The Future of Money:
Creating New Wealth, Work, and a Wiser World

by Bernard Lietaer

The following bullets are reality-checks extracted from The Future of Money (published in January 2001, also available in German from http://www.futuremoney.de), illustrating the dramatic changes we face in the near future.

• Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system. Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression.
• The Information Age has already spawned new kinds of currencies: frequent flyer miles are evolving toward a "corporate scrip" (a private currency issued by a corporation) for the traveling elite; a giant corporation you never heard of is issuing its own "Netmarket Cash" for Internet commerce; even Alan Greenspan, Chairman of the Federal Reserve, foresees "new private currency markets in the 21st century."
• Exorbitant compensations are paid to the very few at the top: it started with movie stars and sports heroes, and has now spread to top lawyers, traders, doctors, and business leaders. In the 1960�s CEO�s salaries were only thirty times greater than those of the average worker, compared with two hundred times today. Is this the dawn of a society where "Winner-takes-all" or a short-term last gasp of the transition out of the Industrial Age?
• 1,900 local communities in the world, including over a hundred in the US, are now issuing their own currency, independently from the national money system. Some communities, like in Ithaca, New York, issue paper currency; others in Canada, Australia, the UK or France issue complementary electronic money.
• The value of barter transactions � exchanges which do not use any money as medium of exchange - totaled almost $6.5 billion in 1994 in the US and Canada, and is increasing three times faster than normal exchanges. The magazine "Barter News" covers the industry�s development and now has 30,000 subscribers. It estimates the total barter worldwide at $650 billion in 1997, and growing at an annual rate of 15%.

All of the above is part of an irreversible process of change in our money system and our societies. We are now in a transition period, an interval of great risk but also of great opportunity. The risks are not only financial, some of the emerging money technologies could create a society more repressive than anyone of us thought possible. More importantly major opportunities are also becoming available: now more than ever it has become possible to address some of the most critical issues of our times, such as enabling more meaningful work, fostering cooperation and community, even realigning long-term sustainability with financial interests. None of this is theory, real-life implementations have pragmatically demonstrated such results. Combining these innovations can make available a world of Sustainable Abundance within one generation.

Specifically in Europe, the traditional ways to handle unemployment are increasingly failing. In areas with high unemployment, people have already demonstrated that living conditions can be significantly improved by creating their own complementary currencies instead of just relying on welfare. Surprisingly, it is in fact not the first time that such solutions have been successfully implemented in the Modern world. During the 1930�s many thousands of such initiatives were operational in the US, Canada, Western Europe and other areas affected by the Depression. Complementary currencies could become a key tool to buffer a region from the shocks caused by failures and crises in the official money system. Finally, this approach is a win/win for both locally owned businesses and society at large.

The degradation of the environment due to short-term financial priorities can similarly be addressed with pragmatic money innovations. Short-term thinking is shown not to be due to human nature, but to the prevailing money system. It is also possible to reverse this process, by using a currency designed specifically for multinational trade and contracts which would make long-term thinking a spontaneous process, focusing the attention on long-term sustainable solutions without the need for regulations or taxation. Historical precedents have proven such results, some of them lasting over several centuries.

Introduction

Three Promises

Underlying Viewpoint

Chapter 1: Money - The Root of All Possibilities

The Time-Compacting Machine

1. Age Wave
2. Information Revolution
3. Climate Change and Biodiversity Extinction
4. Monetary Instability
5. Money at the Core of the Time Compacting Machine

What is Sustainable Abundance?

What Prevents Sustainable Abundance?

Four Seasons in 2020

Spring
Summer
Fall
Winter

Creating Sustainable Abundance with Complementary Currencies

A Road Map to Your Money, Your Future

PART ONE: What Is Money?

Synthesis of Part One

Chapter by Chapter Outline

A Primer on How Money Works

"Your" Money

How does Banking Work?

How Did Banking and "Modern" Money Start?
The Secret of "Modern" Money
Credit Markets

Your Savings: Storing Value

A Scorecard
Real Estate
Stocks
Bonds
Currencies

Central Banks and Other Firemen

National Level
"Money�s Family Portrait"

Money as a System

The Firemen�s Viewpoint
Back Full Circle to You

Chapter 2: Today�s Money

A "Simple" Question

Where is the money mystery coming from?

The History of Money
The Needs of the Confidence Game
Why Money is not a Thing

A Working Definition of Money

The Origin of Money�s Power

Money Shifts and Power Shifts

Today�s Money

Four Key Design Features
The Effects of Interest
What next?

Chapter 3: Cybersphere--The New Money Frontier

Post-Industrial Society=Knowledge Age

The Nature of Information
Implications for the Economy and Society

The Positive Forces

The Negative Forces

Distribution and Retail

Implications for Money

Payment Systems
New Money

Implications for Banks and Financial Services

Wisdom in the Information Age?

Chapter 4: Five Scenarios for the Future

Scenarios - Windows on the Future

The Official Future: "More of the Same"

Why the Official Future is Not Going to Happen

The Corporate Millennium

Timetable for the Transition

How is this Possible?

The Case of the Stealth Mega-Store
From Information Age to Corporate Millennium

Careful Communities

Assessing Possibilities of Breakdowns
The Forces Feeding "Careful Communities"

Hell on Earth

Sustainable Abundance

The Four Scenarios in Perspective

The Two Driving Forces

PART TWO: Choosing Your Future of Money

Chapter 5: Work-Enabling Currencies

An Important Distinction

Unemployed? Who? Me?

The Path not Taken in the 1930s

Today�s systems

Conclusion: Complementary Currencies as �Early Prototypes�.

Chapter 6: Community Currencies

Community Breakdown

Currencies that Build Community

Complementary Currencies in the Information Age

Conclusions

Chapter 7: Some Practical Issues

Complementary Currencies, Legal and Tax Authorities

Complementary Currencies, Central Banks and Inflationary Pressures

Elements for a European Social Policy for the Information Age

How to Start Your Own Complementary Currency

Chapter 8: A Global Reference Currency - Making Money Sustainable

Long-term Sustainability

Positive Results of the Modern Money system

Status Report on Biosphere Earth

The Three Tools of Persuasion

Relationship between Money systems, Time Perception and Sustainability

Far-Seeing Glasses?

A Global Reference Currency (GRC) and the Terra Unit

Terra as a Business Initiative

Chapter 9: Sustainable Abundance

A Visit to the Stanford Campus

Towards an Integral Economy?

The Three Waves toward Sustainable Abundance

A Monetary System for Sustainable Abundance

The Four Seasons of 2020 Revisited

The Four Scenarios Revisited

Conclusion

Epilogue and Prelude

�Copyright 2000 Bernard Lietaer
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