BGE / Unconditional Income / Bedingungsloses Grundeinkommen

Why?

source: https://news.yahoo.com/daily-digit-women-waiting-longer-start-kids-theyre-162108027.html

The answer is: career and in capitalism

or in other words:

insecurity / anxiety not to survive without sufficient support from the (already mentally ill) money-community

Everybody knows the older the woman/men the worse the genetic material gets, the risk for a disabled child increase, the higher the risk of mankind to die out.

So shiny Coca Cola capitalism without limits: it is a poison for families and: IT’S A TRAP!

(for the WHOLE species)

But who can flee and declare independence from the monetary system?

Almost nobody – small steps are possible – grow your own food – your own water well – your own solar system – your own waste water treatment… well here the problems start… because of pro corporations lobby made laws. (gov corruption in short)

You will need money to buy land to free yourself from money (without governmental support a slow and agonizing process that goes over decades).

The worst: Why are there so many singles?

Unrestricted unlimited everyone will be happy “make believe” capitalism poisons the habitat with chemicals affecting the brains plus systematically breeds  selfishness (this is scientifically proven) and psychopaths and destroys social skills – guess how this affects relationships (in the worst way possible… )

Apple: Social Freezing

the term itself makes me chill.

“With more and more women choosing to have children later in life, many are opting to freeze their eggs.”

https://news.yahoo.com/egg-freezing-fertility-ivf-120423781.html

it may sound sad but:

In the 14th century, the cause of death for a lot of people was violence, so a lot has improved since then on the “obvious” violence front.

But the “systemic violence” front on a global scale is invisible to the naked eye… except for a few journalists that get shot because of writing the truth, the “systemic violence” of the system goes undetected – against the poorest of the poor but also against children of the West.

comment: what would be EVEN better: UBI + investment into one’s own independence!

will have biggest impact on well being of people and the well being of the habitat earth – if UBI is combined with education and possibilities for people to invest  (10-20-30% of their income) into their own independence from monopolies and finite resources (oil, coal, gas)

  • public bank giving loans (long running low interest) for:
    • food independence (easy, reliable crops, labor extensive, high quality growing food/gardening/land)
    • energy independence (high quality – well tested – low maintenance – off-grid energy systems for heating and electricity (wind and solar systems (no battery 30% independence with battery 60% independence + x) plan with $1000 repair budget for 5 years))
    • mobility independence (electric mobility?)
    • imho people should even own their own internet lines (to their next neighbour) (no fees no more for the last mile – but a little  maintenance 🙂 make sure the mice are not eating the cables)

Universal Basic Income Is Easier Than It Looks

Posted on by Ellen Brown

“Calls for a Universal Basic Income have been increasing, most recently as part of the Green New Deal introduced by Rep. Alexandria Ocasio-Cortez (D-NY) and supported in the last month by at least 40 members of Congress. A Universal Basic Income (UBI) is a monthly payment to all adults with no strings attached, similar to Social Security. Critics say the Green New Deal asks too much of the rich and upper-middle-class taxpayers who will have to pay for it, but taxing the rich is not what the resolution proposes. It says funding would primarily come from the federal government, “using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks,” and other vehicles.

The Federal Reserve alone could do the job. It could buy “Green” federal bonds with money created on its balance sheet, just as the Fed funded the purchase of $3.7 trillion in bonds in its “quantitative easing” program to save the banks. The Treasury could also do it. The Treasury has the constitutional power to issue coins in any denomination, even trillion dollar coins. What prevents legislators from pursuing those options is the fear of hyperinflation from excess “demand” (spendable income) driving prices up. But in fact the consumer economy is chronically short of spendable income, due to the way money enters the consumer economy. We actually need regular injections of money to avoid a “balance sheet recession” and allow for growth, and a UBI is one way to do it.

The pros and cons of a UBI are hotly debated and have been discussed elsewhere. The point here is to show that it could actually be funded year after year without driving up taxes or prices. New money is continually being added to the money supply, but it is added as debt created privately by banks. (How banks rather than the government create most of the money supply today is explained on the Bank of England website here.

A UBI would replace money-created-as-debt with debt-free money – a “debt jubilee” for consumers – while leaving the money supply for the most part unchanged; and to the extent that new money was added, it could help create the demand needed to fill the gap between actual and potential productivity.

The Debt Overhang Crippling Economies

The “bank money” composing most of the money in circulation is created only when someone borrows, and today businesses and consumers are burdened with debts that are higher than ever before. In 2018, credit card debt alone exceeded $1 trillion, student debt exceeded $1.5 trillion, auto loan debt exceeded $1.1 trillion, and non-financial corporate debt hit $5.7 trillion. When businesses and individuals pay down old loans rather than taking out new loans, the money supply shrinks, causing a “balance sheet recession.” In that situation, the central bank, rather than removing money from the economy (as the Fed is doing now), needs to add money to fill the gap between debt and the spendable income available to repay it.

Debt always grows faster than the money available to repay it. One problem is the interest, which is not created along with the principal, so more money is always owed back than was created in the original loan. Beyond that, some of the money created as debt is held off the consumer market by “savers” and investors who place it elsewhere, making it unavailable to companies selling their wares and the wage-earners they employ. The result is a debt bubble that continues to grow until it is not sustainable and the system collapses, in the familiar death spiral euphemistically called the “business cycle.” As economist Michael Hudson shows in his 2018 book And Forgive Them Their Debts, this inevitable debt overhang was corrected historically with periodic “debt jubilees” – debt forgiveness – something he argues we need to do again today.

For governments, a debt jubilee could be effected by allowing the central bank to buy government securities and hold them on its books. For individuals, one way to do it fairly across the board would be with a UBI.

Why a UBI Need Not Be Inflationary

In a 2018 book called The Road to Debt Bondage: How Banks Create Unpayable Debt, political economist Derryl Hermanutz proposes a central-bank-issued UBI of one thousand dollars per month, credited directly to people’s bank accounts. Assuming this payment went to all US residents over 18, or about 241 million people, the outlay would be close to $3 trillion annually. For people with overdue debt, Hermanutz proposes that it automatically go to pay down those debts. Since money is created as loans and extinguished when they are repaid, that portion of a UBI disbursement would be extinguished along with the debt.

People who were current on their debts could choose whether or not to pay them down, but many would also no doubt go for that option. Hermanutz estimates that roughly half of a UBI payout could be extinguished in this way through mandatory and voluntary loan repayments. That money would not increase the money supply or demand. It would just allow debtors to spend on necessities with debt-free money rather than hocking their futures with unrepayable debt.

He estimates that another third of a UBI disbursement would go to “savers” who did not need the money for expenditures. This money, too, would not be likely to drive up consumer prices, since it would go into investment and savings vehicles rather than circulating in the consumer economy. That leaves only about one-sixth of payouts, or $500 billion, that would actually be competing for goods and services; and that sum could easily be absorbed by the “output gap” between actual and forecasted productivity.

According to a July 2017 paper from the Roosevelt Institute called “What Recovery? The Case for Continued Expansionary Policy at the Fed”:

GDP remains well below both the long-run trend and the level predicted by forecasters a decade ago. In 2016, real per capita GDP was 10% below the Congressional Budget Office’s (CBO) 2006 forecast, and shows no signs of returning to the predicted level.

The report showed that the most likely explanation for this lackluster growth was inadequate demand. Wages have remained stagnant; and before producers will produce, they need customers knocking on their doors.

In 2017, the US Gross Domestic Product was $19.4 trillion. If the economy is running at 10% below full capacity, $2 trillion could be injected into the economy every year without creating price inflation. It would just generate the demand needed to stimulate an additional $2 trillion in GDP. In fact a UBI might pay for itself, just as the G.I. Bill produced a sevenfold return from increased productivity after World War II.

The Evidence of China

That new money can be injected year after year without triggering price inflation is evident from a look at China. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) remains a modest 2.2%.

Why has all that excess money not driven prices up? The answer is that China’s Gross Domestic Product has grown at the same fast clip as its money supply. When supply (GDP) and demand (money) increase together, prices remain stable.

Whether or not the Chinese government would approve of a UBI, it does recognize that to stimulate productivity, the money must get out there first; and since the government owns 80% of China’s banks, it is in a position to borrow money into existence as needed. For “self-funding” loans – those that generate income (fees for rail travel and electricity, rents for real estate) – repayment extinguishes the debt along with the money it created, leaving the net money supply unchanged. When loans are not repaid, the money they created is not extinguished; but if it goes to consumers and businesses that then buy goods and services with it, demand will still stimulate the production of supply, so that supply and demand rise together and prices remain stable.

Without demand, producers will not produce and workers will not get hired, leaving them without the funds to generate supply, in a vicious cycle that leads to recession and depression. And that cycle is what our own central bank is triggering now.

The Fed Tightens the Screws

Rather than stimulating the economy with new demand, the Fed has been engaging in “quantitative tightening.” On December 19, 2018, it raised the fed funds rate for the ninth time in 3 years, despite a “brutal” stock market in which the Dow Jones Industrial Average had already lost 3,000 points in 2-½ months. The Fed is still struggling to reach even its modest 2% inflation target, and GDP growth is trending down, with estimates at only 2-2.7% for 2019. So why did it again raise rates, over the protests of commentators including the president himself?

For its barometer, the Fed looks at whether the economy has hit “full employment,” which it considers to be 4.7% unemployment, taking into account the “natural rate of unemployment” of people between jobs or voluntarily out of work. At full employment, workers are expected to demand more wages, causing prices to rise. But unemployment is now officially at 3.7% – beyond technical full employment – and neither wages nor consumer prices have shot up. There is obviously something wrong with the theory, as is evident from a look at Japan, where prices have long refused to rise despite a serious lack of workers.

The official unemployment figures are actually misleading. Including short-term discouraged workers, the rate of US unemployed or underemployed workers as of May 2018 was 7.6%, double the widely reported rate. When long-term discouraged workers are included, the real unemployment figure was 21.5%. Beyond that large untapped pool of workers, there is the seemingly endless supply of cheap labor from abroad and the expanding labor potential of robots, computers and machines. In fact the economy’s ability to generate supply in response to demand is far from reaching full capacity today.

Our central bank is driving us into another recession based on bad economic theory. Adding money to the economy for productive, non-speculative purposes will not drive up prices so long as materials and workers (human or mechanical) are available to create the supply necessary to meet demand; and they are available now. There will always be price increases in particular markets when there are shortages, bottlenecks, monopolies or patents limiting competition, but these increases are not due to an economy awash with money. Housing, healthcare, education and gas have all gone up, but it is not because people have too much money to spend. In fact it is those necessary expenses that are driving people into unrepayable debt, and it is this massive debt overhang that is preventing economic growth.

Without some form of debt jubilee, the debt bubble will continue to grow until it can again no longer be sustained. A UBI can help correct that problem without fear of “overheating” the economy, so long as the new money is limited to filling the gap between real and potential productivity and goes into generating jobs, building infrastructure and providing for the needs of the people, rather than being diverted into the speculative, parasitic economy that feeds off them.

___________________

This article was first published on Truthdig.com. Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including Web of Debt and The Public Bank Solution. A 13th book titled Banking on the People: Democratizing Finance in the Digital Age is due out early next year. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com.

(Source: https://ellenbrown.com/2018/12/28/universal-basic-income-is-easier-than-it-looks/)

This System is madness.

The short story of our debt-money system aka governmental system (because the politicians are largely “market driven” depend on money from banks, insurance companies, investors):

Let us assume there is only one private Bank.

Let us assume there are only 2 companies in the world that produce the same e.g. tables.

The Bank gives everyone a loan of 50Units with a term of 10 years and an interest rate of 5%.

The money to pay the interest is never generated.

This means company A can only pay back the credit if company A takes away away money from company B. (be cheaper, faster, better, competition)

This creates competition and unemployment when company B goes bankrupt.

Company A might now even have a MONOPOLY on tables, and the prices probably explode.

Creates a bubble for table prices to the point that nobody can afford tables – then the bubble bursts.

Do you think that’s funny?

Not me.

The Bank always wins, because its stake was never high.

You can say it lost 50Units because company B could not pay back the loan and went bankcrupt.

But that is not the case, the private Bank did not borrow the 100% from someone, it had only to borrow 10%/10Units of “real” Central Bank cash money at 0-2% had to borrow.

So 10Units the bank had to borrow 90Units it created itself.

So at the end of the 10 year loan, company B is bankrupt, company A has a monopoly and the bank get’s 63.75Units back – that people worked hard for – what gives the current actual fiat money it’s value.

In theory – 15% unemployment seems to be just a number – in reality – people that own nothing (no house, no garden, no farm, no nothing, can not grow a feed themselves or their families if job is lost, 100% dependence for survival on debt-money) will have to become criminal – just as company A maybe used unfair or even criminal tactics to bankrupt company B (spread lies about their products) – even the super rich want to roam the streets of this planet safe – without constant fear of being kidnapped or robbed. Now let me ask this more productive question:

How would a monetary system look like that is:

  • fostering stability, peace and security
  • fostering creativity and innovation that benefit all of mankind
  • beneficial for a more sustainable survival of mankind aka “everybody” on this beautiful planet

a positive story:

(need more of those)

one fine example what can be done: A city in Brazil was full with plastic waste, the city decided to do something about this (also bad for tourism if your beaches look like trash dumps).

So they accepted a bag full of litter and plastic waste as payment in exchange for one week of free bus and/or train riding. (obviously the bus/train system was still owned by the city and not some private company).

After a few months fishermen even collected trash from the ocean in order to use it as bus tickets.

The city became clean within a few years – the oceans – well that will take a bit longer.

A sentence from Bernard Lietaer, that i not quiet understand:

“money needs to be scarcer than it’s usefulness”

How Currencies Can Be Designed to Promote Environmental and Social Ends

In German:

Der Wahnsinn hat System.

Die kleine Geschichte unseres Schuld-Geld-Systems aka Regierungssystems, weil die Politik maßgeblich sich nach “den Märkten” (Banken, Versicherungen, Investoren) richtet:

Nehmen wir an, es gäbe auf der Welt nur 2 Firmen die das gleiche produzieren z.B Tische.

Die Bank gibt jedem einen Kredit von 50€ mit einer Laufzeit von 10 Jahren und einem Zins von 5%.

Die Zinsen werden nicht erzeugt.

D.h. man kann den Kredit nur zurück zahlen, wenn Firma A Firma B etwas weg nimmt.

So entsteht Konkurrenz und Arbeitslosigkeit, wenn Firma B dann pleite geht.

Firma A hat dann ein MONOPOL auf Tische und kann die Preise ordentlich explodieren lassen. (eine Preis-Blase bildet sich und gefährdet die Stabilität des ganzen Systems)

Findest Du das lustig?

Ich nicht.

Die Bank gewinnt dabei immer, denn ihr Einsatz war nie hoch, da Sie 90% des verliehenen (Giral/Buch)Geldes “aus dem Hut” bzw. Computer gezaubert hat und sich nur 10% “echtes” (Bar)Geld von der EZB für 0% dafür leihen musste.

Ein Satz den ich leider (bisher) nicht verstehe:

“Geld muss immer knapper sein wie sein Nutzen. (!?)”

Vielleicht kann jemand erklären, was das bedeutet.

backup:

How Currencies Can Be Designed to Promote Environmental and Social Ends

Bernard Lietaer is an expert in the design and implementation of currency systems. He has worked in this field for more than 30 years in various roles including central banker in Belgium, fund manager, university professor, and consultant to governments, multinational corporations, and community organizations. His latest book on monetary innovation is People Money: The Promise of Regional Currencies and Money and Sustainability (2012). The monetary system is implicated in many of today’s social and environmental problems. I had a chance to ask Bernard how a better system can be designed.

Allen White: You are well known as a monetary reformer. What led you to study and then rethink the money system?

Bernard Lietaer: As a graduate student at MIT in the late 1960s, I was interested in the application of systems theory to international finance. My thesis, published by the MIT Press in 1970, described how a corporation operating in many countries could optimize currency management. It, among other things, explained how a corporation could best address “floating exchange,” an arrangement, at that time limited to a few currencies in Latin America, in which a currency’s value fluctuates based on supply and demand in the market.

The year after the publication of my thesis, President Nixon took the United States off the gold standard, initiating a global shift to floating exchange that was once a rarity. My research became extremely valuable, and a major U.S. bank negotiated the exclusive rights to my methodology.

I was in management consulting at the time, and my contract with the bank required that I work in a different field for at least five years so that I wouldn’t share my methodology with the bank’s competitors. I took a job advising the largest mining company in Peru and then, after it was nationalized, the Peruvian government itself, where I developed computer models to maximize hard currency earnings. From there, I went back to the Ivory Tower as a professor of international finance, then into the world of central banking via the Central Bank of Belgium. At the Bank, I was tasked with designing the ECU (European Currency Unit), the predecessor to the Euro. Later, after serving as the president of Belgium’s Electronic Payment System, I left government and worked as a currency trader.

Each step in my journey forced me to think about money in a different way: to shift from the perspective of a multinational corporation to that of a developing country to that of an academic to that of a central bank to that of a currency trader. This diversity of perspectives opened my eyes to the merits and flaws of different monetary systems.

AW: How would you describe the prevailing monetary system today?

BL: Today’s monetary system is characterized by a monopoly of scarcity—and debt-based national fiat currencies. Let’s break that down.

In the modern economy, money is inextricably linked to taxation. The government defines money by choosing what it will accept as payment for taxes, and then citizens must work, trade or invest to obtain that money to pay such taxes. Since the abandonment of the gold standard, national currencies have been “fiat” money. “Fiat” here refers to the first words that God spoke in the Latin version of Genesis: fiat lux (“let light be”). In other words, fiat money gains its value simply by virtue of government decree.

Money comes into existence when banks lend. When a bank provides you with a loan or a mortgage, it creates the principal, which you spend, allowing it to circulate in the economy. The bank expects you to pay back not only this principal, but also a certain amount of interest to cover the risk involved in providing the loan. However, the bank does not create any new money for this interest. Instead, it, in effect, sends you into the world to battle everyone else to secure the money required. “Bank-debt money needs to be scarcer than its usefulness” is a quote from monetary economics textbooks. By nature of its creation process, bank-debt money generates scarcity and competition among its users.

I do not think that greed is necessarily ingrained in human nature: it may be cultivated in part by this system of scarcity and competition. But it does not have to be this way. Since money and monetary systems are ultimately social constructs, we can design a monetary system better aligned with our goals on the national and global level.

AW: You have faulted the current monetary system for contributing to growing inequality, environmental degradation, and the erosion of social capital. How does it do so?  

BL: Money is not a neutral and passive medium of exchange, as is generally assumed. It exerts a major influence on human behavior. We design the monetary system, and it, in turn, shapes us, our behavior, and our social relations. The current design incentivizes behaviors antithetical to social and environmental well-being.

For example, our system of debt-based money creates pressure for economic growth because borrowers must secure additional money to pay back the interest on their debt. The payment of interest with debt-based money, in turn, leads to a compounding of interest, which tends to foster exponential growth. However, such exponential growth in economic output is impossible in a world of finite natural resources. Moreover, bank-debt money can be described as an extraction process whose net effect is that money flows to those already at the top, thereby increasing wealth disparities.

Social capital depends on trust, solidarity, and cooperation. These sensibilities are built through voluntary acts of sharing and generosity, such as helping a neighbor or mentoring a student. The monetization of all human transactions promotes the selfish, non-collaborative behaviors that erode community cohesion and, thereby, social capital.

AW: Many of our readers are familiar with the problems caused by monoculture in agriculture. Is monoculture also a problem when it comes to money?

BL: Yes, and some of the deepest thinkers in economics, dissatisfied with the failures of neoclassical orthodoxy, have looked to natural systems for new ideas and solutions. Biologists and complexity experts have shown that the long-term sustainability of a complex flow of networks depends on having the right balance between efficiency and resilience. Efficiency refers to the network’s ability to process a volume of flow per unit of time in an organized fashion. Resilience refers to the network’s ability to cope with change while preserving its integrity. Both of these depend on the same two structural variables—diversity and interconnectivity—but in opposite ways. Efficiency is maximized by reducing diversity and interconnectivity, and resilience is maximized by increasing them. The current economic system puts too much emphasis on efficiency at the expense of resilience. The result is a focus on—some would say obsession with—GDP growth that tallies all economic transactions equally even when they are socially and/or environmentally harmful.

As is the case in agriculture, a monoculture in the money system increases risk. We’ve seen that play out in the crises of the last few decades. Since 1970, there have been 145 banking crises, 76 sovereign debt crises, and 208 monetary crashes around the globe. And if the current system continues to prevail, we’ll see many more.

AW: You have argued for breaking up this monetary monoculture through the use of complementary currencies. How would that work?

BL: Let us start by clarifying what money is: an agreement, within a community, to use some standardized item as a medium of exchange. There is no need to use just one medium. Complementary cooperative currencies can exist alongside our dominant competitive and national currency systems. These currencies can be managed by members of a community, a nongovernmental organization, or business network with the aim of linking unused resources with unmet needs.

A commercial example familiar to most people is frequent flyer miles: they connect the unmet need for airlines of customers’ loyalty with an unused resource, namely, an empty seat on a flight. Whenever there is an unmet need in an economy and an unused resource—and there are many—the two can be linked with a currency. Today, there are approximately 4,000 mature cooperative currencies in operation around the world.

These currencies need not be interest-bearing; indeed, some of them incorporate “demurrage,” a time-related charge for holding onto this currency, which creates an incentive to keep it in circulation. Currencies with demurrage do not contribute to the concentration of wealth and tend to foster a greater sense of community.

AW: Have you witnessed the success of complementary currencies on the ground? If so, what are some examples?

BL: The most frequently used cooperative currency system in the world today is the Local Exchange Trading System (LETS), which was invented in the town of Courtney outside of Vancouver in the early 1980s. After a military base in the town moved, the formerly middle-class town experienced an economic slump, with unemployment rising to 40 percent. But the town still had many unmet needs and a large unused resource in the form of a skilled labor force willing to work. What was missing was a link between the two: that’s what LETS provided. And it has proven to be a great success, encouraging people to use skills they might not have considered valuable (such as cooking, teaching English, or web designing) and giving access to services to people who in the past may not have been able to afford them.

Time dollars provide another example. This system was created by Edgar Cahn, a former speechwriter and counsel to Robert F. Kennedy. The time dollar is equivalent to one hour of service and can be spent on services within a given community, where everyone’s time has equal value. Today, approximately 300 TimeBanks operate in the US and another 300 in the UK, and time banking has spread to almost three dozen additional countries worldwide.

Or consider the Chiemgauer system in Bavaria. Regional nonprofit organizations that wish to participate purchase Chiemgauers for their members at a rate of 100 Chiemgauers for 97 euros. The Chiemgauers can then be used to purchase goods and services in participating stores. As the Chiemgauers are a demurrage currency, people are incentivized to keep them in circulation, rather than hoarding them. Currently, there are 600 participating businesses, and more than 500,000 Chiemgauers in circulation.

Torekes, a currency I helped design, illustrate how complementary currencies can foster greater community. Torekes are in use in Rabot, an immigrant district in the Belgian city of Ghent and the poorest community in the region. We asked residents what they wanted and found that those living in the high-rises dominating the district wanted access to a few square yards of land for gardening. The city had land sitting derelict after a factory moved. An unmet need and an unused resource provided an opportunity for a currency to link them. The city decided to rent out the land in small plots, taking payment in Torekes (Flemish for “little towers”), which people could earn by participating in various urban improvements and beautification activities. The city also arranged for local shops to accept Torekes for specific goods that it wanted to encourage people to buy, such as energy-efficient light bulbs or fresh, seasonal vegetables. The stores could keep the Torekes in circulation or get reimbursed in euros.

AW: How scalable are such complementary currencies? Do they offer a real alternative to the current system?

BL: As I noted before, whenever and wherever there are unmet needs and unused resources, a currency can be designed to link them. Experimentation will be necessary, and when approaching experiments of any kind, and especially social experiments like these, we must be ready to accept failure. Over time, however, the most successful ones will attract the most attention and be replicated. As in any disruptive social innovation, experimentation is essential because we still have much to learn, such as what governance structures are most appropriate for different currency systems. The proliferation of complementary currencies is a testament to human creativity, and I believe they are essential to revamping our socially detrimental monetary system.

AW: If the negative consequences of our monetary system are so clear, why haven’t they been recognized and addressed earlier?

BL: We suffer from a three-layered collective “blind spot” with regard to our money system. The first layer arises from the hegemony of the idea of a single currency. Many people believe that societies have always created, and indeed must create, a monopoly for a single, centrally issued currency. Monopoly has been the rule in many times and places, but there have been exceptions, and such alternative systems fostered economic stability, equitable prosperity, and a longer-term perspective.

The second layer is an indirect result of the ideological warfare between capitalism and communism in the twentieth century. Although the differences between these two systems have been studied ad nauseam, their similarities have not. And among them is a shared belief in a single national currency.

Our institutional framework is the source of the third layer. From the eighteenth century onwards, governance of the money system has been institutionalized through the creation of central banks, which have acted as enforcers of a single currency monopoly in each country.

Multiple forces conspire to keep all three of these blind spots in place. For instance, challenging the hegemony of the monopoly currency puts academics at risk of exclusion from the top conferences and top peer-reviewed economics journals because the gatekeepers in both cases are wedded to the current paradigm. As usual, the costs of nonconformity are high, and the forces of inertia are powerful.

An even deeper obstacle lies in our collective psyche. We are motivated by both greed and a fear of scarcity, both of which lead to an obsessive focus on money, making the issue emotionally charged and discussion difficult.

AW: What role can information technology play in facilitating the use of multiple currencies?

BL: Over the centuries, many different forms of “money” have been invented and used. Today, those in use include bank notes, bonds, and corporate equity as well as gift cards, loyalty points, and community currencies. Digital currencies are the latest addition, with Bitcoin, the first decentralized digital currency, arriving on the monetary stage in 2009. Bitcoin has been followed by a wave of other digital currencies and digital assets that have raised capital while avoiding the high costs of the usual sale of stock in public markets.

Currently, when changing one type of asset into another, one must rely on an intermediary who profits by matching parties with a coincidence of needs. This reliance on matching creates significant barriers, making it nearly impossible for small-scale currencies to be valued against and thus traded for other currencies at market-determined exchange rates. One breakthrough to address this age-old problem is the Bancor protocol. It is named after the proposal made by John Maynard Keynes after World War II for a supranational reserve currency that is nobody’s national currency. Utilizing information technology innovations, particularly “blockchains” that provide transparent, decentralized records of transactions, the Bancor protocol provides an effective way to provide convertibility and liquidity for small-scale complementary currencies without needing a counterparty or an intermediary.

AW: What role can monetary reform play in achieving a Great Transition?

BL: The current monetary system lies at the root of so many contemporary problems. However, because our system of money is a social construct, we can—and indeed, must—change it. A new monetary ecology that combines an array of currencies at various levels—local, regional, national, multinational, and global—can be at the heart of a Great Transition. Such an approach would open up a whole new range of alternatives that can promote the well-being and resilience of both human societies and the environment.

The complementary currencies already in operation today provide glimmers of hope as well as templates for others to adapt according to the needs of their specific communities. By rethinking money and carrying out experiments to connect unused resources and unmet needs, we can help usher in a new era of sustainable abundance.

src: https://www.alternet.org/2017/11/how-currencies-can-be-designed-promote-environmental-and-social-ends/