Obols or No Balls

While policy-makers struggle to increase the flow of money in stagnant national economies they fail to see that it is not the quantity of the money that is the problem but its quality. The imperialist currencies of dollar and euro were designed to serve the interests of elites, so we should not be surprised that they do nothing to support the livelihoods of citizens of countries the world over. In The Ecology of Money, Richard Douthwaite suggested a sophisticated multi-layered currency world, where different types of money played different roles. Although ignored at the time, this may be just the sort of proposal we need now to resolve the crisis in the global economy, and particularly the crisis in the Eurozone.

The structural flaw with the Euro was always clear to economists: a single currency means a single interest rate, a single price for money across a number of diverse econonomies. The overheating, subsequent bust and unpayable debts in Greeece, Spain and Ireland were bound to result from such a system from the start. For this reason the UK Greens campaigned hard against the Euro proposal as soon as its design and inevitable consequences became clear. Our policy was to support the Euro as a common currency rather than a single currency, and a shift to such a policy remains a viable option for the Eurocrats now, enabling them to save face by claiming that the Euro can survive with its membership intact, while allowing the countries of the periphery to escape ongoing suffocation.

So Greeks would still be able to spend Euros, and the tourism industry, for example, might continue to accept them. But the Greek government would initiate a new currency for the purposes of running its national economy (I would suggest that they not call it the Drachma). Governments need a currency in which they accept taxes, and they need to have control over this currency, Greece could issue Obols to pay the salaries of public-sector workers, and accept the same for payment of taxes. This would immediately liberate the country from the death spiral it is currently enduring. Traders would prefer to have Euros, but a currency which you can use to pay your taxes always has an intrinsic value and would be accepted faute de mieux.

Meanwhile Greek citizens are already finding creative solutions to the desperate shortage of currency: they are creating their own.  The best known example is the TEM (an acronym from the initials of the Greek phrase 'local alternative unit') which circulates widely in the Greek town of Volos.  The currency is a typical example of a community or complementary currency, circulating within a defined local economy. This system, like many LETS schemes in the UK today is run entirely electronically. It has provided a lifeline to many Greeks for whom the Euro is now unattainable. Its success provides evidence of the need to end the national and now international monopoloy over money and shift to a pragmatic policy of creating a number of moneys appropriate to the role that money should play in the economy: facilitation rather than strangulation.
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Community Currencies Invade Dark Towers of Davos

The global elite, the men we have come to know as the 1%, will be assembling soon in Davos, Switzerland to discuss the global economy over which they have so much power. This year's conference is organising under the rubric 'The Great Transformation: Shaping New Models'. It the reference to Polayni intended or accidental? It certainly gives intellectual scope to those of us who who seek to unwind some of the worst consequences of the original transformation from an embedded to a capitalist economy.

One idea that they will encounter is certainly a challenge to the centralised finance that has been such an important driver of the economic crisis. John-Paul Flintoff has published an article about alternative currencies in the mainstream business magazine CNBC Business, which he assures me will be distributed in hard copy to all Davos delegates.

Is capitalism compatible with barter? I would suggest not, but if there is a way to extract an unfair share of value from others' work, the Davos delegates are certainly the people to find it.
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Time for trade

There are many reasons to yearn for a relocalisation of our economies. Beyond the immediate importance of reducing the carbon dioxide emissions associated with the pointless transport of goods across vast distances when those goods could be made domestically, there is also the building of community that emerges when we engage in economic relationships, and the increased awareness of our environment that comes when we use its resources to meet our needs.

Although the barriers to rebuilding local economies seem great, they are in fact mainly mental barriers. We are no more useless than our ancestors: we could make the things we use in our everyday lives. The reasons we exploit Chinese people to do this work for us, leaving them poor and ourselves alienated and unskilled is merely because we go along with the rules of this economic game. We need to step outside the game.

One important first step is to think of what we do when we make useful things as a hobby rather than a job. If we operate according to the 'time is money' mantra of capitalism we would never do anything, since it will always be cheaper to buy stuff from a corporation that employed children poverty wages to make it somewhere in the Far East.

Next we need to decide what our role will be in the new local economy. It is no good bemoaning the loss of local economies and repeating how much you would like to buy more local products. If you are not a producer as well as a consumer the local economy will not happen. Deciding whether you are to become a forestry manager or a cosmetics manufacturer is necessarily a rather intuitive process! Go with your passions, backed up by a little smart thinking about unused local resources. If your product is made from something other people locally view as waste, so much the better.

And finally, you need to exchange with others locally. The Argentinian model of the barter market is useful for this. It is something like a table-top sale but where exchange takes place in local 'money' or coupons you have produced yourself rather than in pounds sterling. This recreates the genuine markets of old, and is a fun and sociable way to buy stuff, as well as meeting our ancesteral longing for flocking and foraging!

So get creative! Get active! And most of all: get trading!

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