Subverting Power with Complementary Currency

By Jim Hogue

“Give me control over a nation's currency and I care not who makes its laws.”
Baron M.A.Rothchild

If Vermont, or any other society, is to survive in an age of diminishing resources, it needs to move toward a system of polycentrism, in which there is little centralized authority and in which rules and institutions work toward the improvement of the commonweal. The was, of course, the state of events when Vermont was an independent republic from 1777 to 1791. For more than two hundred years, that polycentrism has slowly eroded.

Perhaps more than other states, Vermont is in a position to at least preserve those aspects of polycentric governance that it still clings to. Perhaps the most important of these is town meeting. Though local autonomy is now minimal, we must keep the structure of town meeting in place, and reclaim the powers that town meeting should afford. Powers we don't use, we lose. Liberties are lost more through erosion and negligence than through blatant acts of tyranny.

Other spheres of influence in Vermont are unions, churches, school boards, arts councils, lobbying groups, civic groups, town clerks, selectmen, clubs and organizations, media, and individuals. If Vermont is to prosper, these power structures must grow in influence in relation to the state—both the State of Vermont and the federal government. Today, state power is overwhelming. Only through incrementally reclaiming our sovereignty as individuals, towns, and finally the Republic of Vermont will we survive the tyranny of the federal government and its eventual collapse.

Frank Bryan states in the first issue of Vermont Commons that Vermonters can be proud of the many times they have stood up to the federal government. There have been several more such instances within the last few years: treaties to ban landmines, resistance to GMOs, an Iraq Resolution regarding deployment of our National Guard, resistance to the USAPA by librarians, and the first law in the country forbidding touch-screen voting.

But despite a proud history of defiance, there is an equally shameful history in recent years of obeisance, complicity, and silence on the part of our salaried public servants when action was called for and none was taken. I refer here to complicity in the theft of two herds of perfectly healthy East Friesian sheep, surrendering congressional authority to the executive branch, support for the pursuit of empire in Afghanistan and Iraq, silence on election fraud, depleted uranium, the welcoming of Homeland Security, and the apparent support of the U.S.-led coup (and slaughter) in Haiti and the failed U.S.-led coup in Venezuela. While our delegation dances on the head of a pin, the U.S. has lost credibility and respect on the world stage and our coffers have gone from surplus to unimaginable debt.

I list these few examples because there are local solutions.

We have the flexibility to experiment with alternative energy, sustainable communities, health care, and even the formation of mini-congresses and city states. We can pass laws protecting crops from GMO pollution and dishonest labeling. Our legislature can nullify laws that violate the Constitution. We can put our taxes in escrow when they would be used illegally.
Of course the most direct route to all of the above is secession. But since secession is somewhat down the road, let's do what we can to save our economy, our property, and our rights as citizens. Let's start where it will do us the most good, and where it will do the runaway government the most harm: with money. We can create a complementary currency.

A complementary currency is an agreement within a community to create a currency to match unmet needs with unused resources. It addresses several of the ills described above:

1. It stimulates the local economy, whose activity does not depend on scarce dollars, but on the goods and services we provide to one another.
2. It enriches local communities.
3. It frees up dollars.
4. It insulates against the fall of the dollar.
5. It helps to create sustainable communities.
6. It is flexible and almost infinite in its uses within the community.
7. It is almost impossible to monitor and tax.
8. It starves the beast. It does not feed the tapeworm economy of waste, debt, and corruption.
9. It feeds your neighbors and preserves local capital.
10. It can be loaned and borrowed without interest.
11. It is inflation-proof.
12. It can be conceived as either a saving currency (compare it to a tree that grows in value and has multiple uses) or tender (compare it to time or service).
13. It does not impede one's ability to earn dollars, but rather it directly adds tax-free wealth to the community.
14. It remains in place and functioning in the event of economic collapse such as the fall in value of the currencies of Germany and Austria after 1923.
15. It is most beneficial to those in need, with the residual benefits to the community (in that it does not drain dollars).
16. It encourages recycling, entrepreneurship, self sufficiency, and creativity.
17. It may be used to eliminate dollar indebtedness (interest payments) in return for goods and services. (Peter pays off Jack's debt to the bank, and Jack owes Peter goods and services or local currency. Peter and Jack both gain while flying beneath the radar of the state.)
18. It drives the central banks crazy. (In fact, complementary currencies were so successful during the Weimar depression in reviving the economies of Germany and Austria that the central banks persuaded their governments to outlaw them—ditto in the U.S. under FDR. The depression in Germany and Austria, which could have been avoided, aided the rise of Adolph Hitler.
19. It can be used at any level and for any purpose: from a few craftsmen and farmers trading skills, time, and produce, to an entire state. Japan has a complementary currency in 372 towns just for eldercare. Today, England, Canada, New Zealand, Senegal, Switzerland, Germany, Thailand, and Bali have significant complementary currencies. Ithaca, New York uses Ithaca HOURS.
20. It costs nothing; and if its participants find it of no value, they can opt out.
21. It is already in place. Thousands of Vermonters and millions of Americans utilize various forms of complementary currency every day. All it needs now is the understanding of what the dollar is: a promise to pay, and a promise that has been gradually and consistently broken.

A cord of wood is worth a cord of wood. It hasn't changed in value. It costs more dollars now because the value of the dollar has dropped. Are the services provided by your town worth more? Is that why your taxes are several times what they were? Of course not. The services are the same; the value of the dollar has dropped. Which would you rather have: the goods and services you need, or the dollars that are a mere promise to pay for them?

Inflation is not inevitable. It is a broken promise, a deliberate devaluation through greed, waste, and debt. We can break the cycle by understanding what money is, where it comes from, and how we are held hostage to the central banks. By claiming our rights and acting as independent citizens, we can claim some financial autonomy as well.

Some of the material for this article was gleaned from the works of Boudewijn Bouckaert (polycentrism) and Bernard Lietaer (complementary currencies).