Debt and the Tar Sands

Fort McMurray, Alberta / Photo: Kris Krug

by Charles Eisenstein

The Occupy Movement has been characterized by, and criticized for, its lack of focused objectives. Originally gathering around issues of economic inequality and debt, it soon ballooned to include every progressive issue under the sun, and then some. Yet amid the cacophony of proposals and messages, we could always detect a hint of a unifying theme. We sensed that all of these issues are somehow connected; we sensed that we were protesting something. What was that thing? What is it now? What is it about current actions to, say, stop the excavation of Alberta’s tar sands that makes them Occupy actions? What does ecosystem destruction and climate change have to do with financial inequality?

Just as we suspect, both arise from the same source. Inequality and environmental degradation are written into the rules of our financial system on a level so deep they are nearly invisible. To see how, let us start by asking, Why is it that there is money to be made by excavating the tar sands, but not by protecting the wilderness and the indigenous way of life there? After all, money is a mere social agreement, created by human beings. It is a story – a system of interpretations of symbols that defines value. How have we come to assign value to those activities that are destroying Earth?

The answer has to do with how money is created: as interest-bearing debt. At any moment, because of interest, the amount of money in existence is always less than the amount of debt. The only way to avoid defaults, unemployment and concentration of wealth is for new money to be constantly created through further lending. Lending can only happen and loans can only be repaid when there are profitable investment opportunities: the creation of new goods and services. That is, it can only happen in the presence of economic growth. When the economy stops growing, debt rises faster than income, defaults rise, employment falls, and the concentration of wealth intensifies.

Continue reading “Debt and the Tar Sands” »