Fiat Money's Role in Environmental Degradation: The Drive for Endless Growth and Its Consequences

There are many problems with the fiat monetary system. But one of the biggest issues I have with it is the need for endless growth.

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The Earth, its inhabitants, and its resources are finite. The idea of endless expansion is inherently unsustainable. But the fiat monetary system creates the incentive for companies to continue to expand indefinitely.

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I am not talking about climate change per se. I am talking more about the toxic chemicals and the very tangible pollution and destruction of the ecosystem on which we depend.

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Stuff like this ????

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The fashion industry generates 92 million tons of textile waste every year, enough to fill a landfill the size of a football field every minute. Does every woman in the Western world really need 150 pairs of shoes?

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The electronics industry produces 50 million tons of electronic waste every year, a number that is expected to grow to 120 million tons per year by 2050.

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The cosmetics industry uses over 120,000 different chemicals, many of which are known to be toxic to human health and the environment.

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The pharmaceutical industry releases over 200 different chemicals into the environment, many of which are harmful to wildlife.

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The agricultural industry is a major source of water pollution, using over 70% of the world's freshwater.

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The mining industry is responsible for a significant amount of deforestation, destroying over 50% of the world's tropical forests.

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The energy industry is a major source of air pollution, releasing over 40% of the world's sulfur dioxide emissions.

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The construction industry is responsible for over 40% of the world's waste, generating over 2 billion tons of waste every year.

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Much (but not all) of this is the result of a high time preference. Companies need more profits TODAY, and people want gratification RIGHT NOW.

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Why?

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To understand the root cause, it is always helpful to do a 5 Whys Exercise. By asking why 5 times, you can usually get to the root cause of an issue.

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Let's try it????

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Q. Why do companies always feel the need to expand?

A. Because investors demand a return on their money each and every year.

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Q. Why do investors demand a return?

A. Because their cash is always losing value. They need a return just to beat inflation.

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Q. Why is their cash always losing value?

A. Because the central bank is printing money.

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Q. Why is the central bank printing money?

A. Because the government is engaging in deficit spending.

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Q. Why is the government spending more than it makes?

A. Because fiat money isn't real. They can conjure it from thin air. They really don't care how much debt they accumulate because the money costs them nothing, and their ability to inflate it away by stealing the purchasing power of their citizens without their permission makes it easy to get away with this for decades at a time.

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There you have it. The root cause of the need for endless expansion is the fact that fiat money is nothing more than a Chuckie Cheese token that someone told us we have to use. When money can be conjured from thin air, you can expect massive corruption to take root in the financial system. The incentives are too strong to expect any other outcome.

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The result is that a corrupt monetary system wreaks havoc on the lives of ordinary citizens who always feel that they are falling behind (working 2 or 3 jobs to make ends meet) and it wreaks havoc on the ecosystem in which we live.

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We live in a culture of consumerism. Everyone wants to "keep up with the Kardashians". We spend our money faster than we make it because we intuitively understand that the money itself is losing value. This is most evident in places where the inflation is extreme, like in Argentina. People buying stuff they don't really need, just to get rid of the money and own something real instead, fuels a massive amount of toxic waste each and every year.

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This is why Bitcoiners often say, "Fix the money, fix the world". On a #Bitcoin Standard, the incentives will be very different. Anyone who hodls #BTC is exercising a low time preference. They are delaying their gratification for another day. When you know that your purchasing power will grow, you will spend less on frivolous items that you know you don't need. You hold onto your cash instead because you know it will buy you even more tomorrow.

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Companies that produce the goods we consume would be forced to invest in innovation in order to produce more output for every unit of input because prices will be adjusting downward each year on a BTC standard. In this world, a company can only remain competitive if they are investing in improving their efficiency. The most efficient companies will capture an outsized share of the markets in which they compete. Consumers are the beneficiaries of this competition through the form of ever declining prices relative to their BTC.

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Rather than heavy handed, top-down government solutions such as giving up beef and eating crickets to reduce methane emissions, humanity would be better off if people and companies had a natural incentive to eliminate waste and to do more with less.

Source: https://twitter.com/danieleripoll/status/1726646854585368779