CCMag-Interview: Henk van Arkel

Parts of this interview appeared in the Community Currency Magazine (archive link), April 2012


What are the questions you would most want to explore with fellow movers and shakers in the complementary currency movement?

My question is: How to get the currency thinking into the mainstream? But more then talking, I prefer to create examples and hope that other will do the same. That is what its all about. And on the long run, sustainability comes from the diversity of 1000 people trying, even if only one of them succeeds. That will be the success of everybody.

What recent developments in the field do you find most exciting?

From the STRO perspective it is that we have succeeded to create software that is even better than standard banking software. We implemented a methodology to track the age and the circulation history of every individual unit which will enable a revolutionary new approach to interest.

Normally interest works like this: the person who gets the loan is the one that introduces the money into the community, has to pay the interest and needs to push this burden forward onto his/her clients. In this way it is continuously pushed forward along the chain towards the people who have ever less opportunities to hand this burden on. The new invention that allow us to know the age of each unit can turn this structure upside down. For example you can base factoring on the creation of liquidity based in claims on future payment. Everybody can see when that liquidity comes to maturity (when the original invoices get paid) and can cash out for national money. So instead of having to borough more money in the meantime and pay interest on it, you can put a virtual identity on your claims and circulate them like cash right away. This will fundamentally change the cash-flow bottlenecks and reduce the impact of interest on the whole system. Interest has always been the central issue in the need for growth and the problems it creates for the poor, so this is a mayor innovation.
For the calculation of dates and circulation history of dues we have requested a patent in order to prevent these new tools to become used in new schemes of exploitation. Because a powerful tool can be applied to create any type of new systems and those best equipped to do this right away are multinational corporations that can guarantee the redeem-ability with their market position. Those without this market position need tons of brains to bypass this disadvantage.

But to be honest, people should´t learn about new projects from interviews like this, but from serious newspapers who write about the real impact and effects. Until we are on that level, we don´t need any more publicity and  there is always the danger of people starting to simply copy and thus stopping their own innovation processes.

And what do you see as key challenges, obstacles or blind spots which hinder the movement’s success?

A movement’s strong points are often its weak points, too.
In this movement we have many charismatic prophets, who dare to follow their own route. That is good, they are very convincing. But since no new currency has impacted the old system yet, there is no firm ground for anybody to assume knowledge of the solution. It would be more appropriate to assume the attitude of a scientist, who continues the searches for answers.

In our research, we realized that in poor areas the purchasing power is always captured long before it could go into local development. Entrepreneurship cannot develop under these conditions. It is rather strange that we had to find this out, while it should have been a mayor issue to be unraveled in the development debate.
We need to be much more open to take the reality for what it is and don’t put ideologies and old ideas into our focus. Particularly with money, you will find that is has always good reason to do what it does. People are not crazy or stupid, its very valuable to observe them and their actions closely.

Unfortunately, the big philanthropist and grand suppliers don´t go for research and development in monetary matters. They seem to be operating from a very privileged point of view, saying: “Money is not the most important thing in life”. But for millions of people, especially in the developing countries, it is. And monetary reform needs stable funding urgently to create breakthroughs.

People, including activists and donors are often involved for the feel-good effect of dealing with this issue, and the creation of real value is often overlooked. That also seems to be the reason why philanthropists concentrate mainly on social alternative currencies. But there is hardly any investor or grand supplier who would look into the heart of the matter of the money system. There is a lot of short term thinking. I once had a huge debate with the people of UNDP in Brazil, who just loved to be giving to he poor, while I hate giving. The best way to make people dependent on you, is by giving donations. If you have money to spare, finance entrepreneurs with a good plan and help them to establish closed loops that prevent your investment from disappearing out of the community. Don´t just put the crumbs to where the people on the ground can pick them up easiest.

What was your own history with STRO in that matter?

We were running a research and development program on the theme of alternative forms of money and banking for many years. We started with checking on historical attempts like that of the Proudhon bank in Marseille. Afterwards we introduced LETS systems in Holland, Belgium and France with some connections to Germany, too. Through this we discovered the strong and weak points of social currencies. They proved to be very strong in community building, in creating opportunities for people to experiment e.g. with new jobs. But on the other hand, we saw that the most active people disappeared out of the system quickly and became dissatisfied with what they got in return and  there was a big burden on the people who took the initiative, the systems were dependent on them.

Next, we experimented with barter-systems and created “Amstelnet” in Amsterdam and we tried to link it with the consumer basis in LETS systems. We always thought that by having more business members the organization of Amstelnet would become affordable. But actually it became more expensive for example because we had to publish larger registries. The unavoidable conclusion was that we had to go digital. This idea had been with us already in the eighties, when we considered the digital path to be a way to bypass the power and influence of central banks. We thought if everything becomes digital information, who will be able to crack down on the flows of information discriminatorily and say: this is money, while that is “just” a contract?

By now, we have even worked together with central banks very successfully for example in Brazil. First they prosecuted us and Banco Palmas, but later they organized conferences where we attended as lecturers.
In 97/98 the president of the central bank of New Zealand promoted LETS because he was obliged to bring down inflation and hoped that the purchasing power created in LETS would help the poor people without him having to supply more national currency. So there had always been central bankers with unorthodox views.

Where do you see untapped resources and unmet needs within the field of complementary currencies? And do you have any suggestions about how to bridge them?

When it comes to funding, competition is a big hurdle. I can imagine, that if we would use the full weight of what we do, realizing the value of all our complementary approaches and come up with a program that covers the whole issue, it would be easier to find support. But this would mean for the competing prophets to cooperate and I don´t really see a solution to this problem.

Besides financial support, what would help the acceleration of the monetary shifts that are needed?

It helps if people who command huge flows of money in a community would realize how they can change the effect of these flows for the better, even for their own purposes. So we should not ask for money but rather show people where the opportunities and benefits lie when using another system to channel the flows in their communities.
Only then we can hope that big institutions get the idea. For example governments, yes, they want to have less unemployment and healthy businesses and more taxes. However they often don´t act like it when it comes to monetary structures.

What could bring about a tipping point in the shift from a monopoly of bank debt money toward a monetary ecology? And is the idea of a “tipping point” the best way of thinking about that change?

The funny thing is that governments reluctantly saved the big banks, but did not prohibit the creation of equally big banks for the future. So in terms of big shifts, the reality seems to be that banks are influential enough to maintain their position.
Tipping points are created by changing realities. If at some moment for example Google would enter the scene as a new player and spoil the big-bank market entirely, the whole framework might be changed in a way that gives small players and community-banks a new competitive advantage, or no room whatsoever. But such shifts are not brought about by any of us or the CC movement. However, when the reality of our economies shows us such an opportunity, we should be ready to push for it.

There are those who feel we need to organize ourselves more efficiently (the way the Right has done in the United States), and those who suggest that there is strength in our natural diversity or that networked systems organize themselves. Where do you stand on this question?

I would always take sides for diversity, but I would not assume that such networked systems organize themselves well. In this sense we try to keep to our own so that cooperation does not block the speed of innovation, the implementation of new systems and our learning curve.
On the other hand we are open to step up with others and make the right moves when needed. Everybody needs to keep one open eye on cooperation, looking for and acknowledging the value of other initiatives.

A lot of valuable community-building initiatives in this movement are done by dedicated people, as a labor of love, but would often highly benefit from actual financial support. if you were given $10,000 to $50,000 to invest in strengthening the currency movement, how would you invest these funds?

I would invest it in our Cyclos software of course. It is multifunctional and many initiatives profit from it. This is a broad and strong investment to support totally different people, ideas and systems.

But in software creation there are two different issues: creating good software that can handle claims on “real” value is a million dollar game. For social currencies you should rather focus on communication and the social networking tools. What Matthew Slater is doing with Drupal is a great state of the art example of this. STRO on the other hand creates an environment where businesses feel secure because risks are eliminated and present economic value can be swapped for claims that can be used as liquidity.

What is your definition of a social currency then?

Social Currencies are based on social claims, they are as strong as the social ties in the community and important for the sense of community. Our currencies, like the C3 (Commercial Credit Circuit), deal with legal claims and are market based.

Of course, even in LETS we had people signing contracts which, when they would leave the system with a negative balance, obliged them to repay in cash and we even enforced this sometimes. And even in the social sphere people are afraid of being abused, so you need to prevent unsocial behavior. But this is not at the heart of it. In general, people take responsibility for what they give and take within the community and they don´t mind to give more if they can or allow others to take more if they have to.

But if you go into the field in which businesses operate you have to be strict on the claims you deal with.
The heart of any  complementary currency is a group of people finding a system to achieve their common goal. And only this then determines the backing their currency needs and the requirements for the software you use.

We wouldn´t even describe ourselves as dealing with currencies anymore and try to keep out of these discussions. LETS for example mostly facilitates the exchanges of labour or services whereas we are building exchange systems for claims which are not very different from a written invoice. Somebody did something and claims a return on it. We try to facilitate exchanges of such claims so that these don´t ever need to be converted into cash.

A C3 is derived from the internal accounting that big companies do amongst the different service accounts of their (sub-)divisions. Its cooperative bookkeeping that keeps the use of expensive cash to a minimum. If you need cash-money at some point to pay outside suppliers, you can simply cash-out some of the claims you hold at the time.
Within the concept of C3 there are several subconcepts and the only umbrella is the backing of units and the security that people can always get what they expect.
Our implementations in Uruguay, El Salvador, Brazil are all very different. While “CompRaS” in Brazil is purely a business network, the system in El Salvador combines some elements of barter-networks and some elements of our advanced C3 methodology. In Uruguay we even operate with state agencies and have a contract with the state owned bank to cash in C3 claims when needed. Only the tax authority can do this without a exit-fee (malus), other users will get a discounted cash value for there claims depending on the maturity of their held claims. In the end, and when operating on a big scale, the malus could even be waived for private companies, if they can prove that the cash for external purchases will create new jobs. And once you have full employment, the malus wont make any sense anymore, because the objective of the whole currency would be reached.
It is important to take all these differences and options into consideration and not just to copy one concept blindly.

Which parallels do you see in your personal experiences with this movement and the green movement in the 60s and 70s?

Movements tend to go up and down. But when they are on an upward slope, the people involved always think that this very moment is unique in history. In the environmental movement, on a hight point, we managed to create institutions that took root and nurtured the next wave to come. But it is very difficult so see from the inside if things are on the way up, on the top or already on the way down and high-points come at very different levels. Only history can tell.
But in any case, we need to maintain the connection to the immediate and emotional context to keep things moving.
In the anti-nuclear movement, for example, we got started strongly purely on a gut feeling. But later it became much more technical and it nearly lost all impetus together with the emotional elements.

Key concepts:
1. Foster research and development
2. Focus on impact and learning curve
3. Join forces when strategically needed

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