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Economics for Transition:
building an equitable and resilient local
economy
<Your Name here!>
Transition Initiative
Ambitious agenda

The current economic crisis and its
historical context (short recap)

Understanding the structure of the
economic system

Understanding money and the banking
system

Understanding the financial system

Responses and Alternatives
Robert Reich summarizes

Connecting the dots about the US
economy
Time to understand the economic
system that leads to these results…

Concept of Surplus

5 types of economic systems

Inherent contradiction and instability
The Concept of Surplus
◦ Who produces it?
◦ Who owns it?
◦ Who distributes it?
Five Economic Systems
◦
◦
◦
◦
◦
Ancient (self-employed) system
Communitarian system
Slavery
Feudalism
Capitalism
The Inherent Instability of
Capitalism
◦ Two major systemic failures in the
last 80 years
◦ In the same period 11 crises
(recessions)
◦ Labor as cost vs. aggregate demand
◦ “investing the surplus” (media control social narrative, government)
◦ C-corporations and the profit imperative
What can you buy with the surplus?

How about the best government money
can buy?

Part one

Part two
Would you like a social narrative with your
Government purchase?
◦
Welfare queens
◦
The poor are lazy and deserve their lot
◦
Don’t tax the job creators (the rich)
◦
The economic crisis is due to excessive
regulations
◦
If you criticize capitalism you are a traitor or a
commie
◦
Raising taxes will hinder economic growth
◦
The private sector is efficient the government
is not
Robert Reich

Debunking 7 economic myths in 2’ 30”
Problems with the current economic
system

Unstable

Concentrates wealth and power

Tendency towards larger entities and
reduced competition

Anti-democratic

Socially and environmentally damaging

Spectacularly wasteful
What way forward?

Localize and democratize

Alternatives

Strategies
◦ Defensive
◦ Pro-active
◦ Transformational
The Money System

Documentary “The Money Fix”

What is money?

A short history of money
◦ Barter
◦ The invention of money (commonly
accepted mean of exchange)
◦ Money as debt
Problems with the current monetary
system

Money is created with issuance of debt

No money is created to repay the
interests on the debt

Growth imperative otherwise…

Scarcity and guarantee of failures

Money creation power in the hand of
private elite

Fundamentally undemocratic
What way forward?

Localize and democratize

Alternatives
◦ Free banking system
◦ Democratic control of credit creation

Strategies
◦ Expand gift exchange economy
◦ Commodity exchange economy

Expand barter

Alternative currencies and LETS
The Public Banking Revolution
The Financial System

Provides investment capital to finance
economic growth

Allocates investment capital

The investments of today determine the
world we will live in tomorrow

The narrow lens of investing
Who Owns and Controls investment
Capital?
Problems with the current financial
system

From capital as mean to capital as end in
itself

Holding period and stock trading

Financialization of our economy

Fundamentally undemocratic
Stock Trading Is About to Get
5.2 Milliseconds Faster
Source: Bloomberg Business Week - March 29, 2012
What way forward?

Localize and democratize

Alternatives
◦ Community Capital

Strategies

Slow Money

Local Investing
Systemic intervention points

Raise awareness, education

Build social capital

Democratize the workplace (workers
owned cooperatives)

Move capital ownership into the hands
of the community (Land Trusts, CDFI,
local government ownership e.g. public
utilities, etc.)

Support existing system alternatives
Responses and Alternatives
(personal)

Withdraw consent and complicity
◦ Move your money
◦ Turn off TV
◦ Decolonize your mind (get your news
from non-corporate media)
◦ Build trust and resilience in the community
(social capital)
Responses and Alternatives
(cultural and political)

Challenge outdated social narratives

Get educated through alternative noncorporate sources

Turn off TV

Stop gap political intervention at the
national level

Engage with the political process at the
local level
Responses and Alternatives
(economics and finance)

Move your money!

Support alternatives with purchases, employment
and investments (local first!)

Sharing economy (from ownership to access/use)

Benefit Corporation as alternative legal structure

Develop and support alternative means of
exchange (local currencies, time banks)

Develop gift exchange economy (Gift circles,
resilience circles, pay forward, volunteering)
Joining the Great Turning

Fight the system but love the people
◦ Allies can come from the most unexpected
places!

Keep it fun and light
◦ Make it irresistible to join your cause!