One of the first TED talks I ever watched was 3 Clues to Understanding Your Brain, by V.S. Ramachandran. A brilliant presentation in which the neurologist addresses the issue of phantom pain. To the layman, phantom pain – the pain in a limb or organ that is not physically present – seems already an unusual thing. But Ramachandran introduces us to an even more bizarre – yet quite common – affliction: a phantom limb that is paralysed. Patients who suffer from such an invisible but painful misfortune say: ‘If only I could move my arm, the agony could be relieved!’ But how to move an arm that does not exist?

Ramachandran has found a simple and cheap method to ease the pain: a $2 mirror box. The patient looks in the mirror, sees the reflection of his real arm, but for an instant is tricked to believe it is the phantom arm. The visual input makes the patient think the phantom is moving, which allows his brain to heal itself from the painful phantom paralysis.

There is another remarkable American who likes to talk about phantoms. A former professor at the Harvard Business School, he is now a prophet for radical economic change. He spreads the word and practice through the Living Economies Forum, the YES campaign and his book Agenda for a New Economy.

David Korten speaks about Phantom Wealth. Phantom wealth is the so-called ‘value’ created in what he describes as the phantom economy, or the financial economy. According to Korten, the phantom economy was originally a part of a whole, real economy, but has developed in such a way that it is now only slightly related to products and services, nature and people in the real world. The phantom economy creates financial ‘wealth’ by self-feeding and self-fuelling its internal system of financial return on investment.

According to Korten, what we call wealth today – progress in terms of GDP growth – is mainly based on this financial phantom. As a start, money is created as debt, out of nowhere, thin air, lent into existence. Once created, money then searches the highest return possible (that is: people and institutions who own money search for most lucrative ways of investing). Because the financial industry has been able to turn money into more money quicker than any other sector (not surprising given it can create financial output with no material input) the financial industry has been mainly financing itself. Money going round and round from banks to insurers to hedge funds to mortgage packages to corporate loans to futures and derivatives, back to banks to insurers to …  you get the picture – has inflated our economic balloon with a whole lot of hot air.

Today however, the financial balloon is deflating; with a speed that scares businesses, governments and lots of people who believe that the growth of the phantom economy was a sign of true advancement. Therefore, rather than letting the air out and leaving the economy to find its natural size – one that first of all fits the planet – we keep the financial ghost alive; by bail-outs, stimulation packages, keeping house prices high, having our pension money invested not in the real economy, but in financial assets. We keep the growth-story going by increasing our debt, which appears as more money, and we interpret as progress. In the self-reinforcing feedback race for money creation, society and the planet stay behind. As natural beings, they are out of breathe with this phantom pace of inflation.

We all know that phantoms don’t exist. We tell our children not to be afraid, to turn on the light and find out that it is only our fear, our imagination that makes us see what we believe. Phantoms may appear real, but they only exist in our minds. The same is true for phantom wealth, says David Korten: ‘If we look upstream for the ultimate cause of the economic crisis, we find an illusion: the belief that money – a mere number created with a simple accounting entry that has no reality outside the human mind – is wealth.’

The illusion that money is wealth has left society suffering from a severe phantom pain. Our mistaken belief in the intrinsic value of money has shaped our common understanding of development, progress and even individual worth. Today, with the phantom of the financial economy in crisis, we are hurt right at the heart of our belief system.

In his presentation, doctor Ramachandran shows us that phantom pain does not originate from physical, tangible nerves. Instead, the suffering is created in the brain, which has learned to see and feel the pain. Even when the paralyzed limb is removed, the brain holds on to its learned behaviour. In a similar way, western economies are stuck in a collective paralyzed belief system. Even though we know true wealth is in a healthy natural environment, in food, housing, good relationships and care for each other; Even though we know that money has no intrinsic value – you cannot eat it, drink it, or live in it – we struggle to let go of the learned misperception that money equals wealth and loss of it means crisis.

In order to resolve its phantom agony, society could do with a mirror box; a simple way of tricking our minds out of the old economic and mental models that keep causing the pain. A mirror that helps ourselves and the (inter)national institutions to face and break through the mental paralysis of our economic belief system.

An even more common method to get rid of phantoms is to simply turn on the light. To see through the fog of financial systems, and illuminate natural reality. Once we perceive the world with clarity and rationality, we realise that the money ghost is a creation of our own minds. We have become so used to the apparition that until now, we have kept it alive with our own value-perception. But if we choose to create a Beautiful Economy, it is time to drop the penny. To put money back into its role as a means of exchange and stop believing that money made with money is wealth. It is time to look in the mirror, blink with our eyes and cure ourselves from the phantom.