When I was in college, I actually was a banker,
and I'm not made to be a banker, so...
well it was actually very depressing to me because I interacted with a lot of people,
doing transactions for them, and it just really surprised me
as to how much money ruled their lives.
Well, I'm always worried about money.
Well, that was after the divorce, but yeah, $60,000 in debt and I wasn't 30 yet.
It's the whole seduction of money, and that lure of a chance to get more.
The normal debt; homes, cars...
We have contests to see who can spend the least amount of money,
and I think one day I actually got down to about $1.50
and that's the whole day's worth of food and everything.
Didn't really have much money, and I was constantly struggling.
The time I was most worried about money?
Well right now. Right now I'm really worried about money.
It was a domestic violence situation, and I was afraid that I wouldn't have the income.
You wonder where your next meal is gonna come from.
Pray that everything is going to work out alright.
I always worry about money.
Whether I have enough, whether I'm spending too much.
You gotta make money. There's just no way around it.
And you gotta do what you gotta do short of illegal things.
I think that if money hadn't been an issue we would have totally been okay.
Questions I have about money?
If I had any questions about money, what would I like to know...
What is the actually worth of a dollar these days?
THE MONEY FIX
Money; money is the source of much anxiety,
much confusion, a great deal of suffering.
Money makes the world go 'round. That's the one that everybody knows.
Money is a tool to help people live a better quality of life,
but somehow it's become the all in all. People think money is life in itself.
The standard view is that if you get richer, you get better off and you're happier.
Well, it turns out not to be true.
People's absolute standard of living, once they're above poverty
is pretty weakly related to happiness.
I'm going to make a rough claim that about 95% of family feuds, problems, breakdowns,
are about money. And I'm probably conservative.
In America, to have a million dollars means that you're successful,
but what does that really mean?
Why is that? What's so special about money?
Why do we feel about money as basically the breakdown in the family.
Why is it so frequent?
Our relationship with money is so troubled, and so upsetting,
and it is not just for people who are trying to make ends meet or feel marginalized.
But even our global billionaires are completely freaked out
about money all the time. So having more money doesn't really resolve
these problems we have around money.
Understanding the dollar.
That means more than knowing what a dollar bill looks like, or what a silver dollar is.
For the first time, essentially the entire world, willing or not,
subscribes to the same set of economic rules.
The money system went global, and it began to disorder
every local ecosystem and every local social system on the planet.
At the bottom of all the rules, is the rule that making money
is always more important than anything else.
We've made money more important than human life,
more important than the natural world, more important than God or spirit,
and on that bed of lies, our relationship with money is resting.
This is where we are today, is that the entire apparatus of assumptions
underlying economics are simply wrong, so, you know,
why do we allow societies to be run with this malfunctioning source code?
Part of the difficulty is that very few people think about what money is,
where it comes from, how it is created and how it is controlled.
Well, remember there has been 150 years of very intense propaganda
and indoctrination to drive to drive these ideas out of people's heads.
If we could unpack all of this mystification, we'd probably find that
economics was made so complicated in order to mystify people,
so they could not really figure it all out.
If everybody knew the full facts about how money is issued,
how it's put into circulation, who was issuing it, how they have power
and control over the economy, and over individual's lives,
I think there'd be a lot of very unhappy people around.
It's often been said that money moves the world, or money is the engine of the world,
or money makes the world go 'round, but in more accuracy,
money stops the world from going.
I'm afraid that's more than I care to spend.
Money doesn't facilitate in its current form, it inhibits transaction and trading.
Money is the one thing that is required for economic exchange.
It is the Khyber Pass if you will.
It's the channel through which every transaction must go
in order to be completed.
We live today by exchanging goods and services with one another,
and money is the medium that we use to do that,
so money actually becomes the controlling element in economics.
Those who control money control everything.
Out of the simple barter of primitive people,
spearheads became one of the first articles used as money.
Shells have also served as money.
Wampum was used by the American Indians,
and hundreds of other articles have been money
to various people and various times.
Money is not a creature of the state.
It didn't require any king or prince to invent money.
Rather, money and monetary trade were products of spontaneous order.
Well, put yourself in barter situation, where you come to market
with some good and try to trade it directly for the good you want
to go home and consume. So if you come to market with asparagus
and you want to go home with plaid shirts, you have to find somebody
who is not only selling plaid shirts, but wants to be paid in asparagus.
But of course, the problem is you often can't find a trading partner
who has the goods you want and wants the goods you have.
An alternative is to think, "well, what does this guy selling plaid shirts want?"
So, what people do is they consider trading not necessarily for
what they ultimately desire, but for other intermediate goods
that they think may be more readily traded for what they ultimately desire.
And at first different people are experimenting
with different indirect exchange strategies.
So somebody may trade for salt, somebody else may be using nails,
a third person may be using barley.
But what happens is, the more certain goods get adopted
in these individual efforts, the more attractive their use
for the same purpose will seem to other people.
Consequently, there can be a snowballing process where
eventually a small set of goods or even just one commodity
seems overwhelming more attractive, and becomes universally adopted.
And when you reach a commonly accepted medium of exchange,
that's when you've got money.
So it's not defined by any physical characteristics,
it's not defined by any legal sanction.
It's defined by this social convention that people will accept it
in order to trade it away later.
In the course of human evolution, societies have used
countless different things as money.
Is it possible that what a society chooses as its money
can affect the behavior of its people?
The classical, the conventional way of thinking about money
is that it's a passive medium of exchange that is being used
as a convenience to make exchanges between people,
and that it doesn't really affect either the kind of transactions that are being performed
it just makes them easier, or the relationships between the people
that are using that kind of money.
Both these things happen to be proven wrong.
Different kinds of money do have very different properties,
and one of the key properties is the level of abundance or scarcity
of the item that's being used as money.
If it's abundant, you will get a proliferation of trade.
People will be able to exchange their goods and services fairly freely.
If money is scarce you create a very serious problem
because you prevent people from actually
being able to exchange goods and services.
We have a number of studies now that actually demonstrate very clearly
that depending on what one uses as a medium of exchange
the relationships between the people are different.
That's a huge huge implication right there.
There are different kinds of monetary systems, and some promote
very socially responsible behavior, and some promote
very anti-social destructive behavior.
My view of money in any society not just modern society,
is a projection of the collective unconscious of that society.
And the sign, the proof of that is that
every society takes its own money system for granted.
If you try and find out what people think money is,
you will be mystified and amazed.
It's a confusion, it's inaccurate, it's absurd, it's superstition,
it's myth, it's religious, it's crazy.
Most people haven't an idea, they just use it.
Perhaps it would be more accurate to say it uses them.
In fact it's impossible for the human mind to grasp the total amount of money
that has been required to build the America we know today.
Where then does all this money come from?
Now we're getting to the point that is news.
Most people have no idea where money comes from.
A lot of people believe that it's the governments that create the money.
I'm not sure of the exact authority under which more money is released.
I know the executive has some power over it.
You know, as long as when I cash my paycheck it's there,
that's all I'm really worried about anymore.
It comes from a big factory, where they make it.
It's, I don't know, created by the government to control us.
Well, it would have to be done by the government.
I mean, that's what you would expect anyways.
Whether or not it really is the government is a different story altogether.
Conventional money is not created by the government as many people believe,
and it's not even created by the central banks, although they do part of it.
It is actually created by the banking system.
People see these films about the US mint and the government printing office,
and they see sheets of dollar bills being run off the printing presses.
And so, they think it's the government that's printing money.
But this is not the real source of money. The real source of money is banks.
The banks have a complete monopoly on the money creation process,
so the public are actually not involved in it at all directly or indirectly.
The Federal Reserve is a private institution owned by commercial banks
who are members of the Federal Reserve system, which includes
all the nationally chartered banks.
Most people don't realize that the Federal Reserve is a private corporation
and is for profit. And in fact Federal Reserve,
it's neither federal, and it's not a reserve.
In 1910 a group of top American bankers met on Georgia's Jeckyll Island
to discuss ways of stabilizing the country's banking system.
Congress passed the Federal Reserve act in 1913 giving this private corporation
a monopoly over issuing the nation's money supply.
How then did the power to issue something
as fundamental as money fall into private hands?
Initially, you can think a bank was about storing people's gold,
so you come in, you store your gold at the bank, and the banker gives you
a gold certificate that says you have such and such amount of gold in my bank.
Now, the basis of the paper money systems
was when you could start trading those pieces of paper.
Let's say you have some gold that you want to keep safe.
You put it in a bank, and the bank gives you a paper receipt
you can redeem later for your gold.
You can now trade that piece of paper in place of the gold
as long as others are also able to redeem it for your gold.
The good name of the bank on the paper note assures people
that behind the piece of paper is a piece of gold waiting to be redeemed.
Soon, as people's confidence in the bank grows,
rather than cashing in the receipt, the person receiving the paper simply trades it again.
The paper may end up being traded many times
before being redeemed for the original gold in the bank.
And banks discovered that when people started paying each other
with claims to the coins in the bank's vault rather than taking the coins out,
that the bank didn't really need to keep all the coins in the vault
in order to have enough to actually pay
people who did come and want the coins.
The banker realizes, nobody's coming to take the gold.
The gold is just sitting there, so instead of just putting out one piece of paper
that says there's such and such amount of gold, you can put out a lot of pieces of paper
given the fact that nobody is coming and taking the gold, and you can lend money.
And the basis of that loan is the trust that people have
that if they want to come and get the gold, the gold will be there.
Money in the bank is not actually wealth.
The only thing that makes that system work is the fact that nobody actually does come
to get the gold. Now if everybody says "You know what,
I'm going to go get my gold at the bank." If everybody went and got it,
there wouldn't be enough gold for everybody.
You often had bank runs and bank panics.
When people would have a lack of confidence in a particular bank,
they would take those bank notes to the bank and demand their gold and silver.
And with fractional reserves, that bank would quickly run out of the reserve metal
and have to close its doors.
So that's fractional reserve banking: the coins in the vault
are a fraction of the claims that could be made for them.
The reason the bank did it is because they were making money
off of earning interest off of those loans
that were promises that there was gold in the bank.
As people's confidence in the bank and its receipts continues to grow,
banks soon discover an unexpected way to earn profit.
The bank can print a receipt for gold that does not even exist.
They can then loan that receipt to someone on the condition
that they pay it back with interest.
While the bank takes a risk by having less gold than the outstanding receipts,
there is an almost unlimited potential to make profit off charging interest
on loaning gold that it does not even have.
If people catch on that there isn't enough gold to redeem the receipts,
they will all go to the bank at once to get their gold.
If this happens there will be a bank run. The bank will fail
because it is caught without enough gold to back up its receipts.
In 1934, in an attempt to prevent further bank failures,
a series of banking reforms slowly took away people's ability to trade
their paper money in for gold or silver.
In 1971, Richard Nixon removed the last vestiges of this convertibility.
Today, our money can no longer be redeemed for gold or silver.
Now we've gone beyond that to what I think of as an even more postmodern reality
which is we don't even see the money anymore. We don't hold it in our hands.
We take a piece of plastic to the supermarket,
buy groceries and run it through a machine
which registers it in our account book somewhere.
The seller doesn't see it either, right?
And at the end of the day, they balance accounts, and some numbers
have been added to the supermarket's and taken out of our account.
Most the assets that we call money are not printed dollar bills.
In fact, the currency is a very small proportion of the total amount of money.
Most of what we call money are bank accounts.
In the same way that banks used to issue more paper money than they had gold,
today banks issue more bank account money than they have cash reserves.
It is these bank account balances that make up about 97% of what we think of as money.
If a landlord wants to know how much money you have before you sign a lease,
you would show them an account balance and not a suitcase full of cash.
Most economic textbooks never say what money is. They just say what money does.
They describe money by its functions. They talk about things like
medium of exchange, standard of value, store of value;
are the classical ones. These are all things that money does.
Money lives in a different space, in fact. It's an agreement.
A lot people think money is something that is tangible, real
and that you can pick up and handle.
That actually isn't so. Money is basically an idea. And it's an idea that
you owe someone something, or someone owes something to you.
And that idea can be symbolized by an account, where your account
goes up and mine goes down or vice versa.
Or it can be symbolized by an exchange of paper currency,
or an exchange of coin whether it's gold, silver, or copper or whatever.
But those are all symbols. It's not actually money.
Another misconception that people have about money is that money is a thing,
but in today's world, money is simply credit,
which means it's an information system. And the question is:
what kind of information does it convey? It's information about
claims against the economic output.
If you have a bank account that says you have a million dollars,
it's nice to say I have a million dollars, but what really makes it nice
is that you can buy a million dollars worth of things that you want to buy.
So if money is nothing more than information about what we owe each other,
how does the money we use everyday get created?
Money is created through the process of bank loans.
People, companies, governments
go into the banking system and borrow money.
So every dollar, every national currency you've ever seen is someone's debt.
For every new dollar created in the monetary system,
you have a corresponding debt.
That works for both the federal reserve dollars themselves
and for the bank deposit dollars that are based on them.
Money is issued whenever someone takes out a loan from the bank.
So if I walk into a bank, and I want to borrow half a million dollars to start a business,
and I've got a good business plan, and I've got customers,
then the bank, assuming they agree,
will give me half a million dollars to start my business.
There is your money, and this is your payment book.
Now most people, if you ask them, will say that that half a million dollars
comes from somewhere else. It comes from someone else's savings;
it comes from investments. That's actually not true.
When I say money is issued as debt, I mean
they don't get that money from anywhere.
They actually create it out of thin air and create credit
in my bank account, and puff there it is.
John Kenneth Galbraith in his book "Money: whence is came, where it went,"
says this. He says "The process by which money is created
is so simple that the mind is repelled."
And it's true. When I tell people how money is created by banks
simply by making ledger entries, they just can't believe it.
The private banking system literally creates our money out of nothing
and loans it into the economy.
The only way new money can get into the economy and ultimately your pocket,
is via a bank loan. This means that every dollar you've ever seen
is someone's debt to a bank.
The simply fact is, and it's an uncomfortable fact for many people to realize,
that if all the debts were repaid,
then the whole money supply would simply disappear. There would be no money,
and that would mean a complete and total collapse of the economy.
If everybody were to reimburse their debts, if that were possible,
that everybody does reimburse their debts, there wouldn't be any money left.
In fact there's more debt than money available.
And the reason is that interest is not created.
The catch is that they want more repaid than what they've given me.
When you go to a bank and borrow $100,000 to buy a house,
they will check whether you have good credit. And then, they will decide
to create the money, entering it electronically in your account,
and say you have to bring back $200,000 in the next twenty years.
The $100,000 of the first loan is created,
the second one (the interest rate) is not created.
So they send you into the world to compete with everybody else
to bring in the second $100,000.
That's how the money is kept scarce. It is through the competition
between different players for interest that is not created.
So there is always less money than is necessary. Okay? And it's systemic.
If you to a bank and borrow money into circulation,
if the bank decides to approve your loan application,
they will make two entries on their books.
One is they will take your note (let's say its a mortgage note)
and that will be an asset on the books of the bank, and they will offset that
with an equal deposit to your account which is a liability on the books of the bank.
So the money creation process is as simple as that,
but the bank does not create the interest that you're going to have to pay
year by year by year until this mortgage loan matures.
So where does that interest come from?
Where does the interest come from? [laughs] I have to find that.
Well, it has to come from some other loan that was made to someone else.
So you have this inherent deficiency in the money supply.
Not everyone can repay what they owe to the banks.
At any given time there is more owed to the banks than exists in circulation.
Which means inevitably, someone is going to lose the game.
Someone is going to go bankrupt,
and that has nothing whatsoever to do with the quality of the goods and services
or the efficiency of the business. Nothing at all.
Everybody in the economy is vying with everyone else to avoid defaulting
on their loans to the banks. And the only way they can do that
is by competing with one another for an inadequate supply.
So, it's a like a game of musical chairs. It assures that there must be some losers,
regardless of how competent they are in conducting their business.
The money we get when we receive a loan is called principal.
Our debt, however, is not discharged when we repay the principal.
Bank loans are all made on the condition that people pay
both the principal and the interest the bank charges.
However, money can only be issued as principal;
no one creates the interest. So the amount of debt owed is actually far greater
than the amount of money there is to repay it.
When a dollar is loaned into the economy it begins a loop.
Joe the farmer gets a loan from the bank and pays Tom for fixing his tractor.
Tom pays Jane for bread at the local bakery.
And Jane in turn buys the wheat from Joe, who can now repay the loan.
The problem is Joe owes the bank interest on top of the principal.
In order to avoid losing his property to the bank,
Joe must go find other money making its own loop in the economy.
He can now repay his loan with the interest,
but the people in that loop are left without their money.
They still need money to facilitate their exchanges,
and to repay the loan that issued the money they had been using.
The only place they can get it is from other such debt loops.
Since all money has an interest price tag attached,
there will never be enough money to repay all the debt owed to banks.
Therefore some people will always have to go bankrupt
or have their property repossessed by the bank.
It's crazy. Sometimes it worries me because, you know,
what if there was like a collective understanding
about how phony the money is, when it comes down to it?
What would people do? Would they riot in the streets?
Who's propagating the illusion behind the money?
What... It just pisses me off actually.
Whenever it rains, the trees direct a certain amount of the rainfall to the bark.
And this bark is set up in these elaborate patterns
to direct rain all the way around the tree.
Yeah, and in these crevices where bugs and ants and other critters live,
you get a lot of exoskeletons that are shed in here.
That then is dissolved by the rain water.
It runs down and it carries the phosphate from the bugs
and the manure of bugs down into this.
All of this organic material at the base here is what feeds the tree,
so it's like a constant recycling of the material of life back into life.
Well, I don't think economics are related only to humans at all.
It's very easy to see nature as an economy.
Nature creates value constantly for the benefit of all its membership,
and that's what I think economics are really all about.
Here you have a kind of banking of resources
that every element in this forest contributes to.
So it's more like a community of contributors,
and you take what you need as you need it.
So there's like a bank at the bottom of that fir tree, there's this bank of resources,
and it's available to the tree, it's available to fungi, to the earthworm, to termites.
To whatever comes along and needs it,
and each time someone takes something they generally contribute something.
There isn't that kind of profit motive or interest or any of that in natural systems.
It really isn't necessary to have more than you need,
unless somehow you are acculturated to that belief system.
So there's a kind of scarcity boogie bear in human culture
that always has us feeling as if there isn't enough
or there's not going to be enough, so we've got to, quick,
gather as much as we can,
and store it where no one can get to it and steal it from us or rob us or whatever.
And then it doesn't really matter if we even use it.
Most people's experience with money is that money is scarce.
And in today's monetary system, it is scarce.
These cultural lies on which our relationship with money rests and is rooted
is really governed almost completely by the most insidious and tragic lie,
which I believe is the lie of scarcity.
Even the Federal Reserve publications claim
that what gives money its value is its scarcity.
And this is false. It's not the scarcity that gives money its value.
When we're talking about credit money, what gives it value is its ability to requisition
whatever you want or need from the marketplace.
We actually swim in a set of unexamined unconscious beliefs.
And we look out into the world, and we just fear that there's not enough to go around,
without any evidence really. And then we make that true.
The domination model artificially creates scarcity,
and that scarcity is one of the ways the system actually maintains itself.
Not only material scarcity, emotional and, yes, spiritual scarcity.
I mean, what does it mean to have enough money?
I guess you always want a little more.
There's not enough time. There's not enough money. There's not enough sleep.
So it's a constant battle with
"There's not enough" "We don't have enough" "It's not enough" "I'm not enough."
And that is a mindset. It's an unconscious unexamined mindset
that creates distorted behaviors that are inconsistent with who we are.
The same thing that keeps a rich person from giving
is the same thing that keeps a poor person from making.
It's that conditioned way of thinking and seeing we have to really begin to address.
Those who consider themselves poor in this country are not poor.
I think it's this scarcity mentality. I think it's a belief system that we all carry.
And that "there's not enough" belief system has a second part to it.
"There's not enough to go around, and someone somewhere is going to be left out."
And that inevitable fear or certainty that
there's not enough to go around and someone somewhere is going to be left out
is actually at the base of our political understanding of the world,
our systems of governance, our education system. It's even at the heart of religion.
Of course there are scarcities that happen naturally.
There's a disaster, there's a flood. All kinds of things can happen.
But here you have a system that artificially creates scarcity
so that then you get people who really are fighting for the spoils,
and since there's so much control from up on top,
it is a way of maintaining the disunity and the confusion of those on the bottom.
What it is is emasculated men, and what do men do when they're emasculated?
They compensate with hyper-masculinity.
When you leave particularly men with no options,
they get violent and they get destructive. I don't care where you are talking about.
Go to Russia. What do you think the Russian gangs are?
Go to Northern Ireland. Go anywhere in the world.
These devastating dynamics are engineered.
So our experience of money as being scarce is an artifact of the money system.
In a properly run monetary system there will be no scarcity of money.
This "there's not enough to go around and someone somewhere
is always going to be left out" gives this very difficult and unfortunate permission
to leave people out. 'Cause if someone's always going to be left out,
then it's your job and my job to accumulate more
than we possibly could ever use or need
to distance ourselves from ever being one of those poor people who gets left out.
At the point of view of the corporation, getting more,
getting more and more and more, that is driven in part by greed,
in part by the dynamic of trying to get profits, capitalism, but it's also driven by fear,
because if you don't do it, if you can't expand faster than the next corporation
they will get research money and they will get marketing money
and they will beat you and may drive you out of the game.
"You're not quick as efficient in this plant as you ought to be by our calculations"
this is the banker speaking,
"and so therefore we're going to either raise the cost of your credit
and drive you to do bad things to your workers or to your community
or to the environment in order to boost that return and boost your stock price.
And we will lend to you under those terms only."
The nice way of saying it is "nice guys finish last."
If you're callous to the effects on others, you have a potential to rise.
The odds are you can compete your way up. If you care
and are socially concerned about others, you're at a tremendous disadvantage.
So I think the competitive dynamic that we have
does sort of weed out a set of people for success,
but what I would say it weeds out for success is not competence,
not creativity, not intelligence, but callousness far more often.
Well, I think if you look at how economies actually function,
they function with both competition and cooperation.
So I think both can coexist. We have probably leaned more towards competition
and I think we could use more cooperation,
but I think either one in its extreme can be dysfunctional.
Competition does have its place
in urging us to our highest level of performance and fulfillment,
but health is dependent on cooperation. We don't have the liver
competing with the heart for blood and for nutrients.
There is this inherent cooperation that leads to the health of the entire entity.
The nature to which people are able to be social, civilized, sympathetic
is quite amazing, and it's in contradiction to the nature of the money.
It's interesting that anybody, whether you're a man or a woman,
whether your aggressive naturally or very sweet and cooperative naturally,
if you're going to have to make the money to live, I make you a prediction,
you're going to have to fight for it. You're going to have to compete for it.
Is that in nature out there? Is that the world that is that way?
Or is it the money system that's between us and the world that is that way.
I make the second claim.
A lot of diversity here. We're starting to see a whole different array
of plants come into being. So, there's some lupins here.
There's strawberry. Small wild strawberry.
This broom with the yellow blooms on it.
This is a nitrogen fixer and is stabilizing these slopes.
And, decomposers here. They're harvesting that broom.
So what are these ants doing for the whole situation?
Well basically, they're breaking carbon down.
They're taking carbon, gathering it together, and breaking it down.
You've got a great part of the umbelliferae family. This is yarrow.
They're deep rooted so they bring a lot of minerals up
from the parent material that goes bellow this sand and dig into
more than silica to bring up things to the surface that will nourish these other plants.
So you've got a lot of complexity here, a lot of plants cooperating with each other
to try and create an ecosystem that stabilizes this shifting sand surface here.
Ecosystems are based much more on cooperation than they are on competition.
We tend to deify cutthroat competition,
and there is some competition in nature, but there's much more cooperation.
Species move from competition to cooperation because they discover
the economic value of cooperating. It is cheaper, more efficient.
All you have to do is look at our pentagon budget
and see that a tiny fraction of it would really develop countries
that we've been leveling instead. Very much more cost effective
to make friends of them than it is to keep them as enemies.
We have eight billion people on the planet.
There's a billion of those that are happy to work but can't. There are no jobs for them.
Some would argue that these people are unemployed
because they lack skills, or because they don't want to work.
And that may be true in a few cases, but in the vast majority
that's not the reason why they're impoverished.
The reason why they're impoverished is because you have this scarcity of money.
The first question I ask is "Am I going to be stuck being a janitor forever?"
And they were like, "Oh no, there's all kinds of chance for advancement.
You could go to calling, we've got data entry.
You've all got kinds of computer skills.." And then four months passed,
and I addressed it again and got a different story. It was like I had no value.
My self-esteem was going down because
I can do more than just clean bingo tables and clean toilets.
If you have an economy which is generating only a limited number of good jobs,
are you surprised that parents feel it's really important
to teach their kids how to compete on every level?
They want their kids to get those jobs.
You know, another kind of response would be to get together and say,
"Hey wait a second. There's a problem with the structure here."
But we have a very individualistic response to the problem.
At the time of the civil war in the United States,
which is a very interesting turning point, midway in the Industrial Revolution,
the industrial rebuilding of the United States,
slavery in the South was obviously condemned. But the counter argument
was something they called "wage slavery." And what did that mean?
It meant that you had no protection; you could be fired at will without a job.
You could be thrown out on the street and you were a "wage slave" was the term.
The Thirteenth Amendment which says you cannot treat a human being
as a commodity for buying and selling.
And the economics is, you can no longer buy or sell labor, but you can rent it.
So the wage is... you're renting somebody.
The word "job" was invented in the industrial age in England.
It didn't exist before. And it describes a pile of things that one does for money.
Work is a very very old concept. And work is something you do
because you're passionate about it, or because you're good at it,
or because that's what you love doing. A job is specifically
something you do for pay. Pay in national money to be precise.
Tell me, why are you interested in this job?
I need a steady job, Mr. Wyaden with a chance to go places.
People like Woodrow Wilson and Abraham Lincoln said that
if America became that sort of society. A society in which everyone became,
or the vast majority became wage laborers, or "wage slavery" as they used to call it,
we would lose the freedoms that made America great.
If you, say, were in such conditions of duress that you just couldn't survive
except by being a slave, you might sign a contract that says "Okay, I'll be your slave."
That's by your own free will. Are we going to take that seriously?
Under some pathological assumptions I suppose.
We live in an economy that takes eighty percent of each new generation,
and educates that eighty percent to obey orders and to endure boredom,
and stifles their creativity and stifles their capacities, and curtails them.
They are systematically crushed by a system which does what?
Which fills slots, and eighty percent of the slots need people who just do
wrote tedious repetitive labor, at least at work,
and therefore are acclimated to doing that.
Most of my jobs, I've never really liked. I've never said, "This is great.
I can't believe I'm getting paid to do this."
There was a job I really really despised, but the money was really good.
And it wasn't the job that I wanted. And my daily life
and my work experience was just not making me happy.
You could say, "You know what, this is a terrible job. I don't want to do it."
It's a free market. You have total choice to not show up under these terrible conditions.
At the same time, if you don't, little problem here,
you're not going to eat and your family isn't going to eat. And that's why people do it.
Yeah, I really hated that job.
I think many of us feel nowadays feel the way Charlie Chaplin role modeled long ago.
Like cogs and wheels, that we're stuck in the machinery of our economy.
That we have very little choice. We have to work a nine to five job,
and watch a little TV and go to bed, and do it all over again.
I want to have a more rewarding experience I guess with life.
And based not just to make money, and to say
"Oh, this year I made 10,000 more than last year."
I think this whole idea of a middle class in this country is ridiculous.
There is no middle class. There's no such thing as that.
They're the working poor too, because their whole lifestyle was financed to death.
They have the big beautiful house, the two lovely cars,
they're putting their kids through college,
but if they fired from their job, all of that stuff is over.
I've always been kind of a cynical person,
so I guess to me doing jobs to just support yourself is just pretty much what life is about.
It's that we do the work we do so often simply for the money.
Now, since we're all chasing this money around, it utterly patterns our society.
So hardly realizing it, they come into their purchasing stage,
and are off on a wild non-stop ride.
It's a happy-go-spending world reflected in the windows
of the suburban shopping centers where they go to buy.
I claim there's enough work in the world for everybody forever,
but if you start to have to pay for it with a national money that's scarce,
that's making the work into a job, that is going to be another question.
Because someone is going to have to borrow that money in order to pay you.
As we get rid of more and more and more jobs, we may have to get to a point where
we redefine the meaning of work.
And you're going to have to find other ways for people to support themselves.
Work, there's an infinity of things we can do.
We can make every city, every garden, every house a paradise.
There's an infinite amount of things to be done to reach there.
Don't expect to be paid for it in national money. Don't get that idea.
So we have to find another way for what people can do in a post-industrial age.
One of the things about local currency, I think that a lot of people are embracing it
because they're starting to understand more about our federal economic system.
Federal Reserve notes don't necessarily serve the best interest of local communities,
and local currency can help tip the scales back into that mindset.
For some people, if they have RiverHOURS, and they don't have federal money,
we felt like, well, that's fine we will take them.
And it works for us because we have employees here
who are willing to be paid in RiverHOURS.
My name is Mark England, and I'm a registered nurse,
and I'm the director of clinical services here at La Clinica.
We're not a free clinic, we expect payment, but we also work with people
because we understand that people also need to buy food and shelter
and other things to keep themselves alive as well.
We don't seek to replace federal money in our communities at all.
We are hoping to facilitate more exchange beyond what's possible with federal dollars.
It's another kind of faith in another kind of currency.
And it's faith in your neighbors, it's faith in local business, it's faith in your region
and what it can offer you, and that there is true wealth there to be had.
Not many of us remember that this country was built
on decentralized issue of currency. By and large what it meant
was that the various regions of the United States could develop in a decentralized way
according to the resources and the skills that they had in that region.
And that's what created the great diversity and economic wealth of this country.
Complementary currency in my definition is an agreement in a community
to use something, just about anything they can agree on,
as a medium of exchange that's other than national conventional money.
The first thing that one has to understand about complementary currencies
is that there are as many different rules as you could want to invent.
In national money, there's only one, and it's basically the same world-wide.
In complementary currencies, different communities agree on different rules.
It is complementary because they do not replace national money.
A local currency is something that is issued at the time that it's backed
by goods and services in our community.
And when people advertise in the RiverHOURS trade directory,
they actually sign a commitment that says that they are backing in whole or in part
that currency with their goods or services that they're offering, and that they're
also agreeing to accept in whole or in part some local currency.
So when you get RiverHOURS,
it's backed by people in your community and that's tangible.
Local currency is a way of encouraging people, inducing people to spend locally.
And it's also a way to help people to support one another in the local economy
when they maybe do not have any money.
It's been probably a third to half of my income.
Whether it was just the advertising in the directory, and getting my name out
or word of mouth has been huge.
Their offerings, their inventory, the money often hits their cash register
and then heads straight out of town to the central office in Ohio or wherever.
RiverHOURS is hopelessly and happily bound to our community.
That value always remains here, and I think people understand that.
Alan Watts in the 50's wrote a critique of the depression where he said,
"Look, the economy went flat because everybody found there was no money.
There's plenty of work needed doing. Plenty of people wanted work.
Plenty of goods in the stores, but nobody could afford them.
Nobody could pay for them because we had no money."
And he said this was like going to build a building, and you've got the materials,
you've got the tools, you've got the skills, you've got the drawings,
you've got the planning permission, you've got the weather, you've got the will.
No inches. Damn!
We had a bunch of inches, but then there was a big project on the other side of town;
they're using all the inches. We don't have any inches,
because all the inches went over there. I guess we're out of work.
Well that's exactly what we do with money.
That's my clearest realization is that there is plenty of work that needs to be done
in this valley, and there are all kinds of people who need work.
To make ends meet, they need work; they could contribute to the community.
There's all kinds of things to do. So we have the work that needs to be done.
We have the workers. What is it that's missing?
Pieces of paper that say I'll do this in exchange for other goods.
People are short of and hungry for a tangible way to just plug into a sense of community.
And that feeling, that attitude, I believe is accomplished transactionally
through using this currency system.
Once they get the concept that we can spend the money here and it stays here
and it helps our school system, our children, and our future and everything,
people really get a hold of it again. And the RiverHOURS and all that,
that's all stuff that we need to keep working hard at.
I think it's exciting. I think RiverHOURS isn't going anywhere.
I think it's only going to continue to bring people together and to get people talking.
I'd like to say right now that it's a huge economic impact,
but that's not the biggest impact of RiverHOURS at this point.
The biggest impact is people starting to shift into recognizing and realizing
that local communities can become more self-sufficient in every way.
And the soil here is interesting because now, this is all dune stuff,
but now we've this humus building up holding the sand together.
You can still see the sand grains in there.
So these dunes have been established for a while,
so they're totally covered in vegetation.
Everything has reached a certain amount of stability.
All of the plants combined are sharing the rhizosphere with each other,
their roots are intertwined, and they're contributing different things.
These plants root associate with probably here it's a fungus
that can actually take nitrogen out of the atmosphere and fix it on their roots.
They actually fix it so the pine tree can get it. The pine tree in exchange,
will through photosynthesis create sugars and send it down and feed that to the fungus.
So there's this interaction going on all the time that is mutually beneficial.
What we're doing is really reinventing the exchange process.
We need to mediate exchanges in a different way than we've done before.
The debt money system creates money on the basis of interest bearing debt.
It's not debt itself that is at fault.
It is the interest component that's attached to the debt.
And the interest component does not get created
when banks create money on the basis of collateral.
Some people are really luddite about this and they think,
"Well we should be back to gold and silver
and that's a precious metal that doesn't change with time."
That's all nonsense in my view. Just nonsense.
And a lot of earnest good people devote their lives to trying to prove
that somehow the world is going to hell because we have this symbolic money
rather than the real thing.
I would say don't waste your brain cells on that subject.
It doesn't lead anywhere, and it's actually quite reactionary if you think about it.
We have to start thinking about money as an information medium,
not as a substantial thing.
It has been merely an information medium
for a couple hundred years in most respects, but nonetheless,
we've stuck ourselves with the idea that there's only so much money.
That's the core of its reality concept.
That all there is is so many trillion dollars or euros or yen,
and what we're doing is juggling them. Comes from you, goes to me,
goes to him, goes to her. It's to and fro, and we're juggling with a real thing.
Therefore we're always going to have shortages.
How can we mediate our exchanges without creating a pervasive sense of scarcity?
Are paper currencies like RiverHOURS really the best way
to solve this problem, or are there other more effective approaches?
RiverHOURS print their currency and as soon as you print a currency,
you have, in fact, in my opinion, created a problem,
because you've created a limited supply currency,
which means there's only so much currency as there are notes in circulation.
And then you end up with the same problem as you have if you have something
like a currency backed by gold, which is there's only so much gold.
In a mutual credit system there's unlimited currency available in potential,
and that's one of its great strengths.
In a mutual credit system each person has an account,
and at sometimes your account may be positive
at other times your account may be negative.
Now, it's this allowance for a negative balance that is the fundamental feature
of a credit-clearing system. This negative balance
represents credit that's been extended to you by the rest of the community.
My name is Francis Ayley. I'm the president of Fourth Corner Exchange.
We are a mutual time-exchange, mutual credit exchange system.
We have over, as of today, 650 members, and about 400 of those are in Bellingham.
I'm Gene Breckon. I offer reading out loud, singing, playing the piano,
word processing, writing, and office work.
Hi, I'm Lynnette Allen, and I'm offering websites, design and development.
One of my favorites is I have this great apple tree, so I have a lot of apples
that I have sold for time dollars, and changed a four-year-old's concept
of where apples come from. They don't come from the store, they come from a tree,
and grandma was very happy that he learned that.
In the case of mutual-credit systems, the rule of the game is I do something for you,
I get a credit, you have a debit. The sum of the two is zero,
so, in other words, net we owe nothing, but I have a credit and you have a debit.
I as a seller may allocate to you some good or service that you need at the time.
I get a credit to my account. You get a debit to your account.
Your debit means you owe something to the community of traders
in our credit clearing circle.
My credit balance means that the circle owes something to me.
I've really been enjoying a lot of things. Chicken soup from my friend Mary Stanton.
I buy the chickens and she makes the soup. It's wonderful.
When, with my credits, I can go and get the cookies of my neighbor,
and you can work in her garden to pay for your debits,
we've created a currency between the four of us. Try to do that with dollars.
It doesn't work that way does it? I need to go and borrow it or I need to earn it,
competing with everybody else to get it. In this game we create it ourselves.
In a mutual credit system, everyone has an account.
This account can go positive and it can go negative.
When Bob repairs Andrew's hotel,
Bob receives a credit, and Andrew receives a debit.
Bob can then use that credit to buy catering from Christine.
Andrew works off his debit by providing lodging for Daniel.
When Daniel does dental work for Christine, the credit and debit are cleared.
No hard cash was needed, and everyone gained something in the transaction.
It's like this network. It provides more security for me just knowing
that I'm part of Fourth Corner Exchange. And, for instance,
during the winter part of my fence blew down in a storm,
and I was able to find somebody, a carpenter
who came up all the way from Mt. Vernon,
and put that fence up for me within a few days.
Over the long run, we expect that each person is going to put in
as much as they take out, and take out as much as they put in,
but we allow these temporary imbalances in order to facilitate this exchange process.
This is the fundamental function of money.
As more people join the mutual credit clearing circle,
this process can become more dynamic. Ultimately, no matter how big the circle gets,
the value people contribute should remain equal to the value they take out.
This is money created not by a hierarchy. It is a medium of exchange
that's created between us. We create the medium of exchange.
Second, there's no interest. Third it's not scarce.
When you start trading in Fourth Corner Exchange, many people talk about
experiencing a shift in consciousness. There's not a scarcity of that currency,
so there's much less competition.
So you end up with a completely different experience.
And people talk about how cooperative, supportive...
people are really concerned about your well being.
So the primary distinction between money that is tight, scarce, limited,
comes from them, and money that is free available and sufficient
and comes from us is that with one we are in fear, greed and competition,
and with the other we behave like sensible human beings.
We are more generous, we are more comfortable,
we are more giving, we are more willing to receive.
It's made me a lot more willing to share my home and open up my space.
I'm not as afraid of people as I once was.
I think that this organization has the potential of making things really livable
as time gets harder in the future. Not only in terms of the goods and services
but in terms of the connections and the community.
Community needs to become our safety net, I believe, the way the economy is going.
I only thought that everything I did, I would have to pay
out of my pocket for in some way, and so now I realize
I have these options, so I kind of see it as relationship-based consumption.
There are literally thousands of grassroots person-to-person networks
like Fourth Corner Exchange all over the world.
However, the concept of mutual credit is not limited to the grass roots.
Mutual credit has also been successfully applied in mainstream business.
The commercial barter industry now oversees $30 billion a year in trade.
240,000 businesses in the US alone participate in a barter system.
These networks use mutual credit to help businesses
make better use of their capacity, while saving on their cash expenditures.
My name is Dave Wallach, and I've been involved in the commercial barter business
as a member since 1972. I started my own enterprise in 1979,
a company called American Trade Association here in the Bay Area.
Well, it's actually a process, it's a business process.
Simply put it makes salable what is unsold wasted and ignored in our economy.
My opinion, there's always an empty table in a restaurant,
just like there's always an empty room in a hotel, so you need to fill it.
And if you fill it by trade, I look at it just like it was cash,
because you're going to order a nice dinner, a nice bottle of wine,
and I'm going to spend that just as on an add somewhere or a taxi top, or whatever it was.
John's Grill became famous when it was a setting in the novel by Daschle Hammett
which was the Maltese Falcon, so John's Grill has been in business since 1908.
My is Kaz, that's my nickname. My real name is Richard Kasmier.
I've been in the wine business about 20 years. I was the first organic grower
of grapes up here in Sonoma Valley, and we're in the town of Kenwood.
And, I've been using barter for almost fifteen years.
Excess capacity in business, simply put,
is business that they could do but are not doing.
One example would be like a printer, and his capacities are press time.
So he's got these presses that he's paid a lot of money for,
there're sitting on the floor, and they're running half the time.
He's making a profit doing that, but they're only running half the time.
That means he's got a 50% excess capacity.
This is Club Sportiva. We're a luxury car share club,
and as you can see behind me here we've got some really exciting cars.
At Club Sportiva our members have access to drive the cars,
so it's like a timeshare for sports cars.
Mario Andretti, the famous formula one race car driver, is a member of Club Sportiva.
Dick Gordon is an Apollo 12 astronaut, he's another member
who's been on board since 2003 or 2004.
So we joined BizExchange about roughly two years ago,
and it was really quickly a good fit for the club.
It was kind of an easy decision to join, and for our first year we were a very big client
for them because a lot of their members found our services to be a good fit.
And we did a lot of marketing and advertising through their company as well,
some catering through their clients. So it was kind of a perfect match;
that immediately, once the fire was stoked, it was going quickly.
You could buy things that you're presently paying cash for.
It could be legal services; it could be printing;
it could be automotive repair; dental; medical.
Thousands of different items are represented.
So it makes sense that if they could exchange that excess capacity
for goods and services they're paying cash for, that they would make a profit doing that.
I'll sell my wine. And for that we've had a dentist, chiropractor, electrician, plumber,
a roof repair guy, printing, brochures, business cards, silk-screening of shirts;
we've used a pretty good gamet of services.
For the small entry price to get into the network,
which I think it was a hundred bucks, I don't know what it was; it was nominal.
It was almost that shouldn't be even a consideration.
It's really more, how would you spend your dollars, your BizEx dollars,
once you start having dollars to spend. And if it's on things
you either would spend otherwise anyway or on things you'd like to spend on
but you haven't, it really should be a no-brainer.
Through the use of bringing this efficiency into the economy,
and utilizing what has been wasted and ignored,
we bring tremendous efficiencies to the economy.
So if we take wasted resources and are able to turn them into something productive,
we now have reached a sociological goal also.
So what we are, we're the ultimate business ecologists.
You can't even begin to talk about how do we think like an ecosystem
until you're aware of your place in your own culture, in your own society.
That you aren't the only thing worth consideration.
That everything around you is part of you, and that you have a responsibility
for those around you. And in order to be aware of your place,
you have to look at the place and understand the place, right?
And it's earth, Planet Earth.
There is without a doubt a mega-crisis that we're facing in the coming years.
And, the big elephant in the living room is the money problem.
And unfortunately, most people who are active in the sustainability movement
and the environmental movement don't understand the nature of this problem.
And we're not going to make any significant headway with sustainability
or restoration of the environment until we solve the money problem.
This is part of the hallmark of a pre-democratic society
is that it functions by taboo.
We have certain assumptions, we accept them, we do not question them.
If you want to be part of the tribe, you will speak the language of the tribe,
and you will follow the rules of the tribe.
I think we will evolve to, number one, become aware of the blind-spots
of what money does to us. That our money is actually like an iron ring
that we put through our nose, and it's leading us in directions
that may not be the ones that we want to go consciously.
It is like playing cards. It is something that maybe we all kinda know
in the back of our minds that it might be like that.
It's just one of those things that you know, but you don't really want to know.
Most people, most of us get up in the morning for things other than just money.
We care about things like family, and, if you will, betterment;
development as whole human beings.
People are not fools forever, and I think we're going to see
a very strong reaction to this as the pain grows and as the difficulties grow,
and that's the time to begin building serious ideas about where we go for the future.
I think we have the opportunity to bring forth an environmentally sustainable,
spiritually fulfilling, and socially just human presence on this planet.
And I think that is the power and possibility of our time.
I think we can use money as a tool, as a servant to what we want to become
rather than be victims.
We don't need to have all this suffering around money.
We can free ourselves from it.
And the economy can be much healthier and much more of service to all of us.
Time to become aware. Time to have a consciousness of our potential.
And I would think our potential as humans is infinite.
Let's not limit ourselves through the medium of exchange.
Time to wake up.
for more information on community currencies, visit www.themoneyfix.org