Rethinking money for a Doughnut economy

Overview

On May 27th, 2026, Tom Foster led a remarkable Doughnut 

# research-for-action hashtag_lookup:#research-for-action seminar on how rethinking money can improve the conceptual and practical application of Doughnut Economics.

Tom Foster is the founder of EcoProsper Consulting, an organisation based in Australia supporting others to navigate strategy and decision-making in a world shaped by ecological limits. Tom’s work integrates ecological economics, post-growth thinking, and contemporary monetary perspectives to help leaders rethink long-term viability beyond growth assumptions. He is a Doughnut Design for Business practitioner and Climate Fresk facilitator, and is currently completing a Master of Economics of Sustainability at Torrens University.

Tom shared a concise and fascinating overview of how money can and should be seen in the 21st century, implications for failing to do so, and some great suggestions on how to incorporate these insights into the core concepts of Doughnut Economics (Teaser: he includes a proposal to 'see money as credit' as an 8th way to think like a 21st century economist, among others!).

Tom's 32-minute presentation embedded below is well worth a watch, and you can read a 3-minute summary generated by Zoom from the meeting transcript further down. Also, here is a link to a great set of additional resources to learn more about money that Tom has posted (on the EcoProsper website), a Google Drive link to all the session's resources, and here is Tom's LinkedIn profile.

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Automated Zoom Summary

***Note: This automated summary was generated by Zoom from the recording transcript, with minor formatting edits.*** 

Tom Foster presented a fundamental reframing of money from a 20th century commodity-based view to a 21st century credit-based understanding, demonstrating how this shift expands policy possibilities for achieving Doughnut Economics goals. The session emphasized that money is created by government spending (not scarce commodity) and that political will—not financial constraints—is the primary barrier to climate action and social investment.

Origins of Money

• The conventional barter-to-money story from Adam Smith (1776) is entirely inaccurate according to anthropological and archaeological evidence
• Money emerged 5,000+ years ago in Mesopotamian temple states as accounting records on clay tablets tracking debts and obligations, not as commodity exchange
• Writing itself originated from accounting, not poetry
• The actual sequence is credit → money → barter (opposite of orthodox economics)

Five Key Implications

1. Money is Infinite (with caveats)

• Currency-issuing governments create money by keystrokes when spending, not by collecting taxes first
• Real constraint (caveat) is inflation from excessive spending relative to available resources (labour, energy, materials, ecological limits), not money supply itself
• Politicians claiming "no money" are making political choices, not facing financial constraints

2. Governments Spend Before They Tax

• Sequence is Spend → Tax → Borrow (STAB), not Tax → Borrow → Spend (TABS)
• Spending creates money; taxation destroys it by marking down accounts
• Government bonds remove money from economy (like taxation), not borrowing like households

3. Governments Not Constrained by Private Wealth

• Public money is a tool for societal purpose, reversing the hierarchy that places billionaires and bond markets above democratic institutions
• Democracy should direct spending priorities, not wealthy individuals or financial markets

4. Banks Operate Within State Hierarchy

• Banks create money but only through government charter within state-governed monetary system
• Banks are analogous to franchises of the government franchiser, not independent authorities
• Government can direct banking behaviour (e.g., defunding fossil fuels) by threatening charter removal

5. Deficits Are Not Financial Mismanagement

• Government debt is private sector credit—the money in citizens' and businesses' accounts
• Balanced budgets or surpluses would drain money from private sector
• Policy should target social foundation (minimum spending) and ecological ceiling (maximum spending), not arbitrary debt limits

Monetary Sovereignty Framework (the other key caveat)

Spectrum of Sovereignty

• Highest: United States (reserve currency), Global North nations, China
• Medium: Eurozone (structural constraints)
• Low: Sri Lanka, Argentina (high foreign debt)
• None: Ecuador (dollarized), some Pacific nations using Australian dollar

Implications for Doughnut Transitions

• Global North nations have high monetary sovereignty but bust through planetary boundaries while meeting social foundations
• Many Global South nations operate within planetary boundaries but have shortfalls in social foundations and face barriers from low monetary sovereignty due to foreign debt
• Current debt repayments from Global South to Global North prevent investment in social foundations
• 20th century commodity-money thinking creates barriers to both Global North climate funding and Global South development
• Credit-money understanding removes these conceptual barriers and enables debt jubilees

Integration with Doughnut Economics

Proposed Eighth Way to Think

• Add "See money as credit" to the seven ways to think like a 21st century economist
• Replace private commodity money framework with public credit hierarchy for societal purpose

Embedded Economy Update

• Financial flows should be shown entering and exiting through public institutions/state, not circulating indefinitely between the public and the private sector

Doughnut Economics Framework Update

• Add Monetary Sovereignty as a 13th social foundation to the Doughnut framework, where anything less than a high degree of monetary sovereignty represents social shortfall

Key Recommendations

Education as Primary Strategy

• The barter origin story pervades 99% of explainer content (including YouTube), making re-education the critical first step
• Focus on causes (misunderstanding money) rather than symptoms (local currencies, market-based solutions)
• The system and tools already exist; only the thinking needs to change

Practical Applications

• Local governments should lobby understanding that federal governments can create needed funding; refusal is political choice, not financial constraint
• Challenge politicians directly when they claim "no money" exists for climate, health, or social issues while military spending proceeds without debate
• Taxation can be decoupled from spending, reducing political resistance to progressive programs

Scale and Urgency

• Monetary system is one of the only tools capable of achieving climate action at necessary scale and speed
• Alternative approaches (local currencies, market-based energy switching) are too slow and address symptoms rather than root causes
• Billionaires can be "taxed out of existence" without needing their money for essential spending, addressing inequality, democratic interference, and ecological overshoot simultaneously

About the seminar series

This online seminar series is co-hosted by Andrew Fanning, DEAL's Research & Data Analysis Lead, together with members of the network and invited guests. The aim is to connect scholar-activists worldwide in open and informal spaces around specific topics/initiatives related to Doughnut Economics research and action. Feel free to bring a snack. 🍩

To stay tuned for periodic updates about events and other activities in the network, join the 'Doughnut Research4Action' mailing list. Thanks very much to Tom for co-hosting this session, and to everyone who generously shared time and contributions.