As part of our series on the 100 Women Who Are Co-Creating the P2P Society, I interviewed Spanish economist Susana Martín Belmonte on her work on monetary reform, commons-oriented P2P systems and future economies.
Susana, tell us about your background, how did you end up being an activist working on financial reform and P2P/Commons Dynamics?
After becoming an economist, I worked for a long time in the internet business sector, but around 2003 I decided to undertake some research on the monetary system, and out of that came a book and other published works. I did this because I felt the need to. I wanted to understand, for myself, many of the dynamics that were taking place in the world, which mainstream economics were not explaining. When you understand the monetary and financial system, everything starts to make sense.
What does abundance mean to you?
Abundance is a new economic frame in which scarcity cannot be preserved. It’s funny to speak in these terms about scarcity, but it is appropriate. Economics used to be about managing scarce resources, but scarcity has turned out to be not a condition to overcome, but the Holy Grail to access monetary wealth for some. Meanwhile, it overlooks other types of scarcity, like our capacity to pollute the air without destroying the planet.
There is no economic value without scarcity. But scarcity is dying in the highest levels of innovation, in the very heart of the digital revolution. For the first time, the evolution of the economic system is not leading to higher productivity or sales, but just the opposite.
Economic evolution is leading to goods in new formats, with new ways of production that are extremely efficient and open by their very nature. That takes them very far from the scarcity context that creates economic value, sales, and profits. We need to adapt the way of organizing production and consumption to this new frame. I think it will be for the best. In general, I think that the end of scarcity is good news.
How can we create abundance in the material sphere?
I think the key to harnessing abundance is through a different monetary and financial system. But you have to bear in mind that this new trend is coexisting with the old trend of financialization and commodification, which goes exactly in the opposite direction. The centre of both of them is the monetary and financial system: it was the financialization that brought us to where we are now. Financialization started when the USA left the gold standard behind. It is only a new, deep evolution in the monetary and financial system that can allow us to adapt to this new economic frame in such a way that we can harness it to create prosperity for the majority of the people in an environmentally sustainable way.
Can you talk about the ongoing trend towards decommodification? Where do you think it will lead, and what are its advantages and dangers? Can we have ethical markets for sustainable livelihoods existing alongside non-monetary access to resources?
Technological innovation is bringing us to different scenarios of decommodification. One of the most important ones is when a corporation takes advantage of a certain innovation to destroy an industry, in order to create a competitive advantage for itself or weaken competitors. For example: Google created Android, a free OS for devices where Google products run smoothly, and destroyed the operating system business—for portable devices at least—where Microsoft and Apple were leaders.
But there is another decommodification trend, like Wikipedia, where voluntary contributors have created an online, free, collaborative encyclopaedia that has left the other ones behind as outdated, and has made it almost impossible to sell them in the foreseeable future.
I think that the disadvantages are that we need to change the way we were organizing the economy. People can’t depend on wages to live anymore, because wages are going to disappear altogether. The advantage is that we can get organized to produce and consume in a different way. In this new economic scheme, people won’t be divided anymore between workers or consumers. In this new units of production, people will have to provide funding, or endorsement for funding, labour and demand of the products. This is how the “prosumer” figure was born.
As Susan George said, we are used to seeing how companies look for the wealthiest markets to sell their products, and for cheaper countries to produce those products—but in reality, consumers and employees are the same people, wages turn into purchasing power, and this effort doesn’t lead to any situation that is sustainable in the long term.
We see this trend of commodities becoming commons and services becoming relationships as a positive thing. But what are the macroeconomic implications?
The macroeconomics implications are clear: we are going to see a reduction in income, in general. If the scarcity disappears, the value chain collapses. Business are no longer profitable and they stop paying taxes and wages…But it is very important to notice that it is not so clear that commodities will become commons thanks to the decommodification trend. For example, Amazon created a digital platform such as Kindle, so authors could publish their work in a “do it yourself” way. This has deeply disrupted the bookshop and publishing businesses, but books have not really become commons thanks to it. Epub format for digital books existed, it was a standard format, but Amazon decided to go with a non-standard format in a closed environment where you can only read these works if you are in their platform, in their apps, or reading with their devices. This way they can show adverts of their other products to you and put cookies in your laptop, to retarget you, so they can show you their adverts also everywhere when you surf the web. Monopolies are the only way scarcity can be maintained, but this won’t lead to a situation where wealth will be distributed at all. All of these global companies use fiscal optimization techniques that allow them to pay very little in taxes.
So, how can we avoid the hollowing out of a welfare state dependent on taxable income?
In my view, some public goods or services will need to start getting funded by a direct compensation, using an alternative means of payment. The people must be able to provide solutions to public needs and have it accounted as a public contribution. For instance, Prof. Bruno Theret from the Dauphine University in Paris has published a paper about how to introduce a time tax in order to fund political action. People would have to pay a time tax, payable with some kind of time money, and they would need to earn this time money by carrying out political participation in a decentralised way, or by paying for it in conventional money through a progressive scheme (the hour would be more expensive for those whose earnings are higher). There are two objectives here: to decentralise the political action so people carry out political action directly (instead of politicians), and to partly reduce the cost of political decision in conventional currency (political parties, consultants, etc.) There are many other currency schemes that can work to get to the same results, we can talk about what kind of currency we could use. We could even use euros, but euros created in a different way. Once this is proven to have worked with pilot projects, why not fund other expenses the same way? We could start with expenses that governments never have the money to undertake, like preventive medicine. That would save conventional state money expenditures in health care, as well as saving the suffering of the people.
As a social currency analyst, what is your opinion of cryptocurrencies? What do you think of the banking sector’s attempt to enter the cryptocurrency arena, will it succeed?
My opinion of currencies based on the block-chain technology is that they are a great invention. It is really interesting to explore what we can do with them. But the core of the transformation of the money system is not the technology of the payment systems, but the way money is created, and the way we build the confidence that underlies the monetary system. So, the social contract that underlies the money system. I understand that the banking sector enters the crypto arena, as Bitcoin, particularly, is designed to make redundant the whole banking system as electronic payment channel. There is a lot at stake for banks in this move; they understood it, and they are reacting quickly. I hope, in spite of this, that some new forms of money can emerge and nurture the creation of another kind of economy focused on people’s needs and the environmental limitations we really have. My only concern about Bitcoin is about the expectations it is creating. Bitcoin can best the banking system in its function of payment system, but it is not a solution for a money creation format that is linked to society. A money creation that is linked to society and its needs is a credit system, where money is created out of credit. A type of credit that will finance productive economy and not speculative bubbles, a different way of creating money out of credit than the one the banks carry out.
Tell us more about prosumers and self-provision. It’s also interesting to talk about this in the context of the Spanish state, and the slew of anti-P2P legislation it seems to specialize in, like the solar tax.
Well, the basis is that everybody has an asset which they don’t presently use to negotiate: their demand, their capacity to buy. Demand is scarce in the capitalist context. People should use their demand not only to get better prices, as we do now, but also to negotiate and get their share of income from the production process, in order to use that income to purchase the good that is being produced.
And do you see that could work in the public sphere as well?
The example of the time tax to fund political action that I just explained could be a case for it. That is, to self-provide political services by prosumer citizens. There are many ways in which people can collaborate to build means of production that will allow them to access the products and services they need. To offer the citizen the option to produce the capital for the commons (which is a way to own but without the right to sell or destroy), and be rewarded with a token that they can then use to pay for the service or product – this is going to be the key competitive advantage of a future without employment and without scarcity. People can collaborate to create solar energy plants, distributed factories, repair workshops, and almost any kind of means of production as a commons.
Is it like an economic closed circuit?
It doesn’t need to be closed. The circuits can be interconnected and the means of production can serve not only those circuits but also the market. The prosumer can fund the initiative, which they can do not only with their money but with their endorsement, too. If they can work to build it, and consume it with a self-made means of payments they have received for the work they have done to build it, such an initiative doesn’t need to fear global competitors, as the main part of their payment commitments will be paid in kind. For everything else, you should still have the market and the state, which you can also fund with a healthier form of money.
What do you mean by a healthier form of money?
I think the de-commodification trend needs to extend to the money itself. Most money is created by the banking sector out of lending. This is the commodification of uncertainty. I think uncertainty needs to be de-commodified by the self-provision of risk assumption in non-speculative projects. Credit risk needs to enter the P2P scenario, not only to provide credit in bank money as the crowdfunding platforms do, but also to create money out of lending, like banks do, for the creation of new kinds of money. This is the way many social and complementary currencies are created. It makes sense to split and spread the risk. It is not only a way of self-provision of the collaborative economy; it also brings about a much better financial system, free of systemic risk and speculative bubbles.
You’ve also examined possible scenarios for Basic Income. Do you think this should be based on fiat currency and taxation or on new money creation? How can a basic income be compatible with sustaining the provisions of a welfare state?
I see the basic income as a necessary means for a transition towards another type of system. Employment levels are never going to recover. People need to survive and basic income is a way forward. Its main advantage is that the beneficiaries of it can devote their time to building long term solutions to solve their needs, which many times won’t be achieved by getting a job, considering the jobs available. We need a different way of production and consumption but this takes time to get built. I think basic income would work if it is mainly paid in fiat or conventional currency. Basic income in complementary currency is being tested, for instance the social currency Moneda Demos, or the Universal Relative Dividend. I think this is definitely worth exploring. But where I think that complementary currencies could be of help the most is in providing a means of exchange for those new ways of production and consumption: for the self-provision of goods and services.
Continuing the conversation on Basic Income, tell us about Barcelona’s EU pilot project for Basic Income. How will it look like and what are your expectations?
The purpose of this project is to test basic income and its potential to take people out of poverty for good. Regarding the social currency project in Barcelona, the council is conducting research about its possible implementation in order to achieve the goals of the city’s government, as a tool that can serve the city’s productive model transformation increasing its sustainability, resilience and reducing its social and economic inequalities, which are among the highest in Spain and Europe.
What is your impression of the new city government a year and a half into the legislature? Do you think En Comú is really commons-oriented, although not overtly so?
I think it has been a very interesting period in which I have noticed the true aim of building bottom-up solutions with citizens. It has been a hard period, too, with some disappointments, projects that go too slow, etc. Facing reality is never an easy matter, but the important part of this is that the council is making an effort to face reality and listen to everyone. We will see if it is able to do it.
One of the things we’ve appreciated in the formation of the new citizen coalitions in Madrid, Barcelona and Valencia is the incorporation of feminism and gender representation as a basic element. The P2P/Commons movement is sometimes characterized as being too male oriented; what can we learn from the post-15M political panorama in these “Rebel Cities”, and how do you see the gender question as it pertains to the Commons?
I think gender equality is important. As I have been able to notice, it is not only that women can access some environment like politics, or the commons, which is important of course; it goes further than that. I think the determination to integrate women changes the attitude towards “the others” in general. What I mean is that it changes the way men do things, too, making everyone more open, willing to listen, understand, and follow different people. This is key in many walks of life, but specially in politics. It makes everything richer.
Finally, how do you think we can achieve a real sharing economy, or a Commons Transition, as we like to call it?
It think the weak part of the commons is that very frequently it is not a business for anyone. So, nobody is interested in funding it. This is a real hurdle for its development. The solution is to create a new kind of money that can fund the commons. Conventional money taps into the scarcity. The new money that can help build the commons taps on the abundance.
SUSANA MARTÍN BELMONTE’S BIO:
Economist with a Bachelor’s Degree in Economic Theory from the Universidad Autónoma de Madrid (1993) and a Master’s Degree in Marketing Management from ESIC (1998). She was a market analyst in the Commercial Office of the Spanish Embassy in Mexico, as part of a Spanish Institute for Foreign Trade (ICEX) program for promoting foreign trade. Her professional career has been largely devoted to the new technology sector in private business, with an international focus. In 2003, she began research on the monetary system. The resulting work was published by the Spanish publisher Icaria, entitled “Nothing is lost: a healthy alternative monetary and financial system.” Since then, she has juggled her work in economic criticism, complementary currency development and developing the Institute for Social Money (of which she is co-founder). She is currently working in a research programe, with the council of Barcelona, on social innovation related to Basic income and a local currency.