The Future of Money | Chapter 4 | Bernard Lietaer (1999)

Reproduced from:

The Future of Money © Bernard Lietaer August 1998

Chapter 4: Five Scenarios for the Future

“Never has humanity combined so much power with so much disorder,
so much anxiety with so many playthings,
so much knowledge with so much uncertainty.”
Paul Valéry1

“In writing scenarios, we spin myths – old and new –
that will be important in the future.”
Peter Schwartz2

“Humanity is entering a period of extreme alternatives.”
Botkin, Elmandjta and Malitza3

This chapter explores future possibilities through scenarios, each of which is targeted for roughly one generation in the future, around the year 2020.

The “Official Future” is a simple extrapolation of what has become familiar over the past couple of decades. You will see why such a scenario has zero probability of occurring. Four more plausible scenarios follow this , each highlighting the implications for shaping our future societies of one of the changes currently possible in our money system. These four scenarios are: The Corporate Millennium, Careful Communities, Hell on Earth, and Sustainable Abundance. First, a cameo story captures the essence of the lifestyle for each scenario. Each time the evidence is provided that grounds the plausibility of such an outcome, in graphic form whenever possible.

In the conclusion, the four scenarios are placed in a broader perspective, and the driving forces that have shaped them are identified.

Scenarios – Windows on the Future

Scenarios are tools that help us to think coherently through complex chains of events and relationships. They inform our decisions and choices today, aiming at creating a better future. They enable better informed decisions that are robust against a wider range of future possibilities.

Aristotle surmised a long time ago that if we know the future, we cannot change it; and if we can change it, we cannot know it. That is why scenarios are not simple extrapolations, forecasts or predictions.

One of the originators of scenario building, Napier Collyns, has called the process “an imaginative leap into the future.” His colleague, Peter Schwartz, president of the Global Business Network, described them as “tools for taking the long view; they’re stories about how the world might turn out. [These stories] are about meaning. They explain why things might happen, and they give order and coherence to events. Stories are history’s oldest way of organizing and communicating knowledge and one of the clearest channels into your mind’s eye.”4

Such scenario building has three objectives:

  1. To challenge habits in mindsets, mental models, images and beliefs. We all have our habitual ways of looking at the world, consistent with our attitudes and beliefs. Such mind-sets can filter out useful insights. Scenarios enable us to momentarily take off these filters and reveal the blind spots, the hidden assumptions, and open new windows on the future.
  2. To identify and better understand the underlying forces that are driving pivotal events. Specifically in our case, the consequences of a shift of control over money systems to various new players in society will be highlighted.
  3. To work creatively with these discoveries, and use the clarity they inspire to shape a more desirable future.

Scenarios are not academic exercises.

The scenario-building process enabled Shell to forecast and prepare for the fall of the former Soviet Union, thereby avoiding billion-dollar mistakes in North Sea oil investments. Shell still updates its scenarios roughly every three years.

The Flight of the Flamingos”

A few years ago, Shell-trained scenario facilitators gathered representatives of all parties in South Africa. Among the participants at these confidential meetings were four of the ministers of the future Mandela government. The scenario that has been implemented in South Africa was called ‘the Flight of the Flamingos,’ a metaphor for all parties taking off slowly, but together.

Clem Sunter, currently with Anglo-American, has published parts of these scenarios.5

This process also contributed to the ‘South African miracle’ of the peaceful transition after Apartheid (see sidebar). These same methods were further refined by the Global Business Network founded by several Shell alumni, and later published by Peter Schwartz.6

The Official Future: “More of the Same”

The Official Future that we are told we can expect during the coming decades, is usually based on an extrapolation of what has happened over the past 20 years or so.

For example, in the Official Future the same political parties are expected to continue to vie for power in the same places. Schoolchildren will continue to learn roughly the same things as their predecessors. The same crops will be grown, harvested, sold, prepared, and eaten in much the same way as in the past. Computers will continue to become faster, cheaper, smaller. We will still pay for our purchases with our familiar Dollars, Pesos, Pounds, Francs, Reales or Yen. We may use “smart cards”1597 instead of the old bills, magnetic credit cards or checks. We may store our small change in an electronic purse instead of a leather one. Europeans will have adjusted to using a common currency instead of the national ones. But when all is said and done, how much of all this really matters?

In the more rarefied spheres of the global monetary system, we may expect an occasional crisis to shake some individual countries–such as happened for the UK in late 1991, Scandinavia in 1992, Mexico in December of 1994, Thailand in June 1997 Indonesia in December 1997, Russia in September 1998 and Brazil in January 1999. Once in a while, the press may also herald a “grand scheme.” Such schemes are given names, such as the “Plaza Agreement”8 or the “Maastricht Treaty,”9 pinpointing the place where the agreement occurred, but giving no indication of the pragmatic implications for the rest of us.

This Official Future10 boils down to a continuation of what we have lived with during the past couple of decades. But the real problem with this Official Future is that it has no probability of occurring. In the words of Willis Harman: “Our societies have reached a point where transformation is not optional anymore.”

Why the Official Future is Not Going to Happen

The words of Harman are prophetic for two reasons.

The first was already synthesized in the Time Compacting Machine of Chapter 1 (see Figure 1.3). The historically unprecedented convergence of the four megatrends — Age Wave, Information Revolution, Climate Change/Species Extinction and Monetary Instability — points out that “business as usual” is just not a realistic possibility. Any one of these trends is sufficient to significantly disturb the familiar societal patters. In combination, they just don’t leave any probability that we will get away with continuing undisturbed on our familiar path.

The second reason why the Official Future is not going to happen has directly to do with the topic of this book: the future of money. Even before any of these megatrends have fully played out, the decade of the 1990s has revealed various significantly experiments which alter the nature of money. Nobody questions that new technologies are going to change the form of our money (i.e., the ever more ethereal aspects that our “normal” national currency can take such as electronic bits in automatic payment systems, on smart cards or on the Net). When Time magazine has a cover story about the “Future of Money,” it refers to electronic dollars.11 However, this is only part of what is occurring.

In parallel with these electronic money developments, something entirely different is emerging. There are those around the world who have already launched, or are experimenting with, totally different kinds of money. They are transforming what money is, who creates it, what it means, what emotions it encourages, and how people will behave toward each other and the environment when using it.

We know that the technological changes that have the most radical revolutionary impact on societies are those that change the tools by which people relate to each other. Fundamental shifts in civilization have been traced back to the invention of writing12, the alphabet13 and to the printing press.14 The breathtaking social, political and economic implications of the invention of the telephone, car, and television15 are classic examples of such shifts that occurred during the 20th century.

Changes in the nature of money will have at least as great an impact as any of the above examples. Money is our key tool for material exchanges with people beyond our immediate intimate circle. Of all the tools that can change human relationships, what is more central in a capitalist society than money? Capitalism uses the flow of money within the marketplace to allocate resources among participants in society. Under capitalism, money is not only the means but also the objective of the overwhelming majority of the exchanges. The internal combustion engine changed only the nature of our transportation system, and look at the results! In today’s capitalist society, changing money would be equivalent to altering both the fuel and the underlying motivation for most of our actions. Therefore, transforming the nature of our money is likely to have more far-reaching consequences than we can begin to imagine.

There are now hundreds of projects under way that are utilizing new kinds of money, and creating just such a transformation. Together they provide a strong indication that our very concept of money will change. Some of these schemes involve the most powerful organizations in the world and billions of dollars of investments. Others have been implemented on a shoestring by social activists in a dozen different countries, and still others were dreamed up by a lonely “cypher-punk” in a loft in Silicon Valley. My forecast is that 90-95% of all these projects will not survive; but that the remaining 5% will succeed at permanently changing our economies, our societies, our civilization, and our world.

Just as radically as gunpowder sealed the fate of the feudal system in Europe at the end of the Middle Ages, those money projects that survive will determine the direction toward which power will shift over the next century. What makes this unusually exciting–or frightening, depending on your viewpoint–is that there is no way to know which approach will prevail. It is not necessarily governments or corporations, or even the best-funded or best-staffed projects, that have the greatest chance. Some entrepreneurs in a garage are succeeding where the giants have failed.16 Conventional wisdom has long held that only the largest corporations could attract top talent and significant financing, because size automatically ensured market clout. None of these well-established “facts” have held true in the 1990s.

When we talk about the future of money, we cannot avoid talking about the future of our societies and of our world. This should not be interpreted as a mechanical cause-and-effect relationship between money systems and broad societal changes. Societies are extraordinarily complex systems and, therefore, impossible to understand in simple mechanical terms. This is truer now than ever before. For the first time in recorded history, our money game has become a truly global one. Now that ex-Communist countries, and even “communist” China of today, have irrevocably switched to money as the social motivator of choice, changing the money system may be the most powerful way available to consciously shift our collective behavior on a global scale. In addition, for the first time in history, the effects of any monetary changes will be multiplied by our information and communication technologies, propelling us at high speed into mostly uncharted territories.

Given that the Official Future is not going to happen, what are some of the other more plausible futures? Here are four very different directions in which changes in our money systems could take us:

  • The Corporate Millennium: a world where private corporate scrip has taken over the role of of the familiar bank-debt national currencies;
  • Careful Communities: where a global monetary meltdown has left community-based local currencies as the dominant money-shaping force;
  • Hell on Earth: where no new social or monetary order has been able to emerge after the collapse of the official money system;
  • Sustainable Abundance: a world where various kinds of money innovations — described in Part Two — form a successful preventive measure against a monetary meltdown and create an “Integral Economy” where the old and new money systems effectively balance and complement each other.

The Corporate Millennium

The Corporate Millennium scenario illustrates how power, including the power to create money, could shift to major multinational corporations over the next decades. This story is reported by a journalist after interviewing Britain’s Last Prime Minister in the year 2020.

Good-bye to the Last Prime Minister17

London, February 7, 2020

While he gazed at the fires burning on the South Bank, I spoke with Britain’s last Prime Minister in his old office at Westminster Palace. This was the most candid and informal interview I have ever had with him, perhaps because this was also his last one. “This isn’t my problem anymore,” was his opening remark. He had signed the final papers earlier in the day. At midnight, Securicor was to take over the police franchise for the United Kingdom.

This was the final piece of the puzzle. Executive Solutions had already won the armed forces contract, in return for control of Cornwall’s offshore oil fields. Social Services is run by Sonysoft, since Sony took over the Microsoft empire after Bill Gates’ tragic death. Consolidated Banks was in charge of the economy. NewsCorp had the Education Department franchise. Even the Houses of Parliament, no longer needed now that elected representatives had ceased to have meaningful functions, belonged to Virgin. Tomorrow the estate agents were coming to look at Number 10 Downing, and he would slip into retirement as easily as power had slipped into the hands of corporations.

He showed me a book of old press clippings. The first was a report of his maiden speech in the Commons in 1992. He was attacking the loss of British sovereignty to the European Union. He smiled at his own naiveté. “I had talked about immigration, demanding greater controls. Talk about barking up the wrong tree. Getting into the country, any country, is easy now–just buy an airline ticket. But entering a corporate enclave, like Islington, Belgravia or Lower Manhattan, requires an electronic appointment and ‘positive identification’.”

His face turned grim. “Really efficient, this ‘positive ID’ technology. As with most important things in history, its general acceptance was a convergence between conscious choice, accident, and necessity. The conscious choice was the initial justification to test smart cards for administrative reasons—they would include name, Social Security number, driver’s license, and emergency insurance and medical information. The accident was the ‘credit card blitz,’ when a group of hackers–who had patiently created a data base with credit card numbers, credit limits and approval codes –disappeared one day in 2001 after charging hundreds of million of dollars on hundreds of thousands of accounts. After that, the smart card payment technology imposed itself almost overnight, and the tie-in with electronic ID made a lot of sense to improve security. However, after the global social unrest of 2006, two additional types of data were added, first in the US: the PSC level and the PEC order, operating both in physical space as well as in the cybersphere.” (See ** note at bottom of previous page)

He continued, with some sadness in his voice: “I remember seeing a BBC newscast back in 1996 about trends in America. It mentioned The Mall of the Americas in Minneapolis–the largest shopping mall in the world at that time–where, because of security considerations, access was prohibited to unaccompanied teenagers at the request of adult shoppers. These youngsters didn’t have the economic buying power to justify their presence there anyway. I remember thinking that this could never happen in the UK. Finland, back in the last days of the 20th century, was the first country to impose general use of positive ID using smart cards. The Americans copied that experiment initially in the major metropolitan areas to cope with the spreading urban mayhem.

Korea was first to legislate surgically embedding electronic ID chips in the hand at birth. Now, the Securicor contract I signed this morning specifies that, in accordance with the Interpolnet agreement, implants are needed on a global level, and therefore in the UK as well. Their argument is irrefutable: how can anybody police the global cybersphere if there are security holes where people can log on without individual ID implants?”

He went on, “An information bridge between product bar codes and personal IDs was also inevitable. In the 1990s, we already knew that the information about who purchases what was more valuable than the profits. Even Orwell did not foresee a Big Brother that could reconstruct everybody’s life at that level of minutia.

Every purchase, toll payment, and phone call made with traceable money is routinely warehoused in massive databases for future reference– the most valuable corporate marketing assets of the Information Age.18 But it has become even more essential to screen out anybody for dubious security connections.”19

The last PM insisted that he go on record as saying that he has tried to stem the corporate tide one last time. “But there had really not been any choice. The first warning signs were already there when ‘market forces’ propelled Britain out of the European Monetary System back in 1991. Then came the Millennium Bug. It imposed a triage system to identify “Y2K compatible” businesses and squeezed out all those that were not. This further concentrated power in yet fewer hands. A few years later, the “leftist” French President tried to raise taxes to pay for essential services. Capital had fled overnight. The wealthy, even the moderately well off, had migrated to other tax bases. The multinationals took a few months to wrap up their operations, and delocated most functions performed in France to friendlier places. Back in 1996, Glen Peters, Director of the Future at Price Waterhouse, had called them nomads. ‘They take what they can while it’s in abundance, then close up shop and move on.’

After that episode, all countries were put in competition to further cut their budgets to the bone. The last items to go were subsidies used to attract foreign investments. The driving force had really been the digital revolution. Bill Gates became the new Karl Marx or George Washington, depending on who you talk to, leading us straight into the Corporate Millennium.

Perhaps it was predictable that The Knowledge Society would become The Corporate Society. After all, the corporations that came out on top were invariably those most effective at using knowledge in an organized, strategic sense. Knowledge, power and money, have always been closely linked, and now have become directly interchangeable. And governments have become irrelevant in all three.”

“We should have seen it coming, “ he reflected. “As long ago as the 1990s, the Director General of the Institute of Directors, Tim Melville-Ross, had said that the possibility of the Third Millennium being ruled by the corporations was ‘a legitimate concern.’ Glen Peters had said that ‘all evidence is that probably the tide is unstoppable.’ Not everyone agreed that it would be so dramatic. Some had thought that the State would return to its traditional roles of setting rules and fighting wars. But we all expected that the Information Age would be as earth-shaking as the Industrial Revolution. And look at what that did to the old landed aristocrats, not to speak of the peasants. A host of business gurus had sounded warning bells for decades. I remember Charles Handy, author of The Empty Raincoat, saying ‘Companies are still run as totalitarian states.’”20

“The real clincher,” he noted, ”was when corporations directly issued their own currency, instead of simply competing for the currencies issued by banks under governmental supervision. It started innocently enough with ‘frequent flier miles,’ initially earned with and redeemable only for airline tickets. American Express simply generalized the concept by creating its ‘world traveler money, redeemable worldwide.’ When these prototypes merged with the booming cybereconomy, it almost became a free for all. However, through coalitions and convertibility negotiations among the larger corporations, we created today’s reality: a few dominant ‘hard’ corporate scrips backed by real goods and services that are increasingly taking over the ‘unstable national currencies only backed by debt.’”

The PM wiped the dust off the window ledge. No one came here any more. The Commons had held its debates on the Internet for almost a decade. That allowed the politicians to spend more time with their constituencies, or so went the reasoning. But nobody in the constituencies cared either. Everybody knew that politicians had no real power to influence events anyway.

He continued, “The turning point for the media was when they discovered that what people really want is to be distracted from reality. So news increasing became entertainment.21 I am willing to bet that more of the footage shot by NewsCorp at tonight’s riots is going to be used as an insert for the latest episode of their series on Cybercops and Robbers, rather than in the news report. Business reports and entertainment news have gradually replaced coverage of political issues. Turnout at elections has sunk to 5%. My government has less legitimacy than a tinpot dictatorship. When I tried to push through a law ordering the de-merger of NewsCorp and the BBC, people had just laughed. The only option left was to just wind the whole thing down.

Not everything is bad, of course. Other institutions, some high profile charities, museums, universities, had done rather well under the new regime. Most workers worked from home, or from somewhere more pleasant than big cities. London has been shrinking for almost a century now, and telecommuting gave the final push to the exodus. The streets are mostly filled with tourists. The Palace of Westminster will remain a grand old building though, now that it is an indoor park, since Disney refurbished it with the perfect theme. As the brochure says, “Representative Government as it was: from the Magna Carta to the year 2000.” They take the usual liberties with the historical facts and emphasize only the most exciting episodes. But I do feel left out– they stopped the clock at the year 2000 because it made marketing easier.

Yes, the buildings will be all right. But what about the people? It wasn’t that the mega-corporations were treating them badly. In many ways, being a citizen of Goldman Sachs or Chrysler-Daimler-Benz had more advantages than being a British or German/American citizen. Certain kinds of employees are thriving like the royalty of the past. The City is paying massive salaries to those with the right skills. The problem is that nobody convinced the global giants to become socially responsible. Last century, big business was trying to bend the rules. Now, there are no rules, except the ones they create. ‘You have to ask whether big business and representative organizations like ours are likely to handle power in a benign way’ Tim Melville-Ross had warned back in the 1990s, ‘And it is by no means certain that they will.’ He had thought disclosure and public scrutiny would be enough to ensure good behavior. Glen Peters, too, had argued that the consumer was more powerful than the biggest company. The public had boycotted businesses they didn’t like, but this inane approach could hardly work. Big business, after all, also controls most of the information people were getting–directly, by ownership of the media, or indirectly, through the influence of the advertising money. It had also managed to colonize almost all of the Cybersphere.

Then there is always the uncontrolled component, the Cyber-underground, at the leading edge of the backlash. By comparison, the earlier IRA bombings in London were a picnic. Who would have thought that weapons of mass disruption would replace weapons of mass destruction? The stock market crazes launched underground by the hackers, disrupted payment systems, commercial aircraft colliding in the skies, mis- tracked commuter trains crashing into freight trains. And when any of these mass disruptions occur, no one can call an ambulance–the 999 network has been blown apart by a computer virus. And the older forms of violence still pose a threat. Even Bill Gates, with all his bodyguards, could not avoid being blown up along with his armored car.

But what should one expect when a third of the population, including many of our brightest kids, cannot find a job, have no room at our collective table, do not fit into the increasingly paranoid business world? The backlash against softhearted people in the business world has been harsh. Women have been singled out for not understanding that this is a tough world, that business is at war with these cyber-terrorists. ‘Love it, or leave it’ had become the unspoken rule, very effective at generating conformity among the ‘Ins’.”

Again the PM glanced across the river and shuddered. People on the far bank had flaming torches. “That is the real problem, the ever growing numbers of ‘Outs.’ The underclass has been falling behind for decades. Even when I was a boy there were men living rough on the streets. Then came the kids. After that, whole families. Now it looks like hordes. Professor Handy had estimated that 20% of the population would be unemployable. He had guessed too low: with increased social uncertainty and criminality, corporations needed to be more selective than ever in hiring anybody who might be a security risk. Unemployment keeps rising for those too old, with outdated skills, or spotty security associations.”

The last PM of the UK closed his book of clippings, put it in his red box and left the Houses of Parliament for the last time. As he walked out, he glanced up. The glowing Seiko sign on Big Ben was backlit by the glow from the fires. He said he felt a deep sense of personal failure, along with the failure of a system of governance. A page of history had been turned—irrevocably.

**  In 2020 cyber-jargon, the cybersphere is the virtual space where all the electronic technologies–payment systems, telephone, computers, media, security systems, Internet–all converge into a single seamless system. The Personal Security Clearance (PSC) defines the areas to which a person can be admitted—which areas of town, which buildings, which rooms in specific corporate buildings. This is all neatly organized through security systems that are automatically updated if you have an appointment with anybody in one of the corporate enclaves. The device reads your ‘positive ID’ status as you walk along. Totally unobtrusive- -with the right clearances. The same PSC also controls access to the cybersphere. It became necessary to increase general security as larger segments of society–excluded from the benefits of corporate jobs–turned increasingly violent to survive (from the old petty street crime to kidnapping of executives, cyber-terrorism, extortion under the threat of mass disruptions, etc.)

The Personal Economic Clearance (PEC) defines an individual’s creditworthiness for using the various corporate scrips in which he or she participates. Without the proper ‘economic clearance,’ one can’t enter certain shops or shopping zones, whether downtown or in the cybermalls (there is not much there that anybody with a lower clearance could afford.

Timetable for the Transition

A timetable follows detailing a plausible transition between the Information Age and the Corporate Millennium. All events through 1998 are actual, beyond that they are projected.

Timetable of the Revolution

1970s: Experimental introduction of frequent flyer miles and product bar codes.

1980s: Generalization of fidelity cards and product bar codes. Introduction in France of smartcards for payments purposes.

1992: Amex embarks on an alliance strategy for the “frequent traveler” market, making membership miles convertible into “Connect Plus” and vice versa, starting the trend of broadening the purpose of private currencies

1994: The first Positive ID chips surgically implanted in the necks of dogs are successfully marketed in Silicon Valley.

1995: Total outstanding “narrow purpose” corporate scrip tops $30 billion in value for the first time; 30 million rechargeable smartcards for payments in circulation in France; 88 million smartcards issued in Germany for national health record management; in Finland the Central Bank issues a combined payment, social security, and health management smartcard.

1996: Joint venture between Microsoft and Barclays to design electronic money systems. Merger of CNN and Time-Warner creating the largest “content” empire. Introduction of Internet stations in public places in the UK. Implementation of the new World Trade Organization (WTO) Treaty, dismantling most remaining national barriers to international trade. Sensar, a pioneering biometric company, signs contracts with NCR and OKI Electric Industry for iris scanning devices in Automatic Teller Machines (ATMs).

1997: The first Britons get Internet access via home TV sets. Biometric iris scanners operational in Japan and London. A pilot project between US and Bermudan Immigration authorities uses automatic hand reading devices to expedite the processing of frequent travelers. Mircrosoft introduces Virtual Wallet in its Internet Explorer 4.0. Worldcom merges with MCI, the largest financial deal in history so far, also the largest “carrier” merger; 170 million smartcards in use worldwide.

1998: Citibank introduces biometric iris scanners in the US. Electronic fingerprint ID implemented. British Telephone merges with ATT, besting the MCI – Worldcom deal to create the largest telecom carrier.

1999: Accelerating merger trend between information “content” and “carrier” groups. Amex launches “cash2000,” a full-purpose corporate scrip “for the global elite.” Microsoft and others follow suit.

2000: The volume of email for the first time exceeds conventional post; 600 million smartcards in use worldwide.

2001: The first Information Rights scandal breaks out: medical information is being used to blackmail people into purchasing from one specific online supplier. As all relevant databases have been accumulated in a tax- haven island in the Pacific, no legal recourse is obtained.

2003: Koreans require by law “positive ID implants” into newborn children. 2006: Repression of the “global job riots,” most violent in US cities.

2010: Private corporate scrip currencies exceed national currencies in commercial exchange volume for the first time.

2015: Tax-slashing promises are fulfilled by privatizing the remaining essential services in the UK. 2020: The last Prime Minister of the United Kingdom retires.

2020: The last Prime Minister of the United Kingdom retires.

How is this Possible?

This scenario describes how the Information Revolution could decisively shift power toward the Corporate world, making the nation-state concept irrelevant. Instead of changing internally to adapt themselves to their expanded social role, corporations reshaped the world to their own priorities.22 Corporate take-overs of government functions can be a double-edged sword, depending on the field, and the way the services are handled. For instance, nobody is regretting the government-owned telephone services in the countries where that was the practice. Private corporations have been supplying better and cheaper service than the government services had supplied. Similarly, the appearance of private postal services, such as Fedex or UPS, has improved quality and reliability of service.

In other domains, the outcome may be less obvious. When First Data Resources built an engineering school for the University of Nebraska at Omaha whose curriculum is specifically tailored to the needs of that corporation, the slope can become slippery. When high school children receive their financial education from a credit card company, and they learn that it is “good financial practice” to have 20-30% of one’s income dedicated to reimbursing credit card debt, we have gone over the edge.

Specialized corporate currencies like frequent flier miles are thinkable only because cheap and ubiquitous computing power.

It is only a question of time before someone (American Express, Microsoft, some newly formed cyber-entity, or a consortium of corporations?) will issue a full corporate scrip, backed by their goods and services. Even Alan Greenspan says he “envisages proposals in the near future for issuers of electronic payment obligations, such as stored-value cards or “digital cash” to set up specialized issuing corporations with strong balance sheets and public credit ratings” and he foresees “new private currency markets in the 21st century.”23 In short, instead of competing for the familiar national currencies backed only by government debt, corporations could issue their own money backed by real goods and services.

“Where to and

Press Release by, November 20, 2000

Applied Digital Solutions, Inc., a NASDAQ-traded company, presented publicly today its “Digital Angel” device before an overflow crowd of more than 300 invited guests including U.S. Secretary of Commerce Norman Mineta.

The technology consists of a miniature sensor device, designed to be implanted just under the skin, that captures and wirelessly transmits the “wearer’s” vital body-function data, such as body temperature or pulse, to an Internet-integrated ground station. In addition, the antenna receives information regarding the location of the individual from the GPS satellite. Both sets of data — medical information and location — are then wirelessly transmitted to the ground station and made available on Web-enabled desktop, laptop or wireless devices. A more sophisticated version of microchip technologies currently used as electronic ID tags for pets, Digital Angel is powered electro- mechanically through muscle movement, or it can be activated by an outside monitoring facility.

As WorldNetDaily has reported, in addition to locating missing persons and monitoring physiological data, Digital Angel will be marketed as a means of verifying online consumer identity for the burgeoning e-commerce world.

And in an interview last March, the chief scientist, Zhou, told WorldNetDaily that he believes the implant will be as popular as cell phones and vaccines. Digital Angel “will be a connection from yourself to the electronic world. We will be a hybrid of electronic intelligence and our own soul”said Zhou.

Richard J. Sullivan, Applied Digital Solutions’ chairman and CEO, waxed eloquent about the market potential of Digital Angel, claiming the company has “uncover d a total marketplace that is conservatively estimated to exceed $70 billion.”

Governments will, most likely, not be the only losers in such a power shift. For instance, a Corporate Millennium has the potential to further erode personal privacy and individual rights to the advantage of the large corporations. Such erosion results from a convergence of the following three trends, alluded to in the scenario:

  1. The perceived need for personal identification (“positive ID”) to ensure security in electronic payments. As the cyber-economy expands, bringing with it a criminal cyber- underground, the rationale strengthens for this possibility (sidebar).
  2. Electronic forms of money — whether of the old national currencies or corporate scrip — are ideally suited to become “traceable currency,” easily used to track who purchases what. The most valuable marketing asset in the Information Age will be the massive consumer data-bases that result, and are already being built today, as is confirmed by the demand for unprecedented large-scale data storage devices by all major retail chains. Another sign of this trend: the South African bank Nector gives its customers a free portable telephone which gives them automatically each morning their bank balance, but also monitors all other calls to build up a profile of the customers.
  3. Connecting product bar-code information to the personal identification of the purchaser. The economic incentive for this is almost irresistible, particularly for mass marketers, who thereby have available to them a complete profile of millions of consumers, including information about their preferences and lifestyles.

Privacy erosion may creep on us like the experiment with frogs that let themselves boil to death if the temperature rises very slowly. And it may all happen, thanks to giant corporations most of us have never heard of, that appear suddenly out of nowhere, like whales breaching from the deep. This is not theory or paranoia, for it can be illustrated by the actual history of the biggest Net distribution corporation of 1997-98.

The Case of the Stealth Mega-Store

Quiz question: Name the largest Net merchandiser in 1997 ($1.5 billion in sales). A corporation that makes available over one million different products and services on-line (as a basis of comparison, a typical Wal Mart has 50,000 items), and that has detailed psychographic and transaction data concerning over 100 million consumers (about half of US households). An extra hint: the same corporation is also the world’s largest franchiser in both hotel chains and in residential real estate.

Did you guess Cendant?

If you didn’t, don’t feel badly. Most of its customers don’t know its name either. Cendant is the result of a merger between two just as little known companies–Comp-U-Card (CUC) and Hospitality Franchise Systems (HFS)–which have nothing in common, except an understanding of the power of information in the Information Age. Their history is a perfect case study about how the dynamics of the Information Age can concentrate power in totally new ways.

Walter Forbes started CUC in 1976 as a computer-based shopping service. His core idea was rock- solid and simple. Instead of having manufacturers ship to wholesalers and retailers who sell to the consumer, they supply the CUC database with information about their goods. CUC presents that information in a palatable way to consumers who can buy at the wholesale price, plus shipping costs. When a shopper buys something, the manufacturer is notified and ships it directly to the customer.

CUC makes its money, not from the merchandise, but mostly from membership fees ($69 per year) and from the vast amount of transaction information it accumulates.

CUC also launched a series of specialized on-line services: Travelers Advantage (a full-service travel agency), AutoAdvantage (purchase and maintenance of cars), Premier Dining (the first national discount dining program), BookStacks (on-line book purchases), MusicSpot (CDs), and Shoppers’ Advantage (a general on-line merchandising service that, by 1993, had 50 million members buying from a database of more than 250,000 products). CUC also acquired successively: Madison Financial Corporation (now FISI Madison, the world’s largest financial marketing organization), Benefit Consultants (insurances), Entertainment Publication (publisher of discount books), Sierra On-line (a software firm), and a large European licensee.

Forbes also cut deals with America On-line, Prodigy, CompuServe, Citibank, Sears, and other similar “brandnames” to provide their on-line shopping services. So without any CUC publicity (on- line or otherwise), and all shipping being handled directly from the manufacturer, most customers have no idea that they ever dealt with CUC. Total sales volumes don’t even have to be reported because they are directly credited to the manufacturers or service suppliers.

HFS comes from a totally different world, except that most of its customers are just as ignorant of its existence as are those of CUC. It was founded in the early 1990s by Henry Silverman. The story began when he engineered the acquisition of the hotel chain licenses of Ramada Inn and Howard Johnson. For these, $170 million was paid, and for Days Inn, $295 million. They became a publicly owned corporation in 1992 under the HFS name. It then further acquired Super 8 for another $120 million, making it the world’s largest hotel franchiser. Silverman explains that few people understand the advantages of being a franchiser instead of an outright owner. The franchiser provides advertising for the brand name, runs the reservation systems, and supplies training and inspection on the franchisees. In short, the franchiser handles only the clean information aspects and is paid a hefty, predictable fee for it. It leaves all the messy and unpredictable aspects to the franchisees, such as the changes in value of the real estate, the continuous maintenance and upgrades needed, the fluctuations of customer flows, and all the labor intensive components.

Silverman also made some other, seemingly unrelated, acquisitions, such as Century 21, ERA and Coldwell Banking in 1995. This made HFS the world’s largest franchiser of residential real estate. Later he also acquired PHH, a conglomerate of corporate relocation and financial services, for $1.8 billion. But the clearest demonstration of the underlying strategy was the handling of the acquisition of Avis car rental for $800 million. Even before the deal was closed, HFS announced that it would be taking the second largest car rental company public. It would sell off Avis’ 174,000 vehicles, 20,000 employees, and 540 car rental locations to the public. The only thing that HFS kept for itself was Avis’ information and reservation system, which it would run for a nice predictable charge, and of course the Avis brand name for further licensing. As Wall Street has not yet named this strategy, I propose the term ”information asset stripping.”

As a consequence, between 1992 and 1997, HFS’s total revenues multiplied by a factor of 10, to $2 billion, and its net profits multiplied by twenty, to $475 million. But the most valuable asset is HFS’s psychographic, demographic, and transaction data it has accumulated about 100 million US consumers from all its activities, covering half of all the US households.

It was that latter asset that made the 1995 meeting between Forbes and Silverman so productive for both parties. They entered into a partnership that would match CUC’s marketing muscle with HFS’s client information base. Under the deal, CUC would market its travel, shopping, dining, and auto- clubs to the millions of guests of HFS. However, this is not done using mindless junk mail, primitive cold calling, or email spamming. When you call any of HFS’s hotels for a reservation, after the booking is completed, you are asked whether you are interested in hearing about a discount travel club that would ensure some significant savings during your trip. A free gas coupon worth $20 is part of the incentive. If you say ‘yes,’ you will be switched to a CUC operator to hear the special offerings available to you if you join the club. The net result: a 30% positive response (compared to the normal 1 or 2% conversion rate of direct marketing). And who could resist? “If you fly, you may want to consider this special deal for an Avis car waiting for you at the airport.”

Similarly, if your company relocates, using the services of PHH Corporation, Century 21 will be delighted to supply your staff with great housing, near the new location. Your employees will, of course, have to supply all the personal financial data necessary for them to obtain mortgages from FISI Madison. But a mortgage requires life insurance for which they have to file all the relevant medical information with Benefit Consultants. When they finally buy that house, via Century 21, they will receive a list of local dining opportunities available through Premier Dining, or an offer on discount books about the area published by Entertainment Publications, as housewarming gift from CUC’s Welcome Wagon.

Cendant was formally created from a merger between CUC and HFS via a stock swap, making the whole group capitalization worth $22 billion. Even Wall Street at first did not understand the Information Age logic behind the deal, so both stocks first dropped by 8%. They recovered after analysts had been briefed about the untraditional synergy available.

By the year 2007, according to Walter Forbes, electronic commerce will capture 20-25% of the gigantic $2 trillion retail business in the US. Forbes explains: “[the traditional retail industry’s] basic cost–bricks, mortar, real estate, people, taxes, health care–are all going up. They have inventory, we don’t. Our basic costs–communications, database, hardware–are all going down. The advantages of interactive shopping are getting greater.” When asked what will happen to conventional stores, he answers: “Twenty to twenty five percent will just go away,” and he points to the lengthening list of bankruptcies of Montgomery Ward, Woolworth’s, Caldor, and Bradlees. “Or they adapt: malls are already becoming entertainment, baby-sitting sorts of places. The amount of food and fun is going up, and the amount of product is going down. They are already responding to a future that’s not even here yet.”24 He also forecasts that the concentration of power in the cybereconomy will be much higher than in the old Industrial economy. “At most 10 companies will have 80% of all the on-line business. It could even be five, because scale, as materialized by price, is going to be so incredibly important.” Cendant has started consolidating its different Shopping Advantage websites into a single “one-click” shopping site called netMarket. Given that the Net is global, these five to 10 companies can serve the world, not just the US.

And yes, you probably guessed it: Cendant now issues its own currency, as well. It’s called “netMarket Cash” and you obtain it as a premium for frequent purchasing (5% of the value of a purchase is credited to your netMarket Cash Account). It is redeemable against future purchases: one million products to choose from, going to three million within three years. Is netMarket Cash a corporate scrip in the making? Or would Cendant be only one of the partners in a joint venture that creates an on-line currency backed by real goods and services?

In 1998, the group could supply about 20% of a typical American household’s goods and services (a database of one million items). Its plans were to supply 95% of all needs (about three million types of goods and services) by 1999. However, these ambitious blueprint has suffered a major setback in 1998-99. A very old fashioned accounting scandal has provoked both the resignation of Walter Forbes as Chairman, and a precipitous loss of 80% of Cendant’s stockmarket valuation.25 So it may not be Cendant itself, but yet another — still unknown — company that may become the “Information Baron” of the cyberworld.

Cartoon by Singer
“Corporate Buddhism”

From Information Age to Corporate Millennium

What is important about the Cendant case is that it illustrates one possible outcome of the dynamics of the cybereconomy. It also graphically shows that there are questions that should be raised about the implications of concentrating information power. Market concentration has led to abuses against which antitrust laws have proven necessary. Information concentration could similarly lead to abusive use of personal information.

Privacy at Risk

There are clearly important issues around privacy protection that the new technologies will create. While Cendant may have no intention to abuse its information power, accumulating an unending stream of personal data in any one hand, private or public, is bound to create abuses at some point. No police state has ever been able to reconstruct individual lives at the level of detail possible through an unlimited accumulation of medical, financial and transaction data. Employees have practically no constitutional privacy rights wherever their employer is involved (see sidebar). The Cybereconomy could extend that process to everybody else.

Big Brother = Your Boss?

Technology makes surveillance cheap and easy. According to a 1997 survey by the American Management Association, two- thirds of major US corporations routinely monitor their employees electronically26. The Fourth Amendment’s safeguards against “unreasonable search and seizure” apply only to government surveillance. Corporations are not tied by these constitutional rights.

  • In desks, drawers, and file cabinets at the employer’s premises, employees have no rights to privacy whatsoever.
  • Any email stored or transferred via corporate computer networks can be read by the employer for whatever reason. Similarly, bosses can listen in on any phone conversations without notifying their workers.
  • Your Boss may own part of your brain. Innovations you develop on or off the job can be claimed by the corporation. On the other hand, under the Economic Espionage Act of 1996, employees risk jail time for disclosing “confidential intellectual property.”
  • Employers increasingly cite healthcare costs to justify genetic testing. Workers have no right to “genetic privacy” and no protection from random drug tests.

The most effective solution for avoiding a continuous erosion of privacy is not European-style detailed regulation, or new forms of US-style anti-trust legislation. The best way is to formally clarify ownership rights over personal data. For example, one could specify that all personal data (transaction, medical, financial) belong, by right, to the individual. Only with his or her permission could this data be sold, traded or used for purposes other than the original transaction. The right to data privacy is one right about which the creators of the American Bill of Rights or the UN Human Rights advocates did not have to think at the time.

With the right of ownership of personal data vested in the individual, the consumer:

  • Will be informed that the information about him or her exists and can be used for other purposes.
  • Can get something in exchange, such as a special discount, for the permission to waive his or her right to privacy if desired.

Without the acknowledgment of such a right:

  • Individual privacy will be pitted against information technology, and technology will ultimately win because a powerful commercial interest exists to ensure this.
  • Abuses of information power are bound to occur, and once all the data capturing systems are in place, it will get harder and harder to seek correction.
  • Privacy will become a commodity that can be purchased at a price (for example via multiple untraceable digital identities, or special high-level encryption services), but it will then become a luxury service that only the rich can afford, adding privacy-inequality to the other inequalities.
  • For the average citizen, the probability of an Information Corporate Millennium will grow as the concentration of information power increases over time.

However, political debates on the cybereconomy everywhere tend to concentrate on issues such as cryptography, taxation, or jurisdiction. The real questions about privacy protection have not yet been asked.

It is important for us to realize that it does not require a dark conspiracy by corporate leaders to create this scenario. Businesses, like most successful organizations, combine reactive with proactive strategies. They react to environments they can’t change by adapting to them, and are more proactive when given the opportunity.

The way most global corporations adapted to this new reality is revealed in the choices they made, on the average, to fill the position of CEO over the last decades. In the 1940s and 50s, production was the key variable—the demand for goods in the post-war reconstruction was such that if you could produce it, you could sell it. Hence, the position of CEO was ideally filled by someone with a solid engineering background. In the 1960s and 1970s, CEOs with marketing backgrounds were in, because the business emphasis had shifted to marketing—by then, there were lots of producers around the world, and selling had become the key to success. By the late 1970s, after President Nixon created a new global monetary reality by floating all currencies, the single biggest business risk for many multinationals were losses due to the ever-fluctuating exchange rates of foreign currencies. Hence, in the 1980s and 1990s, the typical background for a CEO shifted again toward finance.

Paralleling these shifts, over the past 20 years a remarkable double movement has occurred in the way the largest corporations operate: a strong decentralization of the production network has been accompanied by just as strong a global centralization of financial and cash management.

Simultaneously, government agendas all around the world have undergone a striking mutation as well. For a long time, corporations have received subsidies from governments to attract their investments, and to create jobs locally. Now, in addition to subsidies, corporations expect a whole array of other priorities, such as low inflation and deficits, deregulation, particularly of the financial sector, freedom of capital flows, and reduced tax burdens. While none of these single trends are “problems,” together they have shifted the power from governments to corporations in an unprecedented way.

It is certain that the Information Age will deal a whole different set of cards to all the players, and modify the balance of power between governments, corporations and the population at large. This new game promises to shift power away from governments and regulatory authorities, as well as from the public. There are no direct quantitative measures for such power shifts, but the dramatic trend of privatization that is sweeping the world provides some indication of what is going on.

Figure 4.1 shows the process of systematic liquidation of government controlled assets. Before Britain’s Mrs. Thatcher, privatization was a rare event. Since then, a worldwide trend has caught on. For the year 1997 alone, the volume reached some US$157 billion, five times what it was in 1990. Developing countries have recently embarked on the same process, representing at least 30% of the total.

Figure 4.1 Global Privatizations 1990-96 (sources:
27, The Economist)28

Corporate Power: Some Facts and Figures

  • Of the 100 richest economies, 51 are now corporations. For instance, sales by General Motors are greater than the GDP (Gross Domestic Product) of Denmark, or Ford than South Africa.
  • The world’s 200 largest corporations now control 28% of the global economy, yet need to employ only 0.3% of its population to achieve that.29
  • The sales of the world’s largest 200 corporations are equivalent to 30% of global domestic product. Their total annual sales (US$7.1 trillion) are larger than the combined GDP of 182 countries (i.e. all but the largest nine countries).
  • About one third of global trade is really intra-corporate trade, i.e. one subsidiary exporting to another subsidiary controlled by the same corporation.
  • American corporations pay less in US taxes than they receive in public subsidies from US taxpayers.30 In 1994, US corporations received $167 billion in tax breaks, to be compared with $50 billion in total federal expenditure on welfare (AFDC).31
  • Business Week reports in 1997 that the compensation for American CEOs of these same publicly subsidized corporations have soared to an average of US$5.5 million per year, while the wages of the working population remained stagnant. In the 1960s, CEOs’ salaries were 30 times greater than those of the average worker; compared with 200 times today.32
  • For every dollar in total taxes (local, state and Federal) paid by individuals, corporations used to pay 76 cents in the early 1950s (1950-54). By 1980-92 corporate taxes are down to 21 cents per dollar of individual taxes.33 In Canada, even in a year of record corporate profits, like 1996, corporate income taxes were down to 14.5 cents for each dollar of individual taxes

I happen to believe that it is rarely “healthy” for governments to own businesses. But the point here is that this unprecedented global trend towards privatization is one indicator for the growing loss of influence that governments have over their economies.

There are many other indicators of the plausibility of the Corporate Millennium (see sidebar). There are also signs that the US general public actually expects some form of Corporate Millennium to emerge, and may even be preparing for it. In a remarkable survey to test the values of nine million freshmen on 1500 campuses over the past 30 years, Professor Astin of UCLA arrives at some revealing results.34 The following graph illustrates the response to two “value” questions about the reasons for going to college. Whether it was essential or very important to “Develop a Meaningful Philosophy of Life” or to “Be Very Well-off Financially.”

Figure 4.2 Objectives of US Freshmen (1966-96) valuing “essential” or “very important” (in percent). (Survey of nine million Freshmen in 1500 US Campuses).

The most noteworthy result of the entire survey was the radical switch between these two objectives. In 1968, an astounding 82.9% of entering freshmen said it was “essential” or “very important” to “develop a meaningful philosophy of life.” At that time, only 43.3% said that being “financially well off” was “essential” or “very important” to them.

By 1996, the two objectives had completely traded places. “Financially well off” is now top priority for the vast majority (74.1%), while the “meaningful philosophy of life” is now down to fifth priority, (relevant for only 42.1%). It is significant that the statistical variable that seems to best explain this switch in values was the number of hours of television watched before arriving in college. This indicates that if one ranks all nine million freshmen by the number of hours of TV they watched before arriving on campus, those who watched the least tend to believe that values other than making money matter. In contrast, those who were exposed to many hours of TV would invariably tend to believe that only money is important. The reason that this switch showed up over time is that the viewing habits of freshmen have gradually shifted over the decades.

According to Professor Astin’s analysis, the generation coming to college during the 1960s had been exposed to much less TV, largely because the majority of American homes did not have a black-

and-white TV in the 1950s, when these freshmen grew up. By the 1980s, almost all US homes had at least one and often several color TVs. As of 1997, by the time American children leave high school, they have spent more than 20,000 hours watching television–almost double the 11,000 hours they will have spent in the classroom.35 “Given that the commercial message on television is, almost by definition, materialistic, and given that much of the programming itself celebrates materialistic values (“Dallas,” “Lifestyles of the Rich and Famous,” etc.), it is perhaps to be expected that a lot of television would tend to promote materialistic values among young persons. […] Certainly, television does not promote contemplation or reflection on the great questions of life”36

Is it possible that this trend is the result of what Noam Chomski has termed “manufactured consent”? The purpose of mainstream media, Chomski claims, is not so much to inform or report on what happens, but rather to shape public opinion in accordance with the agendas of the prevailing corporate powers. As the Last Prime Minister of the UK observed, because the corporate world was also controlling the content of the media it was able to neutralize any compensating power that the media might otherwise have provided. As a result “Virtually everywhere the mass media provide people primarily with commercial messages…It is hard to discover in most of today’s news media the kind of information that would help citizens of democratic societies to reach well -informed political decisions…The media have been called ‘Weapons of Mass Distraction’”37

Advertising EVERYWHERE38

Advertising is ubiquitous, to the point of being the cultural expression of our times. We have become accustomed to being bombarded with ads as we watch a TV program or even movies and videos. Here are some other spaces that used to be ad-free:

  • Giant labels on clothing transform their wearer into a free billboard walker.
  • Fruit Label Company, based in California, places ads on fruit: the video-release of Jurassic Park was accompanied by little ad labels on 12 million Granny Smith and Fuji apples in supermarkets across America. The possibilities are endless: labeling lemons with “if you don’t want a lemon, buy a Ford,” or fresh tomatoes with Campbell Soup stickers.
  • Autowraps Inc in San Francisco, and FreeCar Media in LA are wrapping cars with giant adds in digitally printed vinyl from top to bottom, including windows. “It is better than billboards. It comes to you.”39 To qualify for the $400 per month income, one needs to be driving at least 800 miles per month, and park in high-value billboard-less neighborhoods. Verification by global satellite positioning.
  • Nike obtained a big pay-off in its $100 Million, 5-year contract from the golfing successes of Tiger Woods. He is indeed their “head to toe Nike man: from Nike footwear, clothing, gloves and hats, to the Precision Toner Accuracy ball.”
  • Another promising new advertising medium are the beaches, where for $25,000 per month a message is inscribed every day in gigantic lettering in the sand. Credit is given for rainy days because “fewer people will be exposed to the ad.”
  • “Reebok commissioned a New York artist to spray paint onto sidewalks and streets without city permission.”40
  • The first ads have started appearing at eye level in public bathrooms and urinaries, taking advantage of a “captive market”.
  • With government cuts to education, more and more universities are cutting costs by marketing their students to corporations. When a Stanford University computer course is given in the Hewlett Packard auditorium of the Bill Gates Computer Science Building, has the medium become the message? University campuses are also a main target for Cycle Stops Displays, an Ottawa-based company that provides free bicycle stands for campuses with the condition that they are adorned with eye-level ad panels. The University of Guelph has been the first to accept these racks.
  • The US Supreme Court ruled in 1995 that a color can become a registered trademark. Pepsi’s global marketing campaign called “Project Blue” includes registering a royal blue as a patented color and a $50 million production for the first ad filmed in space in cooperation with the Russian space station Mir. Pepsi is also considering a giant permanent satellite billboard in space visible around the world as soon as the technology becomes affordable.
  • Sounds can now also be patented. MGM has trademarked its “lion’s roar,” NBC its “three chimes,” and Harley Davidson filed a petition on the “hog call” or the sound of a “45-degree V-twin single crankpin motor.”
  • The James Bond movie “Tomorrow Never Dies” refined the concept of “global integrated film promotions,” by marketing the movie and a series of tied-in products simultaneously. Avis Rent-A-Car, BMW, Smirnoff vodka, Visa International and Heineken have all announced tie-in promotions. For instance, panels of the 007 star will grace point-of-sales displays wherever Heineken beer is sold; and in the film, 007’s BMW smashes spectacularly into a Heineken beer truck.
  • “Virtual Advertising”, the use of digital computer images which are inserted in TV scenes started in sport’s events (e.g. a giant Cola add appears live in the middle of the playing court), but have now spread to entertainment programming as well. It enables an Evian bottle to be placed on a table, or a fashion retailer’s shopping bag in a hotel lobby, where none were at the moment of the original shoots. These adds in live programming are more impactful than those in the breaks, because “people pay more attention during the show than during a commercial”41 and because the inserted adds can be changed for different re-runs and markets. This makes the debate over the colorazition of old black-and-white movies look quite quaint.
  • The Academy of Arts and Television–the organization that hands out the Emmy awards—has since 1997 added a new “Best Commercial” category. After all, the most talented people in the industry and a lot more money goes into producing TV ads, rather than the programs themselves.
  • On the other hand, Dr. Marty Rossman, director of the Academy of Guided Images, which has pioneered the use of imagery for medical purposes, claims that advertising should be considered “pollution for the imagination.” He says that the use and abuse of the most powerful images to make people feel incomplete has enormous consequences in social and health costs. The most powerful archetypes, from the female body to subliminal color combinations, are proven quite effective at selling products, but at what psychological and health cost?

Unlike other species, over at least the last 300,000 years, humans have evolved a genetically built-in need to ponder and celebrate the mysteries of the universe they live in. During their evenings mesmerized in front of the TV, children today find the equivalent of myths, story telling and elder’s chants in initiation caverns. “One could say that the chant has been replaced by the TV show, but at the core of each show, driving the action, and determining whether or not the show will survive the season, is the advertisement. What is the effect on our children? A child will have soaked up 30 thousand advertisements before it enters first grade class, and before entering in any real way into our religious ceremonies. None of us feels very good about his, but for the most part we ignore it.

It’s background noise. We learned to accept it so long ago that we hardly think about it anymore.

This idea of advertising becoming today’s religion may be shocking to some, but advertisers themselves make that point: “Brands are the new religion. People turn to them for meaning,” the ad agency Young & Rubicam declared, according to a report in The Financial Times.42 Fitch, the London design consultancy, noted that people flocked to Ikea instead of church on Sundays. Since 1991, it added, 12,000 people had been married at Walt Disney World, and it was becoming common in the United States for Harley-Davidson motorcycle aficionados to be buried in Harley- branded coffins. Jim Williams, Young & Rubicam European strategy director claimed that brand builders could be compared to the missionaries who spread Christianity and Islam around the world: “It was the passion with which they communicated those beliefs that led to people responding in their millions, because the religions were based on powerful ideas that gave meaning and purpose to life”.

But at the deeper level, what we need to confront is the power of the advertiser to promulgate a world view, a mini-cosmology based on dissatisfaction and craving. One of the clichés for how to construct an ad captures the point succinctly: “an ad’s job is to make them unhappy with what they have.”43 In short, values are not inborn but a cultural creation, and our culture has become saturated by the corporate advertiser’s agenda (see sidebar on advertising everywhere). The net result is that materialism and consumerism has become the real religion and world view that gets inculcated in contemporary children.

Notice that here again we do not even need a dark conspiracy for any of this to happen. During the heydays of the 1950s and 1960s, broadcast technology did not enable broadcasters to charge consumers directly. So they charged advertisers for time used to expose viewers to ads interwoven with programs. “This created a bias toward lowest-common-denominator programming. Consider two programs, one which will fascinate 500,000 people, and the other which 30 million people will watch as slightly preferable to watching their ceiling.” If the advertisers pay for the program, they will prefer the mass audience because its degree of interest in the program has little relationship to the effectiveness of the ad. If the viewers were to pay, they might very well get the niche program. “As a result, charging-for-advertising gives every incentive to broadcast what a mass audience would tolerate. It gives no incentive to broadcast what a niche would love.”44


Here are some arenas in life that, traditionally, have not fallen within the corporate domain, but where new trends can be detected:

  • “We should recognize that the architectural reconfiguration of our cities and towns has been an undemocratic event – with decisions in effect handed down from above by an assembly of corporate agents.”45 Extreme forms of this include malls with their own rules and security force replacing public streets; or sports clubs replacing public playgrounds. Entire incorporated suburbs and “walled communities” built and run by corporations replace cities. The number of such “secure communities” rose from 1,000 in 1965 to 80,000 in 1985, and this trend has accelerated recently.
  • Your genes belong to a few dozen corporations that have patented them, notwithstanding that taxpayers to the tune of $3 billion funded the bulk of the research. The claims are not only for the genes themselves, but all future discoveries that uses a particular gene.46
  • The “world’s most effective peacemaking force” is not run by the United Nations but by Executive Outcome, a South African mercenary company.
  • A company that operates and maintains Ballistic Missile Early Warning Systems, maintains combat aircraft, manages airports and prisons, also operates tunnels, polices cities, maintains municipal water supplies, sewage and communication systems in thirty countries.47
  • “While governments fight against drug abuse, often with pathetic results, pharmaceutical corporations have worked through governments to receive sanction on drugs such as stimulants and anti-depressants – whose effects, it could be argued, are as great as those of outlawed drugs.”48
  • Many sports, churches, and religious sects have become big businesses.
  • Dennis Judd, Urban Affairs Department of the University of Missouri at St Louis, concludes, “We have always put up with restrictions inside a corporation that we would never put up with in the public sphere. But what many do not realize is that life within some sort of corporation is what life will increasingly be about.”
Education Inc.

After graduating from commercial TV kindergarten, Education Inc. could very well become the future of schooling, all the way to the most prestigious universities. “This is the future: universities will have to become entrepreneurs, working with corporations on curriculum and other matters or they will die” was the conclusion of Del Weber, chancellor of the University of Nebraska at Omaha,49 after First Data Resources built an engineering school on his campus designed specifically for the needs of that corporation. Is this corporatization of the university yet another step in the direction that so many other aspects of society are already moving? (see sidebar)

In tracking the way freshmen perceived the importance of “Keeping up with Political Affairs” (Figure 4.3), Professor Atkin addresses another aspect of the purpose of a college education. The results also illustrate a concern expressed by the Last Prime Minister.

Figure 4.3: Objective of US Freshmen (1966-96) “Keeping up with Political Affairs” valued “essential” or “very important” (in percent)

This graph indicates that even freshmen have concluded that politics is becoming increasingly irrelevant, and that the real decision-making power is elsewhere. Political debate has barely addressed this question. “Whereas the Liberal mistake is to think that there is a program or policy to alleviate every problem in the world, the conservative flaw is to be vigilant against concentration of power in government only–not in the private sector where power can be wielded more secretly and sometimes more dangerously. …Corporations are like feudal domains that evolved into nation- states, they are nothing less than the vanguard of a new Darwinian organization of politics.”50

There are indications that many people are becoming more aware of the risks of the Corporate Millennium. A few examples follow:

Media Credibility
  • The credibility of the media in general has dropped to a historic low: a 1997 Harris Poll finds only 18% of the US public still have confidence in TV news, and 12% in the press. This percentage has shown a steady decline; the corresponding numbers in 1990 were respectively 27% and 18%. Another poll showed that in 1985, 84% of Americans felt their newspaper did a good job at being fair; by 1996 that number had fallen to 47%. In 1985, 55% of Americans believed that news organizations “got their facts right.” By 1997 that number had declined to 37%.51 Fewer people bother to look at mainstream TV: the television audience, controlled by the three major networks (ABC, NBC, CBS), dropped from 75% in 1987 to less than half (49%) in 1997. It has become a practice for many magazines to submit articles for prior review by the advertisers. The Los Angeles Times has even reorganized its management structure in order to maximize advertiser/editor cooperation.
  • However, there is also a growing awareness of the deadly trap that a Corporate Millennium means for the credibility of the media. “Establishing credibility means developing a reputation for providing correct information, even when it may reflect badly on the information provider.”52 In short, in an information age, credibility is the real capital. And playing to the corporate agenda for short-term financial benefits is squandering that capital, which is potentially irretrievable. Peter Bhatia, member of the Board of Directors of the American Society of Newspaper Editors, says: “Our credibility is as low as it’s ever been. There is a lot of soul-searching going on right now in our industry.”53The Columbia Journalism Review called the censorship that results from corporate-editorial cooperation “The Big Squeeze.”54 In a democracy, what is ultimately at stake is the legitimacy of both the media and the corporations.

In a remarkable exception, Time magazine published a whole special report on “Corporate Welfare”55. It defines corporate welfare as “any action by local, state and federal government that gives a corporation or an entire industry, a grant, real estate, a low-interest loan or a government service. It can also be a tax break.” The conclusions: “the Federal Government alone shells out $120 billion per year in corporate welfare…The justifcation for much of this welfare is that the US government is creating jobs. Over the past six years, Congress appropriated $5 Billion to un the Export-Import Bank of the United States, which subsidizes companies that sell goods abroad…But the numbers of the bank’s five biggest beneficiaries – AT&T, Bechtel, Boeing, General Electric and McDonnell Douglas (now a part of Boeing) – tell another story. At these companies, which have accounted for about 40% of all loanss, grants and long-term guarantees in this decade, overall employment has fallen 38%, as more than a third of a million jobs disappeared. A whole lobbying industry includes now an estimated 11,000 organizations and agencies all aiming at obtaining subsidies from the different governmental agencies. They have their own journals and newsletters, seminars, conferences and training sessions.

The picture is much the same at the state and local level…There are no reasonable estimates on the amount of money states shovel out. All that is certain is that the figure is in the many billions of dollars each year, and it is growing,m when measured against the subsidy per job” (see sidebar).To Time’s credit the special report mentioned under the title “We play the game too” a series of subsidies obtained by Time Warner, Inc, the parent company of the magazine itself.

Subsidies per Job Created

The subsidies per job give an indication whether the ‘job argument” for subsidies is valid.56

  • The State of Illinois paid $44,000 per job to Sears, Roebuck &Co to keep its corporate headquarters from moving out of the State
  • The State of Indiana paid $72,000 per job to United Airlines in an aircraft maintenance facility.
  • The State of Alabama gave $169,000 per job to Mercedes-Benz for its automobile assembly plant in Tuscaloosa.
  • The State of Pensnsylvania gave $323,000 per job to Kvaerner ASA, a Norwegian engineering firm to re-open the Philadelphia Naval Shipyard.
  • The State of Louisiana has the record with subsidies to Uniroyal ($100,000 per job); Procter and Gamble ($3,100,000 per job); BP Exploration ($4,000,000 per job); Dow Chemical ($10,700,000 per job) and Mobil Oil Co. ($29,000,000 per job).
Corporate Welfare

What Time did was just confrim the claims made for years by consumer advocate Ralph Nader who ran for US President in 1996 and 2000, in a campaign totally ignored by mainstream press… He made an inventory of 120 “corporate welfare programs,” from which he reports:

“It is hard to find a major industry today whose principal investments were not made by the government–in aerospace, telecommunications, biotechnology and agribusiness. Government research and development money funds the pharmaceutical industry. Nobody talks of aid to dependent corporations. It’s all talked about in terms of ‘incentives’ […]. At the local community level, in cities that can’t even refurbish their crumbling schools, where children are without enough desks or books–local governments are anteing up three, four, five hundred million dollars to subsidize corporate sports. …Corporations have perfected socializing their losses while they capitalize their profits. There was the savings-and-loans debacle–and you’ll be paying for the half-trillion dollar bailout in terms of principal and interest until the year 2020. Corporations can go on our lands out West and get subsidies to destroy it (see sidebar on next page). ….When you grow up corporate, you don’t learn about the reality of corporate welfare.”57

  • The American Petroleum Institute, for example, has a lobbying team in Washington with over 500 full-time employees and a budget of $50 million per year. This has to be one of the best oil- well investments in the business. Harold Hubbard in an article in Scientific American estimates that the total subsidies, hidden and direct, benefiting the conventional energy business “range between $100 and $300 billion per year in the US alone.”58

Subsidies to Destroy the Land

There are actually a whole series of subsidies whose main effect is to encourage corporations to destroy land in the US. The Economist, hardly suspect of anti- corporate bias, lists the following examples.59Both Democrats and Republicans support such policies, ironically in the name of rugged individualism said to be typical of Western way of life.

  • The mining subsidies have remained basically unchanged since 1872 when Congress wanted to encourage settlements in the Far West. Anyone who can identify a piece of federal land with hard-rock minerals in it – such as gold, silver, platinum or copper – can obtain a patent to buy the land for $2.5-5 per acre. In 1994, a mining company paid $9,765 for an area in Nevada with a gross mineral value of $10 billion. Between May 1994 and September 1996, land containing $16 billion-worth of minerals was sold for $19,190. The government does not get a penny in royalties. In addition, miners leave an expensive clean-up job for others to perform. The Western Governor’s Association estimates that more than 3,000 miles of streams are polluted by hard-rock mining wastes. There has been a moratorium on new patents since 1995, but every effort at reforming the law has failed.
  • Ranchers graze their life-stock on both public and private lands. The difference is that private landowners receive an average $11.20 per cow in 11 states; compared to $1.20 per cow for grazing fees on federal land. The Federal government recovers in this way only $25 million of the $77 million it costs just to administer the program. This subsidized grazing occurs on 270 million acres of American land, an area the size of California and Texas combined. In addition, a study by the Bureau of Land Management estimates that 60% of its range-lands have lost half of their native plants and grass species as a consequence of this program.
  • The system of timber sales dates from 1897, and includes the construction — at government expense–of logging roads in virgin federal forests. Here again, the revenue of the timber sales does not cover the costs of the program. Every bill to introduce a moratorium on continued subsidies for such road construction has failed.
  • It takes 3,400 gallons of heavily subsidized water to grow one dollar’s worth of sugar beets in California, a state where water is scarce. The Everglades in Florida were drained in the name of flood control from the 1920s to the 1970s, destroying most of a unique ecosystem. Then 700,000 acres of sugar were planted on the recovered land. This acreage is currently still expanding, despite a $1.5 billion federal program to buy back Everglades land used for sugar plantation. Meanwhile, prohibitive tariffs keep sugar produced by low cost countries from being imported.
Autonomous Corporate Power
  • David Korten, a Ph.D. from Stanford Business School, who also taught at Harvard Business School before serving with the Ford Foundation and the US AID program in Asia, concludes that “the contemporary corporation increasingly exists as an entity apart–even from the people who compose it. Every member of the corporate class, no matter how powerful his or her position within the corporation, has become expendable–as growing numbers of top executives are learning. As corporations gain in autonomous institutional power and become more detached from people and place, the human interest and the corporate interests increasingly diverge. It is almost as though we were being invaded by alien beings intent on colonizing the planet, reducing us to serfs, and then excluding as many of us as possible.”60
  • Ian Angell, Professor of Information Systems at the London School of Economics, writes in the British newspaper The Independent: “The main problem of the future will be the glut of unnecessary people who will be irrelevant to the needs of corporations, and therefore will be uneducated, untrained, aging and resentful…The slow redistribution of wealth to which we became accustomed after World War II is already rapidly reversed, so the future is one of inequality. We are entering an age of hopelessness, an age of resentment, an age of rage. …The world belongs already to the global corporation. The nation state is now desperately sick.”
  • Peter Montague, from the Environmental Research Foundation (Annapolis, Maryland) says: “The corporations pretty much determine all the basics of modern life, just as the Church did in the Middle Ages. …Small corporate elites pretty much determine what most of us will read; what we will see in theaters and on TV; what subjects will become public issues permissible for discussion and debate; what ideas our children will absorb in the classroom; how our food and fiber will be grown, processed and marketed; what consumer products will be made by what technologies using what raw materials; whether we will have widely available, affordable health care; how work will be defined, organized, and compensated; what forms of energy will be available to us; how much toxic contamination will be present in our air, water, soil and food; who will have enough money to run an election campaign and who will not.”
The Root Cause?

While these concerns are relevant and poignant, I have come to the conclusion that they are attacking symptoms rather than causes. In Modern Western history, power and influence have traditionally been shared and/or balanced between four “estates”– the government, business, academe, and the media. Today, more blatantly and directly than ever before, money is controlling all four of these estates. Even CEOs of the most powerful corporations are obliged to do what the financial market wants, or they are fired and replaced by someone who will. Giving priority to long- term thinking over next quarter’s profits is brutally punished under the present money system. At some level, we all are prisoners of the same money game.

In short, the money system is what creates the structural conflict experienced by so many CEOs between stockholder’s interests, their own personal ethics, and their concerns for their grandchildren’s future. My contribution to addressing this dilemma is to propose a money system that will harness corporate power and direct it toward the goal of long-term sustainability (Chapter 8: the Global Reference Currency–Making Capitalism Sustainable).

Even though it may seem that The Corporate Millennium is looming before us, this scenario is only one of the ways in which the power shift away from the nation-states could manifest itself. The next scenario–Careful Communities–reveals another very different set of dynamics.

Careful Communities

The other night I woke up from a strange dream.

I had dreamt that I was in San Francisco, at the colorful intersection where Haight Street meets Golden Gate Park. I was sitting in a coffee shop, next to a little shop with a garish sign saying “Tsutomo Tattoos.” I was overhearing a long monologue of a parent talking to an adolescent. There was a calendar hanging on the wall in the coffee shop–a calendar of the year 2020.

Here is how the monologue went.61

Haight Street 2020
[Border decor in a futurist hippie style?]

I got this first one at Nike. Back in ‘94. I was 23, a kid. I worked there delivering–get this–mail. Yeah, paper. Yeah, back when you still could cut down trees. Anyway. We all got them. Sort of started the thing, you know? The “tatsume,” tattoos to mark your jobs, your history, your path.

The tat identified you as family.

This one is from Microsoft. No, I don’t mean “Sonysoft.” Microsoft, back when Gates was alive. Yeah, you’ve heard of him. That’s the Windows 95 banner, well, reworked to be the Windows 98 banner. I did phone support. Yes, humans did that, punk. I lived in Seattle at the time. A bunch of us live together in a house near Capitol Hill. It wasn’t a commune or some other hippified label that you find in the docs. Those days, we were only sharing living space; we didn’t share anything else. No, not even companions, this was before the treatment.

I met this really great woman in San Francisco–I ended up moving down here in ‘99. That’s the logo for Java Jonestown, the coffeehouse where I worked in North Beach. Strange things started happening just after that. Religious nuts and the year 2000 computer bug62 combined to spread a feeling of unreality and fear of the future in almost all aspects of everyday life.

In 2000, my folks moved to Idaho to join some end-of-the-world religious group. They kept trying to get me to move out there too, but each time I went it was more and more clear that I would never really fit in. I wasn’t the right age and I didn’t have kids. When I finally left, the Idaho Christian Fellowship (Kuna Community) wasn’t too sad to see me go. What was weird, though, was in my trips back and forth, and in mail to the home back in San Francisco, I realized the exact same thing was happening there. Everyone was locking themselves up into tight little homogeneous communities, even the hipsters and queers, and everyone was closing in on their own little niche.

Then came the Big Crash. I never really understood what the hell brought down the whole house of cards of the old money game. All I know is that it started with the banks in Japan going belly up on a trillion dollar loss or something, and the whole thing was over before they could even print the newspapers to talk about it. Nothing was the same after that: governments, businesses, everything that depended on international contacts got into trouble at the same time.

That there is the Americorps II barcode–one of the last things that central government managed to launch. Etzione thought of that, at HUD, and the conservatives loved it. Kept track of us; kept us safe. Kept us careful. Half of my house joined the Corps, even while we worked at Microsoft. The Big Crash had left us all shaken up in some way–jobs, friends, losing houses on mortgage payments, whatever–and we all needed some way to work it out. I did on-line counseling. That’s why the Corps-code is blue.

For California, the cherry on the cake came when the Really Big One hit. Almost everybody lost someone they knew. I was among the lucky ones: that day I was out seeing some suppliers up in Sonoma. That earthquake also closed the chapter on the relevance of Washington big wigs for us here. The Big Crash had loosened the financial grip. After the Really Big One, they had just to let go of all the rest it.

One of the key tools that made it possible for everybody to lock themselves into such self- contained cocoons was all these local currency systems. Some had been around for 10, even 20 years, but few people took them seriously then. After the “Millennium Bug” and the Big Crash, they started spreading like wildfire, just for survival.

When you were born, my parents really wanted us back out in Idaho, but I didn’t want you growing up there. They put a lot of pressure on me, but I finally decided to stay in SF.

You may not know this, but SF used to be a pretty diversified city, with a lot of high-tech jobs, and people traveling all over the place. I still managed to move around after everybody had already locked themselves up in little community cultures. That’s because we’re part of a “cosmopolite” com, a community that works with other communities, trading ideas. When you’re old enough you should get out, too. Take a look at the world. The differences between communities will surprise you, because they aren’t what you expect. Lots of places keep themselves safe by locking out not just people that don’t fit in, but ideas that don’t fit too. Even moovies are altered, sometimes the language, sometimes the characters. You should see how the newsnets are changed from place to place. With these new imaging techniques, they can shape anything to order. So all information flows within a com, and from the outside world into the com, can be nicely shaped to fit the world view of the com’s inhabitants. Some places around the country are spooky, with houses that all look alike and families that all look alike. I guess people find it easier that way. Most of them seem to like it, and those coms are pretty safe.

I think I’ll try to take you to Europe, if we can make it work. The patchwork is still different there. But I’ll have to get permission from the council; even a cosmopolite com has rules about Europe for kids. Some coms don’t even let adults go there, but those are communities that don’t like to let cosmopolites in either. Sometimes I wonder how they survive.

Ok, that’s my last tat: a licensed teacher. I like that one the best–they’re using that new holographic ink for instructor tats now. That closes as many doors as it opens, of course. Teachers bring new ideas, we’re meme-carriers, and cosmopolitan memes scare people. Even with all of the community protections, with walls around the homes and minds, identities are fragile. The Nation of Islam com lost almost half of its citizens last year in a struggle over identity–were they African, Muslim, American? The remaining NOI community, in South Cal, isn’t letting any outsiders in, not even for biz.

So here we are. Tsutomo is the best tattist in the area. You scared? Don’t be. The first tat is the hardest, but you’re getting one to be proud of. Anyway, the party tonight will take your mind off the sting. You know, I think that boy with the Rainforest tat has his eye on you. Don’t give me that look! Just remember that your community cares about you. We’re all very proud of you.

That is when I woke up–in a cold sweat.

Careful Communities is a modern version of what happened in Western Europe in the first centuries after the collapse of the Roman Empire (c.500-800 AD). It was a return to smaller scale homogeneous communities, fragmented by the vast and dangerous European forests, that each had their own local currencies, administration and in-bred worldviews. Of necessity, they had become self-sustaining. One of the functions of the Church and monastic orders was equivalent to a “cosmopolitan community” in Careful Communities. Not everything was negative; for instance, it generated a remarkable upsurge in spirituality. Some even have considered it the high period of “Christian Mysticism,” the period in the West where the sacred and the secular sustained each other and worked in harmony. But in most other regards, the assessment that it was a comparatively “Dark Age” remains valid.

The “Careful Communities” scenario is triggered by a sequence of breakdowns—such as a monetary crash, and a significant earthquake in California–each of which has been forecast by many specialists. They do not have to occur in order to attain this scenario, but their combination would be quite devastating to most centralized governance systems. Some experts claim that, alone, a monetary meltdown would be sufficient to provoke a breakdown of our current society.

Assessing Possibilities of Breakdowns

The plausibility and consequences of some breakdowns will now be assessed separately, and the consequences of their combination evaluated.

A Monetary Meltdown?

The potential breakdown of a large-scale monetary crisis exists. The Mexican crash of 1994-95, the Asian crisis of 1997 and the Russian one in 1998 are certainly not going to be the last monetary crises of our times. The dwarfing of the world economy by currency speculation (see Primer) guarantees similar future episodes. However, the “Big Monetary Crash” would occur whenever the US$ comes under attack. It is not a question of whether, but only a question of when, the instabilities of the official monetary system will assail that linchpin currency of the global money system.63

Professor Robert Guttman of the Economics Department of Hofstra University describes the international monetary system as the Achilles’ heel of the US and the global community as a whole. It is the one way whereby a true Depression could repeat itself, with massive unemployment and socio-political consequences.

Every national currency in the world64–even the new Euro–is defined in terms of the dollar, and therefore completely dependent on the stability of this linchpin currency. In the Primer, the context for a global meltdown–in technical parlance, “systemic risk”–is described. The probability of such a meltdown is growing year by year as the volume of speculative flows increases–at the rate of about 15 to 25% per year–while the safety net provided by the Central Banks becomes increasingly inconsequential relative to the ever-growing speculative volume.

Many people worry about “how it could really happen?” This is the less important question. Did it really matter that the Kreditantstalt bank in Vienna provided the trigger for the London market panic that spread to become the 1929 crash in New York? What really matters–then as now–is the degree of stability or instability of the system as a whole. In comparison, identifying the precise card that will bring down the whole house of cards becomes anecdotal. Whether the falling card turns out to be a massive computer Millennium bug, or a financial meltdown in Japan, or the Eurodollar market, the final result that precipitates the unraveling of our dollar-based monetary system could be quite similar.

In Careful Communities, the financial trigger was an interplay between two of the weakest links in today’s global system: a failure of the Japanese banking system that provokes a panic in the Eurodollar market, and proceeds from there to challenge the US dollar market.

A California “Really Big One”

In comparison to the monetary breakdown, a significant earthquake in California may appear parochial. It is also one of the most studied risks around. According to the US Geological Survey study released in July 1990, there is a 67% chance that an earthquake of magnitude 7.1 or greater (Richter scale) will occur in the San Francisco Bay Area within 30 years. It may happen today, or 20 years from now.

Consequences of a Combination

This example of the “Really Big One” is used in “Careful Communities” not to gratuitously pile up disaster upon disaster, but to illustrate how–if either one of the previous breakdowns is serious enough–Central governments could become quite incapable of dealing with local breakdowns.

People would have to reorganize their lives to be more local and self-sustaining, and very different forms of governance–like the ones reflected in this scenario–could become plausible.

The Forces Feeding “Careful Communities”

The Careful Communities scenario is driven by a collective reaction of retreating to safety. It makes a priority of the local security and community concerns that are already evident in today’s society.

When money breaks down, all outstanding financial agreements–such as salaries or rents–become meaningless. Life savings are wiped away in days, leaving people suddenly exposed to a future more uncertain than they ever thought possible. In these circumstances, collective fears and shadows can surge up powerfully.

In the US, for instance, the old “melting pot” model has given way over the past decades to ethnic identities. Many people now identify themselves as Afro-American, Mexican-American, Chinese- American, Italian-American, and so on. Furthermore, the top priority for many people across the political spectrum (86% according to a 1995 US survey by American LIVES) is “to rebuild community.” In the Careful Communities outcome, this priority gets out of hand after the traditional system collapses. The fears present in our current society cause fragmentation, leading to the creation of like-minded communities where the available technologies are mobilized to ensure a feeling of safety and control. To Americans, this outcome may appear less likely than the possibility of a Corporate Millennium. After all, the Careful Community conversation was overheard on Haight Street.65

But in several parts of the world, even more extreme forms of what is described here have already happened. In Yugoslavia, what started as a monetary problem in the late 1980s swiftly became intolerance towards the “others,” whom some ethnic leaders used as scapegoats to redirect anger away from themselves, and to reassert their power in the process. Therefore, “Ethnic cleansing” is a direct consequence of the IMF readjustment program of the late 1980s, which provided the sociopolitical context for extreme nationalist leaders to take over. The 1998 monetary problem in Indonesia, within days, triggered mob violence, plundering, and rapes directed against Chinese minorities. Similarly, in Russia, discrimination against minorities has been exacerbated by the financial collapse. Practically nobody among the intelligentsia in any of these countries would have believed these events plausible even a few months before the mayhem started. Neither are such events unprecedented. For example, the Jewish minority became the scapegoat for the consequences of the monetary collapse of the 1920s in Germany. Monetary crashes invariably leave people in fear, despair, and anger. This is an explosive social mix that irresponsible demagogues can exploit. The rise to prominence of Milosovic in Serbia after the Yugoslav money crisis of the 1980s demonstrates that the recipe is still operational.

In Careful Communities, control over local currencies can be used to lock people into a safety cocoon. Like everything else in this world, local currencies can be used either positively or negatively, and in this scenario their restrictive potential is revealed. Later, in Chapters 5 and 6, you will learn that when designed to complement the national currency, the impact of community currencies is strongly constructive. You will also learn why and how these currencies have spread to over a dozen countries around the world. The following graph illustrates the explosive growth of such complementary currencies over the past decade.

If the official global money system goes into a meltdown, such local systems could very well become–by default–the best safety net around. Under the shock, people are likely to scurry for psychological security at any price. Paradoxically, the very strength of the forces leading toward globalization is fueling a clearly discernible new emphasis toward local priorities and local cultural homogeneity. This can take place peacefully, but, as has been seen in recent years, this is not always the case. The growing trend toward smaller scale local ethnic priorities and cultural divisions has already unchained the dogs of violence and war in places as disparate as ex-Yugoslavia, Azerbaijan, and Rwanda.

Timetable of the Revolution

1980s: Development of the first LETS systems, the first postwar complementary currency systems mostly in Canada, Australia, New Zealand and Northern Europe (more details in Chapter 5)

1984: First published technical warning about the “Millennium Bug” (Y2K)

1990: Tax free approval of the local Time Dollar systems by the IRS in the US. (See Chapter 6) 1991: Beginning of the first ‘Ethnic Cleansing’ war in Yugoslavia

1992: Ithaca Hours introduced in Ithaca, New York

1995: Survey in the US showing that 83% of population puts ‘rebuilding community’ as top priority

1996: (May 14) First Hearing before Subcommittee on Technology at the US House of Representatives about “Solving the Year 2000 Software Problem”

1997: Decentralization of the welfare system, acceleration of devolution of power from the Federal Government to the States and municipalities in the US

1999: Preparations to meet the deadline of the “Millennium Bug” reach its paroxysm, and the precautions taken create some problems of their own (e.g., runs on medium sized banks that are late in Y2K compliance)

2000: Surge in religious apocalyptic movements; The “Millennium Bug” hits.

2010: First year where more commercial exchanges are occurring in complementary currencies than in the old battered national currencies

2020: The girl in the nightmare on Haight Street gets her initiation tattoo

Among the plausible futures, the two described so far are neither the worst nor the most favorable. We shall now have a brief look at two more extreme possibilities. They will be called “Hell on Earth” and “Sustainable Abundance.”

Hell on Earth

The seed bed for “Hell on Earth” is a similar combination of breakdowns as “Careful Communities.” The main difference in “Hell on Earth” is that instead of people organizing themselves in self- contained communities, a highly individualistic “free for all” ensues. It is the world that would result if enough people believed that the solution to any breakdown is to buy more bullets for their guns.

In contrast with the fictitious people described in the previous two scenarios, in “Hell on Earth” everybody is real, actually existing in 1996. The lives of Red, Sean, Addison, Todd and Jeremy are described in the words of my friend Katherine who, at 15, was the youngest member of the audience on which I tested the ideas presented in this book during a series of conferences about the ‘Future of Money.’ What we learn from her is that ‘Hell on Earth’ is already happening. And it is less than half an hour’s driving from the wealthiest counties and the fastest growing economy in the US. Hell on Earth is happening in the backyard of the world’s only superpower and most advanced technological innovator. It is happening during one of the longest economic boom periods on record, during a year when the Dow Jones has broken its record high 43 times.

Katherine’s Friends
[Border decor: a schoolgirl’s journal]


Red was abandoned, left on the streets of Berkeley, California, by his parents when he was three years old. A young homeless couple took Red under their wing. They spent most of their winters in shelter after shelter, because three days was the limit on how long anyone was allowed to stay. In the summers they would roam around Telegraph Ave, day in and day out, searching through dumpsters and garbage cans, looking for their next meal. No one ever talked to them. No one ever bothered to stop. One day Red woke up and they were gone. He was seven years old.

When Red was 10, he met another boy in the same predicament. This boy’s name was Sean. He was 15 and had been homeless since he was five. Sean arranged his hair in two turquoise Mohawks that sliced out of his skull side-by -side. The hair dye matched his eyes and pale skin. He wore a black hooded sweatshirt with drawings and patches sloppily sewn on everywhere with white dental floss. He wore chains around his neck, as well as spiked chokers and bracelets. His nails were neatly painted black. He called himself a gutter punk, an anarchist, a squatter, a member of society that everyone wanted to ignore, and that for which no one wanted to take responsibility.

Red was captivated by Sean–someone who was like him, someone else who had been forgotten, erased. Sean became Red’s mentor. He named him Silence Red–Silence because he was always quiet, and Red because it was his favorite color.

As Red got older, he became part of the society known as the gutter punks or squatters, the lost children who had lost their families and come together to form their own. They never fought among themselves and rarely caused any trouble. They raged against the society that had overlooked them. They hated all adults, especially parents. Most of them had either been abandoned by their parents or had run away from abusive homes. Members of the middle and upper classes spat on them, cursed at them, accused them of being drug addicts and alcoholics. They were hauled off to jail for sleeping outdoors at night, for sitting on sidewalks, even for leaning against walls. They were harassed by everyone, even though they were just fighting to stay alive.

Red and Sean squatted together as brothers for 15 years. They didn’t use drugs and they didn’t drink. They traveled from place to place, looking for the perfect home, but they always returned to Berkeley in the summertime.

Red was a man when he died, but he was only 25. He always said that he wanted to die by decapitation to get rid of the sickness in his head. Then he would always laugh. Before he died, he had told Sean that he had had this horrible pain in his head as long as he could remember and that it was getting unbearable. Sean took him to a friendly doctor. The doctor said that Red had a tumor in his brain and that it was too late, that without medical insurance or money, nothing could be done and that he would die within a few months. The doctor gave Sean a prescription for pain killers, drugs, but Red refused to take them. One day Sean went to a 7-11 to get a Slurpee. When he got back, he saw Red lying in the grass. He had slit his own throat to get rid of the sickness in his head.

When most people saw Red, they were terrified. He was 6’ 7” tall. He had 8-inch red liberty spikes in his hair. He had 27 piercings in his porcelain face alone. But if you looked in his eyes, you knew he never was, nor ever would be a monster. Red would never have hurt a fly. He wouldn’t even hurt those who had hurt him. He was the nicest, sweetest person you could know. He would always make sure that everyone he knew had eaten before he would eat. The only problem was that no one would or could ever look in his eyes to see the sadness and the kindness, because he was invisible. Had someone seen him he might have lived just a little longer. But for most, ignorance is easier than compassion.

And when all the rich people went to sleep, Sean gathered some of the gutter punks to take Red’s body to the dump and they burned him. His ashes are on your $4000 lawn, and his body is making your flowers grow.

One of Red’s favorite songs was by the Rancids, it goes:

“Red and white stripes flyin’
White for skin and Red for dyin’
Why can’t I walk on through
and not feel like I am in hell.”


I looked at Addison, and it was death staring back at me. He stood before me, not as the beloved boy that I knew, but as the dark angel whose image haunts me in my dreams, the angel of death. His molasses skin was yellowing; his black eyes looked as if they had been sanded, left with a dull finish. His paper-thin body shook compulsively as he stepped down from the green bus toward me. He was a torrent of anxiety and sadness. He looked at his old shoes as if he were observing someone else’s feet. He couldn’t feel his feet, but he knew they were there because he could see them.

His skin was peeling and his hands felt like splintered cardboard as I helped him off the final gray step of the bus. Then the bus was all of a sudden gone, and we were alone, and for the first time in my life I was scared. I was scared to look at him, and it hurt to hold his hands, which were dry and felt like shards of glass. His fingernails were falling off. He pulled a comb out of his pocket and combed what was left of his hair. The comb pulled out a big chunk of gray, thin kinky hair. He didn’t even notice.

He used to be so beautiful. My God, now he looked 60 years old, and he was only 16. He looked into my eyes, and he saw my pity, which I could not hide from him. He whispered, “Don’t worry, Katherine. It doesn’t hurt.” I knew he was lying. All expression in his face was lost. He didn’t have the muscle control.

He smelled like a rotting egg, but he was really a rotting boy. His lips were blue and cracked. I kissed my friend softly. He tasted like metal on a 90-degree day. With every step he wheezed, soft little crackles. And I didn’t want to touch him for fear that he might crumble and fall beneath my stroke. I helped him sit down on a bench. It was cold, gray concrete. He looked up at the sky and then at the trees around him. “There aren’t any trees where I live,” he whispered as he tried to hide a tear rolling over his face.

And then he passed out, snared into his dark, cold, black sleep, where reality was just a fragment of his imagination and death and suffering reigned. Blood trickled down from his parched lips. His lungs were bleeding, and he reddened the bench with the serum of his suffering. The blood dripped onto his blue sweatshirt, and then the flowing stopped.

And he laid on that bench for hours in his sleep, and I held him. The blood would flow, and then it would cease. Then it would start again. But, the suffering never stopped, and it was only then that I realized that my dark angel was dying. But, in reality, he was already dead.

* * * * *

Addison grew up in a black ghetto called Hunters Point in San Francisco. He was beaten up for being a good student and by seventh grade had virtually dropped out of school. He showed me his homework, all neatly completed, but which he never had dared to turn in. He was forced to join a gang when he was 15, told that he would be hunted down and shot if he didn’t. He began to use drugs and drink heavily, a way of numbing himself to his own pain. One of his closest friends, who was a crack baby and had been addicted to cocaine since birth, died of a massive heart attack when he was 16, trying to kick his habit. As the people around Addison began to die, he sank into a deep depression. He contracted seven different strains of HIV by the time he was 16 and developed full-blown AIDS just a few months later. He had an estimated two months to live when I sat with him that day. I met him at Pier 39 in San Francisco. I was the only white person he knew, and compared to him I was rich. We had been best friends for two years, and I tried to keep him alive as best I could. But the day before Addison’s 17th birthday, he took a 9mm gun from beneath his bedding, and he shot himself in the head. He lay dead in his room. No one found his body for five days.

Addison was living in hell, and he couldn’t handle it. But then again, who could? Out of the 15 people that Addison grew up with in Hunters Point, 12 died within six months of his death. Three died just months before. They were all dead within 14 months. They lived in an environment that was de-evolving because of isolation, drugs that were rumored to be supplied by the government, and because of an American people who chose to ignore the poverty, to close their eyes because they felt it wasn’t their responsibility. For them, the ghettos didn’t even exist.

“Ding Dong! The castle bell!
Farewell, my mother!
Bury me in the old churchyard
Beside my eldest brother.
My coffin shall be black,
Six angels at my back,
Two to sing and two to pray
And two to carry my soul away.”

-James Joyce



Todd and Jeremy ran away from home when Todd was five and Jer was nine. They took the train to San Francisco, where they slept in Golden Gate Park. They had lived in a trailer park in San Jose with their father who had sexually molested them and abused them for as long as they could remember. Their mother had died in a car accident just months after the birth of Todd. Their father was unemployed, but the television, where he spent most of his time, always seemed to work. The children cooked their own meals, consisting mostly of cereal and of Tater Tots, deep fried potato scraps.

Todd’s given name was Christina, but Jer, her older brother, had always wanted a younger brother, so when they packed their few possessions, Jer renamed his sister Todd. She had a thick mane of blond, almost cream-colored hair that cascaded to just below her waist. She had a small body and high cheekbones that accented her aqua marine eyes. She spoke seldom, and when she did, she was so quiet that it almost hurt to listen to her. She used small fragile words and never looked you in the eye. Jer on the other hand, when speaking, used a barrage of cuss words while frantically flailing his arms about as a way of assuring that his point was understood. He would run his grimy hands through his fluorescent blue liberty spikes, wads of hair that he glued into seven, 6” points. He talked about his dreams of getting his lip pierced and blowing up the White House with a Swiss army knife, dental floss, and a match stick like the TV hero and escape artist, McGiver.

Todd and Jeremy would sit on Haight Street for hours–Todd quietly asking the people who passed by for a nickel or dime, Jer harassing people for blocks for not giving them even a penny, screaming, “FUCK YOU!” as mothers and daughters, fathers and sons, passed by them without even a glance. As night came they would retreat back into the park, the place where they felt the safest. For them, it was the beginning of the end of their lives.

“Deprived of any hope.
Taught they couldn’t cope.
Slaves right from the start.
‘Till death do them part.
Poor little fuckers, what a sorry pair,
Had their lives stolen, but they didn’t really care.
Poor little darlings,
just your ordinary folks,
Victims of the system and its cruel jokes.”


“Hell on Earth” describes a world where there is a lot of work to be done, but there is simply no money around to bring the people and the work together. When children have no chance to develop themselves, the result becomes a way of life that is guaranteed to perpetuate, possibly for generations. The linkage between this situation and our topic of money may appear obvious: joblessness, bankruptcy and/or financial failure have made the parents of these kids lose their homes in the first place. Once started, the currency scarcity snowball continues. Without an education there is no prayer in hell that these kids will get a job. There will not even be money for their burial.

Mental illness is another way out. A Chicago study found that 32.2% of newly admitted mental patients had a history of homelessness prior to their first hospitalization.66

It has proven remarkably difficult to find reliable statistics about homelessness, particularly homeless children in America. Mainstream media refer to it less and less, even as the reality of the problem grows. The number of mentions of homelessness in Washington Post headlines dropped from 149 in 1990, to 45 in 1995 and to 18 by 199867. As one apologetic data administrator put it: “People who have the money are not interested in finding out; those who are interested don’t have the money to find out. And researchers do the studies for which they can get paid.” She explained that the best data is generated indirectly, because each county keeps track of actual numbers of families and children who seek assistance and are eligible for a particular shelter program (the AFDC-HAP)68 during each fiscal year.

Figure 4.5 shows that the number of homeless children in the San Francisco Bay Area alone passed the 40,000 mark in 1995; 325% higher than it was eight years earlier. These numbers reflect by definition only ‘eligible recipients,’ so the actual numbers have to be higher.

Figure 4.5 Thousands of Homeless Children in San Francisco Bay Are

There may be many reasons why the parents of these children became homeless, but the simplest is straightforward arithmetic. The average household income in the California Bay Area increased by 34.3% between 1980 and 1990. The cost of living went up during that time by 64%, almost double that amount. The average rent for a two-bedroom unit increased by 110% over the same time period, while rent for a vacant studio increased by a whopping 288%.70 This explains why 20% of the homeless families have at least one parent with a full-time job. In short, the fastest rising component of the homeless is the families of the ‘working poor’ of yesteryear.

San Francisco is in no way a strange anomaly. Because the US Department of Education funds a project tracking schooling problems experienced by homeless children, it has prepared a Report for the US Congress identifying the different ages of homeless children. Here again, only eligible recipients are counted, which means these children still have to be ‘in the system’ enough to actually try to go to school. For instance, it is unlikely that any of Katherine’s friends would be picked up by these statistics. Here too the graph illustrates really a minimum level of the problem at hand. The most striking aspect of these statistics is the dramatic increase of homeless children in the lowest age brackets (less than six years old).

Figure 4.6: Thousands of homeless children in the US, by age group (US Department of Education, July

‘Trickle down theory’ or ‘hoping for better economic times’ is clearly not addressing the problem. In parallel, the number of families getting federal housing help dropped from 400,000 in the 1970s to 40,000 in the Reagan years (mid 1980s) to zero after the National Housing Act passed in September 1996.

Forecasts, available only for certain cities, are even worse. New York City, for instance, expects the number of homeless families identified at shelters to multiply by a factor of five between now and the year 2005, as a direct consequence of the dismantling of the Federal social security network.

Figure 4.7 Number of Homeless families in New York

Having a full-time job at minimum wage does not provide someone a home anywhere in America. In 1996, the US Conference of Mayors found that nationwide 19% of the homeless population were employed.73 Declining wages have put housing out of reach of many workers: in no state can a full- time minimum wage earner afford the costs of a one-bedroom unit at fair market rent.74 In 45 states and the District of Columbia, families would need to earn at least double the minimum wage in order to afford a two-bedroom apartment at fair market prices.75 The fastest growing segment of the homeless population is families with children, now about 40% of the people who become homeless. Requests for emergency shelter by families with children in 29 US cities are increasing at a rate of 7% per year. The same study found that 24% of the requests for shelter by homeless families were being denied due to lack of resources. The net result: children currently account for 27% of the total homeless population, and their average age has been steadily dropping.76 While in 1987, the average age of a homeless child in New York was nine years old; as of 1992, it was down to four years old.77 This average age has been dropping, even with the appearance of another type of homeless New Yorker: the homeless college student. In 1986, the chancellor of CUNY (City University of New York) estimated that about 3,000 of the students enrolled in his programs were homeless.78 One of these students was perplexed to discover the United Nations Charter of Universal Human Rights which the US has officially signed and keeps referring to in international political debates. However, Congress has not yet approved that Treaty because it includes as fundamental the “right for adequate shelter and education.”

All this occurred before 1996, when the responsibility of the US welfare system was transferred to the states and municipalities. On the second anniversary of this welfare reform, the media and politicians from both parties announced it a success due to large declines in the welfare rolls, and an increase of recipients finding employment. But an independent study released in December 199879 revealed that the number of children living in extreme poverty (below one-half of the poverty line of $6,401 per year for a family of three) grew by 400,000 between 1995 and 1997. Many families are being “bumped off” the welfare lists through little or no fault of their own. For example, a state funded study of Utah families who were denied assistance because of failing to participate in required activities found that 23% failed to participate because of lack of transportation, 43% due to a health condition, 18% due to lack of child care, and 20% due to mental health issues.

This is happening while the US economy is in its longest boom in history…

Finally, for those who believe that all this could not possibly be relevant for them under any circumstances, there are some sobering reality checks, in terms of the historically unprecedented growth in financial risks for the US middle class. Most middle class savings have been moved from the relatively risk-free bonds to mutual funds and stocks (stockholders have increased in numbers from 12 million to 45 million in the past 10 years). This move is the fundamental force that has created the biggest bull stock market in history. However, this also means that these savings are now invested under a significantly higher risk level than ever before.

A dollar meltdown–with its direct impact on the stock market–would hit the broad American public exactly when and where it would hurt the most, just after the last shreds of the safety net concocted under the New Deal have been dismantled. If the result is “Hell on Earth,” the effects of what is occasionally referred to as ‘inevitable Social Darwinism’ would spread from a minority today to a larger part of the population by 2020.

Sustainable Abundance

My strongest motivation for researching and writing this book has been my increasing belief that it is possible for us to create a Golden Age of Sustainable Abundance within our lifetimes. This letter to my best friend from high-school days, presently a Benedictine monk living at Lake Titicaca in Southern Peru, explains why.

[Border decor: a private letter]

Bernard Lietaer
62 Oakdale
Mill Valley CA 94941

My dear friend Pierre,

I am in the process of writing my next book about a topic that you–in your monk’s retreat near your lake at the edge of the world–will probably consider of little relevance. Nevertheless, of all the people I know, you are one of the very few who live in the ultimate luxury–to be able to dedicate your full time and energy to following your bliss, your calling, to being who you want to be, without any concern over money. It is ironic that only monks, who don’t own anything, or possibly the very rich, or the extraordinarily gifted, can afford your equanimity about money. The rest of us, the vast majority of humans, even in the richest countries in the world, have succumbed to the obligation–or you might say the temptation? — of “making a living” that does not really coincide with what we really would like to be doing or being.

How much have we had to give up of our being, of who we really want to be, in this process of making a living? Many have not even dared to find out what they really would like to do, out of the fear that it would be too painful to go back to the “normal” job after that. The game we play is that–later, when we retire, when we have put enough money aside–then we will take care of our dreams. Some take it in little installments. We rush through our week, looking forward to the weekend or a vacation, when we will do what we really want to do.

You know that I have not always been optimistic about the future of humankind. You know that I was “realistic” enough to choose not to have any children if they have to live in periodic fear of atomic annihilation, as was the case during the Cold War. So what I have dreamt about may come as a surprise to you. I have seen the possibility of a Golden Age of Sustainable Abundance, where the money we use will enable us to be ourselves. I have dared to dream that each child born into this world will have as a main concern the discovery what his or her calling really is, and have the opportunity to become a master in that endeavor. What if the main reason geniuses are so rare is that we kill the genius even before anybody knows in what field she is a genius? And how many of those who find out what they really want to be have the opportunity or the resources to learn how to realize their full potential? Maybe the human race will need all the geniuses it can produce to get out of the collective corner into which we have painted ourselves.

What if the scarcity is not mostly “out there” in nature, as we all have believed for centuries? What if the money system we have been using, by which we have been collectively hypnotized, was continuously creating that very scarcity that we most fear? Is there a limit to the amount of learning we can do, to the amount of passion, creativity or beauty we can generate and enjoy? What if every garden could be cared for with the love and attention to minutia that have created traditional Japanese tea gardens? What if every child could be encouraged by the best mentors in her field of bliss? What if every street in our cities could become a work of beauty? What if the limitations arise when we change “work” into “jobs,” i.e. when we need to exchange our work for an artificially scarce currency? Why could we not design a money system that works for us, rather than having us work for it? Walter Wriston, ex-Chairman of Citibank, defined money as information. Why should information be scarce, particularly at a time when the technologies of the Information Age are spreading like wildfire all over the world?

Yes, I’ll concede to you that it is not quite that simple. Before you conclude that I have gone completely crazy, I ask you to hear me out, to accompany me in exploring some new possibilities. I hope you will find them as surprising and as much fun as I do.

Your friend,


For starters, a definition of the term Sustainable Abundance may be useful.

Of all the definitions of Sustainability, the one I prefer is the instruction of my scoutmaster whenever we would arrive at a new campsite: “leave the place in better shape than you found it.” A more formal definition is the one used by the Gro Brundlandt Report for the United Nations (1987): Sustainability is characteristic of a society that “satisfies its needs without diminishing the prospects of future generations.” Such a society, I believe, should also respect the needs and diversity of other life forms in the process.

Abundance does not refer to a mechanical accumulation of more “stuff”, or a Porshe in every garage. Abundance is what provides enough freedom of choice in the material domain to as many people as possible, so that they can express their passion and creativity. Such creativity is the expression of their highest form of consciousness, their highest calling, and provides a true sense of meaning in their life. Someone who is starving, and whose child is dying from hunger, will simply not have the opportunity to express creativity in a positive way.

In the balance of this book, you will discover the evidence upon which the scenario for Sustainable Abundance is grounded, and why it is not a Pollyanna dream. You will learn about the pragmatically tested mechanisms, at monetary and other levels, that make ‘Sustainable Abundance’ available to us as realistically, and with the same probabilities, as the previous scenarios.

One simple way to express the core thesis of Sustainable Abundance is that it is now possible to make capitalism truly sustainable through initiatives in the money system, sustainable not only ecologically but socio-politically as well. In short, capitalism with a human face does not have to remain an oxymoron.

An important common key to developing sustainable capitalism is the implementation of money systems that support such objectives. We will see how at least three of the most critical problems of today’s societies can be addressed effectively by using new kinds of currencies that could operate as a complement to the existing national money, and that are already operating in such a way in small scale, prototype form in a dozen countries around the world..

You will visit real life cases in over a dozen countries where people are successfully implementing several kinds of new complementary currency systems that tackle the two first key issues referred to:

  • Reducing unemployment in the Information Age (as explained in Chapter 5)
  • Healing and rebuilding community (Chapter 6).

The third key issue may be even more critical in the long run: a new global currency– operating in partnership with the national ones–could resolve the conflict between short term financial interests and the needs for long term ecological sustainability (Chapter 8). This same currency would also be inflation proof and automatically convertible, without the need for a new international treaty. Last but not least, it would provide a resilient safety net below the existing monetary system. Today there are no applications of this last kind of currency. However, I found two important historical precedents where the key features of this kind of currency were tested extensively. They have even passed the test over several centuries, proving my points about sustainability and resilience.

Finally, you will see why all the pieces of the puzzle–the technologies, the value systems, even the timing–are converging to give Sustainable Abundance a chance (Chapter 10). The window of opportunity has already opened. Can we take advantage of the coming changes? Instead of passively accepting whatever money system is on hand, you will see that it is possible to make a conscious choice.

The Four Scenarios in Perspective

The difference in the length and detail of our different futures does not reflect their relative importance or likelihood. What these differences do reflect is the complexity of ideas that can be presented now, without the background that will be covered in the coming chapters. All four scenarios have just about the same chance of occurring. And they are not the only possible outcomes. In fact, the most probable outcome is likely to be some mixture of several or all of these stories. Outcomes will also play out differently in different parts of the world. Remember these scenarios were designed to focus your attention on the driving forces that could lead to any of the four outcomes, as well as to surface the variety of choices that are available, and to illustrate the implications of those choices. The next step is to look more closely at these key driving forces that are running their course beneath each scenario.

The Two Driving Forces

The following diagram (see Figure 4.8) is an overview of the scenarios that highlights their relationship to one another.

Figure 4.8 First Approximation of Relationships between the Four Scenarios

What the two lower scenarios (“Hell on Earth” and “Careful Communities”) have in common is one specific event: a global monetary crash. The two top scenarios (Corporate Millennium and Sustainable Abundance) do not include such an event. Similarly, the two scenarios on the left give top priority to individualistic and competitive tendencies; the two on the right do not.

Focusing upon these driving forces, however, only allows us a relatively superficial view of the dynamics involved. The real agents of change are people. Figure 4.9 suggests what we can do, individually and collectively, to improve the chances of Sustainable Abundance.

Figure 4.9 Relationships between the Four Scenarios

The monetary crash of the vertical axis in Figure 4.8 is not a random natural catastrophe–like a thunderstorm—that we may or may not be lucky enough to avoid. The reason no crash is occurring in the two top scenarios is because preventive actions have been consciously taken. The nature of these preventive actions is the recurrent theme of the four chapters that constitute Part Two: Money Choices.

Similarly, the left-right divide of the grid, (i.e., whether highly individualistic priorities prevail in a society or not) should not be considered as a mechanical collective switch that just happens to be turned on or off. Instead, as discussed in Chapter 1, the key will be whether we are willing or not to revisit the money paradigm. The cartoon on the next page depicts in another way the costs of remaining locked in the prevailing interpretation of money. It is only if we choose to become aware that we can walk out of the money box, to the sides where no bars are blocking us, the Sustainable Abundance will become available.

One last question: Where is the “Official Future Scenario” on this Map?

Looking down at the page, imagine that you are suspended above the crossing of the two axes of Figure 4.9. That point in space is where the Official Future is temporarily suspended. Imagine yourself with an open parachute on your back, moving slowly down toward the page, expecting to maneuver a safe landing. One thing is for certain: gravity will pull you down to a landing, somewhere. The Official Future has no probability of keeping us suspended indefinitely. Let us hope that we have the time, and the patience, to learn how to use the ropes of our parachute to make a landing in the future of our choice.

While all four scenarios are equally plausible, I believe that the most preferable is Sustainable Abundance. The balance of this text is like a guide to using the ropes of our money system to make a smooth landing in that upper right corner, in a future where Sustainable Abundance is the norm, as well as the ongoing goal. There is still much to learn about the many strands and facets of these ropes, learning that we all will be doing together. Whatever happens, the ride over the next couple of decades promises to be an extraordinary one. Susan Watkins has said it well:

“I think that wherever our journey takes us,
there are Gods waiting there, with divine patience
and laughter”80

In Part Two: Choosing Your Future of Money, we will explore pragmatic options that are currently available for changing the money paradigm. Each of these systems can operate in parallel, with, and complementary to the prevailing national currencies. The shift in paradigm is not about abandoning the previous system, but complementing it with new money systems that support different sets of values. Together with the conventional system, these currency innovations can materialize Sustainable Abundance.

Gross Cartoon
“Remaining stuck within the
conventional interpretation of


Table of Contents










  1. Valery, Paul Historical Fact (1932).
  2. Schwartz, Peter The Art of the Long View (New York: Doubleday Currency, 1996) pg. 43.
  3. in, J., Elmandjira M. & Malitza, M. No Limits to Learning: Bridging the Human Gap (New York: Pergamon Press, 1979)
  4. Schwartz, Peter “Foresee the Futures: The Art of the Long View” Soundview Executive Book Summaries Vol 13 number 8 part 2. August 1991 pg 1-3.
  5. Sunter, Clem: The World and South Africa in the 1990s, and The High Road: Where are we Now? (Capetown: Tafelberg, Huam and Rousseau, 1996)
  6. Schwartz, Peter The Art of the Long View (New York: Doubleday Currency, 1996)
  7. “Smart cards” look like plastic credit cards, but they contain a computer chip instead of the magnetic strip to store data. This makes possible not only the storage of a lot more information, but also local processing of such data for identification and encryption purposes.
  8. The ‘Plaza Agreement’ was the accord reached among the ‘G-5,’ the five most important central banks (the US, Japan, Germany, the UK and France), at the Plaza Hotel in New York in 1985 for a coordinated effort to gradually lower the value of the dollar in the world markets. It marked the end of the non-interventionist policy by the US in currency markets.
  9. Named after the Dutch town where the European Union countries agreed to implement the next phase of the European integration process including a single currency, the ‘Euro,’ introduced in 1999.
  10. This scenario terminology and methodology is borrowed from Schwartz, Peter The Art of the Long View (New York: Doubleday Currency, 1996) pg. 19
  11. Time April 1998
  12. see Havelock, The Muses Learn to Write: Reflections on Orality and Literacy from Antiquity to the Present (Yale University Press, 1988)
  13. Shlain, Leonard The Alphabet versus the Goddess: The Conflict between Word and Image (New York: Viking, 1998).
  14. McLuhan, Marshall The Gutenberg Galaxy: The Making of Typographical Man (Toronto: University of Toronto Press, 1962)
  15. see among others McLuhan, Marshall The Medium is the Massage: an Inventory of Effects (Hardwired, 1996).
  16. Special Report of Business Week “Making Money on the Net” (September 23, 1996) pg. 104
  17. The style of this scenario and part of its contents are inspired by two articles: “Altered States” by Paul Rogers and “The Wild Frontier” by Peter Popham, both in The Sunday Review (Sunday Supplement of the Independent: October 13, 1996) pg. 10-14. While some ideas come from these articles, there are also substantial additions and differences to which the original authors may not subscribe, so I take full responsibility for these changes.
  18. ???
  19. ???
  20. Handy, Charles: The Empty Raincoat (London: Arrow Business Books, 1992)
  21. Postman, Neil Amusing Ourselves to Death: Public Discourse in the Age of Show Business (New York: Penguin Books, 1986) and Gans, Herbert J. Deciding What’s News: A Study of CBS Evening News, NBC Nightly News, Newsweek and Time (New York: Vintage Books, 1980).
  22. One of the best studies on this topic is by Korten, David: When Corporations Rule the World (San Francisco: Berret- Koehler, 1996).
  23. Greenspan, Alan “Fostering Financial Innovations: the Role of Government” in The Future of Money in the Information Age (Washington, DC: The Cato Institute, 1997) pgs. 49-50
  24. Wired (September 1997) pg 287.
  25. Wired (February 1999) pg 149.
  26. The information in this sidebar is summarized from Wired July 1998 pg 86.
  27. OECD is the Organization for Economic Cooperation and Development, based in Paris. It regroups the 24 most “developed” countries in the world.
  28. The Economist (March 22 1997) pg 143 and (March 21, 1998) pg 135
  29. Sarah Anderson and John Cavanagh in a study performed for the Institute for Policy Studies (1996).
  30. Hawken, Paul quoted by Korten, David The Post-Corporate World: Life after Capitalism (San Francisco: Berret Koehler, 1999) chapter 2 pg. 8.
  31. cited in A Matter of Fact Vol 25, July-December 1996
  32. Hacker, Andrew : Money: Who has how much and why (New York: Scribner, 1997) Chapter 8 (pg. 105-122)
  33. Bureau of Census: Government Finances Series GF, #5 various years. See also Bartlett Donals and Steele, James: America: Who Really Pays Taxes?
  34. Astin, Alexander W.; Parrott Sarah A.; Korn, William S.; Sax, Linda J. The American Freshman: Thirty Year Trends 1966-96 (UCLA, February, 1997)
  35. The Economist (July 5-11th, 1997) pg 65
  36. Astin, Alexander W.; Parrott Sarah A.; Korn, William S.; Sax, Linda J. The American Freshman: Thirty Year Trends 1966-96 (UCLA, February, 1997) pg. 14
  37. Hamelink, Cees J. “The Right to Communicate” IDOC Internazionale (January-June 1999).
  38. Most of the examples provided were documented in Adbusters: Journal of the Mental Environment (Winter 1997). Exceptions are the examples of the beach advertising and Metro Cinevision that were reported on Public Radio International (PRI) and those with separate footnotes.
  39. USA Today, September 15-17, 2000.
  40. Technology Review Sept-October 2000, pg 122.
  41. Stuart Elliott “Digital Image Magic: Going where no Ads Have Gone Before” International Herald Tribune (October 2-3,,1999 pg 9-10.
  42. Source: News Agency (6-Mar-2001)
  43. Swimme, Brian: “The hidden heart of the cosmos” conference presented at the State of the World Forum. San Francisco, November 1997.
  44. De Long, Bradford and Froomkin, Michael : “The Next Economy” in Hurley, Deborah ; Kahin, Brian and Varian, Hal Internet Publishing and Beyond: the Economics of Digital Information and Intellectual Property (Cambridge: MIT Press, 1998). Italics added.
  45. Kaplan, Robert in “Was democracy just a moment?” Atlantic Monthly (Decembr 1997) pg 73
  46. Technology Review Sept-October 2000 pg. 50.
  47. Serco Ltd. is a business listed in the London stock-exchange, and saw its turnover grow tenfold in the decade to 1998 to Pounds 574 Million. It has now 20,000 employees active in 32 countries. See
  48. Ibidem pg 71
  49. quoted by Kaplan, Robert in “Was democracy just a moment?” Atlantic Monthly (December 1997) pg 73
  50. Kaplan Robert Kaplan, Robert in “Was democracy just a moment?” Atlantic Monthly (December 1997) pg 76 and pg 73
  51. Lempinen Edward “Journalists Probe Their Own Credibility Gap” San Francisco Chronicle Saturday, August 2, 1998 pg A7
  52. Keohane, Robert & Nye, Joseph “States and the Information Revolution” Foreign Affairs (September October 1998. Volume 77 Number 5) pg 90.
  53. Lempinen Edward “Journalists Probe Their Own Credibility Gap” San Francisco Chronicle Saturday, August 2, 1998 pg A1.
  54. Baker, Russ “The Big Squeeze” Columbia Journalism Review (October 1997).
  55. Barlett, Donald L. And Steele, James B. “What corporate welfare costs” Time (November 6, 1998)
  56. All data of this sidebar from Barlett &Steele Ibidem
  57. Nader, Ralph: Civics for Democracy ( Essential Information POBox 19405, Washington DC 20036).
  58. Hubbard, Harold R. “The real cost of energy” Scientific American Vol 264 no 4 (April 1991) pg 36.
  59. “How subsidies destroy the land” The Economist (December 13, 1997) pg 49
  60. Korten, David: When Corporations Rule the world (San Francisco: Beret Koehler Publishers) , 1997) pg 74
  61. Abbreviated and adapted from the Scenario prepared by the Global Business Network about Generation X Netview Volume 7, Number 1 (Winter 1996) pgs. 5-7.
  62. The “Millennium Bug” or “Y2K” in computer jargon will be explained below. See also Mark Ludwig Milleniumb : Gateway to a Cashless Society (American Eagle Publish. 1997) and Edward and Jennifer Yourdon Time Bomb 2000 (New York: Prentice Hall, 1998).
  63. Variations on such a crash have been forecast by Joel Kurzman, or George Soros (see both references in Preface) or Judy Shelton Money Meltdown: Restoring Order to the Global Currency System (New York: The Free Press, 1994).
  64. With the curious exception of the Swiss Franc which is technically still fully backed by gold, Switzerland is the only country that officially does not belong to the IMF, but still has a seat in the so called “10+1” core group, regrouping the 10 key monetary countries–and Switzerland.
  65. For the readers who may not remember the 1960s, Haight and Ashbury Street are the central places where the “flower children revolution” officially started.
  66. Homease: 10 Points (San Francisco, Spring 1989) pg 4
  67. The Progessive Review no 105.7 (AFL-CIO website)
  68. AFDC-HAP stands for “Aid to Families with Dependent Children – Homeless Assistance Programs.”
  69. Center for Common Concern: A Homebase Report (San Francisco, annual reports 1989, 1993, 1994, 1996)
  70. City and Council of San Francisco: Comprehensive Housing Affordability Strategies for Siting Housing and Services for Homeless People: Annual Plan for 1994.(November 5, 1993).
  71. Data from “Report to Congress: Education for Homeless Children and Youth Program (Stewart B. McKinney Homeless Assistance Act Title VII, Subtitel B) july 1995 This data captures only children who are reported as they have special difficulties enrolling in school because they are homeless.
  72. Homes for the Homeless, Inc. “A Tale of Two Nations: The Creation of American ‘Poverty Nomads’ January 1996
  73. Waxman and Hinderliter: A Status Report on Hunger and Homelessness in America’s Cities: 1996 (US Conference of Mayors, 1520 Eye St. NW, Suite 400, Washington DC 20006-4005)
  74. “Affordable Housing” is defined technically as absorbing up to 30% of pre-tax earnings. “Fair market price” is the cost of non-subsidized housing in the area.
  75. Kaufman, Tracy: Housing America’s Future: Children at Risk (Wahsington DC Low Income Housing Coalition, 1996)
  76. Waxman and Hinderliter, Ibidem (1996).
  77. Homes for the Homeless, Inc.: The New Poverty: A generation of Homeless Families ( New York, 1992).
  78. Homebase: A regional Support Center for Homelessness Policy and Programs 10 Points (Spring 1989) pg 3
  79. Children’s Defense Fund (CDF) and the National Coalition for the Homeless: Welfare to What? Early Findings on Family Hardship and Well-Being ( December 1998.
  80. Quotable Women (London: Running Press, 1991).

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