the case for local currencies: money as technology

Below is part of a talk I gave at the E. F. Schumacher Society seminar Tools for Change.

I’m assuming that at least one of the reasons why you are all here because you understand that the current economic order isn’t leading us down a healthy path. This is pretty easy to explain and to see as manufacturing jobs are outsourced, as land goes fallow and is developed into unsustainable strip malls, and as workers are more and more disempowered. These are very visible things that we hear about all the time in the independent media, and even in the main-stream media. But it’s much more difficult to see, let alone, explain, the role of our monetary system in all this. So my goal here is to give you the basic tools to explain why we need local currencies. That is the “The case for local currencies.”

I’m going to spill the beans on the case for local currencies as I see it in just one sentence: I can’t live out my values without local currencies. It’s as simple as that. I can’t live out my values with out them. This is because money is actually a technology. Like all technologies, it has effects on two levels, one is the functional level in which it’s effects on society are related to our choices of how we use the technology, and the other is the structural level, where the effects are not ours to choose, because they are the result the nature of the technology itself.

The first level of connection between values and money is fairly broadly understood. At this level the connection between money and values is functional, that is, it’s about how we use it.. We know that if we are to live by our values, we must align how we spend and invest our money with those values. The breadth of understanding of this connection between money in values this is reflected in the growth of excellent things such as Erbin’s fair-trade movement and the socially responsible investing.

The second level of connection between money and values, the level of structural connection, is less broadly understood A this level we see that our values are not just expressed in how we use money, but are encoded into the structure of money itself. As we come to understand that money is just another one of our technologies, it becomes much easier to understand this second level in the case of money.

As a culture, we’ve come to understand the effects of our technologies both levels. We see that technologies are not value neutral, that the use of this or that technology in and of itself has effects because of the nature of the technology that is independent of how we choose to use it. For example, internal combustion engines emit CO2 whether they are in a tank or in a tractor. Even though the internal combustion engine is wonderful at one level (let’s face, it makes the good parts of modern lives possible), at a wider systemic level, it has a the devastating effect on the biosphere that we call global warming.

What we need to understand is that money is another one of our technologies, and just like the internal combustion engine, at one level, conventional money is great, but at that wider systemic level, it is devastating the entire econosphere.

Raise your hand’s if you are thinking: “wait, wait, you’ve got his analogy all mixed up. It’s not the internal combustion engine’s production of C02 that’s the cause of global warming, it’s the fact that petroleum is used as fuel.” (This is because the carbon in the oil is taken out of the ground where it’s been sitting safely for millions of years, and pumped into the atmosphere. We could run the same internal combustion engines with bio-fuels and add absolutely no net C02 to the atmosphere because the C02 it puts out, was just extracted from the atmosphere that year by the crops grown to produce the biofuels. Global warming solved.) Well, you get the gold star, and that’s a key thing, because that points to a structural solution to the problem. If you change the fuel, you have suddenly aligned structurally aligned the technology with your values of not destroying the biosphere. By noticing this, you’ve focused on the structural, not functional aspect of the technology. Local currencies are about doing that with money.

So what’s the CO2 (or petroleum) of money? Well just like CO2 isn’t the only thing that’s going on in the global warming equation, the situation with money also has many variables. However, not surprisingly, here at the Schumacher Society, we’d say that the C02 of money is its centralization. Or more specifically, the CO2 of money (the part of the technology that has deep side-effects on the econosphere) is that its issuance is strictly controlled by centralized monetary institutions. The case for local currencies is built on examining what happens if we take away that centralized aspect of money, and we let communities, businesses, and even people issue money.

[tags]money,local currency,community currency,peak oil,global warming,technology,value neutral,economy[/tags]

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