Guest blog: Abundance Generation
By: Move Your Money Uk
Tags: Economics, Abundance, Blog, Renewable Energy, Bitcoin

Bruce Davis is one of the original co-founders of Zopa, the highly successful peer-to-peer lending site. He’s recently set up Abundance Generation, the ‘first community investment platform that makes it possible for people to earn a cash return by investing in renewable energy farms in the UK’. He also happens to be an anthropologist, deeply interested in the social aspects of money. In this post he explores why we might want to move our money, and reconnect to real value.

Look me in the eyes. You believe that money has real intrinsic value. Now, when I click my fingers, you are ‘back in the room!’

We live in a world that believes that money has intrinsic value, as if you could eat it. Trying to subsist on money though, is a bit like trying to eat a centimetre.

In the 20th Century we started to confuse the functions of money as a medium of exchange and as a store of value. Money is now the dominant medium of exchange because we trust that other people will also accept it in exchange for things we need or services we give. Money is now the measure of all things, but it is just that, a measure. Dollars, Pounds, Euros and Rupees are all just different names for the things we use to measure the value of something.

Unlike the centimeter though, the original of which is kept in France, there is no ‘ultimate’ money from which all other money is judged to measure value (nor is money backed by gold any more, although you still find politicians who don’t realise that fact). Rather our acceptance of money is a function of shared social and cultural beliefs.

The problem however, is that our political masters believe that money is also a store of value and want us to believe the same. However, money has no intrinsic value, and simply creating more of it through unproductive lending to speculative activities merely reduces the value of the money you already have, generating inflation. Believing that printing more money makes you richer is like believing that creating more centimeters can make a person taller.

So what are the real ‘stores of value’ in our society? Essentially these are assets which generate stuff, by producing more stuff from nature (digging up stuff or growing stuff essentially), making things (although this only creates value if you can sell it to someone for more ‘stuff’ in return) or generating from unlimited renewable resource — such as renewable energy.

Wealthy people have long realised this, and taken advantage of this. Their wealth doesn’t come from ‘money’ as such, but rather their investments in other assets. The comedian Miles Jupp sums it up when he recounts an anecdote about being mugged. “Give me all your money”, says the mugger. “Happy to,” says the rich man, “but it will take a while as it is all tied up in land. Let me take your details and I will send you a cheque in a few months.”

This is why wealthy individuals have tended to do rather well out of the financial crisis. As money has been devalued by quantitative easing and bank bailouts (essentially we now have ‘shorter’ centimetres with which to measure the value of things) the effect has been to make the ‘value’ of their real assets increase when measured in terms of money.

So what can you do? Certainly moving your money into the likes of The Co-operative, Zopa or the credit unions means that you are directing money to more ‘productive’ investments and assets, such as community enterprises and renewable energy. We’ve also just launched a new platform which enables you to put your money directly into UK renewable energy assets, just as the rich do, but from as little as £5 per investment. Abundance Generation is the part of a new wave of “democratic finance”. It allows you to have direct control over where your money goes, but also allows you to diversify your money out of “money”, offering you a sustainable way to produce real value both for yourself and society as a whole.

Originally published in March 2012 at moveyourmoney.org.uk