Bernard Lietaer (7 February 1942 – 4 February 2019) was a civil engineer, economist, author, professor and philosopher who studied monetary systems and promoted the idea that the problems of monetary instability and scarcity can be eliminated by fundamentally restructuring the money system, by complementing the prevailing monetary monopoly with a ‘monetary ecosystem’.
- Money is like an iron ring we've put through our noses. We've forgotten that we designed it, and it's now leading us around. I think it's time to figure out where we want to go--in my opinion toward sustainability and community--and then design a money system that gets us there.
- While economic textbooks claim that people and corporations are competing for markets and resources... in reality they are competing for money - using markets and resources to do so. So designing new money systems really amounts to redesigning the target that orients much human effort.
- Greed and competition are not a result of immutable human temperament... greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.
- Money is created when banks lend it into existence. When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000.
- Your money's value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system.
- Economic injustice is one of the most intractable problems that humanity has had because, actually economic justice has never really existed in most societies... in a long history of mankind, 5,000 years. There have been a couple of exceptions where I believe it has happened... and we can see why they were exceptions. That's what's going to get interesting. So here's my plan, first i'm going to give you the context...
The Future of Money : Creating New Wealth, Work and a Wiser World (December 2001)
- Deep in our hearts, we all want to leave a better world for our children and we cherish the hope that we may experience this for ourselves in our own lifetime. However, there is growing concern that many of the challenges we now face are unrelenting and more and more people question our ability to address them effectively. Indeed, despite some breakthroughs and the valiant efforts in the public and private sectors, the challenges to our planet and society are growing both in scope and severity with each passing decade.
- In this new Millennium, we are being challenged by four megatrends that are converging upon us over the next twenty years, namely:
- Climate change and loss of biodiversity;
- An unprecedented growth in the number of elderly (the Age Wave');
- Monetary Instability; and an
- Information Revolution.
- Why have our efforts, the countless billions of pounds and dollars spent all over the world, the many treaties enacted and initiatives taken, not stopped the destruction of our environment, nor effectively addressed a myriad of social issues? Is it possible that our attentions and efforts are misdirected? Or are the challenges and issues facing our world today being fueled by an even deeper systematic problem? The short answer to this last question is yes.
- The Future of Money is a compendium report about solutions already implemented by thousands of people around the world, who have had the courage to first identify, then directly address the underlying mechanism of their problems. Their initiatives to date are small-scale, but I see them as seedlings which - if allowed to grow - have the potential to provide effective and permanent solutions by which conditions for mankind and other living systems may improve dramatically within our own lifetimes.
- Money or lack thereof, is a fundamental component of our lives. It is not, however, just the lack of money that is precipitating present trends or preventing us from addressing current challenges. Rather, it is the limited functionality of our money and monetary system that is a major force behind our present disorders. Many of the problems we face, and the solutions we seek, reside within the architecture of our current monetary system and in our understanding of, and our agreements around, money.
- We allocate a great portion of our physical, emotional, and mental energy to getting, keeping, and spending money - but how many of us really know what money is or where it comes from? Money is created when banks lend it into existence.
- In pre-Victorian England the world was oblivious of pollution, greenhouse effects and overpopulation. Nationalism, competition, endless growth and colonisation were encouraged. These values are what shaped the monetary and banking systems we inherited.
- However, is this what best serves our world today? I submit that those aspects of our monetary system that met the objectives of another time and age are now inadequate for the challenges facing us during an Information Age. This is particularly true in light of the fact that working solutions are already underway, with thousands of communities around the world taking their own money initiatives. They are creating new wealth, while solving social problems without taxation or regulation. They are empowering self-organising communities, while increasing overall economic and social stability. Finally, they enable the creation of very necessary social capital without attaching the established capital formation process.
- There are three reasons why I believe the current, ongoing monetary initiatives have a better chance of success than ever before: First and foremost, these money innovations are not attacking the official money system. What they do instead is complement the conventional money system, providing new tools that can operate in parallel with it, without replacing it. That is why I call them 'complementary currencies', and not, 'alternative' ones.
- This is not a book on economics or economic theory. I am not an economist. My expertise lies in international finance and money systems. This is why I have adopted here a whole systems approach to money. Whole systems take into account a broader, more comprehensive arena than economics does; it integrates not only economic interactions but also their most important side effects. This includes specifically in our case the effects of different money systems on the quality of human interactions, on society at large, and on ecological systems. In essence, money is a lifeblood flowing through ourselves, our society, our global human community, and should be acknowledged and treated consciously.
- Part One of The Future of Money elucidates the mysteries of the current official currency system. Part Two widens the view to encompass and feature newly emerging money systems. Therefore, this book deals with money in the world outside of us, describing how different money systems shape society.
- When we think about money, we tend to take for granted its basic characteristics, which have remained unchanged for centuries. We are not likely to visit the hidden assumptions embedded in our familiar money system, and we are even less likely to re-examine them in search of solutions.
- Part One brings our hidden assumptions about money to the surface. In doing so, it also brings to light new potentials for our interactions with money. It is not about how to make, invest or spend money. There are already plenty of books about all of that. It is about the concept of money, and how different money systems shape different societies.
Money and Sustainability, The Missing Link, The Club of Rome - EU Chapter to Finance Watch and the World Business Academy, (May 2012)
- People concerned with sustainability in general – with issues like climate change, environmental degradation, food and water shortages, population growth and energy use – tend not to worry about the money system. Nor do they tend to look for solutions that involve monetary innovations. Even those economists who are also concerned about sustainability in principle are seldom aware that our money system systematically encourages unsustainable behaviour patterns that may end up threatening human survival on this planet.
- This Report shows that the current money system is both a crucial part of the overall sustainability ‘problem’ and a vital part of any solution. It makes clear that awareness of this ‘Missing Link’ is an absolute imperative for economists, environmentalists and anyone else trying to address sustainability at a national, regional or global level. Aiming for sustainability without restructuring our money system is a naive approach, doomed to failure.
- The money system is bad for social and environmental sustainability. But this Report also proves – perhaps more surprisingly – that the money system is bad for the money system itself. Unless we fundamentally restructure it, we cannot achieve monetary stability. Indeed, this Report also demonstrates that monetary stability itself is possible if, and only if, we apply systemic biomimicry – that is to say, if we complement the prevailing monetary monopoly with what we call a ‘monetary ecosystem’.
- Dealing with the Eurozone Crisis... Another Way? As we go to press, the Greek electorate – after two years of drastic austerity measures – has voted clearly against the cuts, the bailout and the political mainstream. Chaos in the eurozone seems one step closer. So we take this opportunity to outline how just one of the proposals from this book can be applied now, in Greece, Spain or any other country facing this kind of crisis. It’s a solution that mainstream financiers and media avoid discussing, but it’s elegant and simple. It would work, and the necessary (Open Source) software is available now. Current monetary orthodoxy says that 100% of the Greek (or any other) economy must be either ‘in’ or ‘out’ of the eurozone. Everybody knows that either option will entail even higher unemployment and yet more misery. But it doesn’t have to be that way! The core principle of complementary currencies, as set out here, is that they run alongside the main currency, increasing resilience and flexibility for the entire socio-economic system.
- Here’s our systemic solution in a nutshell:
- Greece continues to use the euro for all international business: tourism, shipping, exports and imports, etc. Taxes are levied in euros on profits made in these activities, and used to service the country’s national debt.
- In addition, any Greek city/region wanting to participate can issue its own local currency (generically called ‘Civics’ in the case study in chapter VIII). Civics are used to pay for important local, social and environmental programs. In our example, 1 Civic is issued to anyone who completes 1 hour of approved service to the community. Projects for which Civics are paid should be decided democratically and locally.
- The issuing city/region requires payment from each household of, say, 10 Civics/quarter...
- In his book The Future of Money, Lietaer points out - as the government did yesterday - that in situations like ours everything grinds to a halt for want of money. But he also explains that there is no reason why this money should take the form of sterling or be issued by the banks. Money consists only of "an agreement within a community to use something as a medium of exchange." The medium of exchange could be anything, as long as everyone who uses it trusts that everyone else will recognize its value. During the Great Depression, businesses in the United States issued rabbit tails, seashells and wooden discs as currency, as well as all manner of papers and metal tokens. In 1971, Jaime Lerner, the mayor of Curitiba in Brazil, kick-started the economy of the city and solved two major social problems by issuing currency in the form of bus tokens. People earned them by picking and sorting litter: thus cleaning the streets and acquiring the means to commute to work. Schemes like this helped Curitiba become one of the most prosperous cities in Brazil.
- I have been reading the literature on sustainability for 40 years. I have attended hundreds of conferences on the same theme over that period. However, before I first encountered Bernard’s work, I had never heard anyone describe the financial system as a cause of our society’s headlong rush to collapse. Quite the contrary: there is a widespread effort to identify how minor changes in the financial system could move global society over to a path that leads to sustainability...
- We will never create sustainability while immersed in the present financial system. There is no tax, or interest rate, or disclosure requirement that can overcome the many ways the current money system blocks sustainability. I used not to think this. Indeed, I did not think about the money system at all. I took it for granted as a neutral and inevitable aspect of human society. But since beginning to read Bernard’s analyses I have a very different view. He is not alone. For example Thomas Greco has written on this topic. But the depth of Bernard’s practical experience, theoretical understanding, and historical perspectives on the financial system leave him without peer.
- Dennis Meadows in the Forward to: Money and Sustainability, The Missing Link, The Club of Rome - EU Chapter to Finance Watch and the World Business Academy (May 2012)
- Dr. Bernard Lietaer, Co-creator of the Euro and a pioneer in community currencies, joined the Bancor Protocol Foundation last year and will advise the project. Both he and the Bancor team have been outspoken on the potential of community currencies to combat global poverty using a bottom-up approach to sustainable economic development. The efforts come as a number of groups aim to use blockchain and smart contracts to build the next generation of aid and impact investing tools.
- Bancor To Launch First Blockchain-Based Community Currencies in Kenya, Business Wire (21 June 2018)
- Today we mourn the passing of Bernard Lietaer, one of the greatest monetary innovators of our time & President of the Bancor Foundation. Bernard was a financial justice warrior. He will be truly missed... A student at MIT in the late 1960s, Lietaer conducted an in-depth study on floating exchange rates. While working in the central banking sector, he was involved with the development of the European Currency Unit, which was a precursor to the Euro.
His innovative ideas about money and how it could be changed to work for people were developed well before the blockchain was invented. He had long seen the potential in decentralized financial systems and how they could tackle issues with fiat currency monopolies.
- Bernard was an international expert in the design and implementation of currency systems. He studied and worked in the field of money for more than 30 years in an unusually broad range of capacities including as a Central Banker, a fund manager, a university professor, and a consultant to governments in numerous countries, multinational corporations, and community organizations. He co-designed and implemented the convergence mechanism to the single European currency system (the Euro) and served as president of the Electronic Payment System at the National Bank of Belgium (the Belgian Central Bank). He co-founded and managed GaiaCorp, a top performing currency fund whose profits funded investments in environmental projects. A former professor of International Finance at the University of Louvain, he has also taught at Sonoma State University and Naropa University. He was currently a Research Fellow at the Center for Sustainable Resources of the University of California at Berkeley. He was also a member of the Club of Rome, a Fellow of the World Academy of Arts and Sciences, the World Business Academy, and the European Academy of Sciences and Arts.