Presentation on theme: "2004 Proutist Universal 1 Proutist Economic Development Community and Currency Dr. Michael Towsey."— Presentation transcript:
2004 Proutist Universal 1 Proutist Economic Development Community and Currency Dr. Michael Towsey
Proutist Universal Monetary Decentralisation The Future of Money – Bernard Lietaer –http://www.transaction.net/money/book/http://www.transaction.net/money/book/ Economic decentalisation requires monetary decentralisation. Each community should control its own money system.
Proutist Universal Money - Central versus Local Central bank Community money system Community bank
Proutist Universal Different Kinds of Money (1) Money is a community tool to catalyse community trading. There are many different kinds of money systems. Different money systems suit different purposes.
Proutist Universal Different Kinds of Money (2) Traditional money: –90% of money issued as interest-bearing debt; –created using the fractional reserve system. Producer currency. Stamp currency. Mutual credit.
Proutist Universal Producer Currencies (1) Form of commodity money. Workers are paid in money backed by output. Example 1 - 1920s Germany: –Hyper-inflation - a postage stamp cost billions of marks; –Miners were paid in money (wara) backed by coal; –Mine manager arranged for import of food that could be purchased with wara.
Proutist Universal Producer Currencies (2) Example 2 - 1960s Ireland: –Problem: a banking strike – no money to pay workers; –Dublin brewery paid its workers in beer vouchers; –Vouchers could be redeemed at local pubs for beer, money or other goods.
Proutist Universal Velocity of Money $1 can catalyse $10 worth of transactions. The velocity of money: –velocity = total transactions volume of money. Prout Principle: keep money rolling, i.e. increase velocity! How?
Proutist Universal Stamp Currency Community currency scheme started in Wörgl, Austria, in 1932. A small amount of money can exchange a lot of goods if it circulates rapidly (high velocity of money). Holder of a note had to buy a stamp each month. Therefore money spent quickly – no hoarding. Wörgl was first Austrian town to overcome unemployment.
Proutist Universal Unemployment and the Nazi Vote
Proutist Universal Local Enterprise Trading System LETS Founded in Canada – spread throughout world. LETS – an accounting system. For every credit there is a debit – zero sum. Mutual credit. Unit of money decided locally – bunya, reeky. Value tied to local currency – 1 bunya = $1 AUD. Facilitates multilateral exchange when bank money not available.
Proutist Universal Community Currency Taking Off !
Proutist Universal LETS, Maleny, Australia http://www.mena.org.au/lets/
Proutist Universal International Versions of LETS www.bartercard.com www.ebanctrade.com
Proutist Universal A Hierarchy of Currencies A hierarchy of communities requires a hierarchy of money systems. International trade: barter, mutual credit, Keynes plan National trade: traditional debt money, producer currencies Local trade: producer currencies, LETS currencies
Proutist Universal The South America Experience Curitiba bus tokens – favelas waste exchanged for public transport. Favela is a term commonly used in Brazil to describe areas such as shanty towns or slums.
Proutist Universal A South American Currency (1) Good or bad? Depends on what kind of currency and what for... A South American currency like the Euro? A new currency for a South American trade zone?
Proutist Universal A South American Currency (2) A South American currency like the Euro? Sweden rejected idea because... –shifts power from democratically elected governments to non- elected institutions such as the Central Bank; –erodes ability of member States to implement local solutions to their economic problems; –makes it easier for TNCs to accumulate wealth. One year after adopting the euro, Portugal was forced to make massive cuts in public services and wages. Unemployment rose in Germany and France every month after adoption of the euro.
Proutist Universal A South American Currency (3) New mutual credit currency for a South American trade zone? If similar to Keynes Plan - good idea. Operates independently of member country currencies. Removes Venezuela from dependence on US $ and Euro. Does not erode ability of member states to implement local solutions to their economic problems. Requires an independent money standard such as terra – based on representative basket of traded commodities. The Terra project is the launch of a commodity-backed Trade Reference Currency (TRC), a supra-national currency that works in parallel with national money systems. It is uniquely designed to provide a stable international mechanism for planning, contractual and payment purposes worldwide. –http://www.futureofmoneysummit.com/terra-project.phphttp://www.futureofmoneysummit.com/terra-project.php