Category Archives: Developing Alternatives

New Community Currency Hanbook

The New Economics Foundation has recently announced a new handbook. Covering a variety of currency designs from time banks, LETS, and currencies issued on the basis of conventional money payment, People Powered Money: everything you need to know to set up a community currency, is a useful guidebook for grassroots exchange innovators.

The book can be downloaded from http://communitycurrenciesinaction.eu/peoplepoweredmoney/.

More news from Africa: Berg Rand Launches in South Africa

BergRandWill Ruddick and his team are continuing to proliferate community currencies in various places around southern Africa using their Bangla-Pesa model.

Will reports as follows:

The Berg Rand or BRAND – which means ‘Fire’ Money in Afrikaans, had an amazing launch today! The FlowAfrica team lead by John Ziniades and Anna Cowen of Meshfield spent over 6 months training local youth in topics of architecture, video creation (see their youtube channel), currency and businesses development. These youth helped mobilize a network of small businesses across 3 different towns in the Bergrivier region. The businesses formed the Bergrivier Exchange Network (BEN) and designed their own medium of exchange. Similar to Bangla-Pesa and the other community currencies in Kenya the members of the BEN must be local prosumers and guaranteed by four other members of the network and must contribute to a community fund with their BRAND for social service programs, like trash collection and alien vegetation clearing.

Read the full story here.

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…

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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Thomas H. Greco interviewed on Bartertown Radio

My December 13 interview by Bob Prentice and Sandra Harshman on Bartertown Radio considered moneyless trading in general then zeroed in on what needs to be done to take credit clearing and private currencies to scale. To stream it or download it, click here.