Leadership can be a bad. Organizations are just tools — and leaders are just more proficient users. When would a tool need a more proficient user — a leader — most? When the opportunity cost is greatest: exactly when that tool is about to be outcompeted by a better tool. Leaders are created when organizations are threatened to ensure organizational survival. But sometimes organizational death is the optimal outcome. That’s exactly what we see in the real world: leaders unleashing bailout after bailout, horse-trade after horse-trade, to ensure the survival of yesterday’s malfunctioning machines. The economics suggest that 20th century leadership lets dysfunctional organizations thrive at the expense of prosperity.

Here’s the problem in a nutshell. What leaders “lead” are yesterday’s organizations. But yesterday’s organizations — from carmakers, to investment banks, to the healthcare system, to the energy industry, to the Senate itself — are broken. Today’s biggest human challenge isn’t leading broken organizations slightly better. It’s building better organizations in the first place. It isn’t about leadership: it’s about “buildership”, or what I often refer to as Constructivism.

Leadership is the art of becoming, well, a leader. Constructivism, in contrast, is the art of becoming a builder — of new institutions. Like artistic Constructivism rejected “art for art’s sake,” so economic Constructivism rejects leadership for the organization’s sake — instead of for society’s.

And this is just the absolute beginning of decolonizing. It is internal work that doesn’t accomplish anything in the real world, but it makes all further steps more likely, more feasible, and in many ways more strictly technical.

Next, ask yourself what are the largest, most pressing problems you can help to solve using the gifts that are unique to you in all the universe. People sometimes ask why I write instead of blowing up dams, to which I reply that my only D in college was in quantitative analysis chemistry lab, meaning you don’t want me anywhere near explosives. Some people have said I should be an organizer instead of a writer. These people have never seen my work space; if I can’t keep track of my pens, how would I possibly keep track of anything more complex? Likewise, I’ve filed dozens of timber sale appeals, but it was a very laborious process for me; it took me twelve hours to do what others could do in two. And I write terrible press releases. I can, however, write books. Harness your gifts, and put them in the service of your landbase.

My third suggestion is to ask yourself: what do I get off on? One reason I don’t burn out as an activist is that I love what I’m doing. I was out one day with a wetlands specialist. We were trying to stop a developer from ruining a forest. The specialist dug into the soil, rubbed some between his fingers, and compared the color to a chart, which would help him determine if these were wetlands. I asked, “Do you get off on this?” He laughed and said digging in dirt was his second favorite thing to do after playing with his dogs. I laughed too and said I wouldn’t like to do that work. I, on the other hand, have condemned myself to a life of homework: I get off on trying to figure out, for example, the relationship between perceived entitlement, exploitation, and atrocity.

My next suggestion is to make protecting the land where you live—and by extension the rest of the natural world, since protecting the land where you live will be insufficient to protect anadromous fish, migratory songbirds, or anyone in a world being burned alive by global climate change—the most important thing in your life. That may sound drastic, but we’re talking about life on the planet here. There can be nothing more important than this.

So, Derrick, what exactly do you want us to do?

I want you to make the time to find what or whom you love—whether it’s salmon, sturgeon, a patch of forest, survivors of domestic violence, your own indigenous tradition, migratory songbirds, coral reefs, or Appalachian mountaintops—and I want you to dig in and defend your beloved with your life, and, if necessary, with your death. I want for your actions to positively contribute to the health and defense of the planet. I want for you to figure out how to make it so the world—the real, physical world—is a better place because you were born, and because you lived here.

All of this leads to the point, which is, put simply, to do something. Several years ago I was giving a talk to several hundred people about bringing down civilization. The audience was excited. The atmosphere was like a rock concert. I suddenly stopped and asked, “How many of you have ever filed a timber-sale appeal?” Four or five. “How many have worked on a rape crisis hotline?” Ten women. “How many have done indigenous support work?” Three or four. And so on. It’s all well and good to talk about the Great Glorious Revolution, but what are you doing right now?

The big dividing line is not and has never been between those who advocate more or less militant forms of resistance, or between mainstream and grassroots activists. The dividing line is between those who do something and those who do nothing.

Do something.

This is, I think, a deeply powerful way of thinking because it is a deeply moral way of thinking – we would like to think of ourselves as moral people, but we tend to think of moral questions as the obvious ones “should I steal or pay?” “Should I hit or talk?” But the real and most essential moral questions of our lives are the questions we rarely ask of the things we do every day, “Should I eat this?” “Where should I live and how?” “What should I wear?” “How should I keep warm/cool?” We think of these questions as foregone conclusions – I should keep warm X way because that’s the kind of furnace I have, or I should eat this because that’s what’s in the grocery store. Pat’s Theory of Anyway turns this around, and points out that what we do, the way we live, must pass ethical muster first – we must always ask the question “Is this contributing to the repair of the world, or its destruction.”

So if you told me that tomorrow, peak oil had been resolved, I’d still keep gardening, hanging my laundry, cutting back and trying to find a way to make do with less. Because even if we found enough oil to power our society for a thousand years, there would still be climate change, and it would be *wrong* of me to choose my own convenience over the security and safety of my children and other people’s children. And if you told me tomorrow that we’d fixed climate change, that we could power our lives forever with renewables, I would still keep gardening and living frugally. Because our agriculture is premised on depleted soil and aquifers, and we’re facing a future in which many people don’t have enough food and water if we keep eating this way. To allow that to happen would be a betrayal of what I believe is right. And if you told me that we’d fixed that problem too, that we were no longer depleting our aquifers and expanding the dead zone in the Gulf of Mexico, I’d still keep gardening and telling others to do the same, because our reliance on food from other nations, and our economy impoverishes and starves millions, even billions of poor people and creates massive economic inequities that do tremendous harm. And if you told me that globalization was over, and that we were going to create a just economic system, and we’d fixed all the other problems, and that I didn’t have to worry anymore, would I then stop gardening?

No. Because the nurture of my piece of land would still be the right thing to do. Doing things with no more waste than is absolutely necessary would still be the right thing to do. The creation of a fertile, sustainable, lasting place of beauty would still be my right work in the world. I would still be a Jew, obligated by G-d to Tikkun Olam, to “the repair of the world.” I would still be obligated to live in way that prevented wildlife from being run to extinction and poisons contaminating the earth. I would still be obligated to make the most of what I have and reduce my needs so they represent a fair share of what the earth has to offer. I would still be obligated to treat poor people as my siblings, and you do not live comfortably when your siblings suffer or have less. I am obligated to live rightly, in part because of what living rightly gives me – integrity, honor, joy, a better relationship with my diety of choice, peace.

This peculiar relation to time is inherently destructive of the quality and value of our lives, and of the living body of Earth. And it will intensify because the Industrial Growth Society is, in systems’ terms, on exponential “runaway”–accelerating toward its own collapse.

Even as we see its consequences, we must remember that this relation to time is not innate in us. As humans we have the capacity and the birthright to experience time in a saner fashion. Throughout history, men and women have labored at great personal cost to bequeath to future generations monuments of art and learning, to endure far beyond their individual lives. And they have honored through ritual and story those who came before

To make the transition to a life-sustaining society, we must retrieve that ancestral capacity–in other words, act like ancestors. We need to attune to longer, ecological rhythms and nourish a strong, felt connection with past and future generations. For us as agents of change, this isn’t easy, because to intervene in the political and legislative decisions of the Industrial Growth Society, we fall by necessity into its tempo. We race to find and pull the levers before it is too late to save this forest, or stop that weapons program. Nonetheless, we can learn again to drink at deeper wells.

Both the progressive destruction of our world and our capacity to slow down and stop that destruction can be understood as a function of our experience of time.

We members of post-industrial societies in the closing years of the twentieth century have an idiosyncratic and probably unprecedented experience of time. It can be likened to an ever-shrinking box, in which we race on a treadmill at increasingly frenetic speeds. Cutting us off from other rhythms of life, this box cuts us off from the past and future as well. It blocks our perceptual field of time while allowing only the briefest experience of time.

a) technological and organizational forms of production, exchange, and consumption

b) relations to nature

c) social relations between people

d) mental conceptions of the world, embracing knowledges and cultural understandings and beliefs

e) labor processes and production of specific goods, geographies, services, or affects

f) institutional, legal and governmental arrangements

g) the conduct of daily life that underpins social reproduction.

Each one of these moments is internally dynamic and internally marked by tensions and contradictions (just think of mental conceptions of the world) but all of them are co-dependent and co-evolve in relation to each other. The transition to capitalism entailed a mutually supporting movement across all seven moments. New technologies could not be identified and practices without new mental conceptions of the world (including that of the relation to nature and social relations). Social theorists have the habit of taking just one of these moments and viewing it as the “silver bullet” that causes all change. We have technological determinists (Tom Friedman), environmental determinists (Jared Diamond), daily life determinists (Paul Hawken), labor process determinists (the autonomistas), institutionalists, and so on and so forth. They are all wrong. It is the dialectical motion across all of these moments that really counts even as there is uneven development in that motion.

When capitalism itself undergoes one of its phases of renewal, it does so precisely by co-evolving all moments, obviously not without tensions, struggles, fights, and contradictions. But consider how these seven moments were configured around 1970 before the neoliberal surge and consider how they look now, and you will see they have all changed in ways that re-define the operative characteristics of capitalism viewed as a non-Hegelian totality.

An anti-capitalist political movement can start anywhere (in labor processes, around mental conceptions, in the relation to nature, in social relations, in the design of revolutionary technologies and organizational forms, out of daily life, or through attempts to reform institutional and administrative structures including the reconfiguration of state powers). The trick is to keep the political movement moving from one moment to another in mutually reinforcing ways. This was how capitalism arose out of feudalism and this is how something radically different called communism, socialism, or whatever must arise out of capitalism. Previous attempts to create a communist or socialist alternative fatally failed to keep the dialectic between the different moments in motion and failed to embrace the unpredictabilities and uncertainties in the dialectical movement between them. Capitalism has survived precisely by keeping the dialectical movement between the moments going and constructively embracing the inevitable tensions, including crises, that result.

Change arises, of course, out of an existing state of affairs and it has to harness the possibilities immanent within an existing situation. Since the existing situation varies enormously from Nepal, to the Pacific regions of Bolivia, to the deindustrializing cities of Michigan and the still booming cities of Mumbai and Shanghai and the shaken but by no means destroyed financial centers of New York and London, so all manner of experiments in social change in different places and at different geographical scales are both likely and potentially illuminating as ways to make (or not make) another world possible. And in each instance it may seem as if one or other aspect of the existing situation holds the key to a different political future. But the first rule for a global anti-capitalist movement must be: never rely on the unfolding dynamics of one moment without carefully calibrating how relations with all the others are adapting and reverberating.

Feasible future possibilities arise out of the existing state of relations between the different moments. Strategic political interventions within and across the spheres can gradually move the social order onto a different developmental path. This is what wise leaders and forward-looking institutions do all the time in local situations, so there is no reason to think there is anything particularly fantastic or utopian about acting in this way. The left has to look to build alliances between and across those working in the distinctive spheres. An anti-capitalist movement has to be far broader than groups mobilizing around social relations or over questions of daily life in themselves. Traditional hostilities between, for example, those with technical, scientific, and administrative expertise and those animating social movements on the ground have to be addressed and overcome. We now have to hand, in the example of the climate change movement, a significant example of how such alliances can begin to work.

In this instance the relation to nature is the beginning point, but everyone realizes that something has to give on all the other moments, and while there is a wishful politics that wants to see the solution as purely technological, it becomes clearer by the day that daily life, mental conceptions, institutional arrangements, production processes, and social relations have to be involved. And all of that means a movement to restructure capitalist society as a whole and to confront the growth logic that underlies the problem in the first place.

There have, however, to be some loosely agreed-upon common objectives in any transitional movement. Some general guiding norms can be set down. These might include (and I just float these norms here for discussion) respect for nature, radical egalitarianism in social relations, institutional arrangements based in some sense of common interests and common property, democratic administrative procedures (as opposed to the monetized shams that now exist), labor processes organized by the direct producers, daily life as the free exploration of new kinds of social relations and living arrangements, mental conceptions that focus on self-realization in service to others, and technological and organizational innovations oriented to the pursuit of the common good rather than to supporting militarized power, surveillance, and corporate greed. These could be the co-revolutionary points around which social action could converge and rotate. Of course this is utopian! But so what! We cannot afford not to be.”

2. Overview of present political forces

“The terrain of political struggle and of political possibilities has shifted, both geographically and organizationally.

There are now vast numbers of non-governmental organizations (NGO’s) that play a political role that was scarcely visible before the mid-1970s. Funded by both state and private interests, populated often by idealist thinkers and organizers (they constitute a vast employment program), and for the most part dedicated to single-issue questions (environment, poverty, women’s rights, anti-slavery and trafficking work, etc), they refrain from straight anti-capitalist politics even as they espouse progressive ideas and causes. In some instances, however, they are actively neoliberal, engaging in privatization of state welfare functions or fostering institutional reforms to facilitate market integration of marginalized populations (microcredit and microfinance schemes for low-income populations are a classic example of this).

While there are many radical and dedicated practitioners in this NGO world, their work is at best ameliorative. Collectively, they have a spotty record of progressive achievements, although in certain arenas, such as women’s rights, health care, and environmental preservation, they can reasonably claim to have made major contributions to human betterment. But revolutionary change by NGO is impossible. They are too constrained by the political and policy stances of their donors. So even though, in supporting local empowerment, they help open up spaces where anti-capitalist alternatives become possible and even support experimentation with such alternatives, they do nothing to prevent the re-absorption of these alternatives into the dominant capitalist practice: they even encourage it. The collective power of NGOs in these times is reflected in the dominant role they play in the World Social Forum, where attempts to forge a global justice movement, a global alternative to neoliberalism, have been concentrated over the last ten years.

The second broad wing of opposition arises out of anarchist, autonomist, and grassroots organizations (GROs) which refuse outside funding even as some of them do rely upon some alternative institutional base (such as the Catholic Church with its “base community” initiatives in Latin America or broader church sponsorship of political mobilization in the inner cities of the United States). This group is far from homogeneous (indeed there are bitter disputes among them pitting, for example, social anarchists against those they scathingly refer to as mere “lifestyle” anarchists). There is, however, a common antipathy to negotiation with state power and an emphasis upon civil society as the sphere where change can be accomplished. The self-organizing powers of people in the daily situations in which they live has to be the basis for any anti-capitalist alternative. Horizontal networking is their preferred organizing model. So-called “solidarity economies” based on bartering, collectives, and local production systems is their preferred political economic form. They typically oppose the idea that any central direction might be necessary and reject hierarchical social relations or hierarchical political power structures along with conventional political parties. Organizations of this sort can be found everywhere and in some places have achieved a high degree of political prominence. Some of them are radically anti-capitalist in their stance and espouse revolutionary objectives and in some instances are prepared to advocate sabotage and other forms of disruption (shades of the Red Brigades in Italy, the Baader Meinhof in Germany, and the Weather Underground in the United States in the 1970s). But the effectiveness of all these movements (leaving aside their more violent fringes) is limited by their reluctance and inability to scale up their activism into large-scale organizational forms capable of confronting global problems. The presumption that local action is the only meaningful level of change and that anything that smacks of hierarchy is anti-revolutionary is self-defeating when it comes to larger questions. Yet these movements are unquestionably providing a widespread base for experimentation with anti-capitalist politics.

The third broad trend is given by the transformation that has been occurring in traditional labor organizing and left political parties, varying from social democratic traditions to more radical Trotskyist and Communist forms of political party organization. This trend is not hostile to the conquest of state power or hierarchical forms of organization. Indeed, it regards the latter as necessary to the integration of political organization across a variety of political scales. In the years when social democracy was hegemonic in Europe and even influential in the United States, state control over the distribution of the surplus became a crucial tool to diminish inequalities. The failure to take social control over the production of surpluses and thereby really challenge the power of the capitalist class was the Achilles heel of this political system, but we should not forget the advances that it made even if it is now clearly insufficient to go back to such a political model with its social welfarism and Keynesian economics. The Bolivarian movement in Latin America and the ascent to state power of progressive social democratic governments is one of the most hopeful signs of a resuscitation of a new form of left statism.

Both organized labor and left political parties have taken some hard hits in the advanced capitalist world over the last thirty years. Both have either been convinced or coerced into broad support for neoliberalization, albeit with a somewhat more human face. One way to look upon neoliberalism, as was earlier noted, is as a grand and quite revolutionary movement (led by that self-proclaimed revolutionary figure, Margaret Thatcher) to privatize the surpluses or at least prevent their further socialization.

While there are some signs of recovery of both labor organizing and left politics (as opposed to the “third way” celebrated by New Labor in Britain under Tony Blair and disastrously copied by many social democratic parties in Europe) along with signs of the emergence of more radical political parties in different parts of the world, the exclusive reliance upon a vanguard of workers is now in question as is the ability of those leftist parties that gain some access to political power to have a substantive impact upon the development of capitalism and to cope with the troubled dynamics of crisis-prone accumulation. The performance of the German Green Party in power has hardly been stellar relative to their political stance out of power and social democratic parties have lost their way entirely as a true political force. But left political parties and labor unions are significant still, and their takeover of aspects of state power, as with the Workers’ Party in Brazil or the Bolivarian movement in Venezuela, has had a clear impact on left thinking, not only in Latin America. The complicated problem of how to interpret the role of the Communist Party in China, with its exclusive control over political power, and what its future policies might be about is not easily resolved either.

The fourth broad trend is constituted by all the social movements that are not so much guided by any particular political philosophy or leanings but by the pragmatic need to resist displacement and dispossession (through gentrification, industrial development, dam construction, water privatization, the dismantling of social services and public educational opportunities, or whatever). In this instance the focus on daily life in the city, town, village, or wherever provides a material base for political organizing against the threats that state policies and capitalist interests invariably pose to vulnerable populations. These forms of protest politics are massive.

Again, there is a vast array of social movements of this sort, some of which can become radicalized over time as they more and more realize that the problems are systemic rather than particular and local. The bringing together of such social movements into alliances on the land (like the Via Campesina, the landless peasant movement in Brazil, or peasants mobilizing against land and resource grabs by capitalist corporations in India) or in urban contexts (the right to the city and take back the land movements in Brazil and now the United States) suggests the way may be open to create broader alliances to discuss and confront the systemic forces that underpin the particularities of gentrification, dam construction, privatization, or whatever. More pragmatic rather than driven by ideological preconceptions, these movements nevertheless can arrive at systemic understandings out of their own experience. To the degree that many of them exist in the same space, such as within the metropolis, they can (as supposedly happened with the factory workers in the early stages of the industrial revolution) make common cause and begin to forge, on the basis of their own experience, a consciousness of how capitalism works and what it is that might collectively be done. This is the terrain where the figure of the “organic intellectual” leader, made so much of in Antonio Gramsci’s work, the autodidact who comes to understand the world firsthand through bitter experiences but shapes his or her understanding of capitalism more generally, has a great deal to say. To listen to peasant leaders of the MST in Brazil or the leaders of the anti-corporate land grab movement in India is a privileged education. In this instance the task of the educated alienated and discontented is to magnify the subaltern voice so that attention can be paid to the circumstances of exploitation and repression and the answers that can be shaped into an anti-capitalist program.

The fifth epicenter for social change lies with the emancipatory movements around questions of identity — women, children, gays, racial, ethnic, and religious minorities all demand an equal place in the sun — along with the vast array of environmental movements that are not explicitly anti-capitalist. The movements claiming emancipation on each of these issues are geographically uneven and often geographically divided in terms of needs and aspirations. But global conferences on women’s rights (Nairobi in 1985 that led to the Beijing declaration of 1995) and anti-racism (the far more contentious conference in Durban in 2001) are attempting to find common ground, as is true also of the environmental conferences, and there is no question that social relations are changing along all of these dimensions at least in some parts of the world. When cast in narrow essentialist terms, these movements can appear to be antagonistic to class struggle. Certainly within much of the academy they have taken priority of place at the expense of class analysis and political economy. But the feminization of the global labor force, the feminization of poverty almost everywhere, and the use of gender disparities as a means of labor control make the emancipation and eventual liberation of women from their repressions a necessary condition for class struggle to sharpen its focus. The same observation applies to all the other identity forms where discrimination or outright repression can be found. Racism and the oppression of women and children were foundational in the rise of capitalism. But capitalism as currently constituted can in principle survive without these forms of discrimination and oppression, though its political ability to do so will be severely curtailed if not mortally wounded in the face of a more unified class force. The modest embrace of multiculturalism and women’s rights within the corporate world, particularly in the United States, provides some evidence of capitalism’s accommodation to these dimensions of social change (including the environment), even as it re-emphasizes the salience of class divisions as the principle dimension for political action.

One such new marketplace is Entrex, an “entrepreneurial exchange” based in Chicago and focused on companies with less than US$250 million in annual revenue. Another private liquidity network, called Wall Street Without Walls, links credit unions and community development financial institutions to companies. Three electronic peer-to-peer lending sites — Prosper Loan Marketplace in the U.S.; Zopa in the U.K., U.S., Japan, and Italy; and Qifang in China — as well as hundreds for microlending (including MicroPlace, Kiva, Accion, and Women’s World Banking), are filling a huge need worldwide. An index of private green companies in Brazil is now in the planning stage with Entrex and the green broker-dealer Iowa Progressive Asset Management.

Consider the cultural DNA of exchanges founded along these lines. They are as robust as Wall Street in their back-office efficiency and their clearing and settlement provisions, but they have far less overhead. They trade in small and midsized enterprises: the 400,000 companies that provide most of the jobs in the United States. These companies are generally privately held; they tend to be unattractive to short sellers and market manipulators and leery of venture capital and private equity. Many have no interest in making an initial public offering on Wall Street.

The three of us, as experienced investigators and prosecutors of financial fraud, cannot answer these questions now. But we know where the answers are. They are in the trove of e-mail messages still backed up on A.I.G. servers, as well as in the key internal accounting documents and financial models generated by A.I.G. during the past decade. Before releasing its regulatory clutches, the government should insist that the company immediately make these materials public. By putting the evidence online, the government could establish a new form of “open source” investigation.

Once the documents are available for everyone to inspect, a thousand journalistic flowers can bloom, as reporters, victims and angry citizens have a chance to piece together the story. In past cases of financial fraud — from the complex swaps that Bankers Trust sold to Procter & Gamble in the early 1990s to the I.P.O. kickback schemes of the late 1990s to the fall of Enron — e-mail messages and internal documents became the central exhibits in our collective understanding of what happened, and why.

So far, prosecutors and regulators have been unable to build such evidence into anything resembling a persuasive case against any financial institution. Most recently, a jury acquitted Bear Stearns employees of fraud related to the collapse of the subprime mortgage market, in part because available e-mail messages suggested the employees had done nothing wrong.

Evans-Pritchard suggested a similar remedy for Greece, which he said could break out of its death loop by following the lead of Argentina. It could “restore its currency, devalue, pass a law switching internal euro debt into [the local currency], and ‘restructure’ foreign contracts.”

Standing up to the IMF is not a well-worn path, but Argentina forged the trail. In the face of dire predictions that the economy would collapse without foreign credit, in 2001 it defied its creditors and simply walked away from its debts. By the fall of 2004, three years after a record default on a debt of more than $100 billion, the country was well on the road to recovery; and it achieved this feat without foreign help. The economy grew by 8 percent for 2 consecutive years. Exports increased, the currency was stable, investors were returning, and unemployment had eased. “This is a remarkable historical event, one that challenges 25 years of failed policies,” said economist Mark Weisbrot in a 2004 interview quoted in The New York Times. “While other countries are just limping along, Argentina is experiencing very healthy growth with no sign that it is unsustainable, and they’ve done it without having to make any concessions to get foreign capital inflows.”

Weisbrot is co-director of a Washington-based think tank called the Center for Economic and Policy Research, which put out a study in October 2009 of 41 IMF debtor countries. The study found that the austere policies imposed by the IMF, including cutting spending and tightening monetary policy, were more likely to damage than help those economies.

That was also the conclusion of a study released last February by Yonca Özdemir from the Middle East Technical University in Ankara, comparing IMF assistance in Argentina and Turkey. Both emerging markets faced severe economic crises in 2001, preceded by chronic fiscal deficits, insufficient export growth, high indebtedness, political instability, and wealth inequality.

Where Argentina broke ranks with the IMF, however, Turkey followed its advice at every turn. The end result was that Argentina bounced back, while Turkey is still in financial crisis. Turkey’s reliance on foreign investment has made it highly susceptible to the global economic downturn. Argentina chose instead to direct its investment inward, developing its domestic economy.

To find the money for this development, Argentina did not need foreign investors. It issued its own money and credit through its own central bank. Earlier, when the national currency collapsed completely in 1995 and again after 2000, Argentine local governments issued local bonds that traded as currency. Provinces paid their employees with paper receipts called “Debt-Cancelling Bonds” that were in currency units equivalent to the Argentine Peso. The bonds canceled the provinces’ debts to their employees and could be spent in the community. The provinces had actually “monetized” their debts, turning their bonds into legal tender.

Argentina is a large country with more resources than Iceland, Latvia or Greece, but new technologies now allow even small countries to become self-sufficient.

Issuing and lending currency is the sovereign right of governments, and it is a right that Iceland and Latvia will lose if they join the EU, which forbids member nations to borrow from their own central banks. Latvia and Iceland both have natural resources that could be developed if they had the credit to do it; and with sovereign control over their local currencies, they could get that credit simply by creating it on the books of their own publicly-owned banks.

In fact, there is nothing extraordinary in that proposal. All private banks get the credit they lend simply by creating it on their books. Contrary to popular belief, banks do not lend their own money or their depositors’ money. As the U.S. Federal Reserve attests, banks lend new money, created by double-entry bookkeeping as a deposit of the borrower on one side of the bank’s books and as an asset of the bank on the other.

Besides thawing frozen credit pipes, credit created by governments has the advantage that it can be issued interest-free. Eliminating the cost of interest can cut production costs dramatically.

Government-issued money to fund public projects has a long and successful history, going back at least to the early eighteenth century, when the American colony of Pennsylvania issued money that was both lent and spent by the local government into the economy. The result was an unprecedented period of prosperity, achieved without producing price inflation and without taxing the people.

The island state of Guernsey, located in the Channel Islands between England and France, has funded infrastructure with government-issued money for over 200 years, without price inflation and without government debt.

During the First World War, when private banks were demanding 6 percent interest, Australia’s publicly-owned Commonwealth Bank financed the Australian government’s war effort at an interest rate of a fraction of 1 percent, saving Australians some $12 million in bank charges. After the First World War, the bank’s governor used the bank’s credit power to save Australians from the depression conditions prevailing in other countries, by financing production and home-building and lending funds to local governments for the construction of roads, tramways, harbors, gasworks, and electric power plants. The bank’s profits were paid back to the national government.

A successful infrastructure program funded with interest-free national credit was also instituted in New Zealand after it elected its first Labor government in the 1930s. Credit issued by its nationalized central bank allowed New Zealand to thrive at a time when the rest of the world was struggling with poverty and lack of productivity.

The argument against governments issuing and lending money for infrastructure is that it would be inflationary, but this need not be the case. Price inflation results when “demand” (money) increases faster than “supply” (goods and services). When the national currency is expanded to fund productive projects, supply goes up along with demand, leaving consumer prices unaffected.

In any case, as noted above, private banks themselves create the money they lend. The process by which banks create money is inherently inflationary, because they lend only the principal, not the interest necessary to pay their loans off. To come up with the interest, new loans must be taken out, continually inflating the money supply with new loan-money. And since the money is going to the creditors rather than into producing new goods and services, demand (money) increases without increasing supply, producing price inflation. If credit were extended for public infrastructure projects interest-free, inflation could actually be reduced, by reducing the need to continually take out new loans to find the elusive interest to service old loans.

The key is to use the newly-created money or credit for productive projects that increase goods and services, rather than for speculation or to pay off national debt in foreign currencies (the trap that Zimbabwe fell into). The national currency can be protected from speculators by imposing exchange controls, as Malaysia did in 1998; imposing capital controls, as Brazil and Taiwan are doing now; banning derivatives; and imposing a “Tobin tax,” a small tax on trade in financial products.

If the creditors are really interested in having their debts repaid, they will see the wisdom of letting the debtor nation build up its producing economy to give it something to pay with. If the creditors are not really interested in repayment but are using the debt as a tool to exploit the debtor country and strip it of its assets, the creditors’ bluff needs to be called.

When the debtor nation refuses to pay, the burden shifts to the creditors to make themselves whole. British economist Michael Rowbotham suggests that in the modern world of electronic money, this can be accomplished by creative banking regulators simply with a change in accounting rules. “Debt” today is created with accounting entries, and it can be reversed with accounting entries.

Rowbotham outlines two ways the rules might be changed to liquidate impossible-to-repay debt:

“The first option is to remove the obligation on banks to maintain parity between assets and liabilities . . . . Thus, if a commercial bank held $10 billion worth of developing country debt bonds, after cancellation it would be permitted in perpetuity to have a $10 billion dollar deficit in its assets. This is a simple matter of record-keeping.

“The second option . . . is to cancel the debt bonds, yet permit banks to retain them for purposes of accountancy. The debts would be cancelled so far as the developing nations were concerned, but still valid for the purposes of a bank’s accounts. The bonds would then be held as permanent, non-negotiable assets, at face value.”

In the past Western nations could use their technologies (including weapons, of course!) to dominate the rest of the world and exploit its resources, but suddenly we find ourselves in a new situation, where each nation is now directly dependent upon the good intentions of other nations, whether developed or undeveloped. We have to pull together if human civilization as we know it is going to survive the next few centuries. But why should the poor people in poor countries pull together with me in the U.S.? What’s in it for them? Bare survival, perhaps, but not much more, unless those of us enjoying a comfortable life in wealthy nations start thinking in a less self-centered way. It’s no longer enough to act in ways that (seem to) benefit us personally, or benefit our own group or nation. We are called upon to “wake up” and realize that what is good for me can no longer be pursued at the expense of what is good for everyone else…

What I’m really talking about, of course, is a new understanding of the self. This is where Buddhism comes in, because Buddhist teachings critique the usual understanding of ourselves as separate from others, and emphasize instead the interdependence of everything. What the “climate emergency” does is up the ante, considerably. Suddenly a lot more is at stake – maybe everything. Up until now, Buddhism has been largely an individual path of spiritual development. A few people here and there have awakened, and some societies have become more compassionate than they would have been without the dharma and the sangha. But now we must reconsider whether that’s enough.