By James Corbett
April 3, 2013
Recent events in the EU have taught many a hard lesson: that the Euros or Dollars or Yen or Pesos in your bank account are only as secure as the bank that is holding them. In fact, the lesson is deeper than that. That the money in your bank account is not cash at all, not pieces of paper sitting in a bank vault waiting for you to withdraw them, but mere digital ones and zeros in the bank’s database, capable of being subtracted from your account at a moment’s notice, or even less. Cash that is not in your hand, it turns out, is not cash at all.
This should be reason to give pause for thought about some of the deeper issues behind our current international financial order: what is money, after all, if it is not physical pieces of paper that we keep in our wallet? And if we don’t control it, who does?
As opposed to this system of financial control by a few bankers, heading as it is toward a seemingly inevitable financial collapse that threatens to crash the entire world economy, there are many alternate ideas for facilitating transactions. Some advocate for a gold-backed system, or some other hard asset backed currency that protects against rampant government printing and the possibility of hyperinflation. Others tout debt-free government-issued money, spent into the economy on infrastructure and other tangible benefits to the community and kept in check through taxation or demurrage. Yet others believe the answer lies in more technological solutions, pointing to the recent success of the online crypto-currency Bitcoin as an example of a different way to think about money.
While there are merits and demerits to all of these systems, it is vital that we realize the issue of monetary reform is not constrained to hoped-for changes to our current system that will possibly be implemented one day in the future in all-at-once changeover. In fact, there exists right now the globe examples of alternative currencies that are currently existing alongside the Federal Reserve notes and Euros and other bankster-manipulated debt-based fiat money systems that are already helping facilitate transactions and grow local economies all around the globe. [See this and this and this and this and this.]
These alternative systems do not require a resolution to be passed in congress or parliament, and do not require any wholesale change in the international financial order. These currencies already exist and are already thriving in numerous localities around the globe. Referred to as complementary currencies, they provide a way for communities to bypass the inflation tax and arbitrary confiscation that defines the modern era of central-bank administered currency. Just as the fiat money printed up by these central banks (or issued as debt in the form of back loans) are backed up by the collateral of the people’s promise to pay later through the sweat of their own labor, so too can these complementary currencies be issued through the people’s own labor. The difference being that in this system, the money is not controlled by banksters in closed door meetings in far away offices, but by the people themselves, in their own back yards.
One example of a complementary currency success story is the Ithaca Hours currency issued in Ithaca, New York. Launched in 1991 as a way to invigorate the local economy, Ithaca Hours have since facilitated millions of dollars in transactions and helped businesses and customers alike bypass the uncertainties of the Federal Reserve notes of the central banking economy.
Now, similar ideas are springing up all across America and around the globe. From mutual credit systems to time banking to private currencies and social currencies, there are no shortage of ideas for how to transition off of the current system in a gradual manner while increasing and facilitating local trade.
Last month, I had the chance to talk to Wayne Walton, one of the organizers behind the Colorado Mountain Hours complementary currency, about this idea, and how it is being implemented in the Summit County area.
As with so many other ideas for resistance of the status quo, the complementary currency idea is only as strong as the public’s willingness to use it. Sadly, the comfortable inertia that the status quo offers is enough to keep many from even entertaining the idea of using a different form of money. But as the people in Volos, Greece and other cash-strapped locations around the globe are finding, having an established complementary currency can help a community survive and even thrive in the midst of the economic chaos that we can all see coming.
Just as currencies like Ithaca Hours and Mountain Hours have proven themselves to be successful, so have many complementary currencies withered away from lack of community support. But in this age of Cyprus-style bail-ins, debt ceiling crises, and the ever-looming risk of hyperinflationary currency death spirals, it is incumbent on all of us to identify and support, or even create, a complementary currency system in our own local area.