Proposing a Counterhegemonic Economic System
by Enric Duran, with contributions from members of the Temps de re-voltes collective. firstname.lastname@example.org
Translated by Scott Pierpont email@example.com
January 2008, Translated September 2010
“If people living in an area cannot trade among themselves without using money issued by outsiders, their local economy will always be at the mercy of external factors. Therefore, the first step for any community aiming to become more self-reliant is to establish its own currency system.” (R. Douthwaite, The Ecology of Money, 1999.)
2. Justifications for the Project
3. How it Will Work
4. How to Begin
This document is the second draft of a proposal on how to construct an economic system that is counterhegemonic (and at the same time a solidarity economy: ecological, feminist, and anti-classist), here and now in the surrounding bioregion, what we call Catalonia, although there is no reason that it has to be linked to preexisting boundaries.
Given that this proposal can’t be copied from any model because there are few precedents in the world, analytical work is fundamental: there are many small-scale local currencies but very few are regional in scope and—of those that exist—there is more to learn from their errors than their successes (for example, the Red global de trueque and Red de trueque solidario in Argentina1). Being able to construct a proposal that is designed in such a way that it can function continuously is a necessary condition for the project going forward.
Beyond the purely intellectual and theoretical exercise of how an idea of this scale would function, we are proposing to set a landmark in time: a meeting about de-growth2 and counterpower at the beginning of July3, where the economy will be one of the central themes. There we’ll seek to establish some basic agreements that will permit the whole world to participate in this network-system from their local community.
This project won’t simply be a meeting organized on the internet and with flyers; rather, it will be a group of people meeting at Infoespai4 to go on a bicycle tour of Catalonia over the course of two months, stopping in 30 towns across the region. Among other things, we want to explain this proposal and encourage participation in a gathering at the end of the tour. We know it’s a big bet; it has to be, considering the moment in which we find ourselves and the short amount of time we’ve set.
For more than two years we’ve been educating ourselves about the energy crisis; that was when we began to distribute a video. With oil at 60 dollars a barrel an ex-Environmental Minister of France said “When oil reaches 100 dollars a barrel it will be the end of the world as we know it.” When we’re slightly past that limit the devaluation of the dollar will perhaps make the key figure dozens of dollars a barrel higher, but the path of the price of oil indicates that we’re probably facing the point of no return, of a terminal decline in oil production and—simultaneously—the collapse of the international financial system.
So we need a project that allows us to strengthen the initiatives that are local and ecologically viable for a low-energy world and, at the same time, practice putting into place an economic system adapted to this situation of de-growth that allows us to confront the dominant system from a position of renewed autonomy and strength.
2. Justifications for the Project
Different currents seeking a different type of economy, such as feminist economics, the solidarity economy, critical economics, and cological economics, have provided an extensive literature on the advantages of an economy that doesn’t put the needs of capital over the needs of communities, people, and the environment. Feminist economics guides us on how to equalize the value of time spent caring for children, the elderly, loved ones, and the household with time dedicated to what is conventionally understood as ‘work.’ Solidarity economics explains how it is possible to have socioeconomic relations based on cooperation, and criteria that are at the same time ethical, social, and cological. It is about putting human beings, not money, at the center of economic activity. Critical economics alerts us that the current system in which we find ourselves is based on the exploitation of some human beings for the benefit of others and proposes a system that, through income redistribution policies, covers everyone’s basic necessities. Ecological economics proposes that we consider ourselves members of ecosystems in equilibrium, ecosystems to which we have to contribute using our human abilities.
Furthermore, there are various facts that are clear:
- Imported products are priced in currencies that are devalued or very devalued relative to the euro, something that makes their labor and primary materials very cheap, preventing people here from competing.
- Here, the large distribution chains have control over prices, harming and exploiting the small producers that want to sell what they make. It’s not necessary to say that the true costs of production concerning materials and energy utilized aren’t reflected in prices, but the ecological costs are there.
- A significant portion of the money that we Catalans earn with what we produce or work for goes to the state in the form of direct and indirect taxes. Considering that taxes are dedicated, to a large extent, on spending that we disagree with (the army, police, propaganda, atomic research, biotechnology, payments to banks in the form of interest on money that they themselves create—money, moreover, that could be created by the state to avoid burdening interest payments onto the taxpayer…) and that many of the wealthy don’t pay taxes for the most part thanks to tax havens, we can think of the taxes that struggling people pay as a tribute that we could be saving ourselves.
- In the real world our money is irremissibly devalued due to the money creation system—controlled by the banks—that is independent from goods and services in circulation; we can only partially avoid it by leaving our money with the banks so that they can make small interest payments while they speculate and enrich themselves with something that is ours.
- Solidarity economy projects, in order to subsist in the official system, run into administrative obstacles of all sorts, whether it’s the regulation
of local governments, in relation to the products for sale, or management costs—problems that benefit the powerful in relation to small businesses. Economic activity, as with all human praxis, has to be oriented towards certain aims. The current aims are the accumulation and creation of wealth at the service of power, maintained by misinformation.
All of this is what we want to overcome in constructing a counterhegemonic economic system.
Justifications for De-growth
The critique of de-growth tells us that we cannot grow permanently on a finite planet and, given that we have surpassed its natural limits, proposes that we progressively reduce our impact on the earth until we arrive at true sustainability. A sustainable world implies a profound change in the economic system because capitalism is based on exponential and permanent growth.
In order to be able to put into practice the fundamental elements of a de-growth economy (such as local trade that meets ecological and social criteria, recovering community and reducing necessities), we need to change to rules of the game in order to give products the value that they really have.
We are the only ones who can make these new rules of the game, even if only on a small scale, since the powers that be won’t do it for us.
Within social movements, there are ongoing debates about the following questions:
In the capitalist world, personal survival, as well as that of collective projects, is often difficult. People who are active in social movements are also subject to the robbery of renting or making mortgage payments for housing, as well as continual cost of living increases. More and more, this system forces us to struggle to make it to the end of the month, when what we want to do is struggle to bring it down. If we want to work on projects, or support those that we think will transform parts of our lives and help us live in a way that we want (e.g. joining a consumers’ cooperative, or creating one ourselves), we have to dedicate a lot of time, which is difficult. While we might be able to live in a
way that’s consistent with our values in one area of life, for the others we have to depend on a system that doesn’t meet our needs. Our lack of time is intimately linked to our lack of money.
Should we try to live as we want, or should we focus on transforming society so that we can share a new way of living with a lot of people one day? These two ideas don’t have to be mutually exclusive, as the dialect between practical experimentation and proposing alternatives benefits our struggle by incorporating multiple points of view.
There are clear limitations in working a full day as a cog in the system, then dedicating time to constructing alternatives. Is this an unsolvable problem? Clearly not, but we’ll have to take a chance to solve it, and doing so depends on a counterhegemonic economy. The dominant economy, in which prices don’t reflect the real cost of things or the limits of natural resources, hinders us from constructing projects that sow the seeds of de-growth, and from extending the very struggles that oppose the prevailing system by trying to defend the land and its people. It isn’t news to anyone that the economy— interpreted broadly as a collective strategy for managing resources to live better, today and tomorrow—is vitally important to satisfy the needs of human societies and the land that protects us.
For all of these reasons, it’s necessary to build another economy, here and now; with the great social and ecological challenges that lie ahead, it will allow us to confront the dominant system from a new position of autonomy and strength. The economy is a fundamental element in any strategy of counterpower, since it is what allows us to live our daily lives without depending on what the system dishes out to us.
It’s time to free ourselves from the dominant system, to organize disobedience, to regroup ourselves, to prioritize alternatives, and to connect them with others. It is time to quit working for the perpetual growth economy and dedicate ourselves to de-growth.
Finally, it should be clarified that this isn’t about setting up a parallel society and pretending to live outside the system, without influencing or being influenced by changes in the system itself; on the contrary, this is about not having to spend so much time working in the way that we understand it, by having part of our needs covered by a new currency or a new system, allowing us to spend more time changing things and
constructing the world that we want. What better strength to oppose the system and struggle to change it than that of autonomous production and exchange that feeds us and allows us to live?
This strategy of counterpower contends that economic autonomy is fundamental in strengthening social movements so that they can not only not only survive, but confront the dominant system with all of their force.
3. How This Economic System Would Function
A) Promoting demonetarized spaces
Money is a measure of value and means to exchange the material and immaterial wealth that is necessary when there isn’t enough love, friendship, trust, or time to simply give and receive in a voluntary way. For that reason, if we want to create an alternative monetary system, it wouldn’t have to be present in as many aspects of life as capitalist money, which has appropriated and commercialized formerly communal spaces. Instead, the fundamental units of this other economy would be demonetarized spaces. They would have be governed by what can be called the “community economy”— economic spaces where the values of community, love, friendship, and mutual aid have superseded those of the market—and where would be no selling or buying, only sharing, loaning, helping, and giving.
As such, in this proposal for a counterhegemonic economy, we should promote and protect the creation of networks of affinity that could maintain communal economic relationships not with money, but with trust alone. This idea is especially important in care economies, but it could also be applied to different aspects of education and the necessities of daily life. No one doubts that in families, food and drink are shared, and that the child doesn’t pay the mother for the plate of lentils it receives to eat. Do we need such narrow family relationships in order to share? There are people that already have many community spaces at their disposal, but there are also many people that have lost them or have had them reduced them to the nuclear family.
This idea of demonetarizing the economy in certain circumstances or in certain environments can be extended to other essential areas that aren’t as evident, yet basic. For example, when we find ourselves in a situation where basic goods are in limited supply, we have the option—in addition to fixing prices—of taking them out of the monetary system entirely and distributing them equally. For example, if we have 1000 liters of water in town for domestic use for the month, and there are 50 of us, it would be best to distribute 20 liters per person, before someone keeps the faucet open a bit longer, leaving their neighbors without water. Self-managed rationing could be way of distributing basic goods equally in a situation of crisis like the one that presumably awaits us.
What we’re proposing isn’t anything new—it’s about recovering the community economic spaces that small towns had before money and the market invaded almost every aspect of life. To this day, many indigenous communities function internally without the use of money, and their experiences is one of the best insights that we have. Along with these examples of community economies, we can look to the anarchist
collectivizations during the [Spanish] Civil War, despite that fact that they lasted only briefly and occurred in an unprecedented context. Currently, we have a few small examples of these community economies in social centers, in the form of “free stores” in which everyone leaves what they don’t need to be taken by someone who does.
On the same note we can’t forget about direct barter, which has utilized up to this point in certain spaces and exchange markets such as Xaingra in Gràcia5; despite the limitations of this practice it wouldn’t have to be dropped as a complement to the monetary economic system.
It’s necessary to take this conclusion beyond these concrete options; an economic space where we can prioritize mutual aid and avoid money will always be a better option than a market with money. But since it’s difficult to avoid using money is a complex society like the current one, the rest of the sections of this essay will refer to how to create a monetary system that functions differently.
B) Creating money as income
In this system, we will have to understand money as a neutral instrument without any inherent value, created for convenience and used to exchange the goods that are produced in society. Its value rests on these goods. But today’s reality is very different. We won’t go into how the dominant system functions (there are references in the bibliography), but we’re reminded of its absurdity by the fact that someone has to go into debt and pay interest for every bit of money that goes into circulation.
In our proposal, money is created as income for the population, not as debt. This is a fundamental change compared to the dominant system as well as small alternative systems such as LETS (Local Exchange Trading Systems) and social currency. In the dominant system, money is a debt that only banks have the privilege of creating; the most powerful members of society can receive it at very favorable conditions, while the poor simply don’t have access. As a result, the distribution of the money created invariable benefits the rich and powerful.
In our proposal, on the other hand, income is divided equally among individual participants at the beginning of the month or trimester. The amount of monthly income would vary, being determined by a few standards that we can chose according to what we consider to be fair. Moreover, the creation of money would have to be decentralized (by town and neighborhood) from a set of standards based on common criteria (we’ll expand on this point when we discuss the decentralization and autonomy in neighborhoods).
C) Money would have to be created in relations to the goods and services in circulation
In order for a monetary system to function properly, there have to be mechanisms to help equalize the number of goods and services in circulation with the amount of money in circulation. This monetary equilibrium could be measured based on the supply of products or on effective demand, defined as the economic exchanges that are actually occurring, and would therefore make use of the most basic function of money, which is facilitating exchange.
Despite the fact that measuring according to the supply of goods and services makes for easier accounting, using effective demand to determine the amount of money necessary would be more precise, as well as more appropriate for a sustainable economy (as ours would have to be in the framework of de-growth). Effective demand is the set of goods and services that consumers actually purchase in the market at an established price over a given period of time.
If we were to measure using supply, we would value products that are produced for their own sake and those that are actually in demand equally, thereby allowing the supply of products and the resultant promotion of consumption to determine our monetary policy. If, on the other hand, we measured according to aggregate demand, we would be more precise and give money the value it always ought to have: facilitating the purchase of products that we think we need within the framework of a market.
We’ll get to how to make the measurement later. First, we’d like deal with a topic that we think is important.
According to what we’ve read, the consolidation of barter networks—both LETS systems and social currency—have been very limited due to the way in which they create money. In these systems of exchange money is only created—perhaps due to ignorance—by incorporating new members. In this way, if the currency “loaned” to a new member equals 10 hours of work (we suspect that it’s often much less), the result will be that the average purchasing power of everyone in the network—be it 5, 50, or 5000 participants—will equal 10 hours of work, however rich in goods and services the network is, thus making the currency scarce and making it almost impossible to develop a real alternative economic network that extends beyond particular cases.
The exact opposite could happen as well if many participants enter the network without contributing products, as happened in Argentina when networks grew exponentially due to the economic crisis.6 Nevertheless, we’re left with the fact that barter networks and LETS haven’t known how to create a system that links the creation of currency with the goods and services that are demanded in the network because they’ve only linked the creation of currency with the number of participants. And so the system we propose differs not only from the twisted logic of the official system, but also from the well-intentioned efforts of LETS and exchange networks. This system would function in such as way that when the demand for products offered in the network was computed, the currency needed to buy them would be created.
An example: a network has 100 members. One of them, a farmer, supplies 500 oranges a month, all of which are purchased with 100 units of currency in one month. In order to meet the demand, we would have to create 100 units of currency and divide them among the 100 members; which is to say, all of the participants of the monetary system would see their buying power increased by 1 unit of currency the following month. This goes the other way as well: if in the following month the farmer has a smaller harvest of only 200 oranges that are sold for a total of 40 units of currency, being objective, we would have to subtract 60 units of currency from the network, or 0.6 units per person. At the end of each month, a computer system would go over data recording supply and demand and create or destroy currency based on developments over the previous month. This is a system where the money in circulation increases or decreases based on the effective demand for existing products and services.
D) How to begin and incorporate new members
The problem in starting the network is that we have don’t know how much demand there is for the products offered. Faced with this, we’ll opt for a reference based on the supply that would be useful for creating the initial currency and progressively allow the money supply to adjust itself to demand. The criteria could be 50% of the supply of products in circulation, for example.
When the network is put into place, each participant would put a price on their products, which would have to meet the ethical, social, and ecological criteria that would have been decided on, and currency equaling all of the total value would be created and divided equally among all of the participants. After a few months (three, for example) the total demand would be measured and the money supply would be adjusted. From here on, the money supply would be adjusted to the previous month’s demand. This would be a system where the money in circulation increases and decreases based on the effective demand for the goods and services that exist.
Additionally, when someone joins the network, they’d receive an amount of currency based on the most recent calculation of total demand. If this happens before the currency is adjusted to demand it can be the same amount that everyone received at the beginning; if it happens after it can be calculated based on the average total demand. Conditions can be placed on the supply of products and services to prevent members from taking advantage of others’ work without contributing anything. Goods and services supplied to the network could be priced by a quality commission that would make sure the offers are real (as well in accordance with the ecological criteria explained below), thus confirming their incorporation. There would have to be a minimum value of someone’s contributions to the network in order to be able to enter the network with income, although there would be the possibility for people to explain why they aren’t able to contribute enough, making it easier for people in difficult situations to enter the network. In any case, this system would have to foster the role of the prosumer, someone who consumes as well as produces in the economy, so that consumption and production would offset one another. Put another way, the “account balance” of the prosumer would be as close to zero as possible.
E) The possibility of issuing more money to help the network grow
Given that our economy would be small at beginning—and that we’re interested in making it grow, occupying spaces that have been denied to us by the current system—it’s worth considering the possibility of putting more currency in circulation than total demand (for example 10%) in order to make currency available enough so that the network’s products can replace those offered by conventional consumption.
F) Taxes: redistribution of disposable income
Unlike the current systems of taxation carried out by states, in this system taxes would be a way to redistribute income by eliminating a percentage of the incomes of those who have more; in other words, a way of preventing the accumulation of capital—and power—by a few. As such, taxes only make sense when they affect the highest incomes. Taxes can come from the sale of products, the sale of services, or from a salary. Taxes that are only calculated as a certain percentage of income would discourage people that produce more for their network and can therefore consume more. If taxes were calculated as a percentage of disposable income (total income minus costs), this penalty on production and consumption would be avoided. But it should be kept in mind that this model privileges consumption, which would be fine initially, while the network was expanding, but would have to be modified in the long term.
In any case, it would only be necessary to collect enough taxes to guarantee a dignified life for those who haven’t been able to obtain enough income from the sale of their products and services, or those who can’t offer products because of physical or psychological problems (only if public spending can’t provide for them in another way would it be necessary to use taxes for this).
An example of how taxes could be collected: Let’s imagine that 600 units of currency need to be paid to people in need over three months. There are 10,000 units of currency in the network, at an average of 100 per person. There are 10 people in the network that have more than 200 units of currency and 20 that have more than 150. In order to collect 600, 30 units of currency could be collected from the 10 highest incomes, and 15 from the rest. While this is just an example, there would have to be a similar formula that also promoted solidarity so that people would voluntarily contribute their income before a system of taxation was needed.
To conclude: we need to be conscious of when we introduce taxation: there are taxes that redistribute (such as collecting money from the highest incomes) and those that are not (such as inflation, which can be considered a “hidden tax” that comes from spending money that has been created beyond the level of equilibrium between the goods and services in circulation, devaluing money already in circulation). In other words, inflation
is a type of tax that hurts those with the least money.
G) Public spending
The network could pay for projects that are necessary for the public good, carried out either within the network itself or by autonomous individuals and collectives. In this way we can talk of public works and subsidies. Like we mentioned in the previous section, the network could use public spending to guarantee certain people’s access to basic needs. Obviously, there would need to be places for participatory decision-making to put these plans into action.
Part of the money created as public spending would increase the demand for services (considering salaries as a service) but this would only be done for new services. Continuing to create money for the same service without a corresponding increase in demand would be an unjustified addition to money in circulation. In order to keep the supply of money and demand roughly equal, this money created without a corresponding increase in demand would have to be part of the additional 10% proposed to expand the network, or it would have to come from somewhere else. A corresponding option would be for members of the network to finance projects to be carried out by the network, or a
participating group or person, with donations in social currency. This would imply the extension of Si a la bossa sona7 within the counterhegemonic network itself.
In the same way that the group would have to decide collectively how to distribute income among individuals it would need to decide how to distribute income to the collective itself. Every time there was a collective expenditure we would have to ask ourselves two questions: Are there enough producers to satisfy this demand? Is our system collectively prepared to make this a priority? In other words, do we as a collective know how to be a prosumer, balancing what we produce and what we consume?
H) A system of redistribution to guarantee a dignified life
An economic system has to be able to guarantee a dignified life for all of its members and this means paying special attention the most vulnerable members of society. This means covering the needs of children, the elderly, people with disabilities, the sick, and anyone else who is unable to contribute to the production of wealth because of their physical or mental condition. In the long run, all of these people’s costs should be covered by contributions from the non-monetary economy—which should be prioritized—and those incomes created in excess of the total demand. This amount will be decided upon by each local assembly, either calculated by the average cost or measured from a basket of basic goods. In this situation we run into the problem of how to measure the different levels of involvement in the network, and if people really need these payments, as they might already have subsidies from the state; in the short- and medium-term we think it would be useful to develop another system to meet people’s basic needs. This system would consider giving someone a minimum amount of income at the beginning of the month that would be added to from the money introduced into the system to meet demand for new good and services, thus making people’s needs a priority in the system.
Every trimester taxes could by applied to the highest incomes to equalize the demand for good and services with the amount of currency in circulation. This system would create taxes from social needs, rather than create money to spend on social needs based on decisions about taxes.
We cannot forget that this is a strategic project to launch a countehegemonic economy alongside the dominant capitalist system. Following strategic criteria, we shouldn’t overload the network with too many people who are in a situation of dependency (retired, pensioners, people with disabilities, and those that can’t leave the official system) until our network is consolidated enough to take them on, or until the official system goes under. This doesn’t mean that there won’t be exceptions that will have to be made from the beginning; some ways of guaranteeing a dignified life will have to be put in place from the start—even if only for a few people—and built upon later. Redistribution would have to be part of public spending; we’d have to keep in mind that when the economic system creates money, it would be primarily be doing so for these people, as well as responding to collective needs.
Finally, returning to the big picture, it would also be important to seek more practical ways of covering people’s needs outside of monetary formulas. Since we’re headed towards a world where the agricultural production that will be needed to cover people’s basic food needs will be limited by the availability of land and energy, it’s worth having community systems of rationing that would allow everyone to have the bare essentials on the table.
I) Pricing Products and Services
The price of one hour of work can vary on a scale from 3 to 1, depending on the supply and demand of good and services in the system. This would keep the prices of goods and services down and would serve as a reference for the sale of materials. Second-hand goods could be priced freely as long as they were not produced professionally, in which case additional standards would need to be established. The price of essential goods could be agreed upon by their producers and consumers, as is currently done between organic food coops and their providers. If this system couldn’t function due to a situation of scarcity, we would have to borrow essential goods from the official monetary system and ration them equally among the network’s participants. In this case, if there wasn’t the possibility of non-monetary exchange, the providers would have to be paid via public spending. In the case of important goods whose value might change in the market, the network’s participants could decide how much to pay the people that produce them utilizing a scale agreed upon by the network. For example, some products could be set at a fixed price based on agreements between producers and consumers.
J) Integrating stores into the system
Stores and distributors that need to pay their suppliers in the official currency would have limited capacity to accept the alternative currency. The same would happen to companies in the service industry; despite not having as many suppliers, they need to pay fixed costs such as rent and utilities in the official currency. Even so, in order to optimize the system’s capacity it would be important for participating businesses to accept a portion of payments in social currency; 15 or 10 euros + X amount in social currency could be a formula.
What interests us would be how to value the X amount of social currency since the amount of euros makes no difference to us. The only thing that would concern our network would be that the products able to be partially paid for in social currency would meet the social and ecological criteria of the network. If that’s the case, then the given percentage of the product could be paid for in social currency and could form part of the network. We would possibly have to set a minimum percentage, such as 25%, to prevent the social currency from being used only as a small discount that changes nothing.
In a future version of this document we’d like to study the possibility of exchanging alternative currency for the official currency and vice versa, since we think that doing so in a very controlled manner would improve the network by avoiding excesses and shortages of goods and services.
K) Introducing ecological criteria
Ecological criteria would be considered when accepting new goods into the network, as well as when second-hand goods are introduced, whose usage often implies an unnecessarily high level of energy consumption. These criteria would be important when deciding how to meet people’s basic needs outside of the market, an issue we’ve already discussed.
Above all, ecological criteria would serve to limit the consumption of each participant. The monetary cost of the products bought and sold in the network would reflect the costs of production in terms of energy, water, and environmental degradation. One way of achieving this would be granting each member certain monthly rights to the consumption of energy and water, with an accounting system limiting people’s capacity to buy new products if they surpassed their allotted monthly rights. There are already systems of accounting for the use of water and energy that could be used.
It must be kept in mind that just because a product is accepted in the network doesn’t mean that it will always be the most appropriate choice. For example, a certain transportation system might be the best option at a given time but an excessive one at another. This means various sets of criteria will have to be used simultaneously in order to make an ecologically viable network.
Ecological criteria would be present in:
a) The criteria of access to the network
b) The selection of goods used to meet people’s needs through the non-monetary economy
c) Personal consumption limits
d) The price added to each product to account for its cost in energy and water
e) The assessment of the environmental impact of the network in the surrounding
The complexity of these criteria suggests that it would probably be better to start with only the criteria of introduction to the network and incorporate points b), c), and d) when the network is up and running (after 6 months or 1 year of being fully functional)
L.1) What cannot be bought and sold.
- Land and housing
Neither land nor housing would be able to be bought. Regardless of dominant system’s ongoing support for private property, land wouldn’t be exchangeable private property in our counterhegemonic system. The right to use property would be separated from its role as an object of speculation. The land is a collective good that can’t exist as private property in the hands of a few. The cost of housing would be based on the cost of the materials and hours of labor needed for its construction, but freed from costs due to speculation. In order to reduce costs, houses could be constructed or repaired using biological material, which has a smaller environmental impact.
When someone wants to change houses, they would need to search for an empty one or exchange with someone who wanted to do the same, while it wouldn’t be permitted for people to make a profit by selling the house or getting mortgages to buy them at impossibly high prices. If someone has private property that they don’t use and would like to contribute to starting up the alternative system they could relinquish these properties for community use or give it to specific members of the network; according to the official system, the control of the property probably wouldn’t change but in our parallel system everyone would be building an alternative. Similarly, the right to use couldn’t be misappropriated by the alternative system; when someone is using a house or social space, it wouldn’t be able to be occupied without first setting up an agreement with those who used it previously.
Since it would be difficult to acquire a sufficiently large and stable supply of land through donations or squatting, it would be a good idea to connect with already-existing forms of collective property; despite needing euros to survive, they would expand the number of autonomous spaces in the alternative economy.
- Products that are ecologically unsustainable
Products that are ecologically unsustainable would be not be able to be bought and sold in the counterhegemonic system if more reasonable alternatives could be found. For example, buying at truck would have to be justified for use in roads that would be impassible in other vehicles. These types of products wouldn’t be able to be bought without a justification. In this way we need to speak of an accompanying sense of collective morality that would be sufficiently powerful to attract people.
L.2) Expensive products and restrictions on private property
From the outset, the purchase of expensive goods by only one person would not be permitted, given that it’s a restrictive practice that can’t be extended to the whole network. Additionally, following the criteria of ecological economics, the creation of these products generally requires a lot of energy and human labor. This restriction could also be justified on the basis of avoiding inequalities between people. Thus, in our system the individual acquisition of expensive goods would be controlled, and only accepted when it promoted shared use among various people. Listings of the people necessary for certain new products could be created: for example, an electric car would require half a
dozen buyers willing to share the vehicle. On the other hand, there are already a lot of products being used in the market, whose reuse ought to be prioritized before choosing to buy new products; this would promote a market for second hand goods as well as specialists in repairing products.
Another question is savings. Since the alternative system wouldn’t allow private loans or private financial entities, there also wouldn’t be any consumer loans. In order to have enough money to purchase a good that can’t be paid for in a few months, people would have to save longer or share the cost with others, as mentioned above. This would promote consumer cooperatives that would allow people to buy goods collectively, especially expensive ones. Public spending for important investments to meet public needs would also have to be promoted, thus building collectivized production entities.
M) The principle of transparency
The financial system would be public and transparent such that the disposable income of each citizen or enterprise would also be public information; specific spending could remain private information, except for the work commissions that would need to review this information. In this system money would no longer be anonymous, since it couldn’t be used without being registered to the account of a participant in the network. This would help avoid the corruption and illicit businesses that are so common and integral to the current system.
N) How would the network be organized?
The network will have to be founded on some common principles decided upon by the members of all of the towns and neighborhoods that decide to participate. We propose the gathering at the beginning of July 2008 to found this economic system and set out its basic principles. Here the guidelines would need to be sufficiently robust to keep the network going on its basic principles for at least one year. Perhaps the gathering could be repeated every year.
A coordination center, oriented toward electronic communications, would probably be necessary in order to resolve difficulties. Additionally, technical spaces would be necessary to make sure that the system keeps function correctly. One of these technical spaces would be dedicated to evaluating the creation and distribution of currency, doing studies, and making suggestions for local assemblies as well as the coordination center.
Another would take on expanding and developing the network’s ecological criteria. Another would watch over the network’s technical security, make sure that the payment systems work and guard against falsifications. There would probably also be the need for a legal group to respond to legal threats directed at the network and its participants (for example, those of Ministry of Economy and Finance8). Logically, there would also be a technical team to manage the network’s website and online accounting system. Finally, there could be a space for strategic analysis that would be able foster the creation or incorporation of the network’s principle economic activities; in order to favor the
real needs that the network would need to satisfy there could be a type of “quality commission” like the one that already exists in the ecoconsum.9
In order to ensure the network’s daily functioning we’ll need to carefully study what responsibilities will need to be delegated and what teams, work groups, or people will have to take them on. What is clear is that each local town or neighborhood will have to have a high degree of autonomy in order to handle issues that arise in the network’s daily functioning.
Material support for people interested in working on the network’s general upkeep would need to come from the public spending of each municipality in the long run. Until the network is sufficiently strong, people available to volunteer will have to be supported with forms of community economics and mutual aid.
O) How would each town or neighborhood be autonomous?
Each local space would be crucial in weaving together a self-managed economic system at the local level. This is an economic system that functions from the bottom up, from the margins to the center. Local communities have to make autonomous decisions that can’t be determined the coordinating center; those can only be made by the general assembly if there’s a consensus that a common principle has been seriously violated.
Some basic functions of each local node would be:
- Deciding upon and dividing income among the participants of the town or neighborhood, based on the local demand.
- Administering taxes to redistribute to the lowest incomes.
- Determining public spending in the area, defined as the services of the network itself as well as public projects and subsidies.
- Accept or reject offers of goods and services to inhabitants of their town or neighborhood, according to the criteria consented upon during the Catalonia-wide assemblies of the network, and advise them on how their products can meet these criteria.
Money creation policies—despite being autonomous—would need to be coordinated, as widely diverging policies would create inequalities in the spending capacity of different towns or neighborhoods. At the same time, different productive capacities between nodes can cause inequalities, so it would be important to create a system of redistribution between different nodes, where nodes with an excess of currency would shift it to those with less. Logically, local nodes can create working groups that they consider adequate. There could also be specific spaces between towns in order to develop common projects (such as shared school or transportation system between two towns). There could also be “themed” networks at the Catalonia-wide level for everyone who is interested in participating, expanding upon existing networks with proposals in the framework of this new economic system.
In this economic system, monetary policy would be based on four fundamental rules:
- Money is created as income, not as debt.
- Money supply equals the total demand for goods and services.
- Public spending is limited to 10% of the total demand for goods and services.
- Taxes redistribute the highest incomes to the lowest ones.
This would be an economic system where there are other fundamental mechanisms for regulation:
- The non-monetary economy (community economy and the rationing of scarce essential goods).
- The regulation of prices (a limit on the price of labor, agreements between consumers and producers).
- Ecological criteria (control of the goods that are introduced into the network, a limit on the ecological footprint of each person, accounting of energy costs).
- Everyone’s right to the common ownership of the land.
- Limits on private property and the promotion of shared property according to use.
It would also be an economic system that is both decentralized and coordinated based on the common principles that we just mentioned. Each local node is responsible for:
- Deciding upon and dividing income among a neighborhood’s participants, based on local demand.
- Administering taxes to redistribute to the lowest incomes.
- Determining public spending in the area, defined as the services of the network itself as well as public projects and subsidies.
- Accepting or rejecting offers of goods and services to the inhabitants of their town or neighborhood, according to the criteria agreed to during the Catalonia-wide assemblies of the network, and advising them on how their products can meet these criteria.
4. How to start the project
To start this project we will need to have enough people and commitments to make it work. Below are a few of the most important elements:
A) Promote and define as a priority in Catalonia
The first step is to make the plan known, debate it, and introduce it into the “common imaginary” among members of grassroots social movements in our country so that it can be proposed as a common priority. From this point its introduction on the “Let’s start de-growth” tour by Temps de re-voltes collective would give the plan the chance to be known and debated all over the region.
B) Reflect and redesign the project at a local level
In section 3 we already mentioned how important local organization would be in this project, such that they would determine the shape of the project at the local level. After the debate has begun at the local level, people will have to make it their own and organize to make it happen, making sure that the local components of production, distribution, commerce, and consumption that exist at the local level can be incorporated.
C) Build tools, common criteria, and organizational bases in Catalonia
Once a project has been defined as a priority, the monetary system’s ecological criteria sketched out in sections N) and O) will have to be clearly defined; additionally, shared technical resources will have to be developed to facilitate the work of accounting, information exchange, transparency, and redistribution. We will also have to equip ourselves with participatory and transparent ways of making decisions to make sure the network functions according to our shared values. If we aren’t able to finalize enough details in the gathering in July 2008 we’ll have to call another one to definite common criteria after people have had the chance to debate the proposal in their community.
D) Study the spending habits of potential participants
It would be interesting if local groups researched—without this work being their exclusive responsibility—what spending is most important and what could be most easily integrated into the counterhegemonic economy. Knowledge is the key to assessing strengths and weaknesses; in this way, we can change. In Temps de re-voltes we’ve been experimenting with spending surveys which could become an important tool in planning local economies as well as the networks common criteria across Catalonia. Having this data would help us define shared economic priorities in local and regional economies.
E) Find producers and get commitments to produce the needed products and services
Suppliers are the counterpart to consumers, essential in making the alternative economy work. If we have basic goods, such as food, and basic services to meet our needs, such as education, housing, and health care, then people will want to participate in our alternative economy. But if we only have unwanted goods or marginally useful services then the network won’t meet people’s needs and won’t grow. In order to ensure a diversity of goods and services we’ll have to do extensive outreach, especially to people that can offer products that meet the actual needs of people in the network.
It’s better to take the time to incorporate producers than to start too early, without having useful products to offer. In this vein, the network could support the development of producers for every basic necessity that would need to be covered. Cooperation and the exchange of templates, techniques, and technologies—which would help avoid competition between enterprises and increase efficiency—would be a constant element of this system and condition for entry into the counterhegemonic economy. Put another way, all of the knowledge in the network would be copyleft, or free knowledge.
F) Build critical mass
Besides key products, we’ll need participants; in other words, the system will need a critical mass of consumers willing to get most of their basic goods from within the counterhegemonic economy. We think that 200 people is the minimum number for a local node; to make the project a reality across Catalonia we’ll need 2000 people. This means there need to be at least 10 local nodes working in coordination in the network. We think that this would be enough to start with; if more sprung up, we’d make the network bigger, giving it that much more of a presence. The network could also develop into ever-more-local nodes, which would increase people’s participation. For example, when a local node has 800 participants and relative stability, we could divide it into two of 400 people, each more locally-based.
G) Start off right
When the economy has become a common priority, when there are enough sufficiently developed local nodes with at least 200 participants, when we’ve brought in enough important producers and when, based on knowledge about our spending habits, we’ve developed common criteria for each local node as well as the regional network, as well as when we’ve prepared whatever else we’ve overlooked this document, we’ll be ready to put the plan into action.
We could have a public day of action starting the network, which could include a barter market as well as training session on the network’s technical tools, spaces to make offers of goods and services, and an explication of how everything works. This day would mark the start of the counterhegemonic economy at the local level. In order to make the first distribution of the alternative currency, all of the goods and services offered up to that day would have to be considered; the day of action could be a culmination of outreach to potential participants who would have signed up and put a price on the goods and services they could offer.
Money as Debt. An education video about the creation of money. http://www.moneyasdebt.net.
Web of Debt. The website of a book I read over the summer: http://www.webofdebt.com.
It is very comprehensive. It tells the history from the struggles for control of the creation of money to the current stories of speculation based on derivatives.
“Wizards of Money.” Text and audio to sum up an understand of the money-creation
“Money, Debt, and Virtual Wealth,” by Herman Daly. Afterword to For the Common Good, second ed., 1994. In this article, Herman Daly, one of the founders of ecological economics, explains the nature of the monetary system, exponential growth, and how they endanger the planet.10
An exploration the collectivization of Catalan industries during the Spanish Civil War.
(Les col·lectivitzacions d’empreses a Catalunya 18 de juliol del 1936 / gener 1939) http://
Online book Trueque y economia solidaria http://22.214.171.124/ar/libros/argentina/ico/
This book documents a meeting among Argentine barter networks in 2002, just after the boom and bust of the economy; their organization in simulataneously autonomous and nationally-coordinated nodes is one of the principle examples of what we are trying to do.
* Rasguñando la lona, la experiencia de un club de trueque en el conurbano bonuarense.
The follow two references are about the experience of regional currencies in Germany:
* Círculos de intercambio, moneda regional y clubs de trueque. Aspectos comunes y diferenciales, by Muriel Hermann http://www.regiogeld.de/uploads/media/Herrmann2006_CdI-MR-CdT.pdf
* La moneda regional como instrumento de la economía solidaria. Muriel Hermann
* On the function of the social market in the solidarity economy:
“Objectiu: mercat social.” by Jordi Garcia, Nexe, 9. (January 2002)
*A reference on feminist economics:
Conciliación, No Gracias, hacia una nueva organización social http://www.forogogoa.org/texto/carrasco_2005_06.doc