Re: [ox-en] Obstacles for Free Products?
- From: Michael Bouwens <michelsub2003 yahoo.com>
- Date: Mon, 14 Nov 2005 19:17:27 -0800 (PST)
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Autonomy on the other hand means basically
leaving real life.
Stefan, can you elaborate on this strong statement? Isn't autonomy-in-interdependence what we all want?? (instead of heteronomous alienation??)
Below, some info on currency reform, from issue 99 of my newsletter:
QUOTES
?We can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.?
- Bernard Lietaer, http://www.kuro5hin.org/story/2003/8/26/172939/637
- Sylvio Gesell on ?why money should rot?
?Commodities in general, straw, petrol, guano and the rest can be safely exchanged only when everyone is indifferent as to whether he possesses money or goods, and that is possible only if money is afflicted with all the defects inherent in our products. That is obvious. Our goods rot, decay, break, rust, so only if money has equally disagreeable, loss-involving properties can it effect exchange rapidly, securely and cheaply. For such money can never, on any account, be preferred by anyone to goods. Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes, newspapers, iron and ether. For such money is not preferred to goods either by the purchaser or the seller. We then part with our goods for money only because we need the money as a means of exchange, not because we expect an advantage from possession of the money.?
(http://www.ascentofhumanity.com/book/7-02-The_Currency_of_Cooperation.html )
- Bernard Lietaer, on ?98% of money streams being speculative?
?Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. [...] Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression.?
Source: Bernard Lietaer?s book, ?The Future of Money?, cited in http://www.kuro5hin.org/story/2003/8/26/172939/637
P2P Monetary Issues (0): Reforming the system: demurrage-based currencies http://www.ascentofhumanity.com/book/7-02-The_Currency_of_Cooperation.html
There seems to be a consensus amongst monetary reformers that a key change would be the replacement of interest with the system of demurrage:
?As a matter of fact, there are money systems that encourage sharing not competition, conservation not consumption, and community, not anonymity. Pilot versions of such systems have been around for at least a hundred years now, but because they are inimical to the larger patterns of our culture, they have been marginalized or even actively suppressed. Meanwhile, many creative proposals for new modes of industry such as Paul Hawken's Ecology of Commerce, and many green design technologies, are uneconomic under the current money system. The alternative money systems I describe below will naturally induce the economies described by visionaries such as Hawken, E.F. Schumacher, Herman Daly, and others. They will also reverse the progressive nationalization and globalization of every economic sector, revitalize communities, and contribute to the elimination of the "externalities" that put economic growth at odds with human happiness and planetary health. Given
the
determining role of interest, the first alternative currency system to consider is one that structurally eliminates it. As the history of the Catholic Church demonstrates, laws and admonitions against interest are ineffective if its structural necessity is still present in the nature of the currency. A structural solution is needed, such as the stamp-scrip system proposed by Silvio Gesell in The Natural Economic Order. Also known as demurrage, Gesell's "free-money" (as he called it) bears a form of negative interest. Every week a stamp costing a tiny fraction (say 0.1%) of the currency's denomination must be affixed to it, in effect a "user fee" or a "maintenance cost"; another way to look at it is that the currency "goes bad"--depreciates in value?as it ages. If this sounds like a radical proposal that could never happen, it may surprise you to learn that Gesell's ideas were praised by no less an authority than John Maynard Keynes himself. What's more, the sys
tem has
actually been tried out and it worked!
Although demurrage was applied as long ago as Ancient Egypt in the form of a storage cost for commodity-backed currency, the best-known example of instituted in the town of Worgl, Austria, in 1932 by its beloved mayor Uttenguggenberger. To remain valid, each piece of this locally-issued currency required a monthly stamp costing 1% of its face value. Instead of generating interest and growing, accumulation of wealth became a burden?much like possessions are a burden to the nomadic hunter-gatherer. People therefore spent their income quickly, generating intense economic activity in the town. The unemployment rate plummeted even as the rest of the country slipped into a deepening depression; public works were completed, and prosperity continued until the Worgl currency was outlawed in 1933 at the behest of a threatened central bank.
Demurrage has a number of economic, social, and psychological effects that are highly relevant to our discussion. Conceptually, demurrage works by freeing material goods, which are subject to natural cyclic processes of renewal and decay, from their linkage with a money that only grows, exponentially, over time. As established in Chapter Four, this dynamic is what is driving us toward ruin in the utter exhaustion of all social, cultural, natural, and spiritual wealth. Demurrage currency merely subjects money to the same laws as natural commodities, whose continuing value requires maintenance.?
2. The two main planks of currency reform, explained by Thelma Weeks:
URL = http://www.margritkennedy.de/english/articles/thelma.html
First of all the proposals address two main problems within today's monetary system -
1. The right that Central Banks have to issue money at will, almost without restrictions and without any backing. This right, the uncovered loans and the ensuing interest will have to go.
2. The new system will no longer be built on growth. Without the burden of interest companies no longer need their customers to pay for their loan repayments (an estimated 30% on every article being bought in Europe). This will get rid of inflation and companies can concentrate on production that meets a real need.
The new financial system incorporates the numerous complementary currencies (approximately 5000 at the last count) to sustain the co-operative trade system, alongside the present currencies for competitive global trade. Complimentary currencies - currencies created and issued by co-operating people, used for exchange within a defined context and interest free - are to used wherever appropriate to stimulate local, regional and national trade. They are seen as especially useful to achieve specific aims in specific areas. A lot of these complimentary currencies already exist - e.g. air miles, bonus points barter schemes, LETS, Time Dollars and the Japanese National Health currency. It is further proposed that there is a demurrage (opposite of interest) for currency which is not in circulation('savings accounts') to encourage the use of currency as an active tool for trade and exchange. Money should have the same function in the societal body as blood has in the hum
an body.
When it gets stuck it causes problems. For that reason the demurrage has historically proved its viability. The new system will address many existing challenges in our society and have an immediate effect on poverty, starvation and inequality. Not to mention the damage to ecosystems. It will be part of the present emerging paradigm/consciousness shift from fear and insecurity to confidence and trust of a large part of humanity to implement these proposals. If everyone understands where the present system doesn't work and why and more importantly what it obstructs or undermines then we can all focus on the alternatives and the successful experiments that are already taking place and build on them.
3. An example of Demurrage: Worgl
URL = http://www.worldchanging.com/archives/003575.html
?The greatest success stories of complimentary currencies are in picking up ravaged communities and helping to get them on their feet. A primary example that Lietaer and Kennedy cite is the Worgl, a currency created by a small Austrian town during the great depression. The town of Worgl had high unemployment and lacked the money to pay for its normal infrastructure services, so they killed two birds with one stone by printing a local currency they could pay people to do civic work with, and which could only be used in the local area. They also made the value of the currency time-decaying (or "demurring", as it's properly called) by 12% per year, which caused people to spend it rapidly--increasing the "velocity of money", which in a sense multiplies the amount of money in the community. In about one year, Worgl dropped its unemployment rate by 25% and increased public-works investment by 220%, while the rest of Austria slid further into depression. The ex
periment
was only stopped because the Austrian government was worried that its control over the national money system would be threatened. Today in the Brazilian favela of Palmeira, a local currency called the Palma is helping to lift the residents out of poverty; it is working much more slowly than the Worgl did, but it does not circulate as much because its value does not demur over time.?
4. The Monetary Reform Reading List, by Thelma Weeks
For further reference I would recommend the following books by authors who were present or prepresented at the workshop:
1.' Interest and Inflation and Free Money', Margrit Kennedy, the second edition ISBN 0-9643025-0-0 (1995) available from Seva International, Okemos, Michigan: It sets out the problem as it was first conceived by her. ( Silvio Gesell published his major work in German in 1918 called ("Natural Economic Order")
2.'The Little Earth Book' - James Burger ISBN 1-901970-23-X, available from Alastair Sawday
Publishing UK. Tel: [PHONE NUMBER REMOVED] (0)1275 464891 Fax: [PHONE NUMBER REMOVED] (0)1275 464887 Email: alastair sawday.co.uk
This skilfully illustrates the link between the destruction of our planet (environment and resources)and the link to the monetary system. You will find the ideas/theories of many of the participants to the conference briefly explained in this delightful little book with references to the complete texts.
3.'The Ecology of Money', Richard Douthwaite, (Schumacher briefings 4 ISBN1 870098 81 1).
4.'Transforming Economic Life', James Robertson, (Schumacher briefings 1 ISBN 870098 72 2)
5.'New Money for Healthy Communities', Thomas Greco
6.'The Future of Money', Bernard Lietaer, available through www.amazon.com: This recently published book is not represented in the Little Earth Book and presents a clear, intelligent and easily understandable overview of the present system and its challenges. It introduces the concept of a global currency, the Terra, for co-operative exchange. The book was launched in the House of Commons; see Positive News Spring 2001.
7.'Beyond Globalization', Hazel Henderson (1999) ISBN 1-56549-107-6, Kumarian Press - for the New Economics Foundation.
8.'Recreating Money', Joseph Huber and James Robertson, London 2001
These books offer encouraging reading - even though awareness is created about all the issues that should concern every human being. For the first time I feel that there is a solution in sight and that there are ways in which we can contribute to the outcome - in time or after the event of a collapse. If nothing else we can all help to create awareness of the existing issues and the solutions for when the world needs them and before anything else we can deal with our own emotional blocks around money and abundance consciousness!!!!!!
P2P Monetary Issues (1): Reforming the system: abolishing seigneurage
http://onthecommons.org/node/699
Seigeurage is the privilege of commercial banks to create money. It is a privilege that should be abolished.
1. Herman Daly
?Daly broached an area of social wealth that is rarely explored -- the private privilege of issuing money, called seigniorage. Historically, this was the king's prerogative that was later passed to the commercial banking sector. Some 95 percent of the US's money supply exists in the form of demand deposits and loans made by banks. Under our system of fractional reserve banking, which allows banks to retain only a small fraction of money on hand as a reserve against money lent out, banks are able to reap enormous private profits through their seignorage privileges. Why not gradually raise the reserve requirement to 100 percent, asked Daly, and reap some public gain from the ability to create money? Daly conceded he might be regarded as a "monetary crank" in making this proposal, but cited some illustrious economists of the 1920s who agreed with him. (Note: James Robertson, a progressive-minded economist in Great Britain, has also proposed reforms along th
ese same
lines. See his speech, "The Alternative Mansion House Speech," by James Robertson of the New Economics Foundation, London, and his report, with Joseph Huber, "Creating New Money.")
2. Reforming the Seigneurage, James robertson
URL = http://www.neweconomics.org/gen/m6_i22_news.aspx
?The necessary reform is simple - but our minds should not be repelled by its simplicity! There are two sides to it.
(1) Central banks should create the amount of new non-cash money (as well as cash) they decide is needed to increase the money supply. They should credit it to their governments as public revenue. Governments should then put it into circulation as public spending. In deciding how much new money to create, central banks should operate with a high degree of independence from their governments - as the Monetary Policy Committee of the Bank of England now does.
(2) It should be made illegal for anyone else to create new money denominated in the official currency. Commercial banks will then be excluded from money creation. They will be limited to credit-broking as other financial intermediaries are - borrowing, but no longer creating, the money they need to lend.
This reform will restore "seigniorage", in a form adapted to the conditions of the Information Age. That is to say, it will restore the prerogative of the state to issue money, and to capture as public revenue the income that arises from issuing it, in an age when most money has become information. Originally, seigniorage was the revenue enjoyed by monarchs and local rulers from minting coins. It reflected the fact that the coins were worth more than the costs of producing them. As, over several centuries, the physical characteristics of money have changed from metal to paper to electronic bits and bytes, and as banking practices have developed, the relative importance of that original source of seigniorage has gradually dwindled. Now that almost all money takes the form of electronic entries in computerised bank accounts, extending the traditional principle of seigniorage to non-cash money will correct the anomaly that has grown up over the years.
The arguments for this monetary reform are not limited to the contribution it will make to public revenue, considerable though that will be. As the report explains, it will have beneficial social and environmental effects. It will be very beneficial for the economy as a whole. For example, it will tend to bring about lower interest rates and lower inflation; and it will tend to create greater economic stability, by enabling the central bank to smooth out the peaks and troughs of business cycles more effectively than it can do today. It will also help to clarify monetary statistics, monetary definitions and monetary terminology. This is a crucial point. The distinction between means-of-payment money and store-of-value money - between the functions of sight deposits and savings deposits - has become blurred in recent decades. The result is that the concepts and definitions on which monetary understanding and policy-making are based are now even more obscure
than
they were before. It is not at all clear what is now included in the "money supply". The different definitions of money - M0, M1, etc, up to M4 - are abracadabra to most people. One might imagine that a monetary priesthood had deliberately set out to conceal from citizens and politicians of democratic countries how the money system works, and how it could be made to work better for the common good. The proposed reform will mean that the whole stock of national currency circulating in the economy will have been issued by the central bank. It will include all the non-cash money in everyone?s current accounts, together with the cash which everyone holds. It will be easy to calculate how much of it there is. It will no longer be necessary to juggle with M0, M1, M2, M3, M3 extended, M4, and so on. There will simply be the one amount of plain money M. Everyone - and that includes politicians, officials, bankers and monetary experts, as well as a growing number of citi
zens,
bank customers and taxpayers - will be able to understand better than today how the system works. As befits the citizens of a democracy, we will be better able to evaluate and discuss the monetary and financial policies and policy options which are presented to us. This reform will mark an essential further step towards what, at the Mansion House last year, Chancellor Gordon Brown called "transparency in policy-making, involving an open system of decision-making in both monetary and fiscal policy".
3. More Information
The Creating new Money report is at http://www.neweconomics.org/gen/z_sys_PublicationDetail.aspx?PID=81
A shorter review, at http://www.prosperityuk.com/prosperity/revus/crnewm.html
A summary here, at http://www.prosperityuk.com/prosperity/articles/sumsr.html
FAQ ON DEBT FFEE money, at http://www.prosperityuk.com/prosperity/articles/cmfaqs.html
And check these many interesting monetary reform links, at http://www.prosperityuk.com/prosperity/links/links.html
Books and Reports:
Creating New Money is available for £7.95 from The New Economics Foundation, 3 Jonathan Street, London, SE11 5NH. Tel: 0207 820 6300.
PROSPERITY: Freedom from Debt Slaveryis a 4-page monthly journal which campaigns for publicly-created debt-free money. PROSPERITY is edited and published by Alistair McConnachie and a 12-issue subscription is available for £15 payable to PROSPERITY at 268 Bath Street, Glasgow, Scotland, UK, G2 4JR. Tel: 0141 332 2214; Fax: 0141 353 6900, admcc admcc.freeserve.co.uk http://www.ProsperityUK.com
The Grip of Death: A study of modern money, debt slavery and destructive economics by Michael Rowbotham, [Jon Carpenter Publishing, 1998] and Goodbye America! Globalisation, debt and the dollar empire by Michael Rowbotham, [Jon Carpenter Publishing, 2000] both available from PROSPERITY.
P2P Monetary Issues (2): Reforming the system, for a systems approach http://www.prosperityuk.com/prosperity/revus/gaian.html
This book uses systems theory to analyse the current monetary system and suggest radical changes in its ?protocol?. From a book review at the Prospertity site.
Gaia is the name of the Greek goddess of Earth. On the 10th June a new book, Gaian Democracies: Redefining Globalisation & People-Power by Roy Madron and John Jopling was launched at the London School of Economics.
?To illustrate the power of thinking in systems terms, John then took seven propositions about systems and used them to look at two different systems: the Global Monetocracy, today's highly dysfunctional system; and Gaian Democracy, a system designed with justice and sustainability in mind. The propositions were: thinking in systems terms means seeing whole systems; all human systems have a purpose; systems are self organising and self generating; all systems are always changing; systems go through various stages; systems sometimes get into a vicious spiral; and, while the imperative for change may come from outside the system, change takes place within it. John argued that the Global Monetocracy is a single system with money growth as its purpose; that it is self-organising, always changing and moving through different stages; and that it is currently in a vicious spiral. This, he said, is the system in which we are living today. By viewing the system i
n this
way we are able to make sense of things that would otherwise be baffling, for example: why things are getting worse on so many fronts; why the authorities are failing to do anything about it; and why currently fashionable ways of attempting to influence politicians and their corporate partners are so unsuccessful. He emphasised that neither individuals nor any particular group within society are to blame. Rather the system as a whole is at fault.
So something new is required -- a strategy for reconfiguring the system as a whole -- and this is where Gaian Democracy comes in. This draws on the latest developments in understanding how systems change, and makes use of well-tested processes for bringing about change. In this way, human societies at all levels, from local to global, can learn to cope with the highly complex and difficult situations they face.?
P2P Monetary Issues (3): Reforming the system: Lietaer?s green convertible currency http://www.transaction.net/money/gc/gc01.html
Bernard Lietaer: ?Many countries of the world face a fourfold dilemma. They are experiencing unemployment, inflation, and ecological degradation, and they lack a convertible currency. They produce some raw materials for which an international market exists, but because of the burden of debt servicing and a soft currency, their dilemma yearly becomes more acute. This article proposes a solution in the form of a new convertible currency, that I call New Currency. This comprises a combination of two familiar concepts: stamp scrip and currency backed by a basket of commodities.?
1. Stamp scrip?s and ?basket of commodities? explained
?Stamp scrip is a medium of exchange characterized by a small monthly "user fee" or "negative interest" charge. This fee was typically levied by requiring a small stamp to be affixed to the back of the bill each month to revalidate it. The user fee gives an incentive to the bearer not to hoard this currency. Its practical and demonstrated economic effects include strong, positive impacts on employment creation and on inflation control. It also provides structural support for ecologically sound economic growth. It has been tested and used with remarkable success in a variety of cultures and historical settings, including Western Europe as recently as the 1930s. The second concept--a currency backed by a predetermined basket of commodities--is more familiar. An original aspect of my proposed plan is that a country's central bank would guarantee delivery of the value of the basket but would remain free to deliver it in the form of any mix of the commoditie
s
included in it. This approach provides unusual stability for the international value of the currency, while guaranteeing substantial flexibility in the way the country fulfills its commitments. The stamp scrip concept actively promotes internal economic stability and employment growth, while the basket of commodities concept ensures immediate convertibility of the national currency and the international stability of its purchasing value. These two concepts fit together by equating the negative interest rate of the stamp scrip with the approximate costs of storing, insuring, and delivering to their respective international markets the commodities in the basket.?
2. The Terra Currency Proposal
URL = http://www.margritkennedy.de/english/articles/bernard.html
?One proposal is the Terra (Latin for Earth), a supra-national currency whose unique characteristics would make long-term financial thinking automatically rewarding, while assisting in stabilizing the world economy. Characteristics include:
1. The Terra is defined as a standard basket of the most important commodities and services in the global market for which futures markets can be established (e.g. oil, wheat, copper, etc., and some standardizable services, or for example Carbon Emission rights). Because it is fully backed by a physical inventory of commodities, the Terra would be a very robust international standard of value.
2. The Terra is designed as an inflation-proof currency. Inflation is always defined as the changes in value of a basket of goods and services. Therefore, by selecting the appropriate ingredients in the basket, the Terra can be made inflation-proof.
3. The Terra currency is complementary to conventional national currencies, operating in parallel to, and without replacing them. It basically would amount to introducing some standardization to the international countertrade activities which grow by 15% per year, three times faster than conventional currency denominated trade.
4. The cost of storage of the physical commodities would be applied to the bearer of the Terra at an estimated 3.5-4% per annum). This makes the Terra a 'demurrage' charged currency (the opposite of a positive interest rate currency), and insures its use mainly as a trading device, as it costs the bearer to store or hold onto it. Therefore, it is beneficial to keep the Terra in circulation, which in turn benefits all.
5. The Terra is a public service project, with profits earned used to fund other projects for economic development globally.?
3. More Information
See also this text on Lets and monetary reform, at http://copsewood.net/writings/foundatn.html
Presentation of Bernard Lietaer?s book, ?The Future of Money?, at http://www.transaction.net/money/book/
Interview of Bernard Lietaer, at http://www.nexuspub.com/articles/2003/july2003/interview.htm
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