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Why do we need regional complementary currencies?

Why do we need regional complementary currencies? -Considerations from an integrative point of view- Boulder, Naropa, March 2004 www.stefan-brunnhuber.de. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change.

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Why do we need regional complementary currencies?

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  1. Why do we need regional complementary currencies? -Considerations from an integrative point of view- Boulder, Naropa, March 2004 www.stefan-brunnhuber.de

  2. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change

  3. 1.Sustainability Sustainability „...is a development, which fulfills the present needs without risking that future generations cannot fulfill their own needs...“. Brundlandt-Report, UN, 1986

  4. 1.Sustainability S = D x T x V x I

  5. 1.Sustainability social ecology economy = D x T x V x I finance Sustainability Demography Technology Values Institutions

  6. 1.Sustainability S = D x T x V x I Money is not a natural law, but a convention, like a marriage contract or club rules…

  7. What does sustainability means from a financial perspective?1. to achieve a long term- perspective (SHV)2. closing the income gap (military conflicts, life expectance)3. covering the debth load by one generation4. tackling social issues (unemployment ect.)5. coping with the energy carrier (non-renewable vs.renewable)

  8. 1.Sustainability Indicators:

  9. 1.Sustainability • ISEW: • Income Inequality • Domestic Labour • Health • Education • Services from consumer durables • Air pollution • Depletion of resources • Cost of climate change • Costs of ozone depletion • Other Factors ? http://www.foe.co.uk/campaigns/sustainable_development/progress/

  10. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change

  11. Integrative • Deregulation • Privatization • Liberalization • Personal responsibility neoliberal neokeyensian • Defizit spending • Increase of demand • Anticyclical • Public goods • Conventionell money-system • Growth paradigma • Trickling down effect • Start at the real economic sector

  12. Integrative • From inside out • Enyclopedic knowledge • Homo economicus

  13. Integrative Towards an integrative approach: • Helicopter view • 2. Less affected by the given models • 3. Looking for overlooked connections • 4. bring individual responsibility • and public goods together F. Vester, 2002, K. Wilber, 2001

  14. Integrative neoliberal neokeyensian Complementary currencies as they mainly have a „built in target“ (BIT)

  15. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change

  16. 3. Money system „The last beings to comprehend the nature of water, are fish“ B. Lietaer, 2000

  17. 3. Money system storage reference exchange Control Money-system is not neutral: • Functions of money • National Monopoly • Fiat-currency • interest • Supply-profil: • Non-neutral scarcity sufficency abundance

  18. 3. Money system ? ? Money- system

  19. 3. Money system • 1. Immanent instability: Lack of reference standard • procyclical, banking crisis • 2. Force to grow: interest-rate driven credits, limited • options Social- capital In- stability Money- system Income Growth Concen- tration Short- term

  20. 3. Money system Force to grow: Energy and labor* Energy Production-elasticity (PE) Costs Labor Energy Labor Production-elasticity ( PE) 44% 9% Ratio of costs 5% 65% *Henn, Lindenberger, Kümmel, 2000 (1960- 1989)

  21. 3. Money system • 1. Immanent instability: Lack of reference standard • procyclical, banking crisis • 2. Force to grow: interest-rate driven credits, limited • options • 3. Short-termism: Shareholder value, discounted • cash flow Social- capital In- stability Money- system Income Growth Concen- tration Short- term

  22. 3. Money system Physical reality tree metaphor 10 years € 1000 € 100 costs: 10€ 100 years costs: 10€ Currency with a positve interst rate of 5% per year Financial investment with interest rate € 7,60 Value calculated as from today: € 61,39 Currency with an anchorage due of 5% per year Financial investment with anchorage due Demurrage € 167,02 Value calculated as from today: € 168.903,82

  23. 3. Money system Physical reality tree metaphor 10 years € 1000 € 100 costs: 10€ 100 years costs: 10€ Currency with a positve interst rate of 5% per year Financial investment with interest rate € 7,60 Value calculated as from today: € 61,39 Currency with an anchorage due of 5% per year Financial investment with anchorage due Demurrage € 167,02 Value calculated as from today: € 168.903,82

  24. 3. Money system Physical reality tree metaphor 10 years € 1000 € 100 costs: 10€ 100 years costs: 10€ Currency with a positve interst rate of 5% per year Financial investment with interest rate € 7,60 Value calculated as from today: € 61,39 Currency with an demurrage of 5% per year Financial investment with demurrage € 167,02 Value calculated as from today: € 168.903,82

  25. 3. Money system Physical reality tree metaphor 10 years € 1000 € 100 costs: 10€ 100 years costs: 10€ Currency with a positve interst rate of 5% per year Financial investment with interest rate € 7,60 Value calculated as from today: € 61,39 Currency with an demurrage of 5% per year Financial investment with demurrage € 167,02 Value calculated as from today: € 168.903,82 Short-term thinking is not intrinsic to human nature, but created by today’s money system NB: Historical Precedents: Dynastic Egypt “Age of Cathedrals” Japan 16th century

  26. 3. Money system 1. Immanent instability: Lack of reference standard procyclical, banking crisis 2. Force to grow: interest-rate driven credits, limited options 3. Short-termism: Shareholder value, discounted cash flow 4. Concentration: high capital stock, subsidied 5. Income disparity: from labor to capital life time expectance 6. Erosion of social capital: selection of behaviors Social- capital In- stability Money- system Income Growth Concen- tration Short- term

  27. 3. Money system • Immanent instability • Obligation to grow • Short-termism • Concentration • income discrepancy • Erosion of social capital Social- capital In- stability Money- system Income Growth Concen- tration Short- term • The money-system is a non-neutral • system • The money-system is encouraging • non-sustainable pathway

  28. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change

  29. 4. complementary conventional solutions: Introduction of complementary Innovations • (neo-) liberal: • Privaization • Deregulation • Liberalization • Indivdiual responsibility • Keyensian: • Defizit spending • Regulation • Anticylical • Financing public goods Stucture of the financial system • Extension of the Financial architecture • Regional complementary currencies • Instability • Compulsory growth pressure • Short-term priority • Income disparity • Concentration effect • Erosion of social capital • Changes within the financial architecture • Based on ádditional growth

  30. 4. complementary - REGIONAL COMPLEMENTARY CURRENCIES-Region: Currency: Complementary:Regional complementary currency:

  31. 4. complementary Definition:Region: geographic area where people tend to identify with; between global and local neighborhood (10.000 – 5 Mill.)

  32. 4. complementary Definition:Currency:„… is a convention, an agreement of a community to use something as a medium of exchange“B. Lietaer, 2001

  33. 4. complementary Definition: Complementary: Found in different disciplines (physics: Pauli, Heisenberg, psychology: C.G.Jung, Weizsäcker, Uexkuell, DNA-coding) General issues: Continuity and stability, semantic and syntax, content and form ect. Act as a “medium of exchange” in addition to the given system Not linked causally to each other, but run parallel and depend on each other Necessary to balance the whole system To match unused resources and unmeet needs

  34. 4. complementary Definition:Regional complementary currencies:„medium of exchange that mets regional unmet needs and unused sources and operates parallel to the conventional system“.

  35. 4. complementary Complementary solutions: • (regional) complementary currencies • Principles: • interest-free • mutual credits of • real goods and services • cooperation and peer • control • sufficient supply • chaordic-Principle

  36. 4. complementary Basic Goals of complementary currencies:1. partial decoupling from the globalization2. financial liquidity for the region3. „Built-in-target“: stabil and more sustainable 4. empowering the region (diversity, visibility)5. Human resources are encouraged (social capital)

  37. 1. Sustainability 2. Towards an integrative approach 3. The money-system 4. Regional complementary currencies 5. Time for a change

  38. 5. Time for a change S = D x T x V x I Regional complementary currencies can produce indirect susstainable feed back loops……

  39. 5. Time for a change conventional solutions: Positive sustainable feed-back loops Introduction of complementary Innovations • (neo-) liberal: • Privaization • Deregulation • Liberalization • Indivdiual responsibility • Keyensian: • Defizit spending • Regulation • Anticylical • Financing public goods Stucture of the financial system • Extension of the Financial architecture • Regional complementary currencies • Instability • Compulsory growth pressure • Short-term priority • Income disparity • Concentration effect • Erosion of social capital

  40. 5. Time for a change Indirect sustainable feed back loops: Economy: anticyclical, anti-inflationary, credits get cheeper, local liquidity, costs for transport, empowers regionalization central bank policy, deficit spending Social: social capital, population decreases, alternative values, discrimination, crime rate, less geopolitical wars, sick days, transparency Ecology: long term-thinking, alternative technologies social ecology economy finance

  41. 5. Time for a change What`s the case for business?1. High fixed and low marginal costs2. Added value > marginal costs of an additional costumer3. For example: airlines, hotels, movies, restaurants4. Unused resources and unmet needs

  42. 5. Time for a change What`s the case for public financing?1. cost – benefit analysis: factor 3-72. Increase of „social capital“ in the region3. Decrease of public costs4. f.ex.: social costs, sick days, crime rate,

  43. 5. Time for a change Our future economy Money and sustainability The overlooked connections www.stefan-brunnhuber.de www.futuremoney.de

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