Complementary Currencies
Why do we need Monetary Innovation?
Workshop Leader: Declan Kennedy (for Dr Margrit Kennedy)
Format: Power point presentation
Summary
This workshop discussed the main misconceptions and problems associated with traditional monetary systems. It then covered the 3 main possible solutions, with examples of systems that have been successfully implemented around the world.
Key Points
- The 3 main misconceptions with traditional monetary systems: i) the growth misconception, that money with interest and compound interest can grow forever, ii) the transparency misconception, that interest is paid only when we borrow money – in fact we pay it in everything and iii) the fairness misconception, that everyone is treated equally, when in fact there are large disparities.
- The 3 main problems as a result of these: i) continual inflation ii) widening gap in economic indicators (net income is reducing in relation to GNP) and iii) monetary instability (everything based on speculation and a huge bubble ready to pop)
- Solution 1: Interest free money. The Worgl Example – in 1933 the mayor of Worgl printed his own work certificates to pay workers. The certificate lost 10% of its value for each month which gave the incentive to spend (i.e. a circulation fee instead of interest). The result was a decline in unemployment, an increase in the town’s wealth and an increase in public works investment.
Solution 2: Interest free savings and loan systems. JAK has been running in Sweden for over 50 years. It started with 17 members and currently has 240,000 members. It demonstrates a good system of democratic control. They offer a 3 month free working space for people who want to come and see how to set up a similar system. Oscar Kjellberg is the man to contact, their website is http://www.jak.se/
- Solution 3: Complementary currencies i) Sectoral currencies e.g. Saber in Brazil currently under construction – a proposed 1% surcharge on all mobile phone bills to provide education vouchers for all 7 year olds. The differences between this and traditional currencies are that it is use instead of profit orientated, a limited instead of general acceptance, circulation incentive instead of interest and a democratic, transparent system which promotes community. ii) Regional currencies e.g. Chiemgauer in Germany, are based on vouchers. There is partial decoupling from the globalize economy, added value and services remain in the region, links strengthened between consumer and producer, reduces the need for transport and energy and the community owns essential public utilities.
For further information:
Interest and Inflation Free Money – Margrit Kennedy Regional Currencies – Margrit Kennedy, Bernard A Leitaer (soon to be retitled and published in the UK and US ‘Just Money, Just World’)
[Scribe: Julie]