Ecological Economics

Session 21

ES/SO352 Sustainability - Session 21

S17: Ecological Economics

Required readings



  • Learn ways to foster economic activity avoiding the negative effects of our conventional money system, by means of using complementary currencies (including time banks), or in small local communities, using pure "barter networks" or "natural economies".
  • Learn what is the Degrowth movement.
  • What is the "rebound effect"
  • Learn what the "Social Business Model" is, and success cases using it.


  • "Sustainable development" = oxymoron
  • Grow less, but more important, grow differently: Change focus to the development of the economy, shift in direction and motivation
    • from profit-maximising economies, to economies that seek maximizing community well-being
  • different conception of quality of life: more importance to sensorial experiences, relationships, conviviality, silence, beauty than to consumption.
  • "Degrowth" = programme, ideology or economic theory, but "missile word",
    • "a political weapon to decolonize the collective imagination and free it from the tirany of Growth"

Watch out the "Rebound effect"

  • any gain in energy derived from the use of more efficient technology is usually cancelled out by an increase in consumption.

If money rules the world – who rules money?

Margrit Kennedy (2008). Availability of money, based on the payment of interest, has two sides:
  1. Basic interest, as the price for money:
    • cost of work of the bank, a risk premium, and an inflatory adjustment
  2. Compund interest, as impetus for exponential growth:
    • the liquidity premium (the reward for the lender who lends his money to others.
Money not only provides a key, but also a lock to the market

Retention of money =>
  • Distortion of all market mechanisms
  • Money becomes the prime focus of all economics activities
    • instead of the provision of goods services

Three missconceptions about money

  1. The Growth missconception
    1. The normal phisical growth pattern in nature:
      • everything stops growing at an optimal size.
      • The ONLY sustainable growth pattern
    2. The exponential growth
      • everything keeps growing at a faster rate
      • UNSUSTAINABLE indefinitively
  2. The Transparency missconception
  3. The Fairness missconception

Two results of exponential growth pattern in our money system

  1. Inflation
    • not causing interests but produced by "interest" + "compound interest".
    • 1950 - 2001: Deutsche Mark lost 80% of its value
      (the most stable worldwide)
  2. Monetary instability
    • between 1974 and 2004
      • 97%: global volume of speculative foreign currency transactions
      • 3%: exchange of goods & services (+ tourism)

3 historical solutions to the problem of compound interest

  1. Islam
    • Moneylenders are made part of the financed project (strong sense of responsibility for its continuity and success)
  2. Judaism
    • Every 7 years: Waiving all debt ("jubilee year")
    • Every 49 years: also slaves freed, and private land given back to the community
  3. Christianity
    • Between 900 and 1400 AD: strict interest prohibition laws
    • re-calling and re-minting money (tax collection)
    • time-related charge on money: demurrage (negative interest rate): circulation incentive.

Consecuences when/where none of these solutions are applied

  • hyperinflation (or crash).
    • 87 over the last 25 years.
  • social revolution
  • war

Proposed solution: Complementary currenciesdemurrage

Current proposed solution: Complementary currencies + demurrage

Models of complementary currencies exist at all levels during the lat decades (Germany, as example):

  1. International: Terra TRC http://terratrc.org
    • Bernard Lietaer (Center for Sustainable Resources of the University of California, Berkeley).
  2. National: WIR http://wir.ch
  3. Regional: http://regiogeld.de
  4. Local: http://tauschringe.de

Video 1: "Radical Abundance: How We Get Past 'Free' and Learn to Exchange Value Again" by Douglas Rushkoff (Author, "Life Inc.") (0-6'/15')

    • Douglas Rushkoff (Author, "Life Inc."), "Radical Abundance: How We Get Past "Free" and Learn to Exchange Value Again" English and Dutch captions by Martien van Steenbergen. At Web 2.0 Expo NY 2009.

Video 2: Complementary Currencies: A Beginner's Guide (17')

    • As the Cyprus fiasco focuses attention once again on the faltering Euro, the public is finally questioning the value of the money in their wallets and bank accounts. But as the issue of monetary reform gains currency amongst the public, a vast array of complimentary currencies are already helping people facilitate transactions without the central bank administered fiat money. Find out more in this week's GRTV Backgrounder on Global Research TV.
      TRANSCRIPT AND SOURCES: http://www.corbettreport.com/?p=7219 .

Video 3: The potential of complementary currencies - Bernard Lietaer (13')

Video 4: Complimentary currency example (paper and online): Bristol pounds

"Complementary currency" = "Community Currency" = "Social Currency" (used not profit-maximizing businesses but for Social Business)

    • Bristol's local currency: Our City. Our Money. A secure local currency run for the benefit of businesses and people in the Bristol BS postcode area of the United Kingdom.
    • Mission: Strengthen the local economy, keep our high streets diverse and distinct, build community connections, and support a more sustainable, resilient regional economy.
    • The Bristol Pound is designed to support Bristol’s independent businesses, strengthen the local economy, keep our high streets diverse and distinct, build community connections, and support a more sustainable, resilient regional economy.
    • A local currency increases the likelihood that money spent in Bristol stays in Bristol, retaining and multiplying the benefit of every pound spent for ordinary people and businesses. Using Bristol Pounds will help to plug a major leak of money out of the Bristol economy.
    • You can get Bristol Pounds either by exchanging them with pounds sterling or accepting them as payment.
      More information: http://www.bristolpound.org
    • See also: "Mayor to take salary in Bristol pounds" ( 20 November 2012)

Video 5: Why Degrowth - William Rees (6'-7'/35')

From William Rees, ecological economist. Coauthor of the Ecological Footprint concept. Professor at the University of British Columbia, Canada. At the meeting "Why degrowth? Dialogue on a pathways towards a smaller economy. Vancouver, BC. 2014.

Other interesting readings

Other interesting videos

Page last modified on Wednesday 21 of September, 2016 13:57:01