Lietaer Bernard Money Crunch No Cartoons

8/6/2019 Lietaer Bernard Money Crunch No Cartoons

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The Money CrunchWhy Complementary Currencies Now?

Bernard Lietaer

[email protected]


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PlanTodays Context

Understanding Complementary Currencies

Complementary Currencies in Practice

Conclusions


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T odays Context:T

he Money Crunch We are at the beginning of a substantialMoney Crunch , where money scarcity

will result in a general squeeze in fundingsupport for education, social services,elderly care, etc.

=> T he TI NA syndrome ( T here Is No Alternative)


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T odays Context:

Global Structural ShiftT his situation is going to accentuate over time becausewe are in the middle of a major structural shift of theworld economyEmergence of Information Age = End of Industrial Age

Same scale and impact as shift from Agrarian Age to IndustrialRevolution, except faster

Structural => no business cycle improvements will solve them =>no return to 1990s likely

Japan was first economy to hit that wall with its Crash of 1990 Japan tried all the classical solutions (e.g. tax cuts, public works)

to re-launch their economy, to no avail Germany and Europe is now going the same way

Stubborn unemployment, no recovery in sight US is currently in denial but will be third in the same

sequence


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T odays Context: US 1980-1990s: Devolution of many social issues from Federal to State and

local level, without providing funding without allowing deficit spending

2000-2003: Crash + Economic downturn T otal Denial of Structural Issue

Unemployment problem is temporary Monetary crashes happen only to 87 other countries

=> Massive State and local deficits => 2 solutions: Cutting social and educational programs precisely when they are most needed

Inventing new approach to resolve those problems

Japan: after initial denial & failure of classical solutions, now regionaldevelopment through complementary currencies

Germany & Europe: idem

Can we afford not to learn?


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Some DefinitionsWhat is Money?

Economic Textbooks define money by what it does, not bywhat it is

e.g. Functions of Standard of Value, Medium of Exchange,Store of Value, etc....

Money is an Agreement, within a Community , to usesomething as a Medium of Exchange

C omplementary Currency : a currency - different fromnational currency - that operates in parallel with national currency

Links unmet needs with unused resources.I foresee new private currency markets in the 21st century. Alan Greenspan


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T odays SituationT he Japanese Precedent?

Japan has already gone through 13 years of what we just begin now. T he use of complementary currencies can bring an end to the long-lasting deflation of the

Japanese economy by supplying additional monies of various types at the local level. Japanese Minister of Economy, 2002

Who better to resolve local issues than the local people?

Example 1: T oshiharo Kato, top executive of ME TI , has initiated 40 different types of complementary currency eco-money projects Variety of technologies (from high-tech smart card, to low tech paper) Variety of scales (from mountain village of 800 people, to prefecture of 10 Million) Variety of complexity of functions (from single function to 27 different functions on a single

smart card: elderly or children care, local unemployment, small business loyalty schemes,disaster preparedness training, etc.

Strategy: testing to determine which models works best for what purpose, and go large scalewith the best

Example2: T sutomo Hotta, Mr. Moral Authority in Japan implements F ureai Kippu complementary currency for elderly care Example 3: Next step up is integrated regional systems (pilots in Yamato City,

Germany)

Why cant we start the same in US, in Colorado, now? Pilot project in advanced design phase in Sonoma County, CA.


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In addition to Fureai Kippu 300 other systems


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Regional Currency / Regional PointLQ


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PlanTwo Case Studies

Framework for Complementary CurrenciesCore IdeasMechanism

Complementary Currencies in the U S

Conclusions


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Core Ideas1. Contrary to prevailing economic theory, money is n ot

value n eutral . Instead, different money systemsencourage different collective behaviors andemotions .

Conventional money dissolves communityComplementary money creates it

2 . T housands of c ompleme n tary c urre nc ies experimentsare on-going now around the world that provide newtools for a region to address various socio-economicproblems .

3. F or different types of problems, particular designsare useful !


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Understanding the MechanismSolving social problems with a Single Conventional Currency

National Currency(competitive, scarce )

Competitive/GlobalEconomy

(F inancial Capital)

Non-Profits

Subsidies

Tax-Deductions

Taxation

CommercialTransactions

CommunityTransactions

Cooperative/RegionalEconomy

(Social Capital)


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Understanding the MechanismSolving social problems with Complementary Currencies

N ationalcurrencies

(competitive, scarce )

ComplementaryCurrencies

(cooperative, sufficient )

Competitive/GlobalEconomy

C ooperative/Regio n al E c on omy

CommercialExchanges Community

Exchanges

Complementary Currencies are c ompleme n tary to (not replacing) national currenciesComplementary Currencies create ADDI T IO N AL Wealth, Work, and a safety net

below official system


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Changing the Money Paradigm by

Leaving Monetary Flatland

G lobalEconomy

Regional

Economy


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Framework for Complementary Currencies

Complementary Currencies in Practice

Conclusions


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Todays SituationNumber of Complementary Currency Systems Operational in 12 countries

(1984-2 003 )

USA + Canada

UK

Benelu

Germany +Austria

Ot

er urope

0

500

1000

1500

2000

2500

3000

3500

4000

4500

8 4 8 5 8 6 8 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 2 0

0 0

2 0 0 1

2 0 0 2

2 0 0 3

Ar entina

lsew

er e

Japan

Ot

er urope

Italy

Germany +AustriaFrance

Benelu

UK

Australia

New Zealand

USA + Canada


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T hree Practical Findings1. In the field of complementary currencies, practice is

ahead of theory2. Contrary to key economic theory hypothesis assumed by

Adam Smith, money is not value neutral

Different types of money encourage different types of transactions, and different relationships between people3. Complementary Currencies solve socio-economic

problems Dampens impact from economic shocks=> Can be useful tool to resolve social problems without creating

budgetary deficits, raising taxes or bond issues.Creates a more stable and gentler worldIf there is no crisis, it is very useful as a community building toolIf there is a crisis, it becomes vitally useful


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Framework for Complementary Currencies

Complementary Currencies in the U S

Conclusions


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Conclusion We are now living in an age of fear

=> Disempowerment and isolation of the people We have already started a Money Crunch

=> Money scarcity feeds theTI

NA syndromeComplementary currencies are a pragmaticway to: take back our power; Rebuild and strengthen community; to counteract money scarcity; and thereby find other ways to resolve the challenges

we are facing.


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T he Money Crunch WeekendUnique Opportunity to

Personal contact with world-class experts 7/1 participants/presenter ratio

Create a Community of Practice in Colorado Learn Money 101 how conventional money

really is created and managed Learn about various complementary currency

system from the creators themselvesT here will not be another opportunity of this levelin the foreseeable future


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T he Money Crunch WeekendKey Speakers

Edgar Cahn: Founder of T ime Dollar Foundation, initiator of 300+ T imeDollar systems. Author No More Thro -a ay PeopleT om Greco: Founder of the Community Foundation. Author of Money:Understanding and Creating Alternatives to Legal T ender speaksabout What is money?

Luca Fantacci, Italy: speaks about New Findings on Historical Precedentsfor Complementary Currencies

Alec T soucatos , speaks about Money: the Untold Story Christina Gray , initiator of institutional complementary currencies, speaks

about Lets get real about system change Gilson Schwartz , Brazil: Innovations from the field Stefan Brunnhuber , Germany: Money and Sustainability (the new Report

to the Club of Rome) Octavia Allis, Kathy OConner, Christian Izquierdo Community Applications

Greg Barry, Sergio Lub, Randy Petersen Business Applications Arthur Brock, Joel Hodroff, Les Squire New technologies for

complementary currencies.


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Follow-upOf Human Wealth: Beyond Greed and Scarcity (newgalley edition available here )

Also The Future of Money (London: Random House,2000) and 17 other languages Internet:

www.accessfoundation.org

www.transaction.net/money Email: [email protected]

Lietaer Bernard Money Crunch No Cartoons

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