Ideas evolving from my tour of Nortland

My tour of Northland has brought new learnings on mutual credit systems

Thanks to Geoff and Naomi Waterhouse, Ken Ross and the Far North District Council I was able to respond to their requests to speak to several Transition Towns groups on the issue of money. There were 70 at Kerikeri, 25 at Kaitaia, 75 at Whangarei and 20 at Kaiwaka. The format was to show the film Money as Debt followed by a short discussion, a break, a short powerpoint where I outlined the designs of various community currency systems, and then discussion. A big challenge!

I remain more convinced than ever that the 47 minute Canadian documentary on money showing what a pernicious and unsustainable system we have inherited over the centuries, that this film teaches it brilliantly, with animation and clarity.

Now the case of Kaiwaka has set me thinking. Gail Aitken who had been a member of a LETS system in UK, had set up a small LETS after coming to Kaiwaka to an intentional community at Koanga Gardens. If measured by the trading volume per member, it is a very successful scheme. It has only 40 members but they all know each other extremely well. There is another intentional community involved and a few from the small township of Kaiwaka, an hour south of Whangarei.

The purpose of the discussion was to work out ways to improve their scheme. Gail runs it using just a spreadsheet. She is paid by the system in the local currency, the kauri. They don’t use the internet and the members showed no desire to be dependent on the internet as they believed the LETs was more resilient that way.

In the discussion it became clear that three members were greatly in credit ($4000 and more) and one of these said very eloquently that she didn’t particularly want to spend it as they had all they needed and were against consuming for its own sake. The same woman, when someone pointed out that a solo mother of three children had not traded and was in debit to the system, declared with feeling that the woman was already working raising the children and there should be no pressure on her to trade. (Others may have implied she should sell something or work for others in the mutual circle.)

Afterwards I was pondering. I was thinking about the Time Banking model in Lyttelton which has a Community Chest as a member. An interior design company had done some work free for the system and been credited with Hours. The company donated their hours to the Community Chest so that those who had no time or health to work for others could be supported.

I spoke to one of the administrators of the Kaiwaka system afterwards suggested that if their system tended to be blocked by people with large credits they didn’t particularly want to spend, then they could look to the time bank model and set up a community chest. In that way the solo mother could be cared for while she was doing her child care. “In a way you are setting up a mini social welfare system within your circle”. He was fascinated by the idea.

My other observation was that Kaiwaka may be a model for others wanting to set up mutual credit trading circles without the Internet. Each of the types of currencies could forge links with the others, with exchange rates being determined regularly, thus extending the variety of goods and services available, and giving members a better experience still.

Perhaps there could be a network of LETS systems on the web and a network not on the web. After all when you think of what is happening in the soil in the root system of any plant, there are millions of small fungi, bacteria and working. There is an ecosystem of millions of tiny micro-oganisms where nutrients and energy are exchanged to everyone’s benefits. Feedback loops tell where the needs are and the surplus resources.

We have often talked about how important it is to develop trust and bonding in a community before a community currency can be successful. Well, why not skip this step and go to communities which already have done their bonding and teach them to set up a mutual credit circle for trading? As the global economy collapses around us, local bowling clubs, schools, maraes, Rotary clubs, sports clubs and RSA’s will be amenable. Why not have a series of small interlinking LETs systems in a small town or suburb, rather than one big one? That will give us more administrators, more resilience, more innovation and bigger numbers, vastly improving the experience of community currencies. If they include in each scheme a Community Chest it would be a lifeboat in the case of a ravaged centralised benefit system. This would prepare for the huge scale movement of the newly unemployed city members returning home, complete with their alcohol, debt, drug and gang problems.

Mutual banking
As the international banking system goes through its reform spasms it is critical to develop mini local models under the radar as well. To start a new bank now costs a prohibitive $30m, up from $15million recently.

I am in mind of a Samoan woman who told me during Mike Rowbotham’s visit early this decade that they had systems where members paid a certain amount per month into a pool and at the end of the month there was a draw for an interest free loan. If someone didn’t want it they drew again. As the reformers of the national currencies of the world and the banking system of the world get into action over the next few years, so will those who are building a new money system at the flaxroots level. I have often thought we need a conference to work on a new financial system –Permaculture Economics? Soilweb Financial Systems? A conference gives face to face contact and may attract those working at higher levels as well.