"Our objective should be to create exchange media issued on the basis of human service and Earth service rather than acquisitiveness and domination."
In addressing the mega-crisis which confronts the world today, it should be clear that decisive changes will need to be made in the methods we humans use to distribute power and allocate material resources. As pointed out earlier, the present dominant structures of money and finance, by their very nature, promote the concentration of power into fewer and fewer hands, increase the disparity in the distribution of wealth, channel the vast majority of the earth's resources into wasteful production, and force both social and ecological degradation. The pinnacle of power today is the power to issue money. If that power can be democratized and focused in a direction which gives social and ecological concerns top priority, then there may yet be hope for saving the world.
This chapter describes three proposals for achieving that. These proposals have two primary features: (1) the use of local currencies to facilitate trade and (2) the empowerment of groups which are working to serve the common good. Although they are described in terms of circulating certificates or notes, these exchange media could also take the form of credits in a mutual credit system or some combination of account credits and circulating notes.
The basis of issue of money has, in times past, been more neutral than at present. Now, with the issuance of money controlled by the central government/central bank nexus, it has become a mechanism by which these elements control the application of human and capital resources and allocate them to projects which are usually self-serving, wasteful of resources, and often downright destructive. Our objective should be to create exchange media issued on the basis of human service and Earth service rather than acquisitiveness and domination.
The exchange media described below put control of the exchange process into the hands of the people, giving them more choice over how they will apply their energies and resources. The willingness of others in the community to accept the new exchange media in payment for goods and services, especially the necessities of life, does two things -- it encourages the application of people's energies and resources to life-sustaining activities, and it provides the community with a medium of exchange that by its very nature is abundant, democratic, and locally controlled.
Earth Rescue Receipts (ERR's) are paper receipts for contributions made to what we will call "good work" organizations. ERR's would be issued by any organization which is a member of a consortium of mutual aid, social action, community improvement, environmental and other such organizations. These receipts, issued in small denominations, would simply acknowledge the donation of money, materials, equipment or services to a member organization. They would provide evidence that the donor has done "good work." Unlike the usual receipt form used to acknowledge a donation or payment, ERR's would be printed in standardized denominations, say $5, $10, $20, and $50, and would bear the name and seal of the consortium. When a donor makes a donation, the receipt would be dated and signed and/or validated by the recipient organization and given to the donor. Such a receipt might look like the one shown in Figure 15.1.
Except for the standard denominations, the steps described above are much the same as current practice. So what are the key features of the ERR proposal which make it empowering? Well, what if the donor, who now holds the ERR, were able to get something of value for it? Suppose some local businesses were to agree to accept ERR's in trade? In that case, ERR's could become a circulating currency. The original donor would not be any poorer for having made the donation, but would simply have "gotten the ball rolling." An ERR would be considered to be a "temporary receipt" (TR) which could be spent. Thus, ERR's would pass from hand to hand, enabling any number of trades.
Anyone wishing to make a permanent donation would take ERR's to any organization which is a consortium member and exchange them for a "permanent receipt" (PR) which s/he would hold for tax purposes.  This is the means by which ERR's would be extinguished and go out of circulation. If at any point in time there were an excess of ERR's in circulation (as evidenced by discounting or refusal of ERR's in the marketplace), the consortium would suspend further issuance until permanent donations caught up with temporary donations and reduced the amount of ERR's in circulation to the proper level. Figure 15.2 is a pictorial illustration which shows the process of issuance, circulation, and redemption of Earth Rescue Receipts.
As the positive effects of this process become more evident, more and more people will want to share the burden of community improvement, either by making additional donations to the member organizations, or by accepting ERR's in trade and in the payment of debts. Growing acceptance of this exchange medium, and the increasing local prosperity which it brings, will encourage greater and greater amounts to be contributed to the "good work" organizations and encourage work which is in the public interest. As the use of ERR's expands and proliferates, this process could largely replace taxation as a means of supporting the common good. Besides providing a local medium of exchange, it would provide a more participatory process for local community finance, eliminating the need for many government expenditures and transfer payments.
When money is an object of political control, as it has become in every country of the world, the issuing authorities will attempt to prevent the discounting of their notes and the loss of their gold reserves by redemption. They will refuse to convert the paper currency into gold and declare the notes to be "legal tender." The effect of these measures is to obliterate the value standard and force acceptance of the inferior paper currency. When this happens, sellers have no way of protecting themselves from harm except by raising prices. Without a forced acceptance of the currency, there can be no inflation. Thus, inflation, which consists of higher prices generally, is really a symptom that the market is devaluing the official currency. Since traders are required by law to accept it at face value, the only adjustment they can make is to raise their prices.
So the answer to your question is that, since ERR's need not be accepted at face value, an excess of ERR's in circulation will cause them to be discounted or refused by sellers in the market. If people see this happening, they will tend to ease off on making initial donations of goods and services because the ERR's they would receive could not be spent for full value. At the other end of the line, permanent donors who can make use of the tax deduction will tend to accept more ERR's to donate for tax purposes since they can acquire ERR's more cheaply. For example, if a one dollar ERR is being accepted in the market at only 90 cents, a permanent donor could obtain a $1 tax deduction at a cost of only 90 cents. Whenever the market is free to discount the value of a note (accept it at less than face value), this fact makes that currency system self-adjusting.
So to sum up, what can happen with an alternative currency is that it might not be accepted at par with the unit of account or official currency. In the past, discounting of private currencies below par has occurred. Such discounting is the result of improper issuance. In the case of Earth Rescue Receipts, the amount issued is strictly determined by the amount of value already donated, which itself is a measure of the community's willingness to support the activities of the issuing organizations.
The deciding factor on the amount which will remain in circulation is the time period within which the receipts will be deemed to be valid in trade. This could be six months, a year, or forever. If an expiration date is specified, an ERR would no longer be accepted in trade after that date, but the holder could still exchange it for a permanent receipt and obtain the associated tax deduction. The experience of the market should make the determination as to whether or not an expiration date should be used.
While a local currency system such as the Earth Rescue Receipts described above might approach more closely the ideals for monetary transformation set forth previously, a funded local currency might be initially more acceptable and less vulnerable to official interference. It would probably provide better tax advantages to donors under current IRS regulations. It would be similar in many ways to the Earth Rescue Receipts and could work as follows:
A Cooperative Community Service Credit system provides another way of
mobilizing resources to serve community needs. It too is similar to the
Earth Rescue Receipt, but focuses more specifically on volunteer services and
specific projects. There is always a limit to the amount of time and energy
which volunteers can afford to donate. A service credit system attempts to
transcend the limitations of reliance upon volunteer service by acknowledging
the value of services rendered, without the payment of scarce money, but by
issuing service credit receipts. Businesses, as well as individuals, in the
community could be encouraged to accept service credits in partial or full
payment for the goods and services they offer for sale. The issuing
organization(s), then, would accept the receipts from others either as
donations or in payment for some of the services it provides.
Let's consider a possible example. Let's call the value unit in this system a "SERV." A SERV would be equivalent to one dollar's worth of service. A group of social action, community, environmental, self-help, and mutual-aid organizations might agree to jointly publish a periodical for education and outreach. All work would be paid in service credit receipts (SERVS) redeemable by the publication for copy space in the publication, advertising, and other related services, such as typesetting, layout, mailing list management, etc. The more space a member organization wants in the magazine, the more service credit receipts it must deliver to the consortium. It can get them as donations, or earn them by doing work on the publication, or by selling some of its services. Figure 15.4 shows the creation and circulation of Cooperative Community Service Credits.
Businesses can earn SERVS by accepting them in trade, either from the individuals who have earned them by working on the publication, or from other businesses which have accepted them in payment. The businesses can then donate the receipts to any member organization, or use them to pay for advertising in the publication. Businesses, by accepting the receipts in partial payment for their goods and services, would stimulate their own business just as the use of a discount coupon does, but unlike a discount coupon, service credit receipts can be passed along (spent) for value, or donated to promote activities of benefit to the community. Such a system might be started by making an announcement like the following.
YOUR CHANCE TO SUPPORT
A HEALTHY COMMUNITY
AND A CLEAN ENVIRONMENT
ANNOUNCING PUBLICATION OF THE COMMUNITY WEEKLY
All of our workers are paid for their work in "service credits," or "SERVS." You can support them and our publication by accepting our service credit receipts as you would your own discount coupons, for, say 20%, 30%, 50%, or more, off your regular prices. But, unlike discount coupons, service credit receipts can be used by you to buy things you need. You yourself can spend SERVS for goods and services offered by other participating businesses, or you can use them to buy valuable advertising in our magazine, COMMUNITY WEEKLY. You can also use SERVS to pay for our typesetting, design, and layout services. We can do your advertising flyers, menus, business cards, or forms. Or, you might prefer to donate SERVS to any of our member organizations which you might wish to support.
Call today and let us add you to our list of participating businesses. We will periodically publish this list in our magazine, indicating for each business, the percentage of payment which it accepts in SERVS. The higher the percentage, the more business you'll attract. And remember, it costs you nothing, because you, in turn, can spend the SERVS you accept. By accepting COMMUNITY WEEKLY service credits, you'll be helping the magazine to improve the community and you'll be boosting your own business. EVERYBODY WINS!
Each business would sign an agreement form such as the one below:
___(Name of business)___ agrees to accept ___(Name of consortium/publication)___ service credit receipts (SERVS) in partial payment for all products and services which it offers, to the extent of _____% of the purchase price. ___(Name of consortium/publication)__ agrees to accept its own service credit receipts at face value in payment for advertising or other services which it customarily offers, to the extent of _____% of its standard fees.
This agreement may be canceled by either party at any time upon written notice.
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