Planned obsolescence legislation should be an easy win for the degrowth movement

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The degrowth movement is a global movement that advocates for a transition to a less consumerist and more sustainable way of life. One of the key tenets of the degrowth movement is opposition to planned obsolescence.

Continue reading “Planned obsolescence legislation should be an easy win for the degrowth movement”

7 examples of Sponge Cities, Seawalls, Cool Roofs

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Preparing for life after overshoot in cities and towns means preparing for floods, sea level rise, hurricanes, heat waves, fires or earthquakes. Not easy, but essential. This describes 7 examples of sponge cities, seawalls, and cool roofs. Continue reading “7 examples of Sponge Cities, Seawalls, Cool Roofs”

Strengthening Local Resilience in a World of Floods, Fires and Storms

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Local resilience is in the news. Nobody who keeps up with world news will have missed the devastation of the Lahaina, Maui fire. We received on our televisions graphic pictures of mudslides in Southern California and fires in Greece.

All very interesting to watch. But not so good if it happens to you. Those in Hawkes Bay will be wondering if there was anything else they could have done to prepare for Cyclone Gabrielle which turned them upside down.

Continue reading “Strengthening Local Resilience in a World of Floods, Fires and Storms”

Banks’ Dangerous Power over What is Mined, Manufactured or Grown

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The power of banks to create money as interest-bearing debt has a dangerous influence on the global economy. By allowing commercial banks to do this, we give them the power to decide what resources are mined, manufactured, and grown. And because they can also issue loans for real estate, banks effectively control the flow of money in our economy.

What? You say banks create money? Yes they do indeed and the Bank of England has explicitly stated this. And then they charge interest on it? That sounds like they have a ridiculous amount power. Well actually, they acquired it through several centuries of land enclosures in England. The land barons and industrialists became bankers and they affected the politicians who obliged by changing laws. The three groups also influenced universities’ economic teaching.

Margrit Kennedy in her book Interest and Inflation Free Money has described how money creation leads to an unequal distribution of wealth. Others have explained how it leads to destabilisation of the global financial system. Ultimately, this can cause economic hardship for many people and communities.

Douthwaite and Rowbothan have explained how it leads to a growth imperative.

The power of banks is immense when it comes to the creation and flow of money.

The Negative Consequences of Allowing Banks to Create Money as Interest-Bearing Debt


So let’s summarise the negative consequences of allowing commercial banks to create money as interest-bearing debt . This system gives these banks a significant amount of power and control over our economy.

  1. Firstly, it can result in an unequal distribution of wealth. As banks decide who to issue loans to and at what interest rates, they can inadvertently contribute to the concentration of wealth. This creates a vicious cycle where the rich get richer, while the poor struggle to access necessary funds.

2. Secondly, the reliance on debt-based money creation can lead to a high level of instability in the financial system. As banks issue loans, they expand the money supply and increase the overall level of debt in the economy. If borrowers are unable to repay these loans, it can trigger a domino effect of defaults, potentially leading to financial instability and economic downturns. The contagion can spread throughout the entire financial sector.

Commercial banks’ interconnectedness can amplify the transmission of risks. This interconnectedness can also contribute to the concentration of power. Large banks may become “too big to fail” and require government bailouts, putting taxpayers at risk as seen in the global financial crisis of 2008.

3. Allowing banks to create money as interest-bearing debt is the structural fault responsible for the growth imperative. How does this happen? Well, since banks create the principle but not the interest, there is never enough money in the whole system to pay interest. This means someone misses out and has to get another loan. This expands the money supply. So the economy has to expand. More mining, more material throughput, more energy, more trashing of the planet. More fast food, fast fashion and fast cars.


4. Lastly, this system allows banks to determine what resources are prioritised for extraction, manufacturing, and cultivation. This means that banks can indirectly influence what products are produced and consumed, potentially leading to overproduction in some sectors and underinvestment in others. Sustainable industries are ignored in favour of short-term gains.

Commercial banks, with their power to create money as interest-bearing debt, have the ability to create all these systemic risks in the economy.

But for the rest of this blogpost let’s just focus on the last effect.

Commercial Banks’ Dangerous Power over Business Investment

By allowing banks to create money as interest-bearing debt, we are essentially granting them the authority to determine what resources are extracted, manufactured, and cultivated.

This influence extends beyond simply financing these activities; it encompasses the very decisions regarding what should be produced and consumed. And all this without any concern for the environmental or social consequences of their decisions.


And it is not just the primary industry like dairy they fund. There are a number of industries adjacent to dairy that need loans too e.g. a firm that produces special paint for dairy sheds. Through the issuance of loans, commercial banks control the flow of money in our economy.

They have the power to fund businesses, drive economic growth, and allocate capital to various industries. Additionally, banks play a crucial role in providing loans for real estate, effectively shaping the housing market and influencing property prices.

There is an obvious problem here. Banks, being commercial enterprises, have no concerns about whether planetary boundaries are overshot. Bank decisions can result in:-

  • Soils ruined because agribusinesses have planted monocultures.
  • Greenhouse gases increased by banks lending to fossil fuel companies.
  • Clearing forests for agriculture (land use change). e.g. changing the Amazon from a carbon sink to a carbon source.

As degrowth in rich countries is becoming essential in a full world, degrowth advocates need to understand the role of banks in getting to this situation.

Banks’ Role in Determining What Gets Produced and Consumed


Through their lending decisions, commercial banks shape the direction of our economy. They can choose to invest in industries that align with their profit-making goals, often resulting in the prioritisation of sectors that generate higher returns. This can lead to overproduction in certain industries like the fashion clothing industry, while other essential sectors may be left underinvested and struggling.


By favouring certain industries through loans and financing, they determine which businesses can thrive and which ones struggle to survive. This can impact the variety and availability of goods and services in the market, limiting consumer choices and potentially distorting the economy.

Banks influence the mining industry

In the realm of mining, for example, banks may be more inclined to fund projects that promise quick returns, leading to environmentally harmful extraction practices. This leads to an emphasis on large-scale mining –operations that yield higher returns.

A Chinese mining company MMG wanting to mine zinc, copper and lead in 2021 found itself at odds with the conservation movement as it was to impinge on rainforests with national heritage value.

In the Dominion Republic of Congo campaigners say, “The mining industry has ravaged the landscape of the DRC. Millions of trees have been cut down, the air around mines is hazy with dust and grit, and the water has been contaminated with toxic effluents from the mining processing.”

It is clear this approach can have adverse socioeconomic and environmental consequences. It may disregard the long-term sustainability of resource extraction and neglect the needs and rights of local communities. While this can drive economic growth in the short term, it may not serve the long-term interests of society.

Banks decide what is manufactured

In manufacturing, a focus on industries with higher profit margins might prioritise industries that outsource labour or cut corners on quality.

The fact that it is profitable means it’s fine to manufacture private planes. Or more cars. Banks in Germany or Japan funded the cars imported to New Zealand. We have 895 vehicles per 1000 people (top in the world) whereas the Democratic Republic of Congo has 4. (Hedges Company 2023)

The fact that it is profitable means that outside electric heaters are not just produced but heavily advertised on television. What a waste of precious electricity!

Banks implicit in environmental damage from agribusiness including big dairy

Similarly, in agriculture, banks might favour large-scale, monoculture operations over smaller, sustainable farming practices due to their potential for higher profits. This preference can lead to an emphasis on large-scale, high-yielding practices of industrial agriculture. But they contribute to deforestation, loss of biodiversity, climate change, animal abuse and soil degradation.

This preference for industrial agriculture can sideline sustainable and environmentally friendly alternatives, such as organic farming or regenerative agriculture. Additionally, small-scale farmers and agricultural enterprises may struggle to secure loans, limiting their ability to invest in modernisation and productivity improvements.

Under the current system, commercial banks tend to favour lending toward sectors that promise high returns or quick profits.

In New Zealand bank loans to big dairy have resulted in pollution of the water table of Canterbury and in unswimmable rivers. As prices for milk solids rose, so did our dairy numbers. So over the last 30 years the number of dairy cows has doubled.

Climate Justice Taranaki’s spokesperson says, “For decades Maori have called on farmers to clean up their act and return stolen lands but we have just seen further pollution of waterways, reefs, soils, air and the spread of inequality in our communities by rich, powerful landowners.”

So what have been the effects worldwide? It’s cumulative. Humans and their livestock now account for 96% of mammals biomass, according to a 2018 study. This leaves wild animals at only 4%. Most of the world’s agricultural land is for raising animals for food for our species.

How can the influence of banks be neutralised?

It takes a government decision to slow or ban damaging industries. For example for the first time in history, Australia in February 2023 banned a coal mine north of Brisbane. And under Prime Minister Jacinda Ardern, New Zealand stopped issuing permits for oil exploration.

The only other way is for climate action organisations like 350.org to spend hours of volunteer time campaigning to get commercial banks to stop lending to fossil fuel companies. Ethical investment firms also steer their investors away from fossil fuels.

A Comparison of Business Loans versus Real Estate Loans


When it comes to commercial banking, two types of loans stand out: business loans and real estate loans.


Business loans are designed to fund various business activities, such as expansion, equipment purchases, and inventory financing. They enable businesses to invest in their operations and create job opportunities. Business loans can fuel entrepreneurship and support the development of new products and services.


On the other hand, real estate loans are primarily used to finance property purchases and development. These loans have a significant impact on the housing market and property prices. They influence not only homeownership rates but also the availability of rental properties and overall housing affordability.


Banks benefit greatly from rising land prices. That is why they love real estate loans. Small business owners, in order to get a loan, often have to mortgage their house, showing again that banks prefer the security of land.

The Need for Reforms to Address the Root Cause of the Problem


It is clear that the power banks possess in creating money as interest-bearing debt has far-reaching implications. These implications include an unequal distribution of wealth, an imbalanced allocation of resources, systemic risks within the financial system, damage to the environment, and displacement of indigenous people.

Only through addressing this fundamental problem can we hope to achieve a fair and sustainable economic system that benefits all individuals and communities.

We need a system where the allocation of resources is not solely driven by profit motives but also takes into consideration the needs of society as a whole.

It is going to take some powerful thinking and tough action. Through comprehensive reforms, we can pave the way for a more inclusive and sustainable future, where the creation and allocation of money serve the needs of all individuals and communities.

15 sweltering heatwaves from 1900

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Heatwaves are periods of abnormally hot weather that can last for days or weeks. They can be deadly, especially for elderly people, young children, and people with chronic health conditions. Heatwaves can also cause power outages, water shortages, and crop failures.

There have been many deadly heatwaves throughout history, but some of the most notable ones occurred in the 20th century. Fortunately, few have been in New Zealand! Continue reading “15 sweltering heatwaves from 1900”

Local currencies, community currencies are useful when money is short

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When money is in short supply, or when local communities want to ensure there is more resilience, someone often starts a community currency. Some survive, others don’t. One of the best was the Wōrgl shilling which was so successful it scared the banks. They successfully pressured the central bank to ban it. Here is a list of various currencies, many of which are still in use:

TitleCountryDatesReason Why It Stopped
Wörgl SchillingAustria1932-1933Too successful. Banks got into action. Outlawed by the Austrian National Bank
Ithaca HoursUnited States1991-presentStill in circulation
Bristol PoundUnited Kingdom2012-presentStill in circulation
ChiemgauerGermany2003-presentStill in circulation
Toronto DollarCanada1998-2013Lack of widespread adoption
BerkShareUnited States2006-presentStill in circulation
SardexSardinia2010-presentDigital currency, still in circulation. They employ 60 people
Baroon DollarAustralia2003-2013Decline in usage
Kelantanese dinarMalaysia2006-presentStill in circulation
Sol VioletteFrance2011-presentStill in circulation
Brixton PoundUnited Kingdom2009-presentStill in circulation
Lewes PoundUnited Kingdom2008-2013Lack of sustainability
TuminBrazil1994-2010Widespread acceptance of national currency
TorekesBelgium2005-2014Lack of support from local businesses
Damanhur CreditItaly1995-presentStill in circulation
Calgary DollarCanada1996-presentStill in circulation
EuskoSpain2013-presentStill in circulation
WIR FrancSwitzerland1934-presentStill in circulation
Hudson River HoursUnited States2006-presentStill in circulation
Linden DollarGuyana2003-presentStill in circulation

Introduction

Local currencies are also known as community currencies or complementary currencies. It is no surprise that they have a rich history of being used in various places and times to stimulate local economies and strengthen community ties. These currencies operate alongside national currencies and are typically used within a specific geographic area.

Citizens have implemented them for a variety of reasons, mostly wanting to stop money from leaving their area. Spending in a local currency saves using precious national currency.

While some local currencies have thrived and continue to be in circulation, others have faced challenges and eventually ceased to exist. In this exploration, we delve into 20 examples of local or community currencies from around the world, highlighting their country of origin, duration of use, and the reasons behind their discontinuation.

Local Currencies in Historical Context

One notable example of a local currency is the Wörgl Schilling, introduced in Austria during the Great Depression of the 1930s. This currency was used to combat high unemployment and stimulate economic activity. It was soon called “The Miracle of Wōrgl”.

It arose after some decades of Gesellian movement. Silvio Gesell was an Argentinian businessman whose export business suffered greatly during a depression. Those who had money found that it increased because of interest. Those who had goods watched them deteriorate. He concluded that money should “decay like potatoes and rot like iron”.

So the Mayor of Wōrgl designed the local currency to circulate fast and it did! Anyone held it for a month would have to put a stamp worth one percent of its value on it to validate it. Consequently, the people of Wōrgl spent it fast; the local currency circulated many times faster than the national currency.

The local currency operated for only fifteen months. But look at the success!

“Taxes, in arrears since 1926, were repaid. Seven streets were rebuilt and asphalted, 12 roads were improved, the sewer system was extended, trees were planted and forests were improved. The construction of a ski jump was started in January 1933, along with the water basin for the fire department. A bridge in the town still bears the inscription Built with Free Money.”

Irving Fisher in his book Stamp Scrip

The currency was such a success in so many ways that over 200 surrounding towns wanted to copy it. However, the Austrian National Bank intervened, deeming the currency illegal. And unemployment soon came back. More on Wōrgl currency here.

Modern Initiatives

In recent decades, local currencies have seen a resurgence, with communities worldwide experimenting with alternative forms of exchange. The Ithaca Hours in the United States, launched in 1991, is one such example. It aimed to promote local spending and strengthen the local economy.

Unlike some other initiatives, the Ithaca Hours kept going for years and remain in circulation. This was largely due to the passion of its founder Paul Glover, but when he moved away the currency faded.

Similarly, the Bristol Pound in the United Kingdom, launched in 2012, sought to encourage spending within the city and support local businesses. It has been successful, but when they tried to convert it to digital using blockchain, they met difficulties.

Berkshares inland from Boston, started in 2006, has continued to this day. The secret appears to be that there are three banks that accept the currency and hundreds of local businesses. One Berkshare equals one dollar, which gives the users more confidence.

European Experiments

Europe has been a hub for local currency experimentation. The Chiemgauer in Germany, established in 2003, aimed to support regional businesses. Like the Wōrgl shilling it was designed to have a circulation incentive. Its website says it has over one million Euros in circulation.

The Sardex in Sardinia, launched in 2006, serves as a digital community currency for transactions among businesses. Its adaptability to the digital age has contributed to its sustained use. By 2015 it had the equivalent of 51 million Euros in circulation. It is expanding.

Challenges and Discontinuations

However, not all local currencies have enjoyed a smooth existence. The Toronto Dollar in Canada, introduced in 1998, struggled to gain widespread acceptance, leading to its discontinuation in 2013.

Similarly, the Baroon Dollar in Australia, introduced in 2003 in Maleny, faced a decline in usage and eventually ground to a halt. This underscores the importance of ongoing support for the success of local currencies. Local currencies most often depend on the continued devotion of volunteers.

Currencies with Cultural Significance

Some local currencies are tied to cultural or religious values. The Kelantanese dinar in Malaysia, introduced in 2006, was intended to promote the usage of gold and silver in accordance with Islamic principles. Its continued use reflects its significance within the local cultural context.

The Sol Violette in France, established in 2011, aimed to promote sustainable development and social justice. Its success illustrates the potential for local currencies to align with broader societal goals.

Mixed Results and Lessons Learned

While some local currencies have faced challenges and discontinuations, others have managed to adapt and thrive. The BerkShare in the United States, launched in 2006, became a model for other communities considering similar initiatives.

On the other hand, the Lewes Pound in the United Kingdom, introduced in 2008, struggled and eventually went out of existence in 2013.

Global Perspectives

Local currencies have not been limited to Western countries. The Tumin in Brazil, established in 1994, aimed to address economic challenges in a socially equitable manner. Its discontinuation in 2010 reflects shifting economic dynamics and changing priorities.

The Torekes in Belgium, introduced in 2005, aimed to promote sustainable development and support local initiatives. However, insufficient backing from local businesses contributed to its eventual discontinuation in 2014

Continued Relevance and Innovation

Some local currencies have stood the test of time and remain in circulation. The Damanhur Credit in Italy, introduced in 1995, is still used within the Damanhur spiritual community. This is typical of the lasting impact of local currencies on close-knit communities.

In Canada, the Calgary Dollar, established in 1996, continues to facilitate local trade and foster community connections.

Newer Entrants

In more recent years, the Eusko in Spain, introduced in 2013, has gained traction by promoting local sustainability and reinforcing Basque identity.

The Hudson River Hours in the United States, launched in 2006, have continued to be exchanged within the local community, contributing to a sense of shared prosperity.

Global South and Cultural Heritage

The Linden Dollar in Guyana, introduced in 2003, showcases how local currencies can celebrate cultural heritage and promote local economic resilience.

In conclusion, local currencies have been used in various places and times to address economic, social, and cultural challenges. While some have faced discontinuation due to bad design, legal issues, or volunteers moving away, others have managed to remain in circulation and contribute to a vibrant local economy and stronger community ties.

It is important to secure funding for workers or brokers. However, none can really thrive long-term unless they are acceptable by either rates, power or insurance. Of course, it is best if it the council accepts it for rates.

I have argued this elsewhere. These days the currency must also be digital. These examples illustrate the diverse ways in which communities can use local currencies as tools for positive change.

6 simple questions a fossil fuel company must answer in the affirmative before they can partake in COP28(2023)

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Al Gore in his explosive TED talk on the tactics of the industry explains that they are corrupting the COP process. More and more industry delegates attend each conference and petrostates can veto resolutions to reduce emissions. Fossil fuel companies aren’t really our friends, he claims.

Here are six simple questions companies must answer in the affirmative before they should be admitted to COP conferences:

Continue reading “6 simple questions a fossil fuel company must answer in the affirmative before they can partake in COP28(2023)”

Blistering Al Gore talk: fossil fuel companies are infiltrating our COPs (2023)

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Oil and gas companies are influencing our COPs, says Al Gore in this extraordinarily fierce TED talk. He is angry. “The climate crisis is a fossil fuel crisis,” he said.

Within ten minutes of his powerful address you experience his righteous anger. He talks about the opposition from the fossil fuel industry and their army of lobbyists and fixers, together with their revolving doors. “They have used fraud on a massive scale, capturing the policy-making process for decades.” They’ve had the evidence about climate change and have consciously decided to LIE to calm down the political process to make more money.

Continue reading “Blistering Al Gore talk: fossil fuel companies are infiltrating our COPs (2023)”

Fix the tax system and monetary system? Impossible, banks too greedy

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Here is an example: Those who advocate for money being spent into existence by government interest-free,( the positive money people) sometimes think that their solution is all that is necessary. But during Covid-19 our Government (actually the Reserve Bank, an agent of government) spent millions into existence to ensure that everyone had money for groceries and power. And what also happened? The price of housing went up. There was too much money in the system for the current tax settings.

You see, the government didn’t accompany this action with a full rent on the value of land. When the price of houses rises, it is the price of land that goes up not the house. Solve one problem and another arises for you to solve.

Tax reform is a political impossibility

You may now ask if the government is likely to impose a land rent or land tax. Impossible. The current government of New Zealand won’t even contemplate a capital gains tax or a wealth tax which are the easy options when you should be imposing a land tax. And the opposition even wants to get rid of capital gains for those who speculate in housing.

No, a majority of electors own houses and they don’t want a land tax. The government wants to get re-elected, doesn’t it? So no action is likely there.

Money creation reform is a political impossibility at national level

Until Covid about 97% of our money came into existence at interest when commercial banks issued loans for buying houses. If the mortgage was to be $500,000 they would write a debt of $500,000 on one side of the ledger and at the same time write a credit of the same amount on the other side. Then would charge interest.

This creates a situation where there is more debt in the system than there is money to pay it with. Banks create the principle but not the interest. So mortgage holders have to go out into the world and compete with others for money. Then there isn’t enough for everyone to pay back the mortgage with interest. So some simply have to go into more debt. They borrow more and the total money supply increases. Then the economy has to grow to use it.

You can see that net savers are going to gain at the expense of net debtors, widening the gap between rich and poor.

And there is a more sinister result at bay. If banks (or governments) create money as interest-bearing debt, that builds in a growth imperative into the economy. When the economy grows there are more greenhouse gases, more species extinction, more soil and water pollution etc. In effect more overshoot of planetary boundaries. is the government likely to change the money system? Not a hope in heaven! The banks are too powerful. They don’t want land taxes, not even a 1% land tax. They want us to continue to tax labour – something good. Banks are delighted when we introduce GST or sales tax – which is known to hurt the poor more than the rich.

When the value of land under a house rises due to community activity and building of infrastructure like hospitals, schools or transport hubs, the next buyer of this house will most likely have to get a larger mortgage. And the banks benefit because interest is paid on a larger sum. That is why banks don’t want land taxes.

What else besides tax system and money creation system?

We have talked about money creation and we have talked about tax and concluded you can’t reform them at national level. Where does this leave us?

But we also have local government. Unfortunately in New Zealand, our local government is very poorly funded. Local government revenue in the year ended 2022 accounted for 9.5% of total combined government revenue. And a lot of local government funding – just under 40% –comes from various fees other than rates.

Economist Brad Olsen in a June 2023 paper writes, “In 2022, local government rates revenue was only worth 2% of GDP, and total local government operating revenue was less than 4% of GDP. Central government’s funding dominance is clear to see.”

And if we look at the total powers of local government we would have to conclude they are puny. No wonder councils struggle to keep rates rises low. They simply can’t perform all the functions imposed on them by central government with the revenue they have. And that is before they deal with paying for Cyclone Gabrielle or the Auckland floods.

This imbalance of power between central and local government must be corrected. I deal with this whole dilemma in my book The Big Shift – Redesigning Money, Tax, Welfare and Governance for the Next Economic System