Can Local Currencies Be Considered a Tool for Degrowth

7/27/2019 Can Local Currencies Be Considered a Tool for Degrowth

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P r s e n t e n v u e d e l ' o b t e n t i o n d u M a s t e r e n S c i e n c e s

c o n o m i q u e s , f i n a l i t A n a l y s e e t P o l i t i q u e E c o n o m i q u e s

Can Complementary Currencies Be Considered as aTool for De-growth?

Par Caroline Philippe

Directeur: Professeur Marek Hudon

Assesseur: Professeur Jean-Luc Demeulemeester


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Table of content

Acknowledgments _______________________________________________________________ i

List of abbreviations, figures and boxes ____________________________________________ v

Executive Summary ___________________________________________________________ vii

INTRODUCTION______________________________________________________________ 1

METHODOLOGY _____________________________________________________________ 3

PART ONE: Defining the concept of de-growth and complementary currencies___________ 6

Chapter One: The concept of de-growth, its origins, definitions, and characteristics _____ 6

1. Why and how de-growth emerged __________________________________________________ 6

1.1. The environmental limits _______________________________________________________ 61.2. The impossible economic growth_________________________________________________ 81.3. The inadequacy of sustainable development ________________________________________ 9

2. De-growth la Franaise_________________________________________________________ 11

2.1. Criticisms specific to de-growth la Franaise_____________________________________ 11a. Is de-growth a renewed critique of Capitalism? ____________________________________ 11b. The dis-embedment of the economy and the good chrematistic ________________________ 11c. The bad chrematistics: consumption___________________________________________ 13d. The alienation of technique____________________________________________________ 13

2.2. The solutions suggested by de-growth la Franaise ________________________________ 14a. The 8 Rs of Latouche ________________________________________________________ 14b. Gratuity of Aris ____________________________________________________________ 16

c. Three levels for action ________________________________________________________ 173. Ecological-economic idea of sustainable de-growth ___________________________________ 18

3.1. Weak vs strong sustainability___________________________________________________ 183.2. The steady-state economy______________________________________________________ 20

Chapter Two: Complementary currencies: its definition, objectives and illustration of the

five different profiles_________________________________________________________ 22

1. What is money? ________________________________________________________________ 22

3. Complementary currencies: definition______________________________________________ 254. The organisation of complementary currencies ______________________________________ 26

4.1. The Mutual aid and conviviality profile_________________________________________ 274.2. The Covering consumption needs profile ________________________________________ 304.3. The Valuing competences profile ______________________________________________ 304.4. The Stimulating solidarity experiments profile 30


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3. Conclusion ____________________________________________________________________ 64

Chapter Five: Politics and its relocalisation ______________________________________ 66

1. Decision-making processes _______________________________________________________ 67

2. Democratic re-appropriation of money _____________________________________________ 75

3. Conclusion ____________________________________________________________________ 75

Chapter Six: Redistributing labour_____________________________________________ 77

1. Employment profile _____________________________________________________________ 79

2. Labour in the common economy vs in the complementary currency _____________________ 81

3. Conclusion ____________________________________________________________________ 85

Chapter Seven: Complementary currencies and the environment____________________ 86

1. Sharing goods, re-using, and recycling______________________________________________ 87

2. Reducing consumption __________________________________________________________ 89

3. Reducing transport and mass tourism ______________________________________________ 93

LIMITS OF THE ANALYSIS ___________________________________________________ 96

CONCLUSION _______________________________________________________________ 98

Bibliography ________________________________________________________________ 103

Bibliography ________________________________________________________________ 103

Appendix ___________________________________________________________________ 115

A. Examples of possible impacts of climate change ______________________________________ 115

B. About resilience________________________________________________________________ 116C. Criticisms to growth: a short history ________________________________________________ 116

D. History of the ecological economic field ____________________________________________ 117

E. Four criticised concepts of neoclassical economy by ecological economists _________________ 118

F. Robert Owens experiment _______________________________________________________ 119

G. A complementary currency to answer the 1930s economic crisis. ________________________ 119

H.1. Profiles of complementary currencies according to J. Blanc (2006a) _____________________ 120H.2. The LETS in the United Kingdom (UK) ___________________________________________ 121

H.3. The Trueque- RTZO __________________________________________________________ 123

I.1. Charter of the social-oriented SEL (model)__________________________________________ 125

I.2. Charter of the economic-oriented SEL (SEL-Coup-de-Pouce) ___________________________ 130


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List of abbreviations, figures and boxes

ABBREVIATIONS

p.t.: personal translation

WCED: World Commission on Environment and Development

MOC: Mouvement des Objecteurs de Croissance

GAC: Groupe dAchat CommunCC: Complementary Currency

LETS: Local Exchange and Trading System

UK: United Kingdom

SEL: Service dEchange Local

COCO: Coordination CommitteeSOL: It stands for solidarit

NPO: Non-Profit Organisation

FIGURES

Figure 1: List of the intervieweesFigure 2: List of the debates

Figure 3: The Oikonomia and chrematistics concepts of Aristotle

Figure 4: The 8 Rs of Latouche

Figure 5: The SOL Cycle

Figure 6: The Chiemgauer Currency CycleFigure 7: Results of the workshop on money and currencies at the Second

International Conference on Economic Degrowth

Figure 8: Knowledge of the CC interviewees about de-growth


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Figure 16: Relocalising the economy

Figure 17: Political relocalisation

Figure 18: Employment profile of three LETS in Flanders

Figure 19: Redistributing labour

Figure 20: Achievement of 3 Rs of Latouche concerning the reduction of

environmental impacts

Figure 21: Example of a LETS directory for home services

BOXES

Box 1: About the term de-growth

Box 2: Definition of the different types of capital used in strong sustainability

Box 3: About demurrage

Box 4: The Argentinean economic crisis

Box 5: The Trueque crisis


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Executive Summary

The present work aims to evaluate if complementary currencies (CCs) could be considered as a toolfor the de-growth movement. We decided to assess: 1) the potential of the Belgian SEL, a system in

which non-professional services are exchanged through the use of interest free credit, not backed up

on a legal currency, and owed to the SEL community; 2) the potential of the Chiemgauer, a regional

currency in Germany, convertible with the Euro, and usable in the participating companies; 3) the

potential of the SOL, a French CC that presents one branch like the SEL and one like the Chiemgauer

topped up with a social and environmental goal.

We analyzed the three CCs under the new paradigm of society developed by the French de-growth,

and more precisely under the 8 Rs of Serge Latouche. Reevaluating, reconceptualising, restructuring,

and relocalising were grouped and analysed through the social, economic and political fields.

Redistributing was limited to the labour sphere. Finally, reducing, reusing, and recycling were grouped

to evaluate CCs impacts on the environment.

The results are the following. First, the social fabric is strengthened by the three CCs. The SEL creates

a community in which people support each other, develop solidarity and conviviality. The SOL does

that but specifically support and re-insert the socially excluded. The Chiemgauer re-enforces the sense

of community already present in the region of Chiemgau.

Second, the economy is relocalised only to a certain extent with the SEL and the SOL because of theirsmall size and low frequency of exchanges. They promote different values than the one found in the

mainstream economy. The SEL values equally any type of activities while the SOL promotes the

commitment of people in social actions and exchanges respectful of the environment. The economic

relocalisation is the main objective of the Chiemgauer and it is achieved for services and trade of

goods but not for production.

Third, the three CCs support a re-appropriation of the money by the citizens. In that sense, politics is

relocalised. Yet, the three CCs present an important involvement from members who are part of the

organisation committee but not from the other members (they follow the lead).

Fourth, the notion of labour is modified in the three schemes. They develop activities that have a


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INTRODUCTION

These last few years, society has faced numerous and difficult crises: economic and financialcrises the one of 2008, food crises the current famine in Somalia, Ethiopia and Kenya,

global warming and its climate catastrophes the violent typhoons and tsunamis in Asia, and

also social tensions the Indignant movement in Europe and the Jasmine Revolution in the

Arabic countries. In reaction to those crises, politicians have only offered short-term

solutions. Another reaction is the development of citizens movements. One of them is the de-growth movement. It suggests that societies are tormented because their organisation is

tainted. Therefore, unlike the political parties, the de-growth movement suggests a radical

change of our society, a change of paradigm.

In parallel to this movement and also in reaction to societys problems, a range of citizens

initiatives have emerged such as transition towns, the slow food movement, the development

of ecological behaviours (ex: being part of an association that supports extensive agriculture),

or complementary currencies. De-growth proponents describe those initiatives as schools of

de-growth (Latouche, p.163, 2006). They are experiments whose development is worth

studying more carefully 1 (Rumpala, p.8, 2009).

In the literature, however, there are very few articles that discuss the relevance of citizens

initiatives for the de-growth movement. Only Lietaert (2010) and Cattaneao & Gavalda

(2010) studied the relevance of the co-housing movement for the de-growth movement. Yet,

studying the achievements of such initiatives could provide us with more powerful tools in

the face of the crises we confront (Martinez-Alier et al, p.1746, 2010). Some of these

initiatives were discussed at the Second International Conference on Economic Degrowth for

Ecological Sustainability and Social Equity (Barcelona, March 2010).


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same reasons? Do they aim at the same objectives? Do complementary currencies present

functions that are in line with the de-growth movement? Could complementary currencies be

a leverage towards a de-growth society? These are the questions that will by analysed in this

dissertation in order to establish whether complementary currencies could be seen as a tool of

the de-growth movement. These questions were not addressed by the Second International

Conference on De-growth. They evaluated how complementary currencies could be

implemented but not if they were relevant to the de-growth movement.

The first part of the paper includes a description of the de-growth movement. Then, a

description of complementary currencies is made. The second part is based on empirical

research as well as theoretical research in evaluating the potential role of three specific

complementary currencies in the de-growth movement: the SEL, the SOL and the

Chiemgauer.


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METHODOLOGY

The methodology followed to answer the central question of this dissertation was twofold.

The first part consisted of a theoretical research. Academic papers, as well as books and

websites were consulted in order to describe the concepts of de-growth and of complementary

currencies. We also attended several conferences2 about de-growth and complementary

currencies in order to get a global understanding of those two movements.

There exist two sorts of de-growth: la Franaise and the ecological economic type. The

difference between the two types is that de-growth la Franaise is a movement that

criticized deeply all the pillars of society (politics, economics, social, etc) while the ecological

economic field addresses a more scientific criticism towards the economy. Some ecological

economic scholars developed a theoretical new paradigm for society (ie. the steady-state

economy of Daly), but it could in fact be the result of the de-growth movement la Franaise

(Martinez-Alier et al, 2010). Therefore, it was decided to evaluate complementary currencies

under the light of the French de-growth.

Three specific complementary currencies were considered in this study. They represent threeof the five organisational types of complementary currencies described by Blanc (2006a). The

chosen currencies are developed in Belgium (SEL) or neighbourhood countries: France (SOL)

and Germany (Chiemgauer). Complementary currencies (CCs) of the last two organizational

types not studied here- are located in different continents such as Latin America.

It seemed more appropriate to analyse currencies that evolve in a familiar context consideringthat the evaluation of the CCs according to the de-growth movement takes into account

several dimensions (ie. political, social, economic dimensions).

Th d t f th di t ti i t d f th i i l h Th li k b t d


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in the book Social research methods of Alan Bryman (2008). These techniques are common

in qualitative studies because they enable to distinguish the opinions, motivations and feelings

of the interviewees. The questionnaires of the interviews and focus groups were written

according to the different themes and questions highlighted by the theoretical research.

During the one-on-one interviews, the questions were asked in a semi-structured way. Semi-

closed questions were proposed a set of alternative answers was suggested to the

interviewee but also items such as other and why. These items allowed the interviewee

to develop his answers to a more free expression of his thoughts. Moreover, open questions

supported the questionnaire. This opening, sometimes difficult to examine afterwards,

reassures the interviewee and allows him to provide in-depth answers.

The semi-structured technique was also applied for the focus groups. In a group situation, thistechnique has the advantage to guide the group but allowed him to answer freely. During the

focus groups, the role of the animator was to present the subject, her objectives, and to define

certain rules for the good functioning of the group (the necessary participation of each person,

freedom of speech, etc.), to guide the group through the different themes but also to reframe

the discussion or to make the atmosphere less tense while staying in the background. Usualgroup phenomenons such as leadership phenomenon or conformism appeared during the

focus groups. They were managed appropriately and the focus groups thus provided

interesting elements regarding the study. Two participants of a focus group were interviewed

afterwards in order to get their full opinions on certain subjects.

The interviews were recorded and transcribed word to word. This was necessary to analyse

their content: the different themes developed by the interviewees, the repetitions, but also the

non-verbal expressions (doubts, perplexity in the voice, smiles, sighs, etc.). Thanks to these

elements the qualitative analysis enriches the present study It enables to put forward explicit


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Figure 1: List of the interviewees

Interview of Member of Length Type of interview

Bernard Simon Economic SEL

(founder)1h 21 min

Face-to-face,Villers-la-Ville

Joachim de Sousa Social SEL(founder)

54 minFace-to-face,

Brussels

Luc Belval

SOL(organisation team)

1h 59 minFace-to-face,

Lille

Christophe Levannier Chiemgauer

(organisation team)1h 52 min Phone interview

Michle Gilkinet

De-growth (organisation team)and economic SEL (member)

1h 13 minFace-to-face,Villers-la-Ville

Bernard Legros De-growth (organisation team) 1h 17 min

Face-to-face,Brussels

Source: personal work

A focus group was organized with members of the SEL-Coup-de-pouce, situated in Villers-la-

Ville and neighbouring towns and another focus group with members of the SEL-ensemble,

situated in Brussels (see figure 2). Efforts were also made to organise a focus group with

members of the de-growth movement in Brussels. It did not happen. De-growth members

seemed to be unwilling to participate in such a group. They were afraid they had nothing to

say and concluded that the reflection on complementary currencies was not very developed

among the de-growth movement.

Figure 2: List of the debates

S l k

Focus groupComplementarycurrencys type

Length Type of interview

Sel-Coup-de-pouce(5 , 4 )

Economic SEL 56 min Debate

Complement to the focusgroup: Franoise

Economic SEL 28 min Phone interview

Complement to the focusgroup: Jacques

Economic SEL 1h 03 min Phone interview

SEL-ensemble (2, 1) Social SEL 1h 24 min Debate


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PART ONE: Defining the concept of de-growth3

and complementary currencies

Chapter One: The concept of de-growth, its origins, definitions, and characteristics

The goal of this chapter is to describe the de-growth movement. According to Martinez-Alier

et al (2010), there exist two main subfields of the de-growth movement: de-growth la

Franaise and the ecological economic vision of sustainable de-growth. This section and the

rest of the dissertation addresses essentially de-growth la Franaise because someecological economics ideas and theories would follow from the French de-growth. A first

overview of this movement gives the image of a dynamic phenomenon, therefore, difficult to

understand (Personal translation (p.t.), Duverger, 2010), characterized by a heterogeneous

body of literature from academic and non-academic circles (Martinez-Alier et al, 2010).

This chapter will first explain the origin of the de-growth movement and then look at thespecificities of the two subfields with a focus on de-growth la Franaise. This movement

gathers criticisms against the main pillars of the current society (i.e. economics, politics,

social, environmental) and suggests developing a society based on completely new values.

1. Why and how de-growth emerged

In 2008, the world faced two important crises: the food crisis4 and the financial and economic

crisis5. They illustrate the pressures at different levels that the human population imposes on

nature (see 1.1), but also the pressures that humans can impose on other humans through the

search for economic growth (see 1.2). It also shows that sustainable development might not be

the solution to those problems (see 1.3).

1.1. The environmental limits

Global economic growth has resulted in increased extraction of natural resources and


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footprint of approximately 8 in 2007; meaning that if the world population consumed like

American people, 8 planet Earths would be needed to meet their current consumption and

pollution level (Global Footprint Network, 2010). According to the Intergovernmental Panel

on Climate Change, global greenhouse gas (GHG) emissions due to human activities have

increased 70% between 1970 and 2004 (Intergovernmental Panel on Climate Change, p.5,

2007). They identified human influence on sea level, wind patterns, temperatures, and on risks

of heat waves and their different degrees of likelihood6 (Intergovernmental Panel on Climate

Change, 2007). Another major issue of human activities, besides using too many resources, is

thus the impact of the pollution they create because it affects ecosystems and their resilience 7.

Whats more, nature presents some limits concerning the energy transformations it can handle

(Ayres and Warr, 2008). These limits were expressed by Georgescu-Roegen in 1975 in his

adaptation of the law of thermodynamics8

to the economic field (Harribey, 2009). In thissense, Georgescu-Roegen is considered the father of the de-growth movement (Martinez et al,

2010). The first law of thermodynamics states that energy is never gained nor lost in any

transformation processes. The energy conservation is complete if we do not take into account

its quality. Yet, the second law of thermodynamics the entropy law- states that energy

cannot be used and transformed indefinitely because its quality changes and becomesunavailable after some processes (Georgescu-Roegen, 1975). The important contribution of

Georgescu-Roegen is thus to state clearly that an infinite economic growth based on an

unlimited use and transformation of energy is not possible in an environment with limited

energy sources.

Finally, another important source for the de-growth movement is the report written by the

Meadows and the Club of Rome: Limits to growth. They concluded that economic growth

will always collapse at some point- either because of pollution, food shortage, or resource

depletion or a combination of the three and that technological improvement is only a short


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1.2. The impossible economic growth9

Global growth in production and consumption is socially unsustainable and uneconomic.

6th paragraph of the Degrowth Declaration of the Paris 2008 conference (Research &

Degrowth, 2010).

According to Martinez-Alier et al, the dominant economic paradigm rewards more instead of

better consumption and private versus public investment in man-made rather than natural

capital(italics in the text, Martinez-Alier et al, p.1, 2010). This can, in part, be seen by the

extensive use by governments of the GDP as a proxy of welfare (Cassiers & Thiry, 2009). The

GDP only measures the economic activities values of the residents of one country for a given

year (Zaccai, 2009). It does not include domestic or benevolent work nor all the impacts that

economic activities have on the environment (Robert-Demontrond, 2008; Stiglitz et al, 2009).

Moreover, GDP growth can have negative impacts because it only counts the volume of

monetary exchanges and ignores whether such exchanges go toward building economic

capacity or paying for damages, liabilities and unproductive debt (Goerner et al, p. 80,

2009). Our growing economy is indeed not stable considering that it is based on a virtuous

circle of growth. When a shock appears10 and that the economic growth slows down, the

whole system collapses (Jackson, 2009).

In addition, it has been shown that welfare in developed countries does not follow the same

trend as the GDP growth anymore (Cassiers & Delain, 2006). In the UK, incomes have

doubled during the last 30 years but the loneliness index11 has increased. Jackson showed

that income has a positive impact on the life expectancy, the mortality rate, and the education

rate but only to a certain extent (Jackson, 2009). It was also shown by Easterlin that incomegrowth does not () raise well-being, either for higher or lower income persons (Easterlin,

p.481, 2001).


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since 1975 while the GDP growth just increased 80% (Clerc, 2008).

1.3. The inadequacy of sustainable development

Sustainable development was first defined in the Bruntland report in 1987 as (the)

development that meets the needs of the present without compromising the ability of future

generations to meet their own needs (WCED, p.10, 1987). However, today, this concept

covers a lot of different meanings12 (Latouche, 2004). Proponents of de-growth criticized the

fact that sustainable development only adds an ecological component to the goal of

development and growth (Latouche, 2007). The concept does not question our society, but

rather delays the problems of limited resources (de Benoist, 2007). Latouche even sees the

concept of sustainable development as an oxymoron13 used by technocrats to ease its

acceptation. Whatever the adjective attached to it, development will always be a conception of

the world that values economic growth, progress, and rationality. Latouche and the other

critics of development such as Gilbert Rist see development as the prolongation of the

colonization, as a process of westernization in which western countries imposed their view

of society to developing countries, notably through international organizations such as the

IMF or the WTO. The criticism of sustainable development is therefore first a criticism of the

notion of development (Latouche, 2004; Rist, 2001).

Moreover, in his report Prosperity without growth, Tim Jackson comments on the

incompatibility between sustainability and growth. He criticises the relative decoupling14

solution proposed by sustainable development proponents because it only reduces the

ecological intensity per unit of economic output, not the economic output (Jackson, p. 48,2009). In practice, such decreases were noticed in a few countries only (mostly OECD

countries), not in the whole world. In addition, absolute decoupling15 is not happening: the

total amount of carbon emissions since 1970 has only increased, and the resource


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in energy and resources consumption (Duval, 2004). Jackson explains: far from acting to

reduce the throughput of goods, technological progress serves to increase production output

by reducing factor costs (Jackson, p. 64, 2009). For instance, using energy-efficient lighting

could reduce the electricity bill and energy use, but instead lights are left on longer. The

Ehrlich equation16 explains this phenomenon algebraically (Alcott, 2010).

Finally, the OECD Environmental Outlook to 2030, the European Environmental Agency,

and the Millennium Ecosystem Assessment all concluded that the actions taken today underthe sustainable development framework to reduce human-induced pressure on the

environment are not sufficient. Social problems supposed to be tackled by the Millennium

Development Goals are not improving (Martinez-Alier et al, 2010). And even if sustainable

development was able to decrease the environmental impacts of the economic growth, it

would only postpone the depletion of resources (de Benoist, 2007).

The three problems detailed here - environmental limits, economic growth, and the

inadequacy of sustainable development - are illustrated by the multiple crises the world has to

face today. Martinez-Alier sees those crises as an opportunity to put the economy of the rich

countries on a different trajectory as regards material and energy flows (and) for a

restructuring of social institutions. () Now is the time in rich countries for socially

sustainable economic de-growth (Martinez-Alier, p.1100, 2009). The specific elements of

the de-growth movement are described in the two following sections. Section 2 analyses de-

growth la Franaise while section 3 analyses the ecological economic viewpoint of de-

growth.

Box 1: About the term degrowth

De-growth is the literal translation of the French word dcroissance. It was translated as such by J.

Grinevald for the 1979 book of Georgescu-Roegen The Entropy Law and the Economic Process


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2. De-growth la Franaise

De-growth la Franaise is a movement whose impetus is given by two important French de-

growth proponents: Serge Latouche and Paul Aris. De-growth tries to overcome the three

issues explained above but it goes much further into a criticism of todays society (Kallis,

2011). The first part of this section will describe those critiques and the second part will

describe the solutions proposed by de-growth la Franaise.

2.1. Criticisms specific to de-growth la Franaise

a. Is de-growth a renewed critique of Capitalism?

The de-growth movement developed a critique that is partly in line with the one made against

capitalism18. However, the de-growth critique is larger than a critique about relations ofproduction. De-growth questions the production itself, why it needs to grow, and why society

is centred on the market (Cheynet, 2008; Bernard et al, 2003). In this sense, socialism is also

not desirable for the society because it aims at the development of the production (Galbraith,

1997; Latouche, 2006). Latouche explains that the markets, the currencies, and profit are not

to be blamed since they are necessary elements of a society. Instead, it is the hegemony of themarket, of certain currencies, of profit and of production that are to blame. What de-growth

proponents suggest is to escape economism, and to re-embed (those institutions- market,

currencies) in another logic (Latouche, p. 189, 2006).

b. The dis-embedment of the economy and the good chrematistic

The concept of disembedment was developed by Karl Polanyi who analysed the proper

place of economic activity in society and within our culture (Brown, p.65, 2011). In his book

The Great Transformation Polanyi explained that exchanges during the Greco Roman period


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sufficiency, reciprocity, and redistribution- the three other types of economic activities

identified by Polanyi (Polanyi, 1944).

Aristotle developed the concepts of oikonomia and chrematistics. They characterize two

different sorts of humans activities (see Figure 3). Oikonomia includes the activities linked to

the production of use-values, such as agriculture, and the activities linked to the art of living

and living well.

Figure 3: The Oikonomia and chrematistics concepts of Aristotle

Source: Cruz et al, p.2022, 2009

The concept of oikonomia, literally translated as the art of household management, also

incorporates exchange activities that are necessary for the households- commerce, one sort ofchrematistics supported by Aristotle. However, there exists another sort of chrematistics

characterized as the art of money-making(Cruz et al, p. 2021, 2009) through which people

accumulate exchange-values when they commerce. This sort of chrematistics is not supported

by Aristotle because he considers it as unnatural (Mda, 2011). According to Cruz et al

(2009), The Wealth of Nations of Adam Smith illustrates this change of paradigm. Theeconomic science started in the 18th century to only study chrematistic while the non-

chrematistic dimensions (most of the oikonomia) were taken as exogenous variables in

models (Cruz et al, 2009).


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c. The bad chrematistics: consumption

The individual's autonomy is intolerably reduced by a society that defines the maximum satisfaction

of the maximum number as the largest consumption of industrial goods (Illich, p.7, 1973).

What de-growth proponents also criticize is that todays society is based on the notion of

having instead of being (de Benoist, 2007). Consumption has taken an important place in

our society, up to the point that consuming has now a social and psychological function.

Hamilton identifies an important social change during the last four decades. According to

him, societies values changed from a determination of social categories according to the

occupation (the production) of people to a determination of social categories based on their

consumption (Hamilton, 2010).

Paul Aris supports this idea of a consumption society. According to him, there exist two

different functions of a market good: the official function is the practical use of the good

and the ignored function is the social and psychological use of the good. He explains that

consuming is linked to this ignored function and is prominent in the society, while using has

become less important. For him, de-growth is therefore not about reducing consumption or

avoiding over-consumption but to stop consumption in itself, to stop using goods for their

social and psychological function (Aris, 2005). Anthropologic researches indeed showed for

a lot of countries around the world that consumer goods provide a symbolic language in

which we communicate continually with each other () about what really matters to us:

family, friendship, (), meaning and purpose in life (Jackson, p.38, 2009). This new

function of consumption, however, appeared to compensate for the non-fulfilment of social

and psychological needs of humans. This results from the degradation of social ties (Briceno

& Stagl, 2006).

A new paradigm must be developed to reach a social and psychological functioning of society

not based on goods (Jackson, 2009). This change of imaginary supports a stronger sense of


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Figure 4: The 8 Rs of Latouche

technology because it turns humans into instruments (Martinez-Alier et al, 2010). More

specifically, according to Illich, machines were supposed to replace slaves but they ended

up enslav(ing) men (Illich, p.6, 1973). Technique decreases our autonomy when it is

supposed to liberate us (Clerc, 2004). In addition, According to Bernard Legros, technique

is not neutral; she wears a specific project of society which is today an industrial project. We

question this industrial project of endless economic development, growth, progress.21 (p.t.,

Bernard Legros, interview).

The point of view of Aris on technique is that there must be certain boundaries to its

development because it influences the authenticity of our lives- a life in which humans

should agree and recognize their weaknesses and limits. He is against the dependence of

humans on techniques. They become indeed so complex that humans are not able to

understand how their world functions (Aris, 2010). For Latouche, technique must also be re-embedded in the society because it does not serve the well-being of humans. He argues that

technique is not anymore a tool for humans since it imposes its rules on those of the State22.

Furthermore, the modern man is infinitely less autonomous and less able to solve alone his

problems () he is a technophage, a consumer of technique but not much of a real

technician23

(p.t., Latouche, p.57, 1995).

2.2. The solutions suggested by de-growth la Franaise

a. The 8 Rs of Latouche

Latouche lists eight objectives (see figure 4) to create a different

trajectory and to develop a radical change of direction for

societies. According to him, these objectives will enable the

development of a virtuous cycle of serene convivial and


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Reconceptualizing key values is a necessary step to develop a society not based on growth,

progress and consumption. Changing social values and the goal of production to make

profit- is essential to develop another society where mans happiness is not to live a lot, but

to live better24 (p.t., Latouche, p. 180, 2006).

Redistributing wealth first concerns redistributing lands that have been monopolized by the

intensive agriculture and the development of cities. This problem must be solved in the South

for the farmers without land and in the North for bad land quality (Latouche, 2006). Second,redistributing concerns work: by redistributing employments between people (by reducing

working time), the unemployment problem could be solved. It will also give more free time to

people who could be used to create wealth of another type (Latouche, 2007). It could be

spent to reflect more on the meaning of life as Ellul suggested (Latouche, 2006). Finally,

redistribution concerns wages. According to Latouche, competition on salaries should not beallowed because it leads workers to lower level of quality of live. Instead, a minimum wage

for everyone should be introduced (Latouche, 2007; Laville, 2001; Van Parijs, 1999).

Relocalization is a main subject of the de-growth movement. The idea is to relocalize the

economy at a more realistic level. Local firms would produce products financed by local

savings for the locals therefore leading to a decrease in heavy industries25. Production would

need to suffice only to a small amount of persons- those who live in the locality26. Going even

further, Latouche states that auto-production for food (local farming) but also for energy is

desirable (Latouche, 2006). Whats more, de-growth proponents suggest to relocalize politics

because it will help re-embed the economy in the society and strengthen cultural and social

life. The idea is to develop an ecological democracy similar to the Greek democracy where

society was managed by its members. The approach is to develop more and more local

politics by coordinating the different local experiments in order to finally reach an


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Reducing, recycling and reusing are three objectives that aim to decrease the use of raw

materials, and to reduce our ecological footprint. Reducing and limiting consumption of

goods is a sensitive topic since it is linked with the freedom to choose. Latouche thus

recommends not a total ban of certain products but instead recommends objective limits

imposed after open debates and clear experts information. Reducing consumption concerns

goods but also wastes of goods. Furthermore, transport and energy consumption can be

reduced by increasing transport costs according to the polluter-pays principle (Latouche, 2006

and 2007). However, this reduction in consumption should apply to countries that exceed

their allowable ecological footprint (Martinez-Alier et al, p.3, 2010). Finally, reusing and

recycling products is a good way to avoid waste. Consumption should be abstemious:

products can be repaired; second-hands products can be bought. What is even more important

is that companies should improve the quality of their products. Todays products are indeed

meant to last only for a certain amount of time or of uses. In a de-growth society, disposable

products should be much less present and jobs to repair products will (re)appear (Latouche,

2006).

The size of the world population is also considered a pressure on resources. Yet, there are no

clear solutions proposed by de-growth proponents about this problem (Kerschner, 2010).Latouche only states humanity will imperatively have to master its reproduction. He does

not go further (Latouche, 2006).

b. Gratuity of Aris

Paul Aris is another important de-growth proponents along with Serge Latouche in France.

He agrees with the main point developed by Latouche. However, the reflexion of Aris about

de-growth differs on one point: he supports the development of gratuity for a broad range of


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Second, gratuity has been fought by the rich classes even though, according to Aris, gratuity

on the goods from the nature is a given right (natural gratuity). Aris also supports a social

and economic gratuity such as free public transportation.

The last argument for gratuity is psychoanalytic. Fighting for more gratuity would create a

leverage effect for the de-growth movement. Supporting gratuity of services would question

the importance of the market; would enable to think about another organisation of the society.

He advocates gratuity of the good usage in opposition with the wrong usage. This impliesa debate in the society about what is a good usage and what is not. Aris gives the example of

the use of water for cleaning in opposition with a use of water for filling a swimming pool.

Gratuity is a solution to develop a society that is secured; a society in which people are able to

enjoy their life simply (Aris, 2010).

c. Three levels for action

To achieve the eight Rs of Latouche or more generally a de-growth society, there exist three

levels of action. First, individual actions refer to the voluntary simplicity movement. Frugality

is the main component of this way of living (De Bouver, 2008). Aris stresses that frugality is

a way of living more happily. He explains that the aim of simplicity is to render the economic,

financial and technological sectors less complex to enable a blossoming of the social live

(Aris, 2005). Voluntary simplicity is focused on the time that people find back for their real

needs- not consuming useless goods, decreasing the number of work hours in the benefit of

time for their personal life (Mongeau, 2003; Latouche, 2006).

The second stream of action is the collective actions, citizens initiatives such as the

complementary currencies, the extensive agriculture, the GAC (Groupe dAchat Commun,

ie. common buying group), or the co-housing movement. Cooperation instead of competition


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3. Ecological-economic idea of sustainable de-growth

In parallel to de-growth la Franaise, there exists another academic current that integratesthe environmental limits, the economic growths and the inadequacy of sustainable

developments issues. This ecological economic movement28 is different from de-growth la

Franaise in its structure but also in the ideas it defends. First, de-growth la Franaise

includes some academic but also non-academic proponents while the ecological economy is

mainly composed of scholars. Second, de-growth la Franaise is a socio-politicalmovement that integrates culturalist and anthropologist analysis of the society. On the

contrary, the ecological economy establishes a structured critique of the economy and aims at

developing an economic theory that integrates the constraints of the environment (Martinez-

Alier et al, 2010). The main reproach that is directed to the neoclassical economy is its focus

on the Pareto efficiency criteria

29

as the standard for social welfare. The efficiency objectiveis indeed present in the consumer theory for the utility maximization but also in the

production theory for the profit maximization. They leave distributional and social questions

outside of the economic science. Ecological economists identify four major flaws in the

neoclassical welfare economics: value monism, rational actor model, marginal analysis and

the decisions criteria30 (Gowdy and Erickson, 2005).

The first section illustrates the opposition between the neoclassical and ecological economics

theories by describing first weak sustainability and then strong sustainability (Gowdy, 2000).

The second section describes the steady-state economy framework which could be the result

of the de-growth movement la Franaise (Martinez-Alier et al, 2010).

3.1. Weak vs strong sustainability

a. The weak sustainability paradigm

Th k t i bilit di i l ll d th b tit t bilit di b N


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2010). Weak sustainability assumes also that the economic output can be perpetuated along

with an appropriate framework for humans. If natural capital decreases, it will be replaced by

manufactured capital to continue the development of the economy. It is thus the total capital

stock that prevails here, not the composition of that stock (Gowdy, 2000).

The weak sustainability paradigm is in fact part of the sustainable development theory.

Indeed, the problem of maintaining the total capital stock boils down to an inter-generational

balance problem described in the Bruntland report31 (Van den bergh, 2010; WCED, 1987).Weak sustainability promotes the idea that scarcity is relative and therefore that natural

depletion can be replaced by human capital (Daly, 1974a). Instead, ecological economics is

based on the stronger notion of strong sustainability.

b) The strong sustainability paradigm

Strong sustainability is defined by Neumayer as a paradigm that regards natural capital as

fundamentally non-substitutable through other forms of capital (Neumayer, p.24, 2010). It is

the core value of ecological economics in comparison with utility maximization, the core

Box 2: Definition of the different types of capital used in strong sustainability

The first type of capital- natural capital- presents four functions. Natural capital first provides

production with the necessary raw materials. It also absorbs the pollution created by the

production and the consumption of goods. A third role of natural capital is to enable human life

itself, to ensure the necessary conditions for its development. Finally, it presents a role of

amenity services that provides welfare to humans such as the beauty of landscapes (Ekins et al,

2003). The second type of capital- economic capital- can be divided in manufactured and human

capital as suggested by Neumayer. Ekins adds a third element to that: social capital. Manufactured

capital refers to machines and infrastructures necessary for the production. Human capital refers tothe intellectual knowledge and to labor capacities of humans. Social capital includes all the

organization and networks developed to enable interactions between people (Costanza,2001).


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exhausted, it will not be possible to replace it with the other type of capital (Baumgartner &

Quaas, 2009). The reason is fourfold. First, humans basic needs are dependant on natural

capital. Second, there is a lot of uncertainty around the causes that can undermine natural

capital. Yet, once natural capital is lost, it is so permanently. Finally, it seems that

consumption cannot balance the loss of natural capital (Neumayer, 2010).

The objective of ecological economics is thus to integrate the environmental variable in the

common economic theory because of the non-substitutability of capitals. The steady-state

economy is one theory that integrates this constraint. It is described in the following section.

3.2. The steady-state economy

The concept of a steady-state economy was presented by Daly in 1974 in the economics of

the Steady State. This new type of economy would consist of a stable population rate, a

stable throughput, and a stable level of physical wealth. The throughput would be thenecessary cost to support the level of population and physical wealth- also called artifacts.

The goal of such an economy is to ensure that the throughput will be large enough to sustain

human life but, at the same time, small enough not to waste the level of raw materials. In the

word of Daly, it is simply a strategy () for maintaining our spaceship and permitting it to

die of old age rather than from the cancer of growthmania. (Daly, p.16, 1974a). He uses theconcept of low and high entropy developed by Georgescu Roegen to explain that the human

society could endanger the biosphere if economic growth is not controlled (Daly, 1974a).

The law of thermodynamics of Georgescu Roegen explains why improved technology even if

it increases efficiency of production is not a long-term solution (Czech and Daly, 2004).

Daly also refers to the theory of J-S Mill who claimed, in the mid-19 th century, that a steady

state would be inevitable and desirable in the development of the society since the industrial

progress would have fulfilled all our needs (Clerc, 2004). According to Daly, there exist two


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society must be to distribute more equally wealth in the population such that relative wants

tend to disappear (Daly, 1974b). To reach the steady state: we need (1) an institution for

stabilizing population, (2) an institution for stabilizing physical wealth and keeping

throughput below ecological limits, and () (3) an institution limiting the degree of

inequality in the distribution of the constant stocks among constant population since growth

can no longer be appealed to as the answer to poverty (Daly, p.19, 1974a). Beside the first

point, de-growth la Franaise seems to have the same objectives as point two and three.

This is why we will focus on this movement in the rest of the dissertation.

This chapter described in the first part the three problems that gave rise to the de-growth

movement. They are the environmental limits which cannot sustain economic growth

indefinitely; the economic growth which is an unstable system and which does not develop

happiness; and the sustainable development that seems not to be the answer to the twoprevious problems. Based on this, two movements took shape to denounce the hegemony of

economic growth.

The first one is the de-growth la Franaise.It is mainly a European movement that aims at

re-embedding the economy in the society to come out of productivism and of the market

society. They refer to the analysis of Aristotle to explain that the bad chrematistics hastaken over the whole economy. They also describe the alienation that technique and

consumption create. The solution proposed by de-growth proponents are principally given by

Serge Latouche and Paul Aris. They aspire to a society in which cities would be more

autonomous on an energy and food level; in which waste are rare, but re-using and recycling

abundant; in which equality is present between regions but also between present and futuregenerations; a society in which gratuity of public services would be broader. According to

them, there exist three levels of action for a de-growth society: the individual, the collective,

and the political level.


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Chapter Two: Complementary currencies: its definition, objectives and illustration of

the five different profiles

This chapter aims to define first what money is (section 1) in order to understand what

complementary currencies and their main objectives are (section 2 and 3). It also describes

and illustrates the five different profiles of complementary currencies identified by Jrme

Blanc in his article Choix organisationnels et orientation des dispositifs de monnaies

sociales (section 4). They are 1) mutual aid and conviviality, 2) covering consumption needs,3) valuing competences, 4) solidarity experiments, 5) local and solidarity development

(Blanc, 2006a). An example of type 1, 4, and 5 will be used in the second part of this work to

analyse the possible place of complementary currencies in the de-growth movement.

The theoretical background given in this section is based mostly on Blancs work. He is one

of the few scholars to have worked on a global framework of complementary currencies whileother scholars usually write about a specific type of complementary currency.

1. What is money?

Before explaining in more details what money is, it is necessary to delineate first the

differences between money and currencies as those two terms are usually confused with eachother. As explained by Blanc, they do not have the same meaning in the every-day life and in

the academic sphere (especially for economists). For the common sense, Money - with a

capital letter- refers to the bad chrematistics (see ch.1-2.1.b.), to the capitalist accumulation

and to speculation while currencies are the practical form of money which includes bills and

yellow or brown coins. On the contrary, economists consider money- without capital letter- as

an abstract term defined by its three functions (see below) while currencies are the concrete

application of money32 (Blanc, 2001).

Thi l i h l t i t h LETS (L l E h


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Beside this confusion, money stays a difficult concept to define. It cannot be characterized as

a good, as an instrument nor as an object because it represents something broader than those

categories. Yet, it is certain that money is necessary because of what economists call the

incommensurability of wants and needs (North, p.35, 2010a). People can use barter to

exchange things or services. However, the goods that people agree to exchange may not

correspond to the goods that people want to have. Whats more, certain people may agree on

exchanging goods but not at the same time. The differences in wants and in time preferences

thus explain why we need a mean of exchange (Peacock, 2006). According to Jevons, this

medium of exchange should be portable, indestructible such that we can use it in the future,

homogeneous such that we dont need to convert it too much, divisible and cognoscible (we

need to understand it) (North, 2010a).

Besides its necessity and its characteristics, money is also defined by its three functions(Blanc, 2001). The first function of money is the unit of account. It enables to measure

exchanges. Its illustration lies in the prices (Jones, 2011). The second function of money is the

medium of exchange. This function is only possible if people have trust in the goods in which

money is incarnated (Fantacci, 2006 & Amato, 2006). Finally, money is also a way of storing

value. This last function is in fact the one that led some complementary currencies systemssuch as the LETS to reject money. They rejected in reality the speculation and hoarding

phenomenon34 that money enables. According to Jones, complementary currencies never

present the three functions simultaneously (Jones, 2011).

Conventional money affects peoples lives because it has no frontier. Money flows into

communities according to their efficacy in valorising capital (Peacock, p.59, 2000). Money,

therefore, is not neutral regarding distribution despite what the economic theory says

(Kennedy, 2004). The nature of conventional money implies competitive behaviours because

its creation is based on debt with interests (Greco 2006; Lietaer 2006) This system implies


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2. The origins and history of complementary currencies

Complementary currencies are not a new phenomenon (Pacione, 1999). They existed alreadyin the year 800 A-C in a large variety. They were mainly grouped in two kinds: money made

out of precious metal for long-distance use and money made out of less noble metal for local

use. Some studies35 supported the idea that the co-existence of currencies in the Middle Ages

helped to strengthen the economy at different levels (local, regional). Local currencies at that

time were issued by local public authorities according to the feudal organization (Blanc,2006c).

However, in the 1200s, the decline of local currencies started due to a desire to achieve the

unity of a nation, not due to their lack or low efficiency. Local currencies survived a few more

centuries until the 1800s when the Gold Standard was introduced (Lietaer & Kennedy, 2008).

Then, monetary homogenisation became worldwide and was sold as an equivalent to

modernisation and its necessity imposed as the only way towards an efficient economy36

(p.t., Lietaer & Kennedy, p. 69, 2008). In the 18th and 19th century, nation-states developed

the concept of sovereignty of the nation and of the money. The issuance of banknotes started

and was regulated by an institution: the Central Bank. During this period, Robert Owen37, the

father of the cooperative movement, established for the first time, in 1824 and in 1832,

complementary currencies that were not issued by a local public authority but rather

controlled by citizens (Blanc, 2006c). Later, during the 20th century, in time of wars and

difficult economic time such as the Great Depression, complementary currencies reappeared

from time to time to fight against a perceived necessity38 (p.t., Blanc, p.4, 2006c).

Finally, starting from the 1970s, it seems that the unified nation-states monetary systems

(Blanc, p. 2, 2006c) started to be questioned. Complementary currencies as we know them

today began to appear. They tried to answer the three following problems: the exclusion of


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3. Complementary currencies: definition

Complementary currencies represent many diversified types of currencies. However, theyseem to have four main characteristics in common: circulation in relatively small

geographical areas or interest communities, non-governmentally operated and issued, non-

convertible or of restricted convertibility, and zero or negative interest-bearing (Schroeder et

al, p.33, 2011). Blanc uses the non-governmental origin as the main component of

complementary currencies. According to him, they are a group of currencies developed undera citizen initiative to the contrary of other local currencies that are developed as a political or

lucrative initiative (Blanc, 2006b). Complementary currencies therefore do not include

national currencies nor do they include enterprise barter systems.

In the literature, community currencies also correspond to the above characteristics. Both

terms are sometimes used indifferently. In addition, Romance languages do not use the literal

translation of complementary or community currency to refer to them. They use the term

social currency. In non-Anglo-Saxon countries, terms such as Trueque or Tausch are

employed to name their complementary currency (Schroeder et al, 2011). It is translated as

barter in English although, in Anglo-Saxon countries, this term is used for commercially-

orientated systems (Schroeder et al, p.33, 2011). Thus, there exists no global and unique

convention for denominating those currencies.

Nevertheless, each specific denomination can refer to a specific objective developed by the

currency. For example, Blanc established that a local currency focuses on territorial activities

and actors. Its objective is to strengthen and build local resilience for a specific territory. A

community currency aims to develop social exchanges and reciprocity in a community.

Finally, a complementary currency is governed by market exchange principles and aims to

develop economic activities (Blanc, 2011). Examples of those three types will be analysed in


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4. The organisation of complementary currencies

Complementary currencies were classified by Blanc in his paper Choix organisationnels etorientation des dispositifs de monnaies sociales (2006a). The classification is based on the

different possibilities of organizing a complementary currency. He established three sets of

criteria that need to be taken into account while developing such a currency.

Thefirstset of criteria refers to the size of the currency scheme, the members profiles and the

type of exchanges. First, if the size of the complementary currency is too small (meaning that

there are few members), it will not be attractive for non-members to join. There will not be a

large variety of services and goods offered. If it is too big, there will be practical and

administrative issues. Second, the size will depend on the type of members: private

individuals (small size) or professionals (needs a bigger size). Third, regarding the exchanges,

the more they are linked to the mainstream economy, the more mainstream conditions of

exchange will be (re-)introduced in the currency scheme (i.e. prices will be based on the same

prices than outside the complementary currency system, products bought outside the system

will be resold in the currency scheme).

The secondset of criteria concerns emissions conditions, circulation, and convertibility of thecurrencies. First, there are two different kinds of emissions that are described by Pantaleo

Rizzo. Complementary currencies40 are emitted in a centralized way and can be used

manually or scripturally41. The second kind, multilateral currency, is emitted in a

decentralized way and its emission is automatic when the exchange of goods or services

happens. A multilateral currency uses only scriptural money. Both kinds of emissions inducecosts (e.g. printing bills, recording the currency movement). Second, the complementary

currency circulation depends on the money supply which is created for a members adhesion

and should be destroyed when a member leaves. When currency circulation goes too slowly,


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Box 3: About demurrage

Silvio Gesell (1862-1930) formulated the idea of free money in his 1916 book The Natural

Economic Order, arguing that money should be allowed to rust and decay in the same way as allnatural goods do (Volkmann, p.6, 2009). Decreasing the value of money over time 42 would be a way

of ensuring that farmers, workers and entrepreneurs face the same risk of depreciation. Demurrage is

the inverse of the interests system: it remunerates people who do not use their money directly.

Instead, demurrage devaluates money periodically (Peacock, 2006; Kennedy, 2004). In Germany, the

most common form of devaluation is one of 2% every three months for Regio currencies (Volkmann,

2009).

The thirdset of criteria important for the organisation of a complementary currency system is

the governance principle. Internal governance refers to the debates necessary for the members

to appropriate the system and therefore to integrate the system in the locality. Concerning

the external governance, complementary currencies want to stay independent with regard tothe public institutions. Yet, those institutions sometimes help complementary currency

systems by providing technical help such as a room for their meetings (Blanc, 2006b).

Based on the three set of criteria explained above, Blanc identified five different profiles of

complementary currencies organization. They are summarized in a table in appendix H.1. Therest of the section will briefly describe each profile and give an example of three

complementary currencies- the ones analysed in the second part of this dissertation.

4.1. The Mutual aid43 and conviviality profile

The mutual aid and conviviality complementary currency presents a small size and onlyincludes private individuals. It is a multilateral currency (as described by Rizzo above) whose

goal is to develop solidarity by re-embedding the exchange in the social ties (p.t., Blanc,

p 187 2006b) A good illustration is the Local Exchange and Trading System (LETS)


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2000 and 2500 LETS in 22 countries, most of them occidental countries (Blanc, 2001).

However, LETS are not similar in every country. They were adapted in function of the

context. There exist mainly two kinds of LETS: with a social or with an economic goal.

Social-oriented LETS can be found in France and some in Belgium. Their main goal is to re-

develop solidarity, and to generate social ties in a community (see below). Economic-oriented

LETS are found mainly in Canada, the United Kingdom (UK), and some in Belgium. Their

objective is more focused on the exchanges of goods and services. In Canada and in the UK,

LETS even include professional members (Didier, 2010). Those LETS are included in the

covering consumption needs profile (see section 4.2. below)

The Belgian LETS44

The first Belgian LETS was launched in Leuven in 1995. This same year, a conference on the

solidarity economy was held in Namur, in the French-speaking part of Belgium. This

conference gave the opportunity to discuss the legality and the place of LETS in Belgium with

Philippe Maystadt, the Finance Minister at that time, who was unaware of the non-monetary

exchanges phenomenon. In 1996, 11 LETS already existed in Belgium (Watteau, 1996). He

promised to launch a study to evaluate which regulations changes were necessary to enable

the development of such exchanges (Simonson, 2005). Eventually, in 2011, Wallonia adopted

a clear regulation regarding unemployed participation in a LETS.

This type of complementary currencies is called LETS in Flanders and SEL (Service

dEchange Local) in Wallonia.

Practically, members of a LETS offer and demand different services or goods that areregistered in a list (often, this is done through a website). The units of exchange have a

different name depending on each LETS. In Belgium, one unit is equal to one hour of labour

but in other countries (France UK) members can establish freely the value of exchanges


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deposit currency. It is created virtually by keeping a record of exchanges on which no

interests are charged (Harribey, 2002). The bookkeeping of exchanges is a way to evaluate

how well the system is working but also a way for members to evaluate how involved and

how trustful the other members are. The credit and debit of each member is indeed visible by

any members of the LETS.

In the French-speaking parts of Belgium (Wallonia and Brussels), SEL are divided into two

movements. A first group of SEL is organised under the supervision of Joachim de Sousa.They are specifically oriented towards a social objective. According to their website

http://scs.name45, their objectives are not to answer the economical, ecological, or political

problems but to develop social ties. This is reflected in the limitation of exchanges to services.

Goods in the social-oriented SEL cannot be exchanged for SEL units. Instead, those SEL

organize donnerie, a meeting of SEL members where each person can give their goods toanother member (Michiels, 2010). Some of the SEL in this group even changed their acronym

for Systme dEntraide Locale. The second group of SEL is supported by Bernard Simon, the

founder of the SEL-Coup de Pouce, in Villers-la-Ville. They have a different vision of the

SELs organisation and decision-making processes (see ch.3.3). In the rest of the dissertation,

this group will be referred as economic-oriented SEL. Another difference between the two isthat for the social-oriented SEL, the system of cheques is not to be compared with money. It is

just a system to establish statistics and follow the dynamic of the SEL (Joachim de Sousa,

interview).

The SEL do not include professionals, therefore, they do not exchange professional services.

This is mostly due to legal constraints. Some SEL members in France were sued by the

government for undeclared work (Laacher, 2003).

There is no credit limit specifically defined in the LETS. There is more of a social control


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4.2. The Covering consumption needs profile

This type of complementary currency has an important size because it includes privateindividuals and professionals. It is a multilateral currency whose goal is to develop solidarity

and conviviality as for the mutual aid and conviviality profile. However, this

complementary currency objective is broader. By including professionals, they try to offer a

broader variety of goods and services, therefore aiming at covering consumption needs. A

good illustration lies in the British LETS described in appendix H.2 (Blanc, 2006b).

4.3. The Valuing competences46 profile

The valuing competences profile presents a large size because it includes private individuals

and semi-professionals. It is a complementary currency whose goal is to develop solidarity

and conviviality as for the mutual aid and conviviality profile and to cover consumptionneeds as for the covering consumption needs profile. However, the main objective is to

achieve those goals by supporting and valuing individuals competences. A good illustration

lies in the Argentinean Trueque described in appendix H.3 (Blanc, 2006b).

4.4. The Stimulating solidarity experiments profile

This type of currency is important in size because it includes private individuals, professionals

and also public institutions. This currency system has the ambition of supporting solidarity

activities and practices. It is convertible with the national currency and therefore implies an

important participation of the public authorities in the development of such a system. A good

illustration lies in the French project: SOL (Blanc, 2006b).

The SOL Project


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Funds. In this framework, EQUAL funded 50% of the SOL project until 2008. Afterwards,

the different organizations47 taking part in the project decided to extend their funding to

continue it. The SOL includes very different actors: private individuals-especially those

excluded from the mainstream economy, local public authorities, and the whole structure of

the social and solidarity economy- which includes professionals (Delille and Whitaker, 2006).

The objective of the SOL is to create a currency that would be used as a means and not as an

end. This currency would be used to link and develop the different structures of the social andsolidarity economy. The project also aims to promote ecological and social activities (Delille

and Whitaker, 2006).

Practically, members of the SOL use an electronic card to register the number of SOL they

earn or spend. At first, members receive SOL by buying goods in the participating companies.

In that case, the SOL can be seen as a loyalty card. Another possibility is to earn SOL by

working for the community. The private organisations sometimes also offer SOL units. The

conversion rate of SOL is 1 = 10 SOL. This will be changed in 2011 to 1 = 1 SOL (Luc

Belval, interview). SOL units cannot be converted in Euro to ensure the viability of the

scheme. Whats more, the technique of demurrage is applied to the SOL unit such that they

lose value periodically. This technique ensures the circulation of the currency/units, fosters

exchanges, and avoids savings (Fare, p. 57, 2011a).

The SOL units can be exchanged in three different circuits (see figure 5). The firstcircuit is

called the Cooperation SOL. This circuit includes the structures of the social and solidarity

economy. SOL members can buy products coming from this economy- they are ethical, socialor/and ecological. This circuit can be compared to a loyalty e-card system. Members can also

spend their SOL units in the local public services that are part of the SOL project. This

promotes responsible behaviour and social economy activities (Fare 2011a) The second


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circuit to strengthen the whole SOL project but it is not possible yet (Delille and Whitaker,

2006; Luc Belval, interview). According to Fare, the objective (of the Commitment SOL) is

to enhance non-monetary activities and the skills of each (person) while developing social ties

and community. (Fare, p.58, 2011a). Finally, the Dedicated49 SOL is a circuit of exchange

that uses vouchers in the same way as the meal voucher already well developed in France.

The local public institutions are at the origin of this circuit: they distribute the SOL units to

the economically fragile members (Delille and Whitaker, 2006). Those units can be used

only for specific goods and services that serve the SOL objectives (Fare, 2011a). The goal is

to integrate this specific part of the population into the SOL project which includes a larger

part of the population. In this way, those people can meet members that come from other

social categories (Delille and Whitaker, 2006).

Figure 5: The SOL cycle

Source: Association SOL, 2007 and personal work.


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4.5. The Local and solidarity development profile

This type of currency presents an important size and includes private individuals andprofessionals. It is an open system that allows money transfer between the national and the

complementary currency. What is peculiar to this system is its collaboration with a

microcredit institution in order to support financially collective or individual projects. A good

illustration lies in the German Regiogeld (Blanc, 2006b).

Regiogeld- The Chiemgauer

The Regiogeld is a complementary currency that appeared in Germany around 2001. The

Regiogeld developed rapidly through Germany under different forms. According to Thiel, it is

the result of a fusion between three different movements: a money reform oriented

(movement), an esoteric50

and several regionalization-oriented (movements) (Thiel, p.17,2011). The Regiogeld can be compared to the vouchers system on which the demurrage

technique was applied. The name of this currency refers to its regional characteristic. Indeed,

Germany is a country with an important history of strong regions. Only in 1870, were they

unified under a confederation. Today, there still exists a strong regional culture (Thiel, 2011).

There exist two main kind of Regiogeld: those based on the Euro and those based on goodsand services (Thiel, 2011). This section will describe a Euro-based Regiogeld: the

Chiemgauer.

Christian Gelleri, a teacher of a Waldorf School51 in the region of Chiemgau, started the

Chiemgauer Regiogeld as a school project in 2002. Gelleri explains that the Steiner

philosophy at the base of the Waldorf school is the reason why he developed this project.

According to him, a student should not be the consumer of educational contents but should

learn to be an active participant of society. (Gelleri, p. 65, 2009). The Chiemgauer was


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involved in the Chiemgauer system, providing most of the goods and services that covers

most aspects of consumer life (Volkmann, p. 7, 2009).

The objectives of the Chiemgauer were based on the Steiner philosophy: freedom for a

creative, spiritual, cultural life; democracy in all parts of defining rules for communities and

individuals; solidarity in the economy which means: working together cooperatively in the

region and globally; ( and) the necessity of concrete project from the bottom up (to avoid)

technocratic solutions (Gelleri, p.65-66, 2009). The Chiemgauer also aims to develop astrong local economy, cooperation, to support non-profits, to avoid speculation and too long

transport for food, and to enhance regional investments. Another important objective

according to Gelleri is to ensure the velocity of the Chiemgauer, thus explaining the

demurrage technique (-2% per quarter or 8% per year). According to Gelleri, the demurrage

is a way of reminding the Chiemgauer users to keep a company and to keep a regionrunning (Gelleri, p. 73, 2009). This technique was also part of the Steiner philosophy. Rudolf

Steiner referred to it as the concept ofaging money (Gelleri et al, 2004).

The Chiemgauer uses bank notes that are convertible to Euro and whose value is based on

the Euro: 1 Chiemgauer = 1 (below the unit of one Chiemgauer, Euro-coins are used in an

exchange). The Chiemgauer note is protected with 14 security features such as the ultra-violet

colours and there exist 50 issuing offices. Local banks also support the Chiemgauer by

offering it an electronic structure- a Chiemgauer electronic card exists (Gelleri, 2009).

A fee of 5% taxes the conversion from Chiemgauer to Euro. This fee intends to keep the

Chiemgauer notes in circulation and at the same time to support non-profit organizations: 2%of the fee is used to fund the Chiemgauer structure and 3% goes to a non-profit organization.

Companies can consider this 5% loss as the price to pay for customer loyalty or can avoid it

by trading in Chiemgauer with other companies When individuals buy Chiemgauer 3% of the


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Figure 6: The Chiemgauer Currency Cycle

Source: Gelleri, 2009.

However, this system of a currency backed up on Euros might block the entry to poor people.

Often, they cannot afford to reduce their stock of Euro (that can be spent anywhere) for some

Chiemgauer that they can spend only in specific shops. According to North, people need to

have a certain level of wealth to participate in the Chiemgauer, unless daily needs can be

covered by the scheme. Whats more, the Chiemgauer does not offer any real advantages to

its members. They receive no discounts on products bought in the Chiemgauer. According to

him, the success of the Chiemgauer is due to the strong commitments, whether political, or

ecological, and sense of regional pride of the members (North, 2010a).


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This chapter explained that the meaning of money and currencies were often confused. This

clarifies why some complementary currencies schemes were strong opponents to money at

first. In fact, it is the store value function of money that is rejected by complementary

currencies.

The second section established the history of complementary currencies in order to show that

it is not a new concept. Local currencies were already used in the Middle Ages and coexisted

with the official money. It enabled to avoid some economic shocks. Then, after the wave of amonetary unification that reflected the birth of nation-states, new complementary currencies

experiments arose in the 19th and 20th century. The two most famous experiments are the one

launched by Robert Owen and the one of the town of Wrgl based on the theory of Silvio

Gesell.

The third section defines complementary currencies as currencies launched by citizens

initiatives, which present a low or inexistent convertibility degree with the legal currency,

which charge no or negative interests, and which circulate in a specific geographic area. The

currencies that refer to these four characteristics are sometimes called community currencies

or local currencies.

Finally, the fourth section describes and illustrates the five different organizational types

established by Jerme Blanc. The mutual aid and conviviality profile corresponds to the

social oriented LETS. This type of currency includes a small number of private individuals,

there is no convertibility with the legal currency and the currency is multilateral - the emission

is made automatically when the exchange takes place. The covering consumption needsprofile refers to the economic-oriented LETS, common in the United Kingdom. They differ

from the previous profile because they include professionals. The valuing competences

profile is illustrated by the Argentinean Trueque This currency aims at developing


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PART TWO: Can Complementary Currencies be Considered as a Tool for De-growth?

The second part of this dissertation analyses complementary currencies under the magnifying

glass of de-growth la Franaise52. The goal is to evaluate whether or not complementary

currencies could be considered as a tool for this movement.

According to my research, there have been only two studies about a citizens initiative that

supports de-growth. Both studies examined the relevance of the cohousing movement to de-

growth theories: Lietaert, 2010, and Cattaneao and Gavalda, 2010.

The two international conferences on de-growth are other actions that were taken to define

how a de-growth society could be defined and achieved. The first conference was held in

Paris in 2008. It lasted two days and articles about different subjects linked to de-growth were

presented. The result of the conference was the establishment of a declaration on de-growth 53.

The Second International Conference on Economic Degrowth for Ecological Sustainability

and Social Equity took place in Barcelona in March 2010. Five hundred scientists, civil

society members, and practitioners (joined the conference to) structure proposals toward an

alternative, ecologically sustainable and socially equitable de-growth society (Degrowth

conference, 2010). During four days, they participated in workshops about 28 topics to think

about how to adapt our current society to a de-growth society. Subjects ranged from How

can we politically implement a basic income to all? to What sort of renewable energies for

de-growth?. They also discussed the place of money and currencies in a de-growth society.

According to the website created for the conference, www.degrowth.org, participants talked

about the practical implementation of complementary currencies (see figure 7) but not about

their relevance in a de-growth movement. This is the aim of this second part.


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Figure 7: Results of the workshop on money and currencies at the Second International Conference on

Economic Degrowth

What alternative monetary systemcould we develop in the pursuit of degrowth and how?

Moneyandcurrenc

ies

- Governmental institutions needed to allow the use of alternative currencies- An international research network on alternative monetary systems, to share knowledge

and best practice.- Educational campaign to explain how conventional money is being created in the current

system, and how local currency systems work.- How do we increase the demand for local currencies by getting a wider range of

institutions to accept them? (e.g. local currency in payment of local taxes)- Should we remove the powers of private banking to create money?- What is the potential of alternative currencies to transform the international monetary

system?- What is the relationship between the use of interest and economic growth? Study different

scenarios with different interest rates (positive, neutral, negative) and its relation toeconomic growth. Do we need to replace the functions of interest in a framework ofdegrowth (a framework of limited natural resources)?

- What is the appropriate backing(s) for money (in its various functions), to prevent it from

becoming detached from the real-real economy.- Appropriate way to exchange between local currency and conventional money?

Source: extracted on July 15, 2011, from http://www.degrowth.org/Results.125.0.html

As explained in the methodology, three complementary currencies from the five seen in

chapter two will be analysed: the Belgian SEL, the SOL project, and the Chiemgauer. A

comparison will be made between these currencies and the obj

Can Local Currencies Be Considered a Tool for Degrowth

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