BEYOND GREED and SCARCITY by Bernard Lietaer (fwd)

Victor Guest vic at
Tue Nov 25 09:06:30 EST 1997

ORIGINALLY From s.vani at Tue, 25 Nov 1997 08:53:00 WST remote from eepo
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Victor, here is a bit of e-mail conversation and a website for the
alternative currency discussions.  Shanti Vani

>>BEYOND GREED and SCARCITY  by Bernard Lietaer
>>(from YES! Magazine #2 Spring/97)
>>     Few people in and on the money system in as many different capacities as
>>Bernard Lietaer.  He spent fivce years at the Central Bank in Belgium, where
>>his first prroject was the design and implementation of the single
>>European currency system.  He was president of Belgium's Electronic Payment
>>System, and has developed technologies for multinational corporations to use
>>in managing multiple currency environments.
>>     He has helped developing countries improve their hard currency earnings
>>and taught international finance at the University of Louvain, in his native
>>     Bernard Lietaer was also the general manager and currency trader for one
>>of the largest and most  successful offshore currency funds.
>>     He is currently a fellow at the Center for Sustainable Resources at the
>>University of California at Berkeley.
>>     YES! editor Sarah van Gelder talked to Bernard about the possibilities
>>for a new kind of currency better suited to building community and
>>sustainability. He can be reached to discuss this topic via an Internet
>>conference at:
>>SARAH: Why do you put so much hope into the development of alternative
>>BERNARD: Money is like an iron ring we've put through our noses. We've
>>forgotten that we designed it, and it's now leading us around. I think it's
>>time to figure out where we want to go - in my opinion toward sustainability
>>and community - and then design a money system that gets us there.
>>SARAH: So you would say that the design of money is actually at the root of
>>much else that happens, or doesn't happen, in society?
>>BERNARD: That's right. While economic textbooks claim that people and
>>corporations are competing for markets and resources, I claim that in reality
>>they are competing for money - using markets and resources to do so. So
>>designing new money systems really amounts to redesigning the target that
>>orients much human effort.
>>Furthermore, I believe that greed and competition are not a result of
>>immutable human temperament; I have come to the conclusion that greed and
>>fear of scarcity are in fact being continuously created and amplified as a
>>direct result of the kind of money we are using.
>>For example, we can produce more than enough food to feed everybody, and
>>there is definitely enough work for everybody in the world, but there is
>>clearly not enough money to pay for it all. The scarcity is in our national
>>currencies. In fact, the job of central banks is to create and maintain that
>>currency scarcity. The direct consequence is that we have to fight with each
>>other in order to survive.
>>Money is created when banks lend it into existence (see article by Thomas
>>Greco on page 19). When a bank provides you with a $100,000 mortgage, it
>>creates only the principal, which you spend and which then circulates in the
>>economy. The bank expects you to pay back $200,000 over the next 20 years,
>>but it doesn't create the second $100,000 - the interest. Instead, the bank
>>sends you out into the tough world to battle against everybody else to bring
>>back the second $100,000.
>>SARAH: So some people have to lose in order for others to win? Some have to
>>default on their loan in order for others to get the money needed to pay off
>>that interest?
>>BERNARD: That's right. All the banks are doing the same thing when they lend
>>money into existence. That is why the decisions made by central banks, like
>>the Federal Reserve in the US, are so important - increased interest costs
>>automatically determine a larger proportion of necessary bankruptcies.
>>So when the bank verifies your "creditworthiness," it is really checking
>>whether you are capable of competing and winning against other players - able
>>to extract the second $100,000 that was never created. And if you fail in
>>that game, you lose your house or whatever other collateral you had to put
>>SARAH: That also influences the unemployment rate.
>>BERNARD: It's certainly a major factor, but there's more to it. Information
>>technologies increasingly allow us to attain very good economic growth
>>without increases in employment. I believe we're seeing one of the last
>>job-driven affluent periods in the US right now. As Jeremy Rifkin argues in
>>his book, The End of Work, jobs are basically not going to be there anymore,
>>even in "good times."
>>A study done by The International Metalworkers Federation in Geneva predicts
>>that within the next 30 years, 2 or 3 percent of the world's population will
>>be able to produce everything we need on the planet. Even if they're off by a
>>factor of 10, we'd still have a question of what 80 percent of humanity will
>>My forecast is that local currencies will be a major tool for social design
>>in the 21st century, if for no other reasons than employment. I don't claim
>>that these local currencies will or should replace national currencies; that
>>is why I call them "complementary" currencies. The national,
>>competition-generating currencies will still have a role in the competitive
>>global market.
>>I believe, however, that complementary local currencies are a lot better
>>suited to developing cooperative, local economies.
>>SARAH: And these local economies will provide a form of employment that won't
>>be threatened with extinction?
>>BERNARD: As a first step, that is correct. For example, in France, there are
>>now 300 local exchange networks, called Grain de Sel, literally "Grain of
>>Salt." These systems - which arose exactly when and where the unemployment
>>levels reached about 12 percent*- facilitate exchanges of everything from
>>rent to organic produce, but they do something else as well. Every fortnight
>>in the Ariege, in southwestern France, there is a big party. People come to
>>trade not only cheeses, fruits, and cakes as in the normal market days, but
>>also hours of plumbing, haircuts, sailing or English lessons. Only local
>>currencies accepted!
>>Local currency creates work, and I make a distinction between work and jobs.
>>A job is what you do for a living; work is what you do because you like to do
>>it. I expect jobs to increasingly become obsolete, but there is still an
>>almost infinite amount of fascinating work to be done.
>>For example, in France you find people offering guitar lessons and requesting
>>lessons in German. Neither would pay in French francs. What's nice about
>>local currency is that when people create their own money, they don't need to
>>build in a scarcity factor. And they don't need to get currency from
>>elsewhere in order to have a means of making an exchange with a neighbor.
>>Edgar Cahn's Time Dollars are a classical example [see page 24]. As soon as
>>you have an agreement between two people about a transaction using Time
>>Dollars, they literally create the necessary "money" in the process; there's
>>no scarcity of money. That does not mean there's an infinite amount of this
>>currency, either; you cannot give me 500,000 hours - nobody has 500,000 hours
>>to give. So there's a ceiling on it, yes, but there's no artificial scarcity.
>>Instead of pitting people against each other, the system actually helps them
>>SARAH: So you're suggesting that scarcity needn't be a guiding principle of
>>our economic system.  But isn't scarcity absolutely fundamental to economics,
>>especially in a world of limited resources?
>>BERNARD: My analysis of this question is based on the work of Carl Gustav
>>Jung because he is the only one with a theoretical framework for collective
>>psychology, and money is fundamentally a phenomenon of collective psychology.
>>A key concept Jung uses is the archetype, which can be described as an
>>emotional field that mobilizes people, individually or collectively, in a
>>particular direction. Jung showed that whenever a particular archetype is
>>repressed, two types of shadows emerge, which are polarities of each other.
>>For example, if my higher self - corresponding to the archetype of the King
>>or the Queen - is repressed, I will behave either as a Tyrant or as a
>>Weakling. These two shadows are connected to each other by fear. A Tyrant is
>>tyrannical because he's afraid of appearing weak; a Weakling is afraid of
>>being tyrannical. Only someone with no fear of either one of these shadows
>>can embody the archetype of the King.
>>Now let's apply this framework to a well-documented phenomenon - the
>>repression of the Great Mother archetype. The Great Mother archetype was very
>>important in the Western world from the dawn of prehistory throughout the
>>pre-Indo-European time periods, as it still is in many traditional cultures
>>today. But this archetype has been violently repressed in the West for at
>>least 5,000 years starting with the Indo-European invasions - reinforced by
>>the anti-Goddess view of Judeo-Christianity, culminating with three centuries
>>of witch hunts - all the way to the Victorian era.
>>If there is a repression of an archetype on this scale and for this length of
>>time, the shadows manifest in a powerful way in society. After 5,000 years,
>>people will consider the corresponding shadow behaviors as "normal."
>>The question I have been asking is very simple: What are the shadows of the
>>Great Mother archetype? I'm proposing that these shadows are greed and fear
>>of scarcity. So it should come as no surprise that in Victorian times - at
>>the apex of the repression of the Great Mother - a Scottish schoolmaster
>>named Adam Smith noticed a lot of greed and scarcity around him and assumed
>>that was how all "civilized" societies worked. Smith, as you know, created
>>modern economics, which can be defined as a way of allocating scarce
>>resources through the mechanism of individual, personal greed.
>>SARAH: Wow! So if greed and scarcity are the shadows, what does the Great
>>Mother archetype herself represent in terms of economics?
>>BERNARD: Let's first distinguish between the Goddess, who represented all
>>aspects of the Divine, and the Great Mother, who specifically symbolizes
>>planet Earth - fertility, nature, the flow of abundance in all aspects of
>>Someone who has assimilated the Great Mother archetype trusts in the
>>abundance of the universe. It's when you lack trust that you want a big bank
>>account. The first guy who accumulated a lot of stuff as protection against
>>future uncertainty automatically had to start defending his pile against
>>everybody else's envy and needs. If a society is afraid of scarcity, it will
>>actually create an environment in which it manifests well-grounded reasons to
>>live in fear of scarcity. It is a self-fulfilling prophecy!
>>Also, we have been living for a long time under the belief that we need to
>>create scarcity to create value. Although that is valid in some material
>>domains, we extrapolate it to other domains where it may not be valid. For
>>example, there's nothing to prevent us from freely distributing information.
>>The marginal cost of information today is practically nil. Nevertheless, we
>>invent copyrights and patents in an attempt to keep it scarce.
>>SARAH: So fear of scarcity creates greed and hoarding, which in turn creates
>>the scarcity that was feared. Whereas cultures that embody the Great Mother
>>are based on abundance and generosity. Those ideas are implicit in the way
>>you've defined community, are they not?
>>BERNARD: Actually it's not my definition, it's etymological. The origin of
>>the word "community" comes from the Latin munus, which means the gift, and
>>cum, which means together, among each other. So community literally means to
>>give among each other.
>>Therefore I define my community as a group of people who welcome and honor my
>>gifts, and from whom I can reasonably expect to receive gifts in return.
>>SARAH: And local currencies can facilitate that exchange of gifts.
>>BERNARD: The majority of the local currencies I know about have been started
>>for the purpose of creating employment, but there is a growing group of
>>people who are starting local currencies specifically to create community.
>>For example, I would feel funny calling my neighbor in the valley and saying,
>>"I notice you have a lot of pears on your tree. Can I have them?" I would
>>feel I needed to offer something in return. But if I'm going to offer scarce
>>dollars, I might just as well go to the supermarket, so we end up not using
>>the pears. If I have local currency, there's no scarcity in the medium of
>>exchange, so buying the pears becomes an excuse to interact.
>>In Takoma Park, Maryland, Olaf Egeberg started a local currency to
>>facilitate these kinds of exchanges within his community. And the
>>participants agree that is exactly what has been happening.
>>SARAH: That raises the question of whether local currencies can also be a
>>means for people to meet their basic needs for food and housing, or would
>>those sectors remain part of the competitive economy?
>>BERNARD: There are lots of people who love gardening, but who can't make a
>>living from it in the competitive world. If a gardener is unemployed, and I'm
>>unemployed, in the normal economy we might both starve. However with
>>complementary currencies, he can grow my salads, which I pay for in local
>>currency earned by providing another service to someone else.
>                        Paul Glover * Ithaca HOURS
>                              (607) 272-4330
>                        Box 6578, Ithaca, NY 14851
>          Ithaca Health Fund:
>              * Making a Community While Making a Living *

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