<< 1 >>
Rating: 
Summary: A good enough book for a preview, but another recommendation
Review: I knew Bernard Lietaer as one of the world's leading authorities on complementary currencies and a chief architect of the Euro. As a former senior officer of the Belgian Central Bank and active in the domain of money systems for 25 years, his thoughts about money markets were always quite impressive. This book does an excellent job of providing a summary introduction into how money has worked and evolved in our societies. However, given that you are reading this review and are most likely interested in monetary economics in some way, I'd also strongly recommend Lietaer's seminal work "The future of money", which he wrote while he was a fellow at UC, Berkeley. For some inadequately explored reason, only Amazon.co.uk seems to have the book on their database (ISBN: 0-7126-8399-2). Here are some interesting glimpses from the future of money to give you a feel for the material you'll read... your money's value is determined by a global casino of unprecedented proportions...$2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stockmarkets of the world combined. Only 2% of these foreign exchange transactions relate to the "real" economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-5, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system. Unless some precautions are taken soon, there is at least a 50-50 chance that the next five to ten years will see a global money meltdown, the only plausible way for a global depression. The Information Age has already spawned new kinds of currencies...the ilk of PayPal, frequent flyer miles evolving towards a "corporate scrip" (a private currency issued by a corporation) for the traveling elite; a giant corporation you never heard of is issuing its own "Netmarket Cash" for Internet commerce; even Alan Greenspan, Chairman of the Federal Reserve, foresees "new private currency markets in the 21st century." Exorbitant compensations are paid to the very few at the top: it started with movie stars and sports heroes, and has now spread to top lawyers, traders, doctors, and business leaders. In the 1960s CEO salaries were only thirty times greater than those of the average worker, compared with two hundred times today (of course Enron and Worldcom debacles may change this somewhat, but salaries won't drop overnight). About 1900 local communities in the world, including over a hundred in the US, are now issuing their own currency, independently from the national money system. Some communities, like in Ithaca, New York, issue paper currency; others in Canada, Australia, the UK or France issue complementary electronic money. The value of barter transactions exchanges which do not use any money as medium of exchange - totaled almost $6.5 billion in 1994 in the US and Canada, and is increasing three times faster than normal exchanges. The magazine "Barter News" covers the industry's development and now has 30,000 subscribers. It estimates the total barter worldwide at $650 billion in 1997, and growing at an annual rate of 15%. All of the above are a part of a global and irreversible process of change in our money systems and our societies. We are now in a transition period and Lietaer lucidly documents and analyzes the crevices in our official monetary systems (e.g., the 1994 Mexico crash, the Asian downturn of 1997, Brazil's woes in 1999 etc), societal problems related with ageing of our populations or with the ramifications of an information economy, and even broader environmental issues such as UN's declaration in 1998 of the world's worst year EVER for natural disasters -- and how we can resolve the ideological conflict between short-term financial gains and long term sustainibility. If a work of non-fiction ever came close to being a financial thriller, Lietaer has written it. Required reading for anyone involved in the business of money.
Rating:
Summary: A Monetary System for the Age of Global Warming
Review: If you are one of those benighted souls, as I was, who thinks of money as just a convenience which saves us from having to haul bushels of wheat and live pigs along with us when we go shopping, read this book. In less than 80 pages, Richard Douthhwaite delves into the history and functioning of monetary systems, amply demonstrating that money is much more than just a convenient means of exchange. Shockingly, he persuasively shows that what most of us think of as money is in reality little more than smoke and mirrors "coined" by commercial banks in their quest for profits and that a monetary system based on such interest-bearing currency not only promotes but is dependent on continuous economic growth. This is the crux of the issue for Douthwaite, an environmentalist/economist who has debunked the supposedly positive benefits of growth in his earlier work, "The Growth Illusion". Douthwaite proposes a non-growth dependent, four-tiered monetary system, in part based on "energy-backed currency units", which would encourage efficient usage, if not actual replacement, of carbon-based fuels. Many criticisms might be levelled at Douthwaite. I have a few. For instance, it seems ironic, to say the least, to base a monetary system that is meant to foster "sustainability" on a non-renewable, and therefore dwindling, resource. Also, his suggestion that fuel emission rights be apportioned amongst the nations of the world on a per capita basis represents such a massive transfer of wealth to heavily populated, poor countries, who would no doubt immediately sell their freely obtained rights to the energy-addicted rich countries, smacks of blue sky daydreaming (just looks at how far another form of wealth transference - debt relief for countries too poor to repay their debts in any case - has gotten!). As an advocate of zero growth, both demographic and economic, I was disappointed that Douthwaite frames his proposals only within the context of a global free market amongst competing nation-states. It would be interesting to see what sort of monetary system he would propose on the presumption of a planned global economy, based on mutual survival, in which zero growth is considered not only desirable but mandatory. This, too, is blue sky daydreaming, I admit, but what truly effective remedies in this increasingly precarious world of ours aren't? But whatever its shortcomings, "The Ecology of Money" presents an illuminating look into our current monetary system and some provocative ideas for reforming it. It's a must read for anyone concerned about where the world, and its confused, nearsighted human species, are headed.
<< 1 >>
| 
