Political money is like an illegal drug. Dealing with severe addiction means tackling demand and supply at the same time. Not normal demand…political parties tick over nicely...but peak demand. This comes at election times and is spent on a tiny percentage of the electorate now the whole country is regarded as a Rotten Borough ripe for bribing. Triangulation is the strategy of choice for both New Labour and the Tories. This is how it works. You buy off your core support with a few trinkets like a ban of fox hunting, colonise your opponents territory with double talk that confuses their core vote and then you spend your war chest on the floating voter in the marginal constituencies.

Political parties are legally allowed to spend £20 million in the 12-months to polling day. Reduce this to £5 million or less. This will make triangulation unaffordable and irritating posters and TV ads a thing of the past. There are no grounds for organisations that 98.5% of the country have decided not to join fleecing taxpayers just to provide a bogus legitimacy for a twice-a-decade voting and electioning operation that gets further and further removed from anything that can be called Democracy. The truth is that mass democracy is a contradiction in terms. Stealing people’s hard-earned money to pay for the nonsense is adding insult to injury. Now for more on parallel currencies.

You may find it hard going but you will not be alone. Richard Douthwaite in County Kerry, Tom Greco in Tucson Arizona, James Huber in the Netherlands, Anton Pinschof in Morlaix Brittany and James Robertson in Chorley Oxfordshire make up a significant percentage of those who do understand such matters. The rest of us struggle. And there is nothing special about our generation. 100 years ago Silvio Gesell was bemoaning the ignorance of his contemporaries about The Money Mechanism as Thomas Robertson refers to it in his 1947 classic Human Ecology.

The first step when entering unknown intellectual territory is to become aware of your own ignorance. Once you have the subject mapped out and know what there is to know you can get into the detailing. With a sound grasp of the basics…and the premises…you will understand the Zen master’s remark that a master is not better than a pupil but has gone before. Often with diligence and application you too can become a master.

Money can be created by three groups in society…commercial institutions, governments and users. Douthwaite thinks the job should be done by non-profit organisations representing the users. The money we all use is asked to play too many roles. One is as an international currency…like gold in the 19th century before the collapse of the gold exchange standard. Another is as a national currency related to the international currency. However four-fifth of monetary transactions in towns and cities are between the people who live there. They need a plethora of currencies which like LETS, the Wir and the commodity-based currencies are created by their users to mobilize untapped resources. Most user currencies would be geographically-based but some would link communities of interest.

There are powerful forces intent on retaining the current Debt-Usury Financial System we all use to keep afloat. The Peace Parties needs its own money. It will be defeated before getting started if it relies on the War Party. Quasi-governmental commercial currencies like the dollar provide a means of exchange. But they need a priesthood to create, destroy and manipulate money and with their fingers in the till it is not surprising that they cream off as much as they can get away with for their personal and private use. Another problem is that debt-usury currencies do a very poor job as a store of value…even though it is this that our pensions, savings and peace of mind depend upon.

Tom Greco has concluded that the means of exchange function invariably conflicts with the store of value function and cautions LETS designers against combining the two. What is needed is a currency for spending and another for saving. Between the 1950s and the late 1970s the Sterling Area did quite a good job in this regard as there was effectively capital sterling and consumption sterling. People moving capital out of the Sterling Area had to buy whatever currencies they needed on a special market at a special exchange rate. This is the key ideas in Richard Douthwaite’s proposals in his Schumacher Briefing on The Ecology of Money.

But Douthwaite’s Four Currencies System is wrapped around another idea. On 15th August 1971 President Nixon took the US off the gold standard which set currencies fluctuating at the beck and call of market whims. Hedge funds love this but the biggest hedge funds of all…Government Central Banks…hate to see their domestic economies jerked around by private speculators. So they have been in continuous conference about a new Bretton Woods.

Richard Douthwaite is also dismissive of the current floating non-system and wants to fix it with an energy currency. His proposal is the subject of Thursday's weblog...following on from tomorrow's discussion of a Global Electricity Grid and the idea of the Kilowatt-Hour as the Global Reserve Currency.

Two hundred years hence the current Debt-Usury Money will have been swapped out for something better. But nothing will happen this side of Crash unless thinking people take an active interest in Money Reform Theory and the Politics & Philosophy of Money. Getting the labour unions onboard is one place to start. Renewed interest in The Philosophy of Money by George Simmel published in 1901 might also be a sign of a new Monetary Revival Movement.

Last week the New Labour MP Alistair Campbell wrote an article that appeared in the national press making the case for public funding of political parties. He made it well and there is a case to answer. Behind the scenes the New Labour SD Alistair Campbell was orchestrating a clever PR campaign that Max Clifford would have been proud of to demonise the private funding of political parties by business, unions and party supporters. SP stands for Spin Doctor.

This is the first of two weblogs about parallel currencies…followed by a discussion of energy currencies. These were first suggested by Buckminster Fuller in connection with his One World Island Global Electricity Grid but have taken on new life in recent years as the Global Commons Institute in London has seen the possibility of using Special Emission Rights (SERs) and Domestic Tradable Quotas (DTQs) to support their Contraction & Convergence agenda.

This primer on parallel currencies is based on The Ecology of Money...a Schumacher Briefing by Richard Douthwaite. The above diagram sums up his ideas. I will return to it tomorrow.

EM1 - people with earnings in a Wirtschaftsring-type system exchange them for the national exchange currency.
EM2 - members of a Local Exchange Trading System exchange LETS units for the national exchange currency.
EM3 - ensures that flows of money from imports and exports balance each other.
EM4 - allows people with exchange money to swap it for store-of-value savings money.
EM5 - balances capital flows in the store-of-value currency into and out of the country.
EM6 - composite of all the EM3-type exchanges operated by the rest of the world.
EM7 - balances the flow of money into and out of savings for the rest of the world.

The current Debt-Usury Financial System is seriously flawed. But it does what it was originally designed to do…it maldistributes money and finances wars. As a result those who benefit from the system have ensured that a network of international central banks and their handmaidens the commercial banks have taken over the world of money.

Double-entry bank book-keeping and the King and Country money system misruling the world started by ruling the waves when some old ideas, re-emerging in Amsterdam in the mid-17th century, were refined by Huguenot bankers into a coherent system. The Houblon Brothers brought the ideas to the Dutch and English Courts and in 1694 William of Orange incorporated them into English Law by giving a monopoly to the Bank of England Corporation.