2015 Spring Newsletter
Summer in Greece (and elsewhere in Europe)
The fates have conspired to draw me back to Greece this coming summer.
I’ve recently had a lot of interesting correspondence with people in
Europe who are working, in one way or another, on solutions to the
intensifying global financial crisis. The eastern Mediterranean seems to
be at the leading edge of the global debt tsunami so that’s the place
to be.
I have been invited to serve as a
Scientist in Residence
at the holistic Kalikalos Summer School on the mythical Pelion
peninsula near Volos, Greece. I will be there during the periods 12 to
19 June and 10 to 17 July, and possibly some other times in between or
after those dates. During the 12-19 June period, Kalikalos will also
feature a course,
The Big Picture: Toward a new way of relating to self, community and planet,
led by Jennifer Hinton and Theoharis Tziovaras, and during the 10 to 17
July period, Jonathan Dawson of Schumacher College (UK) will be
offering a course,
Economics of Solidarity, in which I will assist. My residency there will provide lots of opportunities for idea sharing and collaboration.
The school’s website describes it as follows: “The Kalikalos living
learning centers in Pelion, Greece are dedicated to demonstrating the
power of authentic community as a vehicle for building a new holistic
world of peace, partnership and sustainability. Our three campuses offer
an educational programme of workshops, retreats, workcamps, conferences
and living-in-community guest weeks in the summer months that include
healing (self, society & planet), creative arts, communication
science, and Self-enquiry. For the latest information about the Centres,
please subscribe to our bi-monthly newsletter at:
www.kalikalos.com/eNews.”
In addition to my stay at Kalikalos, I expect to be spending some time
elsewhere in Greece during June and July. Besides Athens and Volos,
Crete and Cyprus are also possibilities. At the moment, August is open,
but I plan to remain in Europe until early September. My return flight
is booked from London, so I will be spending at least a few days in
England prior to my departure. As always, I am open to visiting,
presenting, and conferring in places along my routes. Proposals can be
sent to me at
thgreco@mindspring.com.
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The Greek Debt Crisis, an Opportunity for Innovation
Since the January elections there, and in anticipation of my summer
visit, I've been looking closely at Greece,—researching its history,
politics, and economy. A lot of media attention has been given to the
new government of the Syriza Party and its populist
agenda.
Especially prominent in the news has been their new Finance Minister,
Yanis Varoufakis who has been wrangling with Angela Merkel and the rest
of Greece’s European creditors over restructuring the countries debt and
relaxing the austerity conditions that were accepted by the previous
administration.
Varoufakis has an impressive background and some unorthodox ideas about
how to address the debt crisis that threatens to not only crush Greece,
but to unravel the entire Eurozone. He is to be admired for his courage
in standing up to the “troika” (the European Commission (EC),
International Monetary Fund (IMF), and European Central Bank (ECB)), and
for exposing the failures and pretense of the economics profession.
Varoufakis’ blog provides links to many of his interviews and presentations, and his book,
The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy, published in 2011 and updated in 2013, is now gaining wide attention.
That is not to say that he gets everything right. He may have the right
approach to dealing with the immediate crisis of national insolvency,
but he seems to be lacking when it comes to understanding the more
fundamental flaws of money that is created by banks on the basis of
interest-bearing debt, nor does he seem to appreciate the vast potential
of innovative exchange mechanisms like mutual credit clearing and
private currencies issued by trusted domestic producers.
He has however posted one currency idea on his blog that might be of
some help if some features were to be changed. I have posted my
suggestions about that as a comment to his post. You can find both his
proposal and my comment at
http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-currency-blueprint-with-a-potentially-useful-application-for-the-eurozone/#comment-148955.
Besides accessing many web sources, I discovered, quite by accident in a
local bookshop, a new book that is proving to be invaluable in
providing me with essential background and insights into how things
operate in Greece in the post-WWII era. The book is,
The Thirteenth Labour of Hercules: Inside the Greek Crisis,
authored by journalist Yannis Palaiologos (Portobello Books, 2014).
Reading it has shown me the many dimensions of Greek politics and the
domestic and foreign basis of the present crisis. It seems that there is
plenty of blame to go around.
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California Events
I will spend the month of May going back and forth between California
and the East Coast to visit family and friends. Then in early June prior
to my departure for Europe, I will be occupied with events in
California. On June 2, I will lead a discussion in Martinez (San
Francisco Bay area). This event, sponsored the Mt. Diablo Peace Center
and Friendly Favors, is titled,
Between the Devil and the Deep Blue Sea: What Greece needs to do to extricate itself from its economic and financial predicament.
We will discuss the various options that Greece and other debtor
nations might employ, both in dealing with their immediate problem of
insolvency, and in rebuilding their sovereign domestic economies. Please
see Details and RSVP at the Events page of
www.favors.org.
Then, from June 4 thru 7, I’ll be participating in the conference,
Seizing an Alternative: Toward an Ecological Civilization,
to be held at Pomona College in southern California. This is shaping up
to be a huge event with 12 sections and 80 tracks. I’ll be playing a
major role in Section 1,
The Threatening Catastrophe: Responding Now, Track 6:
Political Collapse (
http://www.ctr4process.org/whitehead2015/section-1-track-6/).
I will be providing input on how the geopolitical order is determined
by elite control of money and banking, and outline some promising
strategies for empowering people and communities by
reclaiming the credit commons.
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African Currency Projects Proliferating
We are finding great cause for optimism as we see successful programs in
Africa being replicated and expanded. Will Ruddick and his team are
continuing their excellent work, helping people to discover their own
power by collaborating to establish exchange mechanisms based on the
value of their own production. In a recent message Will reported that,
in Kenya and South Africa, they are “in the process of implementing 8
community currency programs effecting [sic] well over 100,000 people.”
Building upon their success with the
Bangla-Pesa currency in Mombasa and the
Gatina-Pesa
in Nairobi, they expect these community currency projects will unlock
the potential for local producers to greatly expand their trading with
each other and to pull themselves up out of poverty. Will says, “We will
be launching a 2nd community currency in Nairobi's slums (Kangemi-Pesa)
on April 4
th… It will be a large event with marches through
that area…These programs represent the foundation of what is rapidly
becoming a global movement toward democratic and decentralized monetary
systems. Creating resilient networks of markets across Africa is the
path toward truly sustainable development”
Will also reports that they “have recently made the move to develop a non-profit foundation called
Grassroots Economics
to house these programs, and are looking for partners that really
understand the seriousness of the monetary problem and the urgent need
for community based solutions.” A quick update on the currency projects
can be found
here.
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Good Reading, Listening, and Viewing
Richard Werner is one of the few academic economists worth listening to. I recently read his
paper,
How
do banks create money, and why can other firms not do the same? An
explanation for the coexistence of lending and deposit-taking.
This is an excellent and clear explanation of the accounting
sleight-of-hand that enables banks to create deposits (money) without
the vast majority of people, even most bankers, realizing what is
happening. Of course, many of us in the alternative exchange movement
have long recognized that banks do this, but Richard’s explanation of
HOW they are able to do this must be compelling even to his academic
colleagues. This paper is a very important contribution to the
literature of monetary and banking reform and transcendence because it
also outlines the positive implications of some small changes in banking
laws and regulations that could be made if there were the political
will to do them.
Of course, understanding how the flawed money system operates is only
the beginning, and political approaches to reform seem very unlikely.
That knowledge must be used as a departure point from which to design
and implement innovative market oriented approaches to extra-bank
exchange. Mutual credit-clearing circles and private currencies spent
into circulation by trusted issuers, can be organized by businesses and
communities to provide “home-grown” liquidity. To my knowledge, there
are at present no major legal obstacles in most countries that would
impede such innovative technologies from being widely deployed. The
Swiss WIR and the existing commercial “barter” exchanges are imperfect
models that provide proof of concept. In the US at least, commercial
barter exchanges are officially regarded as "third party record keepers”
which are not subject to banking and money transfer regulations.
You might also enjoy viewing the documentary video,
Princes of the Yen, which is based on Richard’s book by the same name (subtitled,
Japan's Central Bankers and the Transformation of the Economy).
It makes me wonder if there might be a place for directed investment
and allocation of credit by central governments in temporarily
addressing the worst effects of the European debt crisis (other than
bank bailouts, that is).
Students of innovation will be interested in
The Innovators: How A Group of Hackers, Geniuses, and Geeks Created the Digital Revolution by
Walter Isaacson. The audio version, which I have just finished, held my attention throughout the entire 15 CD set.
Since listening to his
Black Swan in audio format a few years ago, I’ve been a fan of
Nassim Taleb, so I’m now in the process of listening to his book,
Antifragile: Things That Gain From Disorder. This is another work that is both iconoclastic and filled with original ideas. Highly recommend.
Finally, if you really want to understand what’s happening in the world, you need to follow
Dr. Paul Craig Roberts,
former Assistant Secretary of the Treasury in the Reagan
administration. Dr. Roberts is one of the few commentators today who see
what is really going on and is willing to tell about it. His recent
interview by Greg Hunter is especially timely. View it in my post at
BeyondMoney.net.
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