Something so ubiquitous and commonplace as money should be easy to understand. But, like Herman Daly says, anyone who thinks they understand money has probably not thought about it enough.

Drawing on Daly’s advice, the Economics and Finance Research Group has spent the last fourteen months thinking about money as much as possible. We’ve read hundreds of papers, enlisted the expertise of international experts, and attended conferences from Chicago to Copenhagen.

And we still don’t understand money!

That’s not really true. Through our monthly web-based workshops we have had the opportunity to discuss money issues with people from around the globe. We’ve thought about spatially large issues like International Monetary Systems…and spatially small money issues like local currencies…and everything in between. Our workshops have allowed us to speak candidly with economists who have dedicated their lives to studying money and finance.

Amongst ourselves, we call our work Ecological Finance. Not everyone with whom we interact is an Ecological Economist. Not everyone is a money expert. And not everyone is motivated by the scale and distribution issues that motivate our work.

But from all of the separate pieces, we have managed to pull together a working consensus of the situation we are attempting to understand.

First, the money circuit system is broken. It is too large, too complex, and allocates financing to ecologically- and socially-destructive activities long before it finances the activities we need.

Second, the money creation system is broken. It is privately held rather than democratically controlled. As such, a few very influential power brokers—financially and politically—hold massive amounts of power.

Third, we can fix it! Theories abound about how our money and finance systems can be altered in order to distribute money more equitably without destroying the environment. It is thus our role to sift through all of the amazing and inspiring work in order to coalesce our own working theory of Ecological Finance.

It is really quite simple. Money can be created for the activities that we most desperately need today—education, job guarantees, basic income, infrastructure, sustainable energy, and low-entropy development. Our democratic constitutions all guarantee it! We can spend for these activities much like we have spent for the destructive activities of quantitative easing, bank bailouts, and war.

The question then becomes one of political will in a time when political will is lacking. But we need to remember that money is not a roadblock, overturning current systems of power is. Liquidity is not scarce, allocation to low-return, throughput-stabilizing investment is. And, lastly, the ecosystem is more complex than we may ever understand—our money system needn’t be.

To read more, check out Monetary and Fiscal Policies for a Finite Planet by Farley et al.

To learn more about E4A’s Research Group on Economics and Finance, click here or email manager@e4a-net.org.

Joe Ament graduated from The Ross School of Business at The University of Michigan, focusing on Economics and Finance.  After 7 years in corporate strategy in both the for- and non-profit sectors, he spent 3 years writing about the ecological and economic problems we now face.  Currently at UVM, an E4A fellow, and co-coordinator of the Research Group on Economics and Finance, Joe focuses his research on Monetary and Economic Systems for an ecological civilization through the Gund Institute.  His interests lie in how asset valuation and monetary systems affect social justice and environmental degradation; and how an ecologically resilient civilization will use money and finance. Outside of reading and writing, Joe loves to surf, practice yoga, paint, and listen to reggae.