Proutist Economic Development Community and Currency

1
Proutist Economic Development Community and
Currency

• Dr. Michael Towsey

2
Monetary Decentralisation

• The Future of Money Bernard Lietaer
• http//www.transaction.net/money/book/
• Economic decentalisation requires monetary
  decentralisation.
• Each community should control its own money
  system.

3
Money - Central versus Local
Community money system
4
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.

5
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.

6
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.

7
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.

8
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?

9
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.

10
Unemployment and the Nazi Vote
11
Local Enterprise Trading SystemLETS

• 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.

12
Community Currency Taking Off !
13
LETS, Maleny, Australia
http//www.mena.org.au/lets/
14
International Versions of LETS

• www.bartercard.com
• www.ebanctrade.com

15
A Hierarchy of Currencies

• A hierarchy of communities requires a hierarchy
  of money systems.

16
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.

17
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?

18
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.

19
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.p
  hp