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Slow Money Revolution: the global growth of local currencies. by Cliona O Conaill. New Consumer magazine.
Money is so inextricably woven into the fabric of our lives that it has become fundamental to our survival in the West. It affects almost everything we do, and yet we actually know very little about it. However, understanding of the nature of money will empower us as consumers. Money is not an actual thing. It is only an agreement between businesses, banks, governments, communities and nations to treat something as though it has value. It is “like a marriage, like a political party, like a business deal”, says Bernard Lietaer, author of nine books on money and finances and an economist for over 25 years who was involved in designing the Euro.
THE HISTORY & POLITICS OF GLOBAL FINANCE
How this “agreement” has assumed a mythical power, that dominates us and, as money expert Marjana Kos says, makes us “dance for money,” is the recent history of money. At the beginning of the First World War Britain stopped using the gold standard it had adopted in 1816. Then at the Bretton Woods conference in 1944, Western leaders met to design a post-war financial structure to allow global free trade. They established The World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). Jointly these organisations designed the conditions for millions more Western-style consumers and unlimited access to the resources of the Third World. Transnational corporations were nurtured to the detriment of local economies as globalisation took off and many of today’s problems are a result of this legacy.
After this conference, the US dollar, became the ‘reserve currency’ for world trade so other countries pegged their currencies to it, and the dollar took on the role that gold had previously played, which explains how the US began to become a superpower. When US President Nixon “closed the gold window” in 1971, money stopped being backed by gold and became a free-floating entity backed only by our “agreement” to treat it as though it had value. “This is the first time in the history of the world that every major country has a currency that is not based on gold or silver or some commodity,” says Lietaer.
Money became an abstraction, a numerical figure on a computer screen, existing in a fantasy land where the amount being traded on the foreign exchanges is 150 times larger than the total of all international trade put together, and is 100 times larger than the quantity trading on the global stock markets, according to Kos.
Six decades after Bretton Woods, global financial, social, political, economic and ecological problems are rife. There is a widening gap between the rich and the poor, family and community breakdown, a politicized food-distribution system, skill loss as more and more people move off the land and into cities, causing competition for jobs, high unemployment, housing shortages and over one trillion pounds of consumer debt - while leaving the worlds’ eco-systems in the hands of the multinational corporations.
The politics of poverty become clear when you realize that in the last 25 years, 87 countries have suffered currency crises due to the financial policies of the IMF. “If the United States had to live by the rules that are imposed on, say, Brazil, it would become a developing country in one generation,” says Lietaer.
The modern banking system adds to the problem by perpetuating a debt-based economy, which makes us prey to debt repayment and fluctuating interest rates, disenfranchises people with limited access to money, and increases the drain on the earth’s resources. (See www.moneyasdebt.net and New Consumer Nov/Dec 05).
LOCAL CURRENCIES - THE WAY OUT
But there is a way to short-circuiting mainstream banking and get more oomph out of our wallets. Using local, or complementary currencies is a way of promoting local businesses, rebuilding community, and promoting relocalisation. You may already be using complementary currencies without realising it in the form of airmiles and supermarket loyalty points. But there is much more to them.
These currencies have been gaining momentum over the last 15 to 20 years: from Bali, where they have had a dual currency for centuries; to Curitiba, in Brazil, where pre-sorted rubbish earns you bus tokens. There is even an electronic currency in Japan called ‘Love’ accrued through doing social welfare activities. Over 4,000 communities worldwide use them according to Lietaer. Local currencies are part of the Slow Money Movement because they are physical money and require face-to-face contact to use, which slows down the speed that the money circulates. They complement rather than compete with national currencies and could not replace them.
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(contd.)
THE HISTORY & POLITICS OF GLOBAL FINANCE
How this “agreement” has assumed a mythical power, that dominates us and, as money expert Marjana Kos says, makes us “dance for money,” is the recent history of money. At the beginning of the First World War Britain stopped using the gold standard it had adopted in 1816. Then at the Bretton Woods conference in 1944, Western leaders met to design a post-war financial structure to allow global free trade. They established The World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). Jointly these organisations designed the conditions for millions more Western-style consumers and unlimited access to the resources of the Third World. Transnational corporations were nurtured to the detriment of local economies as globalisation took off and many of today’s problems are a result of this legacy.
After this conference, the US dollar, became the ‘reserve currency’ for world trade so other countries pegged their currencies to it, and the dollar took on the role that gold had previously played, which explains how the US began to become a superpower. When US President Nixon “closed the gold window” in 1971, money stopped being backed by gold and became a free-floating entity backed only by our “agreement” to treat it as though it had value. “This is the first time in the history of the world that every major country has a currency that is not based on gold or silver or some commodity,” says Lietaer.
Money became an abstraction, a numerical figure on a computer screen, existing in a fantasy land where the amount being traded on the foreign exchanges is 150 times larger than the total of all international trade put together, and is 100 times larger than the quantity trading on the global stock markets, according to Kos.
Six decades after Bretton Woods, global financial, social, political, economic and ecological problems are rife. There is a widening gap between the rich and the poor, family and community breakdown, a politicized food-distribution system, skill loss as more and more people move off the land and into cities, causing competition for jobs, high unemployment, housing shortages and over one trillion pounds of consumer debt - while leaving the worlds’ eco-systems in the hands of the multinational corporations.
The politics of poverty become clear when you realize that in the last 25 years, 87 countries have suffered currency crises due to the financial policies of the IMF. “If the United States had to live by the rules that are imposed on, say, Brazil, it would become a developing country in one generation,” says Lietaer.
The modern banking system adds to the problem by perpetuating a debt-based economy, which makes us prey to debt repayment and fluctuating interest rates, disenfranchises people with limited access to money, and increases the drain on the earth’s resources. (See www.moneyasdebt.net and New Consumer Nov/Dec 05).
LOCAL CURRENCIES - THE WAY OUT
But there is a way to short-circuiting mainstream banking and get more oomph out of our wallets. Using local, or complementary currencies is a way of promoting local businesses, rebuilding community, and promoting relocalisation. You may already be using complementary currencies without realising it in the form of airmiles and supermarket loyalty points. But there is much more to them.
These currencies have been gaining momentum over the last 15 to 20 years: from Bali, where they have had a dual currency for centuries; to Curitiba, in Brazil, where pre-sorted rubbish earns you bus tokens. There is even an electronic currency in Japan called ‘Love’ accrued through doing social welfare activities. Over 4,000 communities worldwide use them according to Lietaer. Local currencies are part of the Slow Money Movement because they are physical money and require face-to-face contact to use, which slows down the speed that the money circulates. They complement rather than compete with national currencies and could not replace them.
.
.
.
(contd.)