Grow Your Own Dollars


new internationalist
issue 171 - May 1987

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Grow your own dollars
Moving from fine-sounding conference resolutions into realistic
policies is one of the major problems facing the Greens. Like any
other political party they must worry about how to finance their
proposals. Dick Racey argues that their only real chance is to
start rethinking who creates money and how it should be used.

By some fluke of the electoral process, if the Greens suddenly found themselves in power - surprising everybody, including themselves - what then?

What fresh answers would they bring to the objections raised by the paper manufacturer 'No. We can't clean up our effluents. We can't afford to. Competition is too keen. Force us to clean up the mess, and we'll close down our operation.' And if the Green government thinks of paying, their own finance minister might object.-'How can we possibly find the money, without increasing the deficit or cutting unemployment and welfare benefits?'

What would they reply to the worker, who says: 'Fine. We'll stop producing these poisonous chemicals. But who pays me when my cheque from PolluChemCo stops?' And how would they respond to the farmer whose fields are being washed away by intensive single-cropping: 'Sure, I'd like to give my land a rest. But how do I pay the bank? I have to squeeze every last nickel out of my land, or I lose everything.'

Before a Green government could make any but cosmetic changes it would first of all have to recognize and come to grips with the enemy: the vested interest we have in our own destruction and that of our habitat - and the economic imperatives which impel us toward disaster.

In our present economic system, whenever and wherever a vested interest is assailed, a hue and cry is raised as someone's livelihood is inevitably being threatened. Close down anything on a Monday morning, from a nuclear plant to an arms factory, and by Friday noon, politicians' phones will be ringing off the hook. Those of Green politicians, if they were in power, would ring just as loudly.

Why is this? Well it seems that Western civilization functions within a behavioural straitjacket when compared with the collective behaviour of social creatures like ants or bees or beavers. Scuff an ant hill with a toe, or breach a beaver dam with a shovel, and in a short time there is a burst of activity within the colony until the damage is repaired. There is no delay while 'somebody finds the money'. Sensing an opportunity to contribute their time and skill, individuals simply pitch in and get the job done. Nobody stops to ask, 'How much an hour will I be paid?'; having no money to begin with, they are not inhibited by the lack of it.

With us, it is different. Remedial effort cannot be expended until and unless somebody finds the money. Without that money, nothing gets started; and once started, it comes to a grinding halt in a mire of unemployment and economic distress as soon as the supply dwindles.

Our behavioural straitjacket is an invisible garment donned, perhaps inadvertently, in a period of history least understood in terms of our individual and collective behaviour. Starting well before the Industrial Revolution, we were evicted from the land in an on-going 'fencing-out' process, to make room for a succession of crops: wool, tea, coffee, bananas, cattle - you name it.

In a psychological sense, the fencing-out process alienated us from two fundamental, life sustaining, relationships: to the land and to one another. Goods and services used to move not in response to a cash incentive, but rather in fulfillment of mutual obligation - an almost universal characteristic of cashless societies. Before our mass eviction, labour was 'contributed' - as necessary. Afterwards labour was 'sold' - if it could find a buyer.

The result of these severed relationships has been a complete dependence on money. With a financial incentive we act, often to the detriment of our own health and that of the environment. When incentive disappears, we remain helplessly trapped; our labour immobilized because it cannot be sold. When the money supply dried up, as it did during the Great Depression, we can no longer afford to buy one another's services. We cannot even meet one another's needs - never mind spend money on a threatened environment.

Can we free ourselves from this behavioural straitjacket - as well as from the vested interest in our own destruction? A good start would be allowing people to create their own money for their own reasons. The creation of money would no longer be the sole preserve of the banking system. To the degree that this principle is implemented, we will achieve freedom from incentive and new possibilities will emerge.

As unlikely as it may at first glance appear, this change would produce an entirely new type of economy: one in which goods and services no longer moved in response to incentive, but in fulfilment of obligation; one in which human need would be translated directly into purchasing power, one in which financial restrictions on the deployment of labour would disappear, one in which economic and political power would be decentralized. Are not these some of the most cherished goals of Green philosophy?

Perhaps this could stand a little elaboration. In the present world if you have a dollar and I'm hungry and penniless, you have considerable power to persuade me to do what you want. If you say, 'Dick, see that big rock? Pick it up and move it to over there.' Given that I'm hungry enough, you can safely bet I'll do what you say.

But the relationship between those who have money and those who don't is drastically altered when the individual, instead of banks under the supervision of the state, issues money and places it in circulation. This has already been tried, on a minute scale, in the LETSystem, now in operation for four years on Vancouver Island on the Canadian west coast in the province of British Columbia.

For readers not already familiar with the concept, LETSystem stands for 'Local Employment and Trading System.' In effect, it is a miniature economy, serving a small area, which circulates a quasi-currency called the 'green dollar'.

The way it works is this: If you, Ann Smith, come over and help me build my garage, I can pay you, at least partially, in 'green' dollars. I do that by picking up the telephone and dialing the LETSystem number. A telephone answering device records the transaction: 'Credit Ann Smith, Number 489, with $100 green. Debit me, Dick Racey, Number 109, for the same amount.' The recorded transaction, and a multitude of others like it, are then stored in a computer, the system's nerve centre. I then work off my debit by performing services for other members of the LETSystem. The key feature of the LETSystem, for present purposes, is that l, not the bank or the government, create the currency on the strength of my pledge to reciprocate with my labour to the community.

Now, say, instead of having regular dollars, you have an accumulation of green dollars. If you then say to me, 'Dick, see that big rock? Pick it up and move it over there.' This time my reaction is different because I now have alternatives: I can create another green dollar, equal in value to the one you have; or I can help-out - not 'work for' - somebody else. My choice. Hence my question in reply: 'What's that rock for? And why do you want to move it?' You then tell me: 'It's the cornerstone of a very profitable venture: a munitions factory.' So I might choose to fill my green dollar obligation by taking my help elsewhere. But if you tell me, 'Dick, it's the cornerstone for a hostel, for indigent social theorists.' In this case, I might spring to your assistance.

Perhaps we'd better take a concrete example to illustrate the significance - and potential - of that change in our relationship.

Dr Peter Walford, a dentist living in Cumberland, British Columbia, just starting out in practice, joined the LETSystem centred in the town of Courtney. When patients with hard cash are scarce, Walford accepts, at least in part, green dollars for his services. As a result, a lot of people who can't afford good dental care are now getting it. In return, Walford has furnished his office with locally made furniture. Still, he was able to accumulate a surplus of green dollars. He then decided to refurbish an old school bus as a mobile dental clinic to serve patients living on islands in Georgia Strait. Fifty or sixty people were involved in fixing up the old bus and putting it back on the road - in a brand new role.

Of the experience, Dr Walford says, 'The building of the bus has changed me in positive ways. Its significance, beyond its successful completion, has been that what I have learned will help to sow new seeds that will some day displace the roots of the systems of money and thought and interaction that have brought us to the brink of ecological and military annihilation.' A simple story? But consider carefully the utterly changed conditions in which it all took place. The people who renovated the bus all 'helped out' voluntarily; all had the choice not to help; as far as I know, there was no approach to any bank manager for 'prior approval'; and at no point was the project brought to a standstill because of a lack of money.

The principle which the event illustrates is that to mobilize collective human activity in an environment in which goods and services are delivered in fulfilment of obligation rather than in response to incentive - one doesn't have to dangle 'carrots' in front of people's noses. One dangles, instead, worthwhile objectives and people will, quite naturally, spring to their services. There is no shortage of worthwhile objectives, of social, economic and ecological importance, to pursue in our society. No shortage of labour, skills, will or imagination needed to pursue them - once people are liberated from the need for further contemplation of 'incentives' and are once again free to 'contribute'.

Meanwhile, Greens have habitually dissipated their energies in a multitude of divergent objectives. They have developed no apparent overall strategy for translating their aims into political reality. Their lofty policy resolutions are often like cotton candy, disappearing the moment one tries to sink one's teeth into them. In comparison with Marxists, who have always known where they were going, even if not everybody wanted to take the trip, Greens are generally likeable, dreamy-eyed intellectuals - steering first this course then that across the political landscape, seemingly uncorrupted by any craving for power. It is high time that Greens developed at the very least a common focus: the emancipation of our labour, our thoughts and our imaginations - to do what we must in order to survive on this planet. The Green dollar could be a valuable tool to allow us to work for this end.

Dick Racey drives a school bus in Northern Ontario. The address of the LETSystem is Landeman Community Services Ltd., 375 Johnson Ave., Courtenay, BC V9R 2Y2, Canada.

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If it's printed it seems true. But you might be having
the wool pulled over your eyes. Each month the NI invites
one author to justify their style of argument.

Editor: Don't you overdo it by painting the Greens as dreamy-eyed intellectuals in order to make your own views sound practical in comparison?

Racey: lf the Greens are ever going to make any worthwhile change in the world, one of the first things they'll need is a thicker skin.

Editor: Aren't the sympathetic parallels you drew with the animal world - 'scuff an anthill' - a cheap device for getting readers on your side?

Racey: Of course I want the reader on my side - or else I wouldn't have written the article. I only use 'sympathetic parallels' when I think them valid and if they shed light upon the human condition. The parallels are an attempt to get us to view ourselves, as well as the way we behave, as objectively as possible, in as few words as possible.

Editor: You reduce economics to a series of simple parables in order to justify your own proposals. Do you think this is really a convincing way to tackle the complexities of economic life?

Racey: Whatever gave you the idea I was writing about Economics? Economics is nothing but a quagmire of slippery arguments that continue for decades on end and solve nothing in the article. I was really writing about human behaviour, and how to change it by changing the social and economic imperatives which largely govern it. Those imperatives can be radically altered by changing the nature of money - a possibility I hope the Greens will one day consider.

Editor: Isn't your reference to a 'behavioural straitjacket' a manipulative appeal to everyone's belief in freedom?

Racey: Millions of unemployed throughout the Western world think they are free; but until they are 'free' enough to contribute their labour and talents without restriction, their freedom' is just an illusion. Until that day comes we are indeed, individually and collectively, in what I call a behavioural straitjacket.

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