Alternatives to Political SystemsConsumerismEconomicsFinancial ManagementPeople SystemsSociety

Money as Debt

Many of us are watching the current economic crisis with great interest (albeit with a lot of concern). A lot of us could also see it coming. Our modern economic systems are ultimately inviable, based on ever increasing debt and ever enlarging boom and bust cycles. Systemic economic collapse is inevitable, and painful (indeed, disastrous) though it may be, in many ways the sooner it happens the better it will be for the world. Our ecologies are running out of time, the rate of species loss is becoming exponential, the depletion of critical resources is moving ahead apace, and our human population continues to balloon year by year. We have formerly democratic nations heading towards fascism, and a massive consolidation of power giving money-motivated corporations the controlling influence over governments and media. Creating a whole new society will be excruciatingly difficult – but it will be impossible if we’re trying to do so without decent resources left to work with.

Watching the mortgage crisis in the U.S. is frustrating to say the least. We have thousands of defaulters becoming homeless, and yet, as you shall see in the clips below, the money they’ve borrowed to purchase their house was not even the banks – indeed, it didn’t even exist, but is essentially created out of thin air. The bank ‘loans’ money it doesn’t have, then when the borrower defaults, his home becomes the property of the bank – and yet the banks subsequently manage to secure massive bailouts from this same taxpayer.

The current system of money being debt, and debt being money, puts us on a conveyor belt that ensures wealth will always gravitate to those controlling the money supply. People argue over whether we should be on the political ‘left’ (state controlled economies), or ‘right’ (corporate controlled economies) – but each ends in centralisation. One form of control is voted in, the other purchased in. We need to find a ‘third way’, and fast. We need an economic system based on community stewardship/management of natural capital, and one that measures wealth in real terms – health and happiness (think GNH – Gross National Happiness).

Watch the following well-produced clips to get an easy to understand overview of how we got into this mess. Oh, and if any readers out there can come up with a viable blueprint for the needed ‘third way’, we’ll send you a free copy of our Water Harvesting and Food Forest DVDs. It doesn’t sound like much of a reward for saving the world, but just coming up with the plan is only the beginning…. Getting 6.7 billion people to take the plan and run with it is the real mission. If you can do that I’ll personally give you ten million dollars (it’s a safe reward for me to offer, as in the world you’d be creating with your plan, you wouldn’t want or need it…).

Part I

Part II

Part III

Part IV

Further Reading/Watching:



  1. The problem is the solution, right? The increasing unemployed masses will provide a work force to apply Permaculture techniques. The problem is land ownership, or at least convincing land owners that using their land in an unconventional way is beneficial. What’s needed is a low-capital model that will make such a change in land use economical during the period of transition. Land owners big and small can lease out their otherwise unproductive space for growing organic food to sell at market or buy directly. SPIN-Farming is an example. The most financially stressed families may be the most receptive. This process would have a snow-ball effect as word is spread and host land owners would learn about Permaculture, reduce their consumption, and convince their friends and family of its virtues. Increasing capacity for education from Permaculture demonstration farms will be important during this period, but much training could be done on the job.

    House and land prices are coming down, but food prices are unlikely to. This may allow participants to gain back the residences taken by the banks. Accommodation during this period will be a problem – temporary arrangements such as sharing, rent assistance to participants, tents and shanties may be necessary.

    A progressive amount of food will be grown in proximity to the population, with an associated culture shift of increased self sufficiency – thus relieving government of any stripe the responsibility. The model could be applied to suburban and regional areas.

    Business and training support from the PRI or another purpose made entity, and leadership from experienced permies would be a great way to kick it off: a franchise that people can get into easily without much start-up capital. I personally would be interested in doing this, but would like to work under someone more experienced before working for myself.

  2. Well done Craig for putting the Crash Course on Geoffs site. We’ve been promoting it for months at Permaculture Noosa. One of our members has just run a half day course on the crash course ( a combination of viewing all 20 chapters + lively group discussion). 10 people attended and it was fantastic. For those who haven’t seen it yet. It is an absolute MUST SEE and like RIGHT NOW. It will also make you realize the media are going all out to pull the wool over everyone’s eyes by presenting a host of expert opinions which are all design to deceive us as to the real situation. It is imperative that Aussies really gets a good understanding of what is really going on fast. Otherwise I fear some people are in for a really nasty surprise in the next 12 months. ps for solutions refer to the Transition Town Handbook.

  3. Tim,

    Funny You say that. I’m currently building agreements, gathering tools, seeds, knowledge and builting a greenhouse in order to apply spin-farming to a non-profit model (setting up the non-profit). The goal is to provide local food, products and jobs. We’re trying to figure out how to merge the SPIN model with perma-culture techniques… especially creating and managing food forests. In the end the goal is to have most anything that CAN be made locally being made locally for those persons (hopefully most of us) who can see the value in keeping money in a local economy.

    I’m definitely see the current economic situation as I see it as a perfect opportunity to begin implementing sustainable local practices as people in their desperation are willing to think and WORK outside the box…

    Thank you for your resources everyone who is making them available. If things go well UFA should be giving back in the next couple years with online planting/harvest calendar+calculators, price watching, yard planners and a database with active communities of persons using different permaculture system and comparing notes and techniques to help teach each other. It’s a big goal, but I think we’re all thinking (and even acting) big now eh? :-)

  4. The third way I believe you might find at
    It’s still debt based but the debt is distributed not centralized.

    The most important factor here is that all software for this project is licensed under GPL. Therefore we have the legal right to modify this software as we see fit.

    Ryan added an interest on outstanding debt feature, I think this was just when he started to doubt the uptake of the project.
    As stated though theres no explicit need to implement this.

    Does anybody know Python :)

  5. im setting up 160 acres to prepare for the new beginnings as Tim Auid states in his response. I believe farmers will be interested in trying something new once it has been proven to them they can live a comfortable life doing so.
    Im happy to set my place up as an example.Im presently gathering the tools seeds and equipment and have just put online that im seeking for local people to set up a permie group . Reckon ill meet some too.
    so if you are interested in being involved in the Gatton project (in projects section)
    lets show those old fashioned farmers there s a new way of living… the permie way,,, basically one seed sown makes a tree. Im planting this seed , just need to make the carbon mass grow.

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