WelCom News
A newspaper for the Wellington and Palmerston North Catholic Dioceses

The ecology of money: how system design impacts on us and on the environment

Helen Dew

There is mounting evidence and increasing awareness that the world is in serious trouble, environmentally, socially, and economically.

In most cases we’re aware of what steps are required in order to address the problems, but remedial action is often not possible due to lack of money. Why should this be so?

Money has always been used to represent value of goods and services and to make trade easier. It is easier to use money than pigs or chickens. Given that money is a measuring tool of value it seems odd that a measuring tool should ever be in short supply. Since carpenters never run short of centimetres, how is it that we run short of money?

The reason has to do with how our money system is designed.

The issue goes much deeper than money management. It is not commonly recognised that environmental, social and economic outcomes are deeply influenced, and to a significant extent predetermined, by the design of our monetary system.

Most people think that there’s only one type of money, because that’s all they’ve ever known. Cheques and credit cards etc represent special-purpose forms of cash, but money is money, they think, regardless of the form it takes. Few realise that there are, potentially at least, many different forms of money, and each type can affect the economy, human society and the natural environment in a different way.

A research fellow at the Centre for Sustainable Resources, California, and author of The Future of Money [2001], Bernard Lietaer, says ‘We create our exchange systems and then they create the world we live in.’

Richard Douthwaite, author of The Ecology of Money [1999], says ‘If we wish to live more ecologically, it would make sense to adopt monetary systems that make it easier to do so.’

Note the plural here. Since money systems tend to lead to a particular set of consequences, we are likely to have to use perhaps three or four money systems simultaneously to produce the combination of characteristics that we want our society to possess.

A worldwide movement committed to the design and implementation of diverse currency systems is gaining momentum. The LETS system – Local Employment and Exchange System – is the most common form of community currency internationally. Launched in British Columbia in the 1980s and introduced to New Zealand in 1987, this system operates in several regions throughout the country. Group members record the value of goods and services exchanged using purpose-built software developed and trialled in South Africa.

Another form of community currency, Time Banking, started in Lyttelton in 2005. This system, limited to the exchange of community services, is specifically designed for community building. Invented by American lawyer Edgar Cahn, the system uses time as the unit of measure – one hour of time given earns one hour of credit. Time Banking is adaptable for a variety of purposes. In Japan it is part of the national health system. In the UK it’s used to improve parenting skills.

A fuller description of these and other community currencies is available in Deirdre Kent’s Healthy Money, Healthy Planet [2005].

Importantly, Kent explains in simple language the workings of our ‘sick’ money system, and why change is necessary for the wellbeing of people and the natural environment.

The greatest advantage of a community currency system is that, unlike with conventional money, there is always enough.

For more information: on Bernard Lietaer: http://www.transaction.net/money/bio/lietaer.html

Richard Douthwaite The Ecology of Money, can be read online at http://www.feasta.org/documents/moneyecology/index.htm

Time Banking is explained in Edgar Cahn No More Throw-away People [2000].


For reviews of Deirdre Kent Healthy Money, Healthy Planet go to http://localcurrencies.blogspot.com/ Copies can be purchased from Living Economies, www.le.org.nz

Helen Dew is a member of St Mary’s parish, Carterton. She is trustee of Living Economies, a New Zealand Trust established in 2002 to research and promote the implementation of community currencies. Enquiries: helend@contact.net.nz