on February 9, 2013
This book warrants the five star reviews on the basis of its real content, but the first couple chapters made me almost put the book down. For someone who's been following the crisis closely, it's very tough going. It starts out as a complete rehash of all the problems in the current economy through a long drawn out series of anecdotes and historical examples. You begin to wonder if it is every going to get around to the subject of the book. If you are up to speed on all this stuff, skip to Chapter Three where it starts to get interesting. In general, the writing style of the book is more verbose than it needs to be to attract a general audience. As the book points out we are in an accelerated world treadmill, and many people are very busy surviving. A summary of the book and it's conclusions at the outset and a general description of the contents of subsequent chapters would have been useful to many readers. In my case, after wading through the first couple chapters, I jumped to the final chapter 13, and found it full a vague generalities that were not at all useful in discovering what the book was all about. Fortunately, I persevered and found the intermediate chapters very informative.
on February 5, 2013
When most of us think about money it is to wish we had more of the stuff. In "Rethinking Money" the authors point out the nature of money to most folks is like the nature of water is to a fish; something about which we remain blissfully unaware. Yet the nature of money profoundly impacts our lives, our societies and our environment. To find out how you should read this book. And, there is more to money than the national currencies with which we are most familiar. In fact thousands of alternative currencies the authors call "complementary currencies," exist all over the world. These can range from airline miles to time based systems such as the Ithaca Hour and business to business "credit circuits." One such business to business currency in Switzerland has existed for close to 80 years and currently involves 62,000 businesses. In "Rethinking Money" the authors take us on a tour through this little known world of complementary currency. To most of us this is a whole new monetary world to explore with the help of "Rethinking Money." The book is very readable, extremely informative and after you have read it you will never think about money the way you did before you started the book.
on December 2, 2013
I was very disappointed by this book.
I'm originally an economist and am currently spending all my time on bitcoin-related projects. Because of that I've been reading a number of books over the last months to understand our monetary system better. I'd heard of Lietaer numerous times and had high expectations. Alas, it didn't deliver.
- The first part of the book is a criticism of the current financial system. I found this part of the book strong, but it is also short and other books discuss it in far more detail.
- The rest of the book is essentially an endless string of anecdotes about different complimentary currencies and how they brought about all kinds of miracles. Much of it reads like it was taken straight out of the advertising brochures of the organizations. There is no critical discussion and almost no empirical evidence.
- He has a very manipulative style of argumentation and constantly strings anecdotes together in a way that suggests causality without providing any evidence. For example, he writes that a complimentary currency used in Germany for some time until 1931. Then it was declared illegal. Then 'advocates of centralized solutions gained appeal'. Then Hitler came to rise. So he is suggesting (without outright saying it) that the demise of this currency caused Nazism to rise. Really? I don't buy it and I find this way of writing extremely deceptive. (Another reviewer pointed out his unfounded suggestion that the WIR is responsible for Switzerland's stability.) The book is full of these things.
- He also suggests that complimentary currencies are the answer to the problems of our financial system. But then all the examples he lists are these tiny projects. Even if they work on that scale he provides zero evidence or even a proper argument that they would work on a larger scale.
- The last part of the book is almost entirely a marketing-speak like completely contentless rambling. Sentences like these abound "Each person, when given the opportunity, becomes a unique and brilliant being". If this was a feel-good self-help book okay. But I thought I bought a serious discussion of monetary systems? Or how about this one: "There is a deep yearning for a new context, a new story, a new mythology in which to interpret and play out the human experience."
- Another horrific part are his 'five scenarios portraying a future society'. They go like this: Cha Cha lives in Northern Thailand. She used to be poor. Now there is a community currency. Everyone's self confidence has been improved. There is full employment. Every child has an education. Cha Cha is mayor of her district now. Repeat five times.
I am not sure if this book represents the depth of his thinking. I hope not. I was originally going to read 'The Future of Money' too, but there is no way after a book this bad. If you want to read something good on our financial system I recommend 'Currency Wars' and 'Web of Debt'. This book unfortunately chose repetitive empty rhetoric, unsupported claims and feel-good marketing speak over real analysis. I don't recommend it.
on June 12, 2013
I was hoping for a carefully crafted academic work on complementary currencies. I was sorely disappointed. The first chapters are a poorly supported polemic against the current money system, full of opinions with virtually no empirical support. For example, the authors claim that the "prevailing money system generates...cyclical recessions, unrelenting concentration of wealth, and erosion of social and physical or natural capital". Perhaps, but there is no serious evidence presented to support that the current money system is the sole or primary cause. When I'm done reading a book, I don't want to parrot an author's opinion; I'd like to understand and internalize the data. One particular claim, that "a sovereign government does not really 'need' to raise taxes to pay for its expenses", because it can merely issue currency to pay for it purchases, exemplifies the simplistic analysis. Of course, a government could do this, but the consequent lack of confidence, the devaluation of the currency, the rise in interest rates, inflation, and unemployment that follows prevent most governments from such extraordinary measures. This is not mentioned. The authors claim that complementary currencies are beneficial because they have greater velocity than conventional currencies. They admit that there is no empirical proof for it, but continue to assert it on weak theoretical grounds, forgetting that most people who use conventional currencies do not keep them in their mattresses, but invest them or keep them in banks that keep it circulating. The book presents a great deal of anecdotal complementary currency stories, a sort of survey, but like many broad swath surveys, the anecdotes lack depth. The authors claim that the Swiss complementary currency, the WIR, is responsible for Switzerland's stability, but again provide no empirical basis; the reference given is a paper by Lietaer, which is "forthcoming". The penultimate chapter is literally a series of fictional anecdotes that take place in a future of complementary currencies circulating throughout the world. If you're looking for a serious analysis, this is not the book to read.
on January 3, 2015
Review of “Rethinking Money”, by Bernard Lietaer and Jacqui Dunne
by Claus Gehner, Jan. 1, 2015
This book presents a much interesting information. Mr. Lietaer obviously has a wealth (unintended pun) of expertise on “money” and currencies and their roles within the broader “market economy”. His description of the money creation process and the role of “interest” in shaping economic and social behavior at the micro and macro level is very compelling. I also sympathize with his jaundiced view of academic economics.
On the other side of the coin, the book presents a host of interesting models for using means other than debt-based “fiat currencies”, concentrating on the “medium of exchange” role, to facilitate economic activity through “cooperative currencies". All of these models, be they in the individual, corporate, banking or government arena, depend on taking the “profit” motive out of the transactions, on a certain amount of government support and largesse, and depend on social, moral and “community” instincts of organizers and participants alike.
However, I also find this book to be a misleading, almost fraudulent, in the juxtapositioning of “cooperative currencies” and “fiat currencies”. Although the authors make it clear that they are not advocating replacing bank-debt-based fiat currencies with “spontaneous" cooperative currencies, they explicitly set up fiat currencies as a “stalking horse” by listing all the terrible modern social and economic developments in “free market economies” as being primarily caused by these bank-debt-based fiat currencies, as opposed to being caused by inherent limitations and undesirable side-effects of “free”, laissez-fair, market economies. They thus implicitly lead the reader to expect the the book to offer concrete solutions to these economic woes through cooperative currencies, which in my view is extremely misleading in light of what the book actually presents.
Let us list all the evils of the current economic and social status quo (which have been enumerated in dozens of articles and books in recent years, and which I agree with), which the authors attribute (primarily, so it seems) to the evils of bank-debt-based fiat currencies:
lack of money (poverty) resulting from under- and un-employment, driving people to despair, where in the US almost 1/3 depend on government support to survive.
Scarcity of money - the supply is inadequate for the 7 billion estimated to populate the Earth today.
Even those that have money must deal with the “vicissitudes” of fiat currency: crashes, devaluation, inflation.
Crumbling infrastructure, lack of good health care and education, resulting from “massively underfunded liabilities”.
Retirees having to take menial jobs (“Fred … with a degree in chemistry from UCLA… stooped, his torso almost parallel to the floor, his hands gnarled and disfigured with arthritis, he dutifully double-bags … in a popular national grocery chain” - at age 83, if the authors’ story is to be believed) to make ends meet.
Ruthless competition at the workplace, driving people into psychiatric institutions.
Huge debt loads (avg. of $25,000) for graduating students.
Even “rich people” are seen as suffering from “money’s” evil effects, for example, with the prospect of a seven figure inheritance ripping families apart (in the context of this book, this one is just silly).
This section about the “evils of money” at the individual level is summarized in this somewhat trite conclusion:
“… the current money system provides genuine individual satisfaction neither for those who suffer from its scarcity nor for those who are wealthy.”
The economic and social problems described so aptly in this book are much more the result of unequal distribution of income, wealth and thus power, brought about by laissez-fair market economics in general, of which money is just the most visible component. Just as virtually all of the “cooperative currency” schemes described in this book depend on government cooperation and moral, social and community motivations of participants, if these government controls as well as moral considerations could be impressed upon “market economies” (e.g. as in the “social" market economies prevalent in Europe) many of the evils described above could be alleviated, if not removed altogether.
By contrast, the “cooperative currency” models and schemes describe in this book can do very little, if anything at all, to alleviate these larger economic and social problems. At best they can, and indeed are only designed to facilitate a relatively small volume of additional economic transactions outside of the “for-profit” arena of the larger economy and society.
Let’s take one example, the supposed inherent scarcity of money caused by debt-based fiat currencies. In actual fact there is now absolute scarcity of money - who in todays hugely expansionary money policy of central banks can really talk of “scarcity of money” - but rather lack of access to money and credit by some segments of society. This is entirely due to the perverse nature of profit motivated “market forces” (as if these were “forces of nature”, like gravitation), which need to ensure their profit by putting a premium on “risk”. Thus, poor people, perversely, are forced to pay more for products and services, and indeed may not have access to certain services (like banking) because of the perceived “risk”. Hence the “Instant Cash” and “Check Cashing” services which charge outrageous interest and fees to the poor. With simple, socially motivated laws and regulations by governments (as in many “social” market economies), traditional banks can be forced or incentivized to offer banking services and low interest lines of credit to the poor. Thus, the supposed “scarcity of money" could be solved entirely within the framework of debt-based fiat currencies.
Overall, this book is definitely a worthwhile read, even if it does not satisfy the implicit promise of “cooperative currencies” as a solution to the economic and social evils of our day.
on November 16, 2015
If you ever feel dismayed by money's seemingly limitless power to make the world worse, this book is filled with creative designs for alternative currencies that can redirect the power of money into new patterns of exchange that make the world better. And as more e-currencies begin to emerge, alt-currency ideas gain even more relevance and interest. For just one example, consider the possibilities presented by "smelly money" whose units carry full records of their individual transaction history: when electronic smelly money combines with big-data / machine learning to calculate conversion rates between trading parties with varying values and social priorities, entire markets instantly gain high-resolution ethical sensors and become responsive, in real-time, to world events and evolving social consensus.