Laboratory readings2002-08-29T03:02:26ZUser 105http://www.newciv.org/nl/newslog.php/_v105/OrgSpace NewsLogIs the cup half empty or half full?Do schemata control the world? What are schemata anyway?
In the centre of the page, a 10 year-old boy is pictured looking down the sights of an AK-47 rifle. This marks the start of the 'World' section in a throw-away copy of the Sydney Morning Herald dated Wednesday July 24th, a newspaper consi...Reading the accompanying article, things are not as they first appear. The photo was taken at a military and sports summer camp somewhere in Russia. Further reflection suggests that the photographer went out of his or her way to photograph the youngest participant, thereby creating the maximum impact out of what is a non-news item - one that paradoxically occupies more space on the page than any of the others. Was a photographer flown all the way from Australia to capture this image?
At the top of the page, in bold type, we are reaquainted with that old chestnut, revenge. The Hamas movement in Palestine has vowed to avenge the recent killings of a number of Palestinians, which include Hamas's military leader. There are active peace movements in both Israel [link] and internationally [link], but in the mainstream media their voices somehow rarely seem to be heard above the clamour of hatred and anger, except at Christmas, when they might be the subject matter for the token feelgood Christmas story.
A column on the left refers to Vieira de Mello, who is taking over from Mary Robinson as the UN High Commissioner for Human Rights. In doing so, it succeeds in using the word 'minefield', even though I was unaware of any war in western Switzerland.
Underneath, we hear about the resignation of a Dutch minister within hours of her new government taking office ('Ready, steady, quit') because of previous links to a militia group. At the bottom, there are controversial remarks made by the future Archbishop of Canterbury regarding the ordination of gay priests, and last but not least, the shooting of three polar bears by the authorities on the Spitzbergen archipelago.
I feel that in setting out in a single-minded fashion to do whatever it thinks is necessary to sell newspapers rather than have them sitting around at the end of the day, the Sydney Morning Herald is shamelessly pandering to the latent primitive side of the human psyche and toying with it like a puppeteer.
People who are just glancing through this edition are grabbed by the child/gun image, both centrally positioned and excessively large in relation to the size of the page, located directly under the word 'revenge'. Those who linger are fed weapons (a gun and a minefield), death (Palestinians and polar bears), militarism (a militia group) and dysfunction (a weakening of the Dutch government and some archbishop controversy with an adversarial flavour).
Interestingly, almost all these news items have effectively shifted their focus away from the present day into the history books or a possible future that may never eventuate. The Dutch minister was linked to a militia group twenty years ago. The Russian boy might be conscripted and sent to Chechnya, and then again, he might not. Vieira de Mello may experience challenges at the UNHCR some time in the future, while Hamas may or may not add to the cycle of violence in Israel and Palestine.
Do these six news items help to enlighten readers about the true state of the world, or are they largely tangential to the key events that are shaping it? How do they compare with far more significant happenings from around the planet that may be less inflammatory and addictive, and for a short attention span, too dull? Will future developments of a more optimistic nature be reported with the same thoroughness?
What information is omitted from this page? Why is there nothing about the World Summit on Sustainable Development, which on July 24th was only a month away from commencing? This gathering had the potential to benefit billions of lives, and be a turning point in the world's history.
Why is it often hard to gain a global overview from a mass media that would rather stick to dysfunctional or violent details than provide us with the big picture in a representative way? Why are the views of raving political extremists often given more coverage than those of sane moderates? Is the world viewing its own collective shadow?
A journalist who left Northern Ireland days after ceasefires were declared, was heard to say 'You can photograph violence, but you can't photograph peace'. To voice the unthinkable, what would happen if the perceived absences of data represented by issues such as peace, cooperation, life, and health were to be accorded the status of events? Is the level of peace in the world increasing or descreasing?
How many countries are democracies? Sources other than the mainstream media say that the number of dictatorships in the world has been steadily decreasing for years, and the number of democracies has been steadily rising. Why aren't we being told? As the number of dictatorships has fallen, why haven't we seen a proportional drop in the number of column inches given to what is happening in totalitarian regimes?
In his book 'Towards an Eco-city', David Engwicht refers to a community workshop he attended in the Australian city of Brisbane, where a TV news editor described the criteria he used to pick stories.
'The whole workshop was upset when the producer admitted that the primary consideration was entertainment value. He admitted that the reason so much bad news is covered is because people like to come home after a rugged day in the workplace, lock their safety grille, and from the safe vantage point of their home, watch all the bad things that are happening outside.'
The UK newsreader Martyn Lewis, who was strongly attacked for coming out in favour of the inclusion of optimistic news in 1994, had this to say in a challenging 1998 speech [link]: 'I have an occasional nightmare that when the world ends - and each profession is allocated its tombstone - on that inscribed 'Journalism' will be the words - "Well, folks, we finally did it!" In my waking hours, I am filled with growing confidence that it won’t be too long before we shall deserve a more honourable epitaph than that.'
If reporters cannot be accused of promoting what they are covering, should this principle also extend to the copycat behaviour encouraged by those media outlets which, in a seemingly desperate hunt for dysfunctional behaviour, are publicising members of small, low-budget community groups who, following an accident, are suing these groups for outrageous sums of money?
Children will imitate acts of TV violence. Why aren't they protected by a violence rating for the TV news, a show that is competing for ratings with other violent TV shows? Recent findings show that increased TV exposure alone makes children more violent. *It doesn't matter what they watch*.
Another obvious effect of this onslaught of dysfunctional news is desensitisation. Our emotions become gradually desensitised to the media, and possibly (to a lesser degree) to everything else. We become so desensitized to pictured violence that after a while we succumb and, at a crucial level, regard it as normal.
Inevitably, this begins a vicious cycle in which ever-greater efforts are required to achieve the same level of impact on an audience. The inescapable results are characterised by an increasingly brutal lack of subtlety; when the Sydney Morning Herald's habit of picturing weapons in the centre of the first page in the 'World' section becomes old hat, I'm unsure what its next strategem will be.
But perhaps the most important, invisible, and insidious effect is the mass psychological frames of reference created by the media. Depending on the type of coverage, these may be either dysfunctional or life-orientated (henceforth referred to as 'functional'). Some people may prefer to translate these terms into 'negative' and 'positive', but I feel that the labels 'dysfunctional' and 'functional' are less woolly.
On the whole, the mass media has the effect of promoting dysfunction by giving it mainstream credibility. Indeed, it will frequently imply, and sometimes tell us, that dysfunctional people and families are normal, with the subtext that it isn't too bad if we emulate them. Later, any dysfunctional behaviour we exhibit may be reported, creating an unbroken feedback loop....
Such frames of reference are called 'schemata' (singular 'schema') by cognitive psychology. These are powerful organising mental fields or 'maps' that govern how each person will fill in the remaining detail to supplement incoming information. They also determine whether it is taken on board, or whether the eyes of your interlocutor glaze over as they gaze horizontally into the distance.
As mental biases, determined by incoming sensory data and information, schemata become increasingly marked over time, leading people to seek out certain kinds of subject matter while ignoring others. The selective nature of information taken on board then tends to reinforce existing schemata. This feedback cycle represents a kind of hardening similar to the way that people typically develop increasingly rigid attitudes as they get older.
We apply constant scrutiny to our politicians on the basis that as they are so apparently dishonest and corrupt (the 'child and cookie jar syndrome'), if the media's back were turned for even one day, there is no saying what politicians would try to get away with. One effect of this double-edged edge sword is increased cynicism. Nevertheless, the media's role of exposing is an important one; a better balance between dysfunctional and 'functional' is the key.
Where schemata are concerned, a more healthy media balance would make a world of difference. If the mass media were to provide an equal measure of 'functional' news, this change would radically change the mass schemata, and immeasurably improve the moral health of the societies that news comes in contact with. In the same way that a fish cannot objectively understand water, a person immersed in dysfunctional news will probably not see it for what it is, or recognise that news is essentially 'constructed'. Exposure creates more limited - and limiting - views of the world on the part of individuals, the healthy part generally hidden, the unhealthy aspect in full view.
Given the propensity of mainstream media coverage to latch onto dysfunction, it isn't surprising that cynicism is one of the most dominant schemata in the West. A cynic's cognitive frame of reference is usually skewed in such a way as to unquestioningly believe in anything dysfunctional they are told, no matter how outrageous ('yeah, typical'), while reacting to information of a 'functional' nature with hostility, rejection, scepticism, puzzlement, or blankness.
If you tell the average person that they could be obtaining all their electricity from wind through a newly available consumer option offered by their power supplier, they will probably react in a way that suggests it's a matter for someone else but not for them.
A more cynical individual may say that 'someone' 'in control' will put a stop to it, probably the government, otherwise big business. If this is paranoid thinking of a certain kind, the 'Them' system has not been matched by a corresponding 'Us' system – the counter-conspiracy of individual and collective empowerment. As an acquiescence to who is 'in power' and what they propose, the development of mass cynicism is a great asset in oiling the path for the machinery of government and corporate control.
According to media advisor Michael J Wolf, 'Entertainment....is fast becoming the driving wheel of the new economy'. If dysfunction is largely what makes up the news, and news is now largely a form of entertainment rather than information, we are entering perilous territory. When does the tail begin wagging the dog? Or has it already started? Do we want our reality shows to be filmed in theatres of war?
Our innate moral values are continually under attack from an excessive, unhealthy media focus on death, with the underlying implication that life, especially in the Third World, is a cheap commodity. Crime is continually covered, occasionally admiringly; CEO's are given 'fat cat' pay rises; property speculators are financially rewarded; war is justified; the questionable values that built Western civilisation and appear to be demolishing it a much greater rapidity are everywhere to be found.
When will the global environmental crisis be renamed the 'World Psychological Crisis' or 'World Moral Crisis'? We have been de-moralised and need to be 're-moralised' - by reflecting our moral values in the media through 'functional' news coverage.
Some observers may notice an interesting correspondence between the quality of everyday media coverage, and the quality of everyday thinking and action. Minds are often diverted away from the real solutions that will disadvantage the corporate sector - led away instead towards ineffectual substitutes; understanding of possible solutions is deliberately restricted to 'safe' territory. The saying 'our thoughts create the world' may be true from more perspectives that a New Age one.
People who have developed schemata based on dysfunction are more likely to go out and act dysfunctionally. The message we're getting is that it's all up for grabs. Individuals generally take their behavioural cues from a perception of how things lie in the outside world, distorted or not.
Is exposure to dysfunctional media a formative factor in dysfunctional design – the design of most new cars, houses, buildings, roads, traffic systems and industries (at the same time acknowledging that designs are improving)? Existing patterns of design also carry their own momentum and inertia, governed by schemata of a different kind. The end result is unnecessary consumption. Is this fortuitous for big business, or carefully premeditated? Do insecure people consume more? Does anxiety about death lead people to buy more?
A further schematic level is the blanket assumption that assumes other people think in the same way, with those who don't being labelled 'weird'. Through this mechanism, the greatest insanities, such as filling cities with toxic vehicle emissions, are treated as normal and generally ignored; a kind of societal entrainment exerts subliminal and overt pressure on nonconformists and minorities to be 'normal', adopt 'normal' values, and join in. The same force usually subverts childhood and teenage idealism, to remake it according to a template laid down by those who in the cringe-inducing phrase, are 'living in the real world'.
Whether intentional or not, dysfunctional news may effectively be conveying the message 'This is the way the future is going to be, so get used to it'. A major irony is that the radical media may often fall into the trap of basing their dysfunctional news around the same message to stir up a bit of extra anger. If such negative scenarios are presented as foregone conclusions, the end result is highly disempowering and carries with it a bad energy.
Nazi propagandists (who incidentally were the forefathers of the modern advertising industry) had a habit of filming the German invasion of one country, which was then rushed to the next one they planned to conquer. By appearing to be invincible, they knew that when the next invasion began, most resistance would already be beaten at a psychological level. Is globalisation really inevitable, as the media would have us believe, or is this claim the most likely means of producing such an outcome?
Lester Brown, founder of the WorldWatch Institute, reminds us of the mediaeval latin word for sloth, 'acedia'. In referring to this, Damascene (quoted by Aquinas) describes it as 'a kind of oppressive sorrow' that so depresses a man [or woman] that he [or she] wants to do nothing. It is a kind of spiritual apathy that makes people shrink from spritual good, and indicates a refusal to begin new things.
A tragedy is that, without a counterbalance, dysfunctional media coverage perpetuates, and may even accentuate, the Christian myth of Original Sin, the idea that the human race has carried a heavy weight of 'sin' ever since the time of Adam's Fall. Isn't it an interesting coincidence that the mass media is so fond of using the word 'shame'? As a prison bar, we should shrink with horror away from ever using it – the world already has enough challenges on its plate.
I would suggest that 'acedia' finds a parallel in the 'freeze effect', where overwhelmed, numbed and traumatised people (probably much of the population) wait for the cynic's 'someone else' to act first. No amount of exhortation generally has much effect on them. We have to allow them to be healed first. It requires breathing space and a safe psychological environment.
Media observers are familiar with many of the self-seeking rationales behind dysfunctional news - political point scoring, political empire building, and the questionable anticipation of greater sales figures. An interesting underlying ideology contained within the choice of such coverage (without a counterbalance) is that power ultmately lies at the political level, the view expressed by the wind energy cynic referred to earlier.
A common idea behind such dysfunctional news is that we have devolved down a near-primate level, where stubborn people 'in power' now have to be 'shamed' into taking the necessary action - the subtext being that no other approach will work. This strategem doesn't appear to be the ideal solution. There is a distinct lack of focus on long-term considerations and here-and-now opportunities for being proactive. In feeling you have to pressure another person to reluctantly act in your interests while dragging their feet, you have handed over power to them in fairly stark terms; sometimes we have no choice but to play this game, on other occasions we have another path.
Here are two propositions: 1) Governments often act in a deceitful, self-interested way 2) Many people have resolutely cynical attitudes towards their governments.
There is no denying that 1) will tend to create 2). Is it too bizarre to propose that 2) could create 1), with mass expectations facilitating negative and self-interested behaviour on the part of governments? This could perhaps be compared to mass cynicism being 'a great asset in oiling the path for the machinery of government and corporate control'. It is easier to fulfill the expectations of people than to cut against the grain by going off in a completely different direction.
In contrast, I feel that the subtext to 'functional' news is one of empowerment, and the firmly-held belief that power ultimately lies at a grassroots level. It carries with it the scope to completely bypass governments in some contexts. While most governments feel their hands are tied by international economic factors, the grassroots has no similar obstacle – the biggest challenges it faces include mass cynicism, disempowerment, and a lack of training.
Many outcomes in the political arena lead to a result that could be described as a 'half-empty' or 'half-full' cup, a result that is far from ideal, but not the worst possible outcome. This can be perceived either as a 'half-empty cup' (largely ignore the positive outcomes, tell everyone how bad things are, and pressure the government to act – i.e. fill it all the way up), or a 'half-full cup' (ackowledge the opportunities, grasp them, and run with them largely irrespective of what governments are doing). Wherever relative freedom (of assembly, speech, press) is to be found, it is a half-empty cup, but do we ever acknowledge it as such?
While this analysis is intended as an exposé of what dysfunctional news is doing to us, I don't want to underestimate the power of positive media outlets such as Yes! Magazine in the US [link], Positive News and Living Lightly from the UK [link], and Oz Positive in Australia [link].
The journalists' network Images and Voices of Hope [link], a collaboration between the US-based Visions of a Better World Foundation, and the global spiritual organisation Brahma Kumaris aims to speed our civilisation’s transition from the 'old story' of despair and injustice, to the 'new story' of a sustainable peaceful future.
In the interests of a peaceful media, please refrain if possible from shooting down, torpedoing, or even attacking this article. However, you are still welcome to criticise it or comment on it. My hope is that it will generate plenty of views and discussion. ]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000007.htm2002-08-29T03:02:26Z2002-08-29T03:02:26ZUS veterans return to Iraq to wage peaceIn early May this year, US war veterans made an important journey to Iraq to help repair four water treatment facilities in the southern province of Al-Basrah that had been devastated by bombing and sanctions.
One result of the UN sanctions that have been in place since 1991 is a lack of hard currency for Iraq to buy essential spare parts. Non-functioning water treatment facilities and resulting waterborne diseases have led to a high rate of infant mortality, and fatalities among the sick and elderly.
The veterans were carrying out a humanitarian project organised by Veterans for Peace, a US group founded in 1985 by ex-service members who are 'committed to sharing the horrors they had experienced'. Its key goals are to denounce war and 'wage peace'.
The Iraq Water Project is a joint initiative with another organisation called Life for Relief and Development. Both groups wanted to make a public demonstration of support for the Iraqi people, with participants risking fines and jail sentences for breaking the economic embargo. Citizens of the US, Canada and Japan worked in the hot sun alongside Iraqi labourers in an international show of solidarity.
The last visit saw the completion of 'Phase 1', giving a further 66,000 people access to clean drinking water. Since 2000, water treatment facilities to meet the needs of 100,000 people have been repaired through the group's efforts. The next to be rebuilt are in centre of the country, and donations are gratefully accepted. Veterans for Peace aims to continue rebuilding water treatment plants until the sanctions are lifted.
Candy Lovett, a Gulf veteran with Gulf War Syndrome, requires crutches or a wheelchair for mobility. She said about her visit to the country last year 'The trip changed my life. I will live each day and breathe each breath to see that justice is done in Iraq'.
The group is strongly opposed to George Bush's planned invasion of the country, and deliberately makes a distinction between the dictator Saddam Hussein and the human reality of a people in many ways very much like us, who would suffer greatly if a military action went ahead.
Contact:
Veterans for Peace, World Community Center, 438 No Skinker, St Louis, MO 63130, USA Ph: +1 314 725 6005 Email: vfp@igc.org [link]]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000006.htm2002-08-15T17:20:57Z2002-08-15T17:20:57ZThe challenge of rebuilding local subsistence economiesIn recent times, local economies have fallen victim to globalisation, but this process is not inevitable or non-reversible. Rather than being colonies of the global economy, our villages, towns, and cities have the potential to be largely self-sufficient in essentials. In Western countries, it is ...Richard Douthwaite is an influential non-growth, Green economist based in Ireland. In his important 1996 book 'Short Circuit' (Green Books, UK, 1996), he makes the sobering claim that even those people living in industrialised countries can no longer rely on the global economy to meet their basic needs, and that these needs should ideally be met by a parallel local subsistence economy.
'Short Circuit' sets out four key priorities, which are (in order of priority) to:
1) Create a local complimentary currency 2) Set up local financial institutions 3) Generate power from renewable energy 4) Grow local organic food.
The main body of the book is divided up into four sizeable chapters, each based on one of the four key priorities. For each area of focus, several current examples are given. (The author's reason for placing energy above food is based on the idea that food production is reliant on the use of energy, and I'm sure some people will question this).
Inspired by this book and a number of similar past and present initiatives (the Antigonish Movement (1920's, Eastern Canada), the Australian Antigonish Movement, the Mondragon cooperatives (Spain), I recently put together a draft step-by-step model under which a neighbourhood, suburb or town could create such a parallel economy. This is provisionally called 'Community Inc', and being at a 'work in progress' stage, constructive suggestions are appreciated. (As I'm not interested in ego games along the lines of 'my model is better than your model', if anyone finds any of it useful, inspiring or thought-provoking then it is serving its purpose).
1) Achieve community consolidation 2) Create a fundraising system 3) Establish communication infrastructure 4) Look at setting up a complimentary currency and local financial institutions 5) Gain community control over land 6) Set up housing cooperatives 7) Grow local organic food 8) Generate power from renewable energy 9) Other elements
In putting it together, one of my aims was to reconnect the fragmentation that tends to haunt regenerative enterprises, to substitute this with an integration in which every element in the system is strategically connected (usually economically) to the greater whole. I also feel that it is very important to always work 'on the ground', rather than getting lost in the more comfortable real of abstractions and philosophies.
This model was influenced by the Spanish Mondragon network of cooperatives, created at the end of the Second World War. Under the Mondragon system, a strong synergistic energy was created by the mutual cooperation of the member cooperatives. For example:
- coops trade with other coops as a first preference. - a coop bank was set up, which is authorised to set up further coops. - coops make joint purchasing agreements to reduce costs. - no workers are sacked – instead they are employed in another cooperative.
For grassroots economic regeneration to succeed, it is always easier if local resources are held under local control. Outside companies may come into an area, profit from liquidating the natural capital, and then leave. Only local people have the vested interest in ensuring that local resources are used sustainably. It may be necessary for people to band together for the purpose of buying back these resources.
No matter how hard these challenges appear in an environment of mistrust and community breakdown, the process needs to be started. Overcoming disempowerment is an important first step; another is establishing mutual trust with like-minded people. In Australia mutual trust can be difficult, I expect the picture in the US is similar. We may need to rediscover the meaning of the word 'solidarity' (removed from its socialist context).
To give a real-life example, the local organic farmers' market in Lismore has recently been talking about setting up a bulk-buying cooperative for ecological products such as recycled toilet paper and environmentally sound detergents. The challenge is to translate this into action, and hopefully, in time, even manufacture some of these products locally.
If anyone knows of existing examples of integrative approaches for regenerating local grassroots economies, I'd be very interested in hearing about them.
Richard Douthwaite is also connected to the Irish-based Foundation for the Economics of Sustainability (FEASTA). Their site is at:
In a slightly broader context, and coming from a US perspective, the Institute for Local Self Reliance (ILSR) is a long-running organisation working in the field of locally-controlled economic development.
[link] ]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000005.htm2002-07-29T21:07:55Z2002-07-29T21:07:55ZGovernments could issue interest-free moneyIn most industrialised countries, the vast majority of money is created by the banking sector as a debt in the form of loans. A small remainder is issued by governments in the form of notes and coins, as a debt-free injection into the economy. In 1921, Henry Ford and Thomas Edison held a press conference in Alabama to propose a new way of paying for a dam scheme. They were suggesting that for such large public works, the US government should abandon its usual practice of borrowing from banks or the private sector, and instead create the money itself, interest-free.
Money would be lent to the project without interest, and repayments removed from circulation (which would prevent the possible problem of inflation associated with 'printing money'). This option would save future generations the burden of interest repayments.
In the 18th century, apparently the States of Pennsylvania, New York, New Jersey, Delaware and Maryland all printed and issued interest-free paper money, becoming prosperous as a result.
A US group called Sovereignty was working for ten years on a similar Bill for interest-free public works money (HR1452) to be put before the US Congress. For more details, see:
In 2000, ex-UK government economic advisor James Robertson and Professor Joseph Huber jointly produced a short book based on similar ideas called 'Creating New Money', for the UK's New Economics Foundation (NEF).
They suggest that the value created by issuing new money should be a common rather than a private resource. Interest-free money could be put into circulation by governments as public spending. Under this system, the money supply would ideally be regulated by an independent and democratically accountable central bank.
If the right to issue money is reserved only for the government (a key term referred to is 'seignorage', the prerogative of the State to issue money), the authors foresee increased public revenue, lower interest rates, lower inflation, and greater economic stability. A good summary of their ideas is at:
The NEF is a radical think-tank that works to generate simple solutions to complex social, environmental and economic problems, and their site is worth checking out:
In the UK on June 26th this year, MP Austin Mitchell tabled Early Day Motion 1515, proposing that the government should experimentally create interest-free and repayable loans for all public capital investment (e.g bridges, roads, hospitals, public housing, etc). Through bypassing interest payments, the overall cost of such projects would probably be cut by between a third and a half.
As of Thursday 11th July, 17 MP's had signed their names to this Motion. If it receives enough support, it will go to a vote.
Working along similar lines is the Forum for Stable Currencies, a loose network of UK Parliamentarians and concerned citizens that meets regularly at the House of Lords in London. Their site is at:
[link] ]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000004.htm2002-07-11T19:57:38Z2002-07-11T19:57:38ZBretton Woods and the path not takenThe Bretton Woods System takes its name from the 1944 conference that gave birth to three international institutions - the IMF, the World Bank and GATT (the General Agreement on Tariffs and Trade). It was the basis for the post-war global economy. Broadly speaking, the conference was characterised by two rival plans, one proposed by Harry Dexter White on behalf of the US Treasury, the other coming from John Maynard Keynes on behalf of the UK delegation.
In 1938, Keynes had warmed to Benjamin Graham’s proposals for a 'commodity-reserve currency' (linked in value to a basket of commodities to maintain stability), to replace the Gold Standard. This is covered in more detail at:
Inspired by these ideas, around 1943 Keynes drew up a plan for a world reserve currency called the 'Bancor'. He envisaged replacing the Gold Standard with an international clearing union administered by a Global Reserve Bank.
This would achieve a more stable and fair world economy by automatically recycling trade surpluses to finance trade deficits. In other words, creditor countries would be encouraged to spend their excess Bancors with debtor countries (this is similar to the running of a LETS system, where members with high positive balances are encouraged to seek out high negative balance members to spend with).
In his 1936 work 'General Theory of Employment, Interest and Money', Keynes had expressed some support for the principle of demurrage (for more details about this charge and how it worked in practice, see my 26/6/02 news log 'Wörgl's Stamp Scrip – The Threat of a Good Example').
A revolutionary element of Keynes' plan for Bretton Woods was that it incorporated a form of demurrage. Those countries with high surpluses or defecits would be charged proportionally to their negative or positive balance. This provided a strong motivation for countries to keep these two balance sheet items from getting too high or too low.
The result of the Bretton Woods negotiations came much closer to White's plan than to that of Keynes. It opted for the free movement of capital, with the US dollar as the international currency, backed by gold. (This arrangement persisted until Nixon broke with the Gold Standard in 1971; the resulting lack of stability caused by having 'floating' world currencies led to the modern era of currency speculation).
The US wanted an international bank that would penalise debtors but not creditors. However, if Keynes' plan had been implemented, debtor countries' levels of debt would have been reined in, and not allowed to get out of hand.
In his book 'Goodbye America', Michael Rowbotham explains how Bretton Woods set the scene for the Third World debt crisis that arose in the 70's and early 80's. This trap, one that debtor countries often cannot escape from unless their debts are written off, forces them to liquidate their resources to keep up with interest payments, and can lead to their economies being brought under IMF control. On a more hopeful note, the book also looks into ways of solving this problem.
US Economist Jane d'Arista is interested in creating a modern-day Global Reserve Bank, in an updated version of Keynes' ideas. She envisages this creating an International Reserve Asset that would allow countries to engage in trade and financial transactions using their own currencies, rather than having to use the US dollar. In turn, this would, in her words, 'bar speculators from raiding the world’s currency reserves'. More details about her plan are at:
This is an attempt to draw a few strands out of a very complex subject, rather than provide a complete overview. Much more could be said, not all of it likely to generate insights though.]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000003.htm2002-07-02T22:10:26Z2002-07-02T22:10:26ZWörgl's Stamp Scrip – The Threat of a Good Example?On July 5th 1932, in the middle of the Great Depression, the Austrian town of Wörgl made economic history by introducing a remarkable complimentary currency. Wörgl was in trouble, and was prepared to try anything. Of its population of 4,500, a total of 1,500 people were without a job, and 200 fami...The mayor, Michael Unterguggenberger, had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out. These included repaving the roads, streetlighting, extending water distribution across the whole town, and planting trees along the streets.
Rather than spending the 40,000 Austrian schillings in the town’s coffers to start these projects off, he deposited them in a local savings bank as a guarantee to back the issue of a type of complimentary currency known as 'stamp scrip'. This requires a monthly stamp to be stuck on all the circulating notes for them to remain valid, and in Wörgl, the stamp amounted 1% of the each note’s value. The money raised was used to run a soup kitchen that fed 220 families.
Because nobody wanted to pay what was effectively a hoarding fee, everyone receiving the notes would spend them as fast as possible. The 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. This offer was rarely taken up though.
Of all the business in town, only the railway station and the post office refused to accept the local money. When people ran out of spending ideas, they would pay their taxes early using scrip, resulting in a huge increase in town revenues. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, a reservoir, a ski jump, and a bridge. The people also used scrip to replant forests, in anticipation of the future cashflow they would receive from the trees.
The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full employment.
Six neighbouring villages copied the system successfully. The French Prime Minister, Eduoard Dalladier, made a special visit to see the 'miracle of Wörgl'. In January 1933, the project was replicated in the neighbouring city of Kirchbuhl, and in June 1933, Unterguggenburger addressed a meeting with representatives from 170 different towns and villages. Two hundred Austrian townships were interested in adopting the idea.
At this point, the central bank panicked, and decided to assert its monopoly rights by banning complimentary currencies. The people unsuccessfully sued the bank, and later lost in the Austrian Supreme Court. It then became a criminal offence to issue 'emergency currency'.
Unterguggenberger was opposed to both communism and fascism, championing instead what he referred to as 'economic freedom'. Therefore, it was deeply ironic that the Wörgl experiment was first branded 'craziness' by the monetary authorities, then a Communist idea, and some years later as a fascist one.
The town went back to 30% unemployment. In 1934, social unrest exploded across Austria. In 1938, when Hitler annexed Austria, he was welcomed by many people as their economic and political saviour.
The 1920's had already seen a scrip currency called the 'wara' in the German town of Schwanenkirchen. This saved the town's economy and kept a coal mine operating. It started circulating more widely, and became part of a movement called 'Freiwirtschaft' (Free Economy), based on the ideas of the economist Silvio Gesell.
Central to Gesell's ideas was the use of a hoarding fee of the kind used in Wörgl (technically known as 'demurrage'). The soundness of such an idea was affirmed by John Maynard Keynes in his 1936 work 'General Theory of Employment, Interest and Money'.
Perhaps the most groundbreaking feature of demurrage is that it is intrinsically anti-inflationary. Whereas conventional currencies are progressively devalued by interest, anti-inflationary money steadily increases in value. As each monthly stamp is added, the value of the note effectively increases by the stamp amount. This is technically equivalent to a negative interest rate.
The present short-term focus of investments, and the consequent lack of long-term vision are exacerbated by interest-driven currency devaluation that, from a profit perspective, reduces the appeal of longer-timescale projects. The use of a demurrage currency gives an edge to those working for sustainability, because a rate of return is achieved SIMPLY BY LENDING OUT MONEY. When money is repaid (remember these are non-interest currencies), it will have increased in value owing to the money saved by having avoided paying the monthly demurrage fees. This has the potential to enable investment in highly benefical but economically marginal activities such as earth repair.
A recommended book that covers scrip currencies and more fully explains this 'negative interest' principle is Bernard Lietaer's 'The Future of Money' (see Resources). The following three sites also cover demurrage:
In case the ending of the Wörgl story was disempowering, I'd like to add that the number of complimentary currencies around the world is undergoing an exponential growth. As of 2000, there were more than 2,500 in operation, and I expect that the number is still fast-growing. Local stamp scrip currencies can only work in a country firmly committed to decentralising power.]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000002.htm2002-06-26T01:50:43Z2002-06-26T01:50:43ZThe Proactive RevolutionI feel that the factors of technological change and specialisation are causing protestors to face a growing array of causes to get involved in, encouraging a parallel, oppositional, form of specialisation (which I would call the 'one issue' syndrome). While these activists can generally only hope ...Accepting the fragmented quality of modern Western society and failing to fundamentally challenge its appropriateness may be a case of doing the future a disservice. Most people prefer to live within their comfort zones, but we need to take risks by breaking down boundaries, to become cross-specialists or 'big picture' generalists.
Concentrating on only one issue is comfortable, but not holistic. Some people in the environment movement may be unwittingly contributing to several other environmental problems in their daily lives by ignoring them, while focussing on just one in a single-minded fashion.
Fortunately, in the alternative-leaning northern NSW region of Australia, there seems to be an increasing amount of the kind of lateral thinking that leads forest protestors to buy organic food, or encourages water quality campaigners to look at the urban development that creates dirty runoff. Everything is connected.
In recent years, Greenpeace and the writers David Suzuki and David Korten have (to differing degrees) adopted a solutions-orientated stance, recognising that most of us know what is wrong with the world, and that time is running short. Continuing to lament problems where we already know the solutions is virtually indistinguishable from self-indulgence.
When taking such a solutions-orientated position there are pitfalls to steer around, the most obvious being taken in by corporate 'greenwash'. Distinguishing between what is 'greenwash' and what is not can be a major challenge, but perhaps a breakthrough is the mushrooming ethical investment movement, which routinely takes apart corporate images and looks behind the scenes.
Do you have a limited amount of time to contribute? What about taking a simple step that addresses most of the world’s problems while requiring no ongoing input? Move your investments into an ethically-screened fund. Do the same with your pension/ superannuation money. (Look sceptically at the 'best of sector' funds, as these have been criticised for their lack of 'negative' screens).
In the same spirit, if you have such an option, sign up with a company or scheme that ensures that as much power as possible comes from renewable energy sources, especially solar and wind.
When we work pro-actively individually or as a team, what we are achieving may seem very small. (For TV-watchers it tends to feel totally insignificant; for non TV-watchers it feels modest). However, the tendency for this work to address numerous problems at once makes it worth the effort. Around the planet, positive breakthroughs are being achieved every day, but because they are generally marginalised by the media we tend not to hear about them.
The key message I'd like to convey is - don't wait around for something to happen. In a non-selfish way, make yourself the centre of what you perceive to be 'the world'. Every day, look at your individual or community input as the key focus of global change. You are making a difference. ]]>http://www.newciv.org/nl/newslog.php/_v105/__show_article/_a000105-000001.htm2002-06-15T00:38:03Z2002-06-15T00:38:03Z