Category Archives: Implementation Strategies

Coming soon: a world without money and banks.

Posted on January 12, 2012 | 14 comments

Who in their right mind would be so bold as to predict the end of money and banking as we’ve known it (besides yours truly, that is)?

Well, how about the Governor of the Bank of England?

“There is no reason products and services could not be swapped directly by consumers and producers through a system of direct exchange – essentially a massive barter economy. All it requires is some commonly used unit of account and adequate computing power to make sure all transactions could be settled immediately. People would pay each other electronically, without the payment being routed through anything that we would currently recognize as a bank. Central banks in their present form would no longer exist – nor would money.”

— Mervyn King – Governor of the Bank of England

You see, even the insiders can see the writing on the wall.

Another observer who has been in the thick of cashless trading developments for decades is Bob Meyer, publisher and editor of Barter News. A while back, Bob wrote an article that gives some pertinent history of the “barter” industry and sketches his vision of how “Simple One-to-One Exchanges Will Give Way to Organized, Computerized, Multi-Lateral Barter.” I strongly recommend that people read it: THE ORIGINAL MEANING OF TRADE MEETS THE FUTURE IN BARTER

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Posted in Banking, Developing Alternatives, Implementation Strategies

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The Occupy Movement Wins Support From British Quakers

Posted on November 25, 2011 | 1 comment

“Quakers in Britain share the concern for global economic justice and sustainability expressed by the Occupy movement.  We agree with the statement of Occupy London Stock Exchange that our current economic system is unsustainable. It is undemocratic and unjust. We need alternatives.

We, too, “want structural change towards authentic global equality. The world’s resources must go towards caring for people and the planet, not the military, corporate profits or the rich,” (as stated in Occupy LSX initial statement). We are grateful to the various Occupy groups for raising these issues so passionately and respond to the deep spiritual significance that we recognise in the movement.

“Those of us who have visited have been welcomed, and found the Occupy sites an exceptional learning experience.  We honour the values and positive ways of working within Occupy communities: without hierarchy, based on care for others, open to the contributions of all and searching for the truth.  These are in harmony with our Quaker practice and business methods.

“The idea that another world is possible is crucial for us too.  We cannot accept the injustice and destructiveness of our economic system as it is. At the annual meeting of Quakers in Britain in August 2011 we wrote: “We need to ask the question whether this system is so broken that we must urgently work with others of faith and good will to put in its place a different system in which our testimonies can flourish”.   We support the process initiated by the Occupy movement to create a path towards a different future, and to develop it democratically.

“We hope that individual Quakers will continue to provide support, both moral and practical, to the movement.  We greatly value its peaceful quality and we pray that this can be actively supported by all, including the civil and ecclesiastical authorities who have the difficult task of maintaining simultaneously both public order and the right of peaceful protest.”

Signed Paul Parker, Recording Clerk for Quakers in Britain

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Posted in Developing Alternatives, Emerging paradigm, Implementation Strategies

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Financing alternatives

Posted on November 22, 2011 | 1 comment

More and more people are wondering about how the Occupy movement will shift from protest and demonstration to strategies and actions that will result in personal and community empowerment, actions toward restructuring our institutions and shifting the balance of power from Washington and Wall Street to Main Streets, neighborhoods, and civic organizations. 

One rather obvious strategy is to change the way we spend and invest our money.

Click here to see a list of financing alternatives that I started preparing as a resource list for my presentation to the Financial Planning Association in May, 2011. I have since added a few items to it, including a link to One PacificCoast Bank, a relatively new bank which has as its mission, “to build prosperity in our communities through beneficial banking services delivered in an economically and environmentally sustainable manner.” According to a description on the BALLE website, the “founders granted 100% of the bank’s dividends, when declared, to a foundation dedicated to the communities and environment upon which we all depend.  This unique structure ensures that the bank’s interests are aligned with the needs of its customers and communities. We call this “beneficial banking.” 

I like the sound of that and I’m hoping that this case may be the forerunner of a new pattern of corporate ownership in which service is the foremost purpose and profits are distributed to entities that serve the common good, not just the narrow interests of a few.

I have made my resource list a permanent page which is listed in the sidebar to the right under Resources. It remains a work in progress.–t.h.g.

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Posted in Finance and Economics, Implementation Strategies, Prescriptions

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Coping, caring, and building community

Posted on April 29, 2011 | 8 comments

As the financial and economic ground continues to shift beneath our feet, it becomes ever more imperative that we reduce our dependence upon the institutions and structures that we have come to depend upon and take for granted. The financial tsunami of 2008 and the continuing aftershocks should be a wakeup call. The sock markets may be up (for now), but that should not be taken as comforting evidence that everything is “getting back to normal.” As billionaire financier George Soros said in his recent book, “This crisis …has brought the entire [financial] system to the brink of a breakdown, and it is being contained only with the greatest difficulty. This will have far reaching consequences. It is not business as usual but the end of an era.” (The New Paradigm for Financial Markets: The Crash of 2008 and What it Means. p. 81).

The total outstanding credit for all sectors in the U.S. economy was 160% GDP in 1929, 260% in 1932. By comparison, we entered the 2008 crash at 365%, and Soros believes this will rise to about 500% of GDP within the next few years.

What seems to be in prospects for the foreseeable future for the vast majority of people in the developed world, especially the United States, is diminished purchasing power. This the result of simultaneous trends of underemployment or unemployment, rising prices of basic necessities due to currency debasement (inflation), and systematic attacks on the middle-class by the political establishment.

How do we cope with all of that? It is, of course, as the proverb says, both a challenge and an opportunity. I have suggested before that society is on the verge of metamorphic change that offers the promise of a more peaceful and harmonious world in which basic needs are met and everyone has the opportunity to realize their fullest potential. But it will take the right kind of action to make that vision a reality. It will require that we take sharing and cooperation to new levels, and that we create new structures that can serve the common good. An essential part of that is building community.

On that score, I take inspiration from Richard Flyer and the Conscious Community Network. Richard recently posted a list of 37 ways to build community. No Act is Too Small! You can click on that link to learn more, but I have extracted the 37 ways here for your convenience. I’m sure Richard won’t mind.—t.h.g.

1. A smile and a wave will go a long way.

2. Each morning, ask where you can make a difference.

3. Find the good in others instead of their faults – start in your home and on your street.

4. Become aware of hidden needs on your street – isolated seniors;

youth needing mentors, single parents; etc.

5. Start a community garden.

6. Practice forgiveness.

7. Surprise a new neighbor by making a favorite dinner – and include the recipe.

8. Slow down and enjoy the present moment.

9. Don’t gossip.

10. Start a monthly tea group.

11. Play cards with friends and neighbors.

11. Start a babysitting cooperative.

12. Form a group of neighbors to walk their dogs together.

13. Seek to understand.

14. Start a carpool.

15. Have family dinners and read to your children.

16. If you grow tomatoes, plant extra for a lonely elder who lives nearby – better yet, ask him/her to teach you and others to can the extras.

17. Turn off the TV, Play Station, PSP, and talk with family, friends, and neighbors.

18. Bless your food with gratitude.

19. Know that love is not a feeling but a courageous choice.

20. Ask neighbors for help and reciprocate.

21. Talk to your children or parents about how their day went.

22. Say hello to strangers.

23. Create a neighborhood newsletter.

24. Organize a neighborhood clean-up.

25. Be a model and demonstrate the virtues you want to see in the world.

26. Be a peacemaker.

27. Talk to the mail carrier.

28. Shoot some ‘hoops with neighbor children.

29. Support local merchants.

30. Speak kindly and listen carefully

31. Hire young people for odd jobs.

32. Form a tool cooperative with neighbors and share ladders, rakes, snow blowers, etc.

33. Grow your own food.

34. Be real. Be humble. Be respectful.

35. Offer to watch your neighbor’s home or apartment while they are away

36. Be of service to all.

37. Go to http://www.consciouscommunity-reno.org/ to share your stories.

Adapted from http://bettertogether.org.

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Posted in Developing Alternatives, Emerging paradigm, Implementation Strategies

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Pay Pal Wars—Some Important Lessons for Entrepreneurs

Posted on February 10, 2011 | 2 comments

I’ve just finished reading PayPal Wars: Battles With eBay, the Media, the Mafia, And the Rest of Planet Earth. Written by former PayPal director of marketing, Eric Jackson and published in 2004, this book gives a detailed account of the company’s development and growth from its earliest days to the time just after its sell out to eBay in July of 2002.

It tells of the revolutionary vision of PayPal founder, Peter Thiel, highlights pivotal decisions, and describes the major, obstacles, and challenges that PayPal encountered on its way to becoming a dominant force in online payments. Besides challenges from a bevy of competitors, the company had to contend with “clashes with credit card associations, the banking lobby, state regulators, foreign Mafioso, and litigation-happy lawyers.”

Jackson’s book is both an engaging tale and a valuable resource for entrepreneurs of all stripes. There are many lessons to be learned from the Pay Pal experience about what it takes to bring a significant innovation to market and to scale. I strongly encourage social entrepreneurs especially to read at least the first chapter (“The New Recruit”) and last chapter (“Sell Out”), as well as the Epilog.

The picture which Jackson paints in his telling of the PayPal story suggests to me the urgent need for social entrepreneurs and champions of the common good to find new ways of creating business enterprises that do not depend upon conventional business models or Venture Capital financing.

I substantial portion of the book is available to be read online at Google Books. You can also see a detailed description and reviews of the updated paperback edition (2010) at Amazon.com.

#     #     #

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Posted in Business, Finance and Economics, Implementation Strategies

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Google buys virtual currencies startup Jambool

Posted on August 18, 2010 | 2 comments
AFP – Tuesday, August 17

SAN FRANCISCO (AFP) – – Virtual currency manager Jambool announced Monday that it has been purchased by Google for an undisclosed sum.

“When the opportunity arose to join forces with Google… we couldn’t pass it up,” Vikas Gupta and Reza Hussein, co-founders of the startup, said in a blog post.

Jambool is the company that launched Social Gold virtual transactions technology that processes virtual currencies — make-believe money for online transactions such as games and social networks, including Facebook and MySpace.

The technology allows makers of online games and social networks to mine “real money from virtual goods” — allowing genuine cash to be converted into virtual currency and vice versa.

The company has reported strong growth due to the popularity of online games.

“Our vision is to build world-class products that help developers manage and monetize their virtual economies across the globe,” the company said in the online post.

Gupta and Hussein said they started Jambool in 2006 as an online collaboration platform, but shifted focus a year later to building applications for social networks.

“Along with success, we found fun and lucrative ways to monetize our apps — specifically virtual currency and goods,” the former Amazon.com employees said.

“That led us to create a platform to help developers create, host, manage and monetize their virtual economies,” they wrote.

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Posted in Developing Alternatives, Implementation Strategies

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Interest and the Role of Trade Exchanges

Posted on June 30, 2010 | 3 comments

As cashless exchange becomes an ever more significant portion of total transactions in the economy, the regulatory issue will become a greater concern. It is important that trade exchanges NOT be perceived as issuers of credit, so as to avoid running afoul of banking regulations and possible tax liabilities. Everything that trade exchanges do needs to support the position that the role they play is that of “third-party record-keepers” and that it is the members themselves who provide credit to one another.

Paul Suplizio, former Executive Director of the International reciprocal Trade Association (IRTA), has expressed it this way:

“This means members with positive balances are the issuers of credit and the exchange has only administrative powers, delegated by the members, to regulate credit extension.”

It can be argued that the credit clearing process is simply one of generalizing (collectivizing) the longstanding practice of businesses transacting trades with one another on “open-account,” i.e., selling to one another on credit and allowing some period of time in which to pay.

It has properly been a cornerstone of the trade exchange business that there is no interest charged on negative account balances and no interest paid on positive balances. Therefore it cannot be argued that trade exchanges are acting as banks or lenders of money.

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Posted in Basic Concepts, Exchange Design, Implementation Strategies

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The Essence of Money–A New Video from Paul Grignon

Posted on November 23, 2009 | 4 comments

While I was on tour in western Canada recently, I had occasion to meet Paul Grignon, creator of the excellent videos, Money as Debt I and II. Paul came to my presentation on Salt Spring Island and brought with him a new short video called The Essence of Money, a Medieval Tale. In less than eight minutes, this video explains as well as anything I’ve seen how simple and effective a community-created currency can be. Highly recommended! View it here.

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Posted in Exchange Design, Implementation Strategies

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Launching a Community Currency

Posted on August 17, 2009 | 6 comments

Many people have gotten at least some sense of the inherent empowering potential of community exchange alternatives, but have no idea of how to make it happen. They ask, “How can we go about launching a community currency that will be widely accepted and make a significant beneficial impact on the local economy?”

Achieving the desired results requires proper system design, effective implementation strategies, and adequate management practices. These are matters that I have addressed in my books and articles. My favorite, and the most empowering approach, is to organize and/or support local credit clearing exchanges or associations that include several major businesses, service providers, and/or local government entities. These “trusted issuers” provide the economic foundation needed for a high volume, credible medium of exchange.

That is the centerpiece of the multi-stage regional development plan that I have described in my latest book (Chapter 16) and elsewhere. There are, however, other possible approaches that may be taken as preliminary steps to prepare the ground. These include loyalty schemes, discount or rebate programs, and currencies based on charitable donations.

The choice will depend upon the prevailing economic conditions, local circumstances, and available resources. One promising approach based on in-kind donations from local businesses to the non-profit sector has been articulated by Michael Linton, the originator of LETS. Linton calls this plan Community Way. He describes the basic plan in these videos: Part 1 and Part 2

Community Way monetizes some of the excess capacity of local businesses (transforms their valuable goods and services into a spendable medium), and allocates it to non-profit organizations and community improvement groups which can then spend it or sell it to cash-rich supporters who will then redeem it for donors’ goods and services..

There are of course a few details that must be added to make this approach operational. There needs to be some entity (non-profit) that will organize, recruit, and manage all of the myriad details involved in the process. That entity must eventually generate sufficient revenues to cover its costs and sustain the operation of the program. – t.h.g.

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Credit Clearing Already a Proven Means of Exchanging Goods and Services

Posted on July 14, 2009 | 2 comments

People often ask me how the credit clearing process that I advocate might be established and where existing successful models are to be found. I point them to the commercial “barter” sector, the 75 year old WIR Bank in Switzerland, and a few exchange alternatives that have been emerging spontaneously from the grassroots. Of course, what these trade exchanges offer is not “barter” at all, but credit clearing.

Significant as it is, the commercial trade exchange business is not well known because it does not yet involve consumers or employees to any great extent. It services businesses, mostly small and medium sized businesses (SMEs), and mostly at the retail level or in the service sector. Credit clearing and private currencies are important elements in the economy at any time, but they become even more necessary during times of financial disruption such as the current one.

On June 25 Sky News in the UK did a live interview with one of the leaders in the trade exchange industry, Wayne Sharpe, the charismatic founder and chief executive of Bartercard, International. Sharpe discussed the role that his company, and others like it, plays in revitalising the UK economy by helping businesses to “reserve cash, reduces costs and increase sales and profitability through a sophisticated system of barter.” Here is a transcript of that interview taken from the Bartercard website. (Thanks to Bob Meyer of Barter  News for alerting me to this report). – t.h.g

Why cash isn’t king – The flexible friend that can help businesses beat recession:

Bartercard works like a credit card, but transacting by clients’ own goods and services via its own unique Trade Pound ‘currency’. On joining, account holders receive a transaction card and an interest-free line of credit. When spare capacity is sold, members’ accounts are credited with trade pounds. When purchases are made, trade pounds are deducted. Bartercard allows members to trade without the need to spend valuable cash or engage in a direct swap.
Given recent global economic developments, Bartercard is proving totally relevant. It’s phenomenal growth in the UK market over recent months is testament to this. One reason for the rapid growth is that Bartercard charges success-based fees; charging a small commission on each trade so, if it doesn’t produce results, costs to its members are negligible.

Another reason for Bartercard’s success is the support it provides the beleaguered SME sector. SMEs are the lifeblood of the British economy; accounting for over 60% of domestic GDP yet, in the main, they have been overlooked by government.

Lavish financial support from government has been reserved for selected big businesses and in particular, the banking sector. Instead of using the money to stimulate the economy, the banks have devoted these huge resources to bolstering balance sheets and improving share price. The banks are failing to lend even to those SMEs with solid foundations and a great track record but which need financial support in extremely difficult trading conditions.
Bartercard is providing a real solution. More than 80% of its members are SME’s and Bartercard aims to generate 10% in additional sales for each and every member business, then use that trade to offset regular cash expense, thus improving cash profit by up to 20%.

With over 21 million transactions and more that $15 Billion in trade volume worldwide since inception Bartercard is a proven method to increase SME;s trade.
“I have lived in the UK for over 7 years now and I know and feel for the SME’s – they are the heart of this nation and we will help them beat the recession in any and every way we can” says the eternally upbeat Mr. Sharpe.

It seems the Sky is the limit.

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Posted in Developing Alternatives, Finance and Economics, Implementation Strategies

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