In a new article titled, Reinventing Money – A Community Exchange System from South Africa Conquers the World, Tim Jenkin describes the development and operation of the Community Exchange System (CES) which he founded in 2002. Beginning as a single local credit clearing exchange, CES has evolved into a global network of more than 340 local exchanges distributed over 34 countries.
“The CES web site is just a tool for managing exchange groups, for keeping accounts and for advertising. Each group administers itself and has its own rules and conditions of use. This keeps the overall system democratic and provides the basis for a multitude of separate but interacting local economies. Some groups base their unit of value on the national currency while others use time (e.g hours or minutes)… The long-term vision of CES is to democratise the entire network.”
“The CES has been operating for nearly nine years now and, though it is still minuscule compared to the global financial system, has demonstrated that it is as versatile as the conventional money system, and indeed more efficient in many ways. It caters to fairly large volumes of trade, permits international trade, provides an extremely efficient means of tax collection through an optional transaction levy, handles multiple conversion rates seamlessly and clears accounts instantaneously.”
While the CES prototype needs some refinement, it provides an operational “proof of concept” for the creation of a locally controlled, yet globally useful system of exchange that transcends the dysfunctional interest-based, debt-money system that is driving the world to destruction. I fully agree with Tim’s conclusions that:
“In the new era of declining energy and other natural resources, the global economy is inevitably going to have to contract. The debt-based money system looks increasingly unstable in the current low-growth environment and definitely cannot operate in a steady state or degrowth environment. A new exchange system that operates something like CES will be needed. Such an exchange system simply reflects the economic situation, it does not drive it. When interest is removed as a factor in exchange, the growth imperative is removed along with the debt bondage that most of us live under.
Extraction mechanisms such as speculation, derivatives, securitisation, hedging and other casino-like activities that allow a parasitic class to skim off the wealth of a society are also excluded. The decentralisation of control and lack of opportunities to hijack the exchange system for private gain will return the money power to ordinary people. No longer will those who currently control the financial system be the ones who decide where society puts it efforts and how it allocates its resources.
The realisation that money is information and not real stuff is hugely liberating because it means that a local community can create its own exchange system and not be dependent on the dysfunctional global one that is driving humanity to the brink of disaster.
This has all been made possible by our ability to share information on the internet. Local communities should jump at the opportunity to be able to define and control their own destinies instead of allowing financial institutions and governments to do it.”
I encourage all to read the entirety of Tim’s article. You can read it online or download the pdf file here.–t.h.g.
The CES is working really well for LETS style trading groups in Australia. A combination of the GFC and the adoption of Tim Jenkin’s CES has seen a bit of a renaissance of community trading in Australia.
Aside from making trading and admin easier, the CES helps admins to keep track of where members are clustered, trends in trading volume etc.
For example, I recently put used CES data to create a map showing locations on members in 3 neighbouring LETS groups (Sydney, Hunter & Newcastle).
Money is an accounting system. I can’t emphasize enough how damn stupid it is to try to vilify debt – “dysfunctional interest-based, debt-money system”. Vilifying interest is reasonable. Interest is not the same as dividends. The idea that having a book entry currency in your hand that you have earned doesn’t mean there is a debt to be extinguished is absurd. The problem is knowing who the debt is between – hint: IT’S NOT THE BANK! The debt is between a borrower who went into a glorified bookkeeping agency we call a “bank”, and the creditor – the person with the credits(dollars) who earned them from the borrower. That person is the true lender. I know it’s the biggest secret in world history, but all the bankers and all their vile scum university economists know it.
Of course, if you’ve read my work and E. C. Riegel’s, you’d know that we agree with you.
You seem to disagree with my choice of words to describe the “dysfunctional interest-based, debt-money system”.