Transcript Folie 1 - United Diversity

Why do we need regional
complementary currencies?
-Considerations from an integrative point of viewBoulder, 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
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
1.Sustainability
S=DxTxVxI
economy
social
ecology
1.Sustainability
finance
=DxTxVxI
Sustainability
Demography
Technology
Values
Institutions
1.Sustainability
S=DxTxVxI
Money is not a natural law,
but a convention, like a marriage contract or
club rules…
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 generation
4. tackling social issues (unemployment ect.)
5. coping with the energy carrier (non-renewable vs.renewable)
1.Sustainability
Indicators:
Ecological footprint
(Wackernagel and Rees,
1996)
Area that is needed for
resources/ emmissions of a
country
Index of ecological
sustainability
(World economic forum)
21 key factors
Index of human
development
(UNDP, 1999)
Considers life expectancy,
education and income
Index for sustainable
economic welfare (ISEW)
Corrected by positive and
negative factors (homework,
defensive costs).
Human Development Index
(HDI, 1997)
Life span, knowledge,
standards of living
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/
1. Sustainability
2. Towards an integrative approach
3. The money-system
4. Regional complementary currencies
5. Time for a change
Integrative
•Deregulation
•Defizit spending
•Privatization
•Increase of demand
•Liberalization
•Anticyclical
•Personal
responsibility
•Public goods
neoliberal
neokeyensian
•Conventionell money-system
•Growth paradigma
•Trickling down effect
•Start at the real economic sector
Integrative
•From inside out
•Enyclopedic knowledge
•Homo economicus
Integrative
Towards an integrative approach:
1. 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
Integrative
neoliberal
neokeyensian
Complementary currencies as
they mainly have
a „built in target“ (BIT)
1. Sustainability
2. Towards an integrative approach
3. The money-system
4. Regional complementary currencies
5. Time for a change
3. Money system
„The last beings to comprehend the nature of
water, are fish“
B. Lietaer, 2000
3. Money system
Money-system is not neutral:
• Functions of money
• National Monopoly
• Fiat-currency
storage reference
exchange
• interest
Control
scarcity
• Supply-profil:
sufficency
• Non-neutral
abundance
3. Money system
?
?
Moneysystem
3. Money system
1. Immanent instability: Lack of reference standard
procyclical, banking crisis
2. Force to grow: interest-rate driven credits, limited
options
Socialcapital
Income
Instability
Moneysystem
Concentration
Growth
Shortterm
3. Money system
Force to grow: Energy and labor*
65,00%
60,00%
Production-elasticity (PE)
Produktionsmächtigkeit
55,00%
50,00%
45,00%
40,00%
Costs
Kostenanteil
35,00%
30,00%
25,00%
20,00%
15,00%
10,00%
5,00%
0,00%
Energy
Labor
Energy
Production-elasticity ( PE)
Ratio of costs
Labor
44%
9%
5%
65%
*Henn, Lindenberger, Kümmel, 2000 (1960- 1989)
3. Money system
1. Immanent instability: Lack of reference standard
procyclical, banking crisis
2. Force to grow: interest-rate driven credits, limited
options
Socialcapital
Instability
3. Short-termism: Shareholder value, discounted
cash flow
Income
Moneysystem
Concentration
Growth
Shortterm
3. Money system
Physical
reality
tree
metaphor
€
1000
10 years
costs: 10€
€ 100
100 years
costs: 10€
Currency with a positve interst rate of
5% per year
Value calculated as from
today:
Financial investment with interest rate
€ 7,60
€ 61,39
Currency with an anchorage due of 5%
per year
Financial investment with anchorage due
Demurrage
Value calculated as from
today:
€ 167,02
€ 168.903,82
3. Money system
Physical reality
tree metaphor
€ 1000
10 years
costs: 10€
€ 100
100 years
costs: 10€
Currency with a positve
interst rate of 5% per
year
Value
calculated as
from today:
Financial investment with interest rate
€ 7,60
€ 61,39
Currency with an anchorage due of 5% per
year
Financial investment with anchorage due
Demurrage
Value calculated as from
today:
€ 167,02
€ 168.903,82
3. Money system
Physical reality
tree metaphor
€ 1000
10 years
costs: 10€
€ 100
100 years
costs: 10€
Currency with a positve
interst rate of 5% per
year
Value
calculated as
from today:
Financial investment with interest rate
Currency with an
demurrage of 5% per
year
Value
calculated as
from today:
€ 7,60
€ 61,39
Financial investment with demurrage
€ 167,02
€ 168.903,82
3. Money system
Physical reality
tree metaphor
€ 1000
10 years
costs: 10€
€ 100
100 years
costs: 10€
Currency with a positve
interst rate of 5% per
year
Value
calculated as
from today:
Currency with an
demurrage of 5% per
year
Financial investment with interest rate
€ 7,60
€ 61,39
Financial investment with demurrage
Short-term thinking is not intrinsic to human
nature, but created by today’s money system
NB: Historical Precedents: Dynastic Egypt
€ 167,02
Value
“Age of Cathedrals”
calculated as
Japan 16th century
from today:
€ 168.903,82
3. Money system
1. Immanent instability: Lack of reference standard
procyclical, banking crisis
2. Force to grow: interest-rate driven credits, limited
options
Socialcapital
Instability
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
Income
Moneysystem
Concentration
Growth
Shortterm
3. Money system
• Immanent instability
• Obligation to grow
• Short-termism
• Concentration
• income discrepancy
Socialcapital
Instability
• Erosion of social capital
Income
• The money-system is a non-neutral
system
• The money-system is encouraging
non-sustainable pathway
Moneysystem
Concentration
Growth
Shortterm
1. Sustainability
2. Towards an integrative approach
3. The money-system
4. Regional complementary currencies
5. Time for a change
4. complementary
conventional solutions:
•
•
•
•
•
(neo-) liberal:
Privaization
Deregulation
Liberalization
Indivdiual responsibility
•
•
•
•
•
Keyensian:
Defizit spending
Regulation
Anticylical
Financing public goods
•Changes within the
financial architecture
•Based on ádditional
growth
Introduction of
complementary
Innovations
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
4. complementary
- REGIONAL COMPLEMENTARY CURRENCIESRegion:
Currency:
Complementary:
Regional complementary currency:
4. complementary
Definition:
Region: geographic area where people tend to identify
with; between global and local neighborhood
(10.000 – 5 Mill.)
4. complementary
Definition:
Currency: „… is a convention, an agreement of a
community to use something as a medium of exchange“
B. Lietaer, 2001
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
4. complementary
Definition:
Regional complementary currencies:
„medium of exchange that mets regional unmet needs and
unused sources and operates parallel to the conventional
system“.
4. complementary
Complementary solutions:
•(regional) complementary currencies
5000
Elsewhere
4500
Japan
4000
Argentina
Principles:
• interest-free
• mutual credits of
real goods and services
• cooperation and peer
3500
Other Europe
3000
Italy
Other Europe
2500
Germany +
Austria
2000
1500
Benelux
control
• sufficient supply
1000
UK
99
20
00
20
01
20
02
98
97
96
95
94
93
92
91
90
89
88
87
86
85
0
84
Benelux
UK
Australia
New Zealand
500
USA + Canada
• chaordic-Principle
Germany +
Austria
France
USA + Canada
4. complementary
Basic Goals of complementary currencies:
1. partial decoupling from the globalization
2. financial liquidity for the region
3. „Built-in-target“: stabil and more sustainable
4. empowering the region (diversity, visibility)
5. Human resources are encouraged (social capital)
1. Sustainability
2. Towards an integrative approach
3. The money-system
4. Regional complementary currencies
5. Time for a change
5. Time for a change
S=DxTxVxI
Regional complementary currencies
can produce indirect susstainable
feed back loops……
5. Time for a change
conventional solutions:
Positive
•
•
•
•
•
(neo-) liberal:
Privaization
Deregulation
Liberalization
Indivdiual responsibility
•
•
•
•
•
Keyensian:
Defizit spending
Regulation
Anticylical
Financing public goods
sustainable
Introduction of
complementary
Innovations
feed-back
loops
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
5. Time for a change
finance
economy
social
ecology
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
5. Time for a change
What`s the case for business?
1. High fixed and low marginal costs
2. Added value > marginal costs of an additional costumer
3. For example: airlines, hotels, movies, restaurants
4. Unused resources and unmet needs
5. Time for a change
What`s the case for public financing?
1. cost – benefit analysis: factor 3-7
2. Increase of „social capital“ in the region
3. Decrease of public costs
4. f.ex.: social costs, sick days, crime rate,
5. Time for a change
Our future economy
Money and sustainability
The overlooked
connections
www.stefan-brunnhuber.de
www.futuremoney.de