than masters of the economy.

This is entirely to be expected, since the economy is a planetary community. No state is autochthonous, and attempts to build completely autochthonous systems have ended in either crisis and the dismantling of the system (the USSR and the CMEA countries), or reintegration into the global economic process (China).

Thus, even the largest states initially position themselves as something less than a Great Economic Force of Nature. This is very important - the economy is understood as something spontaneous, like the climate.

The well-being of the “passengers on ships" depends on the skill of their captains. But crises and storms are inevitable.

The modern ideological understanding of economics is based on the idea of ​​the free market as a kind of force, which is:

• by definition a force for good, as it conveys the idea of ​​freedom and self-realisation.
• by definition too strong to be controlled - you can only try to direct, restrain and adapt it to the goals of the common good.

The modern state professes to be an agent of the "common good", which reconciles a person with the terrible and powerful market forces.

This perception, which is still relevant today, allows us to draw several worrying conclusions.

1. Wars, the destruction of nature, and the anthropological degradation of humans are problems that are too global for the most benign and skilful of governments to able to influence alone (and they don’t even set themselves the task to do so). Because the market force is always greater and more powerful than any government.
2. States inevitably begin to serve, not people, but markets. In some cases, this is just the pursuit of GDP figures, in others, it is blatant corruption.

Let’s define “economics"

Has economics always been perceived as an autonomous force?

The hypotheses of market liberalism formulated by Locke and Smith were important novel ideas for people who considered economics a part of human activity, not its basis.

In the 21st century, the foundations of human life on Earth remain the same as they have always been. We want love, happiness, and a peaceful and non-confrontational existence. In other words, we want to put ethical and moral principles into practice in the very foundations of life. But strangely enough, we become completely immoral as soon as we speak, not of life in general, but the economy.

The modern economy does not have the means to measure its moral effects. Economists have the capacity to count the wealth of a state in a given currency, but they cannot calculate the happiness or unhappiness of its inhabitants.

Thus, the modern-day understanding of economics has two distinctive features:

1. People believe that the market, which forms the basis of the economy, cannot be controlled; it is a "superior power".
2. This power is outside the categories of human "pre-economic" life - morality, ethics, love, happiness. The economy can make us more prosperous or more impoverished, but we cannot present the economy (or the state) with a demand to make our life happy and harmonious.

Foundations for the new economy: values, manageability, goal-setting

Axioms of the "New Economy" - a project promoted by the Gaiia Foundation:

Economics is the life of humanity. The realisation of any of its values -whether material well-being, or moral and spiritual values - is the task of economics. We must live in an economy that carries out this task.

• The fact that an economy is unmanageable and uncontrollable, and belief in the market as a superhuman power, are old myths, supported by corrupt and incompetent governments.
• The digital revolution provides opportunities for creating a fundamentally new model of economic management.
• A key feature of the New Economy will be its transparency.

The main technological change in the New Economy will be the creation of a fundamentally new monetary system.

The first key to the economy of the future is an alternative system of monetary circulation

As we have already mentioned, the whole world of human moral and spiritual decisions is at the same time part of economics. But economics as a "metric" (in a mathematical sense) is entirely one-dimensional. The only way to consider, within an economic framework, any issue that has social, moral, spiritual consequences is to determine its value in money, more precisely, in one of the leading world currencies (dollar, euro, pound sterling, yuan). This makes it practically impossible to take decisions concerning the quality of human life into account, since this quality often lacks an exact consumer value. There is no place for such concepts as "meaning", "good", "well-being", and so on.

Moreover, in a modern economy, money is not distinguished as a function of capital investment and emission, as a unit of cost accounting and a unit of price accounting on the consumer market. As a result of this, money generated in the banking system and on financial markets inflate consumer markets. This leads to a growth in material production, depleting the planet's resources.

The dollars created in interbank lending become the dollars of the consumer, then the manufacturer, and de facto - an irreplaceable waste of natural resources and human forces for producing short-lived items that have an imaginary value inflated by advertising. We buy a new phone model and ten pairs of shoes every year because banks issue money at such a rate that all consumer and production chains work to full capacity.

This process resembles the act of boosting a nuclear reactor on the eve of an explosion - and local explosions have already occurred - we need only remember 2008 and the financial crisis in the United States. But the real disaster of this model will be the depletion of the Earth’s resources, the most important of which - climate stability - is now under threat.

The Gaiia project sees the possibility of shutting down the emissions and consumption machine by replacing its "heart" - the financial system. In Gaiia’s developed financial model, investments, the consumer market, and material production are different spheres of monetary circulation. The main limitation of their functioning is the partial linking of the volume of monetary circulation to the equivalent of energy costs for the production of a particular product or the extraction of a specific resource. In this regard, to calculate the cost of production, a specific unit is introduced - the Eco-Unit. For the consumer market, the unit will be the Life-Unit. The systems are balanced through the HERMES Artificial Intelligence system.

The second key to the economy of the future is transparency and morality

We are in the process of developing a digital communications revolution. This revolution is taking place not only in communications and information processing, but also in the field of human relations. We suddenly find ourselves the inhabitants of a highly transparent world - the history of our words and actions is preserved in a digital reality. Almost nothing can be hidden; the secret becomes the manifest. Humanity learns to live in front of the eyes of others.

The digital world will be a place where our actions are visible to others, where everyone can see how honest or dishonest we are, according to what ethical standards we act.

But the modern-day economy is built on the principle of information protection and concealment. The fact that all financial and economic information is a private and closed domain is perceived as a necessary condition for the functioning of the economic system.

We propose an alternative model - an economy in which each actor (an individual or a legal entity) holds complete information about all participants' property, funds and transactions. In agreeing to such "rules of the game", each actor provides the system with complete information about all transactions and the movement of material assets, thereby ensuring total transparency and completeness of information on the economy.

This infrastructure can be implemented on existing information technology platforms. Its introduction will create a kind of "island of open economy" with its monetary circulation, and bring about a gradual separation (or delinking, as defined by Samir Amin) from the rest of the economic system, eliminating its influence.

The third key is HERMES Artificial Intelligence

The completeness of information on the economic system makes it possible to balance the new monetary system (consisting of several types of money for different value streams) by means of Artificial Intelligence. HERMES - Human Energy Resources Machinery EcoSystem - is a system that balances the flows of resources in the economy, its "digital brain".

The development and formation of this system is an entirely new task. The idea of ​​a "superbrain" directing the economy has figured in many science fiction utopias in both socialist and capitalist projects. But the development of information technologies provides an opportunity for this idea to be implemented in practice right now, if not globally, then in a localised version, with the prospect of development on a worldwide scale.

The main challenge for the Gaiia Foundation is to create a team of economists, sociologists and practical workers willing to take up the challenge of creating an economic model as described in this article.