ISH conference platform, International Conference on Community and Complementary Currencies 2011

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Economic Efficiency and Resilience. The scientific evidence for the need for complementary currencies

Bernard Lietaer

Last modified: 2010-12-22

Abstract


Complementary currencies have been, when not ignored, dismissed as being either economically irrelevant or inefficient. In contrast, this paper proves that the instability of our financial system is directly attributed to the lack of diversity of media of exchange due to the imposed monopoly of conventional money. The evidence from this finding comes from a recent breakthrough about the conditions under which any complex network system is sustainable. Indeed, fundamental laws govern all complex flow systems, including natural ecosystems, economic and financial systems.  Natural ecosystems are practical exemplars of sustainability: enduring, vital, adaptive. The sustainability of any complex flow system can now be measured with a single metric as an emergent property of its structural diversity and interconnectivity. It shows that sustainability requires a balance in emphasis between efficiency and resilience. The urgent message for economics from nature is that the monoculture of national currencies, justified on the basis of market efficiency, generates structural instability in our global financial system. It is important to realize that this parallel with natural ecosystems is not a metaphor, but a systemic finding that applies to all network systems with similar structures. Economic sustainability therefore requires diversification in types of currencies, specifically through complementary currencies.