The New Economics Foundation on the 'social economy'.

1. The Great Transition
to a High Well-Being, Socially Just
and Low Carbon Economy
Hard Times Ahead Conference, 30th May 2012
Tony Greenham
new economics foundation
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2. 4 ‘U’s of economics
› Unsustainable › Unstable
› Unfair › Unhappy
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3. Unsustainable
Nine ecological boundaries
Source: Rockstrom (2009) ‘A safe operating space for humanity’
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4. Unfair
The Gini coefficient, 1979 to 2008–09 (UK)
Source: “Poverty and Inequality in the UK”
Institute for Fiscal Studies
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5. Unhappy
Life Satisfaction in Selected OECD nations
Available at www.happyplanetindex.org
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6. Unstable
It’s all connected - Sovereign debt and bank exposure
Reproduced from the New York Times
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7. Goal of a good economy
Achieve high well-being and social
justice within fair ecological limits
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8. New Conceptual Framework
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9. Six Pillars of the Great Transition
1 – Reform Finance and Money
2 – Create Good Jobs
3 – Measure What Matters
4 – Define Ecological Limits
5 – Redefine Role of the State
6 – Reduce Inequality
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10. Taming the Vampire Squid….
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11. ‘Running out of Money’
Stories from the American Great Depression
• Wasted milk, idle labour and hungry children
KEY CONCEPTS – debt deflation, spare capacity
• The parable of the $100 bill
KEY CONCEPTS – relationships of credit; socially constructed; “money is
not metal”
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12. The Miracle of Worgl
• 1932: small town in Austria
• 1500 local unemployed
• 40,000 shillings public funds
• Issued own currency
• Re-paved streets, new water
system , new bridge, new
houses and a ski jump!
• 200 towns ready to copy
• 1933: outlawed by the central
bank See www.lietaer.com/2010/03/the-worgl-experiment/
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13. Local banking – the reinvestment gap
A UK snapshot from Barclays Bank….
Deprived Areas All Other Areas
7%
30%
70%
93%
Reinvestment gap Reinvestment gap
Ratio of lending to savings Ratio of lending to savings
NEF (2006) The Power of Information: opportunities for disclosure
NEF (2006) Full disclosure: why bank transparency matters.
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14. Keeping money local
“Money is round, and it rolls away”
Confucius
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15. Plugging the Leaks
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16. Monetary vs core economy
In 2005 average time spent on housework and care for children
and adults in Britain worth £253.7 billion – 21% of GDP
Source: nef - 21 Hours
“No society has the money to buy, at market prices, what it
takes to raise children, make a neighbourhood safe, care for the
elderly, make democracy work or address systemic injustices…
the only way the world is going to address the social problems
that are dumped on it is by enlisting the very people who are
now classified as ‘clients’ and ‘consumers’ and converting them
into co-workers, partners and rebuilders of the core economy.”
Edgar Cahn
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17. Stories of Co-Production
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18. Complementary currencies
Social exchange
• designed primarily to motivate people’s behaviour
• credits can be issued and simply deleted when spent
Challenge: persuading people to appreciate credits which might
be regarded as basically valueless
Economic exchange
• designed primarily to circulate
• have a continuing existence once they are issued
Challenge: persuading people to trust the credits; backing,
balanced books; continued circulation
Based on “More Than Money” by David Boyle
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19. Social currencies
Examples Outcomes
Local Time-based exchanges, e.g. co-production, building
Member-to-Member, Skill Swap, confidence, skills and social
Rushey Green, Spice, Care Banks networks, supporting people for
personal change or recovery,
building community.
National or Reward points, e.g. Nectar, Nu- Nudging behaviour, reducing
international spaapas, Blue Dot, Wigan and emissions, building loyalty,
Windsor, Time Dollar Youth Court recognising effort
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20. Economic currencies
Examples Outcomes
Local Local currencies, e.g. LETS, rebuilding local economies and
Brixton pound, Ithaca hours, employment, using local
Stamp Scrip, Community Way, resources more effectively, valuing
local barter. local waste, tackling poverty
National or Backed currencies, e.g. kWh re-valuing local renewables,
international money, Carbon points, Liberty revaluing agricultural produce,
Dollar, Terra, WIR, LLP money, providing reliable currency,
goCarShare, C3. paying people
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21. Evidence: economic impact
UK: 80-90% of money spent in multiples leaks out of
the economy (nef 2002)
US: 10% redirection of spending from chains to local
businesses
• San Francisco: $192 million in additional economic activity
and 1,300 new jobs (2007)
• West Michigan: $140 million in new economic activity for the
region, including 1,600 new jobs and $53 million in additional
payroll (2008)
Source: nef (the new economics foundation): The Money
Trail, http://www.pluggingtheleaks.org/downloads/the_money_trail.pdf, p115; Civic
Economics www.civiceconomics.com/SF and www.civiceconomics.com/localworks
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22. Complementary currencies -
benefits
• Local economic multiplier
• Building community cohesion
• Productive v speculative
• Stimulate local production
• Shorten supply chains
• Increased resilience
• Complementary not competing
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23. Community Currencies
in Action
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24. “A map of the world that does not include
Utopia is not even worth glancing at”
Oscar Wilde, Irish dramatist, novelist and playwright
Tony Greenham
tony.greenham@neweconomics.org
@nefbusiness
nef (the new economics foundation)