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Money. Monetary reform and complementary currencies. What i s Money ?. Functional Definition – what money does Money is a: Medium of exchange Measure of value Store of value. These roles are incompatible.
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Money Monetary reform and complementary currencies
What is Money ? Functional Definition – what money does Money is a: • Medium of exchange • Measure of value • Store of value
These roles are incompatible • Amongst money's many functions, that of the lubrication of a fully functioning economy is the most basic. • This role may be incompatible with the role money now plays as a commodity in international speculation. From the perspective of the local economy, the use of money as a global commodity is entirely destructive. • Money is sucked out of the local economy to areas of the world where it can attract a higher rate of return as investment capital. • The inadequate supply of money that remains condemns certain areas to a permanently low level of economic activity.
Money is fiat money • Not supported by collateral • Not related to economic activity • 1944: Bretton Woods: dollar acceptable as backing • Since 1971 simply created by fiat • Importance of reserve currencies
Money and globalisation • The finance industry lies at the heart of globalisation. Of the total international transactions of a trillion or so dollars each day, 95 per cent are purely financial. Globalisation in not about trade; it is about money. • ‘the financial system now completely dominates the real economy of goods and services
Money and growth • Money is created as debt • Hence pestering by banks to borrow money • Hence massive increase in debt • As money supply increases economy must grow to match it • Hence obsession with economic growth • Hence destruction of the planet
Role play instructions • How is the present money system limiting your life? • How can you imagine changing your life for the better if money were not object? • What skills could you share and benefit from from others if you did this outside the money system? • What would be the limitations of a local community money system in your life situation?
Economic disaster in Argentina • As in many non-reserve-currency economies, Argentina suffers from being under-monetised • This makes it vulnerable to citizens’ exchanging their pesos for foreign reserve currencies or sending them overseas. • Exacerbated by the pegging of the currency to the dollar, which meant that once the dollar’s value began to rise on the foreign exchanges from 1995 onwards, Argentina’s exports became more expensive than those of competitor countries whose currencies could devalue against the dollar. • The financial crisis in Mexico in 1994, followed by those of the Asian Tigers, Russia and Brazil from 1997 to 1999 undermined confidence in Argentina’s ability to pay her sizeable external debt.
Anything can become money • Building firm IRSA was accepting grain as payment for luxury apartments in 2002 • By November the global corporate GM was prepared to accept cereal crops in payment for its pick-up trucks under an arrangement known as the Chevrolet Harvest Plan • Ford rapidly followed suit. Acceptable crops included soya, maize, wheat and sunflower. • Banks were prepared to lend farmers money to buy trucks, machinery, agrochemicals or seed in exchange for grain, which never left the silos but was sold on directly for export
Time banking in Wales • Coordinated by John Rogers at Newport
The Chiemgauer • Uses principle of demurrage • Electronic and paper money • Back one-for-one by euros • Can be exchanged back for a 5% fee • Accepted by 150+ shops
The Yamato Love Machine • A local electronic currency based on credit cards • Cards were given to 73,000 residents, each with 10,000 monetary units called ‘love’ already encoded • The loves can be used in exchange for discount at local shops or to buy second-hand goods advertised on the city government’s website • Loves can be earned in return for voluntary social welfare activities, advertised on the website.
