local currencies – P2P Foundation

Demise of Totnes Pound won’t Stop this English Town Pushing Back Against Austerity

P2P Foundation — Sat, 29 Jun 2019 08:00:00 +0000

This article by Brendan Barrett is republished from The Conversation

Walking down the high street of a place described as one of the UK’s most ethical towns, the first thing you notice is the absence of national chain stores and fast food outlets. Instead, you find a diverse mix of independent shops selling organic food, clothes, art, antiques and furniture, as well as cafes and restaurants and an abundance of charity shops.

This is Totnes – a small, historic market town in the south-west of England that has garnered a reputation as a thriving hub for art, music, theatre and alternative lifestyles. Noticeboards around the town advertise everything from yoga lessons to Zen meditation, together with posters for various events – including the next Extinction Rebellion non-violent direct action training session.

In many shop windows today, there are stickers which read “Totnes pound accepted here”. Sadly, after 12 years of operation, the Totnes pound will come to an end on June 30, 2019. This highly symbolic initiative inspired other local currencies including the Bristol pound and the Brixton pound, which encourage people to spend locally and keep money in the community.

The Totnes pound. Totnes Pound.

But the gradual shift to a cashless society and a lack of uptake by local government agencies have ultimately led to the Totnes pound’s demise. Rob Hopkins – co-founder of community-led charity Transition Town Totnes and initiator of the local currency – thinks the Totnes pound has helped to build a sense of community and strengthened the town’s identity, with the £21 note reflecting the local sense of humour.

The impact of austerity

The Totnes pound is just one example of the kind of outside the box thinking that has kept this local community resilient in the face of austerity. Since 2010, the pressure on local authority budgets across England has been intense, with a 50% decline in central funding support. The result has been cuts to public services and less money circulating in local economies.

In Totnes – as elsewhere – there are visible signs of these trends, with the closure of local bank branches and “to let” signs on vacant shops. According to Francis Northrop, former manager of Transition Town Totnes, smaller rural communities like Totnes face difficulties because they lack the economies of scale which make cheap goods and services more accessible in big cities.

Leer más: Retail decline, in maps: England and Wales lose 43m square metres of shop space

Totnes has responded by developing a new ethical economy that puts community values at the core. The closure of the Dairy Crest factory in 2000 convinced many locals that the answer was not to wait for inward investment from big businesses outside of the town. Instead, the focus is on internal investment: harnessing community wealth to address community needs.

But unlike anti-austerity efforts seen in larger cities – such as Preston – a small town like Totnes cannot rely on anchor institutions including local government, universities or hospitals, to redirect their spending into the local economy.

Indeed, one such institution – Dartington College of Art – relocated to Falmouth in 2010 with the loss of an estimated £6m a year in local spending from 900 students and staff. Instead, Totnes has had to show it’s possible for small towns to withstand such losses, by drawing from a toolbox of different methods to build community wealth.

A new ethical economy

The response has grown from more than a decade of community trust building, since the launch of Transition Town Totnes in 2006. Initially set up to promote local resilience in the face of climate change and peak oil, Transition Town Totnes now coordinates an extensive range of local projects, and forms part of a global Transition network, with initiatives from around the world sharing knowledge and ideas.

Some of these projects focus directly on combating the effects of austerity. For example, Caring Town Totnes is a collaboration of around 80 organisations seeking to counter the impact of budget cuts on local health and social services.

Totnes High Street is busy throughout most of the day.
Brendan F.D. Barrett., Author provided

Current Transition Town Totnes manager Jenny Gellatly is also working with the Common Cause Foundation to explore how it may be possible to place compassionate values at the heart of the future transformation of the town. During a recent visit for my research, she explained to me how initiatives like these promote caring for neighbours, friends and family, to help ensure that the most vulnerable people in the community get the support they need.

Other projects focus on building up the local economy and making it more self-sufficient. An important breakthrough came with the launch of the Reconomy Center, to support new enterprises and promote local investment. The centre hosts an annual Local Entrepreneur Forum to crowdfund low carbon, ethical and sustainable business projects.

A number of organisations also came together to produce a Local Economic Blueprint, which highlights the economic benefits for small independent businesses in Totnes of sourcing goods and services from other local businesses and suppliers, to ensure more money circulates in the economy.

The next critical step was the launch of the Totnes Community Development Society – a not-for-profit that raises funds and implements local development projects. It’s currently implementing the Atmos Totnes project, to transform the disused Dairy Crest site into a school for food entrepreneurs and a business incubator, with affordable housing.

In the face of severe challenges, Totnes has shown how a community can mobilise to achieve a more ethical and resilient local economy. It will be fascinating to observe how the town changes in the years ahead, and to see what the next initiative will be, to replace the Totnes pound.

Author Brendan Barrett is Specially Appointed Professor, Center for the Study of Co*Design, Osaka University

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These 5 Rebel Movements Want To Change How Money Works

Brett Scott — Thu, 20 Sep 2018 08:00:00 +0000

There have always been movements with dissenting views on the money system: how it runs and whom it works for. But in the aftermath of the 2008 financial crisis, a new wave of money agitators has emerged, each with very distinct ideas about what money means. From bitcoin evangelists to advocates of modern monetary theory, they have divided into warring factions.

To understand them and what they’re fighting for, it’s important to understand the system they’re challenging.

Our money system is underpinned by national central banks and treasuries that issue foundational “base” money. This includes the physical cash in our wallets and also reserves, the special forms of digital money that commercial banks hold in their central bank accounts, which are inaccessible to us.

These commercial banks then boost the money supply by issuing a second layer of money on top of the central bank money layer, through a process called credit creation of money (sometimes called “fractional reserve banking”) to create commercial bank money, which we see as bank deposits in our bank accounts.

The details are subtle and complex ― especially at the international level ― but the interaction of these players issuing money and taking it out of circulation makes the money supply expand and contract as if it were breathing. Monetary reform groups target different elements of this. Here are five of them.

1. Government Money Warriors

Stephanie Kelton, professor of public policy and economics at Stony Brook University, is one of the leading lights of modern monetary theory.

We say that the sun rises, but in reality the sun stays fixed and the illusion of sunrise is created by the Earth turning. Modern monetary theory argues that a similar delusion occurs in our thinking about government money ― we often claim that a federal government “raises money” through taxation and then spends it, but actually it is government institutions that originally issue money by spending it into existence and then withdrawing it from circulation by demanding it back in taxation. If the government issues money, then why would it have to raise money by asking for it back?

The idea that a federal government can run out of money like an ordinary household or business is an illusion, argue advocates of modern monetary theory. A government can only run out of money if it either does not issue its own sovereign currency (like the European nations, which have opted for the euro) or if an artificial political limit has been placed on how much money it can issue. In the latter situation, governments must first recall money via tax (and other means) before reissuing it elsewhere.

This is why modern monetary theory advocates are incredulous about conservatives who want to block spending on education and health care by saying we don’t have the money to pay for it. “Governments with monopoly control over their currency can always pay for their policy priorities,” says Pavlina Tcherneva, an economics professor at the Levy Economics Institute at New York’s Bard College.

Under modern monetary theory, if there are unemployed people who want to work and material resources for them to work with, a federal government can issue new money without causing inflation because the increase in money supply will be met with an increase in production. “The goal is to use the public purse to serve the broad public interest without accelerating inflation,” said Stephanie Kelton, professor of public policy and economics at Stony Brook University and former senior adviser to Sen. Bernie Sanders (I-Vt.).

2. Bank Money Reformers

Bank money reformers want to target the powers of commercial banks to create money.

Other reformers target the commercial bank money system. They argue it creates economic instability, over-indebtedness and concentration of power in the hands of banks ― the very banks that led us into the 2008 financial crisis.

Bank money reform groups include the American Monetary Institute, Positive Money, and the International Movement for Monetary Reform.

Commercial banks create new money when they issue loans. The moderate wing of the bank reform movement argues that, because the government grants them this privilege, banks should be subject to greater democratic scrutiny over their lending. The hard-line wing believes bank creation of money should be banned altogether.

The movement to curtail bank money is politically more diverse than modern monetary theory; it’s been supported by certain libertarians, including the late economist Murray Rothbard, neoclassical economists such as Irving Fisher, as well as left-wing proponents, such as the U.K.’s Green Party, which believes bank money-creation leads to environmental crises and corporate domination.

Their prescriptions are not uniform: Positive Money, a research and campaigning organization in Britain, calls for the power to create money to be granted exclusively to a democratic, accountable and transparent public body, creating a “sovereign money” system in which we might all have our own accounts at the central bank. This is distinguished from full-reserve banking, which would require your bank to have the reserves to fully back your account.

3. Cryptocurrency Crusaders

The Bitcoin logo on display at the Consensus 2018 blockchain technology conference in New York City on May 16.

Cryptocurrency crusaders not only reject both national and bank money systems, but also reject the entire concept of credit money (money that is “created from nothing” through law or social agreement), calling for it to be replaced with “commodity money” (money that is “created from something” through production). They have inherited the baton from “goldbugs,” who called for gold to be money.

The movement, which began with Bitcoin, argues that the best money system is one that’s outside of human politics. This comes from a philosophical tradition that says systems should be governed by the boundaries of God, physics or math, rather than laws set by politicians. With gold, for example, these natural boundaries would be geology: how much gold can be found and extracted. In Bitcoin’s case, the boundary comes from the fact that the digital system sets a hard limit on how much digital money can be issued and then forces participants to “mine” it as if it were a commodity.

Because Bitcoin hard-liners believe true money is a limited-supply good that must be extracted through production, they claim that fiat money ― created by banks or countries ― is artificial or deceitful money under the control of corrupt powers. There’s a puritanical edge to these cryptocurrency crusaders, who mistrust human institutions and trust in an abstract ‘godlike’ order of mathematics and markets.

While theories like MMT hinge on collective human political institutions, crypto crusaders see politics as foolish. This distrustful attitude shows: The movement sometimes seems as much at war with itself as with the fiat money system, with bitter in-fights between supporters of different crypto-tokens.

They are, however, the richest of all monetary reformers, with many crypto users having ironically become millionaires in the fiat currency they claim to dislike so much.

4. The Localists

A note worth 10 Brixton pounds, an alternative currency in London, is illustrated with an image of David Bowie.

There’s a whole history of alternative non-government money prior to cryptocurrency. These original alternative currency variants include mutual credit systems, timebanks (where time is used to measure how many credits you earn), local community currencies, such as the U.K.-based Brixton pound, and systems like the Swiss Wir, a currency used between businesses.

The tradition is also skeptical of large-scale government-bank money systems, but rather than calling for them to be replaced by a robotic algorithm, they believe small-scale communities should take control to issue money locally.

Unlike cryptocurrency advocates, they have no problem with money being “created out of nothing.” Rather they have a problem with who gets to do that and at what scale. They believe large-scale systems alienate people and dissolve close-knit communities.

A mutual credit system like Sardex in Sardinia, for example, does not reject the idea of money expanding and contracting, but it brings together an island community to decide on what terms that occurs.

While the other movements are outspoken, local complementary currency enthusiasts are often humble and below-the-radar, working for low pay to build resilient community structures.

“Local currencies change how money is issued,” says Duncan McCann of the New Economics Foundation, “how it circulates and what it can be spent on in order to re-localize economies, encourage environmental behaviour, and promote small businesses.”

The crypto-credit alliance looks to merge older, alternative currency systems with blockchain technology.

5. The Crypto-Credit Alliance: Mutual credit meets blockchain technology

This is the least-known or developed of the movements, but is perhaps the most exciting. Nascent initiatives, such as Trustlines, Holochain, Sikoba, Waba and Defterhane, seek to hybridize older alternative currency systems like mutual credit with the blockchain architectures that underpin cryptocurrencies. They share common ground with both modern monetary theorists, who also see commodity money as regressive, and cryptocurrency advocates, who wish to bypass the government.

Cryptocurrency unleashed a lot of creativity, but much has been wasted on toxic speculation. On the other hand, localist mutual credit movements have powerful ideas but often struggle to get heard or to spread. Crypto-credit innovators are exploring the creative possibilities of merging these two to solve flaws in both.

Originally published in the Huffington Post

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A dazzlingly delicious taste of the future in Liége

Michel Bauwens — Tue, 08 May 2018 08:00:00 +0000

Rob Hopkins tells the great story about the Belgian city of Liege, with an exemplary series of food transition projects. It was originally published in Rob’s blog: Imagination Taking Power.

Rob Hopkins: Something really amazing is happening in Liége in Belgium. I was last there 4 years ago, where I gave talks and did meetings in support of Liege en Transition, and to attend a meeting to promote a project they had just launched called ‘Ceinture Aliment-Terre Liégeoise’ (‘The Liége Food Belt’). When I was there, their event brought together academics, politicians, farmers, and many other people with an interest in food, to explore the practicalities of a co-ordinated relocalisation of the food system. That was four years ago. Now I’ve been back after four years and, as I said, something really amazing is happening in Liége…

I had been invited by Ceinture Aliment-Terre Liégeoise (CATL) to be the Patron of their ‘Nourrir Liége’ festival, a 10 day event designed to raise the profile of their work. When I last visited, a cooperative vineyard, Vin de Liége (of which more later), had just raised €2 million in shares, much to everyone’s surprise and delight. That was the first one, which gave CATL the confidence that this was possible.

Now, in 2018, 14 cooperatives exist under the CATL banner, 10 of which have been created after the official launch of the CATL in Nov. 2013. These include Les Petits Producteurs (two shops), Fungi up, a co-op growing mushrooms on coffee waste, Rayon 9, another using bicycles to distribute goods around the city, Cycle en Terre, a seed saving coop, Les Compagnons de la Terre, a farm growing a wide diversity of produce, La Brasserie Coopérative Liègeoise, a co-operative brewery, Vin du Pays de Herve, a second vineyard in the same model as Vin de Liège, ADM Bio, tranforming the vegetables of seven local farmer to reach collectivities kitchens, HesbiCooop, a food cooperative, Marguerite Happy Cow, a local fair trade milk transformation project, plus three distribution coops, Point Ferme, La Coopérative Ardente et Le Temps des Cerises, which are forming, together with Les Petits producteurs, a network of local food distribution. And running like a thread through all of these is Le Val’Heureux, the region’s local currency.

So what I want to explore in this post is what this ecosystem of co-operatives looks like, to introduce you to some of the key players, to how the imagination runs through this and to how this looks to be scaling up.

To kick us off, I sat down one evening with Christian Jonet, one of the people who has been constant in CATL since the beginning, and who now co-ordinates this network of coops, producers, researchers, institutions and associations (my full conversation with him is below). He told me that when Liege en Transition started there were lots of working groups, but the ones that lasted were the money and the food groups.

With Christian Jonet of CATL (left) and Pascal Hennen, manager of Les Petits Producteurs, and the €5 Les Val’Hereux note which features CATL.

It became clear that they were not going to Transition the city just with volunteers, and that what they needed was to change the scale and, as he put it, “professionalise the movement”. Belgium has lost 100,000 agricultural jobs since 1990, and some new thinking was clearly needed.

They started with an event in November 2013 where they hired a big venue, invited everyone in the city with an interest in food, and asked them the question “what if within one generation the majority of food consumed in Liège was grown locally in the best ecological and social conditions?” Good question. One after another people took the mike and identified elements of what needed to happen access to land, finance, seeds, know-how, etc. The first co-op to get running was Compagnons de la Terre, and then the brewery and the others started to follow.

The event that launched CATL

“What was most important”, Christian told me, “was that we created a narrative”:

It was about mobilising citizens for the transition of the food system (fixing the environment with agroecology, empowering the community for the good of future generations, creating local jobs, etc), in three complementary ways. First evidently, it was about voting with your consumption, being a virtuous consumer. But it was also about saying if you can, invest in local economy. And if you invest, then also get involved in running things, volunteer, get your hands dirty. And it was a message that really resonated with people”.

And it worked. Together with Vin de Liège (which raised €3 million on its own), the 14 co-ops have nearly raised €5 million in investment from local people so far.

I was curious as to what, for Christian, were the elements behind the project moving from the ‘What If?’ stage into action. “Firstly, we had a good narrative. CATL is based on the narrative of projecting the future and how it could be, and also the fact that Vin de Liège had been a success gave the whole initiative a foundation of confidence. Each new project inspires more confidence in the next one“. Now, the good narrative was only just a start:

Many people had to step up to imagine, create and run collectively all of these cooperatives, and each time it meant had work. Some projects have been lots of fun, but some others have really been about blood, sweat and tears, and holding on strong until the boat was afloat”. The fact that a local endogenous dynamic can be created must also not be taken for granted. “People in other localities have tried to launch projects similar to Ceinture Aliment-Terre, mimicking the methodology used in Liège, gathering the local food chain actors in an open space to draw a collective strategy for local food system transition, but if in the immediate continuation you don’t create projects in which people can put their enthusiasm, energy and money; nothing just happens.”

Les Petits Producteurs

The first of the co-ops that we visited was Les Petits Producteurs, a shop in the centre of the city that has been open for just over a year. I asked the shop’s manager, Pascal Hennen, to tell me what it is (you can hear our full conversation below). He told me, “Les Petits Producteurs’ is a co-operative of 200 co-operators (members of the co-op), around 15 local farmers plus a few further afield (they source their oranges from a farm in Sicily for example), 2 shops, 7 workers and lots of energy”.

When they found the shop unit, they had just 5 weeks to transform it into a shop, something they achieved by mobilising their friends, wielding sledgehammers and paintbrushes. It’s a very simple concept. A big space, painted white, with pallets on the ceiling, pallets on the floor, food displayed on pallets, in boxes, with a note about the farmer and their story.

They did a financial forecast with a worse case, middle and best case scenario. The shop has been such a runaway success that they are exceeding the best case scenario, and it is already a challenge managing storing stock and the queues that form in the shop. “All positive problems to have…”, Pascal told me.

They raised €100,000 in shares from local people, although the shop took off so fast that they didn’t end up using much of it. So, I asked, what’s the money for? “For us, this is an agriculture project, not just a shop. The goal is to reinvest profits and exceeding capital for the farmers. Will we use it to buy land? To invest in helping new farmers? In buying buildings to help farmers?” It has been such a success that a second shop is already open elsewhere in the city, and Pascal dreams of opening “15 shops, perhaps 10? We never expected to be so successful, never”, he told me.

Les Petits Producteurs tell their story in their window

hey have a principle of not negotiating the farmer on price, and of keeping costs low. So they spent the minimum on fitting the shop out, and have a policy “one need,one product”. So they stock one kind of jam, one kind of beer and so on, the whole shop containing less than 200 products. Les Petits Producteurs is mostly organic, and their prices for organic produce are, on average, 15% lower than in Carrefour. Part of their staff’s job is to tell the stories of where the food comes from.

Being part of CATL really helps. It provides the links between the different co-ops, and they trade with each other, and share resources. Where might it all go, I wondered? “If we have 20 stores, we will reach the point where the supermarkets will start to say “oh shit”. We would love to fragilise (great word) them locally”.

I asked Christian about what a difference community investment makes for a business like Les Petits Producteurs. “As I said, in CATL we have created beautiful stories, we must now create beautiful stories of success, and Les Petits Producteurs is one of them. It is not easy to have a profitable business in food. This is about inventing new economic models and testing them until they work”.

The second CATL coop we visited, on an organic farm on the edge of Liège, was Brasserie Cooperative Liégeoise, a small brewery brewing 2 different types of organic beers using barley grown in the region, wheat grown on the organic farm where they’re based, and Belgian hops. They are planning to grow all their hops on the farm and are expecting their first harvest this year.

Raphaël Lambois, the brewer at Brasserie Coopérative Liégeoise

They are currently brewing on a scale at which it is difficult to be profitable, so they are looking to double capacity soon, although within the same space. Raphaël Lamblois, who showed us round, told me that it was very useful to be part of CATL, as the other members are some of their best customers, and it really helps the business to have good connections with the town.

We also paid a visit to Vin de Liege, in many ways the co-op which gave confidence to what followed that this kind of citizen investor-led approach is possible. Vin de Liege is amazing. We were taken on a tour around the production facilities and also the cellar. It’s impressive to walk around and think that 3 years ago none of it existed. Now it is a state-of-the-art facility, producing 12 wines, with about 30 acres of vines already planted, and plans to at least double that. They are already winning awards.

Their cellar was fascinating, hearing how they commission each barrel so it is a particular mix of different woods, so that the woods are able to impart certain flavours and tannins to the wine. Creating a vineyard is a long term investment, they take many years to be profitable. As a testament to having a dream, telling a powerful story and creating something amazing, Vin de Liege is a remarkable thing.

Where it is all starting to get very interesting is in the impact that CATL is having on the city’s local government. While in Liege, I met with the city’s Mayor and councillor responsible for agriculture, and is it clear that something is really shifting. As Christian told me:

Now the local authorities are stepping up and saying wow, this is really interesting. They can see that what we are doing is good for society, that it can create jobs, build social links between people, that it is good for health and for the environment. I think that in the future, new projects will be a combination of the forces of the public and citizen-led initiatives. This week the City of Liège launched a new project called CreaFarm. We had many discussions with them about what was blocking agricultural Transition, and one of the key themes was the price of land.

They were convinced they could help because they own a lot of land in and around the city which is not really used properly. So they have identified all the sites, characterised the kinds of uses they’d be best for, and tested them for contamination (as a former industrial city, land contamination is not uncommon). They have then invited suggestions from people who would like to use the land, and created a panel to decide applications, which we are part of, and once they’ve decided, the land will be made available at low rents”.

Talking to the Mayor it is clear that for him, CATL is what the city sees as being its future story. Ten years ago, the city was set to move towards being a “smart city”. “Now we want to be a Transition City” he told me.

Members of Nourrir Liege, CATL and the Liege municipality sharing breakfast

I was fascinated to get a sense from Christian of how the projects underway and their success had impacted his, and others’, sense of the future, how imaginative and positive they felt about it. “A lot of people were very pessimistic”, he told me:

Someone who’s been changed by this? Me! I had been very worried and concerned about the possibility of an imminent social collapse. It was very hard. My therapy has been doing these positive projects. I still believe the future might not be very bright. But being active means I feel much better. For me, it’s the connection with other people that changed everything for me, and for many others too!! The antidote was to do something. My sense is that when you read about collapse, you collapse yourself. Doing this work sets you into movement”.

Sitting in the back office at Les Petits Producteurs, Pascal is quietly excited about the increasing involvement of the municipality. “At the beginning, the municipality laughed, but now they think we are quite interesting. We are doing so well, that the municipality will have to follow – I don’t think they have a choice actually! I think it’s going to work. I’m positive because I am a pragmatic guy. I manage a shop. They can’t say no, because we exist and we are making things…”

Pascal Hennen

The following day, in Louvain-le-Neuve, Olivier de Schutter gave a presentation in which he used the term ‘Partner State’, his vision of the state getting alongside bottom-up community action, allowing the ideas and inspiration to rise up from below, and seeing their role as being to remove obstacles and to help things to flourish. My strong sense from everyone I spoke to in Liege was that that looks like the very model that is unfolding in Liege.

About the author: Rob Hopkins, co-founder of both Transition Town Totnes and Transition Network. I am a serial blogger, author of The Power of Just Doing Stuff and 21 Stories of Transition, and I tweet as @robintransition. I previously wrote The Transition Handbook and The Transition Companion, and was awarded a PhD by the University of Plymouth and more recently Honorary Doctorates by the University of the West of England and the University of Namur. In 2012 I was voted one of the Independent’s top 100 environmentalists and one of ‘Britain’s 50 New Radicals’.

I have appeared on BBC Radio 4’s ‘Four Thought’ and on ‘A Good Read’, appear in the French film phenomenon ‘Demain’ (‘Tomorrow’), have spoken at TED Global once, and at 3 TEDx events. I am an Ashoka Fellow, a keen gardener and one of the founders of New Lion Brewery in Totnes and a Director of Totnes Community Development Society, the group behind Atmos Totnes, a very ambitious community-led development project. If you’re wondering why I’m writing a book about imagination, you can find out here.

Republished from the author’s blog, Rob Hopkins, Imagination Taking Power

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Money Is Not Wealth: Cryptos v. Fiats!

Hazel Henderson — Wed, 21 Feb 2018 09:00:00 +0000

Most bankers, economists and investors after a couple of drinks, will admit that money is not wealth. Money is a metric, like inches and centimeters, for tracking real wealth: human ingenuity and technological productivity interacting with natural resources and biodiversity undergirding all human societies along with the daily free photons from our Sun, as described in “Valuing Today’s Circular Services Information Economies”. So brainwashed are we by the false money meme of “money as wealth” that whenever anyone proposes needed infrastructure maintenance, better schools and healthcare or any public goods, we are intimidated by some defunct economist who says “Where’s the money coming from?” They ought to know better, since, of course money is not scarce, it’s just information as I pointed out in 2001 at the annual meeting of the Inter-American Development Bank in an invited talk “Information, The World’s Real Currency, Is Not Scarce “(see World Affairs, April-June, Vol. 5, 2001, Delhi, India).

Since the 2008 global financial meltdown and bailouts, trust is disappearing: in banks, stock markets, corporations, governments, religious institutions, experts, academia, political parties’ rhetoric and even the Internet and social media. This mistrust has fueled global populists across the political spectrum, with ubiquitous signs at their rallies, “Where’s MY Bailout?” We see the rise of cryptocurrencies becoming bubbles, as many seek alternative stores of value and mediums of exchange they hope will prove more trustworthy than central banks’ fiat currencies: dollars, yen, euros, pounds, pesos backed only by their governments’ promises.

Trust is a precious commodity which undergirds all humanity’s markets, trading and exchange. Trust does not scale easily, abiding in face-to-face, handshake interactions in humanly-scaled communities, based on common agreements, shared infrastructure, resources and culture. Trust does not reside in packages of software, apps, AI, big data or social media platforms, as we learned in 2016. So trust was sought in the blockchain platforms first developed by the mysterious computer expert, Satoshi Nakamoto in 2009 for his bitcoin. Now, over 1000 blockchain-based start-up companies and blockchains underlie the over 1,500 cryptocurrencies traded on electronic exchanges including Coinbase. These computer-based distributed ledger blockchains are designed to engender trust by allowing person-to-person ability to verify each transaction or contract with a permanent record open to all.

Crypto promoters aspire to create global-level trust in the value of cryptocurrencies due to this transparency and their protocols limiting finite amounts to be issued, to create artificial scarcity. This vision is sullied by the many cases of criminality, hacking, stealing, frauds and other shenanigans. Nevertheless, faith and trust in these cryptos remains strong, since proponents say central banks also manipulate their fiats — which is true! We see fiat money being printed on TV shows! Yet fake visuals of cryptos, such as the shiny golden colored coins are also shown with news about bitcoin. This is a “bit-con” since bitcoin is a digital algorithm, a string of computer code which is unlikely to become a ubiquitous medium of exchange or a store of value.

Still, the allure to libertarians, hackers and speculators is that cryptos exist with no middleman, for peer-to-peer global private use with no governments, no banks or financial intermediaries and few outside rules except those imposed by issuers. Millions of hackers worldwide soon began solving the ever more complex mathematical puzzles needed to claim their next block of newly minted bitcoin. These “miners” now use some 30 terawatts annually of fossil-generated electricity, equivalent to the consumption of a country the size of Ireland, plus gobs of computer power. They are now affecting the Earth’s climate as I described in “Hey COP23: Bitcoin Miners Exploding CO2 Emissions!”

The loss of trust in fiat dollars, pounds, yen, euros, pesos we always use to pay each other cannot be replaced by cryptos—in spite of the current hype, as traditional financial markets now trade bitcoin futures and ETFs concocted by eager Wall Street players. Nations including Russia, North Korea and Venezuela under international sanctions for violating norms, are now issuing their own cryptos to escape financial controls set by governments for fiat currency transactions. How will this war between governments and libertarian hackers’ cryptos versus fiats work out?

Clearly, trust in all forms of money is fading. Today, people barter more goods and services on electronic platforms, swap and match, often directly without any use of currencies on platforms like Freecycle, and for everything from baby-sitting, sharing garden tools, spare rooms, vacation homes to finding their true love matches! The familiar fiat currencies we still spend our lives earning, investing and saving for our retirement are losing their dominance in our lives and with that their role as a promised store of value. For example, few fiat currencies remain stable, as we see on FOREX trading screens daily. Even our US dollar has lost about 80% of its value over the past 30 years— due to inflation, budget deficits, interest payments to bond-holders on our national debt, which recent tax cuts may increase by another $1.5 trillion.

Most US and European citizens register disbelief when they learn that all their national money in circulation is created out of thin air by private banks when they create loans and is therefore only backed by other peoples’ debts, not gold or any other commodity of value! Governments in Britain, the USA and most countries gave their sovereign power to coin their own national money away to their private banks and allowed them to charge interest on their loans as well, as Ellen Brown explains in “Web of Debt”, (2010). Our TV Special “The Money Fix” details on how this happened in the USA with founding of the Federal Reserve in 1913 and the rise of local currencies, barter and credit circles.

Governments’ policies became ever more erratic, swinging between obsolete textbook policy prescriptions: either “stimulation “(quantitative easing QE, i.e. money-printing, tax cuts, lowering interest rates, buying dud mortgage-backed securities) or “austerity “(cutting safety nets, education, healthcare, public services, selling off public assets) while continuing to bail out too-big-to-fail firms without prosecuting their reckless executives. Ethical Markets dissects such obsolete economic policies and offers more realistic alternatives (www.ethicalmarkets.com).

Today, failing policy levers are being bypassed by the rise of cryptos, crowdfunding, peer-to-peer lending, electronic barter, information-based direct trading I describe in “FINTECH: Good and Bad News for Sustainable Finance”. They reveal the stunning truth: Money Is Not Wealth and worse, it is no longer a reliable store of value! All those dollars we pinched to save for our retirement are losing their value until we use them to buy something useful, and shift our investing from obsolete, polluting, unsustainable corporations into trustworthy, sustainable, well-managed and transparent enterprises so we can monitor their performance and social impacts ourselves.

As the shock of this reality sets in, it reveals how most financial market players try to make money out of money, trading stocks with each other which are tradeable contracts issued by big companies as explained by law professor Lynn Stout in “The Shareholder Value Myth”, (2012). The latest Wall Street bubbles are index-based stocks and ETFs, reaching additional levels of abstraction. I first unraveled these truths in “Creating Alternative Futures” (1978,1996) and “The Politics of the Solar Age” (1981,1986). I described the essential unpaid tasks underpinning the cash-based sectors measured in GDP and incomes of mostly male “breadwinners”. Textbooks designated their wives to perform all the work of maintaining households, raising the next generation, caring for elders, volunteering in community service —all unpaid, as in this diagram (Cake). Economic textbooks described all this vital productive work I called the Love Economy as “non-economic”!

Feminists emerged worldwide to insist this work be recorded and paid, as in Marilyn Waring’s “If Women Counted” (1990); lawyer Riane Eisler’s Caring Economy campaign and Kate Raworth’s “Doughnut Economics” (2017). I documented how thousands of communities around the world starved by their central governments of fiat currencies by austerity programs, simply created their own local currencies, like the famous “Berkshares” issued by the Schumacher Society and circulated, even by local banks in Great Barrington, MA. These townsfolk realized that using their own local currencies and credit could clear their local markets and employ their people meeting local needs. Photographs of thousands of such local currencies issued all over North America and Mexico are catalogued in, “Depression Scrip of the United States 1930” (1961). They taught a key lesson: money cannot be a store of value –it must circulate in the community in order to meet needs and create jobs and prosperity. To assure these currencies were not saved, but spent, they all carried expiration dates and require stamps to re-validate them regularly affixed until they finally expired.

So this myth of money as a store of value is now threadbare. Electronic platforms open up new possibilities for direct barter, with all the fintech exchanges now disrupting traditional finance and banking. These innovations offer hope that both cryptos and fiats may eventually be properly managed and regulated in the service of decentralized prosperity and focus on the new model; the UN’s Sustainable Development Goals (SDGs) now ratified by 195 governments. Accountants are renovating their models for information-based economies where services account for some 80% of production: from unpaid voluntary work to intellectual property, R &D, design, brands, networks, “infostructure” (broadband, internet) and institutions, described in “Capitalism Without Capital” (2018). The International Integrated Reporting System (IIRC) models six forms of capital: finance, built facilities, intellectual, social, human and natural capitals, which then measure the extent to which companies and governments enhance or degrade all six forms. This accounting revolution also from the Sustainable Accounting Standards Board (SASB); the Chartered Institute of Management Accountants www.cimaglobal.com, (ICAEW) finally discloses and internalizes all those “externalities” into companies’ balance sheets and provides full spectrum accounting— beyond money as the single metric. Honest money: currencies fully backed 100% for example, by kilowatt hours of renewable electricity, productive assets and services can continue to be useful as mediums of exchange. Expert Shann Turnbull in “Is A Stable Financial System Possible”, shows why currencies cannot be a predictable store of value, i.e. money is not wealth.

Cross-posted with permission from Ethical Markets.

Photo by reynermedia

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Money and Society MOOC – starts again August 20th 2017!

Stacco Troncoso — Tue, 15 Aug 2017 07:30:00 +0000

This is a trailer of the first minutes of lesson one of the Money and Society MOOC: a free online course at Masters-level will enable you to understand the past, present and future role of money in society. The MOOC runs for one month, with four lessons. Each lesson begins on a Monday, consisting of an audio Powerpoint of two hours, followed by two hours of personal reading and one hour to prepare a written assignment of not more than 400 words, which must be submitted by that Thursday.

Participants can view and comment on each other’s assignments in the forum, and can interact as they wish, with tutors commenting on assignments in the forum. Lessons Two and Four are followed by one hour webinars with the tutors, which occur on Saturday mornings at 10am. The first iteration begins February 2015, and the next will be in quarter three of 2015.

The following text is reposted from the Institute for Leadership and Sustainability:

A free online course at Masters-level will enable you to understand the past, present and future role of money in society. The 5th cohort starts 20th August 2017 and lasts 8 weeks (one lesson every two weeks). Enrol here.

The course is therefore highly interdisciplinary, drawing upon anthropology, sociology, history and heterodox economics. It is designed by Professor Jem Bendell PhD (IFLAS) and Matthew Slater BD (Community Forge), with additional tutoring by Leander Bindewald MA (IFLAS).

Typically 50 to 100 people complete the full 4 lessons, and many then continue to interact in the Alumni Forum. Over 20 have progressed to attend the full certificate course in London.

The next offering of the MOOC (Massive Online Open Course) starts online on August 20th 2017 and runs for over 2 months, with four lessons:

Lesson One: An introduction to money: functions, forms, and fallacies

Lesson Two: The history of money and its discontents

Lesson Three: The problems with mainstream monetary systems

Lesson Four: Alternatives

Each lesson begins on a Sunday, consisting of a audio-narrated slides of less than two hours (which you can listen to when you want within the following days), followed by two hours of personal reading and one hour to prepare a written assignment of around 500 words, which must be submitted by the following week.

Participants can view and comment on each other’s assignments in the forum, and can interact as they wish, with tutors commenting on assignments in the forum.

Lessons Two and Four are followed by one hour webinars with the tutors, which occur on Saturday mornings at 10am (UK time). You need access to a decent broadband connection but do not need any special software to engage in the course. If without a powerpoint viewer, participants can view lessons on youtube. Participants cannot start the MOOC late.

At the end of this MOOC you will be able to:

Critically assess views on the form and function of money and currency by drawing from monetary theories
Explain theories on how social, economic and environmental problems arise from mainstream monetary systems
Explain alternative forms of money and currency and the theories on how they can support better social, economic and environmental outcomes.

The full schedule follows below. On the MOOC you will be joined by participants on the Certificateof Achievement in Sustainable Exchange, which is a credit-bearing module offered by the Institute for Leadership and Sustainability at the University of Cumbria. Four days of classes in person at the Docklands Campus in London begin in April 2017, featuring Professor Bendell, Leander Bindewald and a range of guest lecturers. These classes explore the wider issues of currency innovation and the collaborative economy. There is a fee for the certificate, not the MOOC. You must have started the MOOC in order to enrol.

The Tutors

Matthew Slater is a software engineer who specialises in open source software for community currencies. Co-founder of Community Forge, which produces software for and hosts over 100 local currencies, he is a regular commentator on grassroots initiatives for community control of currency and credit.

Leander Bindewald is the coordinator of the EU funded project Complementary Currencies in Action, and a regular commentator on currency innovation.

Photo by Sole Treadmill

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CIC’s economic ecosystem: Community exchange networks and local currencies in Catalonia

George Dafermos — Tue, 23 Aug 2016 10:00:46 +0000

A characteristic of healthy social movements is that they create the “structures” and the “tools” that are most appropriate to their needs and goals. The economic model of the Cooperativa Integral Catalana (CIC), which aspires to “bring together all the basic elements of an economy such as production, consumption, funding and a local currency” (“What’s CIC?”), is paradigmatic of this empirical axiom.

The kernel of this economic model are the so-called local exchange networks (or exchange groups), which are usually made up of tens or hundreds of members who exchange products and services by using their own digital currencies. In essence, each exchange network constitutes a self-organized marketplace for the local community in which its members can buy and sell locally-available products and services. The payment can take the form of barter exchange or if that is not possible, it can be made by means of the local currency used by each exchange network. Transactions made by using these local currencies are based on the principle of mutual credit, which means that when a transaction between two persons occurs, the account of one person is credited, the other’s debited. To illustrate with an example: if two individuals have no credits in their account and they exchange a loaf of bread at a price of 3 “monetary units”, then one of them will end up with 3 units and the other with 3 units below zero (that is, a “negative balance” of 3 units). From a technical point of view, keeping track of transactions and of members’ credit and debit balances is done through online platforms known as community exchange systems. These platforms constitute the tool with which members of exchange networks manage their accounts, as well as a virtual marketplace for buying and selling locally-available products and services.

A documentary about the local exchange network in Garrotxa

In Catalonia, in specific, there are more than 40 exchange networks known as “eco-networks” (“ecoxarxes” in Catalan) because of the local Catalan currency “eco”, some variant of which they all use. Its “birth” in Catalonia can be traced back to 2009 – about a year before the formation of the CIC in 2010 – when the eco-networks of Tarragona and Montseny introduced their own alternative currency (CIC 2015, Flores 2015).

Number of transactions per month in CIC’s eco-network (Source: IntegralCES)

Although their size differs substantially, some eco-networks have thousands of members: indicatively, the eco-network launched by CIC in 2010 has 2782 members (IntegralCES). From a technical point of view, the operation of about half of the eco-networks is based on the community exchange system (CES), while the rest, including the CIC, have “migrated” to the IntegralCES platform, which was developed upon the initiative of the CIC and several eco-networks as a modified version of CES that is adapted to their local needs.

The IntegralCES homepage

Despite the fact that eco-networks represent an autonomous local structure, they are not cut off from each other: first of all, the software platforms they rely upon for their operation make it possible for members of different eco-networks to engage in transactions. Secondly, though each eco-network has its own autonomous assembly, they are all connected through the “institutions of meta-governance” evolved by the community of eco-networks, such as the “Space for the coordination of social currencies” (Espai de coordinació de monedes socials) and the so-called Bioregional assemblies of the South and the North of Catalonia, which serve as an informally-organized coordinating organ for eco-networks across the Catalan territory.

Bioregional assembly (Ultramort, May 2016)

These are the outlines of the economic ecosystem in which the CIC is embedded and which it proposes as a tool for the transition to the post-capitalist society it envisions: a horizontally organized network of self-managed exchange networks with their own community currencies.

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Project Of The Day: Community Shares

Nathan Slater — Thu, 26 May 2016 02:01:33 +0000

When I lived in Kenya, my friend, Kamau, needed to raise funds to purchase the storefront where he operated his grocery business. Even with a distant relative in the local bank, he could only borrow half the funds he needed.

I offered to help some, but my contribution wouldn’t come close to covering the other half.

Kamau shook his head. “Save it for the Harambee.”

“The what?”

Harambee means “all pull together” in Swahili. The first Kenyan president adopted it as the national motto.

Kamau explained it this way, ” I need to purchase the storefront so that I may continue providing for my family. I cannot afford the purchase price, so I will appeal to the public for help.”

Over a hundred people showed up for the event. There was plenty of food and chai. One by one people walked up and donated. Kamau acknowledged them by name. He came close to his goal. And some relatives helped him with the remainder.

They don’t legally own equity in his business, but they probably won’t go hungry.

This sort of all pulling together is catching on in Western countries. Its a bit more formal, but groups like Community Shares are leading the way.

Extracted from: http://www.communityshares.org.uk/find-out-more/what-are-community-shares

What are Community Shares?

Community shares can save local shops and pubs, finance renewable energy schemes, transform community facilities, support local food growing, fund new football clubs, restore heritage buildings, and above all, build stronger, more vibrant, and independent communities.

Extracted from: http://communityshares.org.uk/resources/handbook/equity-social-enterprises

1.1 Equity for social enterprises

The term “community shares” refers to non-transferable, withdrawable share capital; a form of equity unique to co-operative and community benefit society legislation. This body of corporate law provides many of the same features as company legislation, such as corporate body and limited liability status, but it also has some unique features, especially in its provisions for members and share capital.

Community shares are an ideal way for communities to invest in enterprises serving a community purpose. The remainder of this section explains how community shares work and why co-operative and community benefit society legislation is the preferred legal form for community shares, the business model underpinning community shares, and the many starting points for community share initiatives.

Extracted from: http://www.communityshares.org.uk/standard-mark-0

The Community Shares Standard Mark is awarded by the Community Shares Unit to offers that meet national standards of good practice.

These standards ensure that:

The offer document and application form are easy to understand
You are provided with all the facts you need to make an informed decision
The facts are supported by the annual accounts and/or business plan for the society
Nothing in the documents is purposefully incorrect, confusing or misleading

Societies are asked to sign a Code of Practice requiring them, among other things, to give the public a right of complaint to the Community Shares Unit.

Photo by khym54

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