You'd think that the output of all our work and technology should've improved the quality of our lives more than it has. Why do we pursue ever-increasing amounts of wealth even after our basic needs have been met rather than simply enjoying the money that we have? How is it possible that each laborer is more productive in the history of the world, yet two parents can work full time and still not have enough money to pay for their children’s day care and rent? Why are we becoming ever more isolated from our communities? Why do we have less free time instead ofmore? Shouldn’t the opposite be happening as we continue to become more efficient and produce more? Something is wrong.

The answer lies in the nature of money itself. Not the physical money that we touch, but the monetary system. Our money system, including the way money is issued and removed from our economy, is a stronger force than even religon in the way that it influences our behavior. Think about it. How many people do you know act more in align with their moral convictions than with the culture that surrounding the way we earn and spend money? Money must be a powerful influence to compete with notions of eternal life or ecstatic bliss. Money drives us to act the way we do towards each other and how we interact with the world around us. It even defines the nature of our interactions with each other and shapes our attitudes. It defines who we are and provides us with a measure of success relative to our neighbors.

Problems with Money

Sadly, our monetary system is poorly designed to bring about the type of world that most of us want. It has evolved to meet the needs of another time and just isn't designed to create the highest quality of life for those who use it. We haven’t figured out what we want from our monetary system. We haven’t analyzed the nature of our transactions and the consequences that they bring. We’ve accepted repercussions of our own invention as if it were a fundamental law of nature. We haven’t stopped to think if there could be a better way. We’ve enslaved ourselves with our own system.

One of the major problems with our monetary system is that it creates an artificially scarce money supply. Money is created when we get a loan from a bank. By the very nature of money, there isn’t enough money in circulation to cover the debt that created it. IF you wonder why we don't have enough--it's because we made it that way!

The cycle of debt feeds on itself. A person who pays their debt in payments plus interest is doing so with money that has been created through more debt. As the money supply grows, the debt that needs to be paid grows even more—regardless of how efficiently or how much we produce, regardless of our needs, regardless of our desires. There will always be more debt than money to pay for it.

The cycle of collective debt creates feelings that we never have enough. It’s true, as a society we can never have enough because we always have more debt than money. Always. It’s no wonder than that we work longer and longer hours and turn to the extraction of earth’s natural resources to try to make more and more money.

Exacerbating the problem even further, we feel a need to collect as much money as we can in order to protect ourselves from the scarcity that we feel. Besides, if we have money, there are always people out there desperate to get it. It takes money to make money. So we hoard our money so that it can earn interest and protect ourselves.

But the need to collect money in order to make more money sets up investment decisions that are counter-productive to our collective well-being and to common sense.

Take, for example, the question of how much money to spend on a new car. I could buy a quality automobile that would last 20 years. Instead, it makes more sense to simply dispose of the car after ten years and buy a new one. My investments will double in 10 years and I should be able to afford a new car from my “savings”.. Yet the consequence of this action result in my old car in a landfill and a culture that values cheap disposable items rather than high quality, long lasting ones. Only our blind acceptance of the rules of artificial scarcity could make us accept that this would be more “economical”.

Similar examples can be found in the way we relate to our environment.

Under our current system it makes sense to cut down trees and put the money in the bank; the money in the bank will grow faster than trees. It makes sense to "save" money by building poorly insulated houses because the discounted cost of the extra energy over the lifetime of the house is cheaper than insulating. read: http://www.ratical.org/many_worlds/cc/Lietaer.html

We’ll continue to extract our natural resources until we’ve extrapolated all of our possible resources and maximized our human capital. Our laws, social organizations, and protests will not change this very basic fact. As long as our money is created through debt, then we will become victims of our own invention.

But it is possible to create a monetary systems that addresses these problems.

For example, the demurrage charge is a concept developed by Silvio Gesell about a century ago. His idea was that money is a public good -- like the telephone or bus transport -- and that we should charge a small fee for using it. In other words, we create a negative rather than a positive interest rate. (read: www.reinventingmoney.com)

Rational people would find ways to invest their resources in the things that hold their value over the greatest period of time. They would invest in products and resources that would produce the greatest value over a given time. Rather than buying a cheap car or computer to be replaced in two years for a small amount, and invest the rest, people would invest in the BEST vehicle that would be easiest to maintain and hold its value the longest. Rather than producing more that would end up in the dump, we would produce less.

The possibility of creating such a currency has not been possible until the computer age.

Another great example of a currency that is not bound by the false notion of scarcity is Time Dollar concept perpetuated by Edgar Cahn.

To be short of money when there's work to get done is like not having enough inches to build a house. We have the materials, the tools, the space, the time, the skills and the intent to build ... but we have no inches today? Why be short of inches? Why be short of money? (read: http://www.openmoney.org/)

If you are underemployed, you may choose to volunteer for time-dollars that are accepted in your community. In this case, wealth and efficiency are actually maximized in an inefficient system. You would be earning money when you couldn’t have otherwise earned it. Perhaps you need some gardening done around the house. You have two currencies—one the US dollar, and a community currency earned from tutoring a neighbor’s child. You found tutoring a child inherently valuable—work you would’ve done regardless of the pay. It would make more sense to use a currency that you earn for doing something you find valuable and save your US dollar to pay for something that is accepted by a company that only accepts US dollars.

The time dollar concept allows people to earn time dollars by providing their time. The time dollar currency is actually created when somebody donates his or her time. It is still scarce because people do not have an indefinite about of time to spend. Time Dollar communities create wealth where wealth didn’t exist and builds social capital.

Another example. The lack of available capital to the working poor is widely accepted as one of the greatest impediments to economic progress in much of the developing world. A currency that focuses on credit-worthiness of its participants and allows business to extend credit to one another through information about their neighbors and the products and services they provide could be a far better currency than one that charges 40% per annum. (I’ve written more about this and can send you more info if you like)

Many of these same developing countries are rich in social capital. People know whom to contact in the case of any situation and nobody goes homeless because people are profoundly intertwined and attached to their community.

In the United States, however, we are becoming ever more isolated from our neighbors. A local currency that encourages neighborhood interaction would provide value beyond the scope of the mere transaction.

My point is that the world has many needs. Each need represents a market and should be addressed with its own solution; it’s own tool. I’ve cited these examples, not as comprehensive evaluation of alternative currencies, but to demonstrate how our monetary system affects our values and drives our actions.

There are only two principles required to bring about massive social change. It starts with an awareness of the problems inherent in our money system. The solution follows naturally.

Two Principles

1. We must recognize the role that a monetary system plays in our society in how it creates and distributes wealth and reinforces values. The consequences of the system of money should be understood and its function transparent.

2. Currencies should be free to compete in the marketplace so that the currency that brings the greatest value to its users, both individually and collectively, will be adopted, challenged, changed, and improved.

Our monetary system is deeply embedded in our collective psychology. By continuing to operate under the principles of our established monetary system, we unconsciously reinforce the unsustainable practices and values of an antiquated system.

Ironically, the path out of our cycle of debt and scarcity doesn’t require sacrifice. Change won’t come from protests, wars or conflict. Change will come simply from a realization that there are alternatives and our desire to act in the interest of our communities and ourselves.

Complementary currencies, to be effective, must provide value that our current monetary system doesn’t provide. They should be created to solve problems and to fulfill needs of those who use it. As we begin to realize the cost and benefits derived from the currency they use, we will naturally choose the currency that provides the most value.

The ability to address needs and fulfill them is something that our market economy has taught us to do very well. Enormous time and resources have been placed in figuring out how to recognize and address our needs. It’s remarkable that business hasn’t identified money itself as a product that can be used to bring greater value to its customers. We need to use business practices, and the force of the market economy, to create a currency that effectively addresses the problems with out current monetary system and provides a viable alternative.

It is possible to unleash a virus into the system. It is possible to show that a few people can bring about a new age of positive social values and increased wealth. A heightened awareness about the role of money in our society has the potential to fundamentally change the world that we live in.

It is possible that a new age of increased prosperity for all, greater trust and cooperation, respect for all people, and the appreciation of our environment can be collectively realized. We only need to see it.

TimeBucks doesn't have all the answers, but it's a step in the right direction. By observing the money we use and continuing to make it better, we can start to create the world that is in harmony with our highest ideals.