The Butterfly Economy

1. The Butterfly Economy How communities are building a new world from the bottom up. Thomas H. Greco, Jr. Louisville, Colorado April 16, 2011

2. The Vision and the Reality • The world is going through a metamorphic process • The Industrial Era is at an end • The new Convivial Era is emerging Thomas H. Greco, Jr.

3. Three Levels of Change • Individualconsciousness—values, attitudes, and beliefs. • Relationships with the earth and with each other—transcending indoctrination and cultural conditioning. • Structures—building new structures and institutions that better serve our needs (political, economic, social). Thomas H. Greco, Jr.

4. “Green Shoots” • Transition Initiatives • Sustainability Groups • Social Networks • Community Currencies and Cashless Exchange systems • Farmer’s Markets • Community Supported Agriculture • Peer-to-peer networks Thomas H. Greco, Jr.

5. The Old World Order Based on belief in • Separateness • Scarcity • Violent conflict and competition • Command and control • Elite rule • Immutable and “sinful” human nature Favors large scale hierarchical organization and centralized control to impose order and mitigate risks Thomas H. Greco, Jr.

6. The “New World Order” • Based on the same values and mindset as the “Old World Order” • Further centralizes power and consolidates wealth, by weakening national governments and bringing them under the control of global financial and industrial corporations that are in the hands of a political elite, leading to A global totalitarian “super-state” Thomas H. Greco, Jr.

7. The “New World Order” ”The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole... Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money…” - Prof. Carroll Quigley, Georgetown historian, mentor of former President Clinton, and author of Tragedy & Hope: A History of the World in Our Time, 1966 Thomas H. Greco, Jr.

8. The New, “Convivial” World Order Based on belief in: • Human Unity & The Oneness of all life • “Abundant sufficiency” • Non-violence, sharing, and cooperation • Collective intelligence and community self-government • Potential for human improvement • Personal freedom Favors diverse, decentralized, small-scale systems and communities that enable freedom and self-expression. Thomas H. Greco, Jr.

9. Societal Metamorphosis • From • Superfluous accumulation • Violent conflict, and • Wasteful consumption • To • Sustainable conviviality Thomas H. Greco, Jr.

10. The Old “Caterpillar” Economics Promoted • Continuous growth of economic output • Quantitative measures of value and well-being • Capital accumulation • Resource consumption • Labor productivity • Growing disparities of wealth and power The Consumer Society Thomas H. Greco, Jr.

11. The New “Butterfly” Economics Promotes • Steady-state economic output • Qualitative measures of value and well-being • Restoration of the commons • Resource productivity, sharing and regeneration • More equitable distribution of wealth and power The Convivial Society Thomas H. Greco, Jr.

12. Mega-CrisisA Unique Turning Point in History • Climate Change • Greenhouse gasses > Global warming/cooling? • End of Cheap Energy • Increasing costs of production and transportation • Resource Depletion • Fresh Water, Soil fertility, Minerals, Forests, Marine resources, etc. • Pollution • Chemical,, nuclear, noise • Industrialization of the developing economies • Financial Disruption • Bankruptcies & Unemployment • Currency debasement/Inflation • Debt growth • General Institutional Failure Or Thomas H. Greco, Jr.

13. Disturbing RealitiesThe Disappearing Middle-class • The bottom 50% of income earners in the U.S. own less than 1% of the nation’s wealth. • 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans. • The ratio of executive's pay to worker's pay was ~30 to 1 in 1950. Since 2000, that ratio has exploded to between 300 to 500 to one. • Squeeze on labor. A garment worker in China earns 86 cents/hour, in Cambodia 22 cents/hour. • Over 1.4 million Americans filed for personal bankruptcy in 2009, 32% more than in 2008. Thomas H. Greco, Jr.

14. Wealth Distribution more unbalanced than Income Distribution (2004) Wealth Income Thomas H. Greco, Jr.

15. Rising Income Inequality Thomas H. Greco, Jr.

16. What Must Be Done? • Transcend the Political Debt-money System • Rebuild Local Economies • Phase out our Dependence Upon Fossil Fuels • Decouple Livelihood/Income from Work • Distribute Production More Equitably • Stabilize Population Thomas H. Greco, Jr.

17. Money-the Key Factor • Specialization of labor means that we must acquire most of what we need by trading with others. • Money has been politicized and monopolized, and made an instrument of power. • Whoever controls money controls everything. Thomas H. Greco, Jr.

18. Money – the Primary Lever for Centralizing Power and Concentrating Wealth • Whoever controls the volume of money in any country is absolute master of all industry and commerce. - President James A. Garfield • Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people. - Sir Reginald McKenna, former President of the Midland Bank of England • …I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale. - Thomas Jefferson, 3rd US President, in a letter to John Taylor Prepared by Thomas H. Greco, Jr.

19. Dysfunctions of Political Money and Banking • The Growth Imperative Institutionalized interest/usury forces cancerous growth. • Money is kept artificially scarce • Money is mis-allocated • Money is expensive Concentrates power and wealth in the hands of a few unelected people who are unresponsive to the needs and wishes of the people. Thomas H. Greco, Jr.

20. The Central Government-Central Bank Nexus • The Bank of England was the prototype central bank. • The banking cartel enjoys special privileges granted by the government. • The government, in return, gets to spend as much as it wants without regard to limited tax revenues (by deficit spending). The Money Power is the Mother of All Monopolies Thomas H. Greco, Jr.

21. The Substance of Modern Money is Credit Modern money is nothing more than credit - a promise. Money typically takes the form of • Bank deposits that are created when banks make “loans,” or • Currency notes emitted by the central bank. Why do we trust these forms of money? Thomas H. Greco, Jr.

22. The Creation of Bank Debt-Money as Deposits Bank Banks create money in the form of “deposits” or account balances when a “loan” is granted. Account Deposit (liability) Debt Money Mortgage Note (asset) Mortgage note As interest accrues, the supply of money available for repayment becomes deficient. Thomas H. Greco, Jr.

23. F=P(1+i)n Prepared by Thomas H. Greco, Jr.

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25. Growth of One Dollar at Compound Interest Thomas H. Greco, Jr.

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27. United States National Government Debt $14.3 trillion as of April 1, 2011 (not including guarantees) Thomas H. Greco, Jr.

28. U.S Government Revenues minus Spending Thomas H. Greco, Jr.

29. Systemic Failure of Conventional Money and Banking • The political money system is shaking itself apart • Bubble-and-bust cycles are becoming ever more extreme • Explosive expansion of debt and debasement of the money Bubble Bust Thomas H. Greco, Jr.

30. Essential Elements of the Political Money System • Credit Monopoly by the banking cartel headed by • The central bank, whose currency is granted the privileged status of • Legal tender • Credit money lent into circulation at interest, which requires the • Endless expansion of debt • By lending to either the private sector or the public sector.

31. Banks The Credit Commons Public sector “loans” Private sector “loans” “loans” Central Government The credit commons is the virtual pool of credit that enables economic exchange. In the current system, it can be accessed only by “borrowing” from banks!

32. Parasitic Drains Finance War and Enrich a Few The Economy Inflation Interest Taxes Thomas H. Greco, Jr.

33. Unreliable Bank Credit • The availability of credit to the productive sector, especially to SMEs, is becoming ever more uncertain and unreliable • The political money system favors the demands of • BIG banks, • BIG corporations and • BIG government.

34. Building the Butterfly Economy Toward Sustainability, Relocalization, and a Dignified Life for All

35. Community Empowerment Through the Liberation of Exchange and Finance How to Insulate, but not Isolate, the local economy to: • Enhance economic vitality, • Reduce exploitation, • Enable self-determination, and • Optimize the community's standard of living and quality of life? Thomas H. Greco, Jr.

36. Relocalization - Building Safe Harbors A rising tide may lift all boats, but the tidal wave of globalization smashes all but the biggest.

37. Personal and Community ActionUse your power! • Invest in the Butterfly, Not the Caterpillar. Apply available resources to strengthen your community. • Reclaim the Credit Commons by Organizing Local Cashless Exchange Associations Share * Cooperate * Organize Thomas H. Greco, Jr.

38. From Wall Street to Main Street • Spend locally • Save locally • Invest locally Apply dollar resources to projects that: • Make the local community more resilient and self-reliant. • Provide greater local security in food, energy, housing and other necessities. • Improve the overall quality of life. • Protect against inflation of the dollar. Thomas H. Greco, Jr.

39. How to use your surplus $to promote local ownership andimport-substitution • Lend it • Community loan funds • Peer-to-peer micro-lending • Invest it • Productive real estate • Investment clubs • Cooperatives • LLCs • Give it away • Crowd sourcing Thomas H. Greco, Jr.

40. Emergent Exchange Alternatives • Trade Exchanges and • Private alternative currencies are well positioned to provide SMEs and local economies with • Reliable credit and • Supplemental exchange media, • Based on the exchange of real value By monetizing the local value-added Thomas H. Greco, Jr.

41. Mutual Credit Issuance and Circulation Member - Issuers Member - Non-Issuers Give each other credit Participants utilize their own credit directly within a network of trust. They allow one another to draw upon the common credit pool. Prepared by Thomas H. Greco, Jr.

42. The WIR Model The WIR Business Circle Cooperative has demonstrated • the power of direct credit clearing both in times of financial crisis and in normal times, and • its competitive superiority to conventional money and banking in facilitating the exchange of goods and services among businesses.

43. A SuccessfulMutual Credit Clearing Association • The WIR business circle cooperative (Wirtschaftsring) was founded by the “entrepreneurial middle-class.” in Switzerland in 1934 as an answer to the money scarcity of the Great Depression, and still thrives after 75 years. • 60,000 business members • $2 billion in transactions cleared annually. Prepared by Thomas H. Greco, Jr.

44. Commercial Trade (“Barter”) Exchanges • In 2008, about 250,000 North American companies conducted barter transactions worth more than $16 billion. • About $11 billion of that involved small and medium sized businesses. Thomas H. Greco, Jr.

45. A Regional Currency Based on Credit Clearing Members of the mutual credit clearing circle can use their collective credit to provide a supplemental currency for use by the general population of the region. Prepared by Thomas H. Greco, Jr.

46. Community Currency Issuers and Their Basis of Issue • Municipalities • Anticipated tax revenues • Fees charged for services • Businesses • Capacity to provide goods and/or services • Associations of businesses and/or local governments • Cooperative agreement to issue currency, based on any or all of the above Thomas H. Greco, Jr.

47. Mutual Credit Clearing Associations and Community Currencies Provide Exchange Media That Are: • Abundant • Community controlled • Democratically allocated • Interest-free • Self-adjusting • Stable and Sustainable Thomas H. Greco, Jr.

48. My 5-stage Prescription for Community Economic Development • Institute measures that promote import substitution • Organize a credit clearing association to provide an alternative means of payment, independent of any political currency or banking establishment • Issue a supplemental regional currency • Develop social capital and basic support structures that strengthen the local economy and enhance the community’s quality of life • Develop an independent value standard and unit of account Thomas H. Greco, Jr.

49. Benefits of Community Currencies and Exchange Credits • Provide an independent means of payment, reducing dependence upon borrowing from banks, thus reducing the risk of insolvency and saving interest costs. • Can circulate throughout the local area, supplementing the supply of scarce official currency and bank credit. • Enable local businesses to better compete with large corporate chains. • Enable more complete use of available labor and production capacity. Thomas H. Greco, Jr.

50. Projects and Organizations • Transition in Action (378 groups) • Move Your Money • Slow Money Alliance • Green America • Business Alliance for Local Living Economies (BALLE) • The American Independent Business Alliance (AMIBA) • Common Good Bank • e3 Bank Thomas H. Greco, Jr.