by James Corbett
December 13, 2012
As residents of the Eurozone are all too aware these days, and others around the world are gradually beginning to understand, large, centrally-administered monetary unions may be the dream of the central banksters and the technocrats, but are a colossal failure in meeting the needs of ordinary citizens.
As we examined on the program last week, the standard monetary paradigm of the developed western world relies on central bank administered fiat money created as debt-based instruments owed back, at interest, the the very bankers who are given the privilege of creating this money out of nothing. With a literal license to print money, and to direct that money into those sectors of the economy they see fit by approving or denying credit to businesses and industries on a whim, it is not difficult to see how this system benefits the banksters first and foremost. But as we see in the European example, when this system fails it is inevitably the banks themselves that are deemed “too big to fail” and the ordinary citizens who are left on the hook for the trillions of “dollars” in notional debt that has been rung up in their name.
What happens, then, when a currency begins to fail? Must the public merely wait for the inevitable collapse, and then submit to whatever new monetary paradigm the banksters create from the ashes of the old order?
As the people of Greece are finding out, the power ultimately rests in the hands of communities to bypass the international monetary paradigm and to create their own system for facilitating local trade.
Earlier this year I had the chance to talk to Eyal Hertzog, internet entrepreneur and alternative currency advocate, about the various alternative currencies that have been tried in the past, and how they have helped communities thrive in the face of economic adversity.
Although monetary reform is often posed as an all-or-nothing affair, and advocates of debt-free infrastructure-backed government fiat proponents love to argue with “sound money” goldbugs for ultimate control over which form of currency should become the standard in the future, an idea that is often overlooked is that of complementary currencies. Why must currency be limited to one set definition administered in one single way by one single agency or bank? Why not have multiple, co-existing, complementary currencies that augment and bolster each other, thus diversifying the possibilities of the economy and hedging against the collapse of any particular form of currency?
Earlier this year I talked to complementary currency researcher Matthew Slater about this very concept.
As has been pointed out by many over the years, these alternative and complementary currency ideas look good on paper and occasionally even serve to further trade within a given community, but very rarely if ever do they grow into a monetary instrument that is able to truly match the resilience and utility of the prevailing legal tender. This is because these currencies are inevitably circumscribed by the limits of the community itself. A community currency is only as useful as the community which uses it. Until now, the idea of community has been necessarily a geographical construct, and thus community currencies have been mostly limited to small, local groups of businesses.
With the advent of technology, however, there is now the possibility for a radically different monetary system with the potential to connect people around the world in ways that were never before possible. We will look more closely at this in next week’s instalment of this series.
Meanwhile, as the Euro debt crisis continues to make headlines and the US fiscal cliff continues to loom, it is important for the public to realize that there is more to be done than to merely sit idly by, waiting for a credit crunch or, worse, total monetary collapse to wipe out their savings and their economic livelihood. At the very least, those who are actively contributing to and participating in their own local alternative community system are building up the structures that can survive just such an economic meltdown, and contributing to their local economy as they do so. This is the type of win-win situation that the banksters in charge of the current system would prefer you never find out about.