maintained by Skaggs Island Foundation SIF Home Page
[Last updated 7/6/09]
Copyright © 2003, 2004, 2005, 2008,
2009 by Arthur Warmoth, Ph.D. & Skaggs Island Foundation
on the Current Crisis by Arthur Warmoth, Ph.D.
Economic Primer for Engaged Citizenship
Warrant Dollars, Regional Money,
and Time Credits: The Case for Complementary Currencies and the Need for Public
Discussion and Debate
The election of November 4, 2008 was a major step toward restoring
political democracy in the United States. I believe it is time to take
the next step, which is to move toward Economic Democracy. This step
would amount to a political and cultural revolution. However, unlike the
earlier revolutions that established political democracy, this revolution can
be nonviolent. This is partly because we have the institutions, however
imperfect, of political democracy.
It will, at times, require the courage of nonviolent activism, as practiced
by Gandhi and Martin Luther King. It will also require the
self-discipline to achieve right-brain left-brain integration. What we
need is quantitative imagination. Achieving
economic democracy will require the democratic arts so skillfully practiced by
Barack Obama, but we also need to recognize that understanding economic
institutions requires quantitative reasoning. Economics is not a science,
but it is relentlessly quantitative. And a recession is not a natural
disaster, like a "tsunami" (Alan Greenspan); it is a result of design
flaws in our economic institutions.
The entry point is to think clearly about the two uses of money: as a
medium of exchange and as a store of value. The current crisis shows up
as a shortage of liquidity (medium of exchange), but it was precipitated by a
lack of appropriate regulation of the institutions charged with managing stored
value. And the root of our problems can be traced to the fact that
debt-based fiat currency bearing compound interest is the only modern way to
create national currencies. [For an explanation of "debt-based,
interest-burdened fiat money" see Thomas H. Greco, Jr.
and Bernard Lietaer and my essay Sustainable Community Economics: Basic Theory.]
The Great Depression of the 21st Century is reminding all of us of the
ethical and structural limits of global capitalism. Now
is the time to explore the economic and political advantages of complementary
community and bioregional economies.
Conventional economics is essentially the economics of markets, of
manufacturing and trade. Insufficient attention is thus paid to the question of
the nature of money as such. Furthermore, a large arena of economic activity
that cannot be traded in market is ignored. This economic arena is sometimes
referred to as public goods and services. However, there is no widely accepted
term to refer to these collectively consumed goods, services, and collectively
held assets. Recently some commentators have begun to refer to this economic
arena as "the commons."
This web site offers a comprehensive introduction and guide to a complementary economics of the commons, which is
the basis for a sustainable community economy.
Developing sustainable local economies will require us to re-think much of the
conventional wisdom about basic economic structures.
An excellent place to start is Mark Anielski's The Economics of Happiness:Building Genuine Wealth (Gabriola Island, BC, New Society Publishers,
2007). Anielski charges us to rethink what we really mean by value and
valuation. He identifies five domains of capital or wealth: natural,
built (physical or constructed), social, human, and financial capital.
All of them must be in balance for a healthy economy.
Wendell Berry's book In the Presence of Fear (Great Barrington, MA: The Orion Society,
2001) is a concise manifesto for local economics. Articles by Wendell Berry are
available online at http://www.orionmagazine.org/index.php/mag/contributor/54/
Explore this site and the hotlinks contained in it and learn about
practical strategies for revisioning capitalism by incorporating a healthy and
practical dose of grass roots democracy.
Introductory Essays by Arthur
Introduction to Complementary
Recognition Tools" by Jeff Gates
author of The Ownership Solution
and Democracy at Risk
Basic Bibiography on Money as a
Mark Anielski, (2007). The
Economics of Happiness; Building Genuine Wealth. Gabriola Island, BC: New Society Publishers
(especially chapters 5 & 9).
Edgar Cahn. (2004). No More Throw-Away People:
The Co-Production Imperative (2nd ed.). Washington, DC: Essential
Thomas H. Greco, Jr. The End of Money and the
Future of Civilization. White
River Junction, VT: Chelsea Green, 2009.
David C. Korten. (2009). Agenda for a New
Economy: From Phantom Wealth to Real Wealth. San Francisco: Berrett-Koehler.
Bernard Lietaer. (2001). The Future of Money:
Creating New Wealth, Work and a Wiser World. London: Century.
on the Current Economic Crisis:
Ellen Hodgson Brown. (2008). The Web of Debt:
The Shocking Truth About Our Money System and How We Can Break Free. Baton Rouge, LA: Third Millenium Press.
A comprehensive analysis of the destructive effects
of creating new money as debt and of the recent proliferation of debt leading
to the current crisis. Contains some useful historical information on
Peter F. Drucker. (1996). The Pension Fund
Revolution. New Brunswick, NJ:
Transaction (originally published in 1976 as The Unseen Revolution).
In the 1970s, pension funds had become a major
source of capital. Drucker offers insights into how that development should
have been managed by investing in the creation of real wealth rather than paper
entrepreneurialism. His advice was not taken, leading to the current crisis.
Al Gore. (2006). An Inconvenient Truth: The
Planetary Emergence of Global Warming and What We Can Do About It. Emmaus, PA: Rodale.
The ecological impact and economic imperatives of
Paul Krugman. (2009). The Return of Depression
Economics and the Crisis of 2008.
New York: W. W. Norton.
A Nobel Prize winning economists offers an
explanation of the crisis, with particular refernce to the Great Depression of
the 1930s and the more recent experiences of Latin America, Japan, and South
Bill McKibben. (2007). Deep Economy: The Wealth
of Communities and the Durable Future. New York: Times Books/Henry Holt.
A systems view of the economy by a major ecological
Matt Miller. (2009). The Tyranny of Dead Ideas:
Letting Go of the Old Ways of Thinking to Unleash a New Prosperity. New York: Times Books/Henry Holt.
A common sense analysis of the econmic cliches that
are holding us back and some useful recommendations for dealing with
automation, globalization, and the new economic environment created by the
information, communications, and biomedical revolutions.
Lawrence E Mitchell. (2007). The Speculation
Economy: How Finance Triumphed Over Industry. San Francisco: Berrett-Koehler.
How the roots of the current crisis can be traced
back to decisions made early in the 20th century.
Kevin Phillips. (2008). Bad Money: Reckless Finance, Failed Politics, and the
Global Crisis of Capitalism. New
Nomi Prins. (2006, © 2004). Other Peoples Money:
The Corporate Mugging of America
(2nd ed.). New York: The New Press.
Recent history by a Wall Street insider.
Joseph E. Stiglitz. (2009, January). Capitalist
Fools. Vanity Fair, No.
581, pp. 48-51.
A summary of the major public policy decisions by
free market fundamentalists that led to the Great Depression of the 21st
Important Resource Link:
Currency Systems Links
Complementary Currencies Resource Center
Money.com, Tom Greco
USA, Edgar Cahn
Business: Sonoma County GoLocal Cooperative
Local First: Small-Mart.org, Michael Shuman's Blog/ Business
Alliance for Local Living Economies
Click here for a comprehensive
Annotated Bibliography of Complementary Economic
Theory & Practice [updated 7/6/08]
Click here for additional
Selected References and Links