There exists a strange category of wealth that our economy is incapable of financing. Not because it would be useless. Quite the opposite — it is indispensable! But our way of conceiving the economy does not know how to integrate it. This is what I call the insolvable essential.
Part One — What, exactly, is solvency?
We use the word "solvable" as if it were self-evident. It is not. It designates a very precise mechanism, and it is in that precision that the lock resides.
An activity is solvable, in the sense our monetary architecture intends, when it meets a single but demanding condition: it must be able to generate, in the future, a monetary flow sufficient to repay a lent capital, increased by its interest, within a timeframe compatible with that loan, and to the benefit of whoever repays.
This sentence sounds technical. It is, in reality, the heart of the problem.
For it contains, concealed within it, four distinct conditions. Four locks that an activity must open simultaneously in order to have the right to exist monetarily. Let us examine them one by one.
First lock: monetizability
To repay a credit, you need a monetary flow. Not value in general: money — measurable, collectible, dated.
This presupposes that the value produced by the activity translates somewhere into a price. A good sold, a service invoiced, a receipt.
Yet an immense part of what is indispensable to us produces no price.
What is the price of a stable climate? What is the turnover of a species that does not go extinct? How much does an aquifer that stays drinkable take in?
These values are real. They are even decisive. But they pass through no transaction. They generate no flow. They exist outside the monetary circuit.
The first lock therefore eliminates, from the outset, everything that produces value without producing a price.
Dramatically, in the way we do economics, whatever does not count for money does not count at all.
Second lock: appropriability
Suppose an activity does produce a measurable benefit. It must still be possible for that benefit to be captured by whoever finances it, and by them alone.
This is the logic of exclusion. I only lend if I can make sure the return will come back to me.
But the benefits of the essential are almost always diffuse. Collective. Shared.
A restored forest renders services to an entire watershed, to generations not yet born, to species that will never pay. An averted pandemic benefits everyone — which is to say, no one in particular. Fundamental research irrigates whole fields of knowledge, without its funder being able to confiscate the fruit.
The more widely a benefit is shared, the less appropriable it is. The less appropriable it is, the less it can underwrite a repayment.
The paradox of regenerative activities is that they are domains we all need collectively, but that no one in particular is willing to pay for!
The second lock therefore eliminates everything whose value is common.
Third lock: temporal compatibility
A credit has a horizon. A few years, sometimes a few decades for the longest. Repayment must occur within that horizon.
Yet the processes that produce the essential unfold over timescales that bear no relation to those of credit.
A living soil does not rebuild itself in five years. A mature forest takes decades to become one. The stability of a climate plays out over centuries. The resilience of an institution is built over generations.
Regeneration is slow by nature. It maintains, it reconstitutes, it accumulates patiently. Credit, by contrast, is in a hurry. It demands a return before its due date.
Between these two temporalities, there is no occasional disagreement. There is a structural incompatibility.
The third lock eliminates everything that matures too slowly.
Fourth lock: discounting
It is the most discreet, and perhaps the most implacable.
Even when a future benefit is monetizable, appropriable and compatible with the credit horizon, finance does not count it at its real value. It reduces it to its present value by means of a discount rate.
Yet discounting crushes the future.
A benefit expected in fifty years, brought back to today at a current rate, weighs almost nothing. Mathematically, the distant future tends toward zero.
This is what I have described elsewhere as the tragedy of horizons: our instrument of calculation literally renders invisible the most distant consequences of our actions. The more an activity protects a far horizon, the more discounting depreciates it. A catastrophe averted a century from now has, in today's accounts, almost no value.
The fourth lock therefore eliminates everything that protects the long term.
The mesh of the filter
Let us now look at the four locks together.
Monetizability. Appropriability. Temporal compatibility. Positive discounting.
An activity becomes solvable only if it opens all four simultaneously.
And this is where everything is decided: the essential almost always fails on several locks at once.
A preserved forest produces no price, renders diffuse services, matures over decades, and concentrates its value in a future that discounting annuls. It fails on all four.
This is not a special case. It is the rule. Everything that pertains to the maintenance of the living, the preservation of the commons, the care of the long term, fails on this mesh.
The insolvency of the essential is therefore not an oversight. It is the logical and necessary consequence of the very definition of solvency.
The system is not mistaken. It does exactly what it was designed to do.
At this stage, a question remains. Why do the four locks seem to select, almost always, extractive activities rather than regenerative ones? Is it a mere historical accident? Or is there a deeper reason, inscribed in the laws of physics themselves?
Part Two — The thermodynamic signature
We could stop here. We would already have a solid mechanical explanation. But this question, precisely, remains open — and it is the most interesting one.
It is not a coincidence. It is a signature. A thermodynamic signature.
Money follows the flow, the flow follows entropy
Let us return to the first lock: to be solvable, one must produce a monetary flow. And a monetary flow is born, almost always, of a transformation. We sell what we have transformed.
But to transform, in the physical sense, is to degrade. It is to convert an ordered, concentrated, low-entropy stock into dissipated products and high-entropy waste.
A deposit, a forest, an aquifer, a reserve of fossil energy: these are stocks of low entropy. Accumulated order. To exploit them is to liquidate them. And liquidating a stock produces, in the same movement, goods to sell — and therefore a flow of money.
Extraction is solvable because it liquidates. It converts a patiently constituted natural capital into immediate revenue.
This is the founding intuition of Frederick Soddy, extended by Nicholas Georgescu-Roegen and then by Herman Daly: the economy is not a closed circuit turning upon itself. It is a thermodynamic process. It draws low entropy from the biosphere and rejects high entropy. The wealth-as-flow we measure is, in large part, the product of this degradation.
Regeneration liquidates nothing — and therefore yields nothing
Now let us reverse the reasoning.
What does a regenerative activity do?
It liquidates no stock. On the contrary: it maintains it, reconstitutes it, keeps it in order. A soil that is regenerated remains a soil. A forest that is preserved remains a forest. An institution that is maintained simply keeps functioning.
Yet maintaining a low-entropy stock produces no liquidable flow. Nothing comes out that can be sold. The value created takes the form of a maintenance — of a degradation that did not occur, of a collapse that did not happen.
And an averted collapse has no price. It appears in no account.
Economists call commons the indispensable resources on which society as a whole depends, but whose preservation no private actor can reasonably ensure alone. The climate, the oceans, aquifers, forests, biodiversity, but also certain human commons such as fundamental research, public health or scientific knowledge.
The commons? They are what everyone wrecks because it pays, and what no one repairs because it costs!
There is the signature. The insolvable essential is not a moral category. It is the monetary shadow of the second principle of thermodynamics.
The activities that produce a monetary flow are, overwhelmingly, those that produce entropy — that dissipate a pre-existing order. The activities that do not are those that maintain low entropy — the living world, soils, intact ecosystems, institutions, accumulated knowledge.
Our monetary architecture, by creating money only for what generates a repayable flow, structurally finances the production of entropy and starves the maintenance of negentropy.
This is not an ideological bias of the market. It is a physical coupling between the creation of money and the throughput of matter and energy that runs through the economy.
The first curse
This is exactly what I designate, in NEMO IMS, as the first of the three monetary curses: mechanical extraction.
Our money is mechanically tied to the liquidation of natural capital. Not because actors are malicious, but because the condition of solvency selects the flow, and the flow follows degradation.
As long as money is born of repayment, it will be born preferentially of what sells. And what sells is, most often, what has been extracted.
The insolvable essential is the exact reverse of this curse. What money cannot finance is precisely what does not degrade fast enough to produce a flow.
We can now state it.
Part Three — Why the false solutions fail
Once the mechanism is laid bare, one understands why the usual remedies disappoint. They all commit the same error. They all accept the filter of solvency and try to force the essential through it.
Putting a price on nature
This is the most widespread temptation: if the essential fails on the first lock for lack of a price, let us give it one. Let us value ecosystem services. Let us make people pay for what nature renders freely.
The intention is understandable. The result backfires.
For to attribute a price to an ecosystem is to make it exchangeable. And to make it exchangeable is to open the possibility of liquidating it to whoever will draw the best flow from it. We have not saved the essential from the market: we have brought it in. We have made it solvable by making it extractable.
The monetization of nature does not dissolve the lock. It extends it.
Carbon markets and payments for services
The same limits, in another form. These devices create artificial flows to remunerate what produced none. But these flows remain suspended on a fragile political will, depend on a contestable measurement, and remain infinitely weaker than the flows generated by the extraction they are meant to offset.
We create a remuneration net at the margin, while the main machine keeps running at full power in the other direction.
Green finance and ESG criteria
So-called green finance never touches the insolvable essential. By construction.
It redirects the solvable toward what is a little less harmful. It prefers a profitable, virtuous investment to a profitable, destructive one. That is better than nothing. But it remains subject to the requirement of financial return. It moves within the domain of the solvable. It never crosses its border.
Yet the essential lies, by definition, on the other side of that border.
Taxation
Taxation seems to escape the logic of repayment. It does not.
For taxation levies on a prior economic activity. It draws on flows that already exist. And those flows, as we have seen, come mostly from extraction.
In other words, the tax base is itself the product of the extractive economy. To finance regeneration through taxation amounts to making it dependent on the destruction it is supposed to repair. We finance the care with the proceeds of the wound.
Regeneration then remains structurally downstream. Always second. Always conditioned on the prosperity of what it ought to replace.
Public debt
There remains public borrowing. But a debt remains a debt. It reintroduces, at the scale of the State, the very requirement that made the essential insolvable: a future repayment, backed by future flows, subject to the markets and their judgment.
We have merely shifted the lock by one notch. We have not opened it.
The common error
All these solutions share a presupposition they never question: that the essential must become solvable in order to be financed.
They accept the filter. They try to force through it what, by nature, does not pass.
But if the insolvency of the essential follows from the very definition of solvency, then no effort to render the essential solvable can succeed without denaturing it.
The lock is not in the activities. It is in the filter.
The only coherent way out is therefore not to make the essential cross the filter. It is to create a channel of money creation that does not pass through that filter at all.
Up to here, we have done nothing but analyze the problem.
We now know why the essential remains insolvable.
One decisive question remains.
How can we finance what will never be able to become solvable without being denatured?
Part Four — NEMO IMS: decoupling money creation from solvency
This is exactly the gesture NEMO IMS proposes. Not to make the essential solvable. But to stop requiring it to be.
The central gesture: a debt-free money
If insolvency is born of the requirement of repayment, then we need a money that does not carry that requirement.
A money issued without debt. A money that does not have to return, increased by interest, within a constrained horizon, to the exclusive benefit of a lender.
As soon as a monetary issuance calls for no repayment, the four locks fall together. The financed activity no longer needs to produce a price, nor to capture its benefits, nor to keep a schedule, nor to survive discounting. It no longer has to be solvable, because it is no longer asked to repay anything.
The lock is not forced. It is bypassed.
Anchoring money in regeneration, not in debt
But a debt-free money immediately raises a question: without the discipline of repayment, what justifies its issuance? What stops it from becoming a mere printing press, disconnected from the real?
NEMO IMS's answer is to shift the anchor.
In the current system, money is anchored in debt: it is born of a credit, pledged on the promise of a future flow. NEMO IMS anchors it elsewhere: in regenerative activity itself, measured for what it maintains or reconstitutes.
What justifies the issuance is no longer the capacity to repay, but the contribution to the robustness of the system — its capacity to maintain the very conditions that make the economy possible.
The inversion is radical. Under the old logic, regeneration was a burden, financed with great difficulty out of the proceeds of destruction. Under NEMO IMS, regeneration becomes what grounds money creation. It is no longer the line item one cuts. It becomes the anchor.
An example. A team restores 500 hectares of mangrove. Today this activity is a burden. With NEMO IMS, it becomes the very support of monetary issuance. Money is no longer created because a debt is contracted, but because a common has effectively been regenerated.
Preventing drift: monetary melts
A debt-free money issued without any counterpart of destruction would end up accumulating as permanent excess. We therefore need a regulating mechanism that is not repayment.
This is the role of monetary melts — a form of demurrage, heir to the intuitions of Silvio Gesell, but carried down to the level of the transaction.
The money destined for the commons is not designed to accumulate indefinitely. It melts. It destroys itself progressively in circulation, through use. The monetary destruction that the old system operated through repayment is here integrated directly into the functioning of the money itself.
Credit destroyed money by demanding its return. The melt destroys it by keeping it circulating. In both cases the mass is regulated — but the second mechanism requires no prior solvency.
Two regimes: the dual Yin/Yang circuit of Finance
None of this means the abolition of the market or of classical credit. There exists a domain, a vast one, where the logic of solvency remains pertinent: that of market activities that really do produce flows, and that credit knows how to finance correctly.
NEMO IMS therefore does not suppress this domain. It delimits it.
This is the principle of the dual Yin/Yang circuit of Finance: two distinct regimes of money creation, each obeying its own logic.
A market finance (Yang) is degenerative and generates financial, private, short-term profits. A finance of the commons (Yin) is regenerative and generates diffuse, collective, long-term benefits.
On one side, then, the Yang circuit: backed by solvable activities, close in its functioning to what we know. On the other, the Yin circuit: debt-free, subject to the melts, anchored in regeneration, and dedicated precisely to everything the first circuit cannot finance.
The two circuits do not compete. They complement each other. One does what it knows how to do — finance the solvable. The other takes charge of what the first abandons — the insolvable essential. What was until now a blind spot becomes the proper domain of a circuit designed for it.
To try to finance diffuse, collective, long-term benefits with an instrument designed to maximize private, short-term profits amounts to using a hammer to drive a screw.
It is not the hammer that is bad. It is the tool that is unsuited to the task.
The international scale
This doubling holds only if it is protected at the international scale, failing which a debt-free circuit would be immediately sanctioned by monetary competition and by the Triffin dilemma.
This is why NEMO IMS is not only a national architecture, but an international monetary system: with its regenerative reserve instruments — the NEMO Green SDRs — and its exchange standard, which allow the finance of the commons to exist without being immediately punished by external markets.
I will not develop this international dimension here, which deserves a text of its own. I only wish to underline that it is necessary: one cannot durably finance the insolvable in a single country if the rest of the world keeps rewarding only the solvable.
Conclusion — The lock was a definition
We set out from an observation: the essential is insolvable.
We have learned that it is so not by chance, but by construction. Solvency is a filter with four locks — monetizability, appropriability, temporal compatibility, discounting — and the essential fails on these locks not for lack of value, but from an excess of value that is diffuse, slow and distant.
We have seen that this filter follows a physical frontier: it rewards the liquidation of low-entropy stocks and ignores their maintenance. The insolvable essential is the monetary shadow of the second principle of thermodynamics.
We have seen, finally, why all the solutions that try to render the essential solvable fail or denature it: the lock is not in the activities, it is in the filter.
One question then remains, and it is not the one we think.
The question was never: "where do we find the money?" Money is created every day, by the thousands of billions. The real question is: what does our money creation select for?
As long as it selects solvency, it will finance the liquidation of the world and leave its maintenance without means. This is not a fatality. It is a choice of architecture.
And a choice of architecture can be remade.
The insolvable essential can be discerned only in a system that requires the essential to be solvable. The day money creation stops posing that requirement, the category itself will disappear. Not because we will at last have found the money. But because we will have stopped asking what keeps us alive to prove first that it knows how to pay.
For nearly two centuries, we have asked of each activity: "Will you yield enough to repay a debt?"
This question made it possible to build the modern economy.
But it can no longer be the only one.
The 21st century now obliges us to pose a second: "Do you allow the conditions of life to be maintained?"
The economics of equilibrium does not replace the first question. It completes it.
For a civilization cannot durably prosper if it knows perfectly how to finance what pays…
…but remains incapable of financing what makes it possible.
Jean-Christophe Duval