Results from Barcelona 2010 on the topic money and finance

Money and Finance

The following are the results of the GAP at the Degrowth Conference 2010 in Barcelona that are particularly relevant for this working group

The document first presents a summary, including links to other working groups (in red & capital), and then the complete results of those Barcelona working groups with some relations the current one

Summary

Limit interest rates and money creation by introducing 100% bank reserve rate, implying the disappearance of financial markets, questioning global currencies (TRADE DEGROWTH).

Transition towards local currencies (TRADE DEGROWTH). Movement to physically-backed currency and lending/borrowing. Establish cooperative banks managed by communities/municipalities, cooperative banks' environmental and social standards are set and regulated by the community (SOCIAL ECONOMY).

Working Groups from 2010 GAP in Barcelona with some connections:

Money and currencies

Core points:

• Governmental institutions needed to allow the use of alternative currencies

• An international research network on alternative monetary systems to share knowledge and best practice

• Educational campaign to explain how conventional money is being created in the current system, and how local currency systems work

Research questions:

• How do we increase the demand for local currencies by getting a wider range of institutions to accept them (e.g. local currency in payment of local taxes)?

• Should we remove the powers of private banking to create money?

• What is the potential of alternative currencies to transform the international monetary system?

• What is the relationship between the use of interest and economic growth? Study different scenarios with different interest rates (positive, neutral, negative) and its relation to economic growth. Do we need to replace the functions of interest in a framework of degrowth (a framework of limited natural resources)?

• What is the appropriate backing(s) for money (in its various functions), to prevent it from becoming detached from the real-real economy?

• Appropriate way of exchange between local currencies and conventional money?

New financial institutions

Reform fiscal and monetary policy towards degrowth

Transition economy

• Evolutionary movement from a debt-backed economy to an equity-backed economy by introducing floating cap on interest rates

• a change in lending standards to reflect social, environmental and ethical goals
  
  

Post transition

• Eliminate fiat money, for 100% bank solvency

• Spur the development of cooperative banks, as key players in a system which also requires a central bank to regulate the money supply to avoid inflation or deflation

• Local enterprises/cooperatives can issue bonds in exchange for energy, for instance, to ensure that money scarcity does not prevent unnecessary lending restrictions. If you do not have money you can get them for energy that is to be produced in the future. (we did not talk about what happens if companies go bankrupt...reform insolvency law)

• Limits the sale of derivative

• Make sure that local governments regulate central banks/cooperative banks to ensure that their lending reflects environmental & social standards

• Doubts about a global currency that reflects the world natural capital, as it requires a centralized government
  
  

Trade degrowth

Proposals:

• Ecological and social impacts of trade have to be measured with biophysical and social indicators, and further have to be integrated in trade policies and agreements.

• There is a need for a new democratic global trade organization that moves away from “free trade” and growth as their fundamental basis, and towards social and environmental sustainability.

• Food issues should be given priority to improve food security by working towards food sovereignty and productive autonomy.

• Power relations have to be reduced among others by absolute foreign debt cancellations.

Research questions:

• How can ecological and social impacts of trade be measured with biophysical and human indicators?

• How can the problem of scale adequately be addressed with various mechanisms?

Property rights

Non-regulation of resources is not a solution. Private property needs to be restricted. This implies further discussion on options and alternatives to private property and its regulation.

In this regard, there is a need to

• Distinguish between manufactured and natural resources.

• Identify indicators to determine the maximum level of property

Degrowth is about halting the commodification of nature. The term private property comprises various aspects. In terms of degrowth, some of these ambits could still remain in the context of private property and these should be defined.

Degrowing in a just way demands democratic management of natural resources (including our own bodies) so the resources should not be commodified.

• Global commons: It is necessary to design jurisdiction according to each global common

• Local commons: It is essential to recognize and integrate communal property rights under national law.