a better way...?
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You have no idea what money is.
Bernard Lietaer is too friendly and modest a man to say it that way, but this is the easiest possible way to sum up his message. If you did know what money was, then you — we — would see to it that we had a different monetary system.
Everything revolves around money.
It is more than a cliché; it is the daily experience of just about every world citizen not part of an indigenous tribe in the Amazon rainforest. And this daily experience involves, above all else, a continuous shortage of money. There is not enough money to send the children to school. Not enough money for hospitals, or to care for the ever greater numbers of old people who are getting ever older. Not enough money to clean up the environment and keep it that way. There is a lot of work to do, but no money to pay for it. The sad conclusion: If we just had more money, the world and our lives would be better.
Lietaer, however, recommends another solution: We could immerse ourselves in the meaning of money. He sits on the edge of his chair and poses this question: "Have you ever thought about how much time you spend earning money, and managing or spending the money you've earned? And how often have you thought about what money actually is? We expend an enormous amount of energy — and frustration — on something we understand surprisingly little about. Money wasn't created by God. We have forgotten that it's a system designed by people. And I believe that this design, which dates from centuries ago, is at the root of most problems in our society. And the good news is that, with a small change to the money system, we can make an important contribution to the solution of a number of those problems."
Lietaer's idea is to introduce — alongside the existing national currencies — complementary money systems on a large scale. Based on barter, these systems would fulfill needs and make transactions possible when "normal" money is unavailable. His idea is less revolutionary than it appears. In history, as well as in the world today, there are many successful examples of such systems — from the construction of European cathedrals in the Middle Ages and temples in Bali today to the present-day care systems for the elderly in Japan and airlines' frequent-flyer programs. What these systems have in common is that they do not promote competition but, rather, co-operation; they support community instead of undermining it; and they make possible important and valuable work.
"Complementary money systems put us in a position to be ourselves — to literally cash in on our talents," says Lietaer. "Even when there's no official financial market for them. I'm not saying reformation of the monetary system will solve all our problems. But I know that money is one of the key functions. There is actually nothing that doesn't have to do with money. It is an extremely vital element. I am convinced that within a generation we can realize great positive changes."
According to economics textbooks, money is value-free. It is nothing more than a means of exchange and is regarded as having no effect on transactions. Lietaer contests that view. "Money isn't at all value-free," he argues. "The monetary system is programmed — albeit not deliberately — to cause certain behaviour. It promotes competition and short-term thinking; it forces economic growth, and it undervalues care, education and tasks crucial to maintaining a society. Economics theory teaches us that people compete for markets and raw materials; I think, in reality, people compete for money."
This competition is a direct consequence of the manner in which money is created. Banks put money into circulation by means of loans. For example, as soon as someone negotiates a $100,000 mortgage, money is created and begins circulating in the economy. The bank then expects the recipient of the loan to pay back a total of $200,000 in repayment and interest over the next 20 years. But the bank does not create the second $100,000. The receiver of the loan must get hold of that money — the interest — one way or another, and this forces him or her to compete with others. It's simple: Some people must lose money or go bankrupt in order to put others in the position to pay off their loans. At the same time, this collection of interest results in a concentration of wealth: those who have money "automatically" get richer.
In addition, the system forces society into an endless loop of economic growth: new money must constantly be put into circulation to pay off old loans. "My conclusion," Lietaer says, "is that greed and the competitive drive are not inherent human qualities. They are continuously stimulated by the kind of money we use. There is more than enough food and work for everyone. There is merely a scarcity of money."
A monetary system driven by interest payments also blocks progress toward a sustainable economy. "The environment is a time problem," Lietaer says. "A company like Shell undoubtedly has a better idea of the next century's energy needs than any government. But within the current monetary system, we cannot entrust Shell with the future. Shell has to make a profit today. A government bears the responsibility for the future of the society." Business investments today are weighed against interest rates. This continually leads to short-term choices. "It is financially attractive to cut down trees, sell them and put the money in the bank. Through interest, the money in the bank grows faster than the trees. Solar panels, by contrast, require investments that are only earned back over longer periods. The long repayment period makes these investments no match for the growth of money you can put in the bank today to earn interest."
Businesses are trying more and more often to avoid expensive, competition-promoting money. Barter now accounts for almost 15 per cent of world trade. And it's increasing every year by 15 per cent, while trade conducted with money is growing at just 5 per cent annually. Barter is also the basis of the complementary money systems Lietaer advocates as a solution to the social and ecological disruption our current money system causes. "Complementary monetary systems are no longer marginal solutions," he says. "It is true that they have no macroeconomic impact, but they have proven that they work and can change people's behaviour. What else are frequent flyer miles besides a currency issued by an airline? Initially they were mainly meant to commit customers to a certain airline, but over time you could use them to buy groceries in the supermarket, book hotel rooms, and pay your phone bill. And you can earn miles without even flying."
In Japan, complementary systems have been developed for care of the elderly. People can earn credits by running errands for elderly people or helping them with housework. They can use the credits to buy extra help if they get sick, or send credits to their aging mothers. "This is an example of how a complementary system can be used to solve a social problem. Almost 20 per cent of the Japanese population is older than 65, and that percentage is rising. It is unthinkable that the care for this growing population of old people can be paid for under the current social-security system. Japan is solving this with a new complementary currency, which in addition supports the social structures in the country."
In Germany, authorities are collaborating with banks to develop a complementary money system for a million participants. In Brazil, a plan is afoot to finance education for poor families using a complementary currency. Lietaer enthusiastically offers example after example. "Money is nothing more than an agreement to use something as a means of exchange. Money is not a thing. It is an agreement, like a marriage or a business contract. And that means you can always make a new and different agreement."
"I choose to remain optimistic," Lietaer says. "I can see how a crisis in the dollar could cause the global economy to collapse. Don't forget that in the last 25 years, almost 90 countries have suffered severe currency crises. But I also know that together we have all the knowledge and means we need for a peaceful evolution. I want to help liberate that creativity. To design money that works for us, instead of us working for it."
You have no idea what money is.
Bernard Lietaer is too friendly and modest a man to say it that way, but this is the easiest possible way to sum up his message. If you did know what money was, then you — we — would see to it that we had a different monetary system.
Everything revolves around money.
It is more than a cliché; it is the daily experience of just about every world citizen not part of an indigenous tribe in the Amazon rainforest. And this daily experience involves, above all else, a continuous shortage of money. There is not enough money to send the children to school. Not enough money for hospitals, or to care for the ever greater numbers of old people who are getting ever older. Not enough money to clean up the environment and keep it that way. There is a lot of work to do, but no money to pay for it. The sad conclusion: If we just had more money, the world and our lives would be better.
Lietaer, however, recommends another solution: We could immerse ourselves in the meaning of money. He sits on the edge of his chair and poses this question: "Have you ever thought about how much time you spend earning money, and managing or spending the money you've earned? And how often have you thought about what money actually is? We expend an enormous amount of energy — and frustration — on something we understand surprisingly little about. Money wasn't created by God. We have forgotten that it's a system designed by people. And I believe that this design, which dates from centuries ago, is at the root of most problems in our society. And the good news is that, with a small change to the money system, we can make an important contribution to the solution of a number of those problems."
Lietaer's idea is to introduce — alongside the existing national currencies — complementary money systems on a large scale. Based on barter, these systems would fulfill needs and make transactions possible when "normal" money is unavailable. His idea is less revolutionary than it appears. In history, as well as in the world today, there are many successful examples of such systems — from the construction of European cathedrals in the Middle Ages and temples in Bali today to the present-day care systems for the elderly in Japan and airlines' frequent-flyer programs. What these systems have in common is that they do not promote competition but, rather, co-operation; they support community instead of undermining it; and they make possible important and valuable work.
"Complementary money systems put us in a position to be ourselves — to literally cash in on our talents," says Lietaer. "Even when there's no official financial market for them. I'm not saying reformation of the monetary system will solve all our problems. But I know that money is one of the key functions. There is actually nothing that doesn't have to do with money. It is an extremely vital element. I am convinced that within a generation we can realize great positive changes."
According to economics textbooks, money is value-free. It is nothing more than a means of exchange and is regarded as having no effect on transactions. Lietaer contests that view. "Money isn't at all value-free," he argues. "The monetary system is programmed — albeit not deliberately — to cause certain behaviour. It promotes competition and short-term thinking; it forces economic growth, and it undervalues care, education and tasks crucial to maintaining a society. Economics theory teaches us that people compete for markets and raw materials; I think, in reality, people compete for money."
This competition is a direct consequence of the manner in which money is created. Banks put money into circulation by means of loans. For example, as soon as someone negotiates a $100,000 mortgage, money is created and begins circulating in the economy. The bank then expects the recipient of the loan to pay back a total of $200,000 in repayment and interest over the next 20 years. But the bank does not create the second $100,000. The receiver of the loan must get hold of that money — the interest — one way or another, and this forces him or her to compete with others. It's simple: Some people must lose money or go bankrupt in order to put others in the position to pay off their loans. At the same time, this collection of interest results in a concentration of wealth: those who have money "automatically" get richer.
In addition, the system forces society into an endless loop of economic growth: new money must constantly be put into circulation to pay off old loans. "My conclusion," Lietaer says, "is that greed and the competitive drive are not inherent human qualities. They are continuously stimulated by the kind of money we use. There is more than enough food and work for everyone. There is merely a scarcity of money."
A monetary system driven by interest payments also blocks progress toward a sustainable economy. "The environment is a time problem," Lietaer says. "A company like Shell undoubtedly has a better idea of the next century's energy needs than any government. But within the current monetary system, we cannot entrust Shell with the future. Shell has to make a profit today. A government bears the responsibility for the future of the society." Business investments today are weighed against interest rates. This continually leads to short-term choices. "It is financially attractive to cut down trees, sell them and put the money in the bank. Through interest, the money in the bank grows faster than the trees. Solar panels, by contrast, require investments that are only earned back over longer periods. The long repayment period makes these investments no match for the growth of money you can put in the bank today to earn interest."
Businesses are trying more and more often to avoid expensive, competition-promoting money. Barter now accounts for almost 15 per cent of world trade. And it's increasing every year by 15 per cent, while trade conducted with money is growing at just 5 per cent annually. Barter is also the basis of the complementary money systems Lietaer advocates as a solution to the social and ecological disruption our current money system causes. "Complementary monetary systems are no longer marginal solutions," he says. "It is true that they have no macroeconomic impact, but they have proven that they work and can change people's behaviour. What else are frequent flyer miles besides a currency issued by an airline? Initially they were mainly meant to commit customers to a certain airline, but over time you could use them to buy groceries in the supermarket, book hotel rooms, and pay your phone bill. And you can earn miles without even flying."
In Japan, complementary systems have been developed for care of the elderly. People can earn credits by running errands for elderly people or helping them with housework. They can use the credits to buy extra help if they get sick, or send credits to their aging mothers. "This is an example of how a complementary system can be used to solve a social problem. Almost 20 per cent of the Japanese population is older than 65, and that percentage is rising. It is unthinkable that the care for this growing population of old people can be paid for under the current social-security system. Japan is solving this with a new complementary currency, which in addition supports the social structures in the country."
In Germany, authorities are collaborating with banks to develop a complementary money system for a million participants. In Brazil, a plan is afoot to finance education for poor families using a complementary currency. Lietaer enthusiastically offers example after example. "Money is nothing more than an agreement to use something as a means of exchange. Money is not a thing. It is an agreement, like a marriage or a business contract. And that means you can always make a new and different agreement."
"I choose to remain optimistic," Lietaer says. "I can see how a crisis in the dollar could cause the global economy to collapse. Don't forget that in the last 25 years, almost 90 countries have suffered severe currency crises. But I also know that together we have all the knowledge and means we need for a peaceful evolution. I want to help liberate that creativity. To design money that works for us, instead of us working for it."
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posted by þΛųL jØŋαŦhΛŋ @ 21:45
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