It�s not every day you
hear a former central banker and an architect of the euro advocating
for complementary currencies that have nothing to do with the
national ones we call money. But that�s exactly what Bernard Lietaer
does in his book Rethinking Money: How New Currencies Turn
Scarcity Into Prosperity.
He argues new monetary
tools are needed to avoid repeated financial meltdowns and fiscal
crises like we�ve seen in the U.S. and Europe.
�There�s nothing wrong
with a hammer when you are dealing with nails,� Lietaer told Yahoo
Finance�s The Daily Ticker, on Friday, February 22. �However
I think we are dealing with a broader set of issues than one single
type. Therefore, I think it�s time to look at other possibilities;
complete the toolset. If you want to do a paint job it�s a good idea
to have a paint brush.�
Lietaer says in
complementary currency terms, a �paint brush� is a standard medium
of exchange, functioning in a parallel to conventional money. If
that seems alien, Leitaer gives the example of frequent flier miles
as a relatable example.
For a model of the real
life currency kind, you can look to the WIR. It�s a
business-to-business currency in Switzerland that started in the
1930s, and has become the country�s �secret weapon� to better
stability during tough times, according to Lietaer.
When some businessmen in
the 1930s had credit lines from their banks cut, they created a
mutual credit system among themselves to conduct business, inviting
clients and suppliers to join. Even in modern days, during
recessions when bank loans decline, businesses use WIR to pick up
the slack. That�s how it helps to smooth the tough times, notes
Lietaer. He reports about 600,000 mostly small- and medium-sized
Swiss businesses use the WIR, or about 16% of businesses, with a
volume just under $2 billion annually.
Meanwhile, in the U.S.,
this month we�ve seen Virginia legislators vote to study the
feasibility of minting a metallic-based monetary unit of the state�s
own. And according to CNN, since the financial crisis a growing
number of communities have introduced local currencies. For example,
the Potomac in Washington D.C. was introduced in part to help more
money stay in the local community.
For his part, Lietaer
gives the example of time banks, where 286 systems across the
country including TimeBanks NYC allow people to provide help,
support, and services to one another by using time instead of money
He thinks it�s time to
complete the �toolbox� and adopt more of these types of
While Lietaer was a
co-designer of the ECU (European Currency Unit), which was the
precursor to the euro that brought many currencies into a single
monetary system, he acknowledges the irony that he now advocates
alternative currencies from the regional to global level.
Now he sees
complementary currencies running parallel to national money at all
levels. He claims we need a global business-to-business b2b)
currency that is nobody�s national money, and which encourages
multinational corporations to think long-term. He also sees
complementary currencies providing value even to a local
neighborhood, thus helping solve regional social problems.
Editor�s Note: In the
limited interview time allotted, Lietaer failed to mention the many
b2b trade exchanges that are functioning in some 35 countries around
the globe. They are conduits for considerable business among small
and mid-sized companies (estimated in the billions aggregately), and
a much closer step to his goal of an international b2b currency for
multinational corporations, than are the TIME banks and community
currencies. Several years ago Lietaer made an excellent presentation
on this very subject to the International Reciprocal Trade
Association�s annual convention.