The Future of Money: Creating New Wealth, Work and a Wiser World [Hardcover]

When Bernard analyzes the prevailing monetary systems and begins to look at the consequences (that are not necessarily consciously designed into the system, and that we are not aware of on a daily basis) you can start to see that there are positive aspects of the system that we have--and some negative ones as well.

Our money system is good at creating competition, financing business ventures that compete in the marketplace and centralizing wealth and power--which can be beneficial to development and growth--which are positive results in many cases. On the down side, the current prevailing global currencies have proved to do poorly at addressing a lot of social issues such as poverty, education, community development, unemployment, etc.

While a lot of time, effort and money has been thrown at these important social issues, they still seem to prevail and little progress has been made in the last century.

In "The Future of Money" Bernard proposes some practical solutions. He proposes creating "complementary currencies" that are designed with different rules and different system and designed in a manner that creates sustainability, community, abundance and stability.

While, at fist glance it might sound preposterous that implementing new monetary systems could have enough leverage in our lives to transform the world into a better place, Bernard give many examples of how it has worked successfully in the past and the growing emergence of many new currencies that are positively transforming many communities around the world when they have been implemented.

Bernard has the credential to speak authoritatively on the topic of Money. He has been a university professor in finance, a central banker and was one of the chief architects of the Euro currency. Not only that, Bernard provides many examples of how complimentary currencies have lead to positive results.

While I am not an economist, I do feel this book outlines a new and important philosophy of money that rivals the major thinkers of the last three centuries: Adam Smith, Karl Marx and John Maynard Keynes.

I definitely recommend this book for anybody that has a gut felling that "there has to be a better way." After you read the book, you will see that there are many possible "better ways" and that you, as an individual, have the ability to make happen.

Complementary currency systems are so called because they are intended to run in tandem with national (and multinational) currencies, not to replace them. Mr Lietaer's thesis is that such currencies can help society in two ways: by bringing people closer together, and by reducing what he sees as an artificial shortage of money, a shortage that encourages competitive behaviour and short-term thinking. "[T]he current monetary system obliges us to incur debt collectively, and to compete with others in the community, just to obtain the means to perform exchanges between us."

As a former currency trader of the year and senior Central Bank executive in Belgium, who has taught finance at several leading universities, Bernard Lietaer is no anti-capitalist prophet railing in the wilderness. Far from it: here is someone who has worked at the heart of the international financial system and found it wanting. Mr Lietaer's personal background is reflected in the tone of the book, which is always constructive and sympathetic to business. He has clearly conducted extensive research into complementary currencies, and also seems to have direct practical experience of setting up such systems: at one point, he offers a series of tips on how to set one up yourself!

While the author clearly knows his stuff when it comes to financial instruments and alternative currency systems, the book can feel rather unsophisticated, theoretically speaking. The emphasis on money as, if not quite the root of all evils, certainly a major cause of society's problems, ignores the deeper social roots of these problems. Why do we use the money system that we do? To my mind, there are two broad classes of answers to this question: one, that money is a technological solution to the globalisation of society; the other, that money is a tool of powerful interests in society. Neither type of answer is given by Mr Lietaer, who never really asks the question of why our money system is set up the way it is; but whichever is the case (and, of course, it's probably a combination of both), fundamental reform of the financial system is likely to be impossible without fundamental reform of the society that it serves.

Any criticisms, however, pale into insignificance beside the book's strengths. Mr Lietaer has written a very accessible book about a hugely complex and difficult subject. I myself have no formal economic training, yet I found his ideas very clear and easy to follow. There is a chapter explaining the workings of today's money system, an appendix ("A Primer On How Money Works") for financial novices, and a glossary of financial terms. (I particularly appreciated the discussion of how discounted cash flow analysis encourages short-term economic thinking in Chapter 9, as I had heard a lot about this technique without knowing quite what it was.)

At the same time there is plenty of more specialist information, particularly on the global reach of complementary currency schemes, for those who are more experienced in financial matters. One of the real strengths of The Future Of Money is the way that the author reaches out to diverse groups of people: for example, he stresses the business opportunities that could arise if the government monopoly on issuing currencies were ended, rather than railing against the evils of big business. Mr Lietaer is a highly constructive thinker, so there are plenty of four-point plans, schematic diagrams and the like, which should also appeal to managerial types. His argument is helped by his writing style, which is very clear and readable throughout, and lightened by a few amusing cartoons and stories.

What really sets this book apart, though, is the range of different ideas about money that it synthesises, and the unique insights that appear in its pages as a result. I came to it quite sceptical about how useful local currencies could be: I saw them as a kind of turn-the-clock-back denial of globalisation. I now realise that in the 21st century they have a lot to offer as part of a holistic solution to the world's economic problems and the erosion of community. So, for me at least, this book has succeeded in its task.

This book really opened my eyes- I would recommend it to anyone interested in what sort of world we are in the process of creating. Not only is it rigorously analytic and comprehensively well researched - but it is also genuinely inspiring. The subject is money; what it is, where it comes from, where it goes; its history, its present, its future. Unlike so many books about money it is focused not on what happens in the minds of economists but on the phenomena that point to a revolution in progress. Who better to have witnessed such phenomena first hand than Bernard Lietaer who has 30 years of experience working as a central banker, a speculative currency trader, a professor of international finance and as an international financial adviser. He wrote "The Future of Money" while a fellow at the Centre for Sustainable Resources at Berkeley, California. We often hear that money is at the root of so many of the worlds problems (unpayable debts, capital flight, foreign exchange instability, insufficient funding for social programmes etc.). However, this book attempts to turn that notion on its head in order to show that money could rather be the root of all possibilities. A crucial point is that how we use money is largely determined by what we understand it to be. We are so used to money that we think we know what it is and we tend to take it for granted - and yet the nature of money is changing, offering us the opportunity to reappraise it, reclaim it, reorganize it for the common good. Of course this process is not automatic but rather contingent upon our conscious choice. This book is an invitation to reflect upon the paradigm shift through which our understanding of money could be about to go, heralding potential changes in our society commensurate with nothing that recent history has witnessed. From a variety of perspectives, Bernard Lietaer examines this shift- evident in phenomena such as corporate scrip credits, e-money, mutual credit currencies, global barter, social care credit programmes, LETS schemes Time Dollars etc.- and he illustrates these developments not only with detailed case studies from around the world but also with imaginative scenarios that show the direction that these seed-like initiatives could take. In contrast to the efforts of monetary reformers, past and present, he does not demand root and branch change but rather adopts a complementary approach. This seems to be practical, (the many efforts of various people to challenge the foundations of the "debt-based" fiat money system have never come to anything), instead of trying to reform the current system, he shows that multiple money systems can and should co-exist, from the scale of the village to the whole globe. Moreover, not only do these systems not threaten each other but they work together ( Gresham's law is not applicable). One of these, the WIR in Switzerland has a track record now going back 70 years with a volume of credits of over 2.5 billion SF per year. It is the diversity of so much evidence from around the world that makes his case so convincing. Take Curitiba, a city in the south of Brazil, it is famous nationally as a veritable urban paradise and was recognized in 1992 by the United Nations as the world's model ecological town- it has fantastic public transport, very high rates of recycling, many parks, low pollution, high salaries, restoration programmes. If you want to find out how this was achieved then read the "Future of Money". The question is not whether or not complementary currencies work but whether we are willing to understand and support them. The theory needs to catch up with the practice. What is more, with our present way of doing things, we are approaching crunch point (global financial meltdown is just one of the threats to human civilization, Lietaer also cites the age-wave, climate change and technology driven unemployment). Things staying the same is not one of the options, even if you like the way the world is now you'll need to do something to keep it that way. At the moment we still have the opportunity of deciding to what sort of future we would like to steer our course. Perhaps most thought provoking of all is the idea of an international trading currency, backed by a basket of commodities rather than gold or belief, and thus incurring a demurrage charge to offset storage costs. This would have the effect of inversing discounted cash-flows. So rather than chopping down trees to save money to put in the bank to generate income through interest in the future, it would become more profitable to invest money to plant trees to generate income through commercial activity in the future. The workability of such a demurrage currency is attested both in theory and in practice (Keynes and Gesel): the advantages are multiple - price stability, 100% backing, straightforward transparent international convertibility, its anti-cyclical working would make it complementary to national currencies, and not least of all, it would be free from political interference. The last point results from the fact that such a currency would be instigated not by national governments but rather by an alliance of international traders. The need for it can already be seen through the increased volume of barter occurring throughout the world by transnational corporations. Plans to bring this global reference currency (the Terra) into being are already underway through the agency of the International Terra Alliance. Perhaps more than anything else, this book is a good read, if at times unsettling. It speaks not only to the brain but also to the imagination, inviting us to look again at a world that we think we know and discover where it is going. We are offered a guide to the sort of future we might wish to inhabit and a chilling evocation of one we would most likely not.