4. The Traditional Way to Do It

Shiller (2019). See also Hofmann (2020). To better understand why the regulators have ‘bought’ almost the entire economics profession, see Grim (2009).

Koenig (2003).

We can take this metaphor one step further and add an ethical and normative perspective, which is at the core of the attractor. See Raworth (2017).

Short-termism is not a natural law. It took 632 years to build Cologne Cathedral in Germany, and the construction work would have a current face value of 15 billion euros. History teaches us that there have been societies with a very long-term perspective. Our perspective on time depends in part on our choice of monetary system. On the evolution of monetary systems, see Davies (2010) and Peneder (2022).

Historically, money has never been merely a neutral veil or simple medium of exchange, but has always reflected a predetermined political decision in one way or another. The current central bank mandate for price stability is one such case. As a society, we decided to consider the CPI as a factor in price stability, but not the API (asset price index). But we could change our minds and reach a different decision. See Eich (2022).

In fact, we are neither always rational nor always irrational, but rather search for mechanisms to adapt to a complex world. See Lo (2017).

Any co-financing scenario faces a two-tier dilemma: in a situation of market equilibrium, where allocation is already Pareto optimal, any intervention or redistribution will generate suboptimal results. Alternatively, if not all resources in a market are yet optimally allocated, then any intervention will lead to even greater deterioration of the existing equilibrium. In either scenario, the benefits for the private sector of redistributing liquidity towards the commons will be disproportionally low. As we will see, the more fully the commons are financed, the more both the private and state sectors can benefit from its positive externalities. How this would work and how the twofold dilemma can be overcome will be explained in the following sections.

Jeffrey Sachs proposes a rule-based mechanism to finance climate mitigation and adaptation for LDCs through a carbon tax scheme: high-income countries would provide lower-income countries with 5 USD/t CO₂ and middle-income countries would provide 2.5 USD/t CO₂. This levy would provide 100 billion USD/y, increasing to 200 billion USD five years from now. https://​www.​project-syndicate.​org/​commentary/​fixing-climate-finance-requires-global-rules-by-jeffrey-d-sachs-2021-11

State bonds financed through the international capital market are simply capital transfers from one owner to another, and they are far more expensive (in terms of premium and interest rate) than domestic credit lines. On this kind of enhanced domestic debt management, see Werner (2014). For a general discussion of the credit creation process, see Huber (2020a, b, c).

Historically, most, if not all, social and political upheaval in the past 200 years has been triggered not by the fact that some citizens have an SUV or a pool and others don’t, but because basic needs have not been met. Empirically, a Gini coefficient of over 0.4 can increase the statistical probability of such social upheavals.