Italy’s austerity plan – is it the result of a limited world view?

Italy announces its financial austerity plan and joins a growing list of countries trying to fend off bankruptcy and save the euro from collapse. The experts will discuss the details of interest rates and loan terms and the majority of people will carry on believing that everything will go back to normal once it is all over. But will we really ever go back to normal?

I believe there is just one major reason why everything has gone wrong, and it is based on one simple misunderstanding about money. We have been brought up to believe that money is a limited resource. If something is both limited and valued we have to make judgements about how to distribute it. Do we share it equally amongst all people? Do we give more to some people than others, and on what grounds? Do we keep some in reserve for emergencies, and what kind of emergencies would cause us to tap into our reserves? 

We have made decisions over many generations that have allowed vast variations in wealth to arise between people. We have created a world where you can stay in the Sheraton hotel in Rio de Janeiro and look out on one side onto the rich and famous enjoying a private beach whilst the view from the other side is onto Vidigal, a huge favela or slum area. This may be slightly uncomfortable, but the hotel has not gone out of business so it clearly does not disturb the guests too much. Equally you can walk through the streets of London with a wallet stuffed with cash and a bank account with millions while your fellow human beings sit on the side of the pavement, begging for a few coins. It happens every day, and we are all used to it, so it is not often that we stop to wonder whether it has to be that way.

Now let’s change just one thing. Let’s imagine that money is in fact unlimited. That anyone can have as much money as they want if they only learn how to get it. That there is as much money available for the beggar or slum dweller as there is for the millionaire or the banker. That there is no need to make decisions as to who has more and who has less because everyone can have as much as they want. Would this make a difference to the way we behave?

Of course it would. It would shift our entire focus. Firstly we could easily justify making sure that everyone in the world has a basic standard of living, regardless of which continent they live on and whether they work or not. Secondly we could educate everyone in the skill of making money so they would be free to exercise that skill if they want to. Thirdly we could appoint the most talented money-makers in our society to fund anything that needs funding, from government departments to the arts, sciences and technology and the rest of us could get on and use our varied talents to support our money-makers and others in return.

It’s not much different from now, but it’s completely different. If money were truly unlimited there would be no place for greed and selfishness. Fraud would become obsolete – it would be so much easier to get money honestly, without the risk. Outright poverty and the suffering it causes could be eliminated without it ‘costing’ us anything. We could still have vastly varying incomes if we want and enjoy differing standards of living as a result of personal choices. We could still enjoy the thrill of learning how to make money and buy more stuff but it would not be a hidden competition and there would be no winners and losers. We could still accumulate wealth and become rich if we want, but our focus will shift to sharing our wealth with others along with the knowledge of how we created it. 

It’s a simple change, but would have such a profound effect on our society that we might not be able to recognise it at first. Is it possible that it is happening already?

Joy Prospero is writer of Love Money, Money Loves You.

Picture by A McGill.