‘Green Economics’ by Jean Hardy

There is something contradictory about the two words in the title. ‘Green’ implies living in such a way that humans do not destroy the earth we inhabit: rather, indeed, that we preserve and enhance the earth in the way we make our living here. The present word now used to describe this process is that we live sustainably. Human societies which have lived in this way, have existed for thousands of years on the same land, allowing all other species to flourish beside them.

‘Economics’ is a modern term, which is generally applied to capitalism, particularly free trade capitalism. In this system, the earth and its creatures are essentially seen as a ‘resource’ for humans, to use as we wish. Throughout human history, people have used the earth, of course. They have felt free to chop down great forests ever since the beginning of agriculture. They have cultivated the land for many purposes, and in most ‘developed’ nations for last few thousand years, have felt themselves able to ‘possess’ areas of land. But it is only from the seventeenth century that the whole theory of society, resting in what we now call ‘possessive individualism’, has encouraged Europeans first, then many others, to believe that many people can come to acquire land by law. This has flourished along with the system of building up large amounts of property and money, held as capital, from which further money can be earned by the acquisition of interest.

This development was not really possible before then, because in most societies – and this applies to Islamic law today – ‘usury’, in other words lending money or goods for interest, was subject to severe punishments – indeed sometimes by death. And looked at now from the ecological point of view, it is possible to see that interest/usury can be a really significant offence: because where does this profit come from? It comes partly from a person’s work, human energy, but most of it arises from the use of the earth – what we conventionally and anthropocentrically call ‘natural resources’. As the human race grows richer, the earth is inevitably despoiled. As Clive Ponting points out in his book A green history of the world, Easter Island in the Pacific is a frightening example of what can happen when people destroy their own environment – in this case, as in many others, when power struggles predominate over simple and appropriate life styles. This destruction has become worse with the development of modern economics. “The crucial defect (of capitalism) is that the earth’s resources are treated as capital – a set of assets to be turned into a source of profit. Trees, wildlife, minerals, water and soil are treated as commodities to be sold or developed. More important, their price is simply the cost of extracting them and turning them into marketable commodities. Yet this view overlooks the basic truth that the resources of the earth are not just scarce, they are finite.” (pp 155/6)

Much of the focus of Greenspirit is a critique of what happens in a society based in non-Green economics. It is arguable that our system of economics is the root of all our present problems. And these, of course, rest in a particular human mindset. Can we begin to envisage what a Green economics would look like as an alternative?

Deep Ecology and Gaia theory provide some of the basic alternative values:-
• That all species and all life has its own intrinsic value, not dependent on human estimation. The diversity of all life must be protected and encouraged. The smaller size of the human population should be seen as a factor in the enhancement of all life. People should not be allowed to intervene in other life forms without real cause. The earth itself is alive in a real sense, which we can recognise by perceiving her as ‘Gaia’ and we ourselves are but one living part of this whole wonderful system we call ‘the world’
• Politics and economics needs to change to take these factors into account. We need to recognise that we presently live with deeply anthropocentric assumptions, and instead begin to perceive the earth and its creatures as part of our own world, and of equal importance to ourselves. We are a part of one another.

A Greener economics would incorporate the above philosophy and lead to:-
i) a more simple local life style, eating local food, using less transport.
ii) more power being held by local people over the care of the land they live on and the other species that inhabit it with them.
iii) the use of fossil fuels will need to be cut and alternative energies need to arise.
iv) understanding and controlling the present large international economic agencies that rule our live and promote unthinking and unconscious globalisation, which creates more and more divisions between rich and poor and despoils the earth – e.g. the World Bank, the IMF, the World Trade Organisation (see Links), the large multi national companies.
v) more long-term – to the seventh generation – and conscious understanding of the whole system of which we are a part.

In other words, it is an economics, a means of living on the earth, which promotes human living “as though the earth and all her creatures matter”.




‘The Uninvited Fairy’ by Jean Hardy

It is surprising how mysterious the World Bank is: that great institution, financially supported for 50 years by all of us, never discussed in Parliament, profoundly influential throughout the world; only vaguely in the public consciousness. It is rather like an archetype in the collective unconscious, deeply there but unknowable in its effects and in, for most of us, its very shape. It sits with its twin sister, the IMF, in the heart of America that ‘new-found-land’), in Washington, weaving its web around the countries and peoples of the world.

At its birth 50 years ago, it was almost still-born. For one thing, there was a dispute about where it should live. Maynard Keynes, the economist who nursed its delivery into the world, assured the House of Lords in 1944 that his plan for an international bank would be the ‘indispensable means’ to maintain the ‘long tradition by which most empire countries, and many other countries, too, have centred their financial systems in London’(1). And indeed, for many of its critics, the old colonial element has been endemic to the Bank, a kind of unacknowledged shadow that has affected all that it has done. But the empire has not been the old British one: it has been that of the new power, America, at great advantage at the end of the 1939-45 war. Henry Morgenthau, President Roosevelt’s Treasury Secretary, was clear that the financial centre of the world should be moved ” from London and Wall Street to the United States treasury”(2).

There was some dispute too between Britain and America about its purposes. From the beginning America foresaw the future of the world as lying in free trade world wide, unrestricted by barriers; she was opposed to all the restrictions represented by the old British Empire: at the same time the shadow of empire land of Marx’s analysis of economic power) lies in such statements as that of Acheson, declaring that, ‘we need those markets [abroad] for the output of the United States…we cannot have full employment and prosperity in the United States without the foreign markets’(3).

Keynes, well known for his advocacy of more ‘managed’ capitalism, was responsible at Bretton Woods for the creation of the weaker sister of the two, the Bank. The World Bank’s responsibility should be to pool credit and capital among the nations of the world to the benefit of all, “to rebuild the world when a final victory over the forces of evil opens the way to a new age of peace and progress after great afflictions” (4). The conception of the Bank was original and unprecedented, and always had this somewhat messianic tinge: it was to work for both the reconstruction and for the development of member countries, and both those objectives should have equal importance. And it represented an almost mystical hope on the part of the victors of World War Two, to conquer unemployment and to promote’ prosperity, eventually bringing in the whole world.

But England, the waning power, and America, the rising one, were not in complete agreement. America won in its vision of unlimited free trade. But Keynes, for England, represented the shadow that has always been present within this vision of hope. I would like to quote a passage from Charles Hession’s biography in full, as it lays out the theme of this paper so beautifully. He speaks of the inaugural meeting of the IMF and World bank held at Savannah, Georgia, in March 1946: “The business of the meeting went smoothly until Keynes, in his capacity as Governor of the United Kingdom, rose at the rostrum as the final speaker. He spoke of the privilege of being present at the hour of birth of the two institutions, a privilege which he ‘would not readily have forgone’. He was at his most eloquent and imaginative; he chose to speak of a christening attended by all the usual fairies, veiled in beards of Spanish moss, and carrying appropriate gifts. The first fairy would bear a multicoloured Joseph’s coat to signify that these children belonged to the whole world. The second would carry a box of mixed vitamins to nourish the delicate infants. A third, being older, would represent the spirit of wisdom and discretion because ‘if these institutions are to win the full confidence of the suspicious world, it must not only be, but appear, that their approach to every problem is absolutely objective and ecumenical, without prejudice or favour’. But there a darker note emerged in his address; he hoped there was ‘no malicious fairy, no Carabosse the had seen Robert Helpmann in that role in The Sleeping Beauty a month before) had been forgotten and coming uninvited should curse the children, ‘You two brats shall grow up politicians ; your every thought and act shall have an arrier pensee; everything you shall determine shall not be for its own sake or on its own merits but because of something else’.

‘If this should happen, then the best that could befall and that is how it may turn out – would be for the children to fall into eternal slumber, never to be heard of again in the courts and markets of mankind’”

Hession pointed out that, by then, Keynes was pessimistic about how the whole project was turning out, because of the strength and dominance of the Americans. He commented that they “have the right to call the tune on practically every point. If they knew the music, that would not matter so much, but, unfortunately they don’t.” (5). His view, based on an understanding of capitalism where power is shared between the market and government, was that the World Bank should have been modelled on an organisation like the Bank of England, “where the separation of management and ownership permits a more socialised view of the enterprise’s goals” (6).

This introduction poses the essential issues the World Bank and its critics are faced with today:

i) What is “the music” it is playing? The classic macroeconomics represented by the Bank is believed by its adherents to be the only constructive ‘tune’ available that of the free market world-wide. This is believed to be the objective reality and, in the famous phrase, “there is no alternative” (TINA).

Critics believe there are several alternative economic theories available, based on theories of human nature different from those of the classic economists.,

ii) The whole question of what is ‘objectivity’ is now much more queried than it was in the 1940s. But clearly Keynes was looking for an institution that could stand back from the political scene, be ‘ecumenical’ in the sense that it favoured no nation or group of nations, rich or poor, and lend accordingly. The vision was that of a disinterested, purely economic organisation, which could ‘hold the ring ‘ of world economic affairs. Possibly most people who presently consider such matters reckon that is still what we need.

But the World Bank became in the 1950s not only a Bank but also a Development Agency, deeply ingrained in the affairs of many nations. It has trained many thousands of people within its own framework of thinking, and these people now hold power in many countries. It is involved in issues of poverty directly, in drawing up analyses of countries in its ‘Poverty Profiles’. It is involved in environmental issues and policy and in women’s Issues. It imposes social and economic conditions through its structural adjustment programmes.

Do these two functions, the Bank and the Development Agency need to be separated if there is to be any hope of ‘objectivity or at least some impartiality? iii) The World Bank’s Article IV seems to ensure its political neutrality: ‘The Bank and its officers shall not interfere in the political affairs of any member nor shall they be influenced in their decisions by the political character of the member or members concerned. Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed impartially to achieve the purposes stated in Article 1’.

This should have ensured that the curse of the uninvited fairy that the ‘two brats shall grow up politicians’ would not happen. But critics would state that the World Bank has failed to satisfy the justifiably suspicious world about its intentions. It does not represent wisdom and discretion – quite the reverse, it is weighted in favour of the rich, the exploiters of the environment, the ruthless entrepreneurs, because these are the people who further unfettered free trade. It is possible to argue that the world is divided still along the lines of Marxist analysis: but instead of Marx’s definition of the conflict as being between bourgeoisie and the proletariat, we have that between the North and the South, and the rich and the poor in each country, as the division between exploiter and exploit ed. The present cry of non-governmental organisations around the world of “50 years is enough” echoes Keynes’s vision of an “eternal slumber” being the most desirable fate of the twins in these circumstances.

Can the World Bank or its equivalent lose the Fairy’s curse? And do we, as Quakers, have anything to say about this great organisation which represents a spiritual as well as a physical manifestation in the world? How can we understand the significance of the World Bank? I have known of the World Bank in increasing fascination now, for the last eighteen months. I first started to study it when I was working as a volunteer in 1993 at Christian Aid, first on the Africa desk, and then in the policy unit where I wrote a paper on Jamaica and the effect of the Structural Adjustment Programmes.

All the time it had a familiar ring, and I suddenly realised that it reminded me of Kafka’s Castle. The Castle in Kafka’s novel represents elusive and anonymous powers which dictate everyone’s life, which are answerable to no-one and which are incomprehensible to the ordinary person. The Bank is now one of the purest examples of the bureaucratic model, described by the sociologist Max Weber in the early part of the twentieth century.

I have been interested in reading recent critical studies of the Bank, all published in 1994, that they all responded to the organisation by seeing it as to some extent archetypal and mythical. Bruce Rich’s bril liant and comprehensive study Mortgaging the Earth: the World Bank, environmental impoverishment and the crisis of development starts with an unforgettable picture of the 1991 Bangkok World Bank annual autumn meeting. Staying in the richest hotel accommodation in the city were 15,000 officials and bankers from 156 countries, meeting to review and plan the Bank’s work in loans for development, affecting virtually all the countries of the world; a main aim of this Meeting was to benefit the 1 billion poorest in the world. Meeting outside were thousands of people representing a People’s Forum – including many poor and homeless Thai people whose meagre shelters had been demolished to make way for this great World Bank gathering protesting at policies that were ruining their lives and their natural environments, making them refugees and forcing an economic system that benefited only those already rich. As Bruce Rich writes so forcefully: “in Berlin( 1988, the last annual meeting not in Washington) and now in Bangkok, the planetary boat people and marginalised urban nomads….pressed alarmingly close. It was disturbing to think that their existence somehow had something to do with destruction of rainforests and global warming, not in a direct sense, but as simultaneous phenomena emanating from a common source or shared global system. They were an ontological eruption, a rude one at that. It was not so much the people themselves who were threatening, but the untidy and not very understandable reality they appeared to come from. No place was foreseen for this reality in ‘the dwelling-place of the angels’ Two worlds were colliding.” (7).

Susan George in her latest book on world debt Faith and Credit, written with Fabrizio Sabelli, is equally graphic, giving us pictures of spiritual forces coexisting and colliding. Her book is also often funny I would like to describe one of her imaginary scenarios.

An ‘Interlude’, one of several interspersing the main text of the book, is a picture of ‘Jonathan O’Donnell’, division chief of the World Bank, taking his usual breakfast in a Washington cafe before starting work. This is in the near future, Spring 1996, and he reads to his astonishment on the front page of the Financial Times of a ‘coup against the World Bank in Namland’. “Namland” was a model for the Bank, a Properly Adjusting Country, saturated with loans. Its Prime Minister was ‘Nick’ Nyamba, educated at LSE and previously employed by the World Bank, indeed a fellow employee in Jonathan’s own group. Interestingly, Susan George uses the metaphor of music, as Keynes did, for values: she comments “Nick (Nyamba) not only spoke the language (f the World Bank), he knew the music and all the dance steps as well. You did not have to send a mission – this was a pure formality – because Nick could write a structural adjustment programme for Namland just as he had done for various other countries, practically blindfold.” (8).

But something had happened. According to the Financial Times, “late the previous afternoon… a huge mob of people men, women and children – had gone ‘dancing and singing’ (‘dancing and singing? ‘thought O’Donnell) down the broad avenue which led to the new Bank headquarters, swept up the stairs and swarmed into the offices. Employees were given a few moments to collect their personal belongings ‘but were not permitted to take computers or diskettes with them’. They were then hustled down the stairs where a small fleet of Toyota vans (some apparently commandeered from UNICEF’) was waiting to take them to the airport. The crowd seemed to be having a wonderful time and there was no violence of any kind.”

The reporter, who is clearly enjoying himself, goes-on to say that though Namland was ‘teacher’s pet’ in World Bank terms, other indicators were less favourable: 59% of the population was now living in poverty compared to 37% in 1990, there had been an increase in urban unemployment, the foreign debt had doubled and many social factors had deteriorated since the country had entered its period of successful ‘adjustment’.

The Financial Times then reports a speech to his people by the Chief Minister, Nicodemus (his full name) Nyamba, who has learned to listen again to his ancestral wisdom and to doubt the ‘new faith’ which is being propagated by the World Bank. I am giving an abbreviated speech which is worth reading in full: “I … speak to you this morning but it is not only I who am speaking. I have asked for and received this night the counsel of the ancestors, and they have promised also to speak through me. As the radio and television are vessels for my voice and image, So I feel myself a vessel for the voices of our fathers and mothers. They are sad voices. They watch over our country and they see a few Namlanders growing exceedingly rich but the people perishing. Our forests where the spirits dwell are felled and sold so that we can pay our debts. We no longer grow our own maize and beans….” He speaks of the World Bank: “when the power of an institution is greater than its knowledge :…when it chooses in our place how we may treat our sick people, our parents and our children by telling us that we shall devote such or such part of our wealth to them: when it draws its legitimacy not from the law of our ancestors or from the people but from within itself;…when it is never satisfied with its present domains but sees always new fields to conquer; when an institution makes power, not truth, the basis of its ethics and the proof of its doctrine;….when we ourselves say, ‘There is No Alternative then we have a new faith (9).

Nyamba then says that though he fully entered into the faithful service of the World Bank, he has heard a different voice, and was going back to his village. The myth, this particular faith, had disappeared.

Bruce Rich, Susan George and Fabrizio Sabelli are joined in 1994 by a third critical book. This is Dark Victory: the United States, Structural Adjustment and Global Poverty by Walden Bello. The title itself has the same theme, that of a powerful force bearing a shadow, the uninvited fairy. Bello stresses the ideology of free trade and ‘development’ – the Western ideology which to some extent holds us all in thrall, and which has intensified in the 1980s under Ronald Reagan and Margaret Thatcher. What this particular book brings out is some of the polarisation springing from this ideology which may dominate the early part of the twenty-first century. “Not surprisingly, the dark vision of the twenty-first century as an era of North-South polarisation between privileged white citizens and coloured barbarian hordes, or between the Christian West and the Islamic-Confucian Connection’, has begun to take hold in the writings of Northern intellectuals. Will they be prophetic? Or can progressive forces still successfully mount an effective movement for an alternative future based on the reality that, for the most part, the peoples of the North and South share the same condition of being victims in the same counter-revolution that serves the interests of a global minority?” (l0).

A particular feature of the world economic situation has struck me since I have become more aware of all these issues. That is that so many non-governmental organisations around the world are critical of the ideological assumptions of the main economic powers, and are prepared to protest against them in many ways. These organisations are increasingly in touch with each other through modern technology. There are remarkable people world -wide with a critical analysis of organisations like the World Bank (IMF and the GATT agreements), who do see that there are alternatives – smaller scale economics, regional production and consumption, more real partnership between people in their own countries who borrow money with the lenders. There are many who have a sense of the beauty of the earth and all its living creatures, an approach that springs from ‘reverence for life’ and a feeling for the sacred. There are alternatives and these are what we need to envision and work for.

What can we have to say about the World Bank?

What I have to say in this section isn’t exhaustive. It springs from the sense that I have had throughout that consideration of the World Bank and what it represents is a spiritual matter, and is about spiritual forces. This is not to my mind as simple as ‘good’ and ‘evil’. The World Bank was set up by at least some of its founders with high expectations. But “the road to hell is paved with good intentions”

i) The World Bank must be seen as the responsibility of us all as ordinary citizens. We all contribute f10 a year to its continuation. We should press that it is made more accountable through Parliament, and that we all get to know more about it. The pressure from the Bank is to lend-lend-lend. Its employees are judged by their capacity to lend. Many poorer countries round the world pay back more every year then they borrow. Even the Bank itself admits that a third of its projects are unsatisfactory (11). All of this must become better known.

ii) It has gone way past its original remit by becoming a Development Agency as well as a Bank. These two functions should be separated. The Bank cannot help but be political if these functions are united.

iii ). The Society of Friends must ask itself whether economic violence isn’t as pernicious as war. In each there is an exploiter and an exploited. Each is based on competition and self interest.

iv) There is a vision of peace within the Society of Friends. We need to speak out if the institutions we pay for are working against peace, or are so compromised that this is the effect.

v) The powerful forces and ideologies are now world-wide. Everything is interconnected. It can all seem too much. But what I have found helpful in studying the World Bank is that I have some knowledge now of some of the forces at work instead of the world situation seeming a confusing blur. There are things that can be done.


1) Susan George and Fabrizio Sabelli. Faith and Credit: the World Bank’s secular Empire (Penguin, 1994) p. 24.

2) ibid.p.24.

3) ibid. p.23.

4) ibid. p.31.

5) Charles Hession. John Maynard Keynes (Macmillan 1984) pp. 353-5.

6) ibid. p.215

7) Bruce Rich. Mortgaging the earth the World Bank, environmental degradation and the crisis of development. p. 9

8) George & Sabelli op. cit. p.136

9) ibid. pp. 139-40

10) Walden Bello. Dark Victory the United States. Structural Adjustment and Global Poverty. p.6

11) W. Wapenhams. Report of the Portfolio Management Task Force (World Bank 1992) p ii.



See also The History and Changing Objectives of the World Bank by Jean Hardy


Globalization – the social dimension

The World Commission on the Social Dimension of Globalization was established by the International Labour Organization (ILO) in February 2002.

The Commission was an independent body. It was initiated to respond to the needs of people as they cope with the unprecedented changes that globalization has brought to their lives, their families, and the societies in which they live.

The Commission looked at the various facets of globalization, the diversity of public perceptions of the process, and its implications for economic and social progress. It searched for innovative ways of combining economic, social and environmental objectives, based on worldwide expertise. It has made its recommendations seeking to build upon a broad consensus among all key actors. The Commission’s final report, entitled  Fair Globalization: Creating Opportunities for All, was released on 24 February 2004.

It was  the first attempt at structured dialogue among representatives of constituencies with different interests and opinions on the social dimension of globalization, aimed at finding common ground on one of the most controversial and divisive subjects of our time.

You can access the report at the website of the International Labour Organization or click here for a seven-page synopsis in pdf format.



Monetary Reform – books and links

There are two are two excellent books which deal with this topic. They are:
Bernard Lietaer. The Future of Money (Century, 2001).
David Boyle. The Little Money Book (Alastair Sawday Publishing, 2003).

The topic is also covered by a number of web sites:

Reinventing money Another site with good links.

Bromsgrove Group Includes a good Statement of Belief

The Tobin Tax  The classic article proposing the tax

‘LETS: An Economics in Waiting’ by Michael Colebrook

The July/August 1997 issue of The Ecologist contained a series of articles highlighting the problems of the globalisation of economic activity. The September/October issue of Resurgence focused on the same topic. When the issue of Echoes (an occasional magazine produced by the World Council of Churches) did the same, I remembered the words of wisdom: ‘once is happenstance, twice is coincidence, three times is enemy action’. What is happening is very significant. In their article in The Ecologist, Nicholas Hildyard, Colin Hines and Tim Lang describe how companies are restructuring their operations on a global scale. They justify this on the grounds of the need to be competitive, ‘it is not companies which are competing, however, but workers and communities… Workers are being pitted against workers and communities against communities as companies relocate from one country to another in search for new markets, the weakest unions, the most flexible rules on working conditions and the largest subsidies.’ In his article in Echoes, Jose Bittencourt writes, ‘in the new capitalist logic, those population groups that cannot be exploited for production are permanently discarded. We are arriving at a stage where being exploited is a ‘luxury’, as it means not being excluded’. The losers in the competitive battles are being more than marginalised, they are being excluded from the system altogether.

A story I saw on the back page of the Guardian struck a chord with me. It was about young children being paid a pittance for picking jasmine flowers in the Nile delta for the French perfume industry. Just 25 years ago these flowers were being grown on the terraced fields around Grasse, which is where the perfumes are made. These fields have now vanished under expensive villas which the local people can’t afford to live in (I know this area and have seen this happening).

In a recent book review Diana Schumacher quotes a modern version of the Golden Rule: ‘The golden rule is that he who has the gold makes the rule’. The possession of money confers power because in the conventional economy, money is needed in order to do almost anything and those who have money can control what gets done.. To add insult to injury, the bankers and dealers who help companies with their take-overs and their restructuring pay themselves outrageous salaries, while their activities usually result in substantial numbers of productive workers being made redundant.

In addition to problems with trade and manufacturing, the deregulation and globalization of the economic system has had other unwelcome effects. In 1990 the total value of world trade in goods and services was about $4.25 trillion. On the stock exchanges and money markets the volume of trading is more than $1 trillion every day. The amount of money engaged in making money out of money is more than eighty times the amount involved in trade in goods and services. There is no shortage of money. It is simply in the wrong hands and not doing what is was originally designed for.

At the moment economics is about the rich getting richer and the poor getting poorer. Are we failing to grasp the enormity of the greed, the injustice and the immorality being perpetrated in the name of the free market? The time has come for an economics which puts the environment and people first. In which he who has the gold no longer has the power to make the rules and in which competitiveness is no longer seen as a virtue. The green economist Rudolph Bahro believes that the existing economic system is not reformable. He claims that it has to be replaced by something completely different.

LETS stands for Local Exchange Trading System. In LETS a group of people in a locality agree to trade with each other using a new currency, not connected to pounds and pence. The process is exactly the same as buying and selling goods and services for ordinary money except that no actual cash changes hands. All the trading is done with the equivalent of cheques which are entered to individual accounts just as a bank does. There are two key differences between LETS and ordinary money. Firstly, you don’t need to have any of the LETS currency before you can spend it and, secondly LETS units of currency are not convertible. These differences might not seem at first sight as all that remarkable, but, in relation to conventional economics, they are revolutionary and deeply subversive. Let me try to explain why.

In LETS there are no rich and poor, there is no such thing as debt. There are only those who have a credit in their account and those who have a debit. Every transaction is based on mutual consent between equals. No interest is charged on debits, there is no usury, there is no borrowing or lending, there simply is no point. The ability to buy depends solely on other people’s willingness to sell to you and not upon whether you have any money. One of the many problems with normal money is that it is not always there when it is needed. Alan Watts, writing of the Great Depression of the 1930s said that it ‘was not so much tragic as absurd. Following the Wall Street crash, all the same materials, all the same factories, all the same farms, all the same people, all the same skills, were all still available and still in place. But the economy was paralysed because there was no money’. LETS recognises that real value resides in materials, factories, farms, people and skills. LETS currency has no intrinsic value, real or imagined, and the money supply is infinite.

The non-convertibility of LETS currencies is the antithesis of globalization. It means that the value or wealth involved in trading stays within the local trading community, it cannot be siphoned off to fill the pockets of absentee landlords or overseas investors or multinational corporations. In fact, given a wide enough trading community, the whole concept of financial investment based on capital becomes redundant. If the resources to do something are available within a community, and the community decides that it would be a good idea to do it, they just do it and pay each other in LETS currency. When I said this recently to a social worker, she replied that in her deprived area of Plymouth there was no longer any sense of community. Apart from being a sad reflection on the economic system which is substantially responsible for this state of affairs, it highlights one of the problems raised by LETS economics which is as yet unsolved. Since money no longer decides who can have how much of anything, something else has to take its place. In LETS the state of everybody’s account is available and known to all the members. In a small community in which everybody knows everybody else things more or less work out by themselves. People can judge whether somebody is exploiting the system. At the moment hardly anybody ever says no to a transaction. If LETS systems ever get large enough to aspire to genuine local economic self-reliance and autonomy, methods of decision making about when and how to say no will be needed.. The problem of trading between communities, between regions and nations also needs to be addressed. Concerns about long term sustainability and degradation of the environment mean that such trading will be at much lower levels than at present but it will still be necessary. One solution might be to have a hierarchy of LETS type currencies for trading at local, national and international levels. As far as I know nobody has seriously explored the possibilities of doing this.

LETS provides an economic framework within which individuals and communities can be empowered to realise their creative potentials without the constraints currently imposed by lack of money. If this sounds too good to be true, it is already happening, albeit on a limited and modest scale.

For more information about LETS in the UK go to LETSlinkUK