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A report on ‘Peak Money and Economic Resilience’, a Transition Network one-day conversation


A while ago, Transition Network held a ‘Thinky Day’ around the Big Society and how Transition might best respond to that. These bringings together of people to explore the ‘edge’ of Transition are very useful, and yesterday saw the next one, entitled ‘Peak Money and Economic Resilience: a Transition Network one-day conversation’, held at the offices of Calouste Gulbenkian in London. About 50 people came together to explore the scale of the economic challenges we are facing, what Transition is already doing to respond to that, and what else it might do, or how it might adapt what it does to be more appropriate to these fast-changing times. I will attempt here to provide a record of the day and of the key discussion points that emerged. Any misrepresentations due to my note-taking are entirely my own doing…

PetePeter Lipman (right), the Chair of Transition Network, introduced the day, stating that the initial idea and framing for the day came from Eva Schonveld who had asked what can we do in Transition to best prepare for times of rapid economic change, should we do things differently, or more of the same? He also referred to the debate I had had a couple of years ago with Richard Heinberg about the extent to which we should be preparing for collapse or for a more gentle descent. He mentioned how in ‘In Transition 2.0′ the stories from New Zealand and Japan showed how when things became very difficult, Transition was one of the pieces of the solution that they turned to. Might this offer us a clue to Transition’s future role, he asked?

He compared climate change and economic volatility, saying that ultimately, economic crisis is nowhere near as dangerous, in the long term, as climate change, but when there’s no money, if cashpoints no longer work for example, then the impacts of that could be catastrophic in the short term. How, he asked, do we bring the implications of financial volatility into our lives, and how to we feel about them? (The complete framing statement for the day can be found at the end of this post).

The first speaker was Tony Greenham of new economics foundation (here are Tony’s slides). Initially, he said, money was just a way of people recording debts. Money is a social relationship, a recording of relationships of credit and debit. 1 in 3 people believe that when you deposit your money in a bank it is locked in a safe below the bank, and this money is then lent out to other people, but this is not what happens. Banks create new money into existence when they lend it out. There are 2 kinds of money, he said. Central bank reserves, and commercial money made by banks, which is the one that accounts for 97% of money. Central bank money is what banks lend between each other, and commercial money is now shrinking as the amount of money in circulation shrinks.

Who, Tony asked, has benefitted from the growth in the amount of commercial money in circulation? The top 1%. The lower earners haven’t had much gain at all. This very small group holds all the money, the rest of us hold the debt. Although the UK has a sense that it is somehow immune to what is happening elsewhere, he showed a graph from Morgan Stanley which showed the UK having the most debt in the world, the majority generated by the financial sector (see below). The government, he said, are not on top of this, debt is a blind spot.

There are 4 ways to tackle the debt crisis. The first he outlined is to pay it back, the current strategy of ‘austerity’ However this requires increases in real income, economic growth or a redistribution of wealth which isn’t going to happen. The second is to default, which is one approach but the implications of it would be horrible. The third would be a slow default, with inflation and financial repression, or lastly a debt jubilee combined with debt-free money produced by the state, or by the people themselves.

The second speaker was Molly Scott Cato of the Gaian Economics blog, who is the Green Party’s spokesperson on economics (here are her slides). She stated that although Transition has been great at creating the pieces of the puzzle that people can pick up when things get difficult, it is not yet part of the wider mainstream debates. What we are seeing, she said, is that the economic crisis is causing a decline in concern about the environment. 37% of people in a recent poll believe that environmental concerns are exaggerated. It has also been shown that the richer you become, the more your carbon footprint grows. She said that she wasn’t a fan of the term ‘peak money’, because ‘ peak oil’ refers to a fixed resource, and it isn’t helpful to see money like that. We need, she said, to determine between real commodities and fictional ones.

What we need, she said, is a ‘resilience hierarchy’, which moves from abstract resources to real one, from money to fossil fuels to land. When the national debt is looked at more closely, she said, 20% of it is money that we have lent to ourselves, so we could just wipe that off to everyone’s benefit. In terms of how to bring about change, she dismissed lobbying as a waste of time. The financiers have taken over the government, she said. Community action is very important. ’Move your money’ campaigns are very important. So is reframing the debate to be around turning austerity into resilience. This is a situation that the Transition movement predicted and has been preparing for, and has much to offer.

Gary Alexander gave a talk called “A Transition Economy: looking after people and planet” (you can download Gary’s slides here). From this point forward, he said, we need to create a vision that evokes a “yes”. We have to start to see that the real cost is not the same as the financial cost, that we need to also be taking environmental and social costs into consideration.

Before people used money, it was generalised exchange or mutual support and not barter that was used in human societies, and this needs to be brought back into a Transition economy. We need not just projects, but the infrastructure that supports them. They should have distinct niches to provide stability and avoid competition. All of this built towards a proposal that we create a toolkit for a community exchange, with a local currency at its heart.

Then there were three short talks, under the heading ‘Commentaries from Europe’ which gave a sense of how the economic situation is playing out on the most affected countries in Europe. First Filipa Pimentel talked about Portugal. Portugal, she said, is a country of 10.5 million people, with around 13% unemployment officially, but the true figure is far higher. The average salary is €800 per month, and the minimum wage is €450. At the same time, supermarket prices are the same as in the UK. There has been an 89% rise in unemployment in the last 3 years. In Filipa’s region, 25% of families are now below the poverty line. It isn’t about whether collapse is going to happen or not, people are already adapting to it.

There is good news though, she said. Transition is spreading fast in Portugal, partly due to being based, from the outset, on the idea of the ‘gift economy’. All films and events are offered free. It is felt to be vital to decouple Transition from money. It raises the question of what are people willing to give, and is resulting in lots of exchange. It is creating ways to feed people, with Transition working like a charity, any money being used to create structure. They work with local government, but they never ask for money, just for sharing of resources. She has found that the economic situation has meant that people are more open to new ideas, and that at the local level, people are very concerned about the environment, and about ‘peak land’.

Phoebe Bright works with FEASTA in Ireland, and lives in the south west. Ireland, she said,is a very conservative nation, used to being the underdogs. There is almost a sense that we’re back where we deserve to be, she said, that during the Celtic Tiger years “we lost the run of ourselves”. The thing that no-one really wants to consider is that we might not actually get back to ‘normal’. Events keep knocking their confidence. ”Who can we trust?” she said. There is a feeling that the politicians have let people down. The recent Tribunal on political corruption showed far-reaching levels of corruption. People knew there was some, but not to the extent revealed.




Irish banks have been given €63bn. Allied Irish Bank, for example, was given €23bn, 99% of which was loaned by the State, but it is still not lending to businesses. Small businesses are finding it hard to find work, and if they do then they struggle to get paid for it. Tescos supermarkets have spread all over the country, and Ireland, Phoebe said, is their most profitable country. The suicide rate has doubled since 2007. Where she lives in West Cork the farmers are doing OK (especially those that didn’t borrow too much during the Celtic Tiger years), there is some money there, her local town is still active, but that’s not the case everywhere. Food growing and new food businesses are a big thing, and the IT sector isn’t doing too badly, but there is little money for new goods. So while there are a few positives, the overall picture is grim.

Johan van As gave a perspective from Greece. Things have moved there very quickly he said. Greece has been in recession since 2008. There is now 50% unemployment among the under 30s. For those people who do have jobs, many have experience cuts in their salaries of 30-40%. This has led to a huge liquidity squeeze, with demand for goods and services imploding. The country is in a state of shock. Johan was there recently, and said that it felt like the calm before the storm. On the buses in the cities, the drivers don’t bother to check anyone’s tickets as an act of passive resistance.

There are elections coming up, and it is the first time since 1974 that the centre right and centre left won’t be dominating. Usually they look to share 70-80% of the vote, this time it looks more like 35%, with splinter parties and far-right and far-left parties who are usually anti-European, anti-Troika, and some are even anti-democratic. There is also a rise in conspiracy theories and a search for scapegoats. While people looked shocked to hear the news about the resurgence of far-right groups, Johan asked “well if in the UK there were wage cuts of 40% do you think things would really be that different here?”

All the positive reports we hear about Greece, he said, should be read with the view that it is not talking about the mainstream. It looks in the upcoming elections that the Green Party will get one seat, great news until you also see that the fascist party look set to get about 10. There has been an explosion in buyer co-ops, there is at least one new local currency, there are new allotment schemes and an explosion of interest in food growing, but driven more by necessity than green concerns. Economic hardship is catalysing innovative thinking, but the prevailing school of thought seems to be to throw the police and the bankers in jail and leave Europe, not that practical as a solution to the complexity of the issues.

This was followed by a Q&A session, and then a tea break. I introduced the next session, called ‘So where it Transition at?’ I talked about how I get sent a lot of books that are about peak oil, economic collapse and so on, that at the end say “but there’s this great thing called Transition that might sort it out”… this puts a lot of pressure on Transition, and it feels like we have achieved a huge amount in 5 years, but the aim of the day is to look at how we might reframe things in this context. There is some amazing work emerging in Transition now around the creation of new economies, and it feels like where all this is going.

Fiona Ward (you can download her slides here) gave an overview of REconomy, Transition Network’s initiative to help Transition initiatives their capacity for creating a new economy.

The idea is to encourage an economy with the following characteristics:

  • Resilience outcomes
  • Being about more than just personal profit
  • Respecting resource limits
  • Appropriate localisation
  • Serving the community
  • Big enough to provide the jobs and goods that we need

reconomyAt the moment REconomy is working with 10 Transition initiatives around the UK. There are 4 parts to it, Leadership, Vision, Transforming businesses and starting enterprises. As a microcosm, she talked about what is emerging in Totnes. REconomy is seen as the ‘Engine Room’ for a new economy for the town. The process is seen as cyclical, going from ‘Get inspired’ to ‘Get help’ to ‘Get money’ to ‘Give back’, and then round again.

She talked about the work underway to create a model whereby people can invest into the Transition economy, a fascinating and vitally important piece of work. She finished by saying that the day before the 2012 Transition Network conference, September 13th, will be a day dedicated to REconomy.

She was followed by Ciaran Mundy of the Bristol Pound (you can see Ciaran’s slides here). He talked about how most local currencies so far have been printed notes only, and that a few of those, most notably the Chiemgauer and Berkshares, have been very successful, but it has been a significant limitation for others. What has been developed recently by Transition Network, nef, QOIN and others has been an electronic currency, and the software has now been made available to anyone. Bristol is a good scale for a complementary currency, it has a strong identity and good social capital. Their initial target is 300 businesses accepting it and 1000 account holders in time for the launch.

They ran an art competition to design the notes which reached over 1 million people. The slogan is “your city, your money, your future”. The council was nudged into accepting the currency in business rates by the ‘buzz’ that was created by the art competition. The plan is to go live by the end of June. The artwork for the £1 note was unveiled, but I am not allowed to show it to you. You’ll just have to wait! So instead here is the template people were asked to design into…

People then divided into groups. Here are a few of the findings from that. One group looked at stories, and felt that we need to get new stories about Transition as an alternative out there, and to show that there are other options. We need to be telling stories of positive alternatives. They also stressed the importance of stories from our past. The second group looked at the gaps in what Transition Network is doing to respond to the economic crisis. Thoughts included that one key gap is the degree of confidence people feel in understanding economics as it is presented in the media. As an organisation it is also limited in its capacity and needs to think about how to resource telling its story better. One thought was to work to include the local economy more in resilience planning, asking what thinking has been done in terms of cash resilience, i.e. what happens if one morning the cash machines don’t work?

Another group looked at what we have learnt from 5 years of Transition. One point was that still most people aren’t aware of it, and we need to work hard at making it more attractive. It may be a good blueprint but we are working from low levels of awareness. Although the label can often be very useful, and can bring a holistic take on things that are often not viewed in that way, it can sometimes be problematic. The last group looked at the need for a common strategy, and suggested that people already have values, it is just a case of bringing them out. We should also, it was stressed, really acknowledge and celebrate all that has been achieved over the past 5 years.

After lunch, there was a World Cafe session looking at 4 key questions:

  1. What does a Transition response to these times look like?
  2. What might government do in response?
  3. How can the business sector respond, and what would it look like if it gave its support and shared its skills and expertise with Transition groups?
  4. Who else do we need to connect with and how to we reach them?

I don’t have all the notes from all those discussions, but at the end, Alexis Rowell pulled together 9 things that had emerged from those, and earlier, conversations, in terms of concrete things Transition Network might now do. They were:

  • Create a ‘local currencies kit’ that simplifies the process of getting started with a local currency scheme
  • Work more with councils, offering support and training around economic resilience
  • Keep pushing REconomy, a toolkit, how to do Blueprints etc
  • Look at lenders beyond credit unions such as CDFIs
  • Develop responses to cash resilience, perhaps with your local emergency planning group. If there is no cash, then what?
  • Need to up Transition Network’s communications work to get our story out there
  • Repackage the resources list from this event (which I have attached to the end of this piece)
  • Put out something to local groups about how they can best communicate economic issues
  • Collaborate more with others like Timebank UK to tell positive stories about economic resilience.

And that was that. Most people went to the pub to continue conversations, some people ran through the April showers to get trains home, and people felt stimulated and full. There was a call that we should do this more often, perhaps 6 monthly ‘Thinky Days’. Sounds good to me.

Thanks to everyone who made it happen, most notably Peter, Eva, Justin, Gary, Ciaran and Jules, and with deep gratitude to the Calouste Gulbenkian Foundation and Marmot Charitable Trust who sponsored the event. If you tweet, the hashtag #peakmoney will guide you to the tweets from the day. By way of a couple of appendices, here is firstly, the day’s framing statement, and secondly the recommended reading (and viewing) list that was circulated in advance of the meeting.

The day’s Framing Statement

The sudden disruption of the financial system, which became apparent in 2008, is affecting many people already. However the greatest impacts of ‘peak money’ may yet unfold. ‘Peak money’ could change many aspects of ‘normal’ life, from the personal to the governmental level, much as peak oil and climate change do, but in a much more abrupt way. The Transition movement needs to think through consequences and responses. What are we doing in our communities to create economic resilience and where are the gaps? What might our response be when governments make sweeping changes in services or propose draconian measures?

The purpose of the day will be to begin to develop a ‘toolkit’ of ideas and information for others in the Transition movement and kindred spirits to use and add to. It could also be a starting point for similar meetings in other places, networks and groups around the world.

We will gather information from a range of sources inside and beyond the Transition movement, consider and evaluate these and create proposals for the wider movement, then disseminate this as the start of a larger and wider discussion around the movement.

The emphasis will be on the positive and constructive: What can we do in our communities? However, we will also include background information on what has happened in the past in response to financial crises (e.g. Argentina, Iceland) and some basic background on the nature of the economy to help us evaluate constructive ways forward.

A reading (and viewing) list on the basics of money, debt, economy

Short articles and videos


  • Managing without Growth, (final Chapter) Peter Victor
  • Debt: The first five thousand years David Graeber
  • The End of Growth Richard Heinberg. New Society Publishing
  • Treasure Islands, Nicholas Shaxson

Lessons from elsewhere

Local/alternative/complementary currencies