To fight financial illiteracy, we mapped our money system as waterworks

• This influx of easy money has shored up markets for yacht-backed-loans and securities, dividends, share buy-backs, and merger and acquisition deals.
• Time and again, the financial sector has flooded certain parts of the economy while other parts remained parched.

Two parts of financial literacy

• Lack of financial literacy among most citizens is at least one of the causes – though there are competing definitions of the latter.
• On 7 June, the European Commission (EC) lamented that “levels of financial literacy in the EU are too low”, posing a threat to “personal and financial well-being, households and society more broadly.” However, here the institution takes a rather narrow view of financial education, limited to personal finance – i.e., teaching people how to manage budgets, achieve saving goals, and understand different financial products.
• Earlier in March, Sigrid Kaag, the Dutch Minister of Finance echoed a similarly minimalist view of financial literacy: “By practising how to save, plan and make choices from a young age onwards, children learn how to make sound financial decisions.” The other view of financial literacy, which we support, entails a far more ambitious understanding of the money system.
• “In the age of the CDS and CDO, most of us are financial illiterates”, wrote US financial journalist Matt Taibbi in 2009, referring to the complex financial products that triggered the Great Recession.

The waterworks

• For two and half years, we developed the “waterworks of money”, an architectural visualisation of our money system that bypasses the economic jargon.
• In an animated video, we walk you through a metaphorical representation of our money system, its hidden power made manifest.

What do we water?

• Indeed, the financial sector is to the economy what an irrigation system is for farming lands.
• The architecture of our financial irrigation system and the way the sluices and floodgates are operated impacts us all.
• That’s where banks, pension funds, asset managers, and insurance firms can make a difference,” she said.
• In reality, trickle-down economics popularised by US president Ronald Reagan and UK prime minister Margaret Thatcher, does not take place.
• In democracies, higher levels of systemic financial literacy are a prerequisite to change this architecture and make the financial sector serve society better.