Abstract
Today, discussion of the ecological theory of money, especially in relation to the degrowth theory of money, is no longer a peripheral concern. Frederick Soddy is often cited as the founder of this school of thought, yet his theory of money, as a core part of the history of economics, still remains complicated and difficult to characterize.
Generally considered to be part of the post-Keynesian (PK) approach to monetary theory, Soddy's approach can be differentiated from the way in which both mainstream economics and Marxian economics deal with money.
However, PK monetary theory is often criticized for not being able to adequately account for the "limitation of the growth of debts." This paper argues that this problem can be addressed by referring to Marx's idea that the value of debts is tied to the value of commodities. In the 21st century, the largest part of money issuance is backed by government bonds. The bonds can be sold and have economic value because they beget interest. When interest payments are financed by income taxation which falls disproportionately on the working class, as the owners of labor power commodities, this relationship can be described as the "securitization of labor power."
Under such circumstances, the increased issuance of government bonds can therefore be interpreted as drawing upon labor power in the pursuit of economic growth. If economic growth faces environmental constraints, the limitation of government bond issuance must be supported by labor from the viewpoint of the ecological theory of money. Prescriptively, a government's debt management policy, controlled with regard to environmental constraints, would be a way to realize the degrowth theory of money.
