domingo, 24 de enero de 2016

In search of a plan B

In search of a plan B
Rogelio Segovia is member of the Instituto de la Moneda Social

This article was originally published the 6th January 2016, in Spanish, at VIENTO SUR, “A la búsqueda del plan B

[In this article the need to launch already now and grow a monetary plan B that we will need when we need to look into the eyes the Eurogroup. For when that time comes this plan should already operating, covering a significant percentage of the economy, so that it can expand rapidly in front of a situation of suffocation as the Greek, allowing at least the internal economy work, giving a precious letup, of months, before planting the new state monetary system on the world monetary table. It is a plan B that grows from the bottom up. It is a plan B that is post-capitalist at the roots, which does not pay interest to the Banks. But above all, it is a plan B that can be helping in the meantime, in a practical way, the most desperate population]

Since the definitive establishment of the Federal Reserve (Fed), the US Central Bank, after a long process with two earlier attempts, what we have is the enthronement of the financial power over the rest of the capital (and I dare even classify it as a new superclass); the apostolic model of the State of the four powers is obsolete, the "democratic theater" State has grown a protuberance, a fifth power, the banking power, with their own bodies intermediation, with Central Banks in the lead as private cartels of the banks, with the rest of civil society excluded from these bodies.
The Federal Reserve System US was established on December 23, 1913 by the Law of the Fed (Federal Reserve Act). It is the result of the reaction of the big banks to the panic of 1907: in 1910, executives of the banks JPMorgan, Rockefeller and Kuhn, Loeb & Co. Banks, etc., held for ten days a meeting in Jekyll Island, Georgia, secretly, in pure conspiratorial style, but full of patriotic fervor according their autobiographies, concocted the plan, presented to Congress by the Republican Party and supported by the American Bankers' Association. The Federal Reserve controls the size of the money supply with almost absolute power, out of almost any democratic control, and thus took over all the controls of the economic control room, and now the crisis or booms can be generated at will. It is called "Money Cartel". The European Central Bank (ECB) and most Central Banks in th world are designed in its image and likeness.

There is no way to "conquer it from within." Either it is abolished or amended by law from the classical democratic State bodies, as proposed now Bernie Sanders, and it seems that Varoufakis follows now with the DiEM25 intitiative, and we wish them all the best of all lucks. Bernie does not seem to be very aware that he is calling by her name no other than the mother of Aliens nest, the beast herself. They call it Plan B, but it is a Plan A. As Siriza had a Plan A. For me, it is more than problematic any progress without creating an alternative power to put in place monetary areas of sufficient size out of their system, as it is uncertain modify labor legislation without a healthy dose of workers' struggle. What I miss is a Plan B.

The reality of the monetary movement

There is a huge explosion of literature about monetary reform without a clear ideological compass in a pot of thought where all more or less agree on the diagnosis of the crisis of the current monetary and financial system, but the result is a vortex of approaches ranging from anarcho-capitalist, followers of the Austrian school, till the preachers of the Common Good through a change of consciousness and ethical behavior.

Within this turmoil on the currency reform, a current is emerging without explicit Marxist roots, but clearly post-capitalist, united in some way (although not formally) around a vision of the future with the resistance to climate change, the economic sustainability or de-growth and the fight against poverty as major axes. One of their centers of thought is undoubtedly the National Economics Foundation (NEF), and variants of the "Great Transition". Key authors are for example, Bernard Lietaer, Paul Grignon, Thomas H. Greco, Ellen Brown. We have a solid historical research by authors like Stephen Zarlenga (The Lost Science of Money. The Mythology of Money–The Story of Power (2005, American Monetary Institute). We must especially mention an author with a privileged position at the crossroads between the theory of law, economics and cryptography, Nick Szabo, bridge author with the movement of crypto-currencies.

The STRO, the Social Trade Orgnaization, has played a key role in spreading the ideas into initiatives. Another think tank to mention is the P2P Foundation. Cyclos, Digipay4Growth, Community Currency, Community Exchange System, Community Currencies in Action are all resource centers for complementary currencies, providing from knowledge to software. In Spain a small think tank around the Instituto de la Moneda Social is taking form.

The complementary currency WIR Bank in Switzerland, in existence since 1934, formerly the Swiss Economic Circle (GER: Wirtschaftsring-Genossenschaft) has an annual turnover of 4,6 billion Swiss francs, serving 45 000 SMEs with 15 000 employees. The business plan of SoNantes, France, has a goal to take over 10% of GDP in Nantes. Partly thanks to the activity of STRO, there are nearly 4 000 complementary currencies in the world. 
The telco giants are entering in plunder mode to dispute the role of banks as primary intermediaris of money. M-Pesa in Kenya, mobile money, has a base of 10 million users. Launched in 2007 by Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania. It has since expanded to Afghanistan, South Africa, India and in 2014 to Eastern Europe.
The Tunisian government has introduced the eDinar digital currency in conjunction with Tunisian Telecom and Monetas, 600,000 people had for the first tie access to some form of financial services in recent months.
The Banco Central de Ecuador launches in 2015 its “dinero electrónico”.
In all cases, it is now new money. It is about payment systems, as covered by the EU Directive on Payment Services (PSD), in which the source and final destination is always legal tender money as issued by Banks. 
But Bangla-Pesa, the currency of the slums in Mombasa, with a social orientation, a Credit Clearing System (Barter Exchange), thus not banking money, is also performing very well: launched in 2013, covers 16% of retail sales in their community.

In Spain, and mostly around initiatives of REAS (Red de Redes de Economía Alternativa y Solidaria - Network of Networks for Alternative and Solidarity Economy), VIVIR SIN EMPLEO lists an inventory of tens of complementary or alternative currencies (not to be confused with social banking, such as FIARE, which are a remake of the old Cajas de Ahorro, finally running with the same monetary instrument). To highlight, currencies at municipal level, to be treated further down.

We all know about Bitcoin and the boom of crypto-currencies (1 million downloads of the main android wallet, about 7 billion US $ in capitalization, 200,000 transactions per day), with an ideology behind which is nourished, if by any, by the neocon school and their Golden Calf of the "digital" gold standard.
But it is not the only type of cryptocurrency. Others also use block-chains, but try to implement models much closer to the STRO traditional models. To highlight the open source movement around ethereum. Ethereum enables the design, contrary to a cryptocurrency emulating "gold", scarce, limited, as Bitcoin, abundant crypto-money, allowing for credit money, truly sovereign. In this case, technology is not neutral, it is a key political choice.


The monetary battle is old and historically it formed part of the struggle for power. It goes back to the Punic Wars and the Roman aes, an evolution of the original nomisma of Rome (King Numa, 716-612 BC), designed following the example of Sparta. It was minted in copper and bronze, and not in precious metals, with a nominal value higher than the price of the content in metal on the market (even dipped in vinegar to further degrade the metal). It was used to pay the labor value of the Roman army, the welded, and was legal tender for their taxes. An amount linked to census was emitted, and therefore fixed the exchange value of money in Rome around the value of the soldiers salary, not gold. It was key to destroy the invader equipment and refreshment logistics of Hannibal, who's money was based on precious metals, not accepted in Rome. Until the Punic Wars, the last benchmark for prices in Rome was the pay of the legions. It was the subsequent robbery of the Roman generals who flooded Rome with gold, had as consequence the displacement of the peasants and ended up ruining the Empire.

The warlords had already discovered in prehistory that much more productive than devastate, plunder and abduct slaves in successive raids the weaker territories, it was to maintain armies threatening enough and dictate a tribute to the vassal territories to allow them sufficient prosperity optimize revenues (Laffer curve, … one implication of the Laffer curve is that increasing tax rates beyond a certain point will be counter-productive for raising further tax revenue ...), finance the warlords luxuries and pay the weld of the winning army. To avoid misunderstandings, in times prior to the writing, the warlords left, for example, a copy of a necklace with shells (or other objects) as a reminder of the amount of grain, goats or work to be paid as taxes. Throughout the year, defeated tribes traded between them with these shells, because what mattered was the balance at year end, giving rise to money to solve the "double coincidence of wills" in the market between tribes. The main disadvantage of barter is that it requires the double coincidence of interests, that is, that everyone wants what another is offering in the same place at the same time; money as a medium of exchange, solves it. Then the warlords discovered that religious domination, assumed obedience, can save many army mouths and established tributes on precious metals to the temples, but also other more perishable products but costly to obtain, such as feathers, which destination was not spending, but ornamental (Szabo, Nick 2005, An Explanation of the Kula Ring, en Nick Szabo’s Papers and Concise Tutorials).

Already in the capitalist stage, the film The Secret of Oz, William Still's documentary, explains how several US presidents, including Lincoln himself, have been killed in this monetary battle within the capitalist class, until finally imposing the FED model. They were battles within the elite, without major role of the popular movement, but representing more or less democratic political power options. They were battles for supremacy within the bourgeois class, to consolidate the position of the financial sector over the rest of the capital, and especially about the owner peasants, but class struggle in the end.
Actually, they retook a long history of the battle of gold money, scarce money, linked to power, against abundant money, popular money, represented by silver, an already fought battle in the Middle Ages.

In the panic of 1893, shortly after the death of Marx, came the first really popular currency movement, the Free Silver Movement. The long march of the unemployed in the Coxey's Army, in 1894, called for public works policies, that we would today call Keynesian, linked to expansionary monetary policies based on paper or silver.

Closer, our Spanish civil war is a historic reef of the use of alternative currencies as combat ammunition (Corporales Leal, Carolina 2011, Moneda y guerra civil española, Ab Initio, Núm. Extr. 1, 2011). As a result of the evolution of the war, the metal became scarce and the government of the Republic ordered the hoarding of coins of copper, bronze and nickel, metals needed for the war industry. Collecting pieces of gold and silver in general was also ordered because these precious metals were used to buy weapons to the USSR. During the war, some provinces were cut off from the rest of Republican territory, and had to issue their own currency as an emergency measure. Minting local coins on the Republican side occurred mainly in Catalonia and Valencia. In addition, in areas where the anarchist CNT and the extreme left had more power, collectives and cooperatives emerged. It was economic and social institutions that formed in enterprises and large agricultural farms locally, especially in the regions of Arragon and Catalonia. Many of these communities and cooperatives came to mint their own currency, the outlaw, with revolutionary intentions which aimed to overthrow the economic system of the Republican state. Its monetary model was the currency promise of the good to be produced (''will deliver the bearer" be it potatoes, grapes, clothing, machinery, etc.). There are examples of money based on bread or flour of the miller. It is a self-credit. It came to exist money of the republican army battalions.

The battle against neo-liberal policies, first in Latin America and now in Europe, have definitely converted the currency movement in a movement associated with grassroots movements, the breeding ground where thousands have borne fruit STRO like proposals.


I do not find many wires to pull at Marxist literature to analyze what is discussed in the vast literature of the movement of the monetary reform.

We celebrated text of Ernest Mandel Marx's Theory of Money (2004, Internet Archive). We have the compendium of Fred Moseley Marx's Theory of Money Modern Appraisals (2005, Palgrave MacMillan) and we find 200 pages of authors diving in classic texts to say "This is based on what was already said or not said by Marx", but few proposals on how to generate intellectual tools or artifacts with which to arm current grassroots movements. The debate is being fought mainly in the area of consistency of ideas, essentially with the idea abstract labour value. This is certainly a powerful scientific methodology by which physicists have discovered, for example, never observed planets. But it is a methodology that requires the essential complement of accumulation and richness of details provided by the empirical evidence. The largest source almost contemporary of Marx, based on a systematic investigation of historical, anthropological and archaeological sources, is the enormous work of Alexander del Mar (Por ejemplo del Mar, Alexander, (1867). History of money and civilization, (repr. NY: Burt Franklin, 1969), work to which, apparently, Marx had no access. Since then, as Stephen Zarlenga points, any monetary history research has been the area of academic research in political economy more censored, with the exception of the Austrian School, heavily sponsored and promoted in all schools in the world economy, especially in USA.

If anything I'll take the recommendation of the editor of the above Marx's Theory of Money Modern Appraisals in his introduction :

“In terms of future research, I would suggest that the most urgent task is to develop further a theory of pure credit money (without commodity back- ing), based on Marx’s theory, in a way that is consistent with Marx’s labour theory of value and surplus labour theory of surplus-value. Promising beginnings concerning this important task have been made by several of the authors in this book and by others ...”. 

If what we are talking about is the basic concept of credit money, the problem is solved in the literature of monetary reform sufficiently to operate in practice: credit money represents the labor-value of the products to be produced, they will be sold in the future and with the sale the credit will be canceled. This does not contradict any Marxist principle. On the contrary, it strengthens. Now it is true that this concept would lack deeper treat (I will not go into details, see, for example, Matslats (2105), "Wave/particle money", Segovia, Rogelio (2015), "Credit is the time dimension of money", and a mathematical framework that treats the probabilistic universe of possible future transactions. Nothing missing to be clear about the basic choices of the monetary reform.

The power machine

Money is not just a concept. It is primarily an instrument of power whose mechanisms must be understood.

The modern version of this instrument of power was initially created by the Amsterdamsche Wisselbank, the Sveriges Riksbank and the Bank of England, a model well established already in 1700 and remains in force to this day, commonly known as "fractional reserve banking" or fractional reserve banking. Fractional reserve banking is a system in which banks they are only required to keep as reserve a fraction of the amount of customer deposits, although they have the obligation to return the deposits on demand. The system is based on the fact that depositors tend not to claim all their deposits at once, not all debtors are paying the same time.

The banks twist this concept even further.

This includes deposits generated by granting a credit (the deposit that appears in your account when we sign a mortgage). The deposit in the account of the debtor actually has only a small reserve behind at the bank (the ECB requires only 1%). In this way the multiplication “ex-nihilo” of the money is generated. Several central banks have pages where they shamelessly explain the mechanics [McLeay, Michael et al. of the Bank’s Monetary Analysis Directorate, 2014, Money creation in the modern economy, Bank of England Quarterly Bulletin 2014, Q1]

This fraudulent practice was opened by the ancient goldsmiths with their gold deposit notes. They acted as intermediaries to lend at interest the deposited gold. Soon they began to issue more notes than they had gold reserves. When the State began issuing its own notes, banks replaced the goldsmiths and notes had to be in legal tender notes, ultimately backed by the State gold. Give, as credit, more money than the deposited was forbidden by law as counterfeiting, but the law was talking only about money printed by the Mint. Nothing says the law about electronic money at the bank data bases representing minted money. So the banks repeated the trick of the goldsmiths. It consists of two sources of money, complementary to each other, and a supplementary mechanism to give it a value:

1. Mechanism of imposition of legal tender money and its value

As the legal tender is the required currency in taxes, and the money by which state expenditures are paid, especially government employees, the legal tender money is the one that establishes and anchors the value (the trend of the value) of the money used in all other monetary transactions within State Legal framework. And it sets the value the most Marxist way possible, because it makes it by using the commodity mother of all commodities and final measure of all other commodities, which is none other than the very Marxist labor value of its officials. Is the same monetary policy for value setting used by the Romans and the Athenians. Aristotle money whose value is by law.

The labor value of gold as an intermediate measure of value is not needed. It is a necessary accessory reference value as a bridge only to consider a Country economy in the global economy, a fraction of each economy to this day, which is mainly national (European in our case).

So that the value of a legal tender currency in a State is actually fixed in the spreadsheet of the State Budget, that establishes chapters of expenses and income, and more specifically, establishes an arbitrary figure measured at its currency metrics, which is the global amount for the salary of its civil servants.
Divide it by the number of public employees, compare it with the goods an average civil servant is supposed to buy, and you have the value of this legal tender.
  • A Country may have a State Budget of 1 000 000 COINS to pay 1 000 public employees with an average salary of 1 000 COINS. 1 000 COINS = 1 salary. The value of the money by law.
  • Another Country has a State Budget of 1 000 BUCKS. It pays 1 000 public employees with a salary of 1 BUCK.
  • In the exchange market, the tendency will be 1 BUCK = 1 000 COINS
Sure, we can complicate the example by saying that the standards of living are different, but in the end, all conversions made, the principle will hold.
The Holy Grail of the last reference value of legal tender money, who's market value is fixed by a commodity, translated into value of labour is a much more familiar ground to the left than where it appears that the Marxist scholars seek it, who seek it where the neoliberals do, looking at gold.

And it is a key concept because it gives us clues about how to approach the monetary model to the periphery of the State, such as town councils, but also to the governance structures of any popular, solidarity or alternative movement, any base, solidarity and resistance structure. Whenever we have a Commons or Public work with a circuit on collective contributions, we have a sound monetary base.

2. The amount issued by the Central Bank as a reserve for banks

The first is the so called "money printing press" of the Central Banks. Surprisingly, the state can not issue money and can not use the money issued by the Central Bank. In Europe, according to the Maastricht Treaty, the physical money is issued by the mints under authorization from the ECB, and electronic money is issued by typing, by divine act, at the terminals of the ECB.

The ECB is above the law or any democratic body (“neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body”).

It is is prohibited for the ECB and the National Central Banks the lending in favor of such institutions, the Member States, or any other national public body as well as the direct purchase of "debt instruments", much less to pay their expenses. The ECB money can only be used for lending to private banking the reserves they need to provide credits.

The state is there as troupe to move the machinery, impose the currency by law and give value (could we say "wash"?) to the money generated by and for the cartel of private banking. That's why is called fiat money (fiat), since it is based on faith and trust of the community, that is, not backed on precious metals or anything other than a promise of payment from the issuer. A promise to pay you for a bank note by another banknote. The bank does not need a reserve of gold to backup the value of your money. It is the State machinery which says, in the Banks name, how much is the value of an euro, in proportion to a reference wage.

This article focuses on principles, but its a great opportunity to comment how a currency like the euro, relying on the setting of its value in 24 State Budgets, with 24 wage levels, has not the same purchasing power in all countries.
That's the sign of the Bank which is the Central Bank's mission is to keep inflation under control. It does so by regulating reserves and interest Banking, trying to control the intensity so that this credit be granted, and thus the total money supply. The intention of this mission is none other than, without inflation, debts on loans issued by the cartel members and their interests are paid, mercilessly, at an actual nominal value equal to that contracted.

3. The instrument of credit money

It is the money created “ex nihilo” (out of nothing), as explained above in the fractional reserve banking, multiplying by far the reserves, and a money that when it comes into circulation increases the money supply issued by the Central Bank to meet the amounts needed by quantitative theory of money, and where it fits perfectly Marx considerations on the volume and velocity of money, so far until is returned, when it is wiped out again, and the cycle is repeated with new money created through credit.

In our economies this money is about 97% of the circulating money (mostly electronic deposits). As it is issued with interest, we must return more money than money was created and, therefore, this banking elite stands at a podium above the rest seeing all the other capitalists in the arena competing to death to repay loans, go break the stragglers and, in any case, growing exponentially the GDP to create a market for the growing volume of money to be returned and burning the planet until exhaustion.

We should not launch an anathema too hasty about this kind of money, as the positive money current within the monetary reform current does. In the slums where Bangla-PESA operates, the daily fluctuation of incomes of small businesses is around 400%. The need for money trough credit for SMEs to save the bumps is structural. It is simply the result of the randomness of the small size of their market. Free money available for credit backed 100% by savings is only a small fraction of what is needed, for example, by SME's. Most of the savings, in special family savings, go as investment in capital goods and is not available for lending. Therefore, if you can not create “ex nihilo” money, there will be missing money for credit. You have to keep the magic of pure credit money (without the backing of any commodities), but radically democratizing its generation, taking away that power form the banks by putting this power under popular sovereignty. And especially escape the spiral of growth, abolishing interest.

Proposals of “Fair Banking” or “Ethical Banking”, as far as it works with interest, whatever well intended mission statements, is not even close to what it is needed. In the end they are webbed with the rest of the banking system. The proposal of a Public Bank giving interest-free loans, comes closer, but it takes something much more distributed and more near the democratic sovereignty bodies than a centralized State Public Bank.

This diabolical theater of Chinese shadow puppets, where nothing is what it seems, is like a Matrix world, which only holds because we believe it all, is staged by a small elite and by these shadows they dominate nations, make wars, ruin millions and lead the planet to the abyss. On the left we remain trapped in this illusion, in these concepts and in that language. Perhaps improperly we speak about anti-capitalism, when the capitalists, defined as owners of the means of production, and are a subordinate class of this top predator class. Just look at Piketty (Piketty, Thomas, (2013), “Capital in the Twenty-First Century”, Harvard University Press) and the rates of return of each. When this elite nor has what is traditionally understood as capital because it has not the money it claims to have, but the power to say that it has it, and then money "is". How we call them? Gods?

For this reason, it is necessary, of course, a growing civil tide flooding the institutions of the "canonical" State, but also other tide settling in territories outside the Matrix world, beyond the bondage of interest payments to the outgrowth of the fifth power, in a new monetary world of the Commons, if only to point to show the way to what and who remains inside the Matrix world, and facilitate a massive migration when the Eurogroup ever happens to come again with a blackmail to the people (in an event that one would dream as viral and uncontrollable a second version of the fall of the wall). The leitmotif is the same: sovereignty. Democratic sovereignty, food sovereignty, energy sovereignty ... and monetary sovereignty.

The social acceptance of social currencies that pay not interest to bank credit money to make it grow to significant economic areas is laborious because as payment service they do not have radically superior benefits, and frequently are operated with very amateurish means or platforms, and they generate a lot of mistrust. However, in a shocking situation like the Greek, previous use at small percentages (5%?) of the economy can be enough to make it viral. In the Argentine “corralito”, in the Greek and Cypriot crisis, the growth was explosive for crypto-currencies. A fruit vendor without customers, surely will accept the complementary currency before throwing the rotten fruit.

As a side note, banking has reached this oligopoly by one and only position of strength. It is the only industrial sector that enjoys the almost absolute confidence of everybody to safely carry the books of the transactions between any other third parties. Formerly paper books, now giant databases. And this the Achilles heel on which we have an historic opportunity. Cryptography allows us to design decentralized databases, P2P ledgers, bockchains, safer and more reliable than have ever been the monster computer at the bank vaults. This will remove the carpet under their feet and lowers the entry barrier to the main means of production of their business to within the reach of a Neighborhood Association.

Conceptual and action guidelines

On June 28, 2015, the troika banged his fist on the table and thwarted all Syriza negotiations with a simple action, showing who actually exercises sovereignty. The ECB cut the tap for reserves to Greek banks and that suffocated at a stroke the Greek economy, putting to knees Syriza and thus the Greek people, highlighting the null value of democracy. The monopoly of the money machinery is the monopoly of power. 
Vaguely Varoufakis was speaking of a mysterious "monetary plan B", never matured or explicited. And we all wonder what that plan B was, what the Grexit would consist. The boldest minds talk of a EuroDracma (crypto-currency?), But in the end, bank debt money. Meanwhile, civil society, through its grassroots, is covering the State gaps as it can and is finding alternative ways of economic functioning. It seems that the plan B of Varoufakis has no connection with these movements to provide them with alternative monetary instruments.

In our country (Spain) what we need to do, as Jaime Pastor says in these pages (VIENTO SUR), is to convert the electoral machinery of PODEMOS in a machinery for empowering social movements from existing grassroots and 15M platforms. Otherwise, between now and the next election the millions in poverty and precariat, tired of the limited efficiency of the activity of the 69 MEPs of PODEMOS in Parliament, have resulted in his despair into a Greek New Democracy or French National Front in our country.

It is necessary to launch and grow now the monetary plan B that we will need when we need to look into the eyes the Eurogroup. Juan Carlos Monedero says again and again that the volume of our economy will be enough as a deterrent. I doubt it. Higher towers have fallen. In extreme cases - and the financial crisis of the derivatives bubble can bring extreme cases - their hands have not trembled to make a clean sweep of larger economies like Russia, after the fall of the wall.
When that moment comes, we must have already an operational B plan covering a significant percentage of the economy, so that it can expand rapidly at a situation of suffocation like the Greek, allowing at least the internal economy work, giving a precious breath, may be months, before planting any new monetary system on the world monetary system board. It is a plan B that grows from the bottom up. It is a plan B that has post-capitalist roots, which does not pay interest to the Banking World Web. But above all, it is a plan B that can be helping in the meantime, and in practice, the most desperate population by helping them to run their alternative economic solutions.

In the article Apuntes para una soberanía monetaria (Segovia, Rogelio, 2015, Instituto de la Moneda Social) [Notes around monetary sovereignty] I outline the principles of monetary sovereignty that should guide these efforts. I only pretend to open a first breach in the gap in the left literature in the field. Hopefully it bears fruit in a thousand ideas, but above all, in a thousand initiatives.
I would urge the movement to organize a wide debate with the few scholars, groups of alternative economy, as ATTAC and others, Ethical Banking people, Social Currencies, the agents of the social economy as REAS, party economic teams like 3E, to go first body developing a conceptual guides and solid action. The anti-austerity movement that proposes Varoufakis seems a suggestive framework to frame the debate. My first question is: Where is it written that an expansive policy of public works only have to finance with debt money, as the euro?

The plan B of a peoples empowerment machinery

We are position ourselves at a vision of the economy that has been named "the new feminist economics", a less efficient economy but a more resilient one, in a re-localized economy, less global, a "buy local", which takes into account the total cost of things including its recycling and environmental costs, where you must carefully manage renewable energy. To this what corresponds is a machinery of sovereign money consisting of a monetary systems ecology corresponding to the ecology of governance structures where democracy is exercised (Lietaer, Bernard, et. al. (2012), Money and Sustainability, The Missing Link, Triarchy Press).
The Public Banking of which we speak, is a banking at each level, at each and every economic niche and every community building an ecology of sovereign currencies. Communities are free to issue currency as they like and give or lend it to the government of the community to manage their Commons budgets without further condition than the community has participated in the preparation of the budgets and know and accept the effects in services, taxes and inflation. Some agencies or community agents, strictly evaluated and with powers according their records of successful, returned credits, will be delegated by the community to analyze the solvency of the credit requests, and can create all the needed credit money. Better if nobody selects them and it is all a P2P reputation building process.
The hottest level is the municipal level. SoNantes. Brixton Pound. Now in Barcelona. The program of Barcelona en Comu includes creating a local currency.
The municipal money has some very clear lines, which are not so evident in other grassroots intitiatives. These would be the guidelines:
  1. At least part of the wages of municipal officials must be paid with that money. It is what fixes the labor-value reference of the currency and is resistant to any external monetary maelstrom.
  2. At least part of municipal taxes (or municipal services) must be compulsorily charged in that currency, or optionally with an incentive, because this will encourage all other economic agents to obtain that currency if they want to pay taxes.
  3. You need a first base of local businesses to accept that currency as part of the payments, but mainly as a clearinghouse for businesses, as mutual suppliers, wich is the side that most presses the SMEs books of accounts. It is necessary to guarantee the convertibility to euro.
  4. It must be possible to authorize credit lines in that currency, “ex nihilo”, without interest, by delegated bodies and monitored by the community, ensuring sovereignty over the temporary surplus of credit money.
  5. If possible avoid using a data base resident on a server, centralized, vulnerable, and instead keep the records at a blockchain, decentralized, P2P shared collectively, almost unvulnerable against lightly taken executive decisions at local power shifts. If you close, not before a proper legal battle. The monetary legal building has many cracks, - it could be no other if the business ground is a fraud -, so if the records are saved at a foreclosure, then there is every chance of winning the legal battle.
The structures of solidarity or parallel economy, as now flourish in Greece, temporarily replacing the state or generating new cooperation structures should follow a similar model. In Spain, the Red de Solidaridad Popular seems the most mature candidate to test a state-wide movement monetary system. Is particularly sensitive the payment of the "public proto-employees" of these structures and their place in the labor law, but at a soup kitchen, volunteers must be paid in the currency of the network to which the soup kitchen belongs . All donations should be made in that currency, by changing euros if necessary, so that a stock of euros will be available to buy in the "external" market. If people who come to the dining room can pay whith what they have earned in a Time Bank with that social currency, have won something important, their dignity. And of course, you must give credit by creating new money, as a collective act.

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