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Abstract: In this article (about 2 pages) you can get a quick sense of the power of alternative currencies in helping solve some of the most pressing problems of our world--caring for the elderly, providing jobs, and saving the environment.

Review of the book "The Future of Money" by Bernard Lietaer

Bernard Lietaer is not a lightweight when it comes to money. As senior Central Bank executive in Belgium, he was closely involved in the design and implementation of the ECU (aka the Euro, Europe's single currency). In 1997 he was Business Week's "World Top Currency Trader." The guy knows something about money systems.

In his book The Future of Money, Lietaer has produced a cogent and very readable analysis of four major challenges facing humanity, which are: How will society provide for the elderly, as baby boomers retire? How can we provide a living to billions of people, in a world where economic growth means fewer overall jobs? How can we resolve the conflict between financial interests and ecological sustainability? And how will we insure monetary stability as international money trading increases exponentially?

These are some pretty heavy-duty questions, and Lietaer has some pretty compelling and inspiring answers. Interestingly, complementary currencies (like Madison Hours) are an important part of his overall plan. Let's look at the four questions Lietear asks, and see how complimentary currencies help answer the challenges they pose.

How will we provide for so many elderly?
It can be done, but not through normal economic means. In fact, it IS being done. Since 1995, the Japanese organization Sawayaka Welfare Institute (a privately run citizen's group) has been implementing a special currency called Hureai Kippu ("Caring Relationship Tickets"). Here's how it works: About 100 different non-profit organizations in Japan have agreed to use this complementary currency. To become involved, you perform some service for someone who is elderly--perhaps food shopping, or housecleaning, or whatever they need. As you provide services, you accumulate credits. You can either use these credits yourself, when you sick, or when you get old, or give them to your parents, who may even live in other parts of Japan (the program is very widespread). You can even redeem and manage these credits on-line. This program provides value where there was none before. Plus it has one wonderful side-effect: because people are volunteering their time, and there is no profit-motive, the elderly report they like this kind of care better than any other. By using complimentary currency, people in Japan have better care, more hope for good care in their old age, better relationships, and more involvement in each other's lives. Such systems could work all over the world, and be a real solution to the "age wave" that the world is going through.

How can we provide a living for so many people?
According to Lietaer, the world's 500 largest corporations make and sell seven times more goods and services than 20 years ago, but have managed in that time to actually reduce their overall workforce. Fortunately, in the area of job creation (and local economic stimulation), complimentary currencies really shine. And Lietaer gives real-world examples.

Did you know that during the global depression of the 1930s, there were some places that prospered? The small town of Worgl, Austria, redressed their extreme levels of unemployment and destitution by implementing a local currency. While other cities were struggling, they repaved their streets, rebuilt their water system, built new houses, a ski jump, and a bridge with a plaque that said "This bridge was built with our own Free Money." Because their local scrip could not earn interest, hoarding it was pointless--in fact, every schilling of their local currency created between 12 and 14 times more employment that the normal schilling, circulating at the same time! Other pre-war cities, both in Europe and the US, also prospered using local currency. Lietar presents an excellent and inspiring blueprint for creating jobs in that same way, using complimentary currencies in our modern-day cities.

How can we resolve the conflict between financial interests and ecological sustainability?
It turns out that there are already cities creating incentives both for financial profit and ecological sustainability. Lietaer discusses Curitiba, Brazil, as one of his many examples. Different zones of the city have two building standards: the normal allowable standard, and the maximum standard. Say a developer wants to build a 15 story building in a zone where 10 stories in the normal allowable standard, and where 15 is the maximum. He can build that 15 story building, but he must "buy" credits for the extra five floors. He gets those credits on the "sol criado" market. Imagine, for instance, that there is a run-down, five-story tall historic building in the same area, and the owners of this building do not have the money to restore it. But they do have the right to build on that lot, up to the normal standard of ten floors. In the "sol criado" market, they can exchange those five unbuilt floors as an type of currency. The developer who wants to build the 15-story building buys the right to build those five extra floors from the owners of the run-down historic building. They, in turn, must spend the money on improving the building itself. In this way historic buildings, parks, and other restorations for the public good are funded, as a positive side-effect of development.

Similarly, pollution taxes, taxes on the use of land, and taxes on the use of all non-renewable resources, along with credits for the restoration of natural resources and the biosphere are all ways that development can actually create a better environment, rather than destroy it.

How will we insure monetary stability?
Once again, Lietaer claims that local complimentary currencies are important. In fact, local currencies don't compete with larger currencies, they help keep those national and international currencies stable. Lietaer also goes into detail about a new global reference currency he is proposing, called the Terra, which would not bear interest, and which would be valued against common commodities, thus making it stable: in fact, it would be inflation-proof. But meanwhile, the more we use our local currencies, the more we are safe from the wild "mood swings" that federal currencies sometimes experience.

This review only addresses Lietaer's major point: complimentary currencies can help resolve the most pressing problems facing our society today. He covers a lot of ground along the way to making that point: The history of monetary systems, the fatal problems with interest-earning money systems (an economy has to continually grow, just to stay in the same place), the concentration of wealth in the hands a few, gift cultures vs. exchange cultures, ways of building communities, and much more. He makes his points with readily understandable statistics, studies, and diagrams.

As long as our country is experiencing prosperity, complimentary currencies are unlikely to play any major part in our economy. But, as The Future of Money shows, such currency systems are critical for us to have in place in case we find ourselves in a less prosperous future; a time when there are people willing to work, and there is work to do, but there is a lack of money to allow those exchanges to occur. In such a time, complimentary currencies would make the difference between prosperity and misery.

The Future of Money is, in my opinion, a great book, and must reading for anyone interested in creating community through the use of alternate currencies. The Future of Money is realistic, yet optimistic--a welcome change from books that are either pie-in-the-sky fantasies written by wishful thinkers, or depressing and disempowering books that just tell you how much the world sucks. The solutions that Lietaer suggests, while world-changing in their scope, can be implemented in our own communities. The Future of Money shows how what you and I do in our own cities is an important piece of the greater puzzle of transforming and healing our world.

The only place I have been able to find The Future of Money is at the British version of amazon.com: amazon.co.uk. Amazon.com does NOT carry it, but purchases at amazon.co.uk are simple and the shipping is reasonable.

Dmitri Bilgere is author of Beyond the Blame Game, a publishing coach, and a user of Madison Hours. He can be reached at 608-256-2862 or on the web at www.dbweb.org.

Published in 2003 in the Madison Hours Newspaper