The Currency of Currency
Is money the proper tool to organize our society? Does the answer to local economic strife always have to be increasing the number of dollars circulating in the area, or can economic recovery be accomplished differently? The Imagineer interviewed Venus Project founder Jacque Fresco and Ithaca Hours founder Paul Glover to discuss the true value of currency today.
Explanations for the latest economic crisis are vast in both number and substance. Media pundits and ever-slithering politicians have all created their own tall tales to serve their interests. Terms like “subprime,” “too big to fail,” and “jobless recovery,” along with acronyms like TARP, combine with these pundits and government representatives to create inescapable confusion over what actually happened.
Various ideological spokespersons have grasped the opportunity to criticize the structure of the system itself. Right wing advocates like Yaron Brook, president of the Ayn Rand Institute, promote more capitalism. Left wing advocates like Michael Albert, creator of Participatory Economics, preach the need to embrace social-democratic principles. Almost all debate, however, is within this range of right and left.
Alternatives which stretch this spectrum are often parried to the fringe of discussion. “I don’t know what economists study today, but whatever they study is irrelevant. They know nothing about the distribution of goods and services,” contends Jacque Fresco, founder of the Venus Project. “Neither Socialism, communism, nor capitalism has a blueprint for social advancement.” Fresco’s blueprint looks much different. He wishes to abolish the monetary system completely in favor of what he calls a resource-based economy.
Others wish to not abolish the monetary system but rather make a new one. “I wanted to create a critique of the existing monetary system, which saw money and power in fewer hands and in corporate boardrooms, the policy for which was decided by fewer people to the detriment of an increasing number of people who lacked sufficient tools for trading,” says Paul Glover about his creation of Ithaca Hours, a local currency in Ithaca, New York. In the midst of an economic downslide, the time is right to meander outside the boundaries of left and right and consider nontraditional solutions.
Jacque Fresco has been pushing the conventional boundaries during his ninety-four years of life. Often regarded as a “futurist,” Fresco initiated the Venus Project in the mid-1970s. The Project operates on a 21.5-acre research center in Venus, Florida and showcases the architecture of Fresco. “Cities of today are not designed. They are crude. They are vulgar. We won’t even make the history books of the future. There is so much stupidity and waste of resources,” says Fresco, who instead strives to design more efficient buildings, construction methods, and infrastructure plans.
Fresco seeks to revolutionize the way humans manage the resources of the Earth through more than just his design work. “If you really want a world without war, without poverty, and with reduced crime, you have to declare the Earth and all its resources as the common heritage of all the world’s people. If not, you will continue to have layoffs, booms, and busts.”
Fresco argues that technology is outgrowing social structure. “The industries have become more automated, so they do not need more people to turn out mass numbers of a product. As you can see in the automotive industry, there are machines that pick up the cars, put the wheels on, and so forth. The automotive industry does not have nearly as many people as they formerly had building cars.” In states like Michigan, Fresco’s example truly hits home. Michigan has the nation’s worst unemployment rate at 14.1 percent, according to March statistics from the U.S. Department of Labor, largely due to the defunct automotive industry.
The automation of industry is a looming threat to the working class, which stands to be replaced by machines in the work force. Fresco attributes this threat directly to the monetary system. “The monetary system was designed hundreds of years ago. It no longer fits the physical conditions of today. In other words, if industry gets more orders, it has to automate to produce goods more cheaply, but the more you automate the less purchasing power the people have. Less purchasing power for the people means the economy will not be supported,” he says. “Even if you are a nice guy and say you will not automate, if you pay your workers $30.00 per hour as opposed to $0.75 per hour to maintain a machine, you cannot stay in business, because your profit margin is less and other people will not invest in your company.”
Fresco’s key argument is that the monetary system is impractical and provides for an inefficient social structure. If an economy is required to be supported by the buying power of the working class and automation of industry jobs means laying off members of the working class, automation can be directly linked to economic dysfunction. However, in any other reasonable sense, enabling a worker to escape a monotonous job would be desirable. Fresco contends, “It does not work anymore. The system is breaking down because it is based on nothing more than an old method of evaluation.”
At the core of Fresco’s proposal is eliminating money as a means of buying goods and services. “A resource-based economy does not use money, credit, barter, or servitude of any kind. We want to make all goods and services available to everybody,” says Fresco. Critics often use the words “utopian” and “impractical” to describe his plan, but Fresco argues to the contrary. “A lot of people get angry because they say we want to give away things for nothing, and if people get things for nothing they will lose their incentive. That is what you are taught in schools today. Anybody born in an advanced country got the telephone, the airplane, the automobile, and all technology. Getting things for nothing does not hurt people. It is when things are not available that it hurts people. You got the Earth and all its resources just for being born.”
While the ideas for the future of Jacque Fresco may be unimaginable to most, the initiative of social pioneer Paul Glover is already very real and helping one community weather the current economic storm. In 1991, Glover initiated the Ithaca Hours program in Ithaca, New York. Since, the Ithaca Hours program has developed into the most successful local currency system in American history and has inspired many similar currencies to sprout all over the nation.
“When such local money is distributed around a region, there is likely to be a greater responsibility to communities and the planet,” says Glover. The program is administered by an elected, all-volunteer board of directors, and Ithaca citizens are invited to become members of the program, requiring them to pay $10. With their membership fee, citizens receive 2 Ithaca Hours, which is a value of $20. “There are currently about $120,000 worth of Hours circulating,” says Ithaca Hours Board of Directors President Stephen Burke.
That extra $120,000 circulating locally has helped boost the Ithaca economy. “[It allows] Ithaca to practice its creativity and ingenuity to meet economic needs with less dependence on external forces and distant resources,” notes Glover. In the Hours program, members and businesses are allowed to list services or goods they wish to sell in a directory. Hours members can then sell their work, creating a new market in which Hours are used. Additionally, nearly all Ithaca businesses accept Hours just like they accept dollars.
In the Berkshire region of Massachusetts, community organizers created Berkshares in response to the economic crisis. “[Berkshares] currently number the equivalent of $130,000,” says Berkshare Coordinator Kate Poole about the local currency founded in 2006. Poole stressed that in the midst of national economic hardship, local currency is “an incredibly powerful tool for helping citizens seize control of their local economy.” Since 2006, over $2.5 million worth of Berkshares have been issued.
As the business community has had difficulties receiving loans during these rough economic times, businesses in Ithaca have enjoyed the Ithaca Hours interest-free loan program. “Loans usually range from 50-250 Hours ($500-$2500) but have been given up to 3000 Hours ($30,000),” says Ithaca Hours Board of Directors President Stephen Burke.
If a business takes out a one hundred Hour loan at 0 percent interest as opposed to a $1,000 five-year loan from a bank at five percent interest—a conservative estimate—it means that $150 will be retained for investment within the local community. Allow this to percolate the entire Ithaca business community, and it means a substantial positive impact on the local economic situation, giving a needed boost during the recession.
“There are more human beings daily and more unmet needs daily. The rigid and limited supply of national currencies will be understood increasingly to fail to meet these needs,” says Paul Glover, in some ways echoing the greater discontent of Jacque Fresco. Both men seek to change the way people think about currencies and break economics down into a simpler and more effective way of distributing goods and services.
As Americans struggle to trudge through present economic slough, it certainly never hurts to examine what is ultimately at the base of all the struggles: currency. Currency has no real connection to the goods and services that actually compose the economy but is merely a tool used for societal organization. “Is it so unimaginable,” Fresco questions, “that our social structure has deficiencies? Can’t we find a better way?”
Next: Michael Albert