Flashback – Carbon Currency: A New Beginning for Technocracy?

Energy Certificate Cake presented to Technocracy co-Founder Howard Scott

Intro­duc­tion

Critics who think that the U.S. dollar will be replaced by some new global cur­rency are per­haps thinking too small.

On the world horizon looms a new global cur­rency that could replace all paper cur­ren­cies and the eco­nomic system upon which they are based.

The new cur­rency, simply called Carbon Cur­rency, is designed to sup­port a rev­o­lu­tionary new eco­nomic system based on energy (pro­duc­tion, and con­sump­tion), instead of price. Our cur­rent price-based eco­nomic system and its related cur­ren­cies that have sup­ported cap­i­talism, socialism, fas­cism and com­mu­nism, is being herded to the slaugh­ter­house in order to make way for a new carbon-based world.

It is plainly evi­dent that the world is laboring under a dying system of price-based eco­nomics as evi­denced by the rapid decline of paper cur­ren­cies. The era of fiat (irre­deemable paper cur­rency) was intro­duced in 1971 when Pres­i­dent Richard Nixon decou­pled the U.S. dollar from gold. Because the dollar-turned-fiat was the world’s pri­mary reserve asset, all other cur­ren­cies even­tu­ally fol­lowed suit, leaving us today with a global sea of paper that is increas­ingly unde­sired, unstable, unusable.

The deathly eco­nomic state of today’s world is a direct reflec­tion of the sum of its sick and dying cur­ren­cies, but this could soon change.

Forces are already at work to posi­tion a new Carbon Cur­rency as the ulti­mate solu­tion to global calls for poverty reduc­tion, pop­u­la­tion con­trol, envi­ron­mental con­trol, global warming, energy allo­ca­tion and blanket dis­tri­b­u­tion of eco­nomic wealth.

Unfor­tu­nately for indi­vidual people living in this new system, it will also require author­i­tarian and cen­tral­ized con­trol over all aspects of life, from cradle to grave.

What is Carbon Cur­rency and how does it work? In a nut­shell, Carbon Cur­rency will be based on the reg­ular allo­ca­tion of avail­able energy to the people of the world. If not used within a period of time, the Cur­rency will expire (like monthly min­utes on your cell phone plan) so that the same people can receive a new allo­ca­tion based on new energy pro­duc­tion quotas for the next period.

Because the energy supply chain is already dom­i­nated by the global elite, set­ting energy pro­duc­tion quotas will limit the amount of Carbon Cur­rency in cir­cu­la­tion at any one time. It will also nat­u­rally limit man­u­fac­turing, food pro­duc­tion and people movement.

Local cur­ren­cies could remain in play for a time, but they would even­tu­ally wither and be fully replaced by the Carbon Cur­rency, much the same way that the Euro dis­placed indi­vidual Euro­pean cur­ren­cies over a period of time.

Sounds very modern in con­cept, doesn’t it? In fact, these ideas date back to the 1930’s when hun­dreds of thou­sands of U.S. cit­i­zens were embracing a new polit­ical ide­ology called Tech­noc­racy and the promise it held for a better life. Even now-classic lit­er­a­ture was heavily influ­enced by Tech­noc­racy: George Orwell’s1984, H.G. Well’s The Shape of Things to Come and Huxley’s “sci­en­tific dic­ta­tor­ship” in Brave New World.

This paper inves­ti­gates the rebirth of Tech­noc­racy and its poten­tial to recast the New World Order into some­thing truly “new” and also totally unex­pected by the vast majority of modern critics.

Back­ground

Philo­soph­i­cally, Tech­noc­racy found it roots in the sci­en­tific autoc­racy of Henri de Saint-Simon (1760 – 1825) and in the pos­i­tivism of Auguste Comte (1798– 1857), the father of the social sci­ences. Pos­i­tivism ele­vated sci­ence and the sci­en­tific method above meta­phys­ical rev­e­la­tion. Tech­nocrats embraced pos­i­tivism because they believed that social progress was pos­sible only through sci­ence and tech­nology. [Schunk, Learning The­o­ries: An Edu­ca­tional Per­spec­tive, 5th, 315]

The social move­ment of Tech­noc­racy, with its energy-based accounting system, can be traced back to the 1930’s when an obscure group of engi­neers and sci­en­tists offered it as a solu­tion to the Great Depression.

 

The prin­cipal sci­en­tist behind Tech­noc­racy was M. King Hub­bert, a young geo­sci­en­tist who would later (in 1948 – 1956) invent the now-famous Peak Oil Theory, also known as the Hub­bert Peak Theory. Hub­bert stated that the dis­covery of new energy reserves and their pro­duc­tion would be out­stripped by usage, thereby even­tu­ally causing eco­nomic and social havoc. Many modern fol­lowers of Peak Oil Theory believe that the 2007 – 2009 global reces­sion was exac­er­bated in part by record oil prices that reflected validity of the theory.

Hub­bert received all of his higher edu­ca­tion at the Uni­ver­sity of Chicago, grad­u­ating with a PhD in 1937, and later taught geo­physics at Columbia Uni­ver­sity. He was highly acclaimed throughout his career, receiving many honors such as the Rock­e­feller Public Ser­vice Award in 1977.

In 1933, Hub­bert and Howard Scott formed an orga­ni­za­tion called Tech­noc­racy, Inc. Tech­noc­racy is derived from the Greek words “techne” meaning skill and “kratos”, meaning rule. Thus, it is gov­ern­ment by skilled engi­neers, sci­en­tists and tech­ni­cians as opposed to elected offi­cials. It was opposed to all other forms of gov­ern­ment, including com­mu­nism, socialism and fas­cism, all of which func­tion with a price-based economy.

As founders of the orga­ni­za­tion and polit­ical move­ment called Tech­noc­racy, Inc., Hub­bert and Scott also co-authored Tech­noc­racy Study Course in 1934. This book serves as the “bible” of Tech­noc­racy and is the root doc­u­ment to which most all modern tech­no­cratic thinking can be traced. Tech­noc­racy pos­tu­lated that only sci­en­tists and engi­neers were capable of run­ning a com­plex, technology-based society. Because tech­nology, they rea­soned, changed the social nature of soci­eties, pre­vious methods of gov­ern­ment and economy were made obso­lete. They dis­dained politi­cians and bureau­crats, who they viewed as incom­pe­tent. By uti­lizing the sci­en­tific method and sci­en­tific man­age­ment tech­niques, Tech­nocrats hoped to squeeze the mas­sive inef­fi­cien­cies out of run­ning a society, thereby pro­viding more ben­e­fits for all mem­bers of society while con­suming less resources.

The other inte­gral part of Tech­noc­racy was to imple­ment an eco­nomic system based on energy allo­ca­tion rather than price. They pro­posed to replace tra­di­tional money with Energy Credits.

Their keen focus on the effi­cient use of energy is likely the first hint of a sus­tained ecological/environmental move­ment in the United States. Tech­noc­racy Study Course stated, for instance,

Although it (the earth) is not an iso­lated system the changes in the con­fig­u­ra­tion of matter on the earth, such as the ero­sion of soil, the making of moun­tains, the burning of coal and oil, and the mining of metals are all typ­ical and char­ac­ter­istic exam­ples of irre­versible processes, involving in each case an increase of entropy. (Tech­noc­racy Study Course, Hub­bert & Scott, p. 49)

Modern emphasis on cur­tailing carbon fuel con­sump­tion that causes global warming and CO2 emis­sions is essen­tially a product of early Tech­no­cratic thinking.

As sci­en­tists, Hub­bert and Scott tried to explain (or jus­tify) their argu­ments in terms of physics and the law of ther­mo­dy­namics, which is the study of energy con­ver­sion between heat and mechan­ical work.

Entropy is a con­cept within ther­mo­dy­namics that rep­re­sents the amount of energy in a system that is no longer avail­able for doing mechan­ical work. Entropy thus increases as matter and energy in the system degrade toward the ulti­mate state of inert uniformity.

In layman’s terms, entropy means once you use it, you lose it for good. Fur­ther­more, the end state of entropy is “inert uni­for­mity” where nothing takes place. Thus, if man uses up all the avail­able energy and/or destroys the ecology, it cannot be repeated or restored ever again.

The Technocrat’s avoid­ance of social entropy is to increase the effi­ciency of society by the careful allo­ca­tion of avail­able energy and mea­suring sub­se­quent output in order to find a state of “equilibrium,” or bal­ance. Hubbert’s focus on entropy is evi­denced by Tech­noc­racy, Inc.‘s logo, the well-known Yin Yang symbol that depicts balance.

To facil­i­tate this equi­lib­rium between man and nature, Tech­noc­racy pro­posed that cit­i­zens would receive Energy Cer­tifi­cates in order to operate the economy:

“Energy Cer­tifi­cates are issued indi­vid­u­ally to every adult of the entire pop­u­la­tion. The record of one’s income and its rate of expen­di­ture is kept by the Dis­tri­b­u­tion Sequence, so that it is a simple matter at any time for the Dis­tri­b­u­tion Sequence to ascer­tain the state of a given customer’s bal­ance… When making pur­chases of either goods or ser­vices an indi­vidual sur­ren­ders the Energy Cer­tifi­cates prop­erly iden­ti­fied and signed.

“The sig­nif­i­cance of this, from the point of view of knowl­edge of what is going on in the social system, and of social con­trol, can best be appre­ci­ated when one sur­veys the whole system in per­spec­tive. First, one single orga­ni­za­tion is man­ning and oper­ating the whole social mech­a­nism. The same orga­ni­za­tion not only pro­duces but also dis­trib­utes all goods and services.

“With this infor­ma­tion clearing con­tin­u­ously to a cen­tral head­quar­ters we have a case exactly anal­o­gous to the con­trol panel of a power plant, or the bridge of an ocean liner.” [Tech­noc­racy Study Course, Hub­bert & Scott,p. 238 – 239]

Two key dif­fer­ences between price-based money and Energy Cer­tifi­cates are that a) money is generic to the holder while Cer­tifi­cates are indi­vid­u­ally reg­is­tered to each cit­izen and b) money per­sists while Cer­tifi­cates expire. The latter facet would greatly hinder, if not alto­gether pre­vent, the accu­mu­la­tion of wealth and property.

Tran­si­tion

At the start of WWII, Technocracy’s pop­u­larity dwin­dled as eco­nomic pros­perity returned, how­ever both the orga­ni­za­tion and its phi­los­ophy survived.

Today, there are two prin­cipal web­sites rep­re­senting Tech­noc­racy in North America: Tech­noc­racy, Inc., located in Fer­n­dale, Wash­ington, is rep­re­sented atwww.technocracy.org. A sister orga­ni­za­tion in Van­couver, British Columbia isTech­noc­racy Van­couver, can be found at www.technocracyvan.ca.

While Technocracy’s orig­inal focus was exclu­sively on the North Amer­ican con­ti­nent, it is now growing rapidly in Europe and other indus­tri­al­ized nations.

For instance, the Net­work of Euro­pean Tech­nocrats was formed in 2005 as “an autonomous research and social move­ment that aims to explore and develop both the theory and design of tech­noc­racy.” The NET web­site claims to have mem­bers around the world.

Of course, a few minor league orga­ni­za­tions and their web­sites cannot hope to create or imple­ment a global energy policy, but it’s not because the ideas aren’t still alive and well.

A more likely influ­ence on modern thinking is due to Hubbert’s Peak Oil Theory intro­duced in 1954. It has fig­ured promi­nently in the ecological/environmental move­ment. In fact, the entire global warming move­ment indi­rectly sits on top of the Hub­bert Peak Theory.

As the Cana­dian Asso­ci­a­tion for the Club of Rome recently stated, “The issue of peak oil impinges directly on the cli­mate change ques­tion.” (see John H. Walsh, “The Impending Twin Crisis,” One Set of Solu­tions?, p.5.)

The Modern Proposal

Because of the con­nec­tion between the envi­ron­mental move­ment, global warming and the Tech­no­cratic con­cept of Energy Cer­tifi­cates, one would expect that a Carbon Cur­rency would be sug­gested from that par­tic­ular com­mu­nity, and in fact, this is the case.

In 1995, Judith Hanna wrote in New Sci­en­tist, “Toward a single carbon cur­rency”, “My pro­posal is to set a global quota for fossil fuel com­bus­tion every year, and to share it equally between all the adults in the world.”

In 2004, the pres­ti­gious Har­vard Inter­na­tional Review pub­lished “A New Cur­rency“and stated,

For those keen to slow global warming, the most effec­tive actions are in the cre­ation of strong national carbon cur­ren­cies. For scholars and pol­i­cy­makers, the key task is to mine his­tory for guides that are more useful. Global warming is con­sid­ered an envi­ron­mental issue, but its best solu­tions are not to be found in the canon of envi­ron­mental law. Carbon’s ubiq­uity in the world economy demands that cost be a con­sid­er­a­tion in any regime to limit emis­sions. Indeed, emis­sions trading has been anointed king because it is the most respon­sive to cost. And since trading emis­sions for carbon is more akin to trading cur­rency than elim­i­nating a pol­lu­tant, pol­i­cy­makers should be looking at trade and finance with an eye to how carbon mar­kets should be gov­erned. We must antic­i­pate the policy chal­lenges that will arise as this bottom-up system emerges, including the gov­er­nance of seams between each of the nascent trading sys­tems, lia­bility rules for bogus per­mits, and judi­cial coop­er­a­tion. [Emphasis added]

HIR con­cludes that “after seven years of spin­ning wheels and wrong analo­gies, the inter­na­tional regime to con­trol carbon is headed, albeit ten­ta­tively, down a pro­duc­tive path.”

In 2006, UK Envi­ron­ment Sec­re­tary David Miliband spoke to the Audit Com­mis­sion Annual Lec­ture and flatly stated,

“Imagine a country where carbon becomes a new cur­rency. We carry bankcards that store both pounds and carbon points. When we buy elec­tricity, gas and fuel, we use our carbon points, as well as pounds. To help reduce carbon emis­sions, the Gov­ern­ment would set limits on the amount of carbon that could be used.” [Emphasis added]

In 2007, New York Times pub­lished “When Carbon Is Cur­rency” by Hannah Fair­field. She point­edly stated “To build a carbon market, its orig­i­na­tors must create acur­rency of carbon credits that par­tic­i­pants can trade.”

Point­Carbon, a leading global con­sul­tancy, is part­nered with Bank of New York Mellon to assess rapidly growing carbon mar­kets. In 2008 they pub­lished“Towards a Common Carbon Cur­rency: Exploring the prospects for inte­grated global carbon mar­kets.” This report dis­cusses both envi­ron­mental and eco­nomic effi­ciency in a sim­ilar con­text as orig­i­nally seen with Hub­bert in 1933.

Finally, on November 9 2009, the Tele­graph (UK) pre­sented an article Everyone in Britain could be given a per­sonal carbon allowance:

“imple­menting indi­vidual carbon allowances for every person will be the most effec­tive way of meeting the tar­gets for cut­ting green­house gas emis­sions. It would involve people being issued with a unique number which they would hand over when pur­chasing prod­ucts that con­tribute to their carbon foot­print, such as fuel, air­line tickets and elec­tricity. Like with a bank account, a state­ment would be sent out each month to help people keep track of what they are using. If their “carbon account” hits zero, they would have to pay to get more credits.” [Emphasis added]

As you can see, these ref­er­ences are hardly minor league in terms of either author­ship or con­tent. The under­cur­rent of early Tech­no­cratic thought has finally reached the shore where the waves are lap­ping at the beach.

Technocracy’s Energy Card Prototype

In July 1937 an article by Howard Scott in Tech­noc­racy Mag­a­zine described an Energy Dis­tri­b­u­tion Card in great detail. It declared that using such an instru­ment as a means of accounting is a part of Technocracy’s pro­posed change in the course of how our socioe­co­nomic system can be organized.”

Scott fur­ther wrote,

technatecard“The cer­tifi­cate will be issued directly to the indi­vidual. It is non­trans­fer­able and non­nego­tiable; there­fore, it cannot be stolen, lost, loaned, bor­rowed, or given away. It is non­cu­mu­la­tive; there­fore, it cannot be saved, and it does not accrue or bear interest. It need not be spent but loses its validity after a des­ig­nated time period.”

This may have seemed like sci­ence fic­tion in 1937, but today it is wholly achiev­able. In 2010 Tech­noc­racy, Inc. offers an updated idea of what such an Energy Dis­tri­b­u­tion Card might look like. Their web­site states,

“It is now pos­sible to use a plastic card sim­ilar to today’s credit card embedded with a microchip. This chip could con­tain all the infor­ma­tion needed to create an energy dis­tri­b­u­tion card as described in this booklet. Since the same infor­ma­tion would be pro­vided in what­ever forms best suits the latest tech­nology, how­ever, the con­cept of an “Energy Dis­tri­b­u­tion Card’ is what is explained here.”

If you study the card above, you will also note that is serves as a uni­versal iden­tity card and con­tains a microchip. This reflects Technocracy’s phi­los­ophy that each person in society must be metic­u­lously mon­i­tored and accounted for in order to track what they con­sume in terms of energy, and also what they con­tribute to the man­u­fac­turing process.

Carbon Market Players

The modern system of carbon credits was an inven­tion of the Kyoto Pro­tocol and started to gain momentum in 2002 with the estab­lish­ment of the first domestic economy-wide trading scheme in the U.K. After becoming inter­na­tional law in 2005, the trading market is now pre­dicted to reach $3 tril­lion by 2020 or earlier.

Gra­ciela Chichilnisky, director of the Columbia Con­sor­tium for Risk Man­age­ment and a designer of the carbon credit text of the Kyoto Pro­tocol, states that the carbon market “is there­fore all about cash and trading” but it is also a way to a prof­itable and greener future. (See Who Needs a Carbon Market?)

Who are the “traders” that pro­vide the open door to all this profit? Cur­rently leading the pack are JPMorgan Chase, Goldman Sachs and Morgan Stanley.

Bloomberg noted in Carbon Cap­i­tal­ists on December 4, 2009 that

“The banks are preparing to do with carbon what they’ve done before: design and market deriv­a­tives con­tracts that will help client com­pa­nies hedge their price risk over the long term. They’re also ready to sell carbon-related finan­cial prod­ucts to out­side investors.”

At JP Morgan, the woman who orig­i­nally invented Credit Default Swaps, Blythe Mas­ters, is now head of the depart­ment that will trade carbon credits for the bank.

Con­sid­ering the sheer force of global banking giants behind carbon trading, it’s no wonder ana­lysts are already pre­dicting that the carbon market will soon dwarf all other com­modi­ties trading.

Con­clu­sion

Where there is smoke, there is fire. Where there is talk, there is action.

If M. King Hub­bert and other early archi­tects of Tech­noc­racy were alive today, they would be very pleased to see the seeds of their ideas on energy allo­ca­tion grow to bear fruit on such a large scale. In 1933, the tech­nology didn’t exist to imple­ment a system of Energy Cer­tifi­cates. How­ever, with today’s ever-advancing com­puter tech­nology, the entire world could easily be man­aged on a single computer.

This article intended to show that

  • Carbon Cur­rency is not a new idea, but has deep roots in Technocracy
  • Carbon Cur­rency has grown from a con­ti­nental pro­posal to a global proposal
  • It has been con­sis­tently dis­cussed over a long period of time
  • The par­tic­i­pants include many promi­nent global leaders, banks and think-tanks
  • The con­text of these dis­cus­sions have been very consistent
  • Today’s goals for imple­menting Carbon Cur­rency are vir­tu­ally iden­tical to Technocracy’s orig­inal Energy Cer­tifi­cates goals.

Of course, a cur­rency is merely a means to an end. Who­ever con­trols the cur­rency also con­trols the economy and the polit­ical struc­ture that goes with it. Inquiry into what such a system might look like will be a future topic.

Tech­noc­racy and energy-based accounting are not idle or the­o­ret­ical issues. If the global elite intends for Carbon Cur­rency to sup­plant national cur­ren­cies, then the world eco­nomic and polit­ical sys­tems will also be fun­da­men­tally changed forever.

What Tech­noc­racy could not achieve during the Great Depres­sion appears to have finally found trac­tion in the Great Recession.

Bib­li­og­raphy & Resources

Scott & Hub­bert, Tech­noc­racy Study Course, Tech­noc­racy, Inc., 1934

Hanna, Toward a single carbon cur­rency, New Sci­en­tist, 1995

Victor & House, A New Cur­rency, Har­vard Inter­na­tional Review, Summer 2004

Hannah Fair­field, When Carbon Is Cur­rency, New York Times, May 6, 2007

M. King Hub­bert & The Tech­noc­racy Tech­nate Design, His­tor­ical blog

Everyone in Britain could be given a per­sonal carbon allowance’, Tele­graph (UK)

Net­work of Euro­pean Tech­nocrats, web­site for Europe

Tech­noc­racy, Inc.web­site for U.S.

Tech­noc­racy Van­couver, web­site for Canada

Asso­ci­a­tion for the study of Peak Oil & Gas, web­site for Peak Oil


This article was originally written in 2010

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