Money & Community

I heard an interesting group of speakers last week, who really got me thinking about how we all understand and work with money (or the lack of it!). 

Allen Cookson, an ecological economist, noted that money has been flowing out of NZ faster than it flows in for many years – decades, even.  I was surprised to see that this is not because of a trade imbalance, but because most of our banks are overseas-owned, and they effectively siphon large amounts of money out of the country every year. 

Every time someone in New Zealand takes out a loan, like a mortgage or putting something on a credit card, the bank credits our accounts mostly with money they do not necessarily have so we can pass it on to the person selling.  The interest we all pay on our debt is largely taken out of New Zealand as bank profit.  We have a high level of this kind of debt and this means that each year we lose money to the countries in which the banks choose to report their profit in a classic trickle up pattern

Yes.  Trickle up.  Contrary to what we keep being told, I’ve not seen any examples of money trickling down without the help of well-constructed tax systems. Mostly it trickles up – mainly because those with money make money by investing it in things that give them more money back than what they invested).

This means a few things. 

1. Interest payments cost New Zealand heaps, and as long as the system stays the way it is, and we keep doing as we’ve always done, we will never be able to clear our debt.  From what I’ve read, this is one of the reasons why we are all working so much harder now, but not getting ahead.  It is also part of the reason why there is an ever-increasing income gap. 
2.  We need to look for ways that we can manage our debt better so that money stays within New Zealand for longer and is available for people to use and spend here.   
3. Attracting overseas investment may not be as good for us as our government would like us to think.  In the short term, it may bring money into the country, but in the longer term, we are going to be sending that money back overseas to the investor and paying interest to them as well.   
4. Getting a loan from a New Zealand-owned bank (Kiwibank, TSB, SBS and the Cooperative banks are the only ones I know of) is better than getting one from the overseas-owned banks.  

This just reinforces how our money system is not just weird but is not good for our long term wellbeing either.

The speakers also talked about ways to stop this trickle up effect and to keep money in local economies.  There are great ideas out there, all of which are already in use or developing around Christchurch.  I'm going to have a go at explaining them in subsequent blogs.

 

Money is weird when you start looking at it closely

Having recently started work at the Addington Timebank I've been having lots of conversations about trading and money amongst other things, and I've concluded that money is not the straightforward means of exchange that we take it to be.    

Looking at what has been going on in Greece, I can see there are huge problems when a financial system collapses.  But, like Charles Eisenstein, in Sacred Economics,  I wonder, why do things grind to a halt when there is a financial crash and banks close?  

Banks don’t do any real work - they simply shuffle money around and, make money out of nothing (more about this another time!).    At the same time, farmers and gardeners are still growing food. We still have people who can cook, care, cure, build, clean, organise, entertain and all the other things that people need.  Surely it is a little odd that we need the blessing of a bank to make this continue.  

To take the odd nature of it even further most "money" as it is used today is a bunch of 0s and 1s recorded on computers, and doesn’t actually exist in any other form. When you take time to stand back and look at all this, it is clear that our real assets are our own skills, connections and communities, along with the ecological systems that provide us with the things we need to survive and thrive. 

This is one of the premises of the Timebanking idea that was first developed by Edgar Cahn.  Joining a timebank such as the Addington Timebank in Christchurch is one way  to learn about the many skills and abilities that people around us  have.  It introduces us to the idea of a local currency (time credits) and helps use imagine how we might survive in a world without money.

Timebanks also provides us with a way to imagine a world without banks and financiers, who simply make money out of money and who at present are creaming it because we've forgotten how to imagine a world that does not rely on them. 

Climate change & feeling crazy: some personal reflections

A few years ago, I wanted to believe that my life and the lives of people around me would go on the way they have up until now. And I'm still tempted to do that. It looks easier!  In the short term it IS easier.
The trouble is that I realised my mind had to work hard to manage this disconnect.  There I was talking about the science of climate change, of mass extinctions, of unsustainable lifestyles on the one hand, but continuing to get into planes, to drive, to eat and to live what I recognised logically was a completely unsustainable life without really thinking about what I was doing.

I tried out a lot of justifications and I'm still tempted to use them sometimes.  These include things like:

I can't really make a difference as one person, so why try?
I'm doing so much in other parts of my life that I deserve to have some fun sometimes, or
I'm travelling for work, so this doesn't really count as my personal consumption. 


The part of me that keeps looking for ways out has also tried these approaches:   


Well,  nobody else is doing anything, so I may as well enjoy myself while I can,
They'll all think I"m crazy,
Maybe this is not real and I might be completely wrong because nobody else seems worried, or

I don't want to be THAT person (the one that rants on incessantly and makes life uncomfortable for everyone).

On top of this, I sit in on a lot of conversations about people's fantastic trips to amazing places where my mind tells me that I'm just plain boring.


But then I think about the children I know whose lives might be very difficult, or worse, perhaps even very short.  I think about the people I love and I don't want to see them suffering.  And that makes me want to do everything I can to make whatever difference I can, to the best of my ability. 

When I do look at it squarely, I see that if we could pull out of the mire of our foolish busyness, and work together build a future (any future!), it would be possible to effect the change we need, and to have good, happy lives as well.  And yet, I see a lot of good people turning their heads away from the truth of what this really needs because the path to disaster takes less attention, thought and effort.

Earning, financial security and climate change

A few years ago I looked up from my well paid research job and thought “if I really believe that the world is facing serious limits, is this the work I should be doing?”  The answer to my question was essentially, ‘No.” And as I thought about it more, I realised there were a number of reasons why I should take the plunge and leave my well paid, regular job and start working in the alternative economy. 

First, high incomes lead to high consumption. People with high incomes can travel and consume whatever they like.  They tend to have large houses and all the things that go with it.  With spare money, one ends up investing – even if only be doing it via the bank.  The best I could do would be to give money away and so, in the end, I decided the best course of action was to do the giving by giving my time and skills.

Second, I realised that we have a kind of weird belief in our economic system which really only exists in our collective mind and a few computers that are controlled by us.  On top of that, like any Ponzi scheme, the system requires endless growth and is simply not sustainable.  If the money system collapses, it will cause all sorts of problems if we don’t have other ways of exchanging our skills and goods.

If you think about it, this is pretty weird because, as Charles Eisenstein points out in Sacred Economics, we will still have all the skills and means of production that we do now.  We will only have lost our means of exchange.   Strong community underlies the operation of things like time banks, generosity and reciprocity, which provide different but effective ways to effect that exchange that we need to survive and even flourish.

Third, we are reaching environmental limits and our climate is changing as the planet heats up.  There will be shortages of all sorts of things. It seems very likely that people will be unable to live the kinds of lives they have been used to.  I’m a social scientist and it is clear to me that we can go one of two ways when this happens.  We can pull together and do what is best for all of us, or we can fall apart and become violent and competitive, so a few of us get more.  We have seen both of these things happen in countries where environmental limits have come into play.   I’d rather the former happened at my place and I want to do everything in my power to make that more likely.  Building community, and helping people get to know each other, and conversant with alternative means of trade and exchange, is my way of doing that.

Getting unstuck or coming unstuck?

The Earth is reaching its limits with regard to human consumption on the earth.  I know this is not news because scientists have been talking about this for at least half of the last century.  However it still seems important!  None of us can predict exactly what will happen over the next 50-100 years.  But we do know that serious issues are arising now.  Our climate IS changing, our energy consumption is not sustainable, fresh water is becoming scarce in many places, sea levels are rising, to name a few.

Stand by a busy road one day and watch the endless line of stuck cars.  See if you think there is anyway that this could be remotely sustainable after you have been there for 10 minutes, and think about how much this consumption makes us happy while you  are there!  I'm gobsmacked sometimes when I look at our nonsensical way of life that makes many very unhappy at the same time as it destroys our own unique, miraculous planet and life support system.  The only way this can change and that people can get out of the many binds that they are in is to work out how to act collectively to change the broader system.   While individuals can change, we do need to find ways to make these changes easier and more likely - more ecologically probable as WR Catton put it some years ago, and to do that we need to consider things like the mutual cooercion mutually agreed upon that Garret Hardin talked about in the 60s. 

Governments and transnational organisations such as the World Bank and the UN need to take action now to encourage people to change before the bite comes. An international carbon tax is the idea that currently makes the most sense.  We have already seen that governments will need considerable pressuring to do this – and this means all of us need to be working to get action across the population  –  convincing voters not to vote for governments that refuse to take action,  attending rallies, letter writing, submissions, and educating people about the connections between energy, climate change, our capacity to adapt and our current way of life.  

Overall, we need to build our capacity to act collectively, locally, nationally, and internationally.  We need to minimise the disaster that looms, and we need to increase the likelihood of pulling together to weather disasters and the changes that face us. We can do these things and the need to all be happening at once.  Almost anything you do from writing letters to ministers, to organising or attending rallies, to building community at your place or simply getting to know your neighbours a little better and talking to them about how you’ve stopped using your car or thought about your power consumption, can help!