Download Money - Gaian Economics

Money
Monetary reform and
complementary currencies
What is Money ?
Functional Definition – what money does
Money is a:
 Medium of exchange
 Measure of value
 Store of value
These roles are
incompatible
 Amongst money's many functions, that of the
lubrication of a fully functioning economy is the most
basic.
 This role may be incompatible with the role money now
plays as a commodity in international speculation.
From the perspective of the local economy, the use of
money as a global commodity is entirely destructive.
 Money is sucked out of the local economy to areas of
the world where it can attract a higher rate of return as
investment capital.
 The inadequate supply of money that remains
condemns certain areas to a permanently low level of
economic activity.
Money is fiat money
 Not supported by collateral
 Not related to economic activity
 1944: Bretton Woods: dollar acceptable
as backing
 Since 1971 simply created by fiat
 Importance of reserve currencies
Money and globalisation
 The finance industry lies at the heart of
globalisation. Of the total international
transactions of a trillion or so dollars each
day, 95 per cent are purely financial.
Globalisation in not about trade; it is
about money.
 ‘the financial system now completely
dominates the real economy of goods
and services
Money and growth
 Money is created as debt
 Hence pestering by banks to borrow
money
 Hence massive increase in debt
 As money supply increases economy
must grow to match it
 Hence obsession with economic growth
 Hence destruction of the planet
2500
2000
GDP index
1500
Broad money (M4)
index
1000
500
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
0
6
5
4
3
2
1
0
1966
1971
1976
1981
1986
1991
1996
2001
2006
Anything you haven’t
understood?
Role play instructions
 How is the present money system limiting your
life?
 How can you imagine changing your life for the
better if money were not object?
 What skills could you share and benefit from
from others if you did this outside the money
system?
 What would be the limitations of a local
community money system in your life situation?
Around the world in
community currencies
Economic disaster in
Argentina
 As in many non-reserve-currency economies,
Argentina suffers from being under-monetised
 This makes it vulnerable to citizens’ exchanging their
pesos for foreign reserve currencies or sending them
overseas.
 Exacerbated by the pegging of the currency to the
dollar, which meant that once the dollar’s value began
to rise on the foreign exchanges from 1995 onwards,
Argentina’s exports became more expensive than
those of competitor countries whose currencies could
devalue against the dollar.
 The financial crisis in Mexico in 1994, followed by
those of the Asian Tigers, Russia and Brazil from 1997
to 1999 undermined confidence in Argentina’s ability to
pay her sizeable external debt.
Response was resort to
complementary currency
Anything can become
money
 Building firm IRSA was accepting grain as payment for
luxury apartments in 2002
 By November the global corporate GM was prepared to
accept cereal crops in payment for its pick-up trucks
under an arrangement known as the Chevrolet Harvest
Plan
 Ford rapidly followed suit. Acceptable crops included
soya, maize, wheat and sunflower.
 Banks were prepared to lend farmers money to buy
trucks, machinery, agrochemicals or seed in exchange
for grain, which never left the silos but was sold on
directly for export
Time banking in Wales
 Coordinated by John Rogers at Newport
The Chiemgauer
 Uses principle of
demurrage
 Electronic and
paper money
 Back one-for-one
by euros
 Can be exchanged
back for a 5% fee
 Accepted by 150+
shops
 http://www.chiemgauer-regional.de/
The Yamato Love Machine
 A local electronic currency based on credit cards
 Cards were given to 73,000 residents, each with
10,000 monetary units called ‘love’ already
encoded
 The loves can be used in exchange for discount at
local shops or to buy second-hand goods
advertised on the city government’s website
 Loves can be earned in return for voluntary social
welfare activities, advertised on the website.
ボランティアや様々なサークル活動の募集等を掲載しています
あげます・くださいの情報を掲載しています
ショッピング情報が掲載しています
地域通貨の管理を行えます
 http://www.city.yamato.kanagawa.jp/