Economics for Economics for Transition:Transition:building an equitable and

resilient local economy

<Your Name here!>Transition Initiative

Ambitious agendaAmbitious agenda The current economic crisis and

its historical context (short recap)

Understanding the structure of the economic system

Understanding money and the banking system

Understanding the financial system

Responses and Alternatives

Robert Reich summarizesRobert Reich summarizes

Connecting the dots about the US economy

Time to understand the Time to understand the economic system that leads economic system that leads to these results…to these results…

Concept of Surplus 5 types of economic systems Inherent contradiction and

instability

The Concept of SurplusThe Concept of Surplus

Who produces it? Who owns it? Who distributes it?

Five Economic SystemsFive Economic Systems

Ancient (self-employed) system Communitarian system Slavery Feudalism Capitalism

The Inherent Instability of The Inherent Instability of CapitalismCapitalism

Two major systemic failures in the last 80 years

In the same period 11 crises (recessions)

Labor as cost vs. aggregate demand

“investing the surplus” (media control - social narrative, government)

C-corporations and the profit imperative

What can you buy with the What can you buy with the surplus?surplus? How about the best government

money can buy?

Part one

Part two

Would you like a social narrative Would you like a social narrative with your Government purchase? with your Government purchase?

Welfare queens

The poor are lazy and deserve their lot

Don’t tax the job creators (the rich)

The economic crisis is due to excessive regulations

If you criticize capitalism you are a traitor or a commie

Raising taxes will hinder economic growth

The private sector is efficient the government is not

Social Security is a Ponzi scheme

Immigrants steal our jobs

Robert ReichRobert Reich

Debunking 7 economic myths in 2’ 30”

Problems with the current Problems with the current economic systemeconomic system Unstable Concentrates wealth and power Tendency towards larger entities

and reduced competition Anti-democratic Socially and environmentally

damaging Spectacularly wasteful

What way forward?What way forward? Localize and democratize

AlternativesStrategies

Defensive

Pro-active

Transformational

The Money SystemThe Money System Documentary “The Money Fix”

What is money? A short history of money

Barter

The invention of money (commonly accepted mean of exchange)

Money as debt

Problems with the current Problems with the current monetary systemmonetary system Money is created with issuance

of debt No money is created to repay

the interests on the debt Growth imperative otherwise… Scarcity and guarantee of

failures Money creation power in the

hand of private elite Fundamentally undemocratic

What way forward?What way forward? Localize and democratizeAlternatives

Free banking system

Democratic control of credit creation

Strategies Expand gift exchange economy

Commodity exchange economy Expand barter

Alternative currencies and LETS

Move your money

The Public Banking The Public Banking RevolutionRevolution

The Financial SystemThe Financial System

Provides investment capital to finance economic growth

Allocates investment capital The investments of today

determine the world we will live in tomorrow

The narrow lens of investing

Who Owns and Controls Who Owns and Controls investment Capital?investment Capital?

Problems with the current Problems with the current financial systemfinancial system From capital as mean to capital

as end in itself Holding period and stock trading

Financialization of our economy Fundamentally undemocratic

Stock Trading Is About to Stock Trading Is About to Get 5.2 Milliseconds Get 5.2 Milliseconds FasterFaster

Source: Bloomberg Business Week - March 29, 2012

What way forward?What way forward? Localize and

democratizeAlternatives

Community Capital

Strategies Slow Money

Local Investing

Systemic intervention Systemic intervention pointspoints Raise awareness, education Build social capital Democratize the workplace

(workers owned cooperatives) Move capital ownership into the

hands of the community (Land Trusts, CDFI, local government ownership e.g. public utilities, etc.)

Support existing system alternatives

Responses and AlternativesResponses and Alternatives(personal)(personal)

Withdraw consent and complicity

Move your money

Turn off TV

Decolonize your mind (get your news from non-corporate media)

Build trust and resilience in the community (social capital)

Responses and AlternativesResponses and Alternatives(cultural and political)(cultural and political)

Challenge outdated social narratives

Get educated through alternative non-corporate sources

Turn off TVStop gap political intervention at

the national levelEngage with the political process

at the local level

Responses and AlternativesResponses and Alternatives(economics and finance)(economics and finance)

Move your money!Support alternatives with purchases,

employment and investments (local first!)

Sharing economy (from ownership to access/use)

Benefit Corporation as alternative legal structure

Develop and support alternative means of exchange (local currencies, time banks)

Develop gift exchange economy (Gift circles, resilience circles, pay forward, volunteering)

Joining the Great TurningJoining the Great Turning Fight the system but love the

people Allies can come from the most

unexpected places!

Keep it fun and light Make it irresistible to join your

cause!