Yasuyuki Hirota(Univ. of Valencia, Spain)

mig@olccjp.netSkype: migjp2003

Manado (Indonesia), 05 Oct 2012

Economy: comes from the Greek word “οικονομία” (“οἶκος” (house) + “νέμω” (management))

Economy in East-Asian languages: “keizai” (“ 経済” ) in Japanese “Jīng jì” (“ 經濟 / 经济“ ) in Chinese (Mandarin) ”gyeongje” ( 경제“ ) in Korean All come from the Chinese phrase ”Jīng shì jì mín“ (”

經世濟民 / 经世济民“ , “manage the world and satisfy people“)

None of these concepts say about maximising profits but about the management of production, distribution and consumption

We should produce to satisfy our own needs, not to make money at the cost of people / environment!!

What is money? Answer: “An agreement within a community to

use something as a means of exchange” (Bernard Lietaer)

> So we can have our own means of exchange!: SCC

How is money created and given into the economy?

Answer: As bank credits. No debt, no money More info:

http://www.youtube.com/watch?v=0K5_JE_gOys

Ghana: People lived well with barter (direct exchange): Little need to buy goods from British colonisers

The British gov’t introduced a Ghanan national currency and started to charge tax only payable in this national currency

Consequences: End of self-sufficient economy, dependency on British economy and impoverishment

What makes Bali so attractive to tourists?: Its unique religious and cultural performances done for local communities

Banjar: democratically-managed community-based planning and implementatiion unit for such performances

The coexistence of rupiah and banjar helps the Balinese keep their tradition while prospering as a tourist destination

More info: Lietaer (2003) and Lietaer and Belgin (2012), chapter 28

A: Human being’s growth

C: Cancer’s growth and what our money system demands us

With compound interest rate our economy is destined to eat up all natural resources of our planet

Source: Kennedy (1995)

The interest improverished most people while enriching the few rich

Source: “Inflation and Interest-free money” (Kennedy, 1995) available at: http://kennedy-bibliothek.info/data/bibo/media/GeldbuchEnglisch.pdf

Each regional economy: tends to be export-oriented > only produces exportable goods (monoculture) while giving up self-sufficiency (stops producing goods for local demands and starts importing them)

Dependency on exports: shows vulnerability (weakness) in case of economic crisis as customers stop buying your products

Self-sufficiency: way to soften the crisis

A mutual-credit account system since 1982 and most popular SCC in the world

Each member has a virtual account to clear transactions

Remarkable cases: TEM (Volos, Greece), CES (started in Cape Town, South Africa and spread into the world), Hanbat LETS (Daejeon, South Korea)

CES: http://www.ces.org.za/ TEM: http://www.tem-magnisia.gr/ (in Greek) Hanbat LETS: http://www.tjlets.or.kr/ (in Korean)

Founded in 1998 at Fortaleza, Ceará to struggle against the financial exclusion: originally operated only with real (Brazil’s official currency, R$) but now provides loans in R$ and Palma (SCC, although backed with R$) too

Their slogan: “No community is poor, but there are impoverished ones!”

Website (in Portuguese): http://www.bancopalmas.org.br/

More info in English: http://dowbor.org/ar/community_development_banks-instituto_palmas_methodogy.pdf (also try Wikipedia on Banco Palmas)

Video: https://www.youtube.com/watch?v=h8YLFKr7lZs

An NGO (“Our Footprints” in Spanish) working to set up community banks, among others

The NGO staff visits impoverished communities in Greater Buenos Aires and gives training courses for communities to finance itself

Website (in Spanish, English etc.): http://www.nuestrashuellas.org.ar/

Founded in 2003 as an extracurricular project at a Waldorf school in Prien am Chiemsee, Bavaria

€-backed SCC, with 3% of face value donated to the local project you want to support

5% of commission is charged on reimbursing from Chiemgauer to €

Virtually interest-free microcredits in Chiemgauer started: you need to pay interest, but it will be returned to you if you repay all your loan without delay

Website (in German): http://www.chiemgauer.info/ Video: https://www.youtube.com/watch?

v=6_Bf85tX9YE

Chiemgauer’s circulation

Proposed by German merchant and economist Silvio Gesell (1862-1930) in his masterpiece “Natural Economic Order”

Everything (food, cars, houses) is devaluated over time except money

So let’s abolish the privilege of money by charging fees! > demurrage

Natural Economic Order: http://www.silvio-gesell.de/neo_index1.htm

The most successful experience of demurrage SCC The mayor Michael Unterguggenberger issued this

SCC in July 1932 to tackle the Great Depression 1%/month of demurrage fee This SCC stimulated the local economy and people

even wanted to pay tax in advance The Central Bank of Austria forbade it in Sep 1933

Michael Unterguggenberger’s monument in front of the City Council

A picture of that SCC in 1930s

Operational since 1934 to stimulate B2B transactions among Swiss small businesses: one sixth of small businesses join

The bank provides loans in WIR (SCC), only accepted by other WIRBank-member businesses, at lower interest rate

1.55 billion CHF is traded annually in this currency. More info (in German, French and Italian): http://www.wir.ch/

Video: http://www.youtube.com/watch?v=VMy8zmWSrFA

An interest-free bank Savers don’t get interest but points which allow

them to take interest-free loans Democratically managed by its members Website (in Swedish, English etc.):

http://www.jak.se/ Video (part 1): https://www.youtube.com/watch?

v=aW2pj109Cr8,Video (part 2): https://www.youtube.com/watch?v=ktzRsH9qLiw, Video (part 3): https://www.youtube.com/watch?v=iFx1V0_ysjo, Video (part 4): https://www.youtube.com/watch?v=Rghb0KrKxxE

LETS Banco Palmas

Chiem-gauer

WIR

Food / professional

service

No Yes Yes Yes

Reimburse into offical

tender

No Yes Yes No

Loans Unnecessary

Easy Easy Easy

Extension Neighbour-hood

Neighbour-hood

Regional Regional / National

Comparison of SCC cases Comparison of SCC cases

Microeconomy: management of an enterprise, a non-profit, a credit union etc.

Macroeconomy: management of the whole economy at the local / regional / national level

SCC’s feature: involvement of different stakeholders, such as: consumers, prosumers, volunteers, non-profits, local businesses, public sector, financial sector, tourists, public transportation

LETS Banco Palmas

Chiem-gauer

WIR

Consumers Yes Yes Yes Yes

Volunteers / non-profits

Yes Yes Yes No

Local businesses Few Some Some Many

Public sector No No No No

Financial sector No Yes Yes Yes

Self-employed Yes Yes Yes Yes

Huge corporations No No No No

Tourists Yes / No No Yes No

Public transportation No Yes No Yes?

Stakeholders’ involvementStakeholders’ involvement

Means of transportation: on foot, bicycle, motorcycle, bus, funicular, taxi, private car, tramway, subway, train, ferry, airplanes…: Each means of transportation for its own purposes

The same is true with CC: need to study different typologies and to see their advantages / disadvantages

1

2

3

4

5

Official tender

WIR

CHIEMGAUER

LETS

1: Set your SCC’s goals 2: Set up the leadership team 3: Set the value standard 4: Determine with what the SCC is backed 5: Determine how the SCC management cost is

recovered? 6: Design how the SCC is issued, circulated and

redeemed (withdrawn from the circulation) Further info:

http://www.global-community.org/gc/newsfiles/25/Community%20Currency%20Guide.pdf

Key concept: replace imported goods / services with locally-produced ones

1: Local economy mapping 2: (Re)discover your local resources 3: Discussions in your community 4: Design the CSS model that fits your needs 5: Marketing for different stakeholders Further info:

http://www.pluggingtheleaks.org/downloads/ptl_handbook.pdf

Need for appropriately-arranged language for different stakeholders: non-profits, local shops, factories, consumers, city councils etc…

What is marketing?: “activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association, 2007)

What value can SCC offer for non-profits, local shops, factories, consumers, city councils etc.?

Economy: Not to make profits but to satisfy our needs

Money: An agreement within a community SCC: Our own means of exchange! Current money: Issued by commercial banks

for them to make profits Compound interest: calls for exponential and

unsustainable development and redistributes the wealth only for the rich

Different experiences: LETS, Banco Palmas (Brazil), Nuestras Huellas (Argentina), Chiemgauer (Germany), WIRBank (Switzerland), JAK Bank (Sweden etc.)

Demurrage: to assure money’s circulation and put an end to the privilege of money

SCC as a macroeconomic tool: Need to involve different stakeholders

SCC: Our own means of exchange! Important: Appropriate design, leveraging

unused recourses and customised marketing for different stakeholders

“The Future of Money” (Bernard Lietaer, Century, 2001) “Inflation and Interest-free Money” (Margrit Kennedy,

http://kennedy-bibliothek.info/data/bibo/media/GeldbuchEnglisch.pdf )

“Creating Wealth” (Bernard Lietaer and Gwendolyn Hallsmith, New Society Publishers, Gabriola Island (Canada),2011)

“People Money” (Margrit Kennedy, Triarchy Press, 2012) “New Money for a New World” (Bernard Lietaer and Steven

Belgin, Qitarra Press, Boulder (Colorado, US), 2012) “Sustaining Cultural Vitality in a Globalizing World: The

Balinese Example” (Bernard Lietaer, 2003) available at: http://www.complementarycurrency.org/ccLibrary/materials/sustaining_cultural_vitality.pdf

Yasuyuki Hirota(Univ. of Valencia, Spain)

mig@olccjp.netSkype: migjp2003

Manado (Indonesia), 05 Oct 2012