Transition Culture

12 Mar 2007

Molly Scott Cato’s Talk in Totnes - “The Bioregional Economy”.

**Molly Scott Cato** is the Green Party’s economics spokesperson and is the author of *’Market Schmarket’*. We were delighted when she agreed to come to Totnes to talk at our event last week to launch the TTT Economics and Livelihoods Group. Her talk touched on both the reasons for a more bioregional economy and how we might achieve it. She was an entertaining and passionate speaker, who made the often bewildering subject of economics accessible and relevant. She was also very honest about the gaps in her knowledge, making it clear that each new complementary currency scheme breaks new ground and is adding to the body of knowledge. The following is not comprehensive, but is compiled from my notes.

She began by talking about climate change, setting out the case for action. She talked about the absurd international trade in goods, especially food, carting food from one place to another that could just as easily have produced it too. She quoted Caroline Lucas MEP, who says rather than exchanging food, with all the carbon impacts of that, why not just swap recipes?! She then introduced the concept of bioregionalism, which she defined as “an economy that sits comfortably at the heart of the ecosystem�. Within that bioregion, she argued, we must take care of our wastes, especially carbon. We need to think of our use of resources as borrowing them from the future. You can think of your bioregion as your backyard, she said. People instinctively feel protective of their backyards.

Becoming more aware of one’s bioregion leads to our living a life more rooted in where we live, she said. The principle of local first takes precedence over price or choice, it is local every time, where possible. This process of subsidiarity should guide everything, she argued. She quoted DEFRA from 2003, *“national food security is neither necessary nor is it desirable�*. We need to start to think like Robinson Crusoe, setting our expectations based on looking around us, not idealising but working with what we have.

In terms of food, a good example is the Stroud CSA. This offers close to zero food miles, genuine community ownership, seasonality and the concept of “share�, and an annual cycle of community and festival. In relation to clothes, she talked about how Stroud had a long history of textile production, and of their ‘Grow Your Own Clothes’ campaign. They are exploring the use of Cotswold wool and Alpaca sheep, and well as planting and processing hemp. They are starting a venture called the Stroud Hemporium. It is important, she argued, to counter the trade in cheap clothes, that cause so much misery in the developing world.

She then addressed issues around housing, and the unaffordability of housing. She explored the role of self build and community building, including the Community Land Trust model, as well as changes in places like Wales in relation to low-impact developments. After a short break with questions, she moved on to look at the role of money in the move to a bioregional economy. It is very hard, she said, for a local economy to flourish in the context of the global economy, which functions as a straight jacket. The disparity of wages between the developed and developing nations is too vast. Skills are no longer valued unless they can be sold. We need, she argued, to rekindle the idea of a hobby, and to challenge the mantra that ‘time is money’.

Our current money system was designed 60 years ago at the Breton Woods meeting, where a lot of rich middle class white men set out to design a monetary system that would benefit rich middle class white men. In that system 97% of the money is brought into existence through the creation of debt to banks. This in turn puts pressure on the planet, and is undemocratic, as the Governments have to borrow from the banks on their terms.

This has the effect of allowing people to make a claim on the future value of money. Nowadays, 98% of financial transactions have no contact with the real economy. Keeping money within the local economy insulates against global recession. Here arises the need for a local currency.

What might we want a local currency to do? We want it to;

* Increase local production and consumption
* Increase our control over economic activity
* Extract our activities from the distorting and destructive global economy

She then talked about the salutory tale of Argentina. Here the banks had lent more money than they had, assuming that no-one would want to take it all out at once. Argentina was a very highly developed market economy, the “France of South America�, but then the banking system collapsed. The rich saw it coming and moved their gold to Switzerland, and it was that gold which backed the currency. Then when the ordinary people wanted their money back it created an economic vacuum and it all collapsed. In many ways, Molly argued, the global economy is now like that of Argentina.

People started using what they had, and bartering. In many places they made their own money. One lesson is that where an alternative currency is working it becomes very important. So when designing a currency, what should we take into consideration? Should it be electronic or paper-based? Paper is more anonymous and harder to trace. LETS is OK, but paper systems were, in her opinion, probably better. Should it be backed with something? If so what? Perhaps money, or perhaps energy. There is one German system backed by real money, but 3% is taken off when it is swapped back. There was a good LETS system in Stroud, but it fell apart because of the tax situation. The scheme had put money aside for tax, but the Government wanted it in pounds, not LETS.

Some schemes get round this by issuing money in hours, not pounds, such as the Ithaca Hours scheme. One important factor is the velocity of circulation, how fast it passes from hand to hand. She introduced the concept of ‘demurrage’, where money devalues over time. This is anti-interest, but tends to work better with local money than national money. At the end of the day, she said, all local currency projects are experimental and are trying it out. The important thing, she argued, was to ‘hang loose’ with it and live experimentally.

This, she argued, is a positive vision. It is about the creation of a convivial economy not a lean economy. It is an opportunity to reclaim control of production and value. We need to learn to become producers as well as consumers, and we need to rediscover the importance of community.

She concluded with a quote from Lord Tim Beaumont, the Green MEP.
>“Such a vision offers greater community and personal satisfaction, a world where conviviality replaces consumption, where local identity replaces global trade and where community spirit replaces brand loyalty�