After many months of feeling in equal parts a) guilty for not writing a blog and b) terrified of writing a crap blog, I am taking the plunge and assuaging one emotion at the extreme risk of solidifying the other!

My terror stems from following in the wake of Deirdre Kent who knows her stuff New Economics-wise and I suspect readers of Deirdre’s blogs will also know far more than I on economic matters. My guilt, however, stems also from having promised Deirdre I would do my best to keep the blogging happening, and having so far done less than my best in the face of my fear.

Although I think about changing the economic system almost constantly I feel I have a dearth of conceptual knowledge that allows me to draw on a newsworthy item, for example, and argue the new economic points in a way that might enlighten readers. Or any way at all.

What I am trying to do in my life however, is to find and realise new economic ideas and practices, and practise them.

Tonight I took part in one of my Savings Pool meetings by phone (I belong to two since I moved recently; one in Christchurch that I started with and now, as well, one in Ashburton which is nearer to where I am currently living.) During an extended conversation about a proposed change to the current way of calculating ‘reciprocity points’, it hit me just how much we are building this new system. We don’t know how it works perfectly or even if it works perfectly, but how we figure it out is in the trying.

My Pool in Christchurch is about to knock off its first mortgage and my Pool in Ashburton is going to put up some dosh and I am going to be the conduit between Pools. Effectively some money will be lent to me and I will lend it on. It’s real small fry in the financial markets, let’s face it, but boy does it feel good to be doing community lending. To get that family out of paying interest to the bank and to be supporting each other. To be using money collectively to benefit each other.

And learning by doing is how a lot of this new economic stuff is going to have to happen. Abstract concepts are great until they hit the pavement – ole Einstein knew what he was on about when he told us that in theory, theory and practice are the same, but in practice, they are not!

My theory is that if I practise writing blogs more, my New Economic theory will become more practised and I might end up writing something y’all wanna read! Here’s hoping…

Since the publication of my book The Big Shift: Rethinking Money, Tax, Welfare and Governance for the Next Economic System my blogs are now on my own site

If we don’t like predatory capitalism and we don’t like socialism, what do we want? This is what Gar Alperovitz of The Next System has asked. Many in the climate emergency movement have also called for ideas for a new economy. While some of the ideas are expanded elsewhere, here is a summary of what we believe is necessary:-

1. Leave the existing currency alone. It is what Bernard Lietaer calls a yang currency and needs to be balanced with a yin currency. So many things are wrong with the system it is quicker and better to start again. But the trick is to find how.

2. Elect a Community Board. Appoint hapu and/or iwi representatives. This board guides the process of decentralisation of energy and many other systems previously centralised and vulnerable to shock. They decide what is important for your area in the way of infrastructure for your local resilience – a functioning water system, a port, a roading system, a local radio station, a micro electricity grid, Local Area Networks for internet. They are responsible for planning and community development.

3. Elect a Currency Board, responsible for designing and issuing the currency and keeping it stable. It will eventually become a community bank. These people must be willing to communicate with and cooperate with all the other neighbouring Currency Boards. You can see how important the elections are! This Committee will create a new natural currency that decays by design. They will decide if it will be digital or notes. They will ensure the notes are secure and decide on the rate of decay of the currency and how much to issue in order to avoid inflation.

4. Elect a Land and Resources Board and appoint hapu and/or iwi representatives with knowledge of local land stories, Treaty settlements, sensitive land that is not back under iwi control. These people work with any existing land trusts and decide on what land to buy to put into the Community Land Trust. They first seek council cooperation to put council owned land into their trust. They also work with any local cooperative to ensure the land they use goes into the CLT. Then they make recommendations to the Monetary Committee for suitable properties to buy up with new money. They also monitor local resources – water, fish, forests, minerals and set rules for sustainable use of the commons.

A Lot of Elections are needed

It seems like a lot of elections, but they are important because you need plenty of elected people to act as checks and balances on the other boards. This is big stuff you are dealing with. Each small board has a range of vital functions we are not used to at this level, and it is critical to avoid corruption.

Decide that your Community Board will function as a self-governing local entity, possibly serving a population of 5000 – 25,000 people. Know that you can both make and enforce your local rules, especially rules relating to your currency and your rental gathering. Resist interference from national government in matters you believe are just local matters. Tell them to go away. You will help them later when your own currency and revenue schemes are scaled up. (See Declaration of Interdependence for rights and responsibilities of local communities)

Put it into action

The next phase is for the Currency Board to spend the new currency into existencein one of four ways: 

a. to pay for labour and materials for adapting and maintaining infrastructure – the ones decided by the Community Board. Or you could spend it into existence to pay part of the salary of bank staff. Or a Citizens Dividend for a start? Or all three?

b. To pay part of the salary of  staff in the new currency.

c. To distribute a small Citizens Dividend. 

d. To buy land for the Community Land Trust.

If you can employ staff, get them to persuade your local businesses to accept the new currency for payment.

The Land and Resources Board will decide which land you want to put into community ownership first. Is it bare land or already built on? Will you insist on compulsory purchases? Is there a local factory or business in your district that has privatised part of your commons? (minerals, intellectual property, water, knowledge, public infrastructure). What powers do you want to purchase land of those who are polluting the biosphere?

5. Employ a valuer to set up a Land Rental Index. Accept only the new currency as payment.

6. Compile and maintain of directory of local citizens, including all children. Each will be eligible to share the rents from the use of the commons.

7. Have your Community Board communicate at the earliest possible juncture with neighbouring governance units. Ask yourself at what stage will you need to cooperate with other boards for roading, sewerage, water supply, transport, stormwater infrastructure. Be sympathetic to your local council when they have rating (local tax) arrears and use it as a bargaining tool, so your citizens can pay their rates in the new currency.

8. Employ participatory budgeting. The decision about whether to spend new revenue on infrastructure, administration or on Citizens Dividends will be done at a public meeting only. Establish the principle of community participation in budgeting right from the start. There will always be a tension between building essential infrastructure and giving out Citizens Dividends. Some get really attached to their dividends. Since Alaska doesn’t have participatory budgeting and people love their dividends so much, Alaska’s system isn’t funding enough infrastructure.

A discussion led by Phil Stevens on terminology.

Sin taxes are taxes, but otherwise we should call it rent or royalties. There is a widespread belief that tax or borrowing is the only way governments can get money and it is false because governments can create money. It is just that 98% of our money is created by private banks.

There are a number of mantras that are equally false but have become the dominant discourse – e.g. that a surplus is good. Professor Steve Keen and others have explained it isn’t true but if you say it often enough people believe it. What is income tax then? Phil answers it is theft.

Feminist economist Prue Hyman writes a lot about how bad the wages structure is. Here she is talking about it at the New Economics Party recent Unconference. She was a speaker on the need for a Basic Income.