3-5 september 2011dpi-ngo conference, bonn 1 monetary justice: using a carbon-based international...

3-5 September 20113-5 September 2011 DPI-NGO Conference, BonnDPI-NGO Conference, Bonn 11

Monetary justice:Monetary justice:Using a carbon-based international Using a carbon-based international monetary system towards low carbon monetary system towards low carbon

and climate-resilient developmentand climate-resilient development

ByBy Frans C. Verhagen, M.Div., M.I.A., Ph.D., Frans C. Verhagen, M.Div., M.I.A., Ph.D.,

sustainability sociologist sustainability sociologist

International Institute of Monetary TransformationInternational Institute of Monetary Transformationwww.timun.net; ; [email protected]

New York City, USANew York City, USA

http://www.timun.net/

mailto:[email protected]


OverviewOverview

• IntroductionIntroduction

• Definition of integrated justice in the Definition of integrated justice in the contextual sustainability frameworkcontextual sustainability framework

• Monetary justice: What, Why and HowMonetary justice: What, Why and How

• NGO monetary justice contribution to NGO monetary justice contribution to Rio 2012 Rio 2012

• ConclusionConclusion


IntroductionIntroduction

NO MONETARY justice IS POSSIBLE WITHOUT A MONETARY NO MONETARY justice IS POSSIBLE WITHOUT A MONETARY STANDARD AND A MONETARY VISIONSTANDARD AND A MONETARY VISION

““The continued expansion of free trade, the increased integration The continued expansion of free trade, the increased integration of financial markets and the advent of electronic commerce are of financial markets and the advent of electronic commerce are all working to bring about the need for an international all working to bring about the need for an international monetary standard---a global unit of account….An important monetary standard---a global unit of account….An important question is whether this process of monetary evolution will be question is whether this process of monetary evolution will be intelligently directed or whether it will simply be driven by intelligently directed or whether it will simply be driven by events….In any event, it is imperative that the United States events….In any event, it is imperative that the United States begin to develop and put forward its own global monetary begin to develop and put forward its own global monetary vision for the future.vision for the future.

Economist Judy Shelton, US House of Representatives, May 21, Economist Judy Shelton, US House of Representatives, May 21, 19991999


What is justiceWhat is justice

• Social justiceSocial justice• Ecological justiceEcological justice• Integrated justiceIntegrated justice

– Contextual sustainability Contextual sustainability – Earth Charter/Universal Declaration of the Earth Charter/Universal Declaration of the

Rights of Mother Earth—Cochabamba April Rights of Mother Earth—Cochabamba April ‘10‘10

– Low carbon and climate-resilient Low carbon and climate-resilient development within socially and ecologically development within socially and ecologically just societies just societies


Contextual sustainability Contextual sustainability


Monetary justice—what 1Monetary justice—what 1

• An international monetary system thatAn international monetary system that– includes social justiceincludes social justice

•Not ruled by G7/8/20 but G192 of the UN with Not ruled by G7/8/20 but G192 of the UN with input of all stakeholdersinput of all stakeholders

– includes ecological justiceincludes ecological justice•Climate justice Climate justice •Frugal tradeFrugal trade

– Includes an integrated vision ofIncludes an integrated vision of•Values such as the Earth CharterValues such as the Earth Charter•Low carbon and climate-resilient development Low carbon and climate-resilient development


Monetary justice—what 2Monetary justice—what 2

• Proposed Tierra Fee & Dividend system Proposed Tierra Fee & Dividend system contributes to monetary justice bycontributes to monetary justice by– Using the more equitable Fee & Dividend Using the more equitable Fee & Dividend

carbon reduction method over cap-and-trade carbon reduction method over cap-and-trade – Introducing a carbon-based monetary standard Introducing a carbon-based monetary standard

that promotes climate justicethat promotes climate justice– Making governments regulators and drivers, Making governments regulators and drivers,

being solely in charge of money creation by being solely in charge of money creation by withdrawal of fractional reserve banking from withdrawal of fractional reserve banking from privately-owned banking systems, leading to privately-owned banking systems, leading to more equal distribution of power, credit and more equal distribution of power, credit and wealth and progress w/o poverty in the sense wealth and progress w/o poverty in the sense of Henry George’s writingsof Henry George’s writings


The international monetary The international monetary system system • ComponentsComponents

– Currencies and reserve currenciesCurrencies and reserve currencies– Exchange rates: fixed or floatingExchange rates: fixed or floating– Balance of payments Balance of payments – Monetary standard: gold, dollar/gold, fiat, carbonMonetary standard: gold, dollar/gold, fiat, carbon– Monetary philosophies: apolitical Mishkin, Monetary philosophies: apolitical Mishkin,

political Erturkpolitical Erturk• Quality or effectiveness of present systemQuality or effectiveness of present system

– Non-system; called criminal by Robert MundellNon-system; called criminal by Robert Mundell– National or regional reserve currencies cause National or regional reserve currencies cause

global financial imbalancesglobal financial imbalances– Currency speculation/manipulation and Currency speculation/manipulation and

instabilityinstability


A transformed international A transformed international monetary system such as the monetary system such as the TFDTFD• ComponentsComponents

– Carbon-based monetary standard with Tierra as unit of accountCarbon-based monetary standard with Tierra as unit of account• Specific CO2e emission per person within IPCC targets, e.g. 3 ton per Specific CO2e emission per person within IPCC targets, e.g. 3 ton per

person person where North America is 4x and Europe 2x global average of 5 ton in 2000where North America is 4x and Europe 2x global average of 5 ton in 2000

– Two options: National Currencies pegged to the Tierra or a common Two options: National Currencies pegged to the Tierra or a common global currency of the Tierraglobal currency of the Tierra

– No reserve currencies needed anymore and currency speculation No reserve currencies needed anymore and currency speculation and manipulation are not profitable anymoreand manipulation are not profitable anymore

– Exchange rates are fixed Exchange rates are fixed – Balance of payments balances carbon debt and credit accountsBalance of payments balances carbon debt and credit accounts– Monetary principles of equity, ecological sustainability leading to Monetary principles of equity, ecological sustainability leading to

monetary stability and not vice versamonetary stability and not vice versa• Future of the TFDFuture of the TFD

– UN Commission of Experts on Monetary Transformation, Climate UN Commission of Experts on Monetary Transformation, Climate Change and Sustainable Development (GA resolution)Change and Sustainable Development (GA resolution)

– Tierra Scenario of 2025 Tierra Scenario of 2025


Monetary justice—why 1Monetary justice—why 1

• Economic reasons for the Tierra Fee & Dividend Economic reasons for the Tierra Fee & Dividend system system – Monetary system as glue of the financial, economic and Monetary system as glue of the financial, economic and

commercial systems does not work: currency manipulation and commercial systems does not work: currency manipulation and speculation, costly global reserve system, no standard, etc.speculation, costly global reserve system, no standard, etc.

– Financial reasonsFinancial reasons• Fractional reserve banking privilege removed from the privately-Fractional reserve banking privilege removed from the privately-

owned banking systems, a main cause of the Great Recession, the owned banking systems, a main cause of the Great Recession, the Great Depression and other financial crisesGreat Depression and other financial crises

– Commercial reasonsCommercial reasons• Frugal trade promotes ecological justiceFrugal trade promotes ecological justice

• Ecological reasons for the TFDEcological reasons for the TFD– The Fee & Dividend approach to GHG reduction is fast, The Fee & Dividend approach to GHG reduction is fast,

formidable and fair, more so that Cap-and-Trade.formidable and fair, more so that Cap-and-Trade.


Monetary justice—why 2Monetary justice—why 2

• Political reasons for the TFDPolitical reasons for the TFD– changes the present political economy which changes the present political economy which

still enriches the few, impoverishes the many still enriches the few, impoverishes the many and imperils species and planet and imperils species and planet

– Distributes monetary power more equitablyDistributes monetary power more equitably

• Cultural reasons for the TFDCultural reasons for the TFD– Contributes to a culture of social and ecological Contributes to a culture of social and ecological

justicejustice– Makes cultures in the global North and South Makes cultures in the global North and South

direct their attention to low carbon and direct their attention to low carbon and climate-resilient development climate-resilient development


Monetary justice-how1Monetary justice-how1

• Going beyond monetary reformGoing beyond monetary reform– Build on the best monetary reformsBuild on the best monetary reforms

•Reserve currencies proposals by UNDESA Reserve currencies proposals by UNDESA and UNCTADand UNCTAD

•UN Stiglitz Commission of 2008-9UN Stiglitz Commission of 2008-9

– Demand a more socially and ecologically Demand a more socially and ecologically just international monetary systemjust international monetary system


Monetary justice—how 2Monetary justice—how 2

• Pursuing transformational changePursuing transformational change– Rethinking basics, particularly about money, Rethinking basics, particularly about money,

credit, debt and wealth. Cf. credit, debt and wealth. Cf. www.monetary.org – Supporting the TFD or similar proposalsSupporting the TFD or similar proposals– Removal of money creation function from Removal of money creation function from

privately-owned banking systems, following the privately-owned banking systems, following the Chicago Plan of the 1930s and present proposals Chicago Plan of the 1930s and present proposals of Robertson, Brown, Zarlenga, all of which are of Robertson, Brown, Zarlenga, all of which are based on governments spending credit into based on governments spending credit into circulation without becoming indebted to circulation without becoming indebted to privately-owned banking systems. Cf. Henry privately-owned banking systems. Cf. Henry George, Benjamin Franklin et al.George, Benjamin Franklin et al.

http://www.monetary.org/


Monetary justice—how 3Monetary justice—how 3

• International Institute of Monetary International Institute of Monetary Transformation Transformation – Emerged from Earth and justice Education Emerged from Earth and justice Education

Associates International (EPE) and its Associates International (EPE) and its contextual sustainability frameworkcontextual sustainability framework

– Forthcoming publication of Forthcoming publication of THE TIERRA THE TIERRA SOLUTION: SOLUTION: Monetary Transformation, Monetary Transformation, Climate Change, Sustainable DevelopmentClimate Change, Sustainable Development

– Many activities on Many activities on www.timun.net

http://www.timun.net/


But Pius XI’ 1931Quadragessimo But Pius XI’ 1931Quadragessimo Anno (40 years after Rerum Anno (40 years after Rerum Novarum) hadNovarum) hadreal teeth. He wrote:real teeth. He wrote:

“(105)…“(105)…it is obvious thatit is obvious that not only is not only is wealth concentrated in our times but wealth concentrated in our times but an immense power and despotic an immense power and despotic economic dictatorship is consolidated economic dictatorship is consolidated in the hands of the few…”in the hands of the few…”55

“(106) This “(106) This dictatorshipdictatorship is being is being most forcibly exercised by those who most forcibly exercised by those who since they hold the money and since they hold the money and completely control it, control credit completely control it, control credit also and rule the lending of money. also and rule the lending of money. Hence they regulate the flow…of the Hence they regulate the flow…of the life-blood whereby the entire life-blood whereby the entire economic system lives, and have so economic system lives, and have so firmly in their grasp the soul…of firmly in their grasp the soul…of economic life thateconomic life that

no no one can breathe against one can breathe against their will”their will”

and he recommended real legislative and he recommended real legislative remedies not mere talk. (See AMI remedies not mere talk. (See AMI website)website)

In 1891 Pope Leo’s Rerum Novarum was intended to apply Catholicism to the condition of workers in the modern world. But it was mostly prodding “talk” without serious policy implications


In 1942, as bombs were falling In 1942, as bombs were falling and hundreds of thousands and hundreds of thousands were dying, the were dying, the Archbishop of Archbishop of Canterbury, William Canterbury, William TempleTemple, called for the , called for the nationalization of the private nationalization of the private Bank of England, condemning Bank of England, condemning its monetary operations:its monetary operations:

“the result is to make into “the result is to make into the master what ought to the master what ought to be the servant.”be the servant.”

One of Britain’s first postwar One of Britain’s first postwar acts was to nationalize the acts was to nationalize the Bank of England in 1946.Bank of England in 1946.((see Chapter 20/ see Chapter 20/ Lost Science of MoneyLost Science of Money))


NGOs’ possible NGOs’ possible contributionscontributions• Research Research

– on various aspects of monetary justice on various aspects of monetary justice with a focus on monetary transformationwith a focus on monetary transformation

• EducationEducation– justice education to include monetary justice education to include monetary

education from a justice perspectiveeducation from a justice perspective

• ActionAction– working for the GA Resolution on the proposed working for the GA Resolution on the proposed

Monetary Commission, starting at Rio 2012 Monetary Commission, starting at Rio 2012 Earth Summit and continuing at UNFCCC and Earth Summit and continuing at UNFCCC and other UN Conferences other UN Conferences


Conclusion Conclusion

• Einstein on problem solving:Einstein on problem solving:– “ “No problem can be solved from the same No problem can be solved from the same

level of consciousness that created it.”level of consciousness that created it.”

• Needed are: boldness and visionNeeded are: boldness and vision– ““Whatever you can do or imagine you can, Whatever you can do or imagine you can,

do it. Boldness has power, genius and do it. Boldness has power, genius and magic in it” Johann Goethemagic in it” Johann Goethe

– ““Without vision, people perish.” Without vision, people perish.” Proverbs 28:19Proverbs 28:19

AddendumAddendum



Henry George-1Henry George-1

““To those who, seeing the vice and misery To those who, seeing the vice and misery that spring from the unequal distribution of that spring from the unequal distribution of wealth and privilege, feel the possibility of a wealth and privilege, feel the possibility of a higher social state and would strive for its higher social state and would strive for its attainment.” Dedication of attainment.” Dedication of Progress and Progress and Poverty: An inquiry into the cause of Poverty: An inquiry into the cause of industrial depressions and of the increase of industrial depressions and of the increase of want with increase of wealth…The Remedywant with increase of wealth…The Remedy by Henry George, San Francisco, March by Henry George, San Francisco, March 18791879


Henry George-2Henry George-2

• Henry George: original American Henry George: original American thinkerthinker

• Henry George onHenry George on– Money and wealthMoney and wealth

• Henry George and present timesHenry George and present times– Chicago Plan and Great DepressionChicago Plan and Great Depression– Public control of the money creation Public control of the money creation

system ( not of the banking system) and system ( not of the banking system) and the Great Recessionthe Great Recession

3-5 september 2011dpi-ngo conference, bonn 1 monetary justice: using a carbon-based international...

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