BOOK REVIEW: Bernard Lietaer, The Future of Money

BOOK REVIEW 

The Future of Money: a new way to create wealth, work and a wiser world, 
by Bernard Lietaer, Century/Random House, 2001, ISBN  0 7126 8399 2

Reviewed by J Walter Plinge, France


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"Unless precautions are taken, there is at least a 50-50 chance that the next 
five to ten years will see a dollar crisis that would amount to a global 
meltdown."   



Right. Global Economic Meltdown. Well we are well aware of the alarmist 
theories of the militiamen of the midwestern United States and their conspiracy 
theories so what's the surprise that they should write a book about them? The 
thing is, the citation above is from Bernard Lietaer, an ex-senior executive of 
the central bank of Belgium, from his book, The Future of Money. His message is 
clear. This is not a book loaded down with economic mumbo-jumbo; the text is in 
plain English and easy for the layperson to understand but economists will not 
be disappointed either. 

So, for people who are generally concerned with social and environmental 
issues, why bother with economics? Lietaer's answer is that social and 
environmental breakdown are directly associated with how currencies are 
designed. Most of us never consider the "design" of money because we think of 
money as something that just exists in the environment like air and water. But 
for Lietaer, who was on the team that designed the Euro, and has devoted 
considerable thought and research to the design of money systems, money is 
designed with features that affect how societies and communities function and 
their relationship to the environment.
See Lietaer's website:
http://www.transaction.net

For example he notes, "... the historian Arnold Toynbee concluded that only two 
common causes explain the collapse of 21 past civilizations: extreme 
concentration of wealth and inflexibility in the face of changing conditions." 
The cause: the design of their money.

Here are some design features of modern money worldwide.
 -  It is all fiat money: created from nothing 
 -  All money is lent into existence 
 -  All money is created with interest 
 -  Money is the tool of nation states 

These design features lead to:
 -  scarcity of money; leading inevitably to poverty and bankruptcies 
 -  encourage systematic competition 
 -  fuel the need for continuous economic growth 
 -  concentrates wealth into the hands of a few individuals 


People concerned with social issues and the environment would do well to note 
the last four items. Each carries severe consequences. For a single example, 
the need for continuous economic growth, carried to its logical conclusion, 
means that environmental and social devastation will continue unchecked until 
the earth, in its entirety, looks like New York City... at which time we 
presume the system will collapse for any number of reasons.

Says Lietaer, "The world's 200 largest corporations now control 28 percent of 
the global economy, yet need to employ only 0.3 percent of its population to 
achieve that" How is that possible? The design of the money system actively 
promotes it.

In chapter six Lietaer describes how community breakdown is cause by a single 
major factor : "... both the cause of the problem and its solution can be found 
in money systems." Of course. Money systems of yesteryear were designed with 
features that served the creators. The new development on the horizon, 
Community Currencies, were designed by people interested in their local 
communities.

As regards money being the tool of nation states, Lietaer observes, "... the US 
dollar has become the global currency. This arrangement has serious negative 
consequences for all participants, including the US." The recent collapse of 
the currencies of Asia, Mexico, Brazil, Argentina, Turkey and Russia are a 
direct result of dollar hegemony and the ecological and social devastation are 
clear. These multiple crashes -- unknown in the history of the world --  are 
"signs of systemic dislocations of the official monetary system." 

SOLUTIONS
The resolution Lietaer suggests is to be found in these "new monetary 
experiments" that have been cropping up all over the world: Community 
Currencies. They deserve the support of the state. "My view is that these 
innovations offer realistic possibilities for gradually correcting the excesses 
and imbalances of the current system without revolutions or violence." 

And his citation of John F. Kennedy may be relevant here: "Those who make 
peaceful revolution imposible will make violent revolution inevitable." To 
which we might add, the sooner the changes are made the less drastic and 
disruptive they will be... doing nothing is not much of an option. Those who 
would be clever by moving the WTO meeting to Qatar or by developing new 
"anti-protest" weapons are demonstrating their opposition to peaceful 
revolution.

What is more, if the individuals and organizations now protesting the WTO, IMF, 
World Bank, GATS, FTAA and the like, remain oblivious to the information in 
this book and many others, they are spinning their wheels.