ZEITGEIST and The Huffington Post

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  • Thu, Mar 25, 2010 - 12:24am

    #41
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: ZEITGEIST and The Huffington Post

SJM,

Very very good post!!! I remember over a year ago, somebody made a thread for Bernard Lietaer …

A Martian Lands In Denver On The Wrong Side Of The Tracks …

https://www.peakprosperity.com/forum/martian-lands-denver-wrong-side-tracks/11476

… but unfortunately, someone proved an inability to open up the link and read the article through, making a very swift and off-hand judgement of it and reducing the thread to firewood. Nothing much changed sadly … 

I was more than fascinated with his work. Inspired I think!

I live in Totnes where an alternative currency called the Totnes Pound (not surprisingly!) is used as an alternative currency in about 28 shops so far, keeping the money constantly cycling within the town without ever leaving.

I noticed your links are in pdf and am reproducing a copy of his amazing interview from 2003 below: –

~ VF ~

An Interview with Bernard Lietaer

By Ravi Dykema

 

      What is money? And how well does it work to solve society’s ills? Bernard Lietaer, author of the upcoming book Access to Human Wealth: Money beyond Greed and Scarcity (Access Books, 2003), has made a life’s work of exploring these questions. Lietaer has been involved in the world of money systems for more than 25 years, and his experience in monetary matters ranges from multinational corporations to developing countries. He co-designed and implemented the convergence mechanism to the single European currency system (the Euro), and served as president of the Electronic Payment System in his native Belgium. He also co-founded one of the largest and most successful currency funds.

      Lietaer is the author of nine books on money and finances, including The Future of Money (Random House, 2001), The Mystery of Money (Riemann Verlag, 2000) and a book for kids, called The World of Money (Arena Verlag, 2001). Formerly professor of international finance at the University of Louvain, Lietaer is currently a fellow at the Center for Sustainable Resources at the University of California, Berkeley. Beginning this fall, he will be a professor at Naropa University. Here, Lietaer shares his views on the shortcomings of our conventional currency system, the benefits of creating a complementary currency, and ways to effect lasting social change.

 

RD: You’re very experienced on the world stage with currencies and money-it’s the world you’ve moved in much of your life, right?

BL: Yes, both in the area of conventional money such as the Euro and more recently with less conventional money systems. Below the radar beams of official thought, there has been a resurgence all over the world for the last 15 to 20 years of what I call complementary currencies, currencies that are operating on a smaller scale than the national level, and that can solve social, environmental and education problems.

 

RD: People think of someone who works with currencies as being a materialist. Yet it sounds as if your interests are towards social change through complementary currencies. How did you come to be interested in this other dimension?

BL: The reason I went to the Central Bank in the first place was to check whether it was possible to improve the conventional money system from within. I had been working for a number of years in South America, and I had seen the damage that the existing money system has created on a huge scale in Latin America.

 

RD: You thought it was the money system and not just the governments?

BL: It’s a chicken and egg story: unstable currency equals unstable government. There is practically no way today for a developing country to have a reasonable monetary policy within the current rules of the game. Joseph Stiglitz, Nobel laureate in economics and formerly head economist at the World Bank, makes the same claims in his book Globalization and Its Discontents (Penguin, 2002). Whether you fix your currency to the dollar or let it float, you end up with an unmanageable monetary problem, like Brazil, Russia or Argentina have experienced. Eighty-seven countries have gone through a major currency crisis in the last 25 years. Their fiscal policies are imposed by an International Monetary Fund (IMF). I am afraid that if the United States had to live by the rules that are imposed on, say, Brazil, the United States of America would become a developing country in one generation. It’s the system that is currently unstable, unfair and not working.

      The majority of humanity has gone through a recent monetary crisis at least once already. We’re living here, in America, in an island of perceived stability. And even that is an illusion. We could have a run on the dollar under the current rules.

      We are dealing with an unstable system, an ailing system. Back in 1975, I had come to the conclusion that there would be a systemic series of monetary crashes, starting with Latin America. And that’s why I wrote my book on how the money system was not working and its impact on Latin American development, Europe, Latin America and the Multinationals (Praeger, 1979). I predicted that the first crash in Latin America would be in the early 1980s. It actually happened in 1981 in Mexico. Since then we have had more than 80 other countries undergoing similar monetary crises.

 

RD: So someone’s not connecting the dots-or are they?

BL: Let me put it this way. The powers that be have no interest in connecting the dots. If a new international monetary meeting like Breton Woods were held, the first point on the agenda would be the role of the dollar. So the United States has no interest in such a meeting. The dollar is in a very privileged position.

 

RD: But it would be anyway, wouldn’t it, because we’re a dominant economic player?

BL: I don’t want to spend a lot of time and energy attacking the existing system. It is an obvious fact that America is the sole super power. But when people say, “Well, there are fiscal crises in other countries because the governments are less stable,” my question is, “How long would any government last in a country if you had to repeatedly cut back on education programs, social programs, building roads and all other programs?” How could that make a stable democratic government possible? Like I said, it’s a chicken and an egg sequence.

      There is no way of winning in the current monetary game, particularly for the less developed countries. It’s not accidental that investments in the Third World have dropped proportionally by a third since 1975. Currently, investments happen mainly between developed countries, and that trend isn’t going to create a sustainable world anytime soon.

 

RD: So the Third World is just being abandoned?

BL: Yes. Entire continents. Africa for instance has been dropped off the world economic map for most practical purposes.

 

RD: And re-envisioning and re-engineering money itself could change this?

BL: Correct. And the good news is that such re-engineering of money has started to happen if one knows where to look.

 

RD: Do a lot of other people share your views?

BL: Most people haven’t looked at what’s happening in monetary innovations today. What do you think a frequent flyer mile is, but a currency issued by an airline? In Britain, you can go to J. Sainsbury, the largest supermarket chain, and use British Airway miles to buy your goods. Initially, it was only designed as a loyalty scheme for people taking planes. Today, you can earn this currency without ever taking a plane. On Visa cards you get miles. And you can use them to pay long-distance telephone calls, taxis, restaurants, hotels.

      First, let’s define what a currency is, because most textbooks don’t teach what money is. They only explain its functions, that is, what money does. I define money, or currency, as an agreement within a community to use something as a medium of exchange. It’s therefore not a thing, it’s only an agreement-like a marriage, like a political party, like a business deal. And most of the time, it’s done unconsciously. Nobody’s polled about whether you want to use dollars. We’re living in this money world like fish in water, taking it completely for granted.

      Now the point is: there are many new agreements being made within communities as to the kind of medium of exchange they are willing to accept. As I said, in Britain, you can use frequent flier miles as currency. It’s not a universal currency, it’s not legal tender, but you can go to the supermarket and buy stuff. And in the United States, it’s just a question of time before privately issued currencies will be used to make purchases. Even Alan Greenspan, the governor of the Federal Reserve and the official guardian of the conventional money system, says, “We will see a return of private currencies in the 21st century.”

 

RD: In other words, private currencies are coming back. How would that change the circumstances for poor people, for the Third World?

BL: I gave you that first example-a commercial loyalty currency-only because it would be familiar to most of your readers. But in addition to those commercial private currencies, there are now more than 4,000 communities around the world that have started their own currency for social purposes as well.

      For example, there are about 300 or 400 private currency systems in Japan to pay for any care for the elderly that isn’t covered by the national health insurance. They are called “fureai kippu” (caring relationship tickets). Here’s how they work: let’s say that on my street lives an elderly gentleman who is handicapped and cannot go shopping for himself. I do the shopping for him. I help him with food preparation. I help him with the ritual bath, which is very important in Japan. For this help, I get credits. I put those credits in a savings account, and when I’m sick, I can have other people provide such services for me. Or I can electronically send my credits to my mother, who lives on the other side of the country, and somebody takes care of her.

      Here is an agreement within a community to use as medium of payment something other than national currencies, to solve a social problem. And it makes it possible for hundreds of thousands of people to stay in their homes much longer than they otherwise could. Otherwise, you’d have to put most of these people into a home for seniors, which costs an arm and a leg to society, and they’re unhappy there. So nobody’s winning. In contrast, Japan has created a currency for elderly care.

      In the United States, Florida is the only state that has the same density of elderly people as Japan does-18 percent of the population is more than 65 years old. But Florida is a model for our collective future. Colorado will be there in 2020. Germany will be there in 2006, France in 2008, Britain in 2012. Partly because of the baby boom generation, and partly because of the fact that health care has improved and people live longer. If you put all of these elderly in homes for seniors, you’d go bankrupt. Japan has been looking for another way, and has found it by introducing a monetary innovation.

      Let me give you other examples, already operational here in America today. There are now several hundred “time dollar” operational systems in the United States. The unit of account is the hour. I do something for you. I have a credit for an hour, while you have a debit for an hour. If I can use my credit with someone else, this creates a currency between us. For those people who are willing to give some of their time, the money manifests automatically. It doesn’t quite work that way with dollars, does it? One of the two of us has to get dollars by competing for them somewhere outside of our community.

      Time dollars are helping in a lot of communities where conventional money is scarce: in ghettos, retirement communities, high unemployment zones, student communities. There are 31 states in America that are paying employees to start such time dollar systems, because it solves social problems. There are some operating in Chicago, fairly big ones in Florida. For example, in Chicago, there are entire neighborhoods that used time dollar systems to create a neighborhood watch system that got rid of drugs and gangs. It’s working, it doesn’t cost anything to the taxpayer, it doesn’t create a huge bureaucracy, and it encourages the solution of the local problems by and with the very people who know most about them.

 

RD: What do they use their time-dollar credits for?

BL: Well, it’s a closed circle. If I do something for you, I have a credit, which I can use with any member of the community that is part of the system. I can’t buy cars or pay my telephone bill with this system because the suppliers of such items don’t participate now in such systems; but I can obtain services-so I could have my car repaired, my house painted, my kids mentored.

       The inventor of the time dollar system is Edgar Cahn, who’s the author of No More Throw-Away People (Essential Works Ltd, 2000). He claims that if you can’t compete in the dollar economy, you’re thrown away. He shows how a time dollars system provides a solution to this process, because it operates in parallel with the conventional competitive economy, and it creates an environment where everybody can contribute.

 

RD: So you envision a world where there are a lot of these alternative currencies?

BL: I don’t call them alternative, because they aren’t intending to abolish or replace the national currency. I’m not claiming that we could or should abandon national currencies or the competitive economy. This is a complementary currency system. It facilitates exchanges additional to the normal system. It makes it possible to match unmet needs with unused resources.

 

RD: I can’t see how you’d be able to pay your rent with that.

BL: Well, in Ithaca, New York, there is a currency called Ithaca hours, and some people pay part of their rent with it. Not all of it: for some it is 50/50, for others it is 80/20. And the landlord or lady can go to the farmer’s market and buy his vegetables and his eggs.

 

RD: So the big things-transportation, housing, food-are those covered in the concept of complementary currency?

BL: It all depends on the agreement you’re making, and whom you are succeeding in including in that agreement. Let me give you a real-life example. In Curitiba, the capital city of the State of Paran in Brazil, if you bring pre-sorted garbage, you are given bus tokens. So in Curitiba, public transport is clearly part of their complementary currency system.

      It depends on the agreements you have with your landlord, with the transportation company, with the university, with the business community. It just depends on who wants or is willing to participate. You can’t force anybody to accept this currency. They are not what is technically called “legal tender.” I call them “common tender”: commonly accepted as payment for debts without coercion of legal means.

 

RD: I understand that the government wants to get its chunk out of barter transactions, just as if they were a cash transaction.

BL: Yes, and those taxes will need to be paid in “legal tender”, i.e. dollars. The tax issue has nothing to do with the currency you use in an exchange, but with the kind of transaction you’re performing.

      Say I’m a plumber. I come to your house and fix the plumbing. And you give me a nice cake in payment. I’m supposed to declare the value of that cake and pay taxes on it, because I’m in the plumbing business. Now say I am a professor at a university. I come to your house. I fix your faucet. You give me a $100 bill. I’m not obliged to declare it because I’m not in the plumbing business. As I said: it is not the currency used that determines whether a transaction is taxable or not, but the nature of that transaction.

      Interestingly, there is one complementary currency, the time-dollar system that we talked about earlier, that is officially tax-free in the United States. It’s used only to resolve social problems, and the IRS has ruled that time-dollar systems are tax-free.

 

RD: I think complementary currencies, barter included, should be tax-free, because they offer solutions to a social problem.

BL: Then I suggest you go and lobby for passing such a law. Currently that’s not what the law says in the United States.

      The use of complementary currencies is fairly recent. It took off only in the last 15 years. Even in 1990 there were less than one hundred complementary currency systems worldwide. Today there are over 4,000. It’s definitely catching on.

 

RD: And you would like to see it continue to expand?

BL: I think it is a useful tool to solve a number of our problems. It makes it possible to truly create a more gentle society.

      I spent last summer in Bali. People are remarkably artistic in that island. Their communities are unusually strong. They have festivals that are totally mind-blowing, and can last a month. They’re having a good time. It’s a comparatively non-violent society. And what I found is that it isn’t a simple coincidence that they have been using a dual currency system for many centuries. All these unusual characteristics of Bali turn out directly to be nurtured by their dual money system. I am publishing a detailed paper on how this mechanism works in the forthcoming issue of Reflections, the journal of the Society of Organizational Learning at MIT.

 

RD: How does the money system lead to those outcomes?

BL: Practically all Balinese participate in a dual currency system. The first is the conventional national currency (the Indonesian Rupiah); the second is a time currency where the unit of account is a block of time of approximately three hours. This second currency is created and used within the “banjar”-this is a community entity consisting of between 50 and 500 families. It is in each banjar that the decisions are made democratically to launch any big community project. It could be to put on a festival or build a school. For each project, they always make two complementary budgets: one in the national currency, and one in time. That second currency-called “narayan banjar” (meaning work for the common good of the community)-is created by the people themselves. They don’t have to compete in the outside world to obtain that second currency, and it fosters cooperation between the members of the community. I call it a yin currency-it’s more feminine in nature. And it complements the national currency, which is a competitive currency and therefore of a yang, or masculine, nature.

      Here’s why it works: poor communities don’t have a lot of national currency, but they tend to have a lot of time. In rich communities, the opposite tends to be the case-people have more national currency, but less time. In either case, each banjar is capable of creating extraordinary events just by budgeting and using more of the kind of currency-national or time-in which they are rich. This balance is a key contribution to the unusually strong community spirit that prevails in Bali. And it’s not just because they’re Hindus. There are almost a billion Hindus in India, and they don’t behave that way. Here is an example of how a currency can make a difference.

 

RD: We have a strong emotional attachment to money, and we worry about it. So how we relate to money influences who we are and how we think of ourselves.

BL: Yes, you’re right. But it is interesting that societies that are using different kinds of currency have also very different collective emotions concerning money. The generally accepted theory-dating back to Adam Smith-is that money is value neutral. Money is supposed to be just a passive medium of exchange. It supposedly doesn’t affect the kind of transactions we make, or the kind of relations we establish while making those exchanges. But the evidence is now in: this hypothesis turns out to be incorrect. Money is not value neutral.

      Let’s return to the example of the fureai kippu that I was mentioning earlier, the elderly care currency in Japan. A survey among the elderly asked them what they prefer: the services provided by people who are paid in yen, the national currency; or the services provided by the people paid in fureai kippu. The universal answer: those paid in fureai kippu, “because the relationships are different.” This is one example of evidence that currency is not neutral.

      Another example: there is typically a reluctance among friends to pay for help provided by using national currency. If a friend is helping you move or paint and you pay him with national currency, it just doesn’t feel right. Interesting isn’t it?

 

RD: So people feel differently about complementary currencies than national currencies?

BL: Yes, there have been surveys in several countries that prove this to be the case. Conventional currencies are built to create competition, and complementary currencies are built to create cooperation and community, and it’s important to be aware that both can be available to make our exchanges.

      According to Paul Ray’s (author of The Cultural Creatives, Harmony Books, 2000) study, 83 percent of Americans believe that the top priority should be to re-build community, and yet the kind of currency we use in our transactions is precisely one that eliminates community. The word “community” comes from Latin, “cum munere.” “Munere” is “to give,” and “cum” is “among each other”-so, community means “to give among each other.” In short, it turns out that dollar exchanges tend to be incompatible with a gift economy. Complementary currencies are.

 

RD: Are you saying that you can’t have community if you’re using dollar exchanges?

BL: I’m saying that exclusive use of a competitive programmed currency in a community tends to be destructive for the community fabric. This isn’t theory. We’ve seen this happen at the tribe level, with the collapses of traditional societies. I’ve seen one happen myself in Peru among the Chipibo in the Amazon. That tribe had been in existence for thousands of years. When they started using the national currency among themselves, the whole community fabric collapsed in five years’ time.

      The same thing happened here during the 19th century in the Northwestern United States and Canada, in the traditional indigenous societies. The moment they started using white man’s currency among themselves, the community collapsed, the traditional fabric broke down.

 

RD: Do you think complementary currencies really can transform our planet?

BL: Yes. Bali is a perfect example that long-term use of a dual yin-yang currency system creates a different society. Thirty percent of a Balinese adult’s life happens in the space of the yin, feminine currency, which is the time currency. In contrast, we spend close to 100 percent of our time in the masculine, yang, competitive currency. That 30 percent of time spent on community activities creates another society, where everybody can become an artist, where the community fabric is stronger, where the social safety net is reliable, where abandonment is unknown. It nurtures an extraordinary feeling of trust and a higher quality of life.

 

RD: And you think this kind of culture and community can exist in other places, with completely different religions and cultures?

BL: The short answer is yes. We have evidence from Japan, Germany, Mexico, Brazil and the United States to show that complementary currencies make a difference in the way people relate to each other.

 

RD: In a really transformed world, would a community be using multiple complementary currencies as well as the national currency?

BL: Not necessarily. What has started to happen recently is an integration-many of these services that were using highly specialized complementary currencies are beginning to integrate into a single, local social-purpose currency. For example, youngsters who are taking care of the elderly in Japan using their credits in partial payment for tuition at the university, so we’re solving two problems at the same time. It provides an additional way of making things happen that otherwise is not available when national currency is scarce. Remember, complementary currencies simply enable additional matches between unmet needs and unused resources.

 

RD: Does the internet and electronic transfer systems offer a means for the creation of complementary currencies?

BL: I am convinced that the reason complementary currencies are developing now because of cheap computing. Do you really think American Airlines would have frequent flyer miles if they needed an army of clerks trying to keep track of your miles? I don’t think so. But today anybody with access to a PC can start a currency system. It isn’t a coincidence that about 95 percent of the social purpose complementary currencies are electronic.

 

RD: So can we buy an off-the-shelf program for creating a currency?

BL: Sure. There are even different freewares already available. One of them is for operating a LETS (Local Exchange Trading System). Another one that is free of charge is to start a time dollar system. We are in the process of incorporating a non-profit foundation in Boulder, the Access Foundation, whose purpose is to provide independent information on all the different complementary currency systems that are available worldwide, and on its website one will be able to download the corresponding softwares. This website ( http://www.accessfoundation.org) is planned to be operational early this fall.

      Currently, our biggest problem with money and currencies is unconsciousness. We are not aware of what we are doing around money. We haven’t really thought about what money does to us-we believe it’s neutral, so it doesn’t matter. But it’s not neutral: it deeply shapes us and our societies. The first thing that has to happen before complementary currency systems can effect real change on a larger scale is a shift in consciousness and awareness.

 

RD: You mean, we need to be aware of how money works?

BL: Let me ask you this. Have you taken an inventory of the number of days you spend in life getting ready to make money? And when you have money, to manage the money or spend it? But then, think about how many hours you’ve thought about what money is. I suspect not very much. We are spending a huge amount of energy to get something about which we have surprisingly little understanding.

 

RD: Well, it’s like the rain. It’s something you adapt to.  

BL: Yes, except that rain is not man-made. That’s precisely the difference. We’re treating money as if it is God-given, like rain or the number of planets in the solar system. But it isn’t. If you don’t like the quality of rain, there’s not much you can do about it. If you don’t like your money system, maybe you can do something about it.

      Assume that a Martian lands in Denver on the wrong side of the tracks. He ends up in one of the ghettos and finds that the houses are run down, the kids not taken care of, the elderly in trouble, and the trees dying. He sees all these things, and discovers that there are people and organizations absolutely equipped and ready to solve every one of those problems. So this Martian asks, “What are you waiting for?” The answer: “We’re waiting for money.” “What is money?” the Martian inquires. “It’s an agreement in a community to use something as a medium of exchange.” Don’t you think he may leave the planet believing there is no intelligent life here?

      The point is: if money is an agreement within the community to use something as a medium of exchange, we can create new agreements, can’t we? That is exactly what people are already doing all over the world. So why don’t we do it here? If we’re waiting for conventional currency to solve all our problems, aren’t we waiting for Godot?

 

RD: Is this your whole campaign now? Are you through with Belgian Central Banks?

BL: I’m trying to contribute to a consciousness shift regarding money. I believe that by a small change in the money system, we can unleash huge improvements in our social system. It’s the highest leverage point for change in our society, and surprisingly few people are looking at it. If you start a new complementary currency system, it can become self-perpetuating and facilitate additional transactions forever.

      You know the saying, if you want to feed someone, give him a fish. If you want to really help him, teach him how to fish. This is just a fishing lesson-what you do with it is up to you. You can take big fish or small fish, or you can choose not to fish at all. You decide what issues you want to deal with in your community, and there is a currency system that can help you with it.

  • Thu, Mar 25, 2010 - 12:35am

    #42
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: ZEITGEIST and The Huffington Post

I found this excellent Interview last summer …

http://www.greenamericatoday.org/pubs/greenamerican/articles/Spring2009/BLietaer.cfm

This interview, conducted by Green America Editor Tracy Fernandez Rysavy, complements “Re-examining the Structure of Money,” a piece that appears in the Spring 2009 issue of the Green American, From Greed to Green.

TRACY FERNANDEZ RYSAVY: Green America’s executive director Alisa Gravitz told me that you long ago predicted our current economic downturn and have been saying it’s going to last at least ten years.

BERNARD LIETAER: I’m not the only one saying that now. There have been a handful of people in the States who were predicting this. Paul Volcker was one. Nouriel Rubini at New York University. I was one of the early ones—I first wrote this in 1999, predicting that before 2010, we’d actually hit the wall.

Rubini said this recession is going to be long, deep, and brutal. Nobel Prizewinner Joseph Stiglitz, the ex-head economist at World Bank who’s currently at Columbia University, said that in the beginning of a recession, the debate between economists is whether it’s going to be a “V”—deep and short—or a “U”—not as deep but longer, as in three to four years. He says this one could possibly be in the form of an “L”—hitting the ground and staying there.

 

TRACY: Why did you see this coming, when very few people didn’t?

BERNARD: This problem is structural, and it is being treated as if it were a cyclical problem, or a managerial problem, in that things were badly managed. The kinds of solutions the federal government is doing, like dropping interest rates, saving the banks, saving some key businesses and doing big projects—all these things have been tried for 18 years in Japan. 18 years. And Japan is now where they were then, 18 years ago [when the country entered its own banking and economic crisis].

When I say the problem is structural … let me give you a metaphor. Let’s assume I give you a car. And I say “By the way, that car doesn’t have any brakes, and the steering wheel doesn’t work one time out of two.” Then I tell you to drive it across the Rockies.

Guess what? You’re going to have an accident! That’s pretty certain.

Now I come back to you and say, “What a bad driver you are!” And, “Oh, gee, they really didn’t do a good job on those maps. They didn’t warn you about that curve where you crashed.”

What we’re doing with the regulations to “fix” the economic crisis is akin to saying that the way to prevent an accident in the car I gave you is to make better maps. Nobody is saying the car is the problem, i.e. the system you’re driving is the problem.

Our money system is structurally brittle. It doesn’t matter if you put a very clever guy or a stupid guy at the wheel. The clever guy will take a half hour to have an accident, and the stupid guy will take ten minutes.

I know the structure of money systems. If you have a professional look at the car, they can tell you, “Don’t drive that thing.” That’s what I’m saying about the current money system: Don’t drive that thing. It will get into an accident.

 

TRACY: What is wrong with our monetary system today? Why shouldn’t people “drive that thing?”

BERNARD: Basically, for any complex to be sustainable needs to have a balance between two factors: resilience and efficiency. These two factors can be calculated from the structure of the network that is involved in a complex system. A resilient, efficient system needs to be diverse and interconnected. On the other hand, diversity and interconnectivity decrease efficiency. Therefore, the key is an appropriate balance between efficiency and resilience.

This is more understandable in ecosystems. One animal that can eat only one plant is going to get more easily on trouble than a more omnivorous one. If that plant gets in trouble, the animal will become extinct. If he eats 50 types of plants, when one plant gets in trouble, he can just eat some of the others.

The same thing is true for whatever eats that animal. It’s a chain of the appropriate levels of diversity and interconnections—which are the key to sustainability. We have know been able to measure quantitatively the conditions under which any complex flow network will be sustainable as a function of these two structural variables of diversity and interconnections. 

Our economy is precisely a complex flow network where money circulates, similar to biomass circulating in a natural ecosystem. When you apply what we learn from ecosystems to money systems, it’s clear that our current money system is a monoculture, and that creates problems. Just imagine that you plant one type of plant on the whole planet and eradicate everything else. It’s very predictable that one day, that crop will get in trouble. We don’t know have to know from what—whether a new microbe or climate change or whatever. It is structurally brittle..

Look at any financial institution, at any bank. They’re all photocopies of each other. There’s no diversity of institutions and even less diversity of currency. Therefore, just as you say its very logical that an ecosystem like this will collapse, it’s very predictable a monetary system like this will collapse, too. And it hasn’t finished collapsing, by the way.

 

TRACY: What’s next?

BERNARD: A dollar crash. Paul Volcker has said that there’s a 75 percent chance for “a dollar hard landing.” He probably wouldn’t say that today, because now he’s in a different role again [as Chair  of President Obama’s Economic Advisory Board].

 

TRACY: You’ve also said our current money system, automatically builds in a scarcity factor. Can you explain that?

BERNARD: To understand the reason how scarcity is created, one has to understand the way money is created. Money is created through bank debt. When you go for a mortgage through a bank, they give you $100,000 to buy a house and basically send you out into the world to bring back $200,000 in the next twenty years. The first $100,000 is principal, and the second is interest.

When the banks create the money, they don’t create the interest. They send you into the world to compete with everybody else to get the second $100,000 that never was created and bring it back to them. So if we’re in a world with zero-growth population, goods, services, and money, the problem would be obvious. You would feel it. The way we do not feel it is that there is growth in population, there is growth in production, and growth in money. So basically what you’re doing when paying interest is pay someone else’s principal . Fundamentally, everybody has to compete against everybody else. If you don’t succeed, you lose your house or whatever other collateral was used to obtain your loan.

I have a story that I call the “11th Round Parable.” I learned the story in Australia, so I’m setting it in the Australian Outback, in a little village where people don’t know about money. Every week they gather, and people bring hams, chickens, and eggs and barter and bargain with each other.

Then one day, a gentleman comes with a very fancy hat and very shiny shoes, and he observes the market. At one point, he sees a farmer trying to carry 12 chickens around the market to exchange them for a ham—and the farmer is obviously having trouble doing that. So the man starts laughing.

The wife of the farmer says, “Hey, stranger, do you know a better way of getting around with the chickens?”

And the man says, “I don’t know about chickens, but I know a better way of doing all this.”

“Oh, really,” she says. “What would that be?”

“See that tree in the corner?” he asks. “I’m going to sit under that tree. One of you bring me a big cow skin, and I will prepare something. Bring every family together, and I will explain it to you.”

He goes to the tree, and they bring him the skin. He cuts nine little rounds in that skin and puts a fancy little seal in each of those rounds. He gives ten rounds for every family. One round is equal in value to a chicken. So now the villagers can carry those rounds instead of the chickens.

Then he says, “I’ll come back next year and sit under the same tree. I want everyone to bring 11 rounds. The 11th round is the token of appreciation for the improvement that I’ve made possible in your community.”

The farmer’s lady asks, “Where will the 11th round come from?”

He says, “You’ll see, you’ll see, you’ll see. Don’t worry.”

Do you know what’s going to happen?

 

TRACY: Some people will have enough, and others will be left with fewer than 11.

BERNARD: What has to happen is on average, one of ten families has to go bankrupt to provide the 11th round to someone else. We’ve created a negative-sum game. And the next time the harvest is ready, not everyone will participate to help a neighbor in trouble to get his harvest in before a storm.

That’s how scarcity is created and how competition is generated.

 

TRACY: How can complementary currencies help solve these problems?

BERNARD: Complementary currencies work in addition to existing money, rather than replacing existing, official money. There are whole different families of complementary currencies. One of them is local currencies. One is regional currencies. Another is functional currencies. Another is social-purpose currencies.

Today, conventional money is supposed to be doing everything. By adding in complementary currencies, you actually get different types of things and different outcomes from different complementary currencies.

If you want to create or bolster a local economy, you can use local currencies to stimulate that kind of outcome. A local currency has been proven effective only for up to 300-500 families, within a particular part of town.

If you want to help mitigate unemployment, I would recommend regional currencies. Regional currencies could work for a million people. The purpose there is to create a sense of regional pride and to encourage economic development on a regional level. We have a number of regional currencies operational in Europe. There are 64 projects in Germany, of which 28 are operational and the rest are in process of launch. There are six projects in France that are now in pilot stage..

There are also social-purpose currencies. There is one in Japan that people use to trade elderly care. The Time Dollar system in America is another.

Global currencies can be complementary as well. The Terra is one such example (see http://www.terratrc.org).

 

TRACY: On a bigger level, you’ve been saying that the Terra and Business-to-Business or B2B currencies could help us navigate this economic crisis we’re in. How do you get people to start accepting them?

BERNARD: The Terra is a subset of Business-to-Business (B2B), and I would recommend implementing first a B2B when it comes to addressing this crisis. Being optimistic, it would take at least three to five years for the Terra to make a difference. The B2B could be operational in three to six months.

The prototype of a successful B2B is the WIR system in Switzerland, which  has been proven to help keep the country’s economy and employment more stable than all its neighbors since it was started in 1934.

The B2B keeps the businesses interconnected and trading with each other without borrowing money from the banks, which is the real bottleneck. Because the money is not anymore available from the banks as it used to be, period.

 

TRACY: How could we start a B2B currency this quickly? And how could we get it to be a national movement in the US?

BERNARD: We’re starting a B2B currency here in Europe. I was just at a meeting today at one of the pilot programs in Germany. They are considering calling it the “Com” for complementary and commercial—one Com equals one Euro, and it doesn’t have interest. There are now four pilot projects in gestation in Europe.The idea is to launch the pilot projects independently of each other and then interconnect them in 2010.

One of the main reasons we can do it so quickly is that thereare open-source softwares available for free, to make it all work. That solves much of technical problem.

Therefore, the only thing to be done is the social part, i.e. convincing businesses to be involved. Let me give you an example of how that might be done.

If one of your biggest customers tells you “We are going to buy from you at the condition that we can pay 10 percent with this new Com complementary currency.” As a supplier, when your biggest customers tell you that, you basically have a choice. You don’t have this big customer, or you accept the 10 percent payment in Coms.

The pilot projects are the beginning of the process. As we start to interconnec them on the European level, throughout the Euro-zone, there will be 16 countries that are using the same currency, all connected by the same software.

One of the key elements is transparency. With the Com system, I have the right to see your account before I make a trade with you. In other words, so it’s self-policing. That will make it very unattractive for the mafia and anyone else interested in criminal activity.

You can implement a B2B currency with same pricing structure and the same marketing mechanism and everything else. It simply offers an additional source of funding. The hope and idea is that at some point, at least during the period of the crisis, governments—particularly local and city governments—will accept partial payment of their taxes in the B2B currency, making it acceptable to everybody.

 

TRACY: Is there any talk about doing a B2B project in the US?

BERNARD: That will depend on the American businesses themselves. In order to do something like the B2B, you need to be willing to think out of the box.  

 

TRACY: Our economic system is based on growth, and a lot of economists that are thinking about the coming environmental and even population crises are coming to an agreement that we are reaching a point where the growth has to stop. Can complementary currencies help stop consumption and waste, as well?

BERNARD: I actually disagree that growth as a whole needs to stop. I think what we need is to stop stupid material growth. What I believe is that we only need more smart growth. For instance, we need an infinity of growth in learning. An infinity of growth in beauty. Large amounts of growth in care, help and restoration. So the question is not whether we need growth or not. The real question is to define what kind of growth.

 

TRACY: Well said! Do the B2B currencies stop stupid growth?

BERNARD: For example, we can have currencies that motivate you to put less carbon in the atmosphere. There are now six cities in Europe that are planning to launch a carbon currency to do just that—Bristol, Dublin, Munich, Rotterdam, Brussels, and Amsterdam.

 

TRACY: How does that one work? Is this different from the cap-and-trade system we read so much about?

BERNARD: Oh, yes. Cap and trade involves basically only corporations and governments. The consumer is not involved. Here we’re talking about actually motivating the citizen/consumer to get involved.

Let’s assume that you take the bus or the subway instead of your car. Well, we give you credit for the carbon units that you’re saving with your ticket. It’s all done electronically, using a “smart” card [that works much like a standard credit card with a rewards program]. You want to go buy a bicycle? You can pay for the bicycle with the carbon credits. Or if I install solar panels in my house, I get carbon credits, which I can then use to take the subway.

 The way that the US some state governments try to motivate people to buy a hybrid car is that they give you two- or three-thousand dollars in a tax rebate when you buy a hybrid. You can then use those two- or three-thousand dollars to go to Hawaii and emit more carbon than [you would save in the life of driving that hybrid]. So the government has no way of influencing behavior patterns after the first transaction.

The carbon currency works only in carbon-producing activities. So you create and economy that favors that activity. That’s an example of a complementary currency that actually encourages smart growth.

 

TRACY: What do you think individuals can do, here in the US, as we’re headed toward an unprecedented crisis?

BERNARD: If you’re a business manager, start a B2B currency. There are models available. We’re not talking theory: It’s been done before, and in Europe, we’re in the process of doing it again.

If you are a mayor, or a state governor, obtain the permission to accept such B2B currencies in payment of local taxes. You can choose the criteria that makes that currency acceptable for partial payment in taxes. This will provide the most powerful incentive for other businesses to accept that currency, and it will provide you with city and state income that you otherwise wouldn’t have.

If you’re an individual, gather your community, and create your community, to help build social capital.

In Brazil, the central bank is now helping to launch 150 dual currency banks to solve local problems, at the rhythm of 10 per month. In communities that have little money, survival is about the social capital. You can solve problems together that you can’t do alone. There are complementary currencies to achieve that as well, like Time Dollars. It doesn’t have any meaning to accumulate lots of Time Dollars, but the relationships you establish within a Time Dollars network are important. And local complementary currencies are very easy to start!

 

TRACY: Joanna Macy and others have talked about this moment where we’re going to have to act, to fundamentally change our economic system, or we’re going to enter a period of destruction. Is this it? Is this sink-or-swim time?

BERNARD: Yes, we’ve started, and yes, it’s sink-or-swim time. It’s time to do things differently—structurally differently. The faster we shift, the less suffering we will engender. Time is of the essence.

If I want to be cynical about it, I would guess the federal government will start making structural changes in about five years. What they’ll do is try the classic solutions, which we’ve already talked about, and then they’ll find out that those solutions will not work. I think that process will take three to five years.

The same thing happened to Japan, when it hit an economic crisis like this one. They tried the classical solutions, and after five years, they stopped believing the economic downturn was a cyclical thing, that it was like all the other ones. That’s when they started implementing these structural kind of solutions, which is why Japan is a full-scale laboratory of complementary currencies. However, Japan still haven’t gone to scale yet. They’re still experimenting. My suspicion is in the next two to three years, Japan will announce 10,000 local currencies, or a national B2B currency, and they’ll tell the world they’ve changed their development model.

In Europe, we’re trying to experiment with taking complementary currencies immediately to scale. By the end of 2010-11, we hope to have a B2B system that is available at the  Euro-zone level.

We could do the same thing in America. Basically, we need leadership. It doesn’t need to be political leadership. It could be business leadership. American business has proven it’s capable of turning on a dime. They don’t need to go to Washington to try to beg for a little more money. That won’t work, because there won’t be enough money for everybody. But American business needs to save themselves. Nobody can do it for them.

  • Thu, Mar 25, 2010 - 01:08am

    #43
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    Re: ZEITGEIST and The Huffington Post

[quote=JK121]

 I will heavily disagree with you.  technology is the only thing, when used correctly is the only thing that has solved human problems.  Human problems are technical.  Competition has been a part of mankind because mankind had nothing (scarcity) in the begining driving that behavior and perpetuating competition making it seem like it’s nature as opposed to behavior and that has always changed.  

I agree Technology is being misused RFID and so on, but again technology is solely responsible for the freeing of humanity from mundane jobs.  We can create abundance and sustainability, it’s monetary economics coupled with that behavior of wanting to rule over others that prevents us from changing our value system. 

Technology only goes so far from competition till collaboration takes over and puts in all the missing pieces.  The value system associated with competition has many by products “us vs them” mentality, which is childish.    

What good will unlimited energy long or immortal lifetimes and surplus food do us if we are still killing each other. “Hey Ray work on  bringing peace to Palestine.”

If the U.S. was really concerned with peace over in that armpit of the middle east, it would concentrate on bridging the gaps between both sides and make them understand the commonalities, not from a religious view, but from a view that they all need the same resources they are both destroying.  Also both sides have leaders with serious “old ways” of thinking. More proof that old methods cannot be applied to future problems. 

People are also forced into creating technologies that knowingly would not benefit humanity.  

It will take time but we either have sustainability for humanity or we destroy ourselves.  ZM has been the only movement i’ve seen that has any promises.

[/quote]

JK,

I have to disagree with you on several issues.  No way that technology is the ONLY thing that has solved human problems.  For example, a child hurts himself.  The child’s mother consoles the child and fixes his boo-boo with a band-aid.  Problem solved.  No technology.  Someone with plenty gives of their abundance to a neighbor in need.  Problem solved.  No technology.  A charitable organization has a financial need.  A generous individual makes a contribution to meet that need.  Problem solved.  No technology.

In other words, human love, compassion, kindness, generosity, etc., will solve far more problems than technology ever will.  Technology is wonderful but if an incremental improvement in technology solved an incrementally greater number of problems, why do our problems appear to be growing in number and magnitude?  As Crash pointed out, ZM falls short on the human/spiritual side of the solution. 

While technology can certainly help solve problems, it will also create them.  Think of one of the ‘E’s … Environment.  Pollution, deforestation, soil erosion, depletion of fisheries, etc., etc. have all been caused to a considerable degree by technology.  Even such growing problems as over-population won’t produce any PCB or heavy metal pollution but technology definitely can.

Furthermore, competition will exist, even in the absence of scarcity.  I once watched two very wealthy men (worth 100s of millions each in 1980s dollars) go at it in a heated argument that run on for months and then years.  They were extremely competitive with one another.  It had nothing to do with scarcity.  Each had more from a material point of view than they could ever hope to use.  Yet the competition and strife were still there.  As V pointed out, we do not fully understand all aspects of human behavior nor is it likely that technology will change basic human nature.

In terms of technology freeing us from mundane jobs, isn’t it interesting how, as we get progressively more advanced technology, we have progressively less free time.  As anthropologists have pointed out, primitive tribes in rainforest areas spend about 4 hours per day meeting their basic needs.  The rest of the time is free for enjoyable social and recreational activities.  Wouldn’t folks in our society love to work only 4 hours per day meeting their basic needs?  There is a bit of the consumerist/materialist lie in all of the supposed free time that technology will allegedly provide us.  Theoretically, it should work out that way but in practicality, it just doesn’t seem to work.

ZM has some valid points but it also has inaccuracies, especially in its theological perspectives.  In addition, it is somewhat cult-like and is a religion (i.e. based on a belief system) of sorts as pointed out by Crash.  As folks such as trwiley and sjmvideo have pointed out, there are other perspectives that offer considerable value and perhaps address some of the deficits of ZM.  

     

   

  • Thu, Mar 25, 2010 - 01:42am

    #44
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    Re: ZEITGEIST and The Huffington Post

[quote=Vanityfox451]

[Crash and I are both based in the UK. Now, I can’t speak for ‘Crash’, but for myself I feel I gain a more rounded perspective of the United States than the average American, being outside of it, and looking in.

[/quote]

You’ll certainly have a different perspective.  I know I routinely check CBC, BBC, a NZ news network, the Jerusalem Post, Ha’aretz, and other news sources external to the US to get a perspective different from the generally terrible US media.  But I have a hard time imagining that someone outside the US has a better understanding of what’s going on here from what they hear and see remotely as compared to one who actually lives here, travels here, talks to people here, has a personal historical perspective of what has transpired here in the past and now, and experiences the situation here presently first hand.

To me what you’re saying is analogous to someone being a voyeur and observing me in bed with my wife and then telling me they think they have a better idea of what is happening between my wife and I than I do.  I don’t buy it. 

  • Thu, Mar 25, 2010 - 02:29am

    #45
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    Re: ZEITGEIST and The Huffington Post

AO

I have to disagree with you on several issues.  No way that technology is the ONLY thing that has solved human problems.  For example, a child hurts himself.  The child’s mother consoles the child and fixes his boo-boo with a band-aid.  Problem solved.  No technology.  Someone with plenty gives of their abundance to a neighbor in need.  Problem solved.  No technology.  A charitable organization has a financial need.  A generous individual makes a contribution to meet that need.  Problem solved.  No technology.

band-aid is a technical invention hence technology

Charitable org, donation, which may give a new wheelchair (technology) to a cripple.  you make no sense.

 

People have less time, cause of the monetary restraints it presents due to leaders (politicians) using that invention (money) is an abusive way.

  • Thu, Mar 25, 2010 - 02:39am

    #46
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    Re: ZEITGEIST and The Huffington Post

 

AO read what is posted earlier about technology. 

  • Thu, Mar 25, 2010 - 02:48am

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    Re: ZEITGEIST and The Huffington Post

[quote=JK121]

AO

I have to disagree with you on several issues.  No way that technology is the ONLY thing that has solved human problems.  For example, a child hurts himself.  The child’s mother consoles the child and fixes his boo-boo with a band-aid.  Problem solved.  No technology.  Someone with plenty gives of their abundance to a neighbor in need.  Problem solved.  No technology.  A charitable organization has a financial need.  A generous individual makes a contribution to meet that need.  Problem solved.  No technology.

band-aid is a technical invention hence technology

Charitable org, donation, which may give a new wheelchair (technology) to a cripple.  you make no sense.

 

People have less time, cause of the monetary restraints it presents due to leaders (politicians) using that invention (money) is an abusive way.

[/quote]

I didn’t think I’d have to deconstruct this but here goes.

Try thinking of a poultice instead of band-aide.  No technology.

Think of charitable giving of food or labor rather than wheelchair.  No technology.

Why does charity have to involve technology?  It just doesn’t.

Technology can be taken out of the equation.  It makes perfect sense … if you have an open mind.

  • Thu, Mar 25, 2010 - 03:26am

    #48
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    Re: ZEITGEIST and The Huffington Post

[quote=JK121]band-aid is a technical invention hence technology[/quote]

Bandaids are actually overkill……  another way to separate you from your money!

  • Thu, Mar 25, 2010 - 04:14am

    #49
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    Re: ZEITGEIST and The Huffington Post

Technology is the external expression of the interior human landscape it is non dualistic  and is nothing more than the result of our collective consciousness. Until our internal landscapes fundamentally change our technology and the uses to which it is put will not change.

So called primitive societies with  very limited technology had and have very little of the stress related health issues of modern technocratic societies. ummmmm.

V

  • Thu, Mar 25, 2010 - 09:24am

    #50
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    Re: ZEITGEIST and The Huffington Post

[quote=ao]

[quote=Vanityfox451]

[Crash and I are both based in the UK. Now, I can’t speak for ‘Crash’, but for myself I feel I gain a more rounded perspective of the United States than the average American, being outside of it, and looking in.

[/quote]

You’ll certainly have a different perspective.  I know I routinely check CBC, BBC, a NZ news network, the Jerusalem Post, Ha’aretz, and other news sources external to the US to get a perspective different from the generally terrible US media.  But I have a hard time imagining that someone outside the US has a better understanding of what’s going on here from what they hear and see remotely as compared to one who actually lives here, travels here, talks to people here, has a personal historical perspective of what has transpired here in the past and now, and experiences the situation here presently first hand.

To me what you’re saying is analogous to someone being a voyeur and observing me in bed with my wife and then telling me they think they have a better idea of what is happening between my wife and I than I do.  I don’t buy it. 

[/quote]

That’s why I wrote – ‘Average American’ – in my post ao, do you buy that?

Though I do find…[Ed. note: Nope.]

 

“We Live In The United States Of Amnesia.

No One Remembers Anything Before Monday Morning.

Everything Is A Blank.

We Have No History.”

– Gore Vidal

~ VF ~

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