Healthy Money Healthy Planet - library.uniteddiversity.coop

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The reason the US can write almost whatever cheque it likes is that its national currency is used
as if it was an international one, giving the United States a huge advantage over other nations
… When gold was the world currency, wealth was created where gold was found. Today, wealth
is created in the reserve currency countries when their banks approve loans. 8
Over the years there have been calls for a reform of the trade system, but developing a
new international trade architecture requires discussion about a new international
means of exchange. As mentioned in Chapter 4, in 1944 at Bretton Woods, New
Hampshire, a number of nations came together to discuss the future of international
trade. British economist John Maynard Keynes brought to the conference a proposal to
foster a balance of trade between nations. He said that nations that export more than
they import lose out in material terms because they gain money, which is only of use
when it is spent. Conversely, nations that import more than they export owe the
international group of nations more goods. Keynes maintained that both debtor and
creditor nations therefore disturb the trade equilibrium (as in a green dollar system,
which suffers when anyone accumulates too much credit or too much debt). To balance
the system, he suggested the introduction of a new unit of currency, the bancor, and a
new institution, which he called the International Clearing Union (ICU). All
international trade would be conducted in bancors and the ICU’s job would be to see
that each nation maintained a near zero account. The proposal was essentially a mutual
barter scheme with strict rules, and the bancor would have been a healthy currency. 9
But Keynes’s proposal failed because the powerful American delegation wanted to
expand their export markets and have a trade surplus without any obligation to spend
it. Instead of adopting the economist’s proposal, Bretton Woods set up the World Bank
and the IMF, and made interest payable on all debts. From this decision has emerged an
escalation of Third World debt to an intolerable level and a situation where almost all
nations of the world are in debt. Fifty years of unhealthy money has drained the
developing world of its raw materials and left them with intractable debt.
There have been two more recent major proposals for a new international
currency: Richard Douthwaite’s energy­backed currency unit (ebcu) and Bernard
Lietaer’s terra. Both are interest­free, and Lietaer’s clever proposal is also more selforganising
than Keynes’s bancor.
The Energy­backed Currency Unit
In his book The Ecology of Money, Richard Douthwaite says that every economic system
should establish the scarce resource whose use it seeks to minimise. 10 He identifies one