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Money, interest rates and accumulation on a finite planet: revisiting the ‘monetary growth imperative’ through institutionalist approaches

In: Sustainable Wellbeing Futures

Author

Listed:
  • Romain Svartzman
  • Joseph Ament
  • David Barmes
  • Jon D. Erickson
  • Joshua Farley
  • Charles Guay-Boutet
  • Nicolas Kosoy

Abstract

Ecological economists have often argued that the very nature of modern money, created by banks through interest-bearing debt, forces our socio-economic system to seek perpetual growth if we are to avoid a systemic collapse. The foundations of this so-called ‘monetary growth imperative’ suffer from theoretical weaknesses, as shown by several scholars who have used post-Keynesian theory and models to support their claims. However, this critique relies on an incomplete assessment of money, missing its institutional dimensions. The way money is created, circulated and destroyed is the result of social constructs, and historical accounts indicate that the progressive generalization of interest-bearing debt money since the thirteenth century marks a distinct development in the institutionalization of capitalism and its multiple growth imperatives. As such, “monetary contestations†aimed at diminishing the importance of interest rates remain critical to achieving a post-growth socio-economic system.

Suggested Citation

  • Romain Svartzman & Joseph Ament & David Barmes & Jon D. Erickson & Joshua Farley & Charles Guay-Boutet & Nicolas Kosoy, 2020. "Money, interest rates and accumulation on a finite planet: revisiting the ‘monetary growth imperative’ through institutionalist approaches," Chapters, in: Robert Costanza & Jon D. Erickson & Joshua Farley & Ida Kubiszewski (ed.), Sustainable Wellbeing Futures, chapter 16, pages 266-283, Edward Elgar Publishing.
  • Handle: RePEc:elg:eechap:18954_16
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    Cited by:

    1. Engler, John-Oliver & Kretschmer, Max-Friedemann & Rathgens, Julius & Ament, Joe A. & Huth, Thomas & von Wehrden, Henrik, 2024. "15 years of degrowth research: A systematic review," Ecological Economics, Elsevier, vol. 218(C).
    2. Olk, Christopher & Schneider, Colleen & Hickel, Jason, 2023. "How to pay for saving the world: Modern Monetary Theory for a degrowth transition," Ecological Economics, Elsevier, vol. 214(C).
    3. Hartley, Tilman & Kallis, Giorgos, 2021. "Interest-bearing loans and unpayable debts in slow-growing economies: Insights from ten historical cases," Ecological Economics, Elsevier, vol. 188(C).

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    Keywords

    Economics and Finance; Environment;

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