Wisdom Economics: knowledge-anchored monetary creation within an endogenous biophysical ceiling
Year: 2026
Type: preprint
Abstract: Every monetary system answers one question before all others: against what is new money created? For five thousand years the answer has pointed backwards — cattle, silver, national debt, gold, and since 1971 nothing external at all. Money is minted against things that already exist, which means it is minted against extraction. Knowledge, the one input that is non-rival, that carries increasing returns, and that alone can separate welfare from material throughput, sits entirely outside the issuance mechanism and is funded from the residue of money created against something else. This exclusion is not an oversight but the central design fault of contemporary macroeconomic governance, and it explains a cluster of pathologies usually studied apart: the appropriability gap in innovation, falling research productivity, the deadweight of grant tournaments, the replication crisis, the collapse of journalism’s economics, the inversion of educational finance, and the chronic starvation of culture. Wisdom economics is the discipline that follows knowledge economics, and it turns on one move: where knowledge economics counts the stock of ideas, wisdom economics prices their direction. The paper formalises a wisdom aggregate W = Σ kᵢ·δᵢ·ρᵢ and proposes that new money be issued as a function of W, capped by biosphere regeneration. Knowledge sets allocation; the biosphere sets volume. Regenerative capacity is treated here as endogenous rather than fixed, because verticalisation of the primary sector — vertical farming, cultured protein, entomophagy, integrated aquaculture, kelp mariculture, machine-guided reforestation — releases land and lifts regenerative capacity rather than merely conserving it. A system-dynamics model incorporating that term closes the overshoot gap in 918 of 1,152 parameter combinations tested (80%), and identifies a binding constraint that is neither the biophysical ceiling, nor affluence growth, nor artificial intelligence, but a date: primary sector verticalisation must be underway at scale between 2035 and 2040, depending on how quickly released land matures into regenerative capacity. The paper closes with a concrete implementation path — which regions are best placed to begin, with which instrument, and in what order.
Source: Figshare
Author: Giovanni Di Noto
Language: English
Topic: Economic Theory and Policy
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7225014294