While simple in principle, the full scope of the Sustainable Communities Framework entails some complexity. We have assembled a selection of resources to provide necessary detail. They are presented in order, as one idea typically builds on another. We trust you will find the concepts thought provoking, intriguing and inspiring.
Money is Not What We Think
Currencies that Complement National Currency
In the forgoing, we explained that governments are not the only source of money and that just about anybody can issue their own money, commonly called complementary currencies (CC). This has been reinforced by recent announcements from Facebook and a group of other companies planning on issuing their own money on a global scale. Likewise, cryptocurrencies (one version of a complimentary currency) like Bitcoin have garnered a lot of media attention. In contrast, we advocate for such private money to be issued on a regional (local) basis. We build the case for the use of complementary currencies as a literal complement to the current financial paradigm, unleashing creativity and entrepreneurial spirit, and enabling communities to self-fund economic development.
How Complementary Currencies are Used
Are such local currencies legal and if so, what are some examples of their application? This document, Complementary Currencies In Use, provides the legal context in the U.S., along with some key historical background and examples of the use of complementary currencies throughout history. It also contains useful links to additional resources. Of particular note is the link to Chapter 6 of the book, New Money for a New World by Bernard Lietaer (co-architect of the Euro) and Stephen Belgin that details a 250-year period (1040-1290) of widespread abundance throughout Western Europe that can be directly attributed to the extensive use of local currencies. That experience should prove very instructive for what we can do now. The recent fire in Notre Dame will carry extra meaning once you read that chapter.
A Local Currency-powered Economic Development Program
From our research into money and complementary currencies, we developed a modern strategy for establishing a comprehensive economic development system that can be regionally deployed. We call it the Sustainable Communities Framework (SCF), described on this website. The SCF program maps closely to the Green New Deal (GND). The key difference is that the SCF is local and citizen-driven rather national and government-driven.
Managing the Program
To truly lift a regional economy, an economic development program has to touch on nearly every segment of society, including business, non-profits and governments. That requires an organizational approach that addresses those disparate elements and yet weaves them into a cohesive whole. Those elements are included in the SCF, organized via a non-profit structure we call a Commonwealth Development Organization (CDO) designed to manage all the components of the program, including the distribution of its currency (but not its issuance (see PBFI below)). Although the main entity is a non-profit, we do provide for significant for-profit activities (see below) to provide a more complete economic development program.
A Public Benefit Bank
In support of the above, we established a subsidiary organization under NCG that is parallel to all CDOs. That organization, National Commonwealth Finance LLC (NCF), would be responsible for the issuance and flow of the complementary currencies that would be managed by each regional CDO. Think of it as the “bank” portion of our SCF program. We call it a Public Benefit Financial Institution (PBFI), which we compare to CDFIs. We introduce the CDO and PBFI concepts here. This is the entity that will manage the banking functions of our currencies. It resembles the online banking systems used by most banks and credit unions while also serving as a payment platform similar to PayPal. This combination is similar to the Cyclos banking software system.
A Comprehensive Online Platform
However, just having a banking and payment platform is far from the complete solution needed to support a parallel financial ecosystem where regions issue and use their own currency. That’s why we have also designed a comprehensive online platform that, in addition to the banking and payment management functions, provides for:
- A virtual eBay-like mall where users can find listings and dedicated webpages for a variety of businesses that sell goods and services, including job listings and training, all of whom accept the local currency.
- A Craigslist-like classifieds listings platform where anyone can advertise goods and services for sale or wanted, and where the party listing the classified ad will accept the local currency for payment.
- A Facebook-like social networking platform where users can link up with other users around a common interest area.
- A gateway to an online incubation/acceleration system that can not only be used to help launch and grow new and existing businesses, but also serve as a comprehensive concept development site where any idea, innovation or project can be guided from raw idea to implementation. Built on the Finding Genius platform, we call this program our Entrepreneurship and Workforce Development Program (EWDP).
Launching the Program in Ohio
With the above elements in place, we customized the program for Ohio as described here: Launching the Sustainable Communities Framework Program, which introduces the BuckOH, the name of the currency to be used in Ohio.
Small Businesses Play a Key Role
As explained in the previous document, small and medium sized enterprises (SMEs) are one of our first priorities, as described in greater detail in this document Prosperity for Ohio. This is one of the most important segments of our program, as SMEs represent the key entities that will need to accept the BuckOH and be the places that anyone who has BuckOHs can spend them.
Support for Non-Profits
One of the main beneficiaries of the profits made by NCG through our SME program will be the state’s not-for-profit (NFP) community (includes both private non-profit organizations and government/quasi-government organizations that serve the public rather than business owners). NCG plans to distribute its profits into the community through grants to those NFPs. However, the NFP community can take a more proactive role in generating income and in the process help NCG advance its goals with SMEs and their customers. This document, A New Revenue Source for Non-Profits, describes how.
Targeting Unemployment and Foreclosures
The above solutions are applicable whether the economy is healthy or depressed. The pandemic has introduced additional problems, which the SCF program can substantially mitigate, particularly for two hard-hit constituencies. The first are the nation’s small businesses. Unlike large businesses with access to sustaining funding, small businesses are struggling and it is likely that we will see the largest percentage of businesses permanently close since the Great Depression. Those closures will directly impact the second constituency — their employees. Unemployment has been very high, both from small businesses layoffs and layoffs from other employers. When people are laid off, they usually cannot maintain their financial obligations and bills go unpaid. That means cars are repossessed and homes foreclosed. This is harmful to both the borrowers and the lenders, along with others like taxing authorities and nearby homeowners whose homes drop in value.
Supporting Community Banks
One solution for all parties is to have a complementary currency issuer purchase those troubled assets from banks, credit unions and other lenders, as we explain in our Troubled Asset Acquisition Program. That program allows us to use our complementary currencies to purchase mortgages, car loans, business loans and other debt from lenders and place the borrowers in a payment moratorium until conditions improve for them.
Businesses for Sale - A Growing Problem
On a parallel track, the pandemic is threatening the very existence of a large number of small business, many of whom have already closed. Those conditions are forcing many of the remaining small business owners to try to sell their businesses before they go under, if they can find a buyer. Unfortunately, there was already a growing problem worldwide before the pandemic. In turns out that the majority of small businesses are owned by baby boomer aged owners who, like other boomers, would like to retire. They were already beginning to flood the market with too many small businesses for sale. Unfortunately, there was an inadequate supply of individual buyers to absorb the volume of businesses for sale, resulting in many just being closed, with the loss of jobs and economic activity that represents. Our Troubled Asset Purchase Program is the only systemic solution that we know of to address this problem. We can buy local businesses that otherwise might shut down and keep them afloat and their employees on the job.
How the Federal Government Can Help
There is one fly in the ointment to the above Troubled Asset Purchase Program. It presupposes that existing asset owners will accept those complementary currencies for the sale of their assets. As we point out in Implementing a Local Currency Program, part 3 of the Money article listed in item 1 above, “The single biggest hurdle that any group will face in launching their own currency is to get a sufficiently large enough group of individuals and businesses to accept the currency as “real money” and therefore viable for conducting commerce in goods and services.” Given all that is contained in the SCF program and the benefits it will provide to society, we are confident that in each region it is launched, it will grow rapidly and hit that critical mass point where it is widely accepted. Unfortunately, that could take some time. However, there is one way the process can be greatly accelerated. If the federal government were to accept complementary currencies for payment of taxes, then every government from states on down would have to as well. The prospects of that happening are much closer than most would think, as we detail in this document Virtual Currencies, IRS, Treasury & Federal Reserve. Should Congress or the Biden administration implement the suggestions contained in that document, the positive impact on regional economies would be far reaching and dramatic.
Spreading the Word
Given all that has been described in the above documents and webpages, the enormous potential benefit that the SCF program can bring to local regions throughout the country is clear. That will especially be the case if the federal government gets on board as proposed. However, that begs the question on how best to spread the word and get the SCF implemented on a widespread basis. We determined that a dedicated organization is needed to carry out that task, along with the capture, studying, encoding, and encapsulation of all the elements of the SCF program for promulgation and implementation.
- To that end, NCG has teamed with the Global Institute for Sustainable Prosperity. (GISP) to establish a new “think-do-tank” to be called the Sustainable Communities Institute. We anticipate that in addition to GISP, other partners will team with NCG to advance the Institute’s objectives.
- Our premise is that the Institute would be in the best position to record, analyze and report on the SCF implementation, while taking an active role in guiding those activities. It will use the Genuine Progress Indicator (GPI) metric rather than GDP to more appropriately and accurately measure the health not only of a region’s economy but its societal and environmental health as well. The Institute should attract researchers, policymakers, NGOs, philanthropists, government officials and others from around the world who wish to observe and learn how to adapt the SCF to their local conditions.