How could we move beyond growth? Outlines of an alternative ecological currency.

Abstract

Moving beyond growth, the promise of which is the cornerstone of our economic foundations, without relinquishing prosperity is the biggest challenge facing economists today. The aim of this article is to propose a novel policy: replacing the existing currency with an alternative money denominated in "ecological footprint", a biophysical metric developed by the Global Footprint Network which assesses the consumption of natural resources and ecosystem services and the toll of pollution and waste on the biosphere. Thus, economic value would be aligned with ecological value, and by pursuing their personal interests, people would aim at the greater ecological good. Since prices would refer to natural realities, there would be limited chances of overshoot, inflation and speculation. The most harmful goods and services would become too expensive; their production would therefore cease. It would entail a change in mindsets: "wealth" would become what we can ecologically afford. This alternative money could help to reach a post-growth economy. We draw on theories of endogenous money to show that 1) there cannot be an excess of monetary creation, 2) positive interest rates do not imply growth, 3) in a post-growth economy profits are still possible. We end by reflecting on the feasibility of the transition period to this alternative currency.