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. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system. 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.
*The Information Age has already spawned new kinds of currencies: frequent flyer miles are evolving toward a "corporate scrip" (a private currency issued by a corporation) for the traveling elite; a giant corporation you never heard of is issuing its own "Netmarket Cash" for Internet commerce; even Alan Greenspan, Chairman of the Federal Reserve, foresees "new private currency markets in the 21st century."
*Exorbitant compensations are paid to the very few at the top: it started with movie stars and sports heroes, and has now spread to top lawyers, traders, doctors, and business leaders. In the 1960's CEO's salaries were only thirty times greater than those of the average worker, compared with two hundred times today. Is this the dawn of a society where "Winner-takes-all" or a short-term last gasp of the transition out of the Industrial Age?
*1,900 local communities in the world, including over a hundred in the US, are now issuing their own currency, independently from the national money system. Some communities, like in Ithaca, New York, issue paper currency; others in Canada, Australia, the UK or France issue complementary electronic money.
*The value of barter transactions exchanges which do not use any money as medium of exchange - totaled almost $6.5 billion in 1994 in the US and Canada, and is increasing three times faster than normal exchanges. The magazine "Barter News" covers the industry's development and now has 30,000 subscribers. It estimates the total barter worldwide at $650 billion in 1997, and growing at an annual rate of 15%.
All of the above is part of an irreversible process of change in our money system and our societies. We are now in a transition period, an interval of great risk but also of great opportunity. The risks are not only financial, some of the emerging money technologies could create a society more repressive than anyone of us thought possible. More importantly major opportunities are also becoming available: now more than ever it has become possible to address some of the most critical issues of our times, such as enabling more meaningful work, fostering cooperation and community, even realigning long-term sustainability with financial interests. None of this is theory, real-life implementations have pragmatically demonstrated such results. Combining these innovations can make available a world of Sustainable Abundance within one generation.
Specifically in Europe, the traditional ways to handle unemployment are increasingly failing. In areas with high unemployment, people have already demonstrated that living conditions can be significantly improved by creating their own complementary currencies instead of just relying on welfare. Surprisingly, it is in fact not the first time that such solutions have been successfully implemented in the Modern world. During the 1930's many thousands of such initiatives were operational in the US, Canada, Western Europe and other areas affected by the Depression. Complementary currencies could become a key tool to buffer a region from the shocks caused by failures and crises in the official money system. Finally, this approach is a win/win for both locally owned businesses and society at large.
The degradation of the environment due to short-term financial priorities can similarly be addressed with pragmatic money innovations. Short-term thinking is shown not to be due to human nature, but to the prevailing money system. It is also possible to reverse this process, by using a currency designed specifically for multinational trade and contracts which would make long-term thinking a spontaneous process, focusing the attention on long-term sustainable solutions without the need for regulations or taxation. Historical precedents have proven such results, some of them lasting over several centuries."...
For some strange reason this book is not available from the US and Canadian Amazon web sites. A must read.
Chris Gupta
The Future of Money:
Creating New Wealth, Work, and a Wiser World
a radical fresh look at financial architecture, March 1, 2001
Reviewer: (arthurus@lycos.co.uk) from Oxford
Review: "The Future of Money" -Bernard Lietaer (Jan 2001, Century)This book really opened my eyes- I would recommend it to anyone interested in what sort of world we are in the process of creating. Not only is it rigorously analytic and comprehensively well researched - but it is also genuinely inspiring. The subject is money; what it is, where it comes from, where it goes; its history, its present, its future. Unlike so many books about money it is focused not on what happens in the minds of economists but on the phenomena that point to a revolution in progress. Who better to have witnessed such phenomena first hand than Bernard Lietaer who has 30 years of experience working as a central banker, a speculative currency trader, a professor of international finance and as an international financial adviser. He wrote "The Future of Money" while a fellow at the Centre for Sustainable Resources at Berkeley, California. We often hear that money is at the root of so many of the worlds problems (unpayable debts, capital flight, foreign exchange instability, insufficient funding for social programmes etc.). However, this book attempts to turn that notion on its head in order to show that money could rather be the root of all possibilities. A crucial point is that how we use money is largely determined by what we understand it to be. We are so used to money that we think we know what it is and we tend to take it for granted - and yet the nature of money is changing, offering us the opportunity to reappraise it, reclaim it, reorganize it for the common good. Of course this process is not automatic but rather contingent upon our conscious choice. This book is an invitation to reflect upon the paradigm shift through which our understanding of money could be about to go, heralding potential changes in our society commensurate with nothing that recent history has witnessed. From a variety of perspectives, Bernard Lietaer examines this shift- evident in phenomena such as corporate scrip credits, e-money, mutual credit currencies, global barter, social care credit programmes, LETS schemes Time Dollars etc.- and he illustrates these developments not only with detailed case studies from around the world but also with imaginative scenarios that show the direction that these seed-like initiatives could take. In contrast to the efforts of monetary reformers, past and present, he does not demand root and branch change but rather adopts a complementary approach. This seems to be practical, (the many efforts of various people to challenge the foundations of the "debt-based" fiat money system have never come to anything), instead of trying to reform the current system, he shows that multiple money systems can and should co-exist, from the scale of the village to the whole globe. Moreover, not only do these systems not threaten each other but they work together ( Gresham's law is not applicable). One of these, the WIR in Switzerland has a track record now going back 70 years with a volume of credits of over 2.5 billion SF per year. It is the diversity of so much evidence from around the world that makes his case so convincing. Take Curitiba, a city in the south of Brazil, it is famous nationally as a veritable urban paradise and was recognized in 1992 by the United Nations as the world's model ecological town- it has fantastic public transport, very high rates of recycling, many parks, low pollution, high salaries, restoration programmes. If you want to find out how this was achieved then read the "Future of Money". The question is not whether or not complementary currencies work but whether we are willing to understand and support them. The theory needs to catch up with the practice. What is more, with our present way of doing things, we are approaching crunch point (global financial meltdown is just one of the threats to human civilization, Lietaer also cites the age-wave, climate change and technology driven unemployment). Things staying the same is not one of the options, even if you like the way the world is now you'll need to do something to keep it that way. At the moment we still have the opportunity of deciding to what sort of future we would like to steer our course. Perhaps most thought provoking of all is the idea of an international trading currency, backed by a basket of commodities rather than gold or belief, and thus incurring a demurrage charge to offset storage costs. This would have the effect of inversing discounted cash-flows. So rather than chopping down trees to save money to put in the bank to generate income through interest in the future, it would become more profitable to invest money to plant trees to generate income through commercial activity in the future. The workability of such a demurrage currency is attested both in theory and in practice (Keynes and Gesel): the advantages are multiple - price stability, 100% backing, straightforward transparent international convertibility, its anti-cyclical working would make it complementary to national currencies, and not least of all, it would be free from political interference. The last point results from the fact that such a currency would be instigated not by national governments but rather by an alliance of international traders. The need for it can already be seen through the increased volume of barter occurring throughout the world by transnational corporations. Plans to bring this global reference currency (the Terra) into being are already underway through the agency of the International Terra Alliance. Perhaps more than anything else, this book is a good read, if at times unsettling. It speaks not only to the brain but also to the imagination, inviting us to look again at a world that we think we know and discover where it is going. We are offered a guide to the sort of future we might wish to inhabit and a chilling evocation of one we would most likely not.
See also: Re: If Content Wants To Be Free, How Can I Be Sustainable Robin?
posted by Chris Gupta on Friday September 10 2004
updated on Saturday September 24 2005URL of this article:
http://www.newmediaexplorer.org/chris/2004/09/10/creating_new_wealth_work_and_a_wiser_world.htm
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