Salutogenic Economic Design is a framework for rooting economic understanding, and therefore new economic design, in the fundamentals of human and ecosystem flourishing. This is a framework or all futurists: activists, investors, philanthropists, Web3 designers, municipal managers, and youth. We need YOU(th)!!
From Extractive Economics Toward Regeneration and Resilience
Economics is essentially about how money is created and how it moves. Yet, money is so ubiquitous we often fail to consider how it is designed, and the impacts of that design. As a manmade technology, it should serve the purpose of meeting human needs and not the other way around. Today it seems that humans are the tools in service of money’s insatiable need to grow. Like a parasite, money devours its own life support system just to fulfill its purpose of perpetual growth. That is a fundamental design flaw. While the pathological behavior the design produces is an unfortunate outcome, the primary focus must remain on building better systems.
As we stand at the precipice of economic, environmental, and emotional collapse — seeking to gain a foothold on an emergent future, how do we ensure our economic designs will get us there? Will decentralized digital currencies catch us before we fall, or will we drown in the hurricane of hype? How can we ensure that the pathogenic patterns that perpetuate our systemic problems are not repeated? What is the framework to enable salutogenic economic design?
Salutogenesis is a framework for thinking coherently about the fundamentals of human health and resilience. (Antonovsky) We can use the salutogenic framework to better understand the technology of money, pinpoint pathogenic design flaws, and employ salutogenic economic design to cultivate resilient economic ecosystems.
What is Money?
Money is primarily defined by three qualities: 1.) a unit of measure, 2.) a medium of exchange, and 3.) a store of wealth.
- A Unit of Measure: As far as money goes, a unit of measure simply means a price tag. What do the organic Pink Lady apples cost at the store, versus the farmer’s market, versus planting an apple tree for my best friend’s birthday? How much is my hourly labor worth compared to the cost of renting a home? What is the value of my portfolio and what can I exchange it for? Each of these illustrates how we understand goods and services in relationship to their monetary value.
*Design Flaw: monetary value is not the only value we want to measure. We should measure what matters in order to aim toward it.
2. A Medium of Exchange: Access to money allows us to get our needs and wants met. If I want Pink Lady apples, absent receiving them as a gift or having quirky coincidence of wants (perhaps allowing me to barter pink Naked Lady bulbs), I can trade money. Money is accepted because it is valued, and is valued because it can be exchanged again somewhere else. Each time money exchanges hands in a community prosperity increases. If a twenty dollar bill is exchanged 30 times at the farmer’s market, the single bill enabled $600 of value to be enjoyed that day. As a medium of exchange, money enables prosperity.
*Design Flaw: Interest-bearing or debt-based money creates perpetual scarcity as more money is always owed than what is available for public use.
3. A Store of Value. We store our extra wealth and hope it grows so that we have some sense of future security for ourselves. There are several ways to store value such as saving surplus in a bank for later use, saving for retirement or emergencies in an investment portfolio, or trading financial assets in order to perpetually grow wealth.
- Design Flaw: Money never dies, it just devalues. This leads to a glut in savings and demand for perpetual growth of asset values. Over-inflated asset values, such as housing, cause rising inflation, inequality, and economic instability. (It is like Voldemort as money.)
The more asset values grow in financial markets, the more money as a medium of exchange is siphoned out of real marketplaces. This is a critical design flaw.
Why is Money?
The why of money, or its primary purpose, is to be a tool in service of Life. As a contract or token of trust, money connects us and communicates our needs and wants across broad and diverse networks. If the purpose of money is to be in service of an optimal life experience for all, the extent that planetary destruction and increasing economic hardship impede this purpose offer a design challenge.
At this point in time, economics is primarily the creation and movement of money. As more people become dependent upon it, the extent to which human behavior is influenced by monetary design grows. The extent to which the perpetual need for money causes chronic stress is Economic Trauma. As we face mounting global crises, it is critical to ensure that we reduce the pathogenic effects of economic influences, and design economic ecosystems to be as resilient, life-affirming, and trust-building as possible. We can design salutogenic economic ecosystems.
The three primary functions of money can reflect and be in service of the three core qualities of human resilience.
What is salutogenesis?
In addition to necessary social support networks and the elements needed to sustain our bodies, salutogenesis describes the need for an internal sense of coherence. This essentially means coherence between what we need, what we have access to, and a reason to keep trying. Salutogenesis requires three core human qualities. People need to experience life as being: 1.) meaningful, 2.) manageable, and 3.) comprehensible.
- Meaningful- The research is conclusive: those who have a sense of meaning or purpose in life are far healthier, happier, and more resilient. (2020) We will face challenges, and a sense of meaning or purpose allows us to perceive the challenges as worthy of investment and engagement. Purpose provides perseverance and galvanizes grit.
- Manageable- When we have a sense that life is manageable, the resources are available to meet the demands. If meaning provides a sense that the challenge are worth our time and effort, we must also have enough available resources to make the effort. Do we have the means to make life manageable? This allows our bandwidth for creativity and connection to supercede the stress of scarcity.
- Comprehensible- Refers to the human need for some level of present and future security. Anticipating a relatively clear and structured future allows us to work toward our goals and save for retirement. A highly insecure and unpredictable future increases the fear and mistrust of others and diminishes our cognitive capacity and ability to solve problems peacefully and equitably.
Salutogenic Economic Design
There is a direct relationship between the functions of money and the qualities of salutogenesis. By comparing and contrasting the two, what emerges are three requirements for salutogenic economic design: 1.) Purpose, 2.) Prosperity, and 3.) Peace.
- Unit of Measure + Meaningful Life = Purpose
Measuring what matters means that we are using money as a technology to fulfill a primary purpose. The purpose guides the design, and the design is held accountable to the purpose. We do not compromise our purpose or contort to the will of money. Money, rather, is part of the commons. It is infrastructure that is leveraged toward a collective purpose. The purpose can change and adapt, improving as we reach our goals and target a new set of priorities. More cohesive communities, less recidivism, more trees planted, less driving can all be examples of a purpose-driven design.
2. Medium of Exchange + Manageable = Prosperity
Access to the resources we need and want, in a relatively reliable and stress free way defines prosperity. Whether this is because we live in multi-generational eco-villages, have well-established timebanks, a robust gift economy, complimentary currencies, or more robust local trade, prosperity can be measured by a salutogenic sense of manageability, rather than pathogenic measures of per capita income and poverty.
3. Store of Value + Comprehensible = Peace
Equity is not about being treated the same. Equity is fundamentally about owning a share in the future, having a reasonable amount of security, a reasonable amount of assurance that one’s efforts today will be rewarded by a future ability to manage life. When everyone is invested in the future, there will be a greater sense of shared security and therefore, peace.
Salutogenic versus Pathogenic Culture
We know the economy is at the heart of the crises that afflict people and planet. Pathogenic money has created a pathological culture where consumption is driving us to devour our own health, happiness, and life-support systems.
Stories that describe the problem generally focus more on blaming and shaming other individuals or groups for being too greedy or too corrupt. Instead, we should focus on how to rectify the design flaws that don’t just incentivize but practically demand such behavior.
It is much more practical to focus on prototyping healthier, more resilient economic ecosystems than to lament or expect to change human nature.
Web3 Needs to Know Salutogenic Economic Design
For all the good intentions of the Web3 community to decentralize and prototype a new possible world, the perceived potential and growth of the crypto-marketplace is still driven by the glut of financial value needing to be stored away and grow as much as possible. But problems are not solved with the same thinking that created them. Emergent monetary design must aim for more than being a decentralized digital replacement of the dominant design. We need to drawdown the cloud of toxic, parasitic and pathogenic asset values, and put them into projects with purpose, that cultivate peace, prosperity, regeneration, and wellbeing for all.