Transactional Symmetry

Most monetary reformers stress the problem of interest as requiring the infinite growth that puts our biosphere in danger, but this author believes the problem is deeper, and lies in the 'transactional symmetry' itself.

Text

Transaction Symmetry as a Deep Structural Constraint Driving the Degradation of Our Common Capital

On the "Correlation between physical and economic degrowth".

Michel Foata-Prestavoine:

"What we wish to introduce here as a new element for reflection is that the origin of this implicit project of current monetary tools—to sacrifice common value for the benefit of private value—lies in a specific property of money: transaction symmetry.

This is a fundamental property of currencies, inherited from the Neolithic era because it was constrained by the materiality of the first monetary supports (shells, precious metals, banknotes): what goes into one pocket necessarily comes out of another's pocket. This symmetry persists today in monetary systems that have nonetheless become overwhelmingly digital: in every monetary transaction, what is recorded as a positive for one actor involved must be recorded as a negative in another's account, without the creation or destruction of units. As a consequence, everyone wants "their money's worth." Every monetary transaction is currently only an exchange of private value.

This structure imposes a mode of operation: economic actors must maximize the added value of their activity by minimizing the prices borne by the client, and consequently, the private monetary costs borne by the seller. Everything that is not charged to them (because it concerns common goods with no owner: the atmosphere, biodiversity, social cohesion) is therefore externalized. This is why, in a globalized competitive system within economies disembedded from social relations (Polanyi 1944), the most profitable activities—those able to stabilize their value chains, motivate money issuance, and feed public revenues—are systemically those that destroy shared resources the most.

Tautocracy: A Regime of Implicit Powerlessness

Transaction symmetry creates, with each transaction, a reality we call tautocracy. A regime in which the monetary and accounting system self-validates tautologically and imposes itself on everyone, including political and economic leaders, and banking institutions. It forces every other regime—democratic, autocratic, technocratic…—to proclaim wealth where it is possible to record added economic value, and preferably by reducing the costs dedicated to the care of common capital (consumption or degradation of common resources, which have no owner and are by definition free and of zero monetary value).

On a macroeconomic scale, this translates into the observation that indicators of ecological and social health are anti-correlated with the GDP indicator. The most documented correlation being that between carbon emissions and GDP. Tautocracy, therefore, refers to this accounting illusion: a world that is becoming genuinely poorer but appears to be getting richer in its monetary balance sheets. As long as transaction symmetry structures our exchanges, this illusion cannot be dispelled: the economy remains trapped in a framework where what counts in every economic interaction between agents is not what has value for everyone, but what has a price for some."

Source

• Manuscript. By Michel Foata-Prestavoine. « Lien entre décroissance physique et décroissance économique : Comment aller au-delà du constat ? »