The Future of Money: a new way to create wealth, work and a wiser world, by Bernard Lietaer, Century/Random House, 2001, ISBN  0 7126 8399 2
 

"Unless precautions are taken, there is at least a 50-50 chance that the next five to ten years will see a dollar crisis that would amount to a global meltdown."  Hmmm,... I first wrote this in May of 2001... now, updating things in July 2002 things are looking pretty dang wobbly.
 

Right. So what's this Global Economic Meltdown thing? What is this -- a scare tactic?
    Nope. The citation above is from Bernard Lietaer, a  former senior executive of the central bank of Belgium, from his book, "The Future of Money".  This is definitely not a scare tactic. He's trying to tell you something: your money system has some... ahhh... problems.
    For people who are generally concerned with social and environmental issues, why bother with economics? Lietaer's answer is that social and environmental breakdown are directly associated with how currency systems are designed. Most of us never consider the "design" of money because we are trained all our lives to think of money as something that simply exists in the environment like air and water. But monney systems are human systems designed, today, by corporate entrepreneurs for profit. For Lietaer, who was on the team that designed the European single currency, and has devoted considerable thought and research to the design of money systems, money is designed with features that affect how societies and communities function and their relationship to business, government and the environment.
 

For example he notes, "... the historian Arnold Toynbee concluded that only two common causes explain the collapse of 21 past civilizations: extreme concentration of wealth and inflexibility in the face of changing conditions." The cause: the design of their money.

Here are some design features of modern money worldwide.
 -  It is all fiat money: created from nothing
 -  All money is lent into existence
 -  All money is created with interest
 -  Money is the tool of nation states
.-..It's unstable; could self-destruct

These design features lead to:
 -  scarcity of money; leading inevitably to poverty and bankruptcies
 -  systematic competition
 -  the need for continuous economic growth
 -  concentration of wealth into the hands of a few individuals

To Lietaer's lists above I might add that all money today is created by central authorities. The implication is that, as even Milton Friedman has observed, it is dificult to keep self-interested parties out of the money creation process. That is to say, the creation of money today is a profoundly undemocratic process.
    Furthermore the money creation process has been privatized virtually around the world with a very few exceptions.

People concerned with social issues and the environment today, or issues of centralization and unaccountability of government, would do well to note these lists. Each item carries severe consequences, and Lietaer details them well. For a single example, the need for continuous economic growth, carried to its logical conclusion, means that environmental and social devastation will continue unchecked until the earth, in its entirety, looks like New York City. Such growth is clearly unsustainable but due to the design of our currencies it is unavoidable; it's mandatory.
    Says Lietaer, "The world's 200 largest corporations now control 28 percent of the global economy, yet need to employ only 0.3 percent of its population to achieve that" How is that possible? The design of the money system actively promotes it.
    As regards money being the tool of nation states, Lietaer observes, "... the US dollar has become the global currency. This arrangement has serious negative consequences for all participants, including the US." The recent collapse of the currencies of Thailand, South Korea, Indonesia, Malaysia, Mexico, Brazil, Argentina, Turkey and Russia are a direct result of dollar hegemony and the political, ecological, and social devastation are clear. These multiple crashes -- unknown in the history of the world --  are, he says, "signs of systemic dislocations of the official monetary system."
    In chapter six Lietaer describes how community breakdown is cause by a single major factor: "... both the cause of the problem and its solution can be found in money systems." This may sound simplistic but Lietaer's explanations are quite detailed and conclusive. Of course. Money systems of yesteryear were designed with features that served the creators of those systems: central governments and bankers. The new development on the horizon, Community Currencies, were/are designed by people interested in their local communities. (Actually Community Currencies are not new; they have been around for centuries and have been proven effective, if only greedy central governments would permit them)
 

SOLUTIONS
    The resolution Lietaer suggests is to be found in these "new monetary experiments" that have been cropping up all over the world: Community Currencies/Alternate Currencies. They deserve the support of the state and Lietaer explained why governments would benefit by giving that support. "My view is that these innovations offer realistic possibilities for gradually correcting the excesses and imbalances of the current system without revolutions or violence."
    And his citation of John F. Kennedy may be relevant here: "Those who make peaceful revolution imposible will make violent revolution inevitable." To which we might add, the sooner the changes are made the less drastic and disruptive they will be... doing nothing is not much of an option. Those who would be clever by moving the WTO meetings to Qatar or by developing new "anti-protest" weapons are demonstrating their opposition to peaceful revolution, and to democracy itself.

What is more, if the individuals and organizations now protesting the WTO, IMF, World Bank, GATS, FTAA, as well as the many other social, political, environmental and economic problems pulsing throughout the globe today, remain oblivious to the importance of the design of their own money systems, they are spinning their wheels.
    When the folks in the US wrote the Constitution, they paid little attention (perhaps intentionally, but that's another story) to money creation, saying only that it should be minted by the central government. Within 100 years they were swamped with monopolies and cartels. During the 1880s -1890s there was a revolt. Anti-monopoly, workers rights, and union rights legislation was passed, but nothing was said about the money system. Again within 100 years this progress was totally and utterly undone... because Nobody Was Paying Attention To The Money System.
    If tomorrow we could somehow change the laws to regulate corporations (like they were regulated 100 years ago) and we ignore the money system, then the same old problems will be back. If we could ban the WTO tomorrow and don't change the money system, the WTO will reincarnate itself sooner or later. In Lyon, France in 1998 protestors shut down the Multilateral Agreement on Investments (MAI) talks. Now -- today -- most of the conditions of MAI are written into the GATS agreement, ready to be implemented in December 2002. Why? Because Nothing Has Changed.
 

If you ignore your money system you are spinning your wheels.
 
 

LINKS
See Lietaer's website:
http://www.transaction.net

Strohalm's Links to Economic Change
http://www.strohalm.nl/bookmarks/alles.htm
 
 

Thoughts?

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