land (-potential) as the new money standard

Someone suggested recently to think about a new money standard. Well, thats a challenge, so I did. Since money is a virtual unit of trade, not based on any actual value. Not anymore, at least, since we left the barter economy and entered the money exchange economy, somewhere around 1600, with the Berlage Stock exchange in Amsterdam. That was the first trade exchange center worldwide where money was traded and not goods. Indeed, we in the Netherlands are largely to blame for the fact that money has become detached from the system potential, from the biological capacity, or that value has become emotion instead of based on goods, products, labor and land. I deliberately omit capital here, because it has taken on a completely different meaning in economics. In fact, of the original means of production: land, labor and capital, land was the first to be phased out, as Henri George noted at the end of the 19th century, [1] and labor now seems to be the next, with automated data management and robots entering the scene. By then only (money) capital remains as production means, and that is not at all well, because there are only a few people who still have that in sufficiently amounts (ie, who are filthy rich). In addition, there its countries and banks that can create money at will, which do not even have to pay off the debts created (they do not ‘die’ …). In any case not the countries, with the help of the banks that will keep the interest at 0 . Because they live from it and money has to roll. So that is does not look good.

So: is there another valuation unit possible? I have now realized that , from whatever angle you analyse, biomass growth actually determines how we can live together sustainably on this planet. [2] After all, we are going to phase out fossils, that has been proven to be the wrong direction. What then remains is in fact solar energy, which is mainly transferred into our energy budget via biomass. And that energy budget in turn translates into the potential to extract and use materials: Materials always go hand in hand with energy and vice versa. You cannot consider those two separately. Renewable energy? Yes, but only with the use of materials via technologies to convert that solar and wind energy. Except for a number of simple direct applications, such as drying the laundry on the clothesline, where sun and wind immediately do their work. There are still a few other direct options, but that is limited. A house does not grow directly from biomass, that is, the parts do, but not the composition. However, an English artist has managed to grow chairs directly… I’ll get to that in a moment.

Ultimately, all this can be traced back to the amount of sun (from which wind and also hydropower are derived) that we are able to convert and store, and that starts with biomass growth. The most convenient is to extract and use the necessary materials in the most effective way, and that is to use biomass directly. We may want to use steel, but then you first have to use a lot of biomass to create it. After all, we no longer do fossil energy. And that steel costs a lot of energy. And next, steel in itself does not yield anything, you cannot eat it, and it does not generate any energy. Yes, you can build a wind turbine with it, but why would you do that from steel, it can just as well be made of wood. Also the big turbines. In any case, you will then have to calculate the effectiveness on the basis of biomass input for the different routes.

All well, so biomass as a value unit instead of money? And the annual growth is the capital growth. Maybe, but where does biomass come from? From Land. Land is the free conversion machine available to store energy and material and food in a form usable for humans. And that also determines the potential of our system. Using more is decreasing the potential. So 1 m2 of land as an economic unit of accounting? Yes, I think that is the most correct and fairest. Land is our capital. And as an example that English chair grower I mentioned: you can order a chair that grows directly from willow trees, guided along a mold. It takes about 6 years, and then it is a matter of sawing off the trunk, turn it around, et voila, a chair [4]. Its growth takes up about 2 m2 of land. And it takes 6 years to grow. So the value of the chair is 12 m2-year: the fixed yield of land in time: and that depending on the product in 1 year, with 12 m2, or in 12 years with 1 m2, but that doesn’t matter. By expressing it in m2 year, at least the amount of land in relation to the occupation time is fixed in the value.

I also calculated that for a 100pct biobased house, approximately 800 m2-year is needed for the building materials per m2 of floor. In other words, for a house for each m2, a piece of land of 16 m2 must be reserved over the life of the house (50 years). That is 1600 m2 for a 100 m2 house . This also immediately shows that if that house lasts longer, the land take will be lower! (and the “value” therefore higher!) Calculated over 100 years, it will only be 800 m2 that must be permanently reserved. In other words, materials, for example in the form of houses, should last as long as possible, that creates potential for growth, is freeing land use for other services. So no more demolition, like the timber based houses that have been in the center of Troyes (France) for 550 years now.

This way you can also determine the potential budget per inhabitant on the basis of the country he or she lives in. In the Netherlands there is about 0.2 ha per person available, gross, including waterways and already “occupied land”. Occupied in the sense of unproductive, such as roads and buildings. (You can impose solar panels there, but they remain unproductive, since claiming land elsewhere to produce those solar panels … [5]) o,2 ha is the resource potential per capita, the value and interest.

Anyway, there is a catch, because the land yield is of course different, depending on climate and location. So it is also possible to build an argument for the biomass yield of 1 m2 as a measure. For example, the annual growth volume of wood. Growing that chair may only take 10 m2 elsewhere. Or 14 m2 year. So in addition to land and sun as a measure, the location influences the value that the land can provide.

All well and good, but that value in space-time, or m2-year, in no way reflects the effort made by man himself, labor , also an original production means. That can make quite a difference. Whether you leave the land to its own devices and see what grows, or whether you sow and reap and cultivate (a bit) . That’s right. So that is a variable, besides location, that can make some difference in income from that land-sun value bubble: the effort put into it, bringing land as well as labor back as prime indicators of economy!

How you include that labor value is of course crucial, because you do not want to create inequality, and there are also weaker people in society. That is then the remaining factor to engage in “socio-economic” politics.

Labor can by the way also be expressed in land. In fact, we as humans are also conversion technologies, albeit secondary: we produce labor energy from food that has come from that land as biomass. A basic vegetarian diet per person seems possible on 300 m2 of reasonably fertile and organically managed land. But that has to be studied more in depth.

I think I’m going to follow George Monbiot here, [6] (and others …!), who is recently strongly advocating to organize everything in the form of local commons, where people collectively manage land and decide what the proceeds should be , in ters of food materials or energy, and what effort is going to be made by each as production input.

Incidentally, in all this take into account the fact that the potential of the earth system and the land yield remain more or less the same every year, so that we can create growth by the longer the previous output remains available in society. But that per capita that potential decreases with more people, or less land per person! So our “real income” has in fact already been declining for decades, and will continue to do so for some time to come. Thanks to fossil, we have managed to disguise that, but a lower “income” will be inevitable now that we want to get rid of fossils. Because continuing with fossil fuels will ruin us anyway, and leave us without income at all…

It will not be a period of luxury, let that be clear. So I gladly drop my analysis for someone who sees a more optimistic way of generating potential of the system. It should of course be well within the Planetary boundaries of our system, it remains an island in space, in which, except for solar energy, nothing more is added.

 

 

* with regard to location difference, is also ‘wealth difference’…. Not for nothing that the early civilizations were located along the Mediterranean. But as an example: the rows of vines in France generally have a higher density than in the Netherlands: because of the insolation of course, which is lower in the Netherlands. And sunlight is the most important factor in the growth of plants (ripening is directly proportional to the number of hours of sun, I understand). In order to receive enough sun per vine here in the Netherlands, a slightly greater distance is needed. This partly explains why wine from the Netherlands is by definition more expensive, in terms of money but also in m2 year! By the way, this is an example where value in money and land is still somewhat linked in our current system: here the price reflects somewhat land “costs”!) Although the land value is fictitious, in both countries of course. The labor costs are also higher in the Netherlands, in terms of money I mean, which can be somewhat justified from the same calculation: the (land) yield from solar energy from food is lower here…. (leaving out artificial tricks like fertilizer that are no longer possible in a non-fossil society) Whether that is also exactly reflected in that ratio in money is the question.

 

 

[1] http://www.ronaldrovers.com/the-real-capital-is-land/

[2] http://www.ronaldrovers.com/biomass-growth-is-our-reference-back-to-the-forests/

[3] only in dutch version

[4] https://materialdistrict.com/article/full-grown-growing-furniture/#moved and

https://fullgrown.co.uk/about-us-full-grown/

[5] http://www.ronaldrovers.com/solar-panels-are-not-the-solution/

[6] Monbiot lecture on Land: start at 12 minutes to 58: https://www.youtube.com/watch?v=63WSvrquIPU&feature=emb_logo

and (short) Double Down video:

https://twitter.com/i/status/1322314301647032322

and The Guardian Article:

https://www.theguardian.com/commentisfree/2019/jun/04/tackle-inequality-land-ownership-laws?CMP=Share_AndroidApp_Gmail

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