Seizing an Alternative, Pomona College, June 4-7 – Free Plenary Sessions, Scholarships, and other reasons to participate.

Here’s a portion of the latest informational brief about the upcoming conference. You’re invited:

Don’t stay away!

(I mean, really, when is the next time you’ll be able to get together with hundreds and hundreds of people rethinking civilization from the ground up?)

            Seizing an Alternative: Toward an Ecological Civilization             June 4-7, Pomona College, Claremont, CA

ATTEND FREE PLENARY SESSIONS at Bridges Auditorium, Pomona College, Claremont, CA:

THURSDAY, June 4
Bill McKibben: 7:00 p.m. Opening Night

FRIDAY, June 5
John B. Cobb, Jr.: 9:00 a.m.
Vandana Shiva: 7:00 p.m.

SATURDAY, June 6
Herman Daly-John B. Cobb, Jr. discussion moderated by PRI’s Warren Olney (recorded):
  9:00 a.m.
Sheri Liao: 7:00 p.m.

SUNDAY, June 7
Wes Jackson: 9:00 a.m.

Southern California Edison makes ADDITIONAL STUDENT SCHOLARSHIPS (limited) available. To apply, write to info@PandoPopulus.com.

Read More…

Wave of Action to focus on central banks

 

There are instances where demonstrations can be useful, at least in raising public consciousness. Most people in Western countries are still delusional about money and politics. As David DeGraw puts it “democracy” is an illusion for propagandized minds.

The reality is that our political systems have been captured by elite bankers who are bent on concentrating ever more power and wealth in their own hands. DeGraw is calling for a worldwide Wave of Action to focus attention on central banks, the institutions that are the primary instruments of control over money and economics. He says, “On June 20th, we will rally at US Federal Reserve banks, the Bank of England and central banks worldwide to focus mass consciousness on the crimes against humanity perpetrated by global bankers.”

Read his call and join the ‘wave” here.

Seizing an Alternative-sign up now

Seizing an Alternative: Toward an Ecological Civilization
June 4-7, Pomona College, Claremont, CA
This promises to be the conference of the year.
Get all the details and register here.

A Monetary Reform Proposal for Iceland

I have recently received from several sources word of a new monetary reform proposal. This one, commissioned by the Prime Minister of Iceland, is titled, MONETARY REFORM A BETTER MONETARY SYSTEM FOR ICELAND, and is authored by Frosti Sigurjonsson.

I’ve taken the time to read only the Overview and summary portion, but that is sufficient to discern the crux of the Sigurjonsson proposal, which is this:

The Central Bank will be exclusively responsible for creating the money necessary to support economic growth. Instead of relying on interest rates to influence money creation by banks, the Central Bank can change the money supply directly. Decisions on money creation will be taken by a committee that is independent of government and transparent in its decision-making, as is the current monetary policy committee.

New money, created by the Central Bank, will be transferred to the government and put into circulation in the economy via increased government spending, by reduction in taxes, by repaying public debt or by paying a citizen dividend.

The Central Bank will also be able to create money for lending to banks for onward lending to businesses outside the financial sector.

Sigurjonsson indicates that his proposal draws heavily upon an earlier proposal titled, A Monetary Reform for the Information Age, by Joseph Huber and James Robertson (New Economics Foundation (2001)), which I critiqued early in 2002. That critique, along with subsequent dialog between the authors and myself, can be found at http://reinventingmoney.com/monetary-reform-information-age/.

Since both the Sigurjonsson proposal or the Huber/Robertson proposal advocate the same basic approach, I strongly believe that any serious consideration of either, should also consider my above mentioned earlier critique and subsequent dialog.

While I agree with much of what Huber and Robertson (and presumably, Sigurjonsson) say about the defects in the present money system, I believe that their proposed centralized “solution” does not go nearly far enough in solving those defects. Continuation of the money monopoly in (presumably) different hands does not get to the root of the problem. It is my view that the key to achieving more equitable and sustainable economic interrelationships lies in liberating the exchange process from monopolized money and banking, enabling the creation of competing currencies and credit clearing exchanges, and allowing the needs of traders themselves to determine the supply of exchange media (money) in circulation at any given point in time.

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Beyond Money—Learning the basics of value exchange

We need to get beyond the confusions and obfuscations that surround the concept of money.

To do that we need to distinguish between what money is, i.e., its essence, and what money does, i.e., its functions. Conventional definitions of money, the ones that are universally taught in schools and universities, tell what money is supposed to do, not what it is.

The essence of money is credit. It is the issuer’s i.o.u. or promise to reciprocate, i.e. to provide real value to the market and accept his currency back as payment for it.

With that in mind, we can begin to make sense of money and effectively address the problems that arise from conventional forms of money.

Conventional thinking lists money as having these functions:

  • Medium of exchange—what we use to pay one another.
  • Store of value—what we use to save our temporary surplus.
  • Measure of value—what we use to quantify the market value of all the things that we buy and sell.

But, as I have argued for almost 30 years, these are separate and distinct functions that need to handled by distinct and different means. (For more about that see my book, Money and Debt: A Solution to the Global Crisis, Part III).

Let’s focus on the exchange function, for this is the fundamental and proper role of money, and this is where attempts to solve our global financial and economic problems must begin. Anyone who has studied my work will know that I have thoroughly articulated these concepts in my books and my various presentations. But theory and practice develop together, each informing the other, and finding ways to improve the process requires that we look at both.

Over the past several decades, numerous innovations in the exchange function have emerged, including virtual commodities like Bitcoin, LETS systems, community currencies, and commercial trade (“barter”) exchanges.

Of these, the greatest market success has been achieved by commercial trade exchanges which enable their member businesses to buy and sell without using conventional money. Rather, trading is enabled by using the members’ own credit in a process called credit clearing which simply offsets debits from purchases against credits from sales. (For a more complete description of how this works, see my book, The End of Money and the Future of Civilization, especially Chapter 10).

Over the past 40 years, much has been learned from the operation of commercial trade exchanges, and while they have achieved some modest levels of success, they have barely scratched the surface of the potential market for credit clearing services. It remains for exchanges system designs and procedures to be optimized and standardized and for local exchanges to be networked together into a vast moneyless marketplace.

The trade exchange industry has two trade associations that have been instrumental in helping practitioners to share information and in promoting standards and best practices. These are the International Reciprocal Trade Association (IRTA) and the National Association of Trade Exchanges (NATE). But over the past year a new voice, Bartertown Radio, has emerged that seeks to disseminate the knowledge and wisdom of practitioners to a wider audience. Its mission is to provide an “Educational Program for Business Owners, Entrepreneurs, Barter Exchanges, Owners or New Owners of Barter Exchanges or anyone interested in Alternative Economies.”

Broadcasts are archived and can be accessed on demand at the Bartertown Radio website. Particularly relevant is the April 18 broadcast featuring Richard Logie, a man with 20 years of experience as a trade exchange operator and software platform developer. During that interview, Richard shared his experience and knowledge about a wide range of topics including the factors he considers in allocating credit lines to exchange members, how tax issues are dealt with, and ongoing efforts to establish and enforce good standards of operation. That interview with Richard will be continued next Saturday, April 25 at 11 AM Eastern time (UTC-5). Be sure to tune in at http://www.blogtalkradio.com/educate4barter/2015/04/25/richard-logie-part-2 .

Other archived broadcasts that may be of particular interest are the April 5 interview with industry leader, Harold Rice of the American Exchange Network, and the interview with yours truly from December 13, 2014. Besides operating his own trade exchange company for almost 40 years, Harold Rice has provided consulting services for entrepreneurs and other exchange operators. He is a fount of knowledge about the details of exchange operation and has special expertise in accounting and tax issues.

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2015 Spring Newsletter

In this issue:

  • Summer in Greece (and elsewhere in Europe)
  • The Greek Debt Crisis, an Opportunity for Innovation
  • California Events
  • African Currency Projects Proliferating
  • Good Reading, Listening, and Viewing

IMG_2099 Summer in Greece (and elsewhere in Europe)

The fates have conspired to draw me back to Greece this coming summer. I’ve recently had a lot of interesting correspondence with people in Europe who are working, in one way or another, on solutions to the intensifying global financial crisis. The eastern Mediterranean seems to be at the leading edge of the global debt tsunami so that’s the place to be.

I have been invited to serve as a Scientist in Residence at the holistic Kalikalos Summer School on the mythical Pelion peninsula near Volos, Greece. I will be there during the periods 12 to 19 June and 10 to 17 July, and possibly some other times in between or after those dates. During the 12-19 June period, Kalikalos will also feature a course, The Big Picture: Toward a new way of relating to self, community and planet, led by Jennifer Hinton and Theoharis Tziovaras, and during the 10 to 17 July period, Jonathan Dawson of Schumacher College (UK) will be offering a course, Economics of Solidarity, in which I will assist. My residency there will provide lots of opportunities for idea sharing and collaboration.

The school’s website describes it as follows: “The Kalikalos living learning centers in Pelion, Greece are dedicated to demonstrating the power of authentic community as a vehicle for building a new holistic world of peace, partnership and sustainability. Our three campuses offer an educational programme of workshops, retreats, workcamps, conferences and living-in-community guest weeks in the summer months that include healing (self, society & planet), creative arts, communication science, and Self-enquiry. For the latest information about the Centres, please subscribe to our bi-monthly newsletter at: www.kalikalos.com/eNews.”

In addition to my stay at Kalikalos, I expect to be spending some time elsewhere in Greece during June and July. Besides Athens and Volos, Crete and Cyprus are also possibilities. At the moment, August is open, but I plan to remain in Europe until early September. My return flight is booked from London, so I will be spending at least a few days in England prior to my departure. As always, I am open to visiting, presenting, and conferring in places along my routes. Proposals can be sent to me at thgreco@mindspring.com.

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The Greek Debt Crisis, an Opportunity for Innovation

Since the January elections there, and in anticipation of my summer visit, I’ve been looking closely at Greece,—researching its history, politics, and economy. A lot of media attention has been given to the new government of the Syriza Party and its populist agenda. Especially prominent in the news has been their new Finance Minister, Yanis Varoufakis who has been wrangling with Angela Merkel and the rest of Greece’s European creditors over restructuring the countries debt and relaxing the austerity conditions that were accepted by the previous administration.

Varoufakis has an impressive background and some unorthodox ideas about how to address the debt crisis that threatens to not only crush Greece, but to unravel the entire Eurozone. He is to be admired for his courage in standing up to the “troika” (the European Commission (EC), International Monetary Fund (IMF), and European Central Bank (ECB)), and for exposing the failures and pretense of the economics profession. Varoufakis’ blog provides links to many of his interviews and presentations, and his book, The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy, published in 2011 and updated in 2013, is now gaining wide attention.

That is not to say that he gets everything right. He may have the right approach to dealing with the immediate crisis of national insolvency, but he seems to be lacking when it comes to understanding the more fundamental flaws of money that is created by banks on the basis of interest-bearing debt, nor does he seem to appreciate the vast potential of innovative exchange mechanisms like mutual credit clearing and private currencies issued by trusted domestic producers.

He has however posted one currency idea on his blog that might be of some help if some features were to be changed. I have posted my suggestions about that as a comment to his post. You can find both his proposal and my comment at http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-currency-blueprint-with-a-potentially-useful-application-for-the-eurozone/#comment-148955.

Besides accessing many web sources, I discovered, quite by accident in a local bookshop, a new book that is proving to be invaluable in providing me with essential background and insights into how things operate in Greece in the post-WWII era. The book is, The Thirteenth Labour of Hercules: Inside the Greek Crisis, authored by journalist Yannis Palaiologos (Portobello Books, 2014). Reading it has shown me the many dimensions of Greek politics and the domestic and foreign basis of the present crisis. It seems that there is plenty of blame to go around.

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California Events

I will spend the month of May going back and forth between California and the East Coast to visit family and friends. Then in early June prior to my departure for Europe, I will be occupied with events in California. On June 2, I will lead a discussion in Martinez (San Francisco Bay area). This event, sponsored the Mt. Diablo Peace Center and Friendly Favors, is titled, Between the Devil and the Deep Blue Sea: What Greece needs to do to extricate itself from its economic and financial predicament. We will discuss the various options that Greece and other debtor nations might employ, both in dealing with their immediate problem of insolvency, and in rebuilding their sovereign domestic economies. Please see Details and RSVP at the Events page of www.favors.org.

Then, from June 4 thru 7, I’ll be participating in the conference, Seizing an Alternative: Toward an Ecological Civilization, to be held at Pomona College in southern California. This is shaping up to be a huge event with 12 sections and 80 tracks. I’ll be playing a major role in Section 1, The Threatening Catastrophe: Responding Now, Track 6: Political Collapse (http://www.ctr4process.org/whitehead2015/section-1-track-6/). I will be providing input on how the geopolitical order is determined by elite control of money and banking, and outline some promising strategies for empowering people and communities by reclaiming the credit commons.

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African Currency Projects Proliferating

We are finding great cause for optimism as we see successful programs in Africa being replicated and expanded. Will Ruddick and his team are continuing their excellent work, helping people to discover their own power by collaborating to establish exchange mechanisms based on the value of their own production. In a recent message Will reported that, in Kenya and South Africa, they are “in the process of implementing 8 community currency programs effecting [sic] well over 100,000 people.” Building upon their success with the Bangla-Pesa currency in Mombasa and the Gatina-Pesa in Nairobi, they expect these community currency projects will unlock the potential for local producers to greatly expand their trading with each other and to pull themselves up out of poverty. Will says, “We will be launching a 2nd community currency in Nairobi’s slums (Kangemi-Pesa) on April 4th… It will be a large event with marches through that area…These programs represent the foundation of what is rapidly becoming a global movement toward democratic and decentralized monetary systems. Creating resilient networks of markets across Africa is the path toward truly sustainable development”

Will also reports that they “have recently made the move to develop a non-profit foundation called Grassroots Economics to house these programs, and are looking for partners that really understand the seriousness of the monetary problem and the urgent need for community based solutions.” A quick update on the currency projects can be found here.

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Good Reading, Listening, and Viewing

Richard Werner is one of the few academic economists worth listening to. I recently read his

paper, How do banks create money, and why can other firms not do the same? An explanation for the coexistence of lending and deposit-taking. This is an excellent and clear explanation of the accounting sleight-of-hand that enables banks to create deposits (money) without the vast majority of people, even most bankers, realizing what is happening. Of course, many of us in the alternative exchange movement have long recognized that banks do this, but Richard’s explanation of HOW they are able to do this must be compelling even to his academic colleagues. This paper is a very important contribution to the literature of monetary and banking reform and transcendence because it also outlines the positive implications of some small changes in banking laws and regulations that could be made if there were the political will to do them.

Of course, understanding how the flawed money system operates is only the beginning, and political approaches to reform seem very unlikely. That knowledge must be used as a departure point from which to design and implement innovative market oriented approaches to extra-bank exchange. Mutual credit-clearing circles and private currencies spent into circulation by trusted issuers, can be organized by businesses and communities to provide “home-grown” liquidity. To my knowledge, there are at present no major legal obstacles in most countries that would impede such innovative technologies from being widely deployed. The Swiss WIR and the existing commercial “barter” exchanges are imperfect models that provide proof of concept. In the US at least, commercial barter exchanges are officially regarded as “third party record keepers” which are not subject to banking and money transfer regulations.

You might also enjoy viewing the documentary video, Princes of the Yen, which is based on Richard’s book by the same name (subtitled, Japan’s Central Bankers and the Transformation of the Economy). It makes me wonder if there might be a place for directed investment and allocation of credit by central governments in temporarily addressing the worst effects of the European debt crisis (other than bank bailouts, that is).

Students of innovation will be interested in The Innovators: How A Group of Hackers, Geniuses, and Geeks Created the Digital Revolution by Walter Isaacson. The audio version, which I have just finished, held my attention throughout the entire 15 CD set.

Since listening to his Black Swan in audio format a few years ago, I’ve been a fan of Nassim Taleb, so I’m now in the process of listening to his book, Antifragile: Things That Gain From Disorder. This is another work that is both iconoclastic and filled with original ideas. Highly recommend.

Finally, if you really want to understand what’s happening in the world, you need to follow Dr. Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan administration. Dr. Roberts is one of the few commentators today who see what is really going on and is willing to tell about it. His recent interview by Greg Hunter is especially timely. View it in my post at BeyondMoney.net.

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Clearing away the fog–Paul Craig Roberts on geopolitics and the American economy

Here is another great interview of Dr. Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan administration. I think even the interviewer, Greg Hunter had some scales removed from his eyes. Dr. Roberts is one of the few commentators today who see what is really going on and is willing to tell about it.