The Economy as a Biological Organism

The economy is a biological organism. That is not a metaphor or an analogy, but a reality.

It is one of those statements that you want to first disagree with because it does not sound correct, but then you realize the economy is not a mechanical structure, but is actually made up of a living, growing, evolving mass of people doing their thing. An economy is of people, by people, and for people — and we are biological organisms.

Some might even call the economy a superorganism.

A superorganism is also a real thing, but there are not many of them. Superorganisms evolve and emerge when a species reaches a eusocial or true social condition. Eusocialism is a rare condition and somewhat oddly distributed around the animal kingdom.

The handful of species include ants, bees, termites, some wasps, a few beetles and thrips (whatever they are) have achieved this elite status. For vertebrates, there are two species of mole rats, and still up for debate, perhaps humans.

A predominant trait of superorganisms is the division of labor among castes and individuals. The economy superorganism does that well.

A superorganism also has a highly interconnected communication system. It functions much like a single organism’s nervous and brain system so it can sense and decide what to do next for its survival as a whole. Ants, bees, and termites are capable of — as a superorganism — to understand their environment and make adjustments to how they interact with their environment, so they collectively thrive and survive.

The economy superorganism does not do that very well. In fact, in that arena, we are failing as a superorganism.

It is as if the economic biological organism has more in common with bacteria in a petri dish.

Bacteria are not superorganisms. They do not divide labor or have a highly interconnected communication system. Bacteria just go. They may excrete some enzymes to make whatever they are consuming more consumable, but they don’t slow down until they hit the wall. Mainly because they don’t know the glass wall is there until they get to it.

A superorganism would know the edge of the petri dish is there because some of them would conduct reconnaissance and then come back and communicate that there is a wall ahead and the food will run out.

Bacteria, no. Economic system, no.

Oddly, but in the same manner as bacteria, the economic organism has no internal system to recognize if it resources are running out, until it gets very close to the wall. Yes, people, governments, NGOs, even corporations might wave their arms to get the attention of the economic organisms, but the economic organism has no internal governor of itself. It just goes as fast as it is fed monies.

And that is the moral of the story. The only governor an economic organism has is the rate and quantity of the money it is provided to its biological individuals.

When the US dollar was based on the gold standard, as a non-fiat currency, the economic governor was the rate that gold could be mined and how much gold should be allocated to the money supply.

Of course, it became obvious that that rate was too low to appease people and grow the economy.

To increase the money supply, the US dollar moved from the gold standard to a reserve currency pegged to the price of gold. and functioned as a quasi, non-fiat currency. The US dollar was no longer directly exchangeable for gold, but the physicality of gold still acted as a governor to the money supply.

Under this monetary model more money could be printed to appease consumers and voters, and it allowed the economic organism to continue to grow.

In the early 1970s, the US dollar as a quasi, non-fiat currency was abandoned and the US dollar became fiat with the only governor being monetary policies set by the US government officials. In other words, if you could convince policymakers to print money, then money would be printed.

And this monetary model, only 52 years old, is the monetary model in play today.

Quite amazingly is how often the US monetary system has changed. Nothing seems more permanent to US and global citizens as the US dollar, yet I am a few years older than it.

Money systems obviously evolve.

I’ve lived during two monetary models, my parents three, and my grandparents four.

Money systems obviously evolve.

And now we are perhaps in the greatest Cambrian monetary explosion ever witnessed with the proliferation of 10,000 cryptocurrencies. One would be more prudent to expect a monetary model to change than not. All the scenarios in place point to a monetary model shift:

• Inflation on the rise
• Social inequity
• Rise of global economies
• Ecological-induced inflation
• Natural capital depreciation

One can only hope that the powers-to-be recognize the list above is because of the archaic money model. The monetary system begets economic systems and the economic system begotten is based on a 52-year-old fiat currency.

It is time that the economic organism evolves from that of a mindless bacterium that “just goes” to an interconnected superorganism that is governed by the capacity of what it thrives on.

The economic organism survives and thrives due to the capacity of the ecological system to generate outputs. Imagine the cost of feeding an economic organism on the moon. Or on the Earth that has lost half of its ecological capacity. It would be extremely inflationary.

The next monetary system could be tethered to natural capital so that the total value of the monetary system is governed by the capacity of natural capital to generate wealth. A quasi, non-fiat currency tethered to an NCU (natural capital unit). And since natural capital is the foundation for both economic and ecological systems, the two biological system could communicate and one could become a superorganism, economically speaking.

Tim Gieseke manages natural capital and is the author of three books that outline the environmental, socio-economics, and governance of instituting a natural capital accounting system and employing EcoCommerce.

Collaborative Environmental Governance Frameworks: A Practical Guide (2019)

Shared Governance for Sustainable Working Landscapes (2016)

EcoCommerce 101: Adding an ecological dimension to the economy (2011)