Learning for Sustainable LivingLearning for Sustainable Living

Werner Sattmann-Frese PhDWerner Sattmann-Frese PhD

Love of MoneyLove of Money

Our moneyOur money’’s problems problem ““This planet has - or rather had - a problem, which This planet has - or rather had - a problem, which

was this: most of the people living on it were was this: most of the people living on it were unhappy for pretty much of the time. Many unhappy for pretty much of the time. Many solutions were suggested for this problem, but solutions were suggested for this problem, but most of these were largely concerned with the most of these were largely concerned with the movement of small green pieces of paper, which movement of small green pieces of paper, which was odd because on the whole it wasn't the small was odd because on the whole it wasn't the small green pieces of paper that were unhappy.green pieces of paper that were unhappy.”” ― ― Douglas Adams, The Hitchhiker's Guide to the Douglas Adams, The Hitchhiker's Guide to the GalaxyGalaxy

http://www.goodreads.com/quotes/tag/moneyhttp://www.goodreads.com/quotes/tag/money

Bronski Beat - Love of Money (1)Bronski Beat - Love of Money (1)

Work for money spend moneyWork for money spend moneySpend for love love for moneySpend for love love for moneyPain and love love and painPain and love love and painPain and lust lust for moneyPain and lust lust for moneyLove and moneyLove and moneyLove and moneyLove and moneyExploit for money kill for loveExploit for money kill for loveLove for money exploited loveLove for money exploited loveLove and moneyLove and money

Bronski Beat - Love of Money (2)Bronski Beat - Love of Money (2)Love and moneyLove and moneyBurning me upBurning me upOooh it's burning me upOooh it's burning me upBurning me upBurning me upOooh it's burning me upOooh it's burning me upWork for money spend moneyWork for money spend moneySpend for love love for moneySpend for love love for moneyMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilMoney is the root of all evilHey-yah-heyHey-yah-hey

Part OnePart One

Love of moneyLove of money

What is Money?What is Money?”” The easy answer: The stuff in our wallet.The easy answer: The stuff in our wallet. The most common answer: Money is anything The most common answer: Money is anything

that is generally accepted as payment for that is generally accepted as payment for goods and services and repayment of debts. goods and services and repayment of debts. The main uses of money are as a medium of The main uses of money are as a medium of exchange, a unit of account, and a store of exchange, a unit of account, and a store of value. http://en.wikipedia.org/wiki/Moneyvalue. http://en.wikipedia.org/wiki/Money

The difficult answer: Even Alan Greenspan The difficult answer: Even Alan Greenspan does not seem to have much of an idea. does not seem to have much of an idea. "I "I have found a flaw," said Greenspan, referring have found a flaw," said Greenspan, referring to his economic philosophy. "I don't know how to his economic philosophy. "I don't know how significant or permanent it is. But I have been significant or permanent it is. But I have been very distressed by that fact.very distressed by that fact.”” http://www.guardian.co.uk/business/2008/oct/24/echttp://www.guardian.co.uk/business/2008/oct/24/economics-creditcrunch-federal-reserve-greenspanonomics-creditcrunch-federal-reserve-greenspan

What is its purpose?What is its purpose?

Money is a matter of functions four:Money is a matter of functions four: a mediuma medium a measure a measure a standarda standard a storea store

Why do we love money ?Why do we love money ? It appears that we associate money It appears that we associate money

with:with: easy access to goods and serviceseasy access to goods and services status and powerstatus and power successsuccess winningwinning a sense of securitya sense of security access to sex (not love)access to sex (not love) freedom, andfreedom, and comfort.comfort.

Why do we love money?Why do we love money?

““Yet, do Americans really love money? For Yet, do Americans really love money? For many, as soon as we get money in our many, as soon as we get money in our hands, we spend it on some shiny new hands, we spend it on some shiny new thing that pleases us, or on some new thing that pleases us, or on some new experience that, for a short while, distracts experience that, for a short while, distracts and entertains us. So, do we love money, and entertains us. So, do we love money, or do we love what money enables us to or do we love what money enables us to possess and experience?possess and experience?””

http://www.powerwealth.com/powerwealth/http://www.powerwealth.com/powerwealth/2008/02/for-the-love-of.html2008/02/for-the-love-of.html

Positive effects of moneyPositive effects of money(when distributed fairly and used (when distributed fairly and used sustainably)sustainably)

Sustainable economySustainable economy Well-developed infrastructureWell-developed infrastructure Life-supporting income Life-supporting income Moderate consumption choicesModerate consumption choices Health and well-beingHealth and well-being Old ageOld age

Downsides of moneyDownsides of money““Material goods don't make us happy. Acquiring Material goods don't make us happy. Acquiring things like houses and cars only have a transient things like houses and cars only have a transient effect on happiness. People's desires for material effect on happiness. People's desires for material possessions crank up at the same, or greater possessions crank up at the same, or greater rate, than their salaries. Again, this means that rate, than their salaries. Again, this means that despite considerably more luxurious possessions, despite considerably more luxurious possessions, people end up no happier. There's even evidence people end up no happier. There's even evidence that materialism make us less happy.that materialism make us less happy.””http://www.spring.org.uk/2008/04/3-reasons-http://www.spring.org.uk/2008/04/3-reasons-money-brings-satisfaction-but.phpmoney-brings-satisfaction-but.php

Downsides of moneyDownsides of money

Fixation on money makes many people:Fixation on money makes many people: competitivecompetitive selfish and coldheartedselfish and coldhearted addicted to consumptionaddicted to consumption

Spending or saving money?Spending or saving money?Sydney Morning Herald 15/11/2006Sydney Morning Herald 15/11/2006

Lack of Money: PovertyLack of Money: Poverty

Stan Eales

Do Do youyou love money ? love money ?

Share some thoughts about Share some thoughts about your relationship with money your relationship with money with a person next to you!with a person next to you!

Part TwoPart Two

The economic downturn (crisis)The economic downturn (crisis)

Where is money coming from?Where is money coming from?

•It is issued by the Central Bank.•It is created out of thin air.

Features of the current economic Features of the current economic downturndownturn Decline of equity (e.g., the value of your house)Decline of equity (e.g., the value of your house) Unwillingness to lend moneyUnwillingness to lend money Unwillingness to borrow moneyUnwillingness to borrow money Low consumer confidenceLow consumer confidence

Causes of the economic downturn?Causes of the economic downturn?

The root cause of the financial crisis is the The root cause of the financial crisis is the housing correction (aka subprime mortgage housing correction (aka subprime mortgage crisis) in the USA (Henry Paulson).crisis) in the USA (Henry Paulson).

But, then, why canBut, then, why can’’t people serve their t people serve their mortgages anymore?mortgages anymore?

Here are some possible reasons: outsourcing of Here are some possible reasons: outsourcing of jobs, rising prices, getting into debt to have a jobs, rising prices, getting into debt to have a great lifesyle and keep up with the Joneses.great lifesyle and keep up with the Joneses.

But, then, why do companies rise prices and But, then, why do companies rise prices and outsource jobs?outsource jobs?

Here are some possible reasons: saving costs, Here are some possible reasons: saving costs, increasing profit, offering cheaper goods and increasing profit, offering cheaper goods and services, innovation, and the services, innovation, and the love of moneylove of money..

Causes of the economic downturn -Causes of the economic downturn -Excessive debtExcessive debt ““And so the real question is not why is it And so the real question is not why is it

that consumers acted "irresponsibly" by that consumers acted "irresponsibly" by agreeing to take on risk that they could agreeing to take on risk that they could not handle; the real issue is to find out not handle; the real issue is to find out what were the conditions that led the what were the conditions that led the financial institutions to lure the financial institutions to lure the unsuspecting consumer to carry unsuspecting consumer to carry excessive debt burdenexcessive debt burden””. Ghassan Karam. Ghassan Karam

http://yalibnan.com/site/ http://yalibnan.com/site/ archives/2008/06/root_causes_of.phparchives/2008/06/root_causes_of.php

Causes of the economic downturn -Causes of the economic downturn -Toxic debtToxic debt Lehman Brothers was leveraged 30 to 1 Lehman Brothers was leveraged 30 to 1

before it crashed under its debt ($30 of before it crashed under its debt ($30 of fabricated money for every Dollar of fabricated money for every Dollar of money for which an asset exists).money for which an asset exists).

The Reserve Bank of the USA The Reserve Bank of the USA

Causes of the economic downturn -Causes of the economic downturn -GreedGreed

““The urge to come up with the new and, in The urge to come up with the new and, in retrospect, unsound methods of debt retrospect, unsound methods of debt financing was driven by greed; the urge to financing was driven by greed; the urge to participate in amassing what appeared to participate in amassing what appeared to be easy - though albeit- unethical profitsbe easy - though albeit- unethical profits””.. Ghassan Karam,Ghassan Karam, http://yalibnan.com/site/ http://yalibnan.com/site/ archives/2008/06/root_causes_of.phparchives/2008/06/root_causes_of.php

Causes of the economic downturn - Causes of the economic downturn - Inequality of wealth and incomeInequality of wealth and income

““As mass production has to be accompanied As mass production has to be accompanied by mass consumption, mass consumption, in by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently existing wealth, but of wealth as it is currently produced -- to provide men with buying power produced -- to provide men with buying power equal to the amount of goods and services equal to the amount of goods and services offered by the nation's economic machinery.offered by the nation's economic machinery. [Emphasis in original.][Emphasis in original.]””, , Marriner S. Eccles Marriner S. Eccles cited in: cited in: http://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/Great_Depression

Income inequality Income inequality in the USAin the USA Households in the top Households in the top

fifth of the income fifth of the income bracket earn almost bracket earn almost half of the nation's half of the nation's income. income. http://www.npr.org/tehttp://www.npr.org/templates/story/story.phmplates/story/story.php?storyId=7180618p?storyId=7180618

Causes of the economic downturn -Causes of the economic downturn -Growth addictionGrowth addiction Is a person dead when he or she Is a person dead when he or she

stops growing in size?stops growing in size? Is a machine broken if it only runs at Is a machine broken if it only runs at

95 percent of the speed of last 95 percent of the speed of last year?year?

Probably not, but this is exactly the Probably not, but this is exactly the way many economists argue when way many economists argue when they talk about recession and they talk about recession and economic depression.economic depression.

Causes of the economic downturn -Causes of the economic downturn -The GDP (1)The GDP (1) The concept of the GDP is flawed because:The concept of the GDP is flawed because:

it fails to track domestic labour, volunteer it fails to track domestic labour, volunteer work, and other forms of unpaid labourwork, and other forms of unpaid labour

it lopsidedly measures the wellbeing of a it lopsidedly measures the wellbeing of a society in terms of production and society in terms of production and consumptionconsumption

it grows with the production of weapons, andit grows with the production of weapons, and promotes wastefulness and the production of promotes wastefulness and the production of

goods with a short lifecycle. goods with a short lifecycle. Three Reasons to Scrap GDP, Three Reasons to Scrap GDP,

http://www.condoroptions.com/ http://www.condoroptions.com/ index.php/more-to-life/three-reasons-to-index.php/more-to-life/three-reasons-to-scrap-gdp/scrap-gdp/

Causes of the economic downturn -Causes of the economic downturn -The GDPThe GDP (2) (2) Robert F. Kennedy said at an address at the Robert F. Kennedy said at an address at the

University of Kansas on 18 March, 1968: University of Kansas on 18 March, 1968:

““The gross national product includes air pollution The gross national product includes air pollution and advertising for cigarettes and ambulances to and advertising for cigarettes and ambulances to clear our highways of carnage. It counts special clear our highways of carnage. It counts special locks for our doors and jails for the people who locks for our doors and jails for the people who break them. GNP (a slightly different but related break them. GNP (a slightly different but related measure) includes the destruction of the redwoods measure) includes the destruction of the redwoods and the death of Lake Superior. It grows with the and the death of Lake Superior. It grows with the production of napalm, and missiles and nuclear production of napalm, and missiles and nuclear warheads… it does not allow for the health of our warheads… it does not allow for the health of our families, the quality of their education, or the joy of families, the quality of their education, or the joy of their play. their play. (Continued on the next slide)(Continued on the next slide)

Causes of the economic downturn -Causes of the economic downturn -The GDPThe GDP (2) (2) It is indifferent to the decency of our It is indifferent to the decency of our

factories and the safety of our streets alike. factories and the safety of our streets alike. It does not include the beauty of our poetry It does not include the beauty of our poetry or the strength of our marriages, or the or the strength of our marriages, or the intelligence of our public debate or the intelligence of our public debate or the integrity of our public officials. It measures integrity of our public officials. It measures everything, in short, except that which everything, in short, except that which makes life worthwhilemakes life worthwhile””. .

http://www.mccombs.utexas.edu/ http://www.mccombs.utexas.edu/ faculty/michael.brandl/main%20pagefaculty/michael.brandl/main%20page%20items/Kennedy%20on%20GNP.htm%20items/Kennedy%20on%20GNP.htm

Causes of the economic downturn -Causes of the economic downturn -Decline of human, social, and natural capitalDecline of human, social, and natural capital

There is currently a significant decline of:There is currently a significant decline of: peoplepeople’’s healths health the health infrastructurethe health infrastructure money spent on educationmoney spent on education peoplepeople’’s capacity to negotiate s capacity to negotiate

relationshipsrelationships natural ecological buffer systems.natural ecological buffer systems.

Causes of the economic downturn -Causes of the economic downturn -DecadenceDecadence The final decades of the Roman Empire were The final decades of the Roman Empire were

in a phase of decadence characterised by:in a phase of decadence characterised by:

a breakdown of faith and moralitya breakdown of faith and morality unchecked powerunchecked power overcentralised governmentsovercentralised governments lethargic bureaucracieslethargic bureaucracies a decline in self-reliancea decline in self-reliance a shrinking of the middle classa shrinking of the middle class an increased use of cheap labour to an increased use of cheap labour to

increase profits for the wealthyincrease profits for the wealthy

Causes of the economic downturn -Causes of the economic downturn -Decadence (2)Decadence (2)

an increased appetite for violence, drugs, an increased appetite for violence, drugs, distraction, perversity, cruelty and distraction, perversity, cruelty and

sensationsensation an erosion of civil societyan erosion of civil society a loss of higher purpose in human life;a loss of higher purpose in human life; the trivialisation of art, andthe trivialisation of art, and the breakdown of the family as an the breakdown of the family as an

institution (Whitney, 1997).institution (Whitney, 1997).

Sounds familiar?Sounds familiar?

Causes of the economic downturn Causes of the economic downturn Not learning from historyNot learning from history Our current crisis has many of the Our current crisis has many of the

hallmarks of the first ever economic crisis hallmarks of the first ever economic crisis that took place in France and other that took place in France and other European countries in 1720 after the European countries in 1720 after the invention in 1716 of banknotes, shares, invention in 1716 of banknotes, shares, and large-scale financial speculation by and large-scale financial speculation by John Law. The first stock market crash John Law. The first stock market crash ended a speculative frenzy in Europe that ended a speculative frenzy in Europe that has become known as the has become known as the ““South Sea or South Sea or Mississippi BubbleMississippi Bubble””..

What does the economic downturn What does the economic downturn mean to you?mean to you?

Spend some minutes with two Spend some minutes with two people next to you with discussing people next to you with discussing the effects of the economic the effects of the economic downturn on you.downturn on you.

What do you see as the challenges What do you see as the challenges for you?for you?

ReferencesReferences

Eales, S. (1991). Eales, S. (1991). IsnIsn’’t Progress Wonderful? t Progress Wonderful? London: Grub Street. London: Grub Street.

Whitney, G. (1997). Do all roads lead to Whitney, G. (1997). Do all roads lead to Avernus? Russell KirkAvernus? Russell Kirk’’s conception of s conception of decadence. decadence. The Freeman/Ideas on Liberty.The Freeman/Ideas on Liberty. June 1997, pp. 352-356.June 1997, pp. 352-356.