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ID-10 Check and Compare January 8th, 1986
Check and Compare.
It probably goes without saying that almost any money is better
than none at all.
The costs are probably justified by the benefits.
To demonstrate the distinctions between conventional and personal
currency, it is best to consider both their comparative costs and
their comparative benefits.
Costs of Money.
Administration - external processing.
It costs money to handle money. It may have to be counted,
printed, shipped, kept safe, etc etc. An indication of the
cost that the community bears for its money is the
proportion of the available manpower that is devoted to the
simple maintenance of the process rather than doing anything
productive in itself. For instance, the costs of running
a bank amount to about 2-5% of the money that goes through
its accounts. It is estimated that LETSystems can
operate all their administration for no more than 0.5% of
turnover. Minimal staff, premises and equipment are
needed; no notes have to be printed or coins minted.
Administration - internal processing.
Every business knows that much of its staff time is needed
just to handle money affairs. Point of sale procedures,
security controls, accounting paraphernalia, petty cash
systems etc,etc. How much time do you spend on your
personal financial affairs ? How many hours are spent
balancing cheque-books ? What was the cost of your last
wallet or purse ? Did loose change ever damage your
clothing ? Green money transactions are initiated and
completed with minimal fuss, bother and expense. There is
nothing to carry, count, remember or lose.
Theft and fraudulence.
When someone steals cash someone else loses. Even if it
is insured, you are still paying for it in the long run.
The cost of using a currency that can be stolen is that some
people will try it steal it and will succeed. Green
dollars, existing only as book-keeping entries in a closed
cycle, are not lost if fraudulence occurs. Any person who
checks their account can detect false entries and have the
transaction reversed.
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ID-10 Check and Compare January 8th, 1986
Security
How much does a bank vault cost ? Or an armoured car ?
How much energy do we have to devote to making sure nobody
is going to steal from us ? What price do we pay for our
anxiety ?
What you have to give to get it.
This is another way to count a cost.
Interest
The cost of money conventionally lies between 10% and
25% depending upon the perceived risk level. Green
dollars bear no interest, simply because neither
lending nor debt is neccessary in LETSystems, and hence
the technical "cost of money" for green dollars is
always zero.
Sixteen tons.
Get up in the morning and I go to the mine. What do
you do for your money ? That's the cost of it .
Some people spend their whole lives doing one thing, in
one place, in one way just to keep body and soul
together. If you have to have a job to stay in the
game, then you have to dance to the tune of the piper.
In a green economy, the money supply is sufficient to
ensure that good work will be available to any who want
it.
Fritz Schumacher, in the prologue to Good Work, derives
"the three purposes of human work as follows -
- to provide necessary and useful goods and services,
- to enable every one of us to use and thereby perfect
our gifts like good stewards,
- to do so in services to, and in cooperation with,
others, so as to liberate ourselves from our inborn
egocentricity.
This threefold function makes work so central to human
life that it is truly impossible to conceive of life at
the human level without work. "Without work, all life
goes rotten," said Albert Camus, "but when work is
soulless, life stifles and dies." "
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ID-10 Check and Compare January 8th, 1986
Life
Some people live so much for money that they will die
for it. Or kill for it. That's a significant
expense, to all concerned. It is extremely unlikely
that green dollars will be effective in getting people
to damage each other. With conventional money it
matters little where I get it, I can almost always
spend it easily. By contrast, it will be difficult
to spend green money earned disreputably. Few will
need it so much as to be unconcerned about whence it
came. Green dollars provide little support for
violence.
Systematic impediments.
It is a basic rule of the conventional money system that you
may not spend it if you don't have it. If something
disturbs your income or creates an unforeseen expense, you
will have less money to spend. If you don't spend money on
me, I will have less to spend in a given time, as will
therefore the people who earn when I spend. Any break in
the chain arrests trading until more money comes through.
This cost is one of the highest; time lost is time past.
Notice the collective anxiety that emerges towards the end
of every month when we wonder whether the bills will precede
the paycheck, whether a deposit will clear in time to meet a
deadline, whether a bouncing cheque will bump us into the
red. Green money is always available; no such impediments
apply.
Misdirection of effort.
Certainly the greatest expense of a disordered system is
that it becomes unpredictable, unreliable and hence largely
unuseable. We are restricted by the limitations of the
vehicle, and can only contemplate possibilities within those
limits. Turkeys cannot soar like an eagle. If the car
will only go round in left hand circles, we cannot take it
to town. Our conventional monetary system effectively
discourages cooperative modes of behaviour, by setting each
of us against those with whom we trade. What is the cost
of our excessive indulgence in competition ? What is the
cost of the missed opportunities to create together a world
that works for all of us ?
Personal money costs less than conventional in all the above
categories. Thus far we have been unable to locate any
circumstances where this is not true. Please let us know if you
can see any we have missed.
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ID-10 Check and Compare January 8th, 1986
Benefits of Money.
You pay your money and you get what you get.
What do you get for your money ?
Conventional money offers interest, power and security.
Interest.
It is an inevitable consequence of the scarcity of any
valued commodity that there will be a market for it.
Interest is a symptomatic condition of conventional money
and will probably persist no matter what. It can be seen
as the price of the risk of loss or as an opportunity to
live from the efforts of others. Whatever the ethical
merits or otherwise, few have so much money that they feel
able to decline interest payments, and it would be naive to
propose any opposition to the process. Landsman has no
wish to argue against such practices; only to point out that
the questionable benefits of interest income are indeed only
available in the conventional money game.
Power.
Money talks. No argument. Conventional money offers
power to those who have it. Of course, while you use the
stuff, you will never know whether they love you or your
money. Green money will only be acceptable in conditions
of mutual agreement, since people will be well able to
choose what they are willing to do for it.
Security.
Very important. No one can get by without a measure of
security. The "store of value" function of conventional
money is essential for exchange of large assets where
assurance of value is critical. Pension arrangements and
real estate will probably always require conventional backed
currencies. Indeed, while the majority of trading,
taxation and other expenses are only available in cash, it
is essential that each of us is able to "mind our own
business" - to keep the wolf from the door. Unless you
feel safe you cannot play. On the other hand, " Lay not
up treasures for yourself on earth, where moth and rust doth
corrupt, and thieves break through and steal,.." Some
people learn to ride a bicycle and to trust to their
acquired sense of balance; others will always want training
wheels.
In reference to the above criteria, conventional money offers
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ID-10 Check and Compare January 8th, 1986
distinctive advantages over personal. The only consideration
is the extent to which one wishes to, or has to, play in a game
where competition, scarcity and survival make such cycles of
power, security and interest inescapable.
Personal money offers advantage over conventional in
availability, recirculation and conviviality.
Availability.
You can never go broke if your personal money is good.
The simple willingness to undertake a committment to provide
fair value to another member of the community at some later
date ensures that anyone who acts in good faith can spend as
they need. Of course, a person who consistently fails to
redeem their promises will thereby lose this opportunity,
but at least the situation is of their own making. Most
people who have no money are poor through no fault of their
own. People suffer because they are so dependent on things
beyond their control, like the export market, the bank rate,
general consumer demand, commodity speculation etc., etc.
Recirculation.
Next time you spend a dollar bill, put your initials on it
and see when you next see it. Even if you live in a small
community, it is unlikely that you will ever see it again,
and inevitable that it will soon be out of town and gone for
ever. Try it and see. Green money stays in circulation
in your own community until you earn it back. In a
LETSystem, it is absolutely true that you can spend yourself
into employment.
Conviviality.
Every transaction in a LETSystem is a matter of mutual
consent. Who needs a green dollar ? Nobody needs a
green dollar, and so they earn them because they wish to.
It is pleasant to live in an community where the process of
commerce is the mutual recognition of gifts, of service, of
value.
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