I wrote this for the 8th Way to Think Like a 21st Century Economist competition organized by Kate Raworth, author of Doughnut Economics. Raworth has offered us the first seven principles of a new economic paradigm: 1) Change the Goal, 2) See the Big Picture, 3) Nurture Human Nature, 4) Get Savvy with Systems, 5) Design to Distribute, 6) Create to Regenerate, and 7) Be Agnostic to Growth. The competition is designed to crowd source ideas for an 8th principle.

8) Get specific about “Enough” to kick the habit of “More.”

This principle builds on three others: get savvy with systems, nurture human nature, and be agnostic about growth.

I’m going to start by telling the story of two systems archetypes: More and Enough.

In systems lingo, “More” is a reinforcing feedback loop. The more money you have, the more money you can make. Stock prices go up, so more people think the stock is valuable and buy in, driving the price up further. The problem? When the system of More encounters a limit, the same structure that produced accelerating growth produces accelerating decline. It’s a boom and bust system that produces drastic swings in one direction or another.

The system of More doesn’t just produce these drastic swings in markets as a whole over the course of time – the drive for more also leads to dramatically different outcomes for different people. Not only is each person motivated to have more money tomorrow than they have today, they are also motivated to have more money than their neighbor. The system of More is characterized by a pattern known as “Success to the successful,” which leads to increasing inequality.

Inequality is bad for human well being and bad for the health of our environment.  It is no coincidence that the system we currently have is both breaking through the outer edge of the doughnut as we exceed the carrying capacity of the planet and losing people to the hole in the middle.

“Enough” describes a system known as a balancing feedback loop. Instead of boom and bust, we see a behavior pattern that oscillates gently around a steady state. A simple thermostat is a balancing feedback loop. In a balancing system, when you have more than enough, you give it to someone who has less than enough.

We need to balance out More with Less. Less always has her say in the end, but the dramatic tug of war between the two isn’t very friendly to life – human and otherwise.

We want More and Less working together as a graceful team, both in service of Enough.

Now the big question. We are talking economics, here, so, how much money is enough?

While some people have done great work trying to help folks pin down what enough money might be for them, it’s a hard thing to define.

I don’t think our difficulty settling on Enough is because we are greedy by nature or unenlightened. As my Systems Thinking professor would say, “structure drives behavior.”

The system of More is in part created by the structure of money itself.

Put another way, you can never get enough of what you don’t really need.

Here is where nurturing human nature comes in. Various sociologists and psychologists have offered frameworks for articulating a set of universal human needs, from matters of physical survival, such as food, clean air, and water, to more abstract but no less essential things, such as self-determination, creative expression, belonging, and affection. One of those thinkers is Marshall Rosenberg, who, in his work on Nonviolent Communication, differentiates between such universal human needs and the strategies that we might use to meet those needs. Rosenberg believes that almost all conflict exists at the level of strategy, and not at the level of needs.

Money is a strategy. In and of itself, it doesn’t meet any needs. At the same time, it appears to satisfy every need. In modern capitalist society, money becomes the ONLY strategy available to meet many needs.

Even if we occasionally over-eat on a favorite holiday meal, the idea of enough food is fairly easy to determine intuitively and empirically. Even if we occasionally oversleep, we will wake up when we’ve had enough rest.

Now we come to the importance of being specific about enough. I may have eaten enough food right now but in several hours I will be hungry again. I may be well rested right now, but in sixteen or eighteen hours I’ll be sleepy again. And while we might try criss-crossing our needs and strategies under stress — eating when we are tired, or going to sleep to stave off hunger — those are not healthy or sustainable behaviors. Similarly, it doesn’t help a hungry person for the person next to them to eat two meals.

Needs are specific, and so is enough. If we are going to get specific about enough, we need to answer enough of what, enough for whom, and enough for when?

Money is specific in none of these ways. Money is defined by durability – being a store of value that doesn’t decay over time – and transferability – being acceptable to all in making transactions. By its very design, money transcends the system boundaries that define enough (who, what and when), and undermines our ability to define enough.

Money could be designed differently. Currency diversity, where different currencies are specific either to a geographic area or community, or to a type of commodity, are options that might begin to make money more specific to addressing specific needs for specific people.

To make money more specific in time, we might designing a demurrage currency, where money looses value when hoarded (instead of earning compound interest), and only maintains its value when circulated.

Summary:

In order to live inside of the doughnut, we need to get specific about enough and kick the habitat of more. To get specific about enough, we need to separate needs from strategies, and answer who, when, and what? Money, a strategy, is specific in none of these ways, and needs to be redesigned.