Life, Money and Illusion

"'Life' refers to the biological processes by which living things maintain themselves over time. 'Money,' to the present economic ideology which says that as long as the volume of money changing hands increases, all will be well. 'Illusion' refers to the fact that these two perspectives are directly opposed in terms of how they would solve current problems." - Mike Nickerson.

The previous article reffered to the mechanisms of our economic system, and why it is degrading our society and our environment. Here are two examples of responses to the challenges we face. The first is a personal account from a trip that I made with Kim, my life partner, to the Kufunda Learning Village in Zimbabwe early this year. The second describes Willits, California and why they are gaining worldwide respect for their efforts at localisation.

Zimbabwe is a country in crisis. The four day petrol queues are one obvious manifestation of an economy on its knees. Inflation was 740% per year, leaving the poor to fend for themselves. Now imagine 700,000 people - made homeless last year in a government mission known on the street as "The Tsunami." Bulldozers were used to clear entire shantytowns forcing people to move out into the country. Unfortunately after years of colonisation and reliance on large scale commercial farming, they have minimal tools for this new life.

Step in the Kufunda Learning Village. A group of a dozen passionate Zimbabweans working to demonstrate and teach self-reliance: Composting toilets ensure nutrients are not wasted but used to grow fruit trees. A substantial herb garden and processing room allow healing ointments and solutions to be made for their people who live with a 30% HIV infection rate. Bee hives bring offer wax for some of their ointments, and honey. A pre-school is getting a rammed earth building erected, and the teachers are taking care of the children admirably. There is a large kitchen with efficient wood-fired cooking facilities. The library boasts books on subjects ranging from food growing to geo-politics. Dwellings and meeting rooms have been made using earth bricks and local thatch. Permaculture style vegetable gardens and young fruit trees offer greater food security. And a local currency based on hours of time is being traded in their broader region.

With the environmental, social, political and economic landscapes changing ever more quickly, people everywhere are looking for ways to organise to meet our needs locally. The Kufunda community has made amazing progress over four short years, while simultaneously assisting half a dozen other communities in their country, to do likewise. The persistent feeling Kim and I shared was that we were being given a glimpse of how our society may look as cheap oil becomes a thing of the past, along with the artificial or temporary affluence it has given us. We are most grateful for their examples.

The progressive community of Willits can best be described by the projects it has begun. Due to space constraints I had to omit half of the list, some of which we are already doing on Waiheke. The City of Willits has voted “Yes”, to the building of a solar (photovoltaic) array to offset the City of Willit's electricity usage. A Vehicle Share Demonstration Project is intended to provide a model for a citizen-based transportation in which a variety of vehicles, each serving a different need, would be purchased, maintained, and shared by a number of residents. A Barn Raising Project gets people from the community to help out on projects previously submitted (by anyone in the community) - such projects could include such projects as the home repairs of an incapacitated resident. The School Gardens Project involves siting and creation of teaching gardens at the schools within the area.

Many people in the US have been inspired by their efforts at localisation and self-reliance and are engaging with others to give birth to their own localisation solutions.

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Is raw capitalism the best possible outcome for our well being? Or can thousands of diverse, locally-rooted, grassroots economic projects form the basis for a viable democratic alternative to capitalism? What really sustains us when the factories shut down, when the flood waters rise, or when the paycheck is not enough? In the face of failures of market and state, we often survive by self-organized relationships of care, cooperation, and community - Dollars and Sense by Ethan Miller

The next article will look at Waiheke initiatives as we seek to find ways to respond to the challenges of this evolutionary moment. Please contact me (jms@ihug.co.nz 372 8737) and tell me about your projects.

Hey Honey, they shrunk the money!

Looking at the bright new shiny, and shrunken, coins I wonder if any one else notices how much they have devalued? The new copper 10c piece looks remarkably like the 1c coin we used to have – except it now has an additional zero on it. Is that how much value the money has lost, and why?


Money is issued by commercial banks at little cost to themselves and then lent to people and businesses against interest – the money creation process is essentially an entry into an accounting ledger. Because money is loaned into existence against interest, and interest is not created ahead of time, there is always scarcity of money. Thus, in order to have enough money to be able to pay the interest required, more loans need to be issued. A larger mass of money leads to a gradual loss of value of each monetary unit. Hence the house that cost $40,000 when 1 cent pieces were common now costs $400,000.

I hear the cry: "It's too complicated – how are we to understand these serious and complex economic issues, and if we did what could we do about them?" We quickly pass on the responsibility to others who know better – after all they work in our best interests, no? A paragraph in David C. Korten's latest book "From Empire to Earth Community," answered this very succinctly for me.

"These financial games [money creation, interest bearing loans, manipulated interest rates, financial speculation, and more] contribute nothing of value to the larger society. They do, however, significantly increase the buying power of the ruling elites and their claims on the real wealth of society relative to the claims of those persons who contribute to the creation of that wealth by producing real goods and providing real services. They are the most successful of financial cons because the mechanisms are invisible and the marks—the object of the con—rarely realise they have been conned. Even if they were to recognise they have been conned, there is nothing they can do about it because the con is both legal and culturally accepted."

As shocking as that can sound, we see it all around us. Many of the productive people in our community, are living on incomes similar to what they lived on 10 years ago when our money bought much more. Now almost everyone is working longer hours, taking less holidays, or part of a two income family – just to maintain the same standard of living, if that.

The picture is the same in most countries across the planet, and in a globalised world we are not isolated from the world economy.

"Today the world is run by three of the most secretive institutions in the world: The International Monetary Fund, the World Bank, and the World Trade Organization, all three of which, in turn, are dominated by the U.S. Their decisions are made in secret. The people who head them are appointed behind closed doors. Nobody really knows anything about them, their politics, their beliefs, their intentions. Nobody elected them. Nobody said they could make decisions on our behalf." – Arundhati Roy

In order for national and international banks to justify issuing more loans, economic activity needs to expand, or more areas of life need to be monetized. But this growing economy is gobbling up natural resources and producing lower quality goods. It is leaving many people without the necessities of life. Unfortunately this grand experiment in economic growth will never self-regulate, because then the interest-based money system will fail.

As I was writing this article a friend informed me that the New Zealand national debt – to "overseas entities" – at the end of December 2005 was running at $33,000 for every man, woman, and child in the country. At 5% interest and 2.4 children per family that's $7,260 of an average family's taxes going offshore in the form of interest before we even begin to pay for governmental services!

Despite facts like this, and David C. Korten's somewhat bleak conclusion in his quote above, I am not so certain there is "nothing we can do about it." However, it will surely take considerable intention, based on first understanding how the present system operates, and then through cocreating and evolving new models which work. It is a bold task, and we can't know all the answers before we begin, but if ever there was a time to step up and be agents of the change we wish to see, it is surely now.

Coming in the next article (28 September): Models of exchange and mutual support.