The answer to financial chaos lies on an island in Sweden

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The financial crisis is actually a monetary crisis, and you can do something about it now.

On an island next to Stockholm, leaders in systemic solutions to financial chaos are gathering at a sustainability festival. Join them at the Future Perfect festival in Stockholm on 23-26 August, and hear a panel on monetary reforms and innovations for sustainability, and a workshop for executives who want to start, scale or participate in alternative means of exchange.

Panel: “Currencies of Transition: monetary reforms and innovations for sustainability.”

Chair: Professor Jem Bendell (Lifeworth Consulting, Community Forge and Griffith Business School)

Ben Dyson, director of Positive Money, which campaigns for a systemic solution to monetary crises, by full reserve banking.

Josh Ryan Collins, New Economics Foundation, the Brixton Pound and co-author of “Where does money come from?”

Lynnea Bylund, Board Member, Ormita, the international business barter network.

Matthew Slater, Board Member, Community Forge, a leading provider of open source software for community currencies, and editor of Community Currency magazine.

The panel will address the questions: Is a fair and sustainable economy possible with our debt-driven money system? If not, what needs to change? What is being done already? What can we do to get involved, personally and professionally? How can we make this a movement? What mistakes can we avoid?

Workshop: “How alternative exchange systems work and how to get started”

Trainers: Professor Jem Bendell and Matthew Slater

The trainers work with Community Forge, which provides free open source software for community currencies. This video explains why, what and how Community Forge operates.

You will be able to interact with these experts and others attracted to the topic, at a world class music festival! To book your tickets to the festival, visit http://www.futureperfect.se

The workshop will also be offered in Greece in the second week of October. Contact the European Sustainability Academy for more information.

Fixing the Global Jobs Crisis: time to leave assumptions behind

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Mass unemployment is becoming a headache for all world leaders. At the World Economic Forums (WEF) in Davos, Bangkok and Istanbul, people were talking about how to address growing unemployment.

To find real solutions to this global jobs crisis we need to be clear on the cause of the problem. Some of the conversations I heard at the WEF revealed widely shared yet questionable assumptions about key causes of unemployment. The key myths are, as follows:

Myth 1: “Unemployment is due to falling demand.”

Are people’s needs really falling? Or just the amount of money in circulation to employ people/assets to meet those needs?

Myth 2: “Unemployment is due to technology displacing human labour.”

Could we not design systems of ownership and revenue distribution so that the income from technology frees us to work creatively and caringly for each other? How can we govern technology to release us to a world of service, not a life of redundancy?

Myth 3: “Unemployment is due to the cost of hiring and firing.”

Why then do some countries with high wages and labour standards, like Scandinavia, have less % unemployment? Where would competition between nations to lower costs of hiring and firing lead us?

Myth 4: “Unemployment is due to a lack of skills and appetite for the new types of work.”

The world has more skilled labour than ever before, and more labour mobility than ever before, and many people with Masters degrees can’t get a job.

Myth 5: “Unemployment is due to the option to claim benefits.”

Why then was the existence of benefits not keeping people out of the workforce before the recession? Why do some countries with the most supportive welfare states, like Scandinavia, have less % unemployment?

These assumptions may arise from a general lack of understanding about the first key function of a currency, which is to help connect assets, including people’s time, with needs. If a currency becomes scarce in an economy, then there is less ability for exchange. That means needs go unmet, and assets go underutilised. Its called unemployment.

I recorded a short interview for the social media corner of WEF in Istanbul to explain where we need to start looking for real solutions to the global jobs crisis.

Job Creation Without Austerity or Debt

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In the face of financial crisis and mass unemployment, do you believe we have to choose between either austerity or debt-funded economic growth? Its a false choice, based on false assumptions. My video-keynote at a forthcoming conference in Denmark, explains how we can achieve job creation without austerity or more debt, by redesigning our monetary systems.

If you are near Denmark, go join the conversation at Rebuild21.

Want to learn more? Access more materials.

Collaborative Consumption and Beyond

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Do you have a car pool at work? Car-sharing revenues in North America have been predicted to reach US$3.3 billion by 2016. There are many start-ups in this field, including Zipcar, which floated last year for US $174M. Enabling the more efficient exchange and sharing of products and services, in order to increase human well-being while reducing the consumption of natural resources, is a key dimension to the sustainability transition. The increasing penetration of the internet means new systems of exchanging and sharing products and services, are growing, in many areas. Facebook’s CEO has even emphasised the potential for developing new sharing enterprises as key to its future financial success, after floatation.

These developments in “collaborative consumption” bring a new dimension to the existing forms of alternative exchange systems, such as business barter networks or countertrade agreements, and community currency systems that help connect underused assets with unmet needs. Countertrade accounts for around 20% of world trade, while one national barter network now involves 1 in 5 small or medium sized companies in Switzerland, amounting to over US$1.5 billion a year. The new sphere of peer-to-peer financial-lending has taken off, and predicted to reach US$5 billion next year. It appears to be a time of disruptive innovation through new forms of sharing, exchanging, renting and co-owning.

Some of these activities are important to sustainable development, and, therefore, to the broad field of responsible enterprise (whether we label our work corporate social responsibility, sustainable business, social enterprise, shared value, responsible or impact investment, or some other term). For business executives to contribute to a positive sustainability outcome from these developments requires enhanced understanding of how to explore ways to become involved, including by adapting their own business models.

Which means there is an educational need, for those of us interested in enabling the sustainability transition. Lifeworth Consulting is conducting research on these developments, for presentation in July at the EABIS colloquium at IMD (in Lausanne), and in September at the Necessary Transition conference at GBS (in Brisbane). So, if you are currently employed, and would like to receive the results of this research, please participate in our 5 minute survey, it would really help:

http://www.lifeworth.com/survey-responsible-enterprise-collaborative-consumption

Please, click that link!

Thanks, Jem Bendell

Lifeworth founder and Adjunct Professor @ GBS

The Part of NO That Anglo Could Understand

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Ten environmental groups recently took out a full page ad in the Financial Times and the New York Times, against the plans of Anglo American and Rio Tinto to mine in Bristol Bay, Alaska. The title went “Anglo American and Rio Tinto: what part of NO don’t you understand?”

I think the answer to that question is quite simple: Many senior managers in the company, and their shareholders, don’t understand the part of “NO” that doesn’t affect their bottom line. To be heard, “NO” needs to affect the bottom line. So, to help the more ethical staff in these companies win arguments in headoffice, there needs to be a clearer threat to the mining companies’ bottom line. So, here is how to do it….

Stop Pebble Advert
Stop Pebble Advert appearing in FT and NYT

Anglo American is not susceptible to public pressure in the way that a famous consumer brand could be. But since November last year, Anglo American became the majority shareholder in De Beers. This famous diamond company is not, in most countries, a famous consumer-facing brand. However, it is fast becoming a consumer brand in Asia. De Beers has partnered with the luxury group LVMH to develop the De Beers brand as standing for prestigious high quality, and is opening 6 stores this year in China. Although the United States is still the world’s largest diamond jewellery consumer, by 2015 it will be overtaken by China, India and the Gulf. Interestingly, recent market research shows that wealthy consumers in China are concerned about the environment and beginning to make connections to their purchasing. In Japan such concern, and associated consumer behaviour, is even higher.

Would it be right to tarnish De Beers in China with the activities of its parent company? And would it be effective?

Compared to other diamond companies, De Beers is doing a lot on its social and environmental impacts, particularly with the Forevermark diamonds that are traced to mines that are meant to abide by basic social and environmental standards. And in Bristol Bay, the mining companies are after copper, not diamonds. However, De Beers is effectively now Anglo American. And De Beers is a major profit centre for Anglo American, which makes it easier for Anglo to fund new projects like the Pebble Mine. If De Beers does well, Anglo does well, and thus Anglo can do what it wants in Bristol Bay and elsewhere.

Over many years during the campaign against Nestle, people didnt want to buy a Kit Kat from a company that marketed milk powder to mothers with only dirty water to mix it to feed their babies. Kit Kats didnt kill babies. But babies were dying from the way the products of the same firm were being used.

So, might people not want to mark something as beautiful as their engagement with a ring that co-finances ugly destruction?

We don’t know if such a campaign would be effective, but it would make the campaigners’ criticisms more relevant to the board.

So, Bristol Bay campaigners, I reckon you should drop the ads in the New York Times and Financial Times. Instead, engage the elite social networks in Shanghai and Beijing, or start a viral campaign on QQ, and other networks in China… get famous Chinese film stars to quit their LVMH promotional contracts in protest at the potential destruction.

In this strange new globalised world, even some Chinese consumers may come to the rescue of the Alaskan environment, as ultimately, we share one global environment. We should not assume people won’t care, and instead provide them opportunities to express themselves. In the end, the sustainability of the planet will depend more on Asian middle classes being concerned about the impacts of their consumption and savings on the world at large, than it will depend on the traditional Western middle class targets for ethical campaigning.

More on the campaigns:
http://www.savebristolbay.org/
http://www.stoppebble.org/

More on the issue of responsible jewellery: http://www.lifeworth.com/consult/2011/06/uplifting/

You have to go to this festival

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Am stoked to be speaking at the world’s best sustainability festival this summer in Sweden. Once you go, you wont want to go to conferences again… and music festivals might even seem a bit has-been!

What’s Future Perfect Festival?

World-leaders in sustainable enterprise, science, design, media and more; at a world-class summer music festival; with high-quality health and well-being experiences; using creative and collaborative facilitation; enabling personal action and social enterprise. FuturePerfect Festival 2012 rises from the water on 23-26 August, at Lillsved, on the island of Värmdö in the Stockholm archipelago, Sweden. Pack your paddles, dancing shoes, sunglasses and dreams for three incredible days and nights of inspiration, creativity, exchange, passion, and relaxation offering. This is for professionals and public, young and old, individuals and group, it’s the next stage of the conversation on living well without compromise – a celebration of potential and practical change. Lifeworth is pleased to be participating in making FuturePerfect.

Check it out at http://2012.futureperfect.se/

Or see last years, to get a better sense of how the programme is going to develop:
http://2011.futureperfect.se/

Get your organisation to send a group of you… its great inspiration.

Characteristics of Needed Leaders: Views as a Young Global Leader

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Here’s a clip of an interview I did at the World Economic Forum when accepting being made a 2012 Young Global Leader. I was asked about characteristics or attributes of needed leaders today.

For my views on the dimensions of leadership, i.e. the skills, processes and relationships of good leadership, rather than the leaders, see my blog from last year: “Leadership beyond Leaders”

Information on why Im a YGL and what it means is in Lifeworth’s announcement on the subject.

Dear Economists – please throw new light on money

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Dear Economists

It has come to my attention that you’ve taken a battering in the last few years. Apart from a handful of you, the massive failure to predict the financial crisis, and the peddling of tried-and-failed theories of how to get out of said crisis, seems to have diminished your profession’s standing. Some politicians are even listening to sociologists, who say you have have nothing useful to offer on systems for achieving greater well-being, rather than mere economic growth. Perhaps rather unkindly, some now wonder whether your assumptions about self-interest have been a severe case of projection.

I don’t like to see anyone in such a bind. Especially when I sense there is major opportunity for a turn around in your fortunes. Although I’m one of your poor-cousins (i.e. a sociologist), for the past couple of years I’ve been reading some economics, mostly on monetary systems, and mostly by those I think you call “heterodox economists.” As an active reader, I jotted down some questions that I wanted answering. As I read on, it seemed that these questions were not yet answered! I looked everywhere (well, at least not just on wikipedia) and could not find data on them. So if you work on the following questions, not only could your answers become seminal, secure yourself tenure, you might even gain a spot in the next ‘Inside Job’ movie! I hope you read on and come back with peer-reviewed articles in the coming years.

1) How much money is there is in the world, and how much debt? If the amount of debt is much higher than actual money, what mathematical models can you offer for how this will be resolved, and with what implications for overall utility?

2) Which governments do not issue bonds to private banks, or to (semi-)privately owned central banks, but issue their own money (or issue bonds to government-owned central banks that do not then sell those bonds on to private banks – the same as issuing their own money)?

3) Which governments used to issue their own money, but no longer do, and when did these changes take place?

4) How do the non-GDP aspects of the Human Development Index correlate with the periods and places of governments issuing their own money? (Just take out the “income” component from the HDI and if you have got the information on monetary policy and central bank ownership, then bingo).

I realise some of you may have a more neo-institutional approach (dare I say sociological?!), and are interested in how economics is discussed in the media, or used in public policy. So for you, I also have a couple of research questions to suggest:

5) Of the news coverage since 2008, what % of the coverage on “financial crisis” also mentions “monetary reform”? I ask, as when searching on Google, only 3% of websites mentioning “financial crisis” also mention “monetary reform”. If you find similar statistics from trawling databases of news coverage, could you create follow up questions to reveal why there is this lack of analysis?

6) How are countries receiving advice, assistance and training on monetary issues, and what interests and evidence are involved in that advice?

7) How many economists does it take to change a light bulb?

“As many as need the light.”

Ok, so I knew the answer to that one. But could the answer instead be “as many as know the light is needed?”

I’m asking these questions as they relate to my own interests in sustainable enterprise, exchange and development, and I’m not about to retrain in your wonderful arts (sorry, “science”). If you want to know why more non-economists would like you to research these issues, you can view my TEDx talk on the “money myth.” For some output from economists already engaged in related matters, I recommend “Where does Money Come from” by Professor Werner and colleagues. Other, fairly elementary, resources Ive listed on my blog.

So, dear economists, please throw new light on money. I’m waiting for illumination. Posting links to peer-reviewed work in the comments section below would be great.

Sincerely,
Professor Jem Bendell

Adjunct Professor at Griffith Business School
Distinguished Visiting Professor at IE Business School