Local Currencies—what works; what doesn’t?
By Thomas H. Greco, Jr.
Community currencies, and mutual credit clearing exchanges are key elements in the emergence of a new economic paradigm. These approaches to enabling the exchange of value are not entirely new, they have a long and varied history, but their enormous potential and possibilities have become widely recognized only within the past three or four decades. This is largely the result of increasing disillusionment with conventional money and banking systems, the emergence of Bitcoin and other non-governmental, non-bank currencies, and the growing interest in decentralized, peer-to-peer approaches in all realms of human activity.
The latest wave of exchange alternatives has seen the emergence over the past few decades of scores of commercial trade or “barter” exchanges, and hundreds, if not thousands of local currencies. The scores of commercial trade exchanges that have been operating in many countries around the world for the past four or five decades enable moneyless trading among their business members, and collectively “clear” tens of billions of dollars’ worth of trades annually. Their success provides the strongest proof of the viability of decentralized, non-governmental, non-bank, moneyless exchange options.[i]
On the other hand, the plethora of local and community currencies that have popped-up all over the world have not been so encouraging. The avowed purpose of local currencies has generally been to keep money circulating locally instead of “leaking out” of the community. It is hoped that by keeping exchange media circulating within the local community, the vitality of the local economy will be enhanced and local businesses will be better able to compete with large global corporations and merchandising chains.
That is well and good, but it misses the main point of what ails our communities, and our world. It is the very nature of the dominant political money system that is problematic. So, localization is not the end in itself, but the necessary means to an end, which is personal re-empowerment and freedom; community resilience, sustainability, and self-determination; and the revitalization of democratic governance. Community currencies and exchange systems provide an essential tool kit for achieving those goals but they need to be designed in such a way as to make people less dependent upon political money and banks. So long as we remain harnessed to the dominant money and banking regime, there will be little chance of significant improvement in the human condition, in fact, the trend has been exactly opposite. …. Read the full article or download the full PDF.
Broadly speaking, technology is the organization of knowledge, people, and things to accomplish specific practical objectives. It includes processes, practices, techniques and systems as well as things. So what are the disruptive technologies in money and finance? Or is that even the right question to be asking? Is it Bitcoin, Ethereum, and other so-called crypto-currencies? Is it the blockchain, “smart contracts,” “big data,” algorithms?
To find out, watch this 15 minute video, which was extracted and adapted from a longer recording of the presentation, I made to the International Institute of Advanced Islamic Studies, in Kuala Lumpur, Malaysia, on October 10, 2016. It describes how communities and businesses can escape the debt trap and become more resilient and self-reliant? New independent approaches to payment and reciprocal exchange are being deployed which are making conventional money obsolete.
Links to this video:
YouTube link: https://youtu.be/ty7APADAa8g
Vimeo link: https://vimeo.com/245661935
Many thanks to Ken Richings for doing the hard work of editing and preparing the video for publication.
The full Malaysia presentation titled, A World Without Money and Interest: A pathway toward social justice and economic equity, can be found here.
Posted in Basic Concepts, Developing Alternatives, Emerging paradigm, Finance and Economics, My activities, Prescriptions
Tagged community currencies, credit clearing, currency, disruptive technologies, innovation, money, reciprocal exchange
I have, of late, been attending Sunday services at Grace St. Paul’s Episcopal Church in Tucson. What that might say about my views on religion is something I’ll save for a later time, but among the things that have drawn me to involve myself with that place are, first of all, its declared mission of caring, openness, social action and inclusion, and secondly, the deep insights into Biblical and related scriptures of its rector, Rev. Steve Keplinger.
In his sermon of November 19, 2017, Rev. Steve Keplinger explains the meaning of the parable of the talents (Matthew 25:14-30). Looking at it in the context of the prevailing culture at the time of Jesus, and the audience he was addressing, Steve’s interpretation will surprise you, as it did me. It makes a great deal more sense than the interpretations I (and probably, you) heard in your earlier religious education.
The first part of the audio recording is a clip from the soundtrack of the movie, Jaws, in which two of the characters compare their scars from wounds suffered in previous encounters. That sets the stage for Steve to describe his spiritual scars that remain from his earlier encounters with incorrect interpretations of that parable. You can listen to it here or on the Grace St. Paul’s website, or you can read the transcript here.
In this recent interview below, Dr. Paul Craig Roberts describes the “house of cards” that is today’s global regime of money, banking and finance. Since the financial crisis of 2008, the major central banks around the world—the Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan—have all been active in the securities markets, buying huge amounts of government and corporate bonds and shares of private companies, a process that is euphemistically called “quantitative easing.”
As Roberts points out, these actions are being taken to support the big banks. I agree, but it goes much deeper than that. The underlying objective is to preserve the global interest-based debt-money system which requires continual expansion if debt, an inherent systemic flaw which I call the “debt growth imperative.” The result of these market manipulations, of course, has been the inflation of market bubbles in bonds, stocks, and real estate, and the massive transfer of wealth into the hands of a small segment of the population.
Roberts does not mention it, but the recurrent waves of tax cuts for the rich likewise seem to be designed to keep these market bubbles pumped up. The wealthy class, for the most part, does not spend these windfall gains, they invest them in, you guessed it, bonds, stocks and real estate. If tax cuts were to go mainly to the lower and middle classes, what would they do with the money? They would surely spend much of it, which would stimulate consumption of consumer goods and restore the real economy, but much of it would go toward reducing the massive amounts of debt that these people carry and make it unnecessary for them to borrow even more. A system that requires perpetual expansion of debt cannot tolerate that.
Now, do you understand?
Financial advisor Jim Rickards thinks so. In a recent article titled, The Global Elites’ Secret Plan for Cryptocurrencies, he says,
“…the crypto-hysteria is distracting you from a scary truth no one is talking about. There is every indication that governments, regulators, tax authorities, and the global elite are moving in for the crypto-kill. The future of Bitcoin may be a dystopia in which Big Brother controls what’s called “the blockchain” and decides when and how you can buy or sell anything and everything. Furthermore, cryptocurrency technology could be the very mechanism used by global elites to replace the dollar based financial system.”
Rickards goes on to say “Blockchain does not exist in the ether (despite the name of one cryptocurrency) and it does not reside on Mars. Blockchain depends on critical infrastructure including servers, telecommunications networks, the banking system, and the power grid, all of which are subject to government control,” then lists a number of significant developments involving major banks, governments, and supra-governmental organizations like the IMF, all relating to their plans to legislate and control the use of blockchain technology, including its use in virtual currencies and financial transactions.
Can they really do that? Of course they can. In the mid-1800s, the U.S. government imposed a tax on banknotes issued by private banks driving them out of circulation; in 1933 the government made it illegal for private individual to own gold, requiring them to surrender their gold holdings in exchange for government sanctioned paper money at the arte of $20.67 per ounce of gold.
What will be the popular response to such measures against virtual currencies? Will people docilely comply, or will there arise massive disobedience and flaunting of the law, just as occurred in the 1930s during Prohibition, and has been ongoing more recently in the war against drugs? If there is such an uprising, I think it will be in defense, not of Bitcoin, but of some yet-to-be-created virtual currency that rewards virtuous behavior and contributions to the common good. –t.h.g.
In this interview below Paul Craig Roberts describes the neo-conservative ideology that has driven geopolitics since the end of World War II, and discusses the elite agenda, the prospects for the Trump presidency, and the US economy.
He comes closer than in his earlier statements to highlighting the key control mechanism of domination—the global money system, but still falls a bit short, as indicated by his statement that if there is a severe economic crisis in the US, the Federal Reserve “will have to abandon the banks and save the dollar.”
On that I disagree. Roberts seem not to realize that the FED, as well as virtually all of the other central banks of the various countries around the world, is controlled by the big transnational banks, and that they work together to, as Prof. Carroll Quigley said, create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.
The banking elite thereby control not only the dollar, but all of the other major world currencies. If the inflation rates or unemployment rates become too high in one country, the central banks can spread the misery around by monetizing various securities and manipulating interest rates and currency exchange rates.
For the past several decades the US dollar has been their primary monetary tool, but the dollar is not the be all and end all in their schemes. You can be sure that the banking elite always have a plan. At some time in the not too distant future when the dollar has outlived its usefulness, it will be replaced by a single global currency that will give the elite even tighter control over financial, economic, and political affairs around the globe.
The flies in the ointment of their plan are (1) a few governments that are bent on steering an independent monetary and financial course, and (2) the emergence of independent, non-governmental and decentralized exchange mechanisms and currencies. In the first case, Iraq under Saddam Hussein and Libya under Gaddafi were easily disposed of (but at tremendous costs). Russia and China pose a much bigger problem for the elite, hence the stalemate in Syria and the drum beat of propaganda against Putin and the fear mongering against the Chinese. With regard to alternative exchange mechanisms, the proliferation of virtual commodities like Bitcoin and others suggests that elite control may be vulnerable to innovative and disruptive technologies. But these virtual commodities mark only the beginning of the new paradigm in money and finance. Ultimately, ways will be found to create an “internet of credit” based on decentralized, personalized, local control and backed by real goods and services.