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Building strength: an interview with Bernard Lietaer


Bernard Lietaer, author of numerous books and articles about money, is an international expert in the design and implementation of currencies, and a key figure in the complementary currency movement.  He has studied and worked in the field of money for more than 30 years in an unusually broad range of capacities including as a Central Banker, a fund manager,  a university professor, and a consultant to numerous governments, multinational corporations, and community organizations.   I have been a huge fan of Bernard’s work ever since I read the 2004 galley edition of his latest book, New Money for a New World.   I had an opportunity to talk with him in November of 2010, while visiting him in Brussels for a few days.   This interview was published in the Community Currency Magazine in January of 2011.  It was the first of a series of interviews with complementary currency movement pioneers to take a big picture look at challenges and opportunities in the movement, and what is needed to build strength and momentum.

Bernard Lietaer

Tesa:  Bernard, thank you for being willing to kickstart this interview series.   What are the questions you would most wish to explore with fellow movers and shakers in the complementary currency movement?

Bernard: History has shown that significant systemic changes in the monetary system occur only after the previous system has crashed or collapsed. What would be the most effective way to position the movement so that it can take advantage of the instabilities that are currently occurring? How do we prevent the automatic return to the old monopolistic system, which is what has happened following hundreds of crashes for the past 300 years?

Most complementary currency systems (such as LETS and Time Dollars) are by nature destined to remain small scale. Yet, we are going to need solutions on an enormous scale. How do we assess which currencies are best kept on a small scale but multiplied in numbers (e.g. 1000 systems of 500 people), and which models can be expanded in scope so that they can be directly applied on a very large scale, if needed? Which criteria should be used in making that assessment about the best approach to scaling?

How do we more effectively engage with the political arena? If you include government officials in a project, you run the risk than a future change of government could negatively impact the initiative under way. If you do not include them, you lose the potential support of a key stakeholder. What is the best way to navigate this territory? What questions should we ask policy makers to draw their attention to both blind spots and untapped opportunities in the monetary domain?

Tesa: These are all great questions.  What are your own answers to them?

Bernard: I would need some time to reflect, but I could get back to you in a few weeks!

Tesa:  Sounds good!  So, let’s start with what is working.  What recent developments in the field do you find most exciting?

Bernard: One very exciting development is the C3 (Commercial Credit Circuit) which provides working capital to small and medium-size businesses. These businesses represent more than 90% of all private jobs in most areas, so solving working capital shortages has very positive implications for reducing unemployment. The C3 was developed by STRO over the last 10 years, and it is a brilliant design.

Currently, I feel that the most exciting developments are actually taking place in Latin America. The Central Bank of Brazil’s endorsement of social purpose currencies as a legitimate and effective tool that does not disturb conventional policy is a significant breakthrough. In that same country, the multiplication of the Banco di Palma experiment is a practical and positive sign that progress is under way. Uruguay is now the first country to accept a complementary currency in payment of all taxes and fees, which will make the C3 currency available to everyone in the country. A similar but less known example of this positive development can be seen in Vorarlberg, a region of Austria where local complementary currencies are also accepted for local taxes. This will greatly help mainstream the use of such currencies.

Tesa: And what do you see as key challenges, obstacles or blind spots which hinder the movement’s success?

Bernard: There are thousands of currency experiments under way but very little quality data is being gathered and made available for academics to study the results and thereby provide legitimacy for mainstream implementation. Most people develop currencies for social purposes without bothering to gather the data, and a number of other factors can also interfere with data analysis. For example, the loss of support for complementary currencies in Japan due to a change of government may result in lack of access to critical information about useful currency experiments that have not yet been documented publicly. There are indeed 40 different types of eco-money projects in Japan from which we could learn a great deal.

The unavailability of data slows down our ability to gain credibility over time. We need to ask ourselves what we can do about that. I believe that we should create a neutral electronic repository of transaction and result data from different experiments, and make them publicly available on the net for researchers and academics to use. Some parts of the field of micro-finance have followed such an approach with success.

Another great challenge we face is that too few people in the movement are explicitly recognizing and addressing the need for a diversified family of complementary currencies. The reason is that many designers and practitioners are focused on one type of complementary currency only. Although this specialization has served the growth and dissemination of each of these currencies, it can also create a tendency to relate to other types of currencies through a competitive rather than a complementary lense. Until we start taking a better look at how our respective pieces serve a larger puzzle, we don’t have the scale of demonstration that would actually be convincing to everybody.

This said, the fragmentation of the movement is also paradoxically one of its strengths. This movement could not be stopped by chopping off a couple of heads. It has no visible or official leader, and this may be its best protection against those who are invested in the status quo.

Tesa: Where do you see untapped resources and unmet needs within the field of complementary currencies? And do you have any suggestions about how to bridge them?

Bernard: Well, ironically, it is conventional money which is critically missing to support many initiatives. There is a huge potential for Ph.D and Master level research of complementary currencies but the challenges are finding appropriate academics to supervise work in that area, and securing the funding for such research.

Tesa: And besides financial support, what would help the acceleration of the monetary shifts that are needed?

Bernard: My sad answer to this question is “more pain.” The Dutch have 4.5% unemployment while the Spanish have 30%. Consequently, the Dutch don’t feel there is a need to do anything about the current situation. The Spanish, on the other hand, are begging for something to be done. The problem is actually the same in both places, but it’s a question of timing and scale.

It is becoming increasingly clear that the next stage in the break down of the financial system is the privatization of government-owned assets. The inventory in the US is 9.1 trillion dollars. That includes everything owned by the federal government, such as roads, tunnels, recreation facilities, universities, and buildings. The drive to privatization comes from political and social pain. When the potholes in the roads are big enough, and the government in unable to pay for their repair, they will then sell the highways at a fraction of their cost. Ironically, these desperate strategies will be producing more pain, and that will make people more interested in finding genuine solutions. I would personally much prefer to get to these new solutions without the pain.

In the meantime, conferences and gatherings such as the upcoming conference in Lyon are really helpful in fostering a better understanding of our respective pieces of the larger puzzle. The Community Currency Magazine and IJJCR both provide very valuable platforms for cross-fertilization of ideas and experiments.

Tesa: What could bring about a tipping point in the shift from a monopoly of bank debt money toward a monetary ecology? And is the idea of a “tipping point” the best way of thinking about that change?

Bernard: The most likely candidate for a tipping point scenario would be a dollar crash, because that would force everyone worldwide to rethink the existing system. We are now looking at a possible end game. We are running out of possible ways to return to business as usual in the aftermath of such a crash. The financial sector can no longer hope that the government will be able to step in again because even by the financial sector’s own criteria, governments are no longer creditworthy. In the 1930s, the government learned that it could not allow the banking system to sink because it brought the whole economy down with it. What our governments are painfully learning now is that they literally cannot afford to save the banking system again.

Tesa: People in the sustainability movement seem to be divided between those who feel we need to organize ourselves more efficiently (the way the right has done in the united states), and those who suggest we need to trust that our diversity is organizing us (or rather leading us to self-organize) in more resilient ways. Where do you stand on this question?

Bernard: I do believe that if the movement was seriously funded, it would professionalize the field. This is basically how the right wing folks have transformed America. 5 billionaires have created a major shift toward the right over the last 25 years in America and in the world. They created new think tanks, career paths, lobbying mechanisms, medias etc. It took a bit of time but they have shifted the paradigm…albeit in the wrong direction. They are walking toward a cul de sac, but they have done it nevertheless, and privately. They have shifted the entire system, successfully, SO They have proven it can be done on a large scale.

This said, I have personally come to the point where I hope that we are being coordinated by some larger force, some wider wisdom guiding us all. Well, I really hope that we are being guided (he smiles), and that a shift is trying to happen! Humanity urgently needs a different way forward. A growing number of people are aware of that. There will come a time when mainstream people finally throw in the towel and open up to new solutions. People  are aware that the system is badly sick but feel that there are no alternatives yet. This is why the collection data to demonstrate the effects of different experiments is so important.

The best “strategy” to support this evolution is probably not based on the model of a military campaign or the introduction of the euro where you try to plan for every step of the way. That strategy was necessary then for that particular shift, but it is not what is needed now to support this new type of shift. What we need to do now is try to encourage diversity, rather than promote one model. And we need to experiment so we can discover what best supports efficiency and resilience at the level of the whole.

Tesa: A lot of valuable community-building initiatives in this movement (including the publication of this magazine) are done by dedicated people, as a labor of love, but would often highly benefit from actual financial support.  If you were given $10,000 to $50,000 to invest in strengthening the currency movement, how would you invest these funds?

Bernard: The way I would allocate funds is informed by my own bias about the key importance of academic research, but I trust that there are many other good answers to this question besides mine, and I look forward to reading about them. Here are three different things I would very much like to see funded, although funding all three would clearly require a larger budget than the one you just allotted me!

I would want to fund:

  • a coordinator to create linkages between the cc movement and the academic world to fast forward effective data collection and analysis of models that will help legitimize the results.
  • scholarships for Ph.D research on complementary currencies. I think we need to dedicate more time to exploring how to create synergy between different types of monetary solutions.
  • a mainstream movie about monetary ecology and about movement-level possibilities.

It would also be really worthwhile for our movement to have a web platform where we could propose and comment on our suggested ‘acupuncture points worth funding. This would be a very helpful resource for funders who are interested in supporting this movement. With the advent of crowd sourcing solutions, some of the most affordable projects could perhaps even be funded by grassroots philanthropists rather than larger ones. The challenge which our movement faces is that the people with the most financial resources tend to be the ones who have the least incentives to forward the types of monetary changes we are recommending.

Tesa: Any final comments?

Bernard: Yes, I am really looking forward to reading my friends and colleagues’ answers to these questions. It is clear to me that our greatest strength is in our diversity of perspectives, and we have a lot to learn from our different ways of approaching the types of questions you have just asked me. The next generation of currency designers and practitioners has a lot to offer when it comes to out-of-the-box thinking.

If you would like to learn more about Bernard Lietaer, please check his website.  Bernard is the author of many books including the Future of Money (2001 – out of print), New Money for a New World (2011), and Creating Wealth: Creating Local Economies with Local Currencies (2011).   You can also see many of his videos on youtube by searching for Bernard Lietaer.  I especially recommend watching the series of short interviews by my friend Katie Teague.