Complementary Currencies for Social Change - Bernard Lietaer
http://www.nexuspub.com/articles/2003/july2003/interview.htm
Complementary Currencies
- currencies that are operating on a smaller scale than the national level, and that can solve social, environmental and education problems.
Currency and Governments
- Unstable currency equals unstable governments
- Whether fix currency or float, unmanageable currency problem is a result, same if IMF dictates fiscal policy
Corporate scrip
Some examples of "corporate scrip" (a private currency issued by a corporation):
- Frequent flyer miles are private currencies issued by airlines.
- Disney Dollars can be used on par with U.S. dollars at most Walt Disney World locations.
- Canadian Tire money is a scrip issued by Canadian Tire Stores and Mastercard. It is now gaining popularity in bars, where people can sometimes spend it at par.
- Trilegiant Corporation is issuing its own Netmarket Cash for electronic commerce.
Corporate scrip can be used to abuse workers. In 1931 W.A. Bechtel was paving roads in Northern California. Workers were paid $4 a day in scrip and charged half of that for food and a rented tent. Because of the scrip, workers couldn't choose another tent or food.
Complementary community currency systems
Some examples of private currencies issued by communities:
- Time dollars are a tax-exempt kind of money that lets people convert their personal time into purchasing power by helping others in the community. Everyone's contribution is valued the same: an hour for an hour. The time dollars earned helping others can be used to receive services or help from someone else. When someone spends time dollars, someone else earns them. They can be saved up or they can be given to someone else who needs help.
- Fureai kippu are japanese private currency systems to pay for any care for the elderly that isn't covered by the national health insurance.
- Ithaca HOURS local currency is issued by a local community organization in Ithaca, New York. Ithaca HOURS are printed and exist physically. In Ithaca people can go to the farmer's market and buy vegetables and eggs with them, or even pay part of their rent.
- LETSystem is a self-regulated trading network supported by its own private currency, equivalent in measure to the national currency to make the system more practical.
The LETSystem units are information about an individual's position within a trading community. All accounts begin at zero, but nobody needs to earn before spending, because accounts can have unlimited negative balances. This information is disclosed in the network. If someone goes away leaving a negative balance nothing happens. But people could refuse to trade with that person until he or she has put his/her account into better shape. That is why balance and turnover details are available to all the other people who hold an account in that LETSystem.
So LETSystem can be considered an honor system. Most of the other complementary currencies (with the exception of Ithaca HOURS) work in a similar way.
The problem with conventional money systems: the global casino From Bernard Lietaer's book The Future of Money: Creating New Wealth, Work, and a Wiser World:
Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. [...] Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression.
And Lietaers adds in the interview:
There is practically no way today for a developing country to have a reasonable monetary policy within the current rules of the game. [...] Whether you fix your currency to the dollar or let it float, you end up with an unmanageable monetary problem, like Brazil, Russia or Argentina have experienced. Eighty-seven countries have gone through a major currency crisis in the last 25 years. Their fiscal policies are imposed by an International Monetary Fund (IMF). I am afraid that if the United States had to live by the rules that are imposed on, say, Brazil, the United States of America would become a developing country in one generation.
This system is based in scarcity, as Lietaer says in another interview:
We can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.
Gift economy
On the contrary, complementary currencies issued by communities create a gift economy based on cooperation instead of competition. These mutual credit systems do not require any centralized money supply management. Every user can 'issue' LETSystem units, because there is no negative balance limit. The only requisite is that every transaction must be registered at the LETSystem Registry to be disclosed for other people at the LETSystem. So this system avoids scarcity and therefore complementary community currencies cannot be subject of speculation.
The foreseable future
The Internet facilitates global communications, so a community does not have to be limited to a geographic area. Systems like LETS are easy set up with a computer connected to the Net. Quoting Lietaer: "It enables us to consciously design money to work for us, instead of us for it."
Due to complementary community currencies and to corporate scrip, conventional currencies will lose their hegemony, although they will not disappear. Lietaer says these currencies are "complementary" and not "alternative" to national and supranational currencies like the Dollar, the Euro, etc.
What is money?
An interesting point of the interview is the definition of what money is:
I define money, or currency, as an agreement within a community to use something as a medium of exchange. [...] And most of the time, it's done unconsciously.The agreement can be conscious or unconscious, coerced or free. Most of us don't consciously choose our money. So currencies (and therefore, money) are like The Matrix; they exist and work because we believe in them.
Complementary Currencies
- currencies that are operating on a smaller scale than the national level, and that can solve social, environmental and education problems.
Currency and Governments
- Unstable currency equals unstable governments
- Whether fix currency or float, unmanageable currency problem is a result, same if IMF dictates fiscal policy
Corporate scrip
Some examples of "corporate scrip" (a private currency issued by a corporation):
- Frequent flyer miles are private currencies issued by airlines.
- Disney Dollars can be used on par with U.S. dollars at most Walt Disney World locations.
- Canadian Tire money is a scrip issued by Canadian Tire Stores and Mastercard. It is now gaining popularity in bars, where people can sometimes spend it at par.
- Trilegiant Corporation is issuing its own Netmarket Cash for electronic commerce.
Corporate scrip can be used to abuse workers. In 1931 W.A. Bechtel was paving roads in Northern California. Workers were paid $4 a day in scrip and charged half of that for food and a rented tent. Because of the scrip, workers couldn't choose another tent or food.
Complementary community currency systems
Some examples of private currencies issued by communities:
- Time dollars are a tax-exempt kind of money that lets people convert their personal time into purchasing power by helping others in the community. Everyone's contribution is valued the same: an hour for an hour. The time dollars earned helping others can be used to receive services or help from someone else. When someone spends time dollars, someone else earns them. They can be saved up or they can be given to someone else who needs help.
- Fureai kippu are japanese private currency systems to pay for any care for the elderly that isn't covered by the national health insurance.
- Ithaca HOURS local currency is issued by a local community organization in Ithaca, New York. Ithaca HOURS are printed and exist physically. In Ithaca people can go to the farmer's market and buy vegetables and eggs with them, or even pay part of their rent.
- LETSystem is a self-regulated trading network supported by its own private currency, equivalent in measure to the national currency to make the system more practical.
The LETSystem units are information about an individual's position within a trading community. All accounts begin at zero, but nobody needs to earn before spending, because accounts can have unlimited negative balances. This information is disclosed in the network. If someone goes away leaving a negative balance nothing happens. But people could refuse to trade with that person until he or she has put his/her account into better shape. That is why balance and turnover details are available to all the other people who hold an account in that LETSystem.
So LETSystem can be considered an honor system. Most of the other complementary currencies (with the exception of Ithaca HOURS) work in a similar way.
The problem with conventional money systems: the global casino From Bernard Lietaer's book The Future of Money: Creating New Wealth, Work, and a Wiser World:
Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. [...] Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression.
And Lietaers adds in the interview:
There is practically no way today for a developing country to have a reasonable monetary policy within the current rules of the game. [...] Whether you fix your currency to the dollar or let it float, you end up with an unmanageable monetary problem, like Brazil, Russia or Argentina have experienced. Eighty-seven countries have gone through a major currency crisis in the last 25 years. Their fiscal policies are imposed by an International Monetary Fund (IMF). I am afraid that if the United States had to live by the rules that are imposed on, say, Brazil, the United States of America would become a developing country in one generation.
This system is based in scarcity, as Lietaer says in another interview:
We can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.
Gift economy
On the contrary, complementary currencies issued by communities create a gift economy based on cooperation instead of competition. These mutual credit systems do not require any centralized money supply management. Every user can 'issue' LETSystem units, because there is no negative balance limit. The only requisite is that every transaction must be registered at the LETSystem Registry to be disclosed for other people at the LETSystem. So this system avoids scarcity and therefore complementary community currencies cannot be subject of speculation.
The foreseable future
The Internet facilitates global communications, so a community does not have to be limited to a geographic area. Systems like LETS are easy set up with a computer connected to the Net. Quoting Lietaer: "It enables us to consciously design money to work for us, instead of us for it."
Due to complementary community currencies and to corporate scrip, conventional currencies will lose their hegemony, although they will not disappear. Lietaer says these currencies are "complementary" and not "alternative" to national and supranational currencies like the Dollar, the Euro, etc.
What is money?
An interesting point of the interview is the definition of what money is:
I define money, or currency, as an agreement within a community to use something as a medium of exchange. [...] And most of the time, it's done unconsciously.The agreement can be conscious or unconscious, coerced or free. Most of us don't consciously choose our money. So currencies (and therefore, money) are like The Matrix; they exist and work because we believe in them.
posted by tucque at 12:24 AM
0 Comments:
Post a Comment
<< Home