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[Last updated 7/6/09]

Copyright © 2003, 2004, 2005, 2008, 2009 by Arthur Warmoth, Ph.D. & Skaggs Island Foundation


Reflections on the Current Crisis by Arthur Warmoth, Ph.D.

 An 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.]

--Art Warmoth

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.

Two fundamental innovations are complementary or local currencies (Thomas H. Greco, Jr,; Bernard Lietaer) and microlending (Muhammad Yunus, Grameen Bank). It is also necessary to look at the structure of asset ownership (Jeff Gates, Henry George) and the problem of the aligning of the rules of the economic game with sound ecological principles (Mark Anielski; Hazel Henderson; Paul Hawken, Amory Lovins & L. Hunter Lovins; Lester Brown). For an overview of the ecology and economics of the commons see the (formerly the Tomales Bay Institute).

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

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 Warmoth, Ph.D.

Introduction to Complementary Economics:

Basic Theory: Sustainable Community Economics: (©2001, 2002, 2003)

Other Essays:

Annotated Bibliography of Complementary Economic Theory & Practice [updated 7/6/08]
Selected References and Links

"Pattern Recognition Tools" by Jeff Gates
author of The Ownership Solution and Democracy at Risk

Basic Bibiography on Money as a System

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 Books.

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.

References 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 alternative strategies.

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 global warming.

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 Asia

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 economist.

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 York: Viking.

Recent history.

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 century.

Important Resource Link:

Complementary Currency Systems Links

Complementary Currencies Resource Center

Re-Inventing, Tom Greco

TimeBanks USA, Edgar Cahn

Sustainable Business: Sonoma County GoLocal Cooperative

Buy Local First:, Michael Shuman's Blog/ Business Alliance for Local Living Economies

Associative Economics Association


Click here for a comprehensive
Annotated Bibliography of Complementary Economic Theory & Practice [updated 7/6/08]

Click here for additional
Selected References and Links

For more information, contact Art Warmoth, Ph.D. []