Stop measuring money transactions, start measuring the health of our rivers, our forests, our children, our communities. It’s not very difficult.
- Vandana Shiva, Renowned Scientist & Environmentalist
Once we know how and why central banks have created a wealth mechanism that unfairly stacks the odds against the ordinary person, is there anything we can do about it? The answer is yes!
Alternative or complimentary currency and monetary systems are appearing all over the world as a response to this new wisdom about our flawed money system. These are systems that prevent the flow of wealth to the elite power structure that has controlled the wealth ever since central banks were conceived of in 1913.
Did you know that there are over 5,000 alternative or complimentary monetary systems in the world today? Many of these can be set up for local communities and provide enormous benefits while debt-based paper money continues to serve as the foundation upon which all the extreme inequities and environment problems in the world are created. How is it that aboriginal people did not have any form of sophisticated currency but lived wit true community wealth and were natural stewards of the environment? The key is that wealth is NOT dependent on central bank produced paper money, but on only 3 things: sufficient natural resources, people with enough skills who are willing to work and suitable use of land. If you have these 3 elements in your community, and you create your own alternative or complimentary monetary system, you will find that you can create wealth, regardless of the state of the global economy.
The current economic crisis has renewed interest in the need for global monetary reform. Only after the fundamental causes of systemic economic failures are eliminated will evolution towards a sustainable and socially just global economy become feasible.
But how should the monetary system be reformed? What should new money be like, what purposes should it meet and what functions should it perform? The ultimate aim of the First International Social Trasformation Conference on Energy Currency is to place the study of alternative monetary systems within mainstream economic thinking and put global monetary reform onto the political agenda.
- Alternative monetary models
- Input-output models (embodied energy and water)
- Energy economics
- Sustainable money and sustainable economy
- Complementary currencies
- Ethics of financial relations
- Economic philosophy of money
- Culture of money
Questions to be answered in the Conference Resolution:
- Why do we need an alternative monetary system?
- Should the money be nationalized or privatized?
- Which scale is optimal for currency: local, national, global or sectoral?
- Is commodity backing necessary for money?
- Is an energy unit better for economic accounting than monetary unit?
- Global energy-backed supplementary currency: pro’s and contra’s.
- How can modern technologies enhance the efficiency of money?
- How will the economy react to the alternative currency?
- What are the best examples to benchmark?
- What steps are political authorities required to take to implement the new currency model?
The most difficult things to see are often those which are before our very eyes
Everyone knows what money is. We use it everyday of our life in this modern world to earn our keep and to pay for things we want or need. Yet, at the same time, there is something about these pieces of paper or metal that remains wholly hidden from us in plain sight. It is like a magicians trick that the everyday user is both aware and unaware of different aspects of it. In fact, this balance of awareness and ignorance is vital for its very survival, for as Henry Ford once said:
“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Use the mindmap above to explore these alternative systems. It’s up to the grassroots to adopt these changes locally, thereby compelling the government to listen. In a world of government where officials by-and-large act out of self-interest, it is the only way practical democracy can work.
Benjamin Franklin’s model of Paper Money
Ironically, the solution to our problem lay in the very origin of the modern money system itself. For our modern money system finds its roots in Benjamin Franklin advocacy for paper currency centuries ago. His advocacy was based upon sound principles which were applied during his lifetime and resulted in widespread social beneficiation. However, over the past few centuries, human greed has led the monetary system in the opposite direction of its founding fathers.
Dr. Robert Bowman of The Patriots movement, wrote about Franklin’s fateful meeting with the Iroquois and the social impact of the Colonial Scrip that Franklin championed is nicely summarized by John G Root here. Below is a selected reproduction from Bowman and Root’s website:
Benjamin Franklin attended an Iroquois Nation Pow Wow when he was a young man and was very inspired by the separation of powers he found in their governance, which was an inspiration for our republic. While they were in the midst of the pow-wow, a young brave came in loaded down with wampum, and laid it all at the feet of the Big Chief. Franklin asked the Chief what was going on, and the Chief replied:
“Every year, we distribute wampum to the Chiefs of the nations. They distribute it to the chiefs of the tribes, who distribute it to the chiefs of the families, who make sure that everyone gets enough wampum to meet their needs and to allow them to give gifts at all of our many ceremonies during the year. Everyone must have enough wampum to allow for a free exchange of goods and services. That way there is always prosperity. There must be no poverty among the people, whether young or old, and no embarrassment at not being able to be generous in gift-giving. It’s a matter of dignity.”
he chief recognized the question Ben Franklin had and explained to him that in Indian culture wampum is not money, but is used to make flags and belts to commemorate and remember all the events and gifts that are given during the year. “Of course, there always has to be enough wampum to make all the ceremonial mementos we use to honor our gifts to each other.” Ben Franklin realized in that instant that “There always has to be enough money for all the transactions the people want to make”. He became a major advocate of fiat paper money, called Colonial Scrip, and attributed the prosperity the colonists enjoyed, to its use.
When Franklin was in England representing the colonists he was dismayed to discover the unemployment and poverty and alms houses and debtors prisons. It was explained to him that there was a population explosion and too many people without enough work. He wrote:
“There is abundance in the Colonies, and peace is reigning on every border. It is difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort prevails in every home. The people, in general, keep the highest moral standards, and education is widely spread… We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”
This was not the case in England, which had the Bank of England and a debt based monetary system in place – and where debtors who could not afford to pay their debts were often thrown in jail. There was plenty of poverty in the streets of London and elsewhere. Here, Franklin explains the difference between England and her colonies:
“In the colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and have no interest to pay to anyone… You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury.”
Soon enough, however, the Bank of England had Parliament impose restrictions on the Colonies’ issuance of Colonial Scrip. The first law was enacted in 1751, with more restrictive measures in place by 1763. Colonial Scrip became illegal tender, and British Parliament declared that all taxes could only be paid in coin. Poverty and unemployment began to plague the colonies just as it had in England, because the operating medium had been cut in half and there were insufficient quantities of money to pay for goods and work. Indeed, this was the cause of the Revolutionary War, and not the Stamp Act or a tax on tea, as is taught in most history books.
“The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.” – Benjamin Franklin
John Rutledge was the chair of the committee that drew up the US Constitution. Rutledge proposed they model the new government they were forming along the lines of the constitution of the Iroquois League of Nations, which had been functioning as a democratic government for hundreds of years, and which he had observed in Albany. While there were many desirable, as well as undesirable, models from ancient and modern histories in Europe and what we know now as the Middle East, Rutledge and the committee agreed that only the Iroquois had a system that seemed to meet most of their demands for the new constitution.
So there it is plain as day. There can’t be too many people or too little work. Only too little money. Just think for a minute about the poverty in the world. Are there too many people who are unwilling to put their capacities in the service of the community and thus provide everything that the community needs? Or, is there too little money for them to be able to do this? If you look at the goods and services that are available and think about how you want to contribute to the mix then you realize how important credit is. You need money up front so you can put yourself in a position to do what you want to do to meet the needs you see which are unmet and which you are particularly suited to provide. Should the community capitalize your capacities? Does everyone have a right to the capital their capacities warrant? If you agree, then it is easy to see that issuing the currency debt free and interest free is an essential community function. If the community (town, county, state, region or nation) gives too much credit then prices increase and if too little credit is given then productive capacity is limited and prices may go down. Just the right amount of credit and everyone is prosperous and prices are stable. It really is this simple.Once we have the will to issue a debt and interest free currency there are numerous ways in which we could go about it. Increase the use of Berkshares until there are enough transactions to decouple from the dollar and issue credit in Berkshares based on a locally available resource, such as hydro power from the Housatonic, or locally generated hydroxy gas, etc. Berkshares would be accepted everywhere because they can be redeemed, not for dollars, but for power..