Embedded Files
Helpful prior knowledge and learning objectives
Helpful prior knowledge and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 6.1.1 Money systems, which describes the parts, relationships and functions of money systems
Section 6.1.2 History of money systems, which outlines the historical origins of different money systems and their functions
Section 6.1.3 Modern money creation, which explains how forms of money are created in modern money systems
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)
Learning objectives:
explain how money systems can both strengthen and weaken human relationships through values, power, narratives and social norms
When Michiko retired from her job in Tokyo, she began helping elderly neighbours. She shopped, cooked, and walked with them. She didn’t earn Japanese yen, but instead received fureai kippu, or ‘caring relationship tickets.’ This alternative money system supported social ties. Michiko could save the credits for her own care later or send them to a family member. The system helped make care a shared responsibility.
This story shows how money systems can shape relationships. In Michiko’s case, the design encouraged trust and support. This section explores how money systems connect or distance people and how they are connected to values, power and narratives.
How does money both connect and distance people?
How does money both connect and distance people?
Money systems allow people to exchange goods and services with strangers. This depends on trust in the system, not in individual people. You don’t need to know the baker personally, just trust that your money will be accepted. By enabling trade and mobility across regions and cultures, money systems make large-scale cooperation possible.
But not all exchanges build relationships. Philosopher Michael Sandel explains that turning social acts into money transactions can weaken trust (Section 3.2.5). For example, if you pay a friend for helping you move house, it may feel like a job, not a favour. The exchange ends with the payment, leaving no shared story or future obligation (Section 1.3.8).
Figure 1. You wouldn’t pay a friend money for helping you move house because it would harm the relationship.
(Credit: Drazen, licensed from Adobe Stock)
Money systems that rely heavily on market exchange reduce the need for reciprocity (Section 1.3.8). People can buy help rather than ask neighbours. This may be convenient, but can lead to loneliness. In contrast, helping others builds trust and strengthens community.
Financial security and independence is desirable, but too much wealth can weaken social ties. Studies show that as people gain wealth, they can become less empathetic and more likely to believe that success is due to individual effort rather than luck or the design of economic systems. This belief, called meritocracy, can lead to blaming poor people for their struggles (Section 5.4.2). As economic inequality grows, social cohesion weakens.
What is the relationship between money systems and power?
What is the relationship between money systems and power?
Power means the ability to influence other people, conditions or events (Section 1.3.9). Money systems both reflect and shape power in society.
Money systems reinforce power
Money systems reinforce power
Money systems often reflect long histories of inequality (Section 6.1.2). People with wealth or legal advantages can easily access credit and financial services. These tools help them build even more wealth. Others face barriers due to income, gender, race, or citizenship.
Money systems also influence status. Those with more money are often treated with greater respect. Their voices are louder in politics, media, and business. Those with less money may be excluded, even when they do essential work. In this way, money systems affect who is valued and who is ignored.
Power, in turn, shapes money systems
Power, in turn, shapes money systems
At the same time, powerful groups influence how money systems are designed. Large companies and wealthy individuals help shape laws, financial rules, and digital platforms through lobbying, campaign funding, or control over infrastructure (Section 5.2.3).
These power dynamics affect:
who can get affordable credit,
which public services are funded,
how crises are handled.
For example, financial rules may protect big investors during financial crises while public services like healthcare or education are cut (Section 5.2.1). This creates reinforcing feedback loops, where the powerful gain more control and others are pushed further to the margins, an example of the success-to-the-successful system trap (Section S.9).
Figure 2. Reinforcing feedback loops showing how increases in wealth can increase investments that increase incomes and further increase wealth (right loop). Wealth also reinforces economics and political power that can be used to shape laws that further increase wealth (left loop).
What is the relationship between money systems and values?
What is the relationship between money systems and values?
Values shape how money is used and what kinds of behaviour money encourages. In return, money systems send signals about what matters in society.
Values shape money systems
Values shape money systems
Money systems reflect the values and goals of the societies that create them (Section 1.3.2). Some are designed around competition and individual gain. In these systems, success means accumulating more money than others. Other systems aim to support fairness, care, or shared wellbeing. These systems aim to keep money circulating so that everyone can meet their needs.
Different societies create rules based on what they believe is fair. For instance, Islamic finance forbids charging interest (riba) on loans, because it’s seen as unfair to profit from lending unless it involves real work and shared outcomes and risk.
Other systems, like time banks (where people exchange hours of work) or rotating savings groups (where members take turns receiving money from a shared pool), are based on equality and trust. Complementary currencies like Bangla-Pesa (Section 6.1.1) are also designed to encourage local exchange, not wealth accumulation.
Figure 3. Should forms of money be stored and grown, or shared and circulated?
(Credit: Maksym Yemelyanov, licensed from Adobe Stock)
Money systems shape what we value
Money systems shape what we value
The word value can mean both price and importance. Money systems often reward profit-making, even when it harms people or Earth systems. Essential work like caregiving, farming, or teaching is often unpaid or underpaid.
This creates a mismatch between social value and monetary value. Sometimes the most important work for human and ecological wellbeing is the least rewarded (Section 5.3.5). When money becomes the main way we measure value, people may believe that only things with a price are worth something.
Money systems also influence how we think about the future. Most modern money is created through loans, which must be repaid with interest (Section 6.1.3). This pressures people, businesses, and governments to grow the economy quickly, during the time period of the loan.
Economist Bernard Lietaer argued that interest-based money systems encourage short-term thinking. People are rewarded for making fast profits, even when it causes long-term harm. In this way, the money system makes it harder to care for ecosystems and future generations
Figure 4. Our money systems pressure people to produce, sell, and compete, increasing stress and putting pressure on social and ecological relationships.
(Credit: Dibikar Roy, Pexels license)
How narratives and social norms shape our beliefs about money?
How narratives and social norms shape our beliefs about money?
Narratives are shared stories and beliefs. They help justify how money systems work. Some common examples include:
Money is earned through hard work.
Higher profits are always good.
Success means having more money than others.
These ideas influence how we behave and what systems we support. If we believe profit equals success, we’re more likely to accept systems that reward and empower wealthy people, even if those systems increase economic inequality.
Figure 5. Common narratives view this as success, and deserved.
(Credit: Sector30, licensed from Adobe Stock)
Social norms are unwritten rules about what is acceptable. In some places, it’s normal to talk about money. In others, it’s not. In some cultures, lending to friends is seen as generous. In others, it may be seen as unwise.
Norms shape who is trusted with money, who is blamed when things go wrong, and what is considered responsible behaviour. These beliefs often go unchallenged. But money systems are built on ideas and ideas can change.
What kinds of money systems support stronger human relationships?
What kinds of money systems support stronger human relationships?
Some communities create money systems based on trust, care, and shared responsibility. These include time banks, rotating savings groups, mutual aid networks, and other local, relationship-based systems (Section 6.3.3 - coming soon!). They are part of a wider tradition called social commitment pooling (Section 4.3.4). These systems show that money can strengthen community, not just serve profit and wealth accumulation. They make it easier to help each other, share resources, and build trust.
Money shapes how we relate to others in our homes, communities, and beyond. It reflects our values and reinforces patterns of power and inequality. Whether money weakens or strengthens our human relationships depends on how we design it. The same is true with money and our relationships with Earth systems, discussed next.
Figure 6. Community members in Kinango, Kenya supporting each other through a system of rotational mutual service called Mwerya
(Credit: Grassroots Economics, used with permission)
Activity 6.1.4
Activity 6.1.4
Concept: Systems, Power
Skills: Thinking skills (critical thinking)
Time: varies, depending on option
Type: Individual, pairs, and/or small group
Option 1: When is it a favour? When is it a job?
Time: 30 minutes (individual work first, then sharing with a partner)
Think about how different forms of exchange, like giving money or returning a favour, can change the meaning of an interaction. You can think about these questions on your own first, then share and compare your ideas in a pair or small group.
Read each situation below and imagine two versions:
The person helps you and you thank them with a meal, gift, or future favour.
The person helps you and you pay them money.
A friend helps you revise for an exam.
Your neighbour waters your plants while you’re away.
Your cousin spends a weekend helping you paint your bedroom.
A classmate tutors you every week for two months.
You help your aunt move heavy furniture.
Reflection questions:
For each scenario, which type of exchange feels more like a relationship, and which feels more like a transaction?
What changes in each exchange when you introduce money?
Do any of these relationships feel stronger or weaker depending on the kind of exchange? Why?
Option 2: Who gets paid more and why?
Time: 30 minutes (including the discussion/brainstorming about how to reward socially meaningful work)
Draw a table with two columns. In the first column, list 5 jobs that are well paid in your country. In the second column, list 5 jobs that are paid little or nothing, but are important for society.
Questions to consider:
Which jobs do you think contribute most to human wellbeing?
Which jobs contribute most to environmental harm?
Why do you think some are paid more than others?
What does this show about how money systems reflect power and status?
Can you imagine ways to better reward social value instead of market value? What might they look like?
Part of Section 5.3.5 Employment discusses why wages and salaries differ, and how we can support more regenerative work.
Ideas for longer activities and projects are listed in Subtopic 6.5
Checking for understanding
Checking for understanding
Further exploration
Further exploration
The World’s Most Valuable Unused Resource - a Freakonomics podcast discussing timebanks. Difficulty level: easy
Offers and Needs ‘Market’ - a website explaining an offers and needs ‘market’ where people in a community can come together to find out what each person can offer and what each person needs. The strategy makes it easier to set up systems of mutual benefit or local gift economies. Difficulty level: easy
Grassroots Economics: Reflection and Practice - a book exploring strategies for commoning by Will Ruddick. The PDF of the book is available as a free download. Difficulty level: easy
Mutual aid in Sudan: the future of aid? - an interesting article detailing many concrete examples of spontaneous mutual aid in Sudan in 2023, as the country plunged into civil war. Difficulty level: medium
Timebanks.org - a platform promoting time banking, a system where communities exchange time and skills instead of money to build trust and strengthen social ties. The site provides resources, tools, and success stories to help individuals and groups start or join time banks
Sources
Sources
Barinaga. E. (2024). Remaking Money for a Sustainable Future. Bristol University Press. https://library.oapen.org/viewer/web/viewer.html?file=/bitstream/handle/20.500.12657/89799/9781529225402.pdf?sequence=1&isAllowed=y
Bianchi, E. C., & Vohs, K. D. (2016). Social class and social worlds: Income predicts the frequency and nature of social contact. Social Psychological and Personality Science, 7(5), 479–486. https://doi.org/10.1177/1948550616641472
Mechanic. M. (2021, April 4). Research Proves It: There’s No Such Thing as Noblesse Oblige. The Atlantic. https://www.theatlantic.com/ideas/archive/2021/04/does-wealth-rob-brain-compassion/618496/
Piff, P. (2013, October). Does money make you mean? [Video]. TEDxMarin. TED Conferences. https://www.ted.com/talks/paul_piff_does_money_make_you_mean
Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House.
Sandel, M. (2012). What Money Can’t Buy: The Moral Limits of Markets. New York: Farrar, Straus and Giroux
van Staveren, I. (2015). Economics after the crisis: An introduction to economics from a pluralist and global perspective. Routledge
Terminology (in order of appearance)
Terminology (in order of appearance)
coming soon!
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