Transforming our Money System – 1

By John BristowComments Off on Transforming our Money System – 1

Transformation of our Money System: the need and some tested solutions A review and summary of The End of Money and the Future of Civilisation by Thomas H.Greco 2010 Floris Books, UK,             ISBN 978-086315-733-2     2009 Chelsea Green Publishing, US.  http://beyondmoney.net

You can download this by clicking on the PDF icon at the end of the document.   Also as noted in the comment at the end there are links to each of the other 5 parts at the end of this document and a summary of the topics in each part which are highlighted in that part.

Summary and Discussion of the book by John Bristow:  I have recently read this book by Thomas Greco and summarised it in order to get to grips with the ideas as I am unfamiliar with what money really is and how it has developed, and am interested in this as a key element of possible changes in our way of thinking about and organising our economy, particularly in more developed countries (though the solutions here are very relevant to the less developed and some of them are trying out new ways of doing business with money and with investments and savings). Other relevant and fairly recent books are Niall Ferguson’s Ascent of Money (more of an historical account) and Rachel Botsman and her colleague’s What is mine is yours (“collaborative consumption”) whose recent book has won acclaim for her as a “thought leader” alongside her work as a social innovator.

This book provides the information needed to understand the money system better and the effects of the current system on our lives, as well as practical ideas for possible local initiatives supported by national and international NGOs and research and knowledge centres.

Greco has worked in the area of alternative forms of exchange for 30 or more years as a teacher, advisor and author. This recent book is of practical interest as it describes the real need for a transformative change for the future of civilisation and gives examples of some tried and tested (knowledge based) ways forward in addressing the need. He shows  how a transformation of the kind he points to is in line with both felt needs. The ways forward make economic and financial sense and fit the need for economies that do not grow in ways that destroy our natural habitat and human and other lives on the planet (seeing all life as one life) and that create more social co-operation and cohesion rather than division between the have’s and have nots and the fragmentation of local communities. His suggestions for change also fit the kind of values and guiding ideas that appeal to younger people seeking alternatives and older seeing opportunities for change that they sought but had not seen or formulated in this way before. They seem to reflect aspects of the next step in humanity’s history, though this century is full of drama and uncertainty around how much suffering or cost will be incurred before some transition to a different way of living, thinking and doing things is arrived at. The solutions he puts forward would be supported by and need to be integrated with the emerging transformational change towards a more web-based trading platform world-wide, the technological infrastructure. He sees the main drivers for change being these felt needs and local “bottom up” initiatives, that do not use coercion or become unduly threatening to the current regime, that use the technology for information and communications and fit these values, and are globally networked and informed. National governments and the vested interests of some of the large financial organisations may well resist it and be fearful of not having the option available for borrowing off the central bank to cover spending above revenue from tax and so using the legal tender basis of national currency to pay off their debts or to use deficit spending to counteract deflation. They will need to see viable alternatives. Greco sees this political-financial elite and their world view as having inordinate power over our money system and therefore our economies, a form of what he calls “materialistic feudalism”, a politicised global debt-money regime. But local businesses may well see the advantages as well as financial service enterprises based on more co-operative models, and community groups seeking an economy based on a different mix of values and priorities and more resilient and empowered local communities. With similar successful initiatives in a few local regions, each requiring sufficient “critical mass” to be become stabilised, Greco sees similar changes be adopted elsewhere. So there are many factors coming together to make a key societal change, already under way in terms of 30 years (and more) of learning and in web-based developments. A more thorough analysis of the drivers and context for this change are set out in the last section.

The summary can be used for reference as it is organised with links to  these 4 sections (4 with 2 parts) and the topics within them are  listed here and can be found by scrolling down to the highlighted topic:

1. The Money System: historical development and current problems: the money sytem defined  –  5  Stages in the Transformation of Money –  Barter – Commodity – Symbolic – Credit, Fractional Reserve Banking, Monetisation, Deposits -Cheques – Credit Clearing – Mutual Credit Clearing – Governments, Central and Investment Banks – legal tender status –  Stages in development of Central Banks and Issuing of Money

2. Implications of Problems with the money system    Monopolised credit supply – Debt Imperative –   Concentration of wealth –  Inflation and Government Finance – Lending and high powered money – Issuing money and Inflation –  Interest and Usury defined and distinguished.

3. Principles to guide reform of the money system and the design of alternatives 

4, Transforming the money system (1) Alternatives:  Mutual Credit Clearing -Alternative Exchange Systems – analysing failure in these –  Commercial Trade Exchanges –  Investment through Partnership Finance –   Equity and Debt Financing compared –   Peer-to-peer lending – Standard Measure of Value –  Basis of Issuing Local Currencies –  Web-based trading platform – Forms of Organisation and Governance – Regional Cooperative Economy: Basque Example –  Organising Credit Clearing Exchanges – Limited Liability Partnerships –  Mutual Companies –   Mutual Credit Clearing the Swiss WIR example –  Social Money and Social Banking –  Role of Central Government in Transformation of the Money System – Local Government – Regional Socio-Economic networks in a country

4. Transforming the Money System (2) Implementing Change:  Disruptive Technology (Christensen) – Force Field Analysis –  Niche Markets – Web-based Trading Platform –  Four key components of Web-based platform –  Bottom up Change and Awareness Raising – Tipping Point, Networks, Design Characteristics and Context

Economics, Money System
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