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A sustainable alternative to the financial meltdown

Although the global financial problems are causing trouble for investors now, they could lead to something better – for investors and the environment.

We’ll still need bills and coins, but complementary currencies can encourage behaviors that traditional money can’t. The most obvious and familiar may be frequent flier miles, which reward loyalty. But alternative currencies may be most powerful when they address social problems.

Dozens of Local Exchange Traded Systems (LETS) have been established around the world, connecting communities in credit networks designed to support local economies. In Japan, where more than 50 alternative currencies are in circulation, the fureai kippu scheme awards credits when you spend time caring for the elderly; the credits can be redeemed for care when you’re old, or you can give them to an aging parent. Similarly, Lietaer has proposed a currency that could award kids credits toward university tuition in exchange for tutoring. All address social problems, developing the local community, the need to care for an aging population, the rising cost of higher education, that the traditional money system has been unable to fix.

And the government needn’t get involved. Alternative currencies, in fact, function best among a network of businesses. Swiss banks now support the WIR, but it was an agreement of 16 businesses in 1934 that established the model. 'Businesses, save yourselves' is Lietaer’s message. "If you’re waiting for governments to save you, you’re naive. But you can’t do it individually: you have to get together."

It’s not so far-fetched, and at the Social Capital Markets conference, that’s exactly what a lot of companies were trying to do. Even with the credit markets in turmoil, a recession on the horizon and traditional financial institutions lurking in the halls, the mood was optimistic.

Maybe the meltdown could refocus consumers and investors on sustainability and shift awareness to more than one bottom line. And maybe a commitment to suppliers and employees, in addition to shareholders, can help everyone survive the economic downturn. That’s the kind of collective action that could bring change to a broken system; the only question, Lietaer says, 'is simply, how long do we have to wait?' Not long, if Griswold and the other participants at the Social Capital Markets conference have anything to say about it.

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