I have posted the following at The Daily Bell: http://thedailybell.com/3434/Austrian-Economics-and-Religion
Following is taken from an interview with Bernard Lietaer in June, 1997. The interview can be found at:
Where a quote is attributed to “Sarah,” she is the interviewer.
BL: …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.
BM: I think this is a novel idea. I wonder why every two-bit dictator in Africa hasn’t thought of this: print enough money and scarcity will disappear. Why should the starving suffer if the only thing standing between them and a hot meal is a printing press? I think this has never been tried anywhere.
BL: Information technologies increasingly allow us to attain very good economic growth without increases in employment.
BM: Haven't we heard this line with every advancement of technology? The telegraph put the pony express out of business. Was that the end? Employment went downhill from there? Do we really have unemployment today because of Amazon and EBay?
BL: A study done by The International Metalworkers Federation in Geneva predicts that within the next 30 years, 2 or 3 percent of the world's population will be able to produce everything we need on the planet. Even if they're off by a factor of 10, we'd still have a question of what 80 percent of humanity will do.
BM: Of course, we could each work 3 days per year and vacation for the remaining 362 – we could just job-share, thus ensuring employment for all, while at the same time achieving tremendous time for leisure.
What a wonderful life this would be; I hope The International Metalworkers Federation in Geneva is correct about this.
But if this is a problem for BL, we cold simply require that every individual can only eat food that he produces himself. That will ensure everyone is employed.
BL: I believe, however, that complementary local currencies are a lot better suited to developing cooperative, local economies….Every fortnight in the Ariege, in southwestern France, there is a big party. People come to trade not only cheeses, fruits, and cakes as in the normal market days, but also hours of plumbing, haircuts, sailing or English lessons. Only local currencies accepted!
BM: If this is cooperative (voluntary), I am all for it. I guess this proves that even a fruitcake this nutty can have its uses: perhaps a re-gift, or a doorstop.
BL: Local currency creates work, and I make a distinction between work and jobs. A job is what you do for a living; work is what you do because you like to do it.
BL: For example, in France you find people offering guitar lessons and requesting lessons in German. Neither would pay in French francs.
BM: Why not?
Sarah: So you're suggesting that scarcity needn't be a guiding principle of our economic system. But isn't scarcity absolutely fundamental to economics, especially in a world of limited resources?
BL: My analysis of this question is based on the work of Carl Gustav Jung because he is the only one with a theoretical framework for collective psychology, and money is fundamentally a phenomenon of collective psychology.
BM: No, money is fundamentally a phenomenon of the desire to divide labor. Without the division of labor, we can all go back to scraping our existence from the earth every day. Is this what BL is getting at? I can’t wait to find out.
BL: Now let's apply this framework to a well-documented phenomenon - the repression of the Great Mother archetype. The Great Mother archetype was very important in the Western world from the dawn of prehistory throughout the pre-Indo-European time periods, as it still is in many traditional cultures today.
BM: Wait a minute, I am afraid I know where this is going….
BL: But this archetype has been violently repressed in the West for at least 5,000 years….
BM: Does he mean the “archetype” of scraping a daily existence, being attacked by beasts, foraging for food, with a life expectancy of what, exactly? And, while a trivial point to some (but rather important to 99.9% of the 7 billion people on this plant): exactly what was the population on earth that was supported by such an “archetype”?
BL: So it should come as no surprise that in Victorian times - at the apex of the repression of the Great Mother - a Scottish schoolmaster named Adam Smith noticed a lot of greed and scarcity around him and assumed that was how all "civilized" societies worked.
Sarah: Wow! So if greed and scarcity are the shadows, what does the Great Mother archetype herself represent in terms of economics?
BL: Let's first distinguish between the Goddess, who represented all aspects of the Divine, and the Great Mother, who specifically symbolizes planet Earth - fertility, nature, the flow of abundance in all aspects of life. Someone who has assimilated the Great Mother archetype trusts in the abundance of the universe. It's when you lack trust that you want a big bank account.
BM: I will mimic Sarah here…WOOOWWWW. Where to begin? It appears all we have to do is believe in the Goddess and the Great Mother, and we will be free of scarcity and want. We won’t need a big bank account.
Memehunter, I will gladly relieve you of your bank account. Again, I can have my lawyer draft an agreement on Monday.
BL: We can, however, design a monetary system that does the opposite; it actually creates long-term thinking through what is called a "demurrage charge." The demurrage charge is a concept developed by Silvio Gesell about a century ago. His idea was that money is a public good - like the telephone or bus transport - and that we should charge a small fee for using it. In other words, we create a negative rather than a positive interest rate.
BM: How does the spending of wealth create long term thinking? Long term thinking results in saving, not spending.
How is money a “public good”? This belief is enough, even without all of the other nutty ideas in this interview, to cause me to call Bernard a monetary crank.
Sarah: Has this ever been tried?
BL: There are only three periods I have found: classical Egypt; about three centuries in the European Middle Ages, and a few years in the 1930s.
In ancient Egypt, when you stored grain, you would receive a token, which was exchangeable and became a type of currency. If you returned a year later with 10 tokens, you would only get nine tokens worth of grain, because rats and spoilage would have reduced the quantities, and because the guards at the storage facility had to be paid. So that amounted to a demurrage charge.
BM: This isn’t demurrage; this is a charge for spoilage and payment of the guards. Bernard should understand his own words before he speaks.
BL: In Europe during the Middle Ages - the 10th to 13th centuries - local currencies were issued by local lords, and then periodically recalled and reissued with a tax collected in the process…. Practically all the cathedrals were built during this time period. If you think about what is required as investment for a small town to build a cathedral, it's extraordinary.
BM: I do often think about how such cathedrals were built in a time when the general population was otherwise in great want of food and shelter. Now I know – their lords stole the money from them.