The unique value proposition of complementary currencies
Illustrating the distinction made beteen the terms “money” and “currency” in another article on this site, this Prezi-tation by Arthur Brock of the Metacurrency project offers a good segue into the next distinction of value and wealth:
The the transformation from value to wealth is the only logic step in this narrative that I would emphazise more explicitely. Wealth to me is a shorthand for accountable value.
Both, value and wealth, can come in very different forms, as we saw in the different layers of value that are peeled of Bessi the cow in the above story. Value (and values) however can be determined by the individual, for her/himself, and can be absolut. Wealth on the other hand is relative and relational and requires some form of communication to be recognized and conveyed.
In this sence, the function of currencies is to articulate, to translate or to “coin” value into wealth.
This might sound strange when only looking at our commonplace money, because it is curiously “designed” to represent both, a unit of value and a store of wealth. What its value actually is, is a curious question in itself and how poorly it serves as a store of wealth becomes (again) apparent in our times.
The case is easier to see with complementary currencies that often challange our everyday understanding of money because their value (in practice and theory) often lies ouside the obvious. With the position that currencies transform percieved qualitative value into measurable, quantifyable wealth, complementary currecies are mandatory to tap the full potential of the different values in our society and world. I was very excited to find this illustrated last year in the work presented by my later collegues in Madison, WI and then jointly published in the IJCCR under the title “Trophic Currencies: ecosystem modeling and resilient economies”.
(see the full-text paper for a complete explanation of this illustration)
The increasing volume of the different layers of the pyramid in (a), as much in natural trophic chains as in the (inclusive) economy, represents the total value which only becomes fully recognizable when considering it through the different “lenses” appropriate for the different layer. In our society and economy that requires the deployment of complementary currencies. And the volume of the lower layers is their “value added”, which we need to turn to for resilient economies (and successful currency designs).
The different possible and complementary forms of wealth (again very well captured by the Metacurrency people, see here) that we can thus realize through complementary currencies are the hidden treasure that money (in the narrower sense, as defined here) can´t reveal to us. And accessing this wealth is the “unique value proposition” of complementary currencies.
3 comments to “The unique value proposition of complementary currencies”
This is crucial theoeretical work. My question is a practical one: how do we turn these insights into practical design tools that local people can use when going through a local design process for a new currency?
Another thought. Maybe you could put some leading existing systems through your trophic currencies model to see how they look: Brixton and Bristol Pounds, Chiemgauer, BerkShares, Blaengarw Time Network, Dane County Time Bank etc.
Hi John, thanx for your questions.
Towards and answer to the first one: articulating the value added of any currency helps implementers to get stakeholders involved. Reiterating ambitious visions doesn´t help to get the bus on the road. It is the concrete outputs and outcomes that make the vehicle fly 😉 And the general framework above is rather geared to evangelists and theorists who need to justify why CCs in general have something to add to the world. This might be helpfull to image how to actually move the position of the current system “up-hill” towards a more sustainable situation against the slope of efficiency (see Bernard Lietaer´s dipiction: http://www.cloud-lab.criterical.net/wp-content/uploads/2012/10/Lietaer-Graphic.jpg) Guess this would merit dedicating a blog-post to it.
On your second question: p2p timebanking would sit closer to the base of the pyramid then agency timebanking (like Blaengarw), and the regional currencies further up from there. The pyramid does not only map currencies by geographical scope but also according to how close the used currency model activates the values of the “human economy” (or “core economy” as it is called at the New Economics Foundation).
Hi John,
I meant to reply earlier, must have gotten my math question wrong 😉
We’re going to do what you suggest, and map out this model as applied (hypothetically at first, then hopefully tested in a local neighborhood) to a desired community outcome (probably energy and/or wellness). Using timebanking, trade, etc for the very abundant, price-based mutual credit for somewhat less abundant, JAK-style banking when money resources need to be pooled, cooperative ownership and public banking models for leveraging larger capital resources, etc. We’ll see if we can get this started in earnest at tomorrow (Oct. 18)’s Builders Workshop Healthy Community Economy Part II. We did some groundwork for it at the Action Summit session of this past week’s Economic Democracy Conference.
It’ll be fun to see where it goes!
thanks
Stephanie