Complementary Currencies for social change

An Interview with Bernard Lietaer. Part II

by Ravi Dykema courtesy Nexus Magazine [1]

RD: Would you like to see the use of complementary currencies continue to expand?

BL: I think it is a useful tool to solve a number of our problems. It makes it possible to truly create a more gentle society.

I spent last summer in Bali. People are remarkably artistic in that island. Their communities are unusually strong. They have festivals that are totally mind-blowing, and can last a month. They're having a good time. It's a comparatively non-violent society. And what I found is that it isn't a simple coincidence that they have been using a dual currency system for many centuries. All these unusual characteristics of Bali turn out directly to be nurtured by their dual money system. 

RD: How does the money system lead to those outcomes?

BL: Practically all Balinese participate in a dual currency system. The first is the conventional national currency (the Indonesian Rupiah); the second is a time currency where the unit of account is a block of time of approximately three hours. This second currency is created and used within the "banjar"-this is a community entity consisting of between 50 and 500 families. It is in each banjar that the decisions are made democratically to launch any big community project. It could be to put on a festival or build a school. For each project, they always make two complementary budgets: one in the national currency, and one in time. That second currency-called "narayan banjar" (meaning work for the common good of the community) is created by the people themselves. They don't have to compete in the outside world to obtain that second currency, and it fosters cooperation between the members of the community. I call it a yin currency - it's more feminine in nature. And it complements the national currency, which is a competitive currency and therefore of a yang, or masculine, nature.

Here's why it works: poor communities don't have a lot of national currency, but they tend to have a lot of time. In rich communities, the opposite tends to be the case-people have more national currency, but less time. In either case, each banjar is capable of creating extraordinary events just by budgeting and using more of the kind of currency - national or time - in which they are rich. This balance is a key contribution to the unusually strong community spirit that prevails in Bali. And it's not just because they're Hindus. There are almost a billion Hindus in India, and they don't behave that way. Here is an example of how a currency can make a difference.

RD: We have a strong emotional attachment to money, and we worry about it. So how we relate to money influences who we are and how we think of ourselves.

BL: Yes, you're right. But it is interesting that societies that are using different kinds of currency have also very different collective emotions concerning money. The generally accepted theory, dating back to Adam Smith, is that money is value neutral. Money is supposed to be just a passive medium of exchange. It supposedly doesn't affect the kind of transactions we make, or the kind of relations we establish while making those exchanges. But the evidence is now in: this hypothesis turns out to be incorrect. Money is not value neutral.

Let's return to the example of the fureai kippu that I was mentioning earlier, the elderly care currency in Japan. A survey among the elderly asked them what they prefer: the services provided by people who are paid in yen, the national currency; or the services provided by the people paid in fureai kippu. The universal answer: those paid in fureai kippu, "because the relationships are different." This is one example of evidence that currency is not neutral.

Another example: there is typically a reluctance among friends to pay for help provided by using national currency. If a friend is helping you move or paint and you pay him with national currency, it just doesn't feel right. Interesting isn't it?

RD: So people feel differently about complementary currencies than national currencies?

BL: Yes, there have been surveys in several countries that prove this to be the case. Conventional currencies are built to create competition, and complementary currencies are built to create cooperation and community, and it's important to be aware that both can be available to make our exchanges.

According to Paul Ray's (author of The Cultural Creatives, Harmony Books, 2000) study, 83 percent of Americans believe that the top priority should be to re-build community, and yet the kind of currency we use in our transactions is precisely one that eliminates community. The word "community" comes from Latin, "cum munere." "Munere" is "to give," and "cum" is "among each other" - so community means "to give among each other." In short, it turns out that dollar exchanges tend to be incompatible with a gift economy. Complementary currencies are.

RD: Are you saying that you can't have community if you're using dollar exchanges?

BL: I'm saying that exclusive use of a competitive programmed currency in a community tends to be destructive for the community fabric. This isn't theory. We've seen this happen at the tribe level, with the collapses of traditional societies. I've seen one happen myself in Peru among the Chipibo in the Amazon. That tribe had been in existence for thousands of years. When they started using the national currency among themselves, the whole community fabric collapsed in five years' time.

The same thing happened here during the 19th century in the Northwestern United States and Canada, in the traditional indigenous societies. The moment they started using white man's currency among themselves, the community collapsed, the traditional fabric broke down.

RD: Do you think complementary currencies really can transform our planet?

BL: Yes. Bali is a perfect example that long-term use of a dual yin-yang currency system creates a different society. Thirty percent of a Balinese adult's life happens in the space of the yin, feminine currency, which is the time currency. In contrast, we spend close to 100 percent of our time in the masculine, yang, competitive currency. That 30 percent of time spent on community activities creates another society, where everybody can become an artist, where the community fabric is stronger, where the social safety net is reliable, where abandonment is unknown. It nurtures an extraordinary feeling of trust and a higher quality of life.

RD: And you think this kind of culture and community can exist in other places, with completely different religions and cultures?

BL: The short answer is yes. We have evidence from Japan, Germany, Mexico, Brazil and the United States to show that complementary currencies make a difference in the way people relate to each other.

RD: In a really transformed world, would a community be using multiple complementary currencies as well as the national currency?

BL: Not necessarily. What has started to happen recently is an integration. Many of these services that were using highly specialized complementary currencies are beginning to integrate into a single, local social-purpose currency. For example, youngsters who are taking care of the elderly in Japan using their credits in partial payment for tuition at the university, so we're solving two problems at the same time. It provides an additional way of making things happen that otherwise is not available when national currency is scarce. Remember, complementary currencies simply enable additional matches between unmet needs and unused resources.

RD: Does the internet and electronic transfer systems offer a means for the creation of complementary currencies?

BL: I am convinced that the reason complementary currencies are developing now is because of cheap computing. Do you really think American Airlines would have frequent flyer miles if they needed an army of clerks trying to keep track of your miles? I don't think so. But today anybody with access to a PC can start a currency system. It isn't a coincidence that about 95 percent of the social purpose complementary currencies are electronic.

RD: So can we buy an off-the-shelf program for creating a currency?

BL: Sure. There are even different freewares already available. One of them is for operating a LETS (Local Exchange Trading System). Another one that is free of charge is to start a time dollar system. Currently, our biggest problem with money and currencies is unconsciousness. We are not aware of what we are doing around money. We haven't really thought about what money does to us-we believe it's neutral, so it doesn't matter. But it's not neutral: it deeply shapes us and our societies. The first thing that has to happen before complementary currency systems can effect real change on a larger scale is a shift in consciousness and awareness.

RD: You mean, we need to be aware of how money works?

BL: Let me ask you this. Have you taken an inventory of the number of days you spend in life getting ready to make money? And when you have money, to manage the money or spend it? But then, think about how many hours you've thought about what money is. I suspect not very much. We are spending a huge amount of energy to get something about which we have surprisingly little understanding.

RD: Well, it's like the rain. It's something you adapt to.

BL: Yes, except that rain is not man-made. That's precisely the difference. We're treating money as if it is God-given, like rain or the number of planets in the solar system. But it isn't. If you don't like the quality of rain, there's not much you can do about it. If you don't like your money system, maybe you can do something about it.

Assume that a Martian lands in Denver on the wrong side of the tracks. He ends up in one of the ghettos and finds that the houses are run down, the kids not taken care of, the elderly in trouble, and the trees dying. He sees all these things, and discovers that there are people and organizations absolutely equipped and ready to solve every one of those problems. So this Martian asks, "What are you waiting for?" The answer: "We're waiting for money." "What is money?" the Martian inquires. "It's an agreement in a community to use something as a medium of exchange." Don't you think he may leave the planet believing there is no intelligent life here?

The point is: if money is an agreement within the community to use something as a medium of exchange, we can create new agreements, can't we? That is exactly what people are already doing all over the world. So why don't we do it here? If we're waiting for conventional currency to solve all our problems, aren't we waiting for Godot?

RD: Is this your whole campaign now? Are you through with Belgian Central Banks?

BL: I'm trying to contribute to a consciousness shift regarding money. I believe that by a small change in the money system, we can unleash huge improvements in our social system. It's the highest leverage point for change in our society, and surprisingly few people are looking at it. If you start a new complementary currency system, it can become self-perpetuating and facilitate additional transactions forever.

You know the saying, if you want to feed someone, give him a fish. If you want to really help him, teach him how to fish. This is just a fishing lesson - what you do with it is up to you. You can take big fish or small fish, or you can choose not to fish at all. You decide what issues you want to deal with in your community, and there is a currency system that can help you with it.