Sunday, December 11, 2011

News from Hungary

The following review appeared in the International Journal of Complementary Currencies Research recently. It is by a Hungarian and I think it is the best review yet. It was followed up by a request to translate my book into Hungarian! Gillian Seyfang, who edited the IJCCR referred to my book as "one of the classics in the field" which is rather nice.



Although this book was published almost seven years ago, its statements today are more relevant than ever. The “Occupy Wall Street” movement sparks demonstrations against the social and economic inequality; earlier in 2008 we experienced a financial crisis, and now we are facing the eurozone crisis, and there is no end in sight... All these events show us that there must be something wrong with our “one-¬‐size-¬‐fits-¬‐all” economic structure and money system. We need a radical change. Deidre Kent’s book gives us a compass for understanding how money could connect, but not control people.

Healthy Money, Healthy Planet: Developing Sustainability through New Money Systems explains Gesell’s statement: “They improved money exclusively from the point of view of the holder, with the result that it became worthless as a medium of exchange. The purpose of money didn’t concern them, and thus as Proudhon put it, they forged ‘a bolt instead of a key for the gates of the market.’” (Gesell, 1927) Kent elaborates on Gesell’s thoughts and the operation of the servant role of money: if and when it serves the community.

In the first part of the book Kent gives an overview on the current interest-¬‐bearing money system, and problems associated with it. No wonder the author calls it ‘sick money’. In the first four chapters after a brief history of banking she discusses the economic and social consequences of current money system: the growing debt spiral, the widening income gap, the instability and other environmental, social symptoms. She argues for a new and better model of globalization, since the monoculture damages and destroys all other cultures and structures of life. The fifth chapter examines the use of GDP as an indicator of progress, better said: as an indicator of market activity.

It is time to point out one of strengths of the Kent’s work: it explains why a new type of money system is one of the absent elements of the definition and interpretation of sustainability. The importance of communities, let it be a local body or a group of citizens, is the other absent element of the sustainability. That is obvious from her explanations. The last chapter of the first part is a very useful summary, it summarizes the counterarguments, which may support the current mainstream model and explains why a paradigm shift is inevitable.

In the second half of the book we are introduced to the “Healthy Money” system. Kent prefers to define money not by its function, as others economics textbooks. Accepting Bernard Lietaer’s statement: “it is an agreement, within a community, to use something as a means of payment”(from B. Lietaer quotes on page 95). It should serve the community, so it should be the main part of the common property. Although the latter conclusion isn’t written word by word in the author’s text, it is implied: “The privilege of creating money to pass into private interests [...] is the most basic privatisation of all” (page 90).

The next chapter (Chapter 8) is the most exciting part of the book. Not only because Kent sees economy as an organic whole, emphasising that it should mimic the patterns of nature and arguing for the model “economies nested within economies”, but also, because she formulates a new approach, which is barely known even after seven years: “The way of treating parts as wholes has been called ‘holarchy’ [...] such systems are more appropriate than hierarchies. Each living part is whole in itself and possesses something non-¬‐material and irreducible: a pattern of organisation.” She adds: “In an organic holarchic model, each economy -¬‐ supranational, national, regional, local and neighbourhood – would be a complete unit” (all citations on pages 103-¬‐105).

She states that a healthy economy (just like the cells in the body) needs semi-¬‐permeable membrane to provide protection, consequently we have to decide how to regulate the different flows (capital, goods, etc.) effecting our economy. The holarchic view gives guidance for the communities to construct their own healthy money systems.

Chapter 9 organizes the social benefits of community currencies, the next 40 pages present the different forms of complementary currencies all over the world – the reader may find a very useful systematic overview in Appendix I about the classifications of currencies and the comparative table following this (page 289-¬‐294). The different LETS initiatives (Chapter 10), the commercial trade barter systems (Chapter 11) and the perishable money systems with demurrage (like Wära, local shillings in Wörgl, Stamp Scrip, Simec, Chiemgauer) are described in chapter 12. The next chapter (Chapter 13) describes business-¬‐issued currencies, including the pre-¬‐paid vouchers schemes and a privately issued fiat currency (Chatham Islands notes). Chapter 14 shows us a very new type of complementary currency: Richard Douthwaite’s energy-¬‐backed currency unit and Bernard Lietaer’s terra.

The last four chapters give us a synthesis for the whole book, together with the above mentioned Appendix I to deepen our knowledge. The list with its 16 points on page 202-¬‐204 could be seen as the most important aspects for the stakeholders. Following that Kent emphasises some very important questions, e.g. legality by the government, acceptability by the users, convertibility, tax issues, etc.... Kent does not avoid mentioning the phenomenon, that instead of having more and more diverse currencies, the world is moving towards fewer and even more monopolised currencies. She mentions four different disadvantages for common supranational currencies – all this prevail now during the time of euro-¬‐crisis. Chapter 18 deals with community banking in New Zealand and in other parts of the World in 20 pages.

Finally the last, 19th chapter emphasises the necessity of the change once more, and encourages the reader: “The time for monetary literacy has arrived [...] The freedom to shape the money we use may turn out to be just as important as other basic human freedoms, like the freedoms of speech and beliefs.” (page 267)

Let’s quote the words of a Hungarian holistic ecologist, József Agócs: “The trouble of the world is not that we are doing something the wrong way. The trouble is that we do wrong things. If we Ainally did something of value, even poorly, the results would be better, even if not perfect.” Deirdre Kent’s work helps us create a well-¬‐tuned money system.

This book should be of interest to activists and researchers as well. Activists get a lot of information from the glossary of definitions, from the useful websites and the list of organizations. The detailed bibliography and the 20 pages long list of end notes stimulate further research.

S. Gesell (1927): The Natural Economic Order (trans: Ph. Pye) p121

Zsuzsanna Eszter Szalay
Institute Of Business Economics Corvinus University Of Budapest Budapest, Hungary


Szaly, Z. (2011) ‘Healthy Money, Healthy Planet: Developing Sustainability through New Money Systems’ book review.

Reviewed for the International Journal of Community Currency Research 15 (C) 5-¬‐6, ISSN 1325-¬‐95475.

Reproduced with permission.

Healthy Money, Healthy Planet
is available from author Deirdre Kent or from Living Economies

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