COMMENTARY

Peter Burgess

Why invent a new money when our official monies seem to do the job?

http://www.ces.org.za/docs/newmoney.htm

Because our conventional money system is at the root of most of the misery, suffering and problems faced by humanity. It is also the prime factor behind the environmental crises we face.

The money systems we use are not neutral, non-partisan, services provided by our governments. They are a 'service' provided by private financial institutions (banks) specifically for their own benefit rather than those who use them. Our conventional money systems only work for those who already have money and marginalise the rest. They are also the fuel that powers the growth imperative of our economies, forcing us all to compete and having disastrous consequences for the health of our planet.

The main problem with conventional money is that it 'exists', or at least we are encouraged by the commercial banks to believe that it exists so that they can 'lend' it to us at a price! As such it has to be created, distributed and the amount of it restricted and controlled. As money comes into existence when commercial banks grant loans, every unit in existence is based on a unit of debt. This determines the quantity of money, which has nothing to do with the amount of money people require to live decent lives. Such money is also based on speculation, because it is loaned into existence on the premise that it will be paid back in the future with interest.

Despite its modern electronic trappings, our conventional money systems are a relic of history. They are the latter day equivalent of cattle or gold. The debt-based money system was developed for the industrial revolution to provide a rapidly expanding money supply that could not be provided by a money system based on the quantity of precious metals. This introduced intangible money that did not exist in the same way as earlier 'hard' monies, but people continued treating it as a tradable commodity. Money that 'exists' can thus be accumulated like any other commodity. It can also be stolen, traded, collected, destroyed and lost. Its distribution is not based on the delivery of value to others but on the ability of people to 'make money'. Conventional money has no restraints and always flows away from where it is created and needed, towards the 'money centres'.

The CES breaks out of this paradigm by recognising that the electronics revolution has eliminated the need for an exchange medium. Never before in the history of humankind has it been possible to record accurately who delivers value to whom. Now that this is possible there is no longer a need for an 'existential' money; money can at last truly measure the delivery of value and be based on nothing other than the expenditure of effort by people for others. Money is information - a unit of measure - not a thing.

If money does not need to exist as a thing it does not have to be created and distributed. People will earn money solely on the basis of their delivery of value to others, not through charging interest, trading it in money markets and a multitude of other ways without delivering anything of real value.

Money that does not exist can never be in short supply, but no one can have more of it than the value they can deliver. No one will be able to take more of the social product than they contribute to it, as they do under our current money system. Wealth will remain where it is created and needed, and not leak away to the 'money centres'.

http://www.ces.org.za/docs/advantages.htm

Here are some of the advantages of the using the Community Exchange System

• It provides another stream of income
• It bridges the 'money gap' between the skills/offers/talents/gifts of sellers on the one hand and the wants/needs/requirements of buyers on the other. Conventional money usually can't bridge this gap because its supply is limited or non-existent.
• It builds community
• CES 'money' is abundant and can never be in short supply
• CES 'money' can never be in oversupply and cause inflation
• It is democratic: it returns 'money power' to the people
• It allocates credit democratically
• It eliminates usury. Its money is 'free' (i.e. interest free)
• It keeps wealth where it is created
• It eliminates cheating, theft and fraud (of money)
• It provides a support network
• It eliminates the problem of sellers not being paid for what they supply
• It reconciles the accounts of buyers and sellers immediately
• It promotes honesty because one can never 'run out of money'
• It levels the playing field: everyone starts from zero and those who deliver real value to others are the ones who get 'rich', not those who deliver nothing but acquire their wealth by manipulating the currency
• It gives local suppliers preference
• It eliminates the waste of transporting goods from all over because its focus is local
• It destroys the notion that the source of money is a job: the source of money is the delivery of value from one entity (person, company etc.) to another
• It streamlines transactions and eliminates wasted effort (e.g. sending accounts, debt collecting)
• It mobilizes the real wealth of a community: The knowledge and skills of its people is the real wealth of a community
• It fosters self-reliance and self esteem
• It fosters social justice and equality
• And many, many more...

http://www.ces.org.za/docs/badmoney.htm

• It is partisan
  Money as we know it is not a neutral service provided by the government. Our money supply is created by private financial institutions on a for-profit basis. This money system is designed to benefit those who provide it, not those who use it.
• It is based on debt
  Money is created when banks grant loans. Thus for every unit created there is one unit of debt.
• We are encouraged to think of it as a 'thing'
  Money is essentially information and has no physical existence yet banks encourage us to think of it as a 'thing' so that they can 'lend' it to us and thereby make a profit by charging interest. 'Thing' money also has to be created, distributed and controlled so that there is not too much of it. It can also be stolen, lost, bought, sold and counterfeited, with serious consequences for everyone.
• It is permanently scarce
  The money to pay the interest on debt-money is never created. There is therefore a permanent shortfall of money to pay back both the principal and the interest.
• It causes cancerous growth
  Banks continuously need to create more money than is required to pay back their loans so that borrowers can pay back the interest on those loans. This is the source of the growth imperative of our economies. There must be a continual expansion of bank credit or else the economy goes into recession. Systemic growth leads to the environmental problems we now all face.
• Its value is based on its shortage
  The shortfall of money keeps it valuable. There only needs to be enough of it to buy back the goods and services available. This has nothing to do with the monetary requirements of people. Those who have none are not seen by the market and so are marginalised.
• It is expensive
  Every unit of conventional money is based on a unit of debt. This debt has to be paid back with interest, and the interest on the interest is compounding. Interest is built into the prices of everything we buy, resulting in higher consumer prices.
• It redistributes wealth from the poor to the wealthy
  Usury is the tool used by the wealthy to suck wealth from the poor and middle classes to the moneyed class. Parasitism and class antagonisms are the result of this.
• It promotes dishonesty and corruption
  You can get it without delivering anything of value (e.g. speculation, interest, gambling etc.) so people concentrate on 'making money' rather than producing/delivering anything of real value. It is usually far easier to get money through dishonest means than by honest work. When you have no money you have no choice but to try and get it dishonestly
• It leaks away from where it is created
  Conventional money knows no bounds and loyalty. It always leaks away to the 'money centres' (financial centres, big businesses, etc.)
• It destroys local economies
  Goods produced cheaper elsewhere replace locally produced goods. This creates a local shortage of money and reduces the market for local sellers. This also results in the irrational transportation of goods all over the world, consuming precious fossil fuels and creating pollution.
• It destroys community
  Dependence on money means we no longer need our neighbours. We can get everything from anonymous strangers in return for money. We have no obligation to anyone when the bills are paid. Every trade is a complete and closed action: you provide me with something and I give you money. End of story. No one does us any favours and we need do no favours for anyone.
• It fosters competitiveness
  The shortage of money means we all have to fight for a share of an amount that is too small to go around. The need to repay interest means that we have to eat others to prevent ourselves from going under.
• It creates poverty
  While it makes some super rich, it makes most people poor. Poverty is caused by a lack of money (not by a lack of jobs). Usury and the need to keep money scarce ensure that money constantly moves to those who already have money.
• It causes social and cultural degradation
  The elimination of local opportunities to exchange and relate to one another focuses attention on ways of getting money outside the community. Communities fall apart as they become indebted to entities outside their communities.
• And so many more ...!