permaculture

[Wesley Roe and Marjorie Lakin Erickson <lakinroe@silcom.com>]

Denver, Colorado, USA


First International Complementary Currency Summit
July 31, 2005 - August 5, 2005


The ACCESS Foundation has released the info about its international conference

"BRIDGING THE CHASM:

Bringing Complementary Currencies into the Mainstream"

which will be held in Denver University, Colorado, United States

from Sunday, July 31st to Friday, August 5th,
featuring the following key people from all over the world:

* Edgar Cahn ­ US ­ Time Dollar Institute
* Stephen DeMeulenaere ­ Indonesia ­ Appropriate Economics/Strohalm
* Bernard Lietaer ­ US/Europe ­ ACCESS Foundation
* Michael Linton ­ Canada ­ Open Money/LETS
* Toshiharu Kato ­ Japan ­ Founder Eco-Money, MITI
* Margrit Kennedy ­ Germany ­ MonNetA
* Jean-François Noubel ­ France ­ Angenius Institute
* Henk van Arkel ­ Netherlands ­ Strohalm

The following five subjects will be discussed at the conference.

* Currency design and innovations to address emerging social and economic 
needs.
* New and Enabling Technology Advancements
* Complementary Currencies and the Developing World
* Legal and Governance concerns on local and national levels.
* Online and continuing education for community practitioners.

Further information is available at:

http://dev.openmoney.org/tiki-download_file.php?fileId=4

ARTICLE ON COMPLIMENTARY CURRENCY

Implementation of Complementary Currencies

at the Regional Level
http://www.margritkennedy.de/english/articles/index.html
Margrit & Declan Kennedy
MonNetA in Lebensgarten Eco-village, Steyerberg, Germany


Four years ago we asked ourselves, how we could introduce and test a 
practical model of a permanent and stable money system, based on a 
circulation incentive ­ at a scale that would be relevant.

The local level seemed to be too small. Many of the mutual exchanges or 
LETS systems that exist nowadays, prove that people are looking for a way 
to create complementary systems. But the transaction costs are usually too 
high; that is: the time needed to obtain the desired product or service is 
often too long and, therefore, only a fraction of the needed goods and 
services can be obtained. One possibility of reducing the disadvantages, 
and including more specialized services, is to link the individual exchange 
clubs to larger units though a ”Clearinghouse-Function“, i.e. a jointly set 
up accounting system. This is presently being introduced and tested in the 
Austrian region of Voralberg.

On the national level, e.g. in Germany, we have just given up the Deutsch 
Mark and accepted the Euro. This has positive and negative aspects 
simultaneously. Positive: because it has put an end to the speculation 
between the former European currencies. Negative: as it is more difficult 
to react to specific national monetary situations, financial developments 
or critical events.

What remains is the regional level. It is here, at least theoretically, 
that the amount of commercial exchange that takes place within a region can 
be covered by a regional exchange medium and that the regional economic 
development can be revitalized through this measure. There are different 
conditions, naturally, which will determine how suitable some regions are 
for such a solution. In a region where there is a large diversity of 
production, the economic autonomy will be greater and in this way it will 
be more suitable for this solution, in contrast to a region that is 
dominated by a single employer where most people work in one and the same 
factory. Regional currencies, by the way, were common in Europe until the 
French Revolution in the 19th century. Then national currencies were 
introduced mainly in order to concentrate power and control, rather than to 
create more efficiency ­ as it often assumed in economic theory.


What is a Region?

At present, there are relatively few studies or data available that can be 
used to support the arguments for regional currencies. The ”Region” itself 
may be defined with the use of the new currency. Where the region begins 
and ends, physically, is dependent on the will of the people using the 
complementary currency. No one can be forced to use it. And the readiness 
to use it will be determined by socio-economic situation - but also by 
commercial, cultural or historical relationships.

Ideally, a complementary regional currency should be introduced parallel to 
a labelling of regional products so that goods and services can be 
identified as “regional products”. That would give people a choice in 
shopping - especially for products and services from their region - and 
thus a further choice in supporting the region in which they live.

Most new jobs are created by small and middle-sized enterprises (SMEs). If 
money is put into production and not primarily into moneymaking activities, 
new perspectives are opened for regional economic growth through regional 
currencies. It seems entirely possible that local service-oriented banks 
could offer a regional currency in their product portfolio in co-operation 
with the municipalities in their particular region.

The goal is to allow a new practical experience with a stable exchange 
medium, designed as a community service rather than a profit-making 
commodity. This may be the starting point of a new development. And similar 
to the first energy-saving houses that were built in the 1970ies, the new 
models may probably not yet be perfect.


Let us take a practical example

From the numerous projects that are presently being implemented and which 
will be included in the next book, co-authored by Margrit Kennedy and 
Bernard Lietaer, we would like to talk about one example. Having mentioned 
the idea of a complementary regional currency system for the first time in 
a conference in June 2002 in Steyerberg, Germany, this project was put into 
practice within a half year. The first attempt, in creating regional money 
as a complementary exchange medium, was initiated in a Steiner School in 
Prien in the region of Chiemgau, Bavaria, by the economics teacher 
Christian Gelleri (www.Chiemgauer-regional.de).



The ”Chiemgauer” project is a voucher system in which, ideally, all 
stakeholders have advantages. Many consumers are members of an 
”association”. In exchanging Euros, they get Vouchers of the same value ­ 
but support their association, which gets 3% of the transactions.

The shopkeepers who take the vouchers in payment can redeem them back into 
Euros with a slight loss ­ a 5% redemption fee - or they can use them for 
paying in another shop, for paying their employees or for paying their 
advertisements in the local newspaper. But within three months the 
Vouchers, which are subject to a circulation fee, return to the issuing 
agency which receives the two percent difference between the redemption fee 
of 5% for the shopkeepers and the bonus of 3% for the association for its work.

In addition, customers accept a circulation incentive ­ a fee of 8% per 
annum. Every three months (4 times a year), a 2% stamp has to be bought and 
stuck on to the voucher ­ otherwise the voucher does not retain its full 
value. This somewhat clumsy system can be later simplified by use of 
electronic payment functions.

The Chiemgauer consumer chooses a charitable organization or project to 
which the 3% bonus fee will be paid. In this manner, the buyer of this new 
exchange medium - at first: the parents of the Steiner School children - 
supported the new extension of the school. In the meantime, many other 
non-profit projects are on a list ­ and now the members come from all over 
the region.

Most of the shopkeepers see the complementary currency system as a customer 
loyalty programme (similar to airline bonus-miles, with which a person can 
pay for a room in a hotel or for many other commodities and services). The 
voucher system, actually, is not really creating a new currency, but using 
the possibility of giving the customer loyalty or bonus systems - an 
additional function. Through the statutes of an association ­ the members 
have defined a framework of how and where the vouchers can be used.

Nowadays, in Germany, anything up to 10% of their income is being used for 
customer loyalty. Therefore, the support of the regional currency does not 
bring more costs for the shopkeepers. As the people can pay with this 
regional exchange medium, they come back to that particular shop. As 
retailers experience that they can pay others with this medium of exchange, 
the Steiner school students coming back to the shops (at the end of each 
month) to exchange the Regional Vouchers i.e. the Chiemgauers for Euros, 
hear that there are no vouchers in the cash box, because the shop keepers 
have passed them on. The participating businesses in Chiemgau have 
increased their turnover.

The effect for the customers is pretty clear ­ they pay with vouchers, 
where they possibly can, before using Euros. And that is what a regional 
currency is all about. In Australia, a similar scheme showed that while 70% 
of the SABC vouchers were exchanged back into Australian Dollars in the 
first year, in the third year, it was only 7%. The vouchers were being used 
as a complementary currency and the cost of redemption had worked like a 
demurrage or circulation fee.

The cost of administrating the vouchers is covered by the income difference 
between the 3% bonus and the 5% redemption fee. Any “surplus” from the 
circulation fee goes to the specified projects in the region. Those who use 
the regional exchange medium are ready to accept a small loss (if they hold 
on to it in their pockets as cash), because they have the advantage that 
they can support their choice of projects, associations or events.

One advantage of the voucher system is that the consumer only exchanges 
Euros into the regional-vouchers for what is needed or can be spent. This 
also works as a safety measure that not too many vouchers will be issued. 
Otherwise, this might cause an inflation of vouchers, if the issuing 
association is not careful.

This safety feature of ”Voucher Currencies” does not exist in the so-called 
”Fiat-Currencies” which can be created practically out of nothing. This was 
the way in which the DM was introduced in 1945. Each person was paid a flat 
sum of DM 40, - which started the German “Economic Boom”. Likewise, one 
could imagine, for instance, that a ”regional currency” could start by 
paying out a relatively small sum of regional currency per head of the 
population. This may create legal problems nowadays; and the danger of 
unlimited expansion of the amount of money issued. In the Argentine ­ after 
the national currency crash in Dec 2001, for instance -- many complementary 
currencies all over the country helped two million people to survive for 
some months. Later, inflation - printing too many notes - and forgery were 
the reasons for the collapse of this otherwise very effective medium of 
exchange.

The following three reasons may help to explain why this idea ­ in Germany 
- has been taken up so quickly and been put in practice:

- Firstly, there seems to be many aspects that speak for a revitalisation 
of regional economy and identity, balancing the unilateral tendency towards 
globalisation. This applies to the marketing of fresh food in the region as 
well as to the use of regenerative energies or improving bio-regional 
water, sewerage and waste disposal systems;
- Secondly, many individuals and groups are searching nowadays for a 
practical way to overcome the present economic and unemployment crisis;
- Thirdly, there are very few legal possibilities to create a regional 
exchange medium that simultaneously offers advantages to all concerned ­ 
and, therefore, has the chance of being accepted by a wider population base.


Further Development

In the last two years, a group of Economics Professors from Austria, 
Germany and Switzerland have formulated a new report for the ”Club of 
Rome”. The title is Wie wir wirtschaften werden (How we will develop our 
economies). It has been published in September 2003 and fills a gap that 
was left by the first Report of the Club of Rome The Limits of Growth that 
started the sustainability debate about 30 years ago. The Meadows and their 
co-authors left out the subject of money, as they saw money as a passive 
accounting system that had neither negative nor positive influence on the 
question of sustainability. The new report refutes this thesis and 
identifies the introduction of complementary local and regional currency 
systems as an important part of sustainable development.

This indicates a new openness in the scientific and political realm and is 
the basis for our further work which aims at:

• implementing regional currencies in the regions in a professional manner 
yet also as a community service, i.e. on a non-profit basis;

• structuring the governance of regional currencies in such a way that they 
can be democratically controlled and lead to linking unmet needs and 
underutilized resources in the region;

• analysing the experience of the concept of ”regional currency” in a few 
regions before too much enthusiasm creates too many mistakes and gives the 
opponents enough arguments to blast the concept before it has been tried out.


Resources:

Web sites:

www.MonNetA.org

www.stable-money.com

www.geldreform.de


Books:

Margrit Kennedy,

Interest and Inflation Free Money ­ Creating an exchange medium that works 
for everybody and protects the earth
Seva International, Okemos, Michigan, USA, 1995

Changing the Money System (als pdf, 570kb)


Bernard Lietaer,

The Future of Money
Random House, London, 2000


Stephan Brunnhuber & Harald Klimata,

Wie wir wirtschaften werden ­ Szenarien und Gestaltungsmoeglichkeiten fuer 
zukunftsfaehige Finanzmaerkte
Ueberreuther, Frankfurt am Main, 2003


Margrit Kennedy & Bernard Lietaer,

Regional-Währungen ­ Neue Wege zu nachhaltigem Wohlstand
Riemann - One Earth Spirit, Munich, 2004


        
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Interest & Inflation Free Money

Creating an exchange medium that works for everybody and protects the earth
By Margrit Kennedy

English expanded and revised Edition, 1995





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