At first glance, it seems like a logical story, where at some point people decided they wanted a medium of exchange rather than doing direct swaps of, say, your chicken for my apples. In my Money Myth TEDx I described a parable of a knight coming to a village with tokens to solve problems with barter. I said it wasn’t a history lesson, just a thought experiment. My aim was to show how charging interest on money can make us value money more than real wealth, like food, community and so on. I didn’t realize that the idea of money emerging as a way to deal with barter is taught widely in economics classes. Thing is, it’s complete bollocks. Now I realize what a pernicious fairytale it is, if believed to be true, as it distracts us from the real history of money, which is far more interesting, far more social, and way more political. So, let me to put the record straight with some heavy duty references

Some put the origin of the story of money emerging to improve barter to Adam Smith in the 18th Century. Then in the 19th century, William Stanley Jevons wrote a popular book that reinforced this view. He gave an account of a famous naturalist who, when on his expeditions in the Malay Archipelago, found that in islands where there was no currency but much food, mealtimes were sometimes preceded by long periods of hard bargaining, and if the commodities offered by the explorers were not wanted then their whole party went without dinner (in Evans, 2002). Monetary historian and economist Glyn Davies said of Jevons “It was largely his great influence which helped to condition conventional economic thought for a century regarding the inconvenience of barter.” (2002, p14). Such anecdotes then entered popular culture. For instance, in 1940, Geoffrey Crowther, formerly editor of The Economist, insisted that money “needed the conscious reasoning power of Man to make the step from simple barter to money-accounting” (Crowther 1940, p15).

Yet what substantial evidence is there? To find some, we have to look outside economics and to history, anthropology and archeology. “The picture drawn by economists about the inconvenience of barter in primitive communities is grossly exaggerated. It would seem that the assumption that money necessarily arose from the realisation of the inconveniences of barter, popular as it is among economists, needs careful re-examination” concluded Professor Einzig in the 1960s (1966, p353). Then, in the 1980s, after a career studying the topic, Cambridge anthropology professor Caroline Humphrey concluded “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.” Glyn Davies (2002) concludes “the overwhelming tangible evidence of actual types of primitive moneys from all over the world and from the archaeological, literary and linguistic evidence of the ancient world, is that barter was not the main factor in the origins and earliest developments of money.”

Anthropologist David Graeber provides further explanations on how and when barter takes place. “Ordinarily, barter takes place between … people who might as well be strangers-that is, who feel no sense of mutual responsibility or trust, or the desire to develop ongoing relations… The English words ‘truck and barter,’ like their equivalents in French, Spanish, German, Dutch, and Portuguese, literally meant ‘to trick, bamboozle, or rip off…. We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around. What we now call virtual money came first. Coins came much later, and their use spread only unevenly, never completely replacing credit systems.” We are never going back to barter, as barter was never the big thing back there somewhere.

The mistaken “barter theory of money” is unhelpful as it suggests that money works like a commodity with value in itself, rather than being an accounting system. As we explore in lesson 2 of the forthcoming free open online course on Money and Society, launched by the Institute for Leadership and Sustainability (IFLAS) where I now work,  the earliest forms of money we know of from archeological records are systems of promises from trusted institutions for work done for them. The origin of money is credit and debt, not in escaping barter and not as precious metals. Once we recognize this, then we understand that money was not originally a thing of value, but a social agreement about how to coordinate economic activity. The question that arises is what conditions the issuance and redemption of debt is useful for society at large.

A big problem is that the misinformation continues. My search of “back to barter” in the news brought up quotes in the Economist, Financial Times and Wall Street Journal. If mainstream Economists can’t even get the basics about the history of money right, why do we trust them with informing us about the present or future of money? It’s high time sociologists, anthropologists, psychologists, currency innovators and activists bring the issue of monetary system design into the public domain.  We are never going back to barter but we may go forward to new forms of collaborative credit system that displace the disfunctional role of banks and their deluded friends in economics departments.  We hope to help with our free course.

Professor Jem Bendell

Founder of Lifeworth and IFLAS, and Professor of Sustainability Leadership.

More info on IFLAS www.iflas.info

(Thanks to Matthew Slater, co-author of the Money and Society course for help in researching this topic.)

Sources:

Crowther, G. (1940). An Outline of Money (London).

Davies, G. (2002) A History of Money. A History of Money. Cardiff: University of Wales Press. https://archive.org/stream/HistoryOfMoney/HistoryOfMoney_djvu.txt

Einzig, P. (1966) Primitive Money, Oxford.

Graeber, D (2011) Debt: The first 5000 years, Melville House Publishing.

Humphrey, C (1985) Barter and Economic Disintegration, Man New Series Vol. 20, No. 1 (Mar., 1985), pp. 48-72 [p. 48]

That is a meaningless statement. Neither is there a rule or principle that stops a country adopting another country’s currency as its own legal tender. Ecuador uses the US dollar for its currency and has done for over a decade.

An independent Scotland could easily adopt the British pound as its legal tender if it wanted to, without being part of a banking union. However, its banks could not issue such currency as bank deposits via loans (the current origin of 97% of British pounds), unless it registered those banks HQs and assets within Britain. That’s not that difficult – just over the border, Carlisle might even develop as a financial centre!

Although we might want to keep the UK together, we shouldn’t be misled by politicians, civil servants or reporters who aren’t willing to have a quick google to see what happens around the world.

For Scotland to keep the pound, it would not profit from the issuance and sale of notes and coins. The issuance of physical currency is a tiny issue compared to the economic and social implications of issuance of the majority of money by banks, as debt. If it kept the pound but became independent, Scotland would have no control over monetary policy. If the UK wanted a strict monetary policy but Scotland needed a less strict one to enable more credit to boost economic activity, then Scotland’s economy would suffer an absence of a means to transact. That’s exactly the situation of Greece right now in the Eurozone. It means prolonged recession, austerity and a firesale of state assets. Hmm, but wait. That’s the current situation in Scotland… because the Scotish and British public have very little control over monetary affairs right now, as it is the private banks that decide how much credit is created, at what price and for whom.

So if concerned about monetary policy, as it should be, Scotland could keep the British pound but create a complementary currency to enable internal transactions. After all, why allow the volume of local trade to be determined by monetary policies decided elsewhere? That doesn’t sound like independence to me.

Such complementary currencies are widespread, many thousands of them worldwide, and much more stable than the recent cryptographic currencies like Bitcoin that have become famous in the past year. Some are very local, some are global and involve governments bartering products and even satellite time, some are backed by commodities, like Ven. We learned about dozens of them at a UN conference we helped organise last year, and we teach about them at our Institute: www.iflas.info

Since Bitcoin shot to fame, it is becoming more widely understood that a currency can be founded on an unhackable public database of transactions that is maintained by a network of any computers that download the relevant software. Therefore there are now hundreds of adaptations of the bitcoin code, which create other currencies. It is not surprising then that an entrepreneur announced yesterday that they are creating Scotcoin.

Could Scotcoin be the answer that Scottish independence advocates are seeking? Almost. One of the problems of these cryptographic currencies is that the way they are issued. Early adopters get a huge reward, as do those with the most powerful computers. Therefore, the proposal by Derek from Scotcoin is that an agency will distribute these coins to whoever is registered as resident in Scotland.

Scotcoin, or something similar could work, if a number of things happen:

• The code is changed to adopt Freicoin’s demurrage system so that a small fraction of your coins is paid into a common pot, which can then fund an ongoing basic income payment to every registered user. This avoids hoarding and encourages circulation of the currency
• The code is changed to remove some of the less useful aspects of bitcoin, for instance, requiring a larger amount of mining power to be decisive in changing the protocol (more than 51%), and to speed up the transaction times
• The agency issuing the currency becomes democratically accountable to the people of Scotland, so that people can decide how much the computing processors should receive for maintaining the network, what the demurrage fee should be, what the minimum income should be, and what guidance should be given on new developments in the code
• If issued and governed democratically accountable, then the Scottish government adapts legal tender laws to recognise Scotcoin, so that it would have the same legal standing as Pound Sterling when debts are disputed in court. In addition, the Government would accept tax payments in Scotcoin, or even demand some tax payments in Scotcoin, from companies operating in Scotland. In addition, the Scottish government could begin to pay some portion of state employees with Scotcoin. This would provide some basis for stabilising the demand for Scotcoin, and therefore its market price against other currencies.

Such issues are too important to be left to individual brilliance. If the initiators of Scotcoin don’t like this, no problem, the Scottish government can create their own domain extension, register Scotcoin to it, create their own cryptographic currency with a public mandate in mind, and regulate so that anything called Scotcoin that is not the government-backed system, would simply be counterfeit, and its commercial users prosecuted as such.

I dont think that will be necessary but, yes, in saying this I’ll come clean I’m not an anarchist libertarian who thinks that somehow private enterprise will fix all our problems. Instead, a blend of libertarian sentiment, entrepreneurial drive, and a strong social democratic spirit, could create a more useful monetary system in the long term. Activist entrepreneurs can lead the way, but they need to team up with others who know more about community governance, for instance.

This future governance wouldn’t mean that other private currencies couldn’t emerge.. indeed we are already seeing the emergence of a multi-currency economy around the world. Its just that if one such currency is to play a role as a national currency and be backed by the government, it will need certain characteristics and forms of governance.

If Scots want to go independent and keep the pound, that’s up to them, and they shouldn’t be misled by treasury officials.

The fact this has been opened up is good news, as it reveals how little our politicians and mainstream media seem to understand about monetary issues, so wedded are they to mainstream delusion about the nature of money.

As I heard the Chancellor I was reminded of a quote I included in my new book “Healing Capitalism”:

“To desire freedom is an instinct. To secure it requires intelligence. It must be comprehended and self-asserted. To petition for it is to stultify oneself, for a petitioner is a confessed subject and lacks the spirit of a freeman. To rail and rant against tyranny is to manifest inferiority, for there is no tyranny but ignorance; to be conscious of one’s powers is to lose consciousness of tyranny. Self-government is not a remote aim. It is an intimate and inescapable fact. To govern oneself is a natural imperative, and all tyranny is the miscarriage of self-government. The first requisite of freedom is to accept responsibility for the lack of it.”

That was E.C. Riegel, quite a long time ago, in a book arguing for us to create our own currency systems. As Felix Martin says, Bitcoin ain’t all that new, as the field of currency innovation has been around as long as we have. What is new is the ability for us to create and scale new systems quickly. In bringing attention to monetary issues in the context of the debate about Scottish independence, George Osborne may have inadvertently started a conversation that will bring more people to an awareness that money systems should be what we chose them to be, not means of control and exploitation.

So while I’m at it… Psst, all you austerised local authorities… listen up! You could create your own currencies too, and back them up by your payroll, by local taxes and charges for things like your super expensive car parks. Sound odd? Well these aren’t new ideas, they have been used by around the world already, from Brazil to Kenya. It’s about time we got our DFID civil servants studying what we can learn from the rest of the world, as our Treasury officials sound far too little-Englander to me! Now the Scottish independence debate has taken a monetary turn, and we wake up to our current monetary delusion, perhaps we all might be free.

Thanks, Jem Bendell

Professor of Sustainability Leadership (www.iflas.info)

Some links:

If you want to discuss this, see you over on the Lifeworth-IFLAS Linked In Group: http://www.linkedin.com/groups/Sustainable-Leaders-IFLAS-4778761

The BBC article: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26166794

See Scotcoin project: www.scotcoin.org

My book where I discuss all these things: http://jembendell.wordpress.com/2014/01/31/healing-capitalism/

If you dont know about Bitcoin: http://jembendell.wordpress.com/2014/01/29/davos-conversations-on-bitcoin/

For my views on the limitations of Bitcoin: http://jembendell.wordpress.com/2014/01/06/crypto-at-the-ok-coral/

I had the pleasure of working with Thomas and the European Sustainability Academy to develop a network of professionals in Greece who organise alternative exchange systems, such as the local market currency in Volos, called the TEM. We facilitated the drafting of the Drapanos Declaration on Community Exchange, which provides a basis for future collaboration. It highlights the insight and purpose that many people share. I recommend you read it, share it, and consider endorsing it yourself.

Thomas then came to the north west of England, to speak at events organised by the Institute for Leadership and Sustainability (IFLAS), which I’m founding at the University of Cumbria. We organised the events with Transition Lancaster, the local chapter of the worldwide Transition Towns movement, which encourages local action to create sustainable communities. As a result of the events, IFLAS is now engaging Transition Lancaster and the Lancaster Ethical Small Traders Association, other interested business networks and community groups in the region, and the nation-wide Sustainable Money Working Group, to design experiments and action-research projects for scaling up alternative means of exchange. We hope to link this local innovation with the Working Group on the Sharing Economy, of the Young Global Leaders of the World Economic Forum, because we believe these issues are of global relevance.

The next event is a one day seminar on why and how to launch your own local exchange system, led by myself and John Rogers, co-author of People Money: the promise of regional currencies, and in association with the United Nations Non-Governmental Liaison Service, on March 11^th, 2013.

The Institute for Leadership and Sustainability (IFLAS) will be formally launched next year, with a 3 day summit of international sustainability leaders. Based in the middle of the world-famous Lake District, the ILS is an autonomous part of the University of Cumbria Business School, collaborating across the University on inter-disciplinary research, education and advisory. We work on personal and collective transitions towards more fair and sustainable societies. The field of alternative exchange systems and complementary currencies is an area which we welcome enquiries, particularly from potential doctoral candidates, partners in funded research, or prospective participants in our March seminar. For this, I can be contacted via my profile page at the University.

Professor Jem Bendell

Director, Institute for Leadership and Sustainability, University of Cumbria

Founder, Lifeworth.com and Lifeworth Consulting

In the First Policy Brief of the EU’s ‘SPREAD Sustainable Lifestyles’ project, they identified five pivotal issues for sustainable lifestyles. One of these is “the emergence of non-monetary systems: reward schemes, alternative currencies and the principle of reciprocity to incentivize people to rethink the value of services and goods in terms of their actual costs and benefits.” It recommends “a Toolbox for change makers” to “enable the transition” that should include “alternative currencies and reward schemes..”*

There is a growing sense that we are on the cusp of disruptive innovation in sustainable exchange, as EU SPREAD notes, “web and mobile technologies can play a critical role in building large-scale, sharing communities for the future.”* Data from the NGO I advise, Community Forge, show a significant uptake in the last 2 years, with now 400 currencies using its free open source software and 130 fully hosted on its servers.

If you are interested in these areas, then I recommend attending one of the following events in the coming months:

Sweden, 24^th August: a short workshop on community currencies with myself and Matthew Slater. Contact the organisers of Future Perfect for more information.

Greece, 10^th and 11^th October: a 2 day workshop on community currencies with best selling author and expert Thomas Greco, myself, Matthew Slater and innovators of local currencies in Greece. Contact the organisers of the European Sustainability Academy for more information.

UK, 30^th and 31^th  October: a talk and then half day workshop on community currencies with Thomas Greco, at the Lancaster Campus of the University of Cumbria. Contact the organisers at Transition City Lancaster for more information (email:  th@  reliablegreenweb.co.uk)

Later this year, at the University of Cumbria, I will be launching a trans-disciplinary programme of research, dialogue and training on alternative currencies and exchange systems, and how they might enable a sustainability transition. If you are interested in this agenda, Id be pleased to hear from you (jb at lifeworth . com).You can also follow tweets on this topic via https://twitter.com/jembendell

Thanks,

Jem Bendell

Director, Lifeworth

Professor of Sustainability Leadership, University of Cumbria (Incoming, Oct 2012)

* Quotes from: Emerging Visions for Future Sustainable Lifestyles. Preliminary policy considerations from the SPREAD Sustainable Lifestyles 2050 European Social Platform project. Developing pathways to more sustainable living. First Policy Brief, February 2012

Click here to view the embedded video.

In the coming months, Lifeworth, in association with the world’s leading provider of free open source software for community currencies, is co-running workshops at major sustainability events in Sweden and Greece, and lecturing on this topic in Australia. Scroll down to see details on the events nearest to you. A crisis is an opportunity for a new system to emerge, if we make it so!

Sweden

At the Future Perfect festival in Stockholm, world-leaders in sustainable enterprise, science, design, and media will gather at a world-class summer music festival on 23-26 August.

At Future Perfect, we (Lifeworth Consulting) are hosting a panel on monetary reforms and innovations for sustainability, and a workshop for executives who want to start, scale or participate in alternative means of exchange.

Panel: “Currencies of Transition: monetary reforms and innovations for sustainability.”

Chair: Professor Jem Bendell (Lifeworth Consulting, Community Forge and Griffith Business School)
Ben Dyson, director of Positive Money, which campaigns for a systemic solution to monetary crises, by full reserve banking.
Josh Ryan Collins, New Economics Foundation, the Brixton Pound and co-author of “Where does money come from?”
Lynnea Bylund, Board Member, Ormita, the international business barter network.
Matthew Slater, Board Member, Community Forge, a leading provider of open source software for community currencies, and editor of Community Currency magazine.

The panel will address the questions: Is a fair and sustainable economy possible with our debt-driven money system? If not, what needs to change? What is being done already? What can we do to get involved, personally and professionally? How can we make this a movement? What mistakes can we avoid?

Workshop: “How alternative exchange systems work and how to get started”
Trainers: Professor Jem Bendell and Matthew Slater
The trainers work with Community Forge, which provides free open source software for community currencies. This video explains why, what and how Community Forge operates.

To book your tickets to the festival, visit http://www.futureperfect.se

Greece

In Greece right now there is an exciting air of change and thirst for new ideas and innovations. On the 10th October Lifeworth’s Jem Bendell will co-lead a half day seminar with Matthew Slater of CommunityForge.net on creating and participating in alternative exchange systems and community currencies. They will be joined by Greeks who are pioneering these solutions to the current crisis. On the 11th, Matthew Slater will offer a software training for those wanting to implement a local currency.

The seminars are part of a 2 week sustainable business summit to launch the new European Sustainability Academy in Crete. Information on the final days of the summit, including these workshops on alternative exchange systems, is here. Contact the European Sustainability Academy for more information or to book.

Australia

“Currencies for the Sustainability Transition” is a speech that Professor Jem Bendell will give in Brisbane at the Necessary Transition Conference at Griffith Business School, on the 26th-28th September. Contact the centre for more information on tickets.

As a meeting place of leaders in business and government, the WEF seemed the ideal place to share ideas on how to tackle the jobs crisis. Many of the discussions highlighted small things that businesses can do, such as helping promote employability through funding career-relevant education, or investing in internet start-ups that provide new job opportunities. They also discussed how governments could invest more in infrastructure, education and look again at labour mobility. However, all these issues are secondary to the prime role of our banking system in determining levels of potential employment. As money is issued as debt, if the banks won’t lend to businesses in the real economy, particularly small and medium sized businesses who provide the majority of jobs in any society, then as debts are paid back, so the amount of currency in circulation shrinks. The first key function of a currency, any currency, is to help connect assets, including people’s time, with needs. If a currency becomes scarce in an economy, then there is less ability for exchange. That means needs go unmet, and assets go underutilised. It’s called unemployment.

This critical factor was mentioned at the WEF events in passing, for instance when a finance minister from a North African nation called for more regulations on the percentage of bank lending that must go to small and medium sized enterprises. However, I did not hear discussion of how governments around the world have previously addressed this problem, for instance in East Asia, where 5 year plans often included controls on bank lending, to guide lending to the real economy and job creation, rather than lending for consumer debt and speculative activities. Indeed, I heard from a senior official in Thailand’s planning ministry that credit controls had been dropped from the new 5 year plan. This indicates that the mainstream discourse on the job crisis needs to shift, and business leaders from the real economy, could play a role in that, given that job creation is a win-win for business and society.

For business leaders to play a role in addressing the challenge, the first step is to gain insight into the most significant levers of change, and escape untenable myths about the key causes of unemployment. Five myths I heard from delegates in Davos, Bangkok and Istanbul about the main causes of the jobs crisis, that business leaders need to escape from are:

Myth 1: “Unemployment is due to falling demand.”

Are people’s needs really falling? Or just the amount of money in circulation to employ people/assets to meet those needs? Clearly, given the levels of human need in the world today, its the latter.

Myth 2: “Unemployment is due to technology displacing human labour.”

Could we not design systems of ownership and revenue distribution so that the income from technology frees us to work creatively and caringly for each other? How can we govern technology to release us to a world of service, not a life of redundancy?

Myth 3: “Unemployment is due to the cost of hiring and firing.”

Why then do some countries with high wages and labour standards, like Scandinavia, have less % unemployment? Where would competition between nations to lower costs of hiring and firing lead us? What will competition between nations for the same number of jobs worldwide lead to the total global level of unemployed? Clearly the loosening of employment law is not a systemic solution.

Myth 4: “Unemployment is due to a lack of skills and appetite for the new types of work.”

The world has more skilled labour than ever before, and more labour mobility than ever before, and many people with Masters degrees can’t get a job. The internet means that people can access knowledge more easily than ever before. Education is important, and a lack of education may be a problem for specific groups, but is not a critical factor in mass unemployment at present.

Myth 5: “Unemployment is due to the option to claim benefits.”

Why then was the existence of benefits not keeping people out of the workforce before the recession? Why do some countries with the most supportive welfare states, like Scandinavia, have less % unemployment?

These myths arise from a general lack of understanding about the monetary system. Once we understand that the availability of a currency in an economy determines employment levels we must then look at the monetary system. Once we look at the monetary system we must question why governments have chosen to create a system where 97% of our money is created by private banks as debt with interest so that governments cant spend on public needs without taxing us to pay interest to banks. Rather than maintaining the myth that the financial markets are like the tides or the weather, its time to redesign these entirely man-made systems, to enable currencies to be in fair, stable, sufficient and targeted supply, for job creation. To tackle jobs crisis we need to:

1. wind down non-reserve banking and replace private bank credit creation with government issuance of money, according to strict rules enshrined in law, to avoid inflation. In this situation governments could create credit to lend at low rates to banks who would then lend it to businesses.
2. regulate bank lending and leverage to ensure a large share of lending goes into the real economy and not into consumer debt or speculation.
3. create complementary currencies or exchange systems for communities and businesses, some of which could be issued or backed by local governments.

In my video keynote at the Rebuild21 conference in Copenhagen last week I went into some detail on the monetary system and what we need to do about it, as responsible professionals working towards sustainable development. Then at the World Economic Forum in Istanbul, on video, I explained further how we need to work on monetary reform in order to solve the global jobs crisis.

Once these reforms and innovations occur then governments and companies in the real economy will be far better placed to invest in the necessary transition to a low carbon and resource efficient economy. As Ida Auken, the Environment Minister of Denmark explained at the WEF in Istanbul, there will be tens of millions of jobs created in the green economy of enterprises that deliver more efficient use of resources. Government needs to guide businesses in that transition, but if its only tools are bonds, even eurobonds, then that means very limited spending, higher taxes for future generations, and greater resources for global banking to invest in what it decides will deliver the highest returns. If anything is learned from the financial crisis is that the power of global banking is out of hand.

Folks, in the 5 years since the beginning of the credit crunch, it is now clear that not enough politicians or civil servants know what to do, or are willing to take leadership on the root causes of the financial crisis. In this situation, we need more statesmanship from business leaders from the real economy, to help shift the policy debate onto real solutions. In so doing, as business leaders you will be protecting your own businesses from the disruptive effects of recession. There is also a case for institutional investors to engage in this issue as well, as the long term interests of savers are being risked by the current monetary system.

To sum up: how can your company help create more jobs? By getting involved in monetary reform efforts, and alternative exchange systems, including business barter networks, and the fledgling self-issued credit systems that people like my colleagues are working on. It might be easier to parrot the myths I mentioned above, but it wouldn’t be responsible, or effective.

Professor Jem Bendell

Founder, Lifeworth Consulting, Young Global Leader, World Economic Forum.

June 10th, 2012.

These developments in “collaborative consumption” bring a new dimension to the existing forms of alternative exchange systems, such as business barter networks or countertrade agreements, and community currency systems that help connect underused assets with unmet needs. Countertrade accounts for around 20% of world trade, while one national barter network now involves 1 in 5 small or medium sized companies in Switzerland, amounting to over US$1.5 billion a year. The new sphere of peer-to-peer financial-lending has taken off, and predicted to reach US$5 billion next year. It appears to be a time of disruptive innovation through new forms of sharing, exchanging, renting and co-owning.

Some of these activities are important to sustainable development, and, therefore, to the broad field of responsible enterprise (whether we label our work corporate social responsibility, sustainable business, social enterprise, shared value, responsible or impact investment, or some other term). For business executives to contribute to a positive sustainability outcome from these developments requires enhanced understanding of how to explore ways to become involved, including by adapting their own business models.

Which means there is an educational need, for those of us interested in enabling the sustainability transition. Lifeworth Consulting is conducting research on these developments, for presentation in July at the EABIS colloquium at IMD (in Lausanne), and in September at the Necessary Transition conference at GBS (in Brisbane). So, if you are currently employed, and would like to receive the results of this research, please participate in our 5 minute survey, it would really help:

http://www.lifeworth.com/survey-responsible-enterprise-collaborative-consumption

Please, click that link!

Thanks, Jem Bendell

Lifeworth founder and Adjunct Professor @ GBS

Jem Bendell by Paulo Pellegrin

“I’m delighted to hear Professor Jem Bendell has been appointed a Young Global Leader” said the head of the UN Global Compact, the largest corporate responsibility initiative in the world. Georg Kell explained “Bendell’s pioneering work on multistakeholder alliances in the late 1990s helped us at the United Nations understand how to engage business in new ways, which led to the launch of the Global Compact. We now count nearly 7,000 active participants. But that is not yet a critical mass. The great majority of companies worldwide remain aloof or sceptical. It is our aim that Rio+20 will bring a big boost to the spread of universal sustainability principles as advanced by the UN Global Compact so that the movement can reach a critical mass and transform markets for sustainable development.”

In his interview accepting the accolade, Professor Bendell discussed the opportunities and challenges for leadership today:

“One opportunity for the new generation of leaders is an awakening. Everywhere I turn, I’m hearing people asking “how long can it go on?” Financial and ecological crises are leading people to sense the need for a transformation of economic systems. In the past years working on sustainable development I’ve seen positive initiatives, products or services, but they remain marginal. Social innovations can no longer be the side show to systemic decay. Its time to team up for massive change, and take positive innovations from the margin to the mainstream. For that we need leaders who are adept at learning from the edge, because those ideas that seem strange to you today may hold the solutions for tomorrow.

“In a sense, the challenge of this generation of leaders is the same as any, to transcend the mental barriers we are brought up with, between us and them, us and nature, my generation and yours, my specialism and yours, my faith and yours. These barriers are inventions, yet we maintain them due to our egos, and fears, and our need to belong to one particular group. In an interdependent world we now need globally responsible leaders: not just leaders serving their own, but conscious of the world, and how they affect it. I’m not talking about leaders from the West, but leaders from the rest of the world, caring about all of the world.”

“One of the unique aspects of the Young Global Leader Community is that it is the first generation of leaders who are truly global citizens: they have all lived, studied and worked in different countries throughout their careers,” said David Aikman, Head of The Forum of Young Global Leaders. “They see themselves as being fundamentally interconnected and have the cross-cultural leadership skills to be successful in a globalized world. Thanks to the incredible diversity of the group, they are able to collaborate across complex systems and build informal coalitions to facilitate action on the biggest challenges facing the world today.”

In 2012 Professor Bendell is training leaders around the world, on the theme of “Healing capitalism through critical collaboration.” Destinations include: Abu Dhabi, Bangkok, Beijing, Brisbane, Dubai, Hong Kong, London, Istanbul, Madrid, Paris, Singapore, Stockholm, Sydney, and Zurich.

More on Jem Bendell:

A strategist and educator on social and organisational change, specialising in responsible business development, alliances for sustainable development, and transformative philanthropy. Professor Bendell has helped create innovative initiatives, such as the Marine Stewardship Council, to endorse sustainable fisheries, and The Finance Innovation Lab, to promote sustainable finance. He leads a consulting network, whose clients include UN, NGOs, large firms and family foundations, in over 25 countries. With a PhD in international policy, over 100 publications (including four books and five UN reports) and Visiting Professorships in management (GBS and IE), Professor Bendell is an award-winning international authority on business-society relations. He works with people who seek to contribute to, and benefit from, the transformation of markets to promote global well-being. His latest book on collaboration is “Evolving Partnerships”, and his latest TEDx talk is on sustainable currencies.

Business travel is taking Lifeworth’s Jem Bendell to these cities in 2012 and he wants to make his carbon count by speaking with and training professionals committed to the necessary transformations in business and finance. So if you live in one of those cities and could organise an event, or know someone who does, please read on.

The challenge is to take promising innovations in social and environmental practices to the mainstream, fast. After 16 years working on collaborative innovation for sustainable development, Professor Bendell dug deeper into our need to heal capitalism. He is identifying the businesses, investors, community leaders and policy makers who are getting to the roots of our problem.

• In a keynote presentation “Healing Capitalism”, you can hear about the actors and opportunities within this transformation and be inspired to connect with them (a lecture from 30 mins to 1 hour).
• In the skills workshop “Critical Collaboration” you can learn the methods for working together on transformative change, which Professor Bendell has been using in his work (a training of a half day to 1 day).

Hosts of keynotes or training workshops will demonstrate their commitment to this agenda through various communications channels available to Lifeworth, and could be featured in his forthcoming book “Healing Capitalism: business opportunities in global transition.”

The windows of opportunity to book Jem include:

Abu Dhabi – 2nd week of October
Bangkok – last week of May
Beijing – September 10th or 14th-19th
Brisbane – last 2 weeks of September
Dubai – 2nd week of October
London – 1st week of July
Hong Kong* – September 10th or 19th or 1st-2nd October
Istanbul – 1st week of June
Madrid – 1st week of September, last 2 weeks of October, or last 3 weeks of November
Paris – last 3 weeks of either June or July
Singapore* – last week of May or 30th September or 1st-2nd October
Stockholm – 22nd to 27th August
Sydney* – 29th or 30th September or 1st October
Zurich – last 3 weeks of either June or July

There is a fee to host, but no travel costs. The starred* cities need to be booked before March 30th to be definite. Other cities and dates may be possible, but will incur significantly more expense and a clear strategy for impact (so as to maximise the time and resources). In November, Professor Bendell will launch his latest book “Healing Capitalism”, co-authored with Ian Doyle.

If interested, please copy and paste the following questions and answer them in an email to connect @ lifeworth.com

1) The dates, times and location we propose:
2) Speech or workshop or both:
3) If the speech/seminar is part of another event, provide link:
4) The organisers:
5) The likely attendees (type and number):
6) How the event is funded:
7) If fees will be charged for the event, the amount:
8 ) What accommodation is offered for Professor Bendell:
9) The amount of the speakers fee guaranteed even if your organisation cancels later (for speech and/or training):
10) What other activities requested of Professor Bendell, if any:
11) Whether professional video filming and editing with free online release:
12) Name of contact person:

More on Jem Bendell:

A strategist and educator on social and organisational change, specialising in responsible business development, alliances for sustainable development, and transformative philanthropy. Professor Bendell has helped create innovative initiatives, such as the Marine Stewardship Council, to endorse sustainable fisheries, and The Finance Innovation Lab, to promote sustainable finance. He leads a consulting network, whose clients include UN, NGOs, large firms and family foundations, in over 25 countries. With a PhD in international policy, over 100 publications (including four books and five UN reports) and Visiting Professorships in management (GBS and IE), Professor Bendell is an award-winning international authority on business-society relations. He works with people who seek to contribute to, and benefit from, the transformation of markets to promote global well-being. His latest book on collaboration is “Evolving Partnerships”, and his latest TEDx talk is on sustainable currencies.

As I read leading commentators on business responsibility and sustainability sharing their insights on trends for 2012, I saw a new boldness. People are recognising the need for ambitious goals that address root causes, including economic governance failures. At Lifeworth we have been seeking to contribute to a sustainable economic transformation and published a variety of works on that theme over the past ten years. In that time I’ve seen the more critical analyses initially ignored by leaders in favour of less challenging narratives. Yet this year I think we will see more opportunity for ‘radical’ suggestions for change to be discussed and trialled. In that sense, despite the fears, it’s the year we have been waiting for. But rather than adding to the many predictions, I’ll summarise Lifeworth’s efforts that could be of relevance if you seek to team up to strive for far greater positive change than you might have before.

The first area for transformative action in which we are engaged is policy innovations for scaling responsible enterprise and finance. Rightly or wrongly, government budgets cuts are happening in many countries. The implications for them to regulate businesses for social and environmental objectives are beginning to be felt. How then can we promote and reward better business practice, without increasing the costs to government? Leveraging private standards of social or environmental performance is one option. In work for the UN Conference on Trade and Development (UNCTAD), we looked at public policy innovations to scale the number of firms adhering to voluntary standards like the Forest Stewardship Council. This appeared in the World Investment Report, with the full academic study published elsewhere. The idea that these forms of ‘collaborative economic governance’ are a pragmatic response to the twin challenges of sustainable development and government efficiencies, was fed into the policy discussions leading to Rio+20, happening this June. The need now is to create systems for collecting innovative public policies for scaling responsible business, analysing which work well in what contents, and disseminating this to government officials worldwide. If you can help on this project, do get in touch.

Yet we must go further than coping mechanisms in a world of irresponsible enterprise and governance failures. The second area for transformative action, therefore, is redesigning financial systems for more fair and sustainable outcomes. Although commitments to responsible investment have existed for some years, the translation into investment practice and the realities of corporate leaders has far to go. The limitations of current environmental, social and governance (ESG) practice in empowering investors to act is one of the stumbling blocks which we analysed in 2011, sparking lively debate. Our interest in ESG is because of the potential for progressive investor influence, which is a historically novel situation. In 2012 I hope we see the emergence of a progressive voice from investors on matters of public concern. Aside from investor-business relations, the public voice of the progressive investor has been slow to emerge. The Carbon Disclosure Project has shown that on climate change investors can sound a new tune on public policy. In 2012 and beyond, we could see other forums, particularly the UN-backed Principles for Responsible Investment (UNPRI), providing opportunities for progressive investors to promote policy debates that better include social and environmental priorities. Whether they will be able to counter-balance the more regressive investor resistance to financial re-regulation will be interesting to watch.

In 2012 I’ll continue to participate in fora that discuss the need for transformation of economic systems for sustainable development, including The Finance Innovation Lab in the UK, the World Economic Forum in Davos, Switzerland, and the Griffith University conference on transition, in Australia. As I explained in an interview for Griffith, the key stumbling block to progress on tough issues is our limiting assumptions and oversights about the real causes of our crises. During the next months I’ll be asking world leaders what they think are the key activities to drive massive positive change that weren’t possible before now, and who they need to work with to make that happen. Identifying such pressure points for massive positive change will inform our philanthropy advisory during 2012, and beyond.

One area where I think there is currently a woefully lack of attention, funding and action is in “sustainable currencies”. Current monetary systems are incompatible with the goal of a fair and sustainable economy, and thus we need greater efforts at reform, as well as at developing secure, scalable and community-owned alternative currencies and barter systems. It is, no doubt, a difficult area for many to grasp; as I experienced myself. Yet in 2011 there were strides towards greater understanding by sustainable development professionals, through the work of New Economics foundation (nef), among others. My TEDx talk on the topic reached over 12,000 views in a couple of months. As austerity bites and unemployment persists, new ways of getting people working for each other without putting governments further into debt will inevitably rise up political agendas. In 2012 we will help through collaboration with Community Forge and The Finance Innovation Lab, amongst others, and promote the uptake of ‘sustainable currencies’ as an innovative social development mechanism, through fora such as the Geneva Forum on Social Change.

What does this renewed emphasis on systemic change mean for specific industry sectors? I think the main implication is to be more ambitious in attempting to mainstream change for sustainable development. That is a third area for seeking transformative action. That has been our approach in the work we do in the luxury and mining sectors. With the organisation Fair Jewelry Action we researched and published “Uplifting the Earth: the ethical performance of high jewellery brands.” In this report we mapped out a transformative agenda for responsible jewellery, where the industry can contribute to sustainable development. From this basis, we aided De Beers’ stakeholder consultations, and worked with the UN Institute for Training and Research (UNITAR) on their training for the jewellery industry, which will be rolled out from Antwerp this year. The Spanish version of the report was launched at the world’s first Sustainable Luxury Awards, in Buenos Aires, co-organised with CSSL and the Authentic Luxury Network. The aim of these awards is to encourage sustainable innovation in the luxury sector; this year’s awards are scheduled for November. The insights from our work on transformative corporate responsibility in the luxury sector were refined for the launch of the world’s first MBA module on ‘Sustainable Luxury and Design’, which I teach at IE Business School, in Madrid. Students learn how sustainability is the smartest and most elegant paradigm within which to design anything. At the other end of the value chain, in 2012 we are working with Channel Research and the German development agency Gesellschaft für Internationale Zusammenarbeit (GIZ) to encourage disclosure on the social, environmental and economic impacts and contributions of mining companies in the Congo. There are few more challenging locations for mining to align better with the goals of peace, human rights and development.

A fourth area for transformative action in 2012 is enhancing the way UN agencies and civil society organisations engage companies. There are now many cross-sectoral partnerships, and the relationships they established hold the potential for greater changes. Largescale change goals need to be connected back to practical steps that can deliver benefits in the near term for various partner organisations. That’s the thinking behind a spate of new resources on more transformative partnering that were released in 2011, including reports from the UN Global Compact, and my own book, “Evolving Partnerships: engaging business for greater social change.” During 2011 we applied our approach to developing transformative alliances in our support for the International Labour Organisation’s fight against forced labour. In 2012 we aim to help the development of their Global Business Alliance against Forced Labour.

Despite the shocking persistence of slavery today, and the general dystopian tone we hear from thoughtful people in international fora, or indeed, because of such darkness, we need a bright vision for life on Earth. That is why we are helping the Future Perfect Festival in Sweden in August. It will celebrate the brilliance and fun of sustainable lifestyles, sustainable businesses and sustainable communities. It will shine rays of light on a better way of life, beyond the dark mountains of outmoded and destructive ways of thinking, working and living. Our ability to understand values, and articulate them in professional contexts, is important when working towards a positive vision. My colleague Ian Doyle has therefore been teaching ‘voicing your values’ class at Grenoble Graduate School of Business, and we will be integrating this into various lines of work in 2012. In our forthcoming book, Healing Capitalism, Ian and I will seek to integrate both the personal and systemic levels of analysis, to aid transformative action.

In summary, we hope our 2012 will involve the following arenas of transformative action:
1) Policy innovations for scaling responsible enterprise and finance;
2) Redesigning financial and monetary systems for more fair and sustainable outcomes;
3) Mainstreaming contributions to sustainable development within specific industry sectors (including luxury, mining etc);
4) More ambitious collaborations between UN agencies, civil society organisations and companies;
5) Visions of sustainable ways of living, pathways to achieve them, and values competence to walk that path.

To better develop our work, this year we become a Swiss non-profit association. We will remain a network of independent associates, and will continue to deliver in partnership with other service providers, for a limited number of clients who seek to create meaningful change. If you can help us have an impact in these areas, I’d love to hear from you.

Professor Jem Bendell
Founder and Director, Lifeworth.com and Lifeworth Consulting
Adjunct Professor, Asia Pacific Centre for Sustainable Enterprise, Griffith Business School
Distinguished Visiting Professor, IE Business School

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