Why we Need a Monetary Ecosystem
Scientific Evidence for Complementary Currencies
JIUIUI. s
Mi V.
Espftard Li5oTT101oiooio...
What to answer to
•Those who claim that Bitcoin is a potential
problem for banks or the official money
system?
What to answer to
•Those who claim that Bitcoin is a potential
problem for banks or the official money
system?
© Conventio...
A Simple Question
•Who creates conventional
money?
A Simple Question
• Whocreates conventional
money?
-The Government?
-Central Banks?
A Simple Question
•Who creates conventional
money?
—The Government?
—Central Banks?
—Someone else?
All « national » moneys are created
- out of nothing (« fiat » money)
- through bank debt
- with interest!
How many of you have used a
complementary (non-conventional)
currency other than Bitcoin?
Plan
• Conventional Money generates un-
sustainabilities
* Systemic Cause for Monetary Instability
* Systemic Solution
• C...
Conventional Money System is the
Systemic Cause for 4 Un-sustainabilities
1 !t Amplifies Business Cycles
2) It Makes Econo...
1. Money Creation Process amplifies
the business cycle
Economic
Cycle
after money
Creation
Business
(Inventory)
Cycle
2. Compulsory Growth
GRO
•When a bank creates money through
a loan, only the principal is being
created, not the interest.
•Without new loans (i.e....
3. Money System Automatically
Concentrates Wealth
.i
5T
•What is the Median wealth
(most frequent amount) of US
households?
<L>
tJ
C
0/ '9
a. a |
a¥ 4fl
3
!
it iI
*
*
*O 4
n
u
r
: *B a
'
3
2
Iu.
l
-0 5 0.0 0 S 1.0 1 5
Wealth, millions of dollars
...
Comparison of Interest Paid & Gained
in ten groups of households of 3 8 million each
reference year 2000
all values in tho...
1
The Transparency Misconception:
"Interest is paid only when we borrow money"
r
Cost of interest on capital 12%
/A
* .i
A...
4. Conventional Money Generates
Short-termism
ma*Or>o.:os
/
o
o(/
t
V
_
r
Short-termism
A.
lUyvart
* *
% lOft
iOQyear*
9
S 1,000
Financial Viewpoint
Iurrsti; t
*ilk pMitivz I/tf§
a jVfw
Value ilhu...
V
L
t
V
6
3A
iB*
r
i
Plan
• Conventional Money generates
unsustainabities
• Systemic Cause for Monetary Instability
• Systemic Solution
• Concl...
Money System is itself
structurally unstable
iII i1FI
1+1 i
—
*
ak
f:
r
', *
.
*.
Between 1970 -2010 IMF identified:
145 banking crashes
204 monetary collapses
76 sovereign debt crises
425 systemic crises...
*
i
m
IS*
:IAl C
r
V.1 f
I9I rim
nr
jt
iJ
*
L-*
n *ÿ
im *„ÿ
*>
1m m
#ÿ
p
B
I
7_ j
4%
I
-« -
' "S *-T
/ÿ
mJ (r ,i
I
i '
a %...
Sustainability of Complex Networks
•Robert Ulanowicz 25 years of ecosystems flow
data. Natural ecosystems have in common t...
Sustainability of Complex Networks
•Robert Ulanowicz 25 years of ecosystems flow
data. Natural ecosystems have in common t...
Balance in Natural Networks
Resilience
Efficiency
(In)Balance in Our Financial Network
"Monoculture = accident waiting to happen"
Efficiency
Resilience
r w-

i
J
V
1 _ A,
La
v»*>ymum1
r-r
r. 1
v«y
I li J!
i
'4
S _
J
** i
*7;
A M•f
- -* #- EJ Xi“l f #n-
I
r
J'
i
L
v
r
h
- 's...
[
' X»
,XT ;
l:£.
L P t
*y
*
t
•*A
Li
* X. <il
i,
.ÿ
"f
**
m «J[/' *, '
- X» I
' -C* '*<&. '
1
.flf *
I 
,4* : * A
~./ A
s...
1
;<ry
* :_-d
i
**
J*Ipd
iL 4
»V
r
A*.t
- f’§l%
UJfe)
v$4
I
f
Lÿ4r
h 1
*
"If* •tr ¥
*i
Jri
>iSi
4
4
«
wfit*'
f
C *Vp
fr
I»...
- 1
a4
‘T
-
3
**I
*A
d1-
M
* f|
4
u
m
A'<<T
i
u)fe)I
mr P1
i
r
***
tr m
rj:
*
*1r
P
*
f«.
;<i
T
'ÿ4
r
*r
*1«i
#J#
1
- I
ti...
« Monetary Ecosystem » is NOTa
metaphor !!!
•Diversity and intercormectivity are 2 structural
variables => applies to all ...
Key Points
© We need monetary diversity, even to stabilize
the conventional money system
(2) Resilience requires sacrifici...
Plan
* Conventional Money generates
unsustainabities
• Systemic Cause for Monetary Instability
• Systemic Solution
• Concl...
Sustainability Optimum
100%
/
Excess
xcess
Resilience
o%
Resilience <<fci
{Diversity + Interconnections)
Efficiency (A)
{S...
Sustainability Op6™mNaturai
Ecosystems100%
0%
Efficiency (A)
(Streamliner!)
Resilience (ÿ)
(Diversity + Interconnections)
Optimumÿ jyja(||r a|
Ecosystems
Sustainability
100ÿ
0%
Resilience
(Diversity + Interconnections)
Efficiency (A)
(Streamlin...
Susiarnability Optimum a|Ural
g0k£ÿ!EcosYstcms*100%
>
0%
Efficiency (A)
(Streamlined)
Resilience (<M
(Diversity + Intercon...
Optimum
•
Sustainability
100% * m
*
a
*
NWindow of
Viability
Current
Operation of
Financial Systerr?
0%
Resilience (*)
{Di...
Sustainability Optimum
1 / “ Window of "
/ Viability
4
—*ÿ
f Collapse of
Financial System
100%
0%
Resilience (*t»)
(Divers...
Natural Recovery
Suslamability Optimum _
100%
m
9
m
Window rf
Viability
0% Collapse
Resilience (<t»l
[Diversity + tntercom...
Sustainability Optimum
* * ; Reestablishment of
Monopoly of Bank-debt Money
f Window of
f Coilap&e of
Financial System
100...
Sustainability Optimum
* ; Reestablishment of
Monopoly of Bank-debt Money
LggZXw Collapse of
Financial System
100%
0%
Resi...
Plan
• Conventional Money generates un¬
sustainabilities
• Systemic Cause for Monetary Instability
• Systemic Solution
Towards a Monetary Ecosystem:
FROM TO
*
; 1n#
jj
(
JJ
:*a>: '<L J
A.>
s*
*‘ f
Sustainability Optjmum
Effect of
Complementary
J Currencies
100%
*
IWindow of
Z Viability
Current
Operation of A
Financial...
WIRiBank
•feX*R<
WIR-Karte •Carte WIR * Carta WIR
SH5b 01001 SS'rSOÿSi
’jJ I KKLEK H AR!E-LQU l $£ jQ
5 5905-00 09. Oc
Gii...
Other Example: Regios in Germany
J[ 5
Q1 542219 542538
i s Chiemgauer j ji Chiemgauer1
EH
f H
1* t,»o titu*
<L
d
20£10 542...
13
1i iJfllj 1 a 1 1 i
1Lu
I!
a> ai
Iv s1A ™
U
O 
<u 
 i

CL 3 
u 1
fD
u
O ro
</>
a>o
£ i
0> <u
-Q
Q.
i E
O
u
1 ! I 1 i a a
Other Examples
* Big variety ofsocialpurpose currencies: elderly
care, ecological, learning, etc.
•Terra: A global currenc...
’
?%
k
<T.
tE
c>?.
I®.
«K
i
IIS
• • 4?
p J.
*g?
'
% 
»
m
%
m
v1J %
Plan
• Conventional Money generates several
un-sustainabilities
• Systemic Cause for Monetary Instability
• Systemic Solut...
Our international monetary system is in
[TROUBLE|
[TROUBLE } {TROUBLE?
(TMnucf—|-r»ouBur (
Tjeiovcc'i
&rEb rIH3
EHH E 4siG...
Value Shift
Patriarchal vs, Matrrfocal
Patriarchal Societies • Matrifocal Societies
m4 i
 r> *
a?>77!
}*
S *i
-C' <r v
,
V...
Value Shift
Patriarchal vs. Matrifocal
* Patriarchal Societies
Monopoly of centralizing
Currency with interest
=> Great fo...
Value Shift
Patriarchal vs. Matrrfocal
* Patriarchal Societies
Monopoly of centralizing
Currency with interest
=> Great fo...
Value Shift
Patriarchal vs. Matrifocal
• Patriarchal Societies • Matrifocal Societies
L*j
-L . ,
hr
Lit-gdNfy
i
*
Yi
/ i
L...
Conclusions
© We need monetary diversity, even to stabilize
the conventional money system
(2) Complementary currencies mak...
flrHI
/
f
is
1if i
f
V
r
V' r
.r
,F
,
r
v
{i
V
V Bernard Lietacr e.i,
VJ Htmjird LictacrhChristian ArmpcrgcT.
Salty Goemcr Stefan Brimnhtiher! VA
o
Money anu Sustainab...
A
t PEOPLE MONEY
£
I
Vlui: r
(
HOW
NEW CURRENCIES
TURN SCARCITY INTO
PROSPERITY
f
r RETHINKING
M( KNEY
Denuinl LieUier
ill...
Follow Up
•www.lietaer.com
• bernard@iietaer.com
• Articles in 4 different peer-reviewed journals
• => see www.lietaer.com...
Upcoming SlideShare
Loading in …5
×

Bernard Lietaer - Scientific Evidence for Complementary Currencies

514 views

Published on

Bernard Lietaer - Scientific Evidence for Complementary Currencies
Source video: https://www.youtube.com/watch?v=M4ThwS1Xln0

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
514
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Bernard Lietaer - Scientific Evidence for Complementary Currencies

  1. 1. Why we Need a Monetary Ecosystem Scientific Evidence for Complementary Currencies JIUIUI. s Mi V. Espftard Li5oTT101oiooioTT j I)"|ÿOTOTJÿol(TlDroÿ/, 1 U10101010U101 1 fa;JiangjioioioioioioiÿHteHM )110101010101C >1010101010100 noioioioioioioi. ninimnininimmii , £ rf i0 P , - 010 * - +V I* E * I* iJ 4, J * vW !J lr iP ft rf- * % :i “ - * * HE l * 1101 W t™l “ T. / L /K L*. - Vj HO;,1 - =A I i V7
  2. 2. What to answer to •Those who claim that Bitcoin is a potential problem for banks or the official money system?
  3. 3. What to answer to •Those who claim that Bitcoin is a potential problem for banks or the official money system? © Conventional money provokes various un- sustainabilities (2) Conventional money is structurally unstable (3) Bitcoin as part of a monetary ecosystem is part of a solution for systemic instability!
  4. 4. A Simple Question •Who creates conventional money?
  5. 5. A Simple Question • Whocreates conventional money? -The Government? -Central Banks?
  6. 6. A Simple Question •Who creates conventional money? —The Government? —Central Banks? —Someone else?
  7. 7. All « national » moneys are created - out of nothing (« fiat » money) - through bank debt - with interest!
  8. 8. How many of you have used a complementary (non-conventional) currency other than Bitcoin?
  9. 9. Plan • Conventional Money generates un- sustainabilities * Systemic Cause for Monetary Instability * Systemic Solution • Conclusions
  10. 10. Conventional Money System is the Systemic Cause for 4 Un-sustainabilities 1 !t Amplifies Business Cycles 2) It Makes Economic Growth Compulsory (3) It Automatically Concentrates Wealth @ It Programs Short-Termism
  11. 11. 1. Money Creation Process amplifies the business cycle Economic Cycle after money Creation Business (Inventory) Cycle
  12. 12. 2. Compulsory Growth GRO
  13. 13. •When a bank creates money through a loan, only the principal is being created, not the interest. •Without new loans (i.e. new growth), everybody goes bankrupt!
  14. 14. 3. Money System Automatically Concentrates Wealth .i 5T
  15. 15. •What is the Median wealth (most frequent amount) of US households?
  16. 16. <L> tJ C 0/ '9 a. a | a¥ 4fl 3 ! it iI * * *O 4 n u r : *B a ' 3 2 Iu. l -0 5 0.0 0 S 1.0 1 5 Wealth, millions of dollars Figure 2.4: 2007 U.S. wealth distribution [48] (Federal Reserve Reserve Bank, 2007}
  17. 17. Comparison of Interest Paid & Gained in ten groups of households of 3 8 million each reference year 2000 all values in thousands of Euros per household per year Th*,€ 80 Germany 80% bottom always pays net interest to Top 10% 70 fl InltiHl pan! tor monttvy andItEM* Hwiijinci Banktmi 60 Interest galnad HI monetary fine! Sink IHI} fttad 50 40 30 n20 I10 unmiL0 f T T 1234 56 769 10Household Groups:
  18. 18. 1 The Transparency Misconception: "Interest is paid only when we borrow money" r Cost of interest on capital 12% /A * .i A bV dÿ Cost of jnierest on capital 38% o KM / d I. 3 Rent in Public Housin Cost of interest on capital 77% Soÿtc H CreuTi
  19. 19. 4. Conventional Money Generates Short-termism ma*Or>o.:os / o o(/ t V _ r
  20. 20. Short-termism A. lUyvart * * % lOft iOQyear* 9 S 1,000 Financial Viewpoint Iurrsti; t *ilk pMitivz I/tf§ a jVfw Value ilhuuntd lo today. $7.60 JL' JL
  21. 21. V L t V 6 3A iB* r i
  22. 22. Plan • Conventional Money generates unsustainabities • Systemic Cause for Monetary Instability • Systemic Solution • Conclusions
  23. 23. Money System is itself structurally unstable iII i1FI 1+1 i — * ak f: r ', * . *.
  24. 24. Between 1970 -2010 IMF identified: 145 banking crashes 204 monetary collapses 76 sovereign debt crises 425 systemic crises = more than 10 countries/year! My Claim: Our conventional money system is structurally unstable!
  25. 25. * i m IS* :IAl C r V.1 f I9I rim nr jt iJ * L-* n *ÿ im *„ÿ *> 1m m #ÿ p B I 7_ j 4% I -« - ' "S *-T /ÿ mJ (r ,i I i ' a % J -» . * i i ttl-J 5 S.% Sjfe1- Ai 1{»«' / * t*4
  26. 26. Sustainability of Complex Networks •Robert Ulanowicz 25 years of ecosystems flow data. Natural ecosystems have in common to be sustainable. What else do they have in common?
  27. 27. Sustainability of Complex Networks •Robert Ulanowicz 25 years of ecosystems flow data. Natural ecosystems have in common to be sustainable. What else do they have in common? •Sustainability of complex network results from appropriate balance between and Resilience, emergent properties from 2 structuralvariables of complex networks: diversity and interconnectivity
  28. 28. Balance in Natural Networks Resilience Efficiency
  29. 29. (In)Balance in Our Financial Network "Monoculture = accident waiting to happen" Efficiency Resilience
  30. 30. r w- i J V 1 _ A, La v»*>ymum1 r-r r. 1 v«y I li J! i '4 S _ J ** i *7; A M•f - -* #- EJ Xi“l f #n- I r J' i L v r h - 's 1 r W * IV *** I t % K * J H * |r J I 1 H - 1
  31. 31. [ ' X» ,XT ; l:£. L P t *y * t •*A Li * X. <il i, .ÿ "f ** m «J[/' *, ' - X» I ' -C* '*<&. ' 1 .flf * I ,4* : * A ~./ A s 'ft* 32*;/r ‘t sw r J*-. (Lflf1 1 >V*«ft — J? j£ w > **> !fc- HAFV J# .Vc 1 » gh V. A w% i-ft +., *ÿ r V l i ii n s £ r r ‘i * ft r r|f. -#J . s' - y*M, .:v #n j* * ni - f«i i A /ÿÿ- 3r 't £3 Tony Northrup X •* *rÿL * JH * i
  32. 32. 1 ;<ry * :_-d i ** J*Ipd iL 4 »V r A*.t - f’§l% UJfe) v$4 I f Lÿ4r h 1 * "If* •tr ¥ *i Jri >iSi 4 4 « wfit*' f C *Vp fr I»ÿ # # I 1 > *r P - iif f i i i * A>. I ri T .& 23U1U 1
  33. 33. - 1 a4 ‘T - 3 **I *A d1- M * f| 4 u m A'<<T i u)fe)I mr P1 i r *** tr m rj: * *1r P * f«. ;<i T 'ÿ4 r *r *1«i #J# 1 - I tiI f
  34. 34. « Monetary Ecosystem » is NOTa metaphor !!! •Diversity and intercormectivity are 2 structural variables => applies to all complex flow networks with similar structure, including money system! • Structural variables are independent from what is being processed in network — biomass in an ecosystem, — electrons in electrical circuit, - information in immune system, - money in an economy
  35. 35. Key Points © We need monetary diversity, even to stabilize the conventional money system (2) Resilience requires sacrificing some efficiency (3) Digital Age Monetary innovations provide tools to motivate people at different scales and issues.
  36. 36. Plan * Conventional Money generates unsustainabities • Systemic Cause for Monetary Instability • Systemic Solution • Conclusions
  37. 37. Sustainability Optimum 100% / Excess xcess Resilience o% Resilience <<fci {Diversity + Interconnections) Efficiency (A) {Streamlined)
  38. 38. Sustainability Op6™mNaturai Ecosystems100% 0% Efficiency (A) (Streamliner!) Resilience (ÿ) (Diversity + Interconnections)
  39. 39. Optimumÿ jyja(||r a| Ecosystems Sustainability 100ÿ 0% Resilience (Diversity + Interconnections) Efficiency (A) (Streamlined)
  40. 40. Susiarnability Optimum a|Ural g0k£ÿ!EcosYstcms*100% > 0% Efficiency (A) (Streamlined) Resilience (<M (Diversity + Interconnections)
  41. 41. Optimum • Sustainability 100% * m * a * NWindow of Viability Current Operation of Financial Systerr? 0% Resilience (*) {Diversity + Interconnections} Efficiency (A) (Streamlined)
  42. 42. Sustainability Optimum 1 / “ Window of " / Viability 4 —*ÿ f Collapse of Financial System 100% 0% Resilience (*t») (Diversity + Interconnections) Efficiency (A) (Streamlined)
  43. 43. Natural Recovery Suslamability Optimum _ 100% m 9 m Window rf Viability 0% Collapse Resilience (<t»l [Diversity + tntercomecnons) Efficiency [A) [Streamlined}
  44. 44. Sustainability Optimum * * ; Reestablishment of Monopoly of Bank-debt Money f Window of f Coilap&e of Financial System 100% 0% Resilience {<i»t (Diversity + Interconnections) Efficiency lA) (Streamlined)
  45. 45. Sustainability Optimum * ; Reestablishment of Monopoly of Bank-debt Money LggZXw Collapse of Financial System 100% 0% Resilience (4>l (Diversity + Interconnections) Efficiency (A) (Streamlined)
  46. 46. Plan • Conventional Money generates un¬ sustainabilities • Systemic Cause for Monetary Instability • Systemic Solution
  47. 47. Towards a Monetary Ecosystem: FROM TO * ; 1n# jj ( JJ :*a>: '<L J A.> s* *‘ f
  48. 48. Sustainability Optjmum Effect of Complementary J Currencies 100% * IWindow of Z Viability Current Operation of A Financial Systei 0% Resilience HO (Diversity + Redundant Interconnections) Efficiency (A) (Streamlined]
  49. 49. WIRiBank •feX*R< WIR-Karte •Carte WIR * Carta WIR SH5b 01001 SS'rSOÿSi ’jJ I KKLEK H AR!E-LQU l $£ jQ 5 5905-00 09. Oc Giiltiq bis •Vaiable jusqu’au * Valiflo fino al 1 * - * i;
  50. 50. Other Example: Regios in Germany J[ 5 Q1 542219 542538 i s Chiemgauer j ji Chiemgauer1 EH f H 1* t,»o titu* <L d 20£10 542389 542743 1i Chiemgauer Chiemgauer % -ii "K 3l ~pal L*1 wI>4? AT IV t |*<S- 5i itit
  51. 51. 13 1i iJfllj 1 a 1 1 i 1Lu I! a> ai Iv s1A ™ U O <u i CL 3 u 1 fD u O ro </> a>o £ i 0> <u -Q Q. i E O u 1 ! I 1 i a a
  52. 52. Other Examples * Big variety ofsocialpurpose currencies: elderly care, ecological, learning, etc. •Terra: A global currency that makes it profitable for multinationals to think long-term * Dual Currency Banking reduces poverty (Brazil) •Loyalty Currencies: most common commercial complementary currencies •Etc. etc. etc.
  53. 53. ’ ?% k <T. tE c>?. I®. «K i IIS • • 4? p J. *g? ' % » m % m v1J %
  54. 54. Plan • Conventional Money generates several un-sustainabilities • Systemic Cause for Monetary Instability • Systemic Solution • Conclusions
  55. 55. Our international monetary system is in [TROUBLE| [TROUBLE } {TROUBLE? (TMnucf—|-r»ouBur ( Tjeiovcc'i &rEb rIH3 EHH E 4siG GEIJ prp: f —r —- r —. Fÿf r J <ÿ
  56. 56. Value Shift Patriarchal vs, Matrrfocal Patriarchal Societies • Matrifocal Societies m4 i r> * a?>77! }* S *i -C' <r v , Vr , 1 P8 ' I mi 0 /;, LI / ; i/a. B5S£ iA;
  57. 57. Value Shift Patriarchal vs. Matrifocal * Patriarchal Societies Monopoly of centralizing Currency with interest => Great for Industrial Revolution • But Promotes: - Booms & Bust cycles - Concentration of wealth - Destroys community (incompatible with gift economy) • Matrifocal Societies ?-4
  58. 58. Value Shift Patriarchal vs. Matrrfocal * Patriarchal Societies Monopoly of centralizing Currency with interest => Great for Industrial Revolution • But Promotes: - Booms & Bust cycles - Concentration of wealth - Destroys community (incompatible with gift economy) * Matrifocal Societies Duai Currency Systems - Partriarchal one for long-distance - Different type of currency (bottom up) for local exchanges • Promotes: - Economic stability for centuries - General well-being for the "little people” - Builds and sustains community
  59. 59. Value Shift Patriarchal vs. Matrifocal • Patriarchal Societies • Matrifocal Societies L*j -L . , hr Lit-gdNfy i * Yi / i L" L m5®S _
  60. 60. Conclusions © We need monetary diversity, even to stabilize the conventional money system (2) Complementary currencies make it possible to flexibly adapt to the changes coming in the 21st century (3) Bitcoin and other crypto-currencies are part of a systemic solution in an emerging monetary ecosystem!
  61. 61. flrHI / f is 1if i f V r V' r .r ,F , r v {i
  62. 62. V V Bernard Lietacr e.i, VJ Htmjird LictacrhChristian ArmpcrgcT. Salty Goemcr Stefan Brimnhtiher! VA o Money anu Sustainability TheMissingLink 0 GELDENV Geld DUURZAAMHEID b Lind Nachhaltiirkeit V u 3PH 5i b REPOTHEM i 1 Trf CLUB Of ROHE .Eu CwtfTBt KJ Of .Von dnem iibtrWhen FiiunzsyitEiq £ii cincm mutictiivn OLovystem I * ** jÿh-ÿi.CiuboLRome ft IT IkinurdI.LILHI' tÿriHun MfiÿT|n *lh fi**rrw >kUn nruuihukii HIUmVt AI VrfcltltLlN •www.lietaer.com
  63. 63. A t PEOPLE MONEY £ I Vlui: r ( HOW NEW CURRENCIES TURN SCARCITY INTO PROSPERITY f r RETHINKING M( KNEY Denuinl LieUier illHI Jar»|iii Dunne =4§f[t > SR 4Tir s
  64. 64. Follow Up •www.lietaer.com • bernard@iietaer.com • Articles in 4 different peer-reviewed journals • => see www.lietaer.com/research

×