45. We need globalized and localized money at the same time – Ester Barinaga

”Our leaders are so bad at organizing common solutions to our problems”, says Ester Barinaga, a professor in Economics who has done extensive research into social entrepreneurship and the power of bottom-up initiatives.

She began her work in the suburb of Kista in northern Stockholm, which at the time was a major tech hub. She saw a divided society. The tech people had this vision of connecting humanity, but they lived in a different world than the service people of that same suburb, who in fact came from all over the world.

”The information society that promised to bring us together was actually the reason why we perpetuated division”, says Barinaga.

She saw the same structure in Silicon Valley, and even the IT cluster in India had its ”ins” and ”outs”. So she began to study how cities could become more inclusive.

Ester Barinaga zoomed in on alternative money systems. There are two types: crypto currencies and community currencies. They both want to rethink the current top-down system, but whereas crypto aims at creating a new standardized system, community currencies are purely local and aim at integrating economic thinking with social dynamics.

There are several problems with the current money system, according to Barinaga:

It is supposed to fulfill contradictory functions using the same centralized currency. As a medium of exchange money has to be spent, and as a store of value it has to be saved.

Plus: most of the monetary mass is created by private banks issuing loans for private homes.

”The banks give loans to those they deem credit worthy, with a profit motive, which reinforces inequality. But they have not created the interest, so for you to be able to pay that you have to take it from somebody else. So it ties up people.”

After the financial crisis of 2008 and 2009 there was an explosion of community currencies all over the Western world: In the US, France, Spain, Germany, Italy.

People thought: ”We may have a crisis, and I may be unemployed, but I still have my skills. I can still paint houses. Let’s create our own currency and continue our lives as we did before.”

And they did. Like the gita, the choquito or the común in Spain and the wir in Switzerland (which is much older, actually). Or the amazing lixo coin in Campolide in central Lisbon, which you earn from recycling waste and can then use to buy local produce.

There is nothing wrong with a transnational currency like the euro, points out Ester Barinaga. The thing is that we need a hierarchy of currencies.

”We need a transnational currency for transnational trade, perhaps even a global currency. But we also need currencies on other levels, for other purposes, to serve the needs of regional economies with their specific properties.”

”Globalized and localized at the same time!”

Like many others who have had the opportunity to compare ”leaders” with ”ordinary people”, Ester Barinaga feels that hope grows in the grassroots.

”When I look at the people, there are so many initiatives and so much knowledge. The solutions are here. That’s when I am an optimist.”