Why we Need a Monetary Ecosystem Scientific Evidence for Complementary Currencies JIUIUI .
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What to answer to • Those who claim that Bitcoin is a potential problem for banks or the official money system?
What to answer to • Those who claim that Bitcoin is a potential problem for banks or the official money system?
Š
Conventional money provokes various un-
sustainabilities (2) Conventional money is structurally unstable (3) Bitcoin as part of a monetary ecosystem is part of a solution for systemic instability!
A Simple Question
• Who creates conventional money?
A Simple Question
creates conventional • Who
money?
-The Government? -Central Banks?
A Simple Question
• Who creates conventional money? —The Government? —Central Banks? —Someone else?
All « national » moneys are created - out of nothing (« fiat » money)
- through bank debt - with interest!
How many of you have used a complementary (non-conventional) currency other than Bitcoin?
Plan • Conventional Money generates un-
sustainabilities *
Systemic Cause for Monetary Instability
*
Systemic Solution
• Conclusions
Conventional Money System is the Systemic Cause for 4 Un-sustainabilities 1 !t Amplifies Business Cycles 2) It Makes Economic Growth Compulsory
(3) It Automatically Concentrates Wealth
@ It Programs Short-Termism
1. Money Creation Process amplifies the business cycle Economic Cycle
after money Creation
Business (Inventory) Cycle
2. Compulsory Growth
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•When a bank creates money through a loan, only the principal is being created, not the interest. •Without new loans (i.e. new growth), everybody goes bankrupt!
3. Money System Automatically Concentrates Wealth
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•What is the Median wealth (most frequent amount) of US
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4. Conventional Money Generates
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Plan • Conventional Money generates
unsustainabities • Systemic Cause for Monetary Instability • Systemic Solution • Conclusions
Money System is itself structurally unstable
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Between 1970 -2010 IMF identified: 145 banking crashes 204 monetary collapses 76 sovereign debt crises 425 systemic crises = more than 10 countries/year!
My Claim: Our conventional money system is
structurally unstable!
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Sustainability of Complex Networks â&#x20AC;˘ Robert Ulanowicz 25 years of ecosystems flow data. Natural ecosystems have in common to be sustainable. What else do they have in common?
Sustainability of Complex Networks â&#x20AC;˘ Robert Ulanowicz 25 years of ecosystems flow data. Natural ecosystems have in common to be sustainable. What else do they have in common? â&#x20AC;˘ Sustainability of complex network results from appropriate balance between and Resilience, emergent properties from 2 structural variables of complex networks: diversity and interconnectivity
Balance in Natural Networks Resilience
Efficiency
(In)Balance in Our Financial Network "Monoculture = accident waiting to happen" Efficiency
Resilience
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« Monetary Ecosystem » is NOT a metaphor !!! • Diversity a nd intercormectivity are 2 structural variables => applies to all complex flow networks with similar structure, including money system!
• Structural variables are independent from what is being processed in network
— biomass in an ecosystem,
—-
electrons in electrical circuit,
information in immune system,
- money in an economy
Key Points
Š We need monetary diversity, even to stabilize the conventional money system (2) Resilience requires sacrificing some efficiency (3) Digital Age Monetary innovations provide tools to motivate people at different scales and issues.
Plan *
Conventional Money generates
unsustainabities • Systemic Cause for Monetary Instability
• Systemic Solution • Conclusions
Sustainability 100%
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Plan • Conventional Money generates un¬
sustainabilities
• Systemic Cause for Monetary Instability • Systemic Solution
Towards a Monetary Ecosystem: FROM
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Other Examples * Big variety of social purpose currencies: elderly care, ecological, learning, etc.
• Terra: A global currency that makes it profitable for multinationals to think long-term * Dual Currency Banking reduces poverty (Brazil) • Loyalty Currencies: most common commercial complementary currencies • Etc. etc. etc.
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Plan • Conventional Money generates several
un-sustainabilities • Systemic Cause for Monetary Instability • Systemic Solution • Conclusions
Our international monetary system is in
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Matrifocal Societies
Value Shift Patriarchal vs. Matrrfocal
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Patriarchal Societies
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Destroys community (incompatible with gift economy)
* Matrifocal Societies Duai Currency Systems - Partriarchal one for long-distance - Different type of currency (bottom up) for local exchanges
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Conclusions
Š We need monetary diversity, even to stabilize the conventional money system
(2) Complementary currencies make it possible to flexibly adapt to the changes coming in the 21st century
(3) Bitcoin and other crypto-currencies are part of a systemic solution in an emerging monetary ecosystem!
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Follow Up • www.lietaer.com • bernard@iietaer.com • Articles in 4 different peer-reviewed journals • => see www.lietaer.com/research