#178 Building Tomorrow: Practical steps to a new economic system with Paddy Le Flufy
Finally: six economic, business and structural technologies which, if we put them all together, would completely restructure our culture towards a regenerative future.
As you will know by now, this podcast searches long and hard for answers to the over-riding question of ‘what do we need to do, to get us from where we are, to where we need to be to set the stage for that generative future our hearts know is possible?’ So when I got a book that directly asked and then answered that question, I dived straight in. Building Tomorrow: Averting Environmental Crisis With a New Economic System does exactly what it says on the cover. It’s full of concrete examples of individuals, organisations and businesses who are forging new ground at the leading edge of change, weaved into a coherent imagining of a future that runs by different rules.
Author, Paddy Le Flufy, read mathematics at Cambridge, then – as seems to have happened with quite a lot of our recent guests, he took a job in the city and qualified as an accountant with KPMG. And then, as also seems to happen with our guests, he didn’t buy into the system, but instead spent years living something of a double life, earning money as a finance specialist in London then spending it living in remote places, alongside people whose lives were radically different from his own. This period culminated with a year, funded by a Royal Geographical Society Award, being taught by indigenous wisdom-keepers in the Peruvian Amazon. Since 2015, he has been based in the UK and then Canada, researching how we can redesign our economic system to avert the impending environmental catastrophe. His book is the result of this research. It brings together some ideas we’ve explored already on the podcast, but knits them with things I had never heard about, and it creates a whole that has the potential to change the way our culture functions – which is genuinely exciting.
Manda: Hey, people, welcome to Accidental Gods. To the podcast where we believe that another world is still possible and that if we all work together, there is time to create the future that we would be proud to leave to the generations that come after us. I’m Manda Scott, your host in this journey into possibility, and your co-pilot in our search for answers to the overriding question of what do we need to do to get us from where we are to where we need to be? To set the stage for that generative future that our hearts know is possible. We ask this all of the time on this podcast, so when I got a book that directly asked and then answered this very question, I was quite cheerful. It’s called Building Tomorrow Averting Environmental Crisis with a New Economic System. And it does exactly what it says on the tin. The author is a young man called Paddy Le Flufy who read mathematics at Cambridge and then, as seems to have happened with quite a lot of our recent guests, he took a job in the city and qualified as an accountant with KPMG. But then, as also seems to happen with a lot of our guests, he didn’t really buy into the system. So Paddy spent years living a double life where he worked as a finance specialist in London for six months of the year and then used the money with the other six months to live in remote places alongside people whose lives were radically different from his own.
Manda: He has travelled with economic migrants, been taught to fish by the rural people of Mozambique and lived with the Hadza hunter gatherers. He spent two months living with an indigenous tribe in the Amazon rainforest, and then he won a Royal Geographical Society Award to spend an entire year being taught by traditional wisdom keepers from another jungle culture. With all that behind him, he has put it to good use. And since 2015 he’s been based in the UK and then more recently in Canada, researching how we can redesign our economic system to avert the impending environmental catastrophe. His book is the result. And it brought together some ideas that we’ve explored already on the podcast; the doughnut model, for instance, complementary currencies. But then he knits them with things I had never heard about, particularly the Future Guardian model. And he creates a whole, a unified concept that has the potential to change the way our culture functions. Which I think is genuinely, really exciting. So you will want to buy this book, but I hope you will want to listen to us talking about it first. So people of the podcast, please do welcome Paddy Le Flufy, author of Building Tomorrow.
Manda: Paddy, welcome to the Accidental Gods podcast and thank you for turning out on what is probably the middle of the day for you, somewhere in the beautiful west coast of British Columbia. Sounds lovely.
Paddy: Yes, it is lovely and thank you very much for having me. I’m very excited to be here. I love Accidental Gods podcast, so being on it is brilliant.
Manda: Thank you. You’re more than welcome. It’s an honour. Because your book Building Tomorrow Averting Environmental Crisis with a New Economic System feels like the synthesis of a lot of the conversations that we have on the podcast. And I notice in one of the many reviews you have on the cover, you’ve got Nathan Schneider saying ‘Building tomorrow is an invaluable synthesis of radical ideas that should be common sense. It clarifies concepts that I’ve seen floating around for years but didn’t fully understand until reading it. This clarity is a powerful step towards achieving the world that we need’. Which feels true and useful. And I’m wondering how you got to be writing this, when so many other super bright people have not stitched all this together. What led you to this? And tell us a little bit about the process of putting it together.
Paddy: Yes. So I started seriously focusing on this area in 2015. Before that, I’d had quite a varied career that wasn’t directly related to this.
Manda: You did maths at Cambridge, so you were pretty technophilic, were you?
Paddy: Um, I don’t know, on the techno side of things, average. But I knew a reasonable amount about the economy already, because I’d been an accountant and things like that as well. But I hadn’t been specifically working on economic transition until in 2015 I started focusing in this area, but in a slightly more general way. I was worried, of course, about the environmental crisis and many aspects of the situation of the world. And but I also could see that our society was and still is really, running on 20th century systems. That were pretty good, I mean, probably could have done better, but pretty good in the 20th century. But now they’re really not useful because they’re, you know, driving the environmental crisis essentially. But we also, due to technological and social innovations over the last 50 years, 50 ish years, we also have the opportunity to basically redesign society and make it much better. Insofar as if we were to be starting with a blank slate of organisation at the moment, but with the technological and social knowledge and knowledge of the world and what have you that we have, we wouldn’t design society the way it is at the moment. It would be completely different. But understanding what that different thing would be and obviously we’re not starting from a blank slate, we’re starting from a very complicated world.
Paddy: So understanding what a better system could look like and how we can get there from here, was what I was interested in. At first I wasn’t specifically focussed on the economic system because, you know, the political systems, agricultural systems, the the whole works needs to or could be improved greatly. But I did kind of home in on the economic system quite quickly, partly because I already know or knew then a reasonable amount about it, and partly because I could see that it’s a real driver of the problems and it’s something that I think we can find ways, I mean I think I’ve now found ways of changing it, in the reasonably near future, that will also affect other systems, hopefully. So at that time I was just wanting to get into this general world and have a bit of an impact, but I wasn’t thinking of writing a book. So I was reading lots of books and articles and they seemed to cover the problems with the current system, which I knew a bit about, and they filled me in on more details and general ideas of what a better system might look like.
Paddy: And again, I had ideas and they kind of helped me understand that more. And generally, people in this kind of world seemed to have a generally similar kind of idea of what a better world would look like. And then in terms of things to do, they generally talk about government policies. But the problem with that, is that governments generally have pretty solidly proven that they don’t want to put those policies into action. They don’t want to create systemic change. And then a lot of books would kind of give a scatter shot of good things, like Mondragon has done some good things, Patagonia has done some good things; citizens assemblies are nice and that kind of thing. But what I couldn’t find was a coherent explanation of how we can get from where we are now to where we want to be, what that would look like in reasonable detail. And what we can do to get there. So I found myself very often left at the end of reading these books and articles with a frustratingly unanswered question: but what should we actually do? And so to cut a long story quite short, I wrote Building tomorrow to answer that question.
Manda: All righty. And exactly. This is where we get to, after four years of podcasting we get to the end of it, and you’re right, citizens assemblies would be a nice idea. Building communities would be a nice idea. Changing the economy would be a nice idea. And the question is, yes, but how? And your book exactly does begin really to unpick the route from here to there. So without me interrupting too much, do you want to talk? I’m really curious to know what happened in 2015 to switch you on to this. But leaving that aside, you can answer that in passing if you feel like it. How did you begin to unpick this? Because that seems to be the barrier up against which a lot of very smart thinkers come. Is that they’ve got vague ideas of what would be nicer, but unpicking actually the structure of how to get there is really hard. And yet you’ve outlined some really good ideas in the book. So just unpick for us maybe a little bit about how you approached it and then where you got to.
Paddy: Yeah, sure. So I began concentrating on researching what people were actually doing. Because there are lots of really good organisations and groups and businesses and what have you, that are dedicated to working out how to improve specific parts of the economic system. So I was looking for those and looking for ones that could together combine to get us to and create a new system. So I call these things organisational technologies. So they’re like processes and institutions that help us to organise society. In this particular case, organise the economic system. So I was looking for organisational technologies that met three criteria in order to be kind of genuinely useful in creating a new economic system. So the first criteria was that they need to be practically and realistically possible to implement given the current circumstances.
Manda: Okay. So we could put these into being tomorrow if we had the political will to do it.
Paddy: Well, no, not just that, because that’s not practically realistic, because we don’t have the political will to do it. So it’s that the people who want to put them into action can do so without having to get permission or wait for legal changes or whatever it is themselves. So, for example, it’s unrealistic to think that we can get the entirety of the business world to suddenly decide to try to have positive impact tomorrow. But there are individual companies that want to have positive impact. So finding a way of enabling those companies to do so and then to spread that across the business sector is a realistic, pragmatic solution.
Manda: Yeah, brilliant. Okay. Yes. And you could do this tomorrow and we’ll discuss the examples of that in a moment.
Paddy: Exactly. And we can begin tomorrow. And it’s already beginning and we can go step by step kind of thing.
Manda: Okay. So practically and realistically possible. That’s number one. What’s number two?
Paddy: Yeah. So the second criteria is that they need to be powerful enough to actually transform the system. And so I kind of think of this as they go to the source, but in fact, the more technical way of putting it is that they approach leverage points, which is what Donella Meadows, the great system theorist, calls them. So an example, I can actually use the business example for this again. One of the technologies that I’ll talk about later is the Future Guardian model, which is being pioneered by Riversimple, a company in Wales. And it changes the way businesses are structured. So clearly there’s a lot of problematic issues around businesses at the moment, the kind of impact they have.
Manda: Sure are.
Paddy: And there are a lot of policies that could improve them. For example, at the moment, the four day working week is something that’s quite in vogue. And moving to a four day working week would mean that there’d be less consumerism potentially, and people would have more time to do community activities. And it could improve quality of life. But if we just institute a four day working week, but companies are still profit maximising, then they’re still going to be greenwashing, they’re still going to be getting as much out of their employees during those four days as they possibly can. You know, there’s still going to be a lot of other problems. So the Future Guardian model kind of goes upstream of all of those and it changes the way the business is defined, so that instead of being run on behalf of all of the shareholders and therefore being profit maximising shareholder value maximisation; a Future Guardian company is run on behalf of all of the stakeholders. So that includes the customers, the employees, the commercial partners, the investors, the community and the environment. So this means that a Future Guardian company, if their employees want to have a four day working week and it fits in with the rest of the business in general, then the Future Guardian Company will want to put it in place, because they want to act on behalf of their employees. And equally, they don’t want to do greenwashing, they want to actually improve their environmental impact, because that’s part of the way that they’re structured.
Manda: It completely changes the value system within which they are operating, and yet they are still selling a product into the market at the end of the day.
Paddy: Exactly. So it opens up all of these other individual policy possibilities, as options that it actually wants to do, kind of thing. And then the third is that between them, they need to cover the main areas of the system. So if we just change one thing, like businesses because that’s the example we’ve been using in other bits, but we don’t change the financial system and we don’t change the goal of economic growth and those kind of things, then it’s not going to actually create a new system. It’s just going to push a little bit better. So I’ve got six organisational technologies in my book. The first two are about the frameworks that guide our actions. The second two are about our businesses and organisations and the last two are about our monetary and financial systems. And I ordered them like that as well, because this helps to build up a picture of the new system as we go through the book.
Manda: Brilliant. That’s excellent. Thank you. And yes, that makes a lot of sense. It has to be possible and and it has to actually make the impact that we need. As Simon Michaux pointed out, we need to change everything everywhere, all at once, which would appear to be the title of a film. But I haven’t seen it, so I can’t say.
Paddy: Oh, it’s really good. I recommend watching it. It’s a crazy film. Another important aspect of our book is that the majority of the writing is about positive, real world examples of things that people are doing, and showing how they’re doing it and why and in what situations.
Manda: Yes, this is not just hypothetical. This is actually being done. That’s what’s so amazing about it. So let’s crack on then with your organisational technologies, which I think is a fantastic idea anyway, that all fit your criteria and you’ve got them in frameworks, business, monetary and financial models. So let’s start with the frameworks and the two technologies of the six that are within that. What frameworks matter and what is being done that can shift them?
Paddy: Yeah. So one of the themes in the book is getting over the imperative for economic growth. Because if you’ve read any newspaper about economic type things from politicians in the last while, they really love their economic growth. It’s the absolute be all and end all for a lot of people. And this is a serious problem because basically there’s a lot of decisions in which the interests of economic growth is in conflict with decreasing environmental impact. And clearly, in very poor countries, economic growth is very likely to be an essential element in eliminating poverty. But in the developed world, in rich countries, it doesn’t necessarily have much positive effect. And there are lots of ways of having positive impact on quality of life, that don’t involve economic growth, but they’re much harder in the growth paradigm.
Manda: Can I interrupt very briefly? Because we’ll go back to this. I’m just interested in whether we do need economic growth in countries that definitely need to improve their well-being and their flourishing and their prosperity. I was listening to Tim Jackson recently; Prosperity Without Growth was his book. Do you think we definitely need economic growth in the places that are still modernising?
Paddy: I think economic growth is very likely to be something that happens in the process of eliminating poverty. I mean, I spent time in Mozambique, in rural Mozambique, and, you know, there’s nothing there. Like that’s what living off a dollar a day means. It means…
Manda: There’s no infrastructure.
Paddy: Yeah, exactly. I went to buy a watch and I bought like 3 or 4 watches and they all were broken or definitely couldn’t work before I even started trying to use them. And those were the only ones available for like 30 or 40 miles or something. And there’s just hardly anything there. So there’ll be more things and therefore, assuming they’re using money, which is likely, then there will be economic growth to get there. But that doesn’t mean to say that they should be specifically aiming for economic growth, because economic growth is just a proxy. The kind of reason why, I mean, this is simplifying massively, obviously, but why economic growth is seen as such an important thing, is because it’s kind of like a proxy for actual improvement in quality of life. So the first organisational technology in my book, which is one of the frameworks ones, is the doughnut paradigm, which was invented by Kate Raworth in 2011. And so it’s still quite new, it was only invented 12 years ago, but it’s already being taken on by quite a lot of cities and communities and to some extent governments as well. And the doughnut paradigm gives a new societal goal in place of economic growth, which can be summarised in a sentence as ‘aiming to meet the needs of all within the means of the living planet’. So meeting the needs of all means ensuring everyone has enough food, water, shelter, education, social networks and so forth. And being within the means of the living planet means that we don’t collectively have so much negative environmental impact that we cause dangerous amounts of climate change, biodiversity loss, mess with the nutrient cycles and those kind of things. And both of these bounds have been laid out very clearly with indicators and calculated, and it can be drawn as a doughnut. So you want to be above the inside ring of the social foundation and below the outside ring of the ecological ceiling. So you want to get inside the doughnut is the idea.
Manda: You want to you want to be in the carbohydrate bit of the doughnut. Because I always think inside the doughnut is the gap in the middle. But it’s not the gap in the middle, it’s the social floor. You want to be in the actual edible bit. And it seems to me that at city level, that’s the most exciting. Because, you know, if there are governments in the world implementing this, I don’t know where they are. But at city level, again, this is one of those places where they can bypass national slow, not willing to change governments. And there seem to be a number of cities, there’s one in Canada,that are endeavouring to map out a doughnut model and and see how it works. And it seems to be able to exist within the rest of the paradigm. It doesn’t take the entire city and somehow put it in a bubble so that it can’t function in the rest of the economic world. Have you looked into, probably since writing the book, any of the current doughnut cities to see how they’re getting on?
Paddy: So there’s a section in the chapter, quite a big section, on the doughnut for cities. But obviously I wrote that a while ago. Amsterdam was one of the first cities to get into using the doughnut and they did a city portrait with an organisation that Kate Raworth started called Doughnut Economics Action Lab that are really good.
Manda: They’ve been on the podcast
Paddy: They’ve been on the podcast?
Manda: Yes. Rob Shorter,yeah.
Paddy: Oh awesome. Yeah. So they’re really, really good and they’re working with people in all sorts of different communities, cities, governments, etcetera to implement the doughnut. So they worked with Amsterdam on the city portrait along with a couple of other organisations. And then, yeah, since then there’s definitely quite a lot of cities using that. I haven’t looked into it in a massive amount of detail and they do still have the Amsterdam City doughnut as the main kind of example on the website. So I think that in terms of how to go about things it’s a really good guide.
Manda: But just for interest, before we move on that, can you see on a time horizon that counts, whole nations moving to a doughnut model? Do you think that’s on? Do you think that’s coming down the line?
Paddy: So there are various countries that are using the doughnut to some extent and making kind of cautious moves towards it. There’s a Wellbeing Economies Alliance, I think it’s called, that includes a few countries.
Manda: Scotland, Canada, New Zealand.
Paddy: Costa Rica has got a national scale initiative and there’s a few things. But the thing is, for countries it’s a very big step. Like it’s, you know, quite risky to make those kind of experimentations. So I do think that it’s at other levels that it’ll grow first, the doughnut. And then in terms of countries moving towards it, hopefully there’ll be some small countries that will do more and it’ll get more well known. And then to be honest, given what’s likely to happen in the next 10 or 15 years, I think all bets are off in terms of what actually happens on that kind of level. And it’s quite hopeful. That I very much hope that the doughnut does become the global dominant paradigm in the next while, I don’t know how long that while will be ten, twenty, I don’t know how many years, you know.
Manda: Who knows? It seems to be small countries that that are getting it most. You quote Michael Higgins, president of Ireland in 2020, saying that a radical paradigm shift is required in the connection between ecology, economics and society. Which, you know, ten years ago I would never have expected a national politician to be saying that. So there are some people who are definitely getting it and maybe they just need your book to let them see how to get it. Let’s move on, because time is moving and there’s so much in this that we want to talk about. So did you want say anything else about the doughnut model?
Paddy: Not specifically. I mean, I’ve got loads more to say, but there’s loads more to say about the rest of the book as well. So I’m happy to move on.
Manda: That’s what I’m thinking. Yes. All righty. So of the six technologies, there was another one that was still in the frameworks technology. And maybe we can talk about doughnut model and economics together with the next one, which is the circular economy, which seems to me huge at the moment. We are just mining endless amounts of stuff in order to touch them for a few seconds and then throw them into landfill or into the sea. It’s that extract, consume, pollute is the defining feature of predatory capitalism and it has to stop. So tell us how you see that and where you see it going.
Paddy: So the circular economy, exactly, gets rid of that whole issue. What you just described is the linear economy and the circular economy basically redesigns material flows through the economy so that materials cycle endlessly in the economy, and never need to be thrown away. And therefore, if it works properly, then it eliminates the waste problem. And it’s analogous to natural cycles. Like, you know, nutrients cycle continuously through nature. And we need to get a similar kind of thing for artificial materials in society. The idea was first introduced by Kenneth Boulding in, I think the 1960s or something like that. But in the last 20 years it’s become much more well known and people are working on it much more, particularly through the work of the Ellen MacArthur Foundation, which is a really great organisation. So check that out. And so a lot of the ways of doing it have been worked out, but there are new ones being developed as well. So I think to kind of summarise quickly, I’ll just explain how I do it in my chapter. Which is I basically, after a little bit of explanation more than I just gave now, but a bit of explanation of the circular economy, I go through examples that go through the main strategies for getting into a circular economy. So some of them are for individual products, you know, making products that are modular or that individual parts can be taken out and replaced and those kind of things.
Paddy: And then others are more structural ones, for example, using tool libraries instead of buying loads of tools. And then ones that produce new types of cycles. So, for example, there’s a company called Ecovative that use high tech engineering techniques on mycelium to create loads of different products. So that kind of general idea of using modern engineering with natural materials that are fully compostable and can just join the natural cycles has a lot of potential, but that still needs to be developed. And then another version of that is one that an organisational company called Miniwiz does, which is to look at trash as a raw material. So it’s more than just recycling, because recycling generally things get downcycled. So you can use something as one thing once and then it gets recycled into another thing that maybe can’t be recycled. Or it can only be recycled a couple of times kind of thing. Whereas the idea that Miniwiz are working on, and have got loads of products in already, is to see trash as a raw material, turn it into products, with the aim being that when the product reaches the end of its life, the trash it becomes is equally as versatile as a raw material and therefore it can keep on cycling.
Manda: Yes, I thought this was extraordinary, because what you said in the book is that they’ve they’ve got a trash lab. It’s a thing. And it’s created 1200 new materials, experimenting with different recipes until they find the highest performance materials from trash. And that feels to me like this is where human creativity pushes up against the edges of what we thought was possible. Because again, ten, twenty years ago, if you’d said somebody would create new stuff from rubbish, you wouldn’t have believed it. Just before we go on into other things, I’d like to just take a flip back and look at the three kinds of toasters. Because I thought, other than the fact that it seemed quite fun, it was a really interesting way of looking at how the different kinds of things that we make can be circularised, if you like. Is that okay? Are you all right to go in with those?
Paddy: Yes, that’s fine. Yeah I think that’s a really good example.
Manda: So there was the optimist, the pragmatist and the realist toaster. So just tell us a little bit about who did this and why.
Paddy: Yeah. So this was a design project by an organisation called the Agency of Design, who have loads of circular economy projects. And because this was just a design project, it wasn’t kind of for someone exactly, they were trying to work out how to get electronic waste into the circular economy. Specifically kind of small scale electronic waste because e-waste, it’called, is a major problem. There’s actually more e-waste produced every year in weight terms, than all commercial aircraft that have ever been built in the whole of history. So there’s an enormous amount of e-waste. I mean, that includes everything from washing machines to toasters to computers, you know, anything electronic. And a lot of that waste is small things like toasters and kettles and things that are cheap and easy to just chuck in the bin.
Manda: You just throw it away. If it doesn’t make your toast, you throw it away and get a new one.
Paddy: Exactly. And that makes it much harder to get into the circular economy, because you’ve got to persuade people to use it in a circular way kind of thing. But they’re also quite simple items, toasters. So they did this project and it shows very clearly three of the main strategies for getting individual products into the circular economy. There are other strategies that I go into later on in the book, but three of the main ones are the toaster ones. And so the first one, the optimist, is it’s very long lasting and made of fully recyclable material. So this means that less material is used because you don’t have to make a new one very often.
Manda: You’re going to be giving this toaster to your grandkids.
Paddy: Yeah, exactly. They literally make it and they have little extra bits. They’re really good at showing how you can make it more engaging as well. So on that one, they’ve got a toaster counter, so as they put it, your grandkids will be able to see when your family has made 55,220 rounds of toast.
Manda: Yeah. And it’s still going.
Paddy: And they genuinely look on this as something that that can last that long.
Manda: That becomes a family heirloom. Exactly. Yeah.
Paddy: Then the second one is the pragmatist, and this one is modular. So an important aspect of making these circular is making things both fully recyclable and so that you can just take out the parts that need to be recycled. So the modular toaster, each module is one piece of toast big, and you can put them together and then it’s made out of a type of plastic that can be recycled nine times. Because generally, although plastics say they’re recyclable, they’re only recyclable like once or not even that.
Manda: Oh, really?
Paddy: Yeah. Yeah. I mean, maybe a couple of more times or whatever. But generally plastics are all recycled in a mix, but there’s loads of different types of plastic. So in order to make them much more recyclable, they need to be recycled as their type of plastic. That’s part of this toaster.
Manda: Homogenous plastic that can then be made into itself again.
Paddy: Exactly. Yeah, a single polymer I think is what it is. And so with the pragmatist, each module can be recycled nine times because that’s the kind of plastic it is, which is one of the best. And another aspect of the design is that the way that they’re modular, each module can easily be posted through a letterbox, so it’s easy to send it to and from the manufacturer to get a new one. And yeah, there’s loads of little extra bits like that, that they explain and how the business model can work and all of that. And then the third one is the realist. So this is going for the cheap end of the market where, you know, £5 toaster that might last for a couple of years or whatever. And then you chuck.
Manda: And you’re expecting to throw it away.
Paddy: Yeah, exactly. And people who are buying those kind of toasters are very concerned about price. So the only way you can compete is by having a cheap toaster. So the way they built their realist toaster was they made it so that it’s got little expanding balls inside, a little like ball bearing type things, that expand when it’s in a vacuum, in all of the parts of the toaster. So then you can put it into a vacuum when one’s broken, you can put it into a vacuum chamber, which is quite a cheap piece of capital equipment, and the whole toaster pops apart and then you can just take out whichever parts don’t work and use all the rest of it in a new toaster. So that means that it’s actually cheaper for you to rebuild the toaster because you don’t have to keep on making new parts. And so you can stay cheap. Another problem is getting people to actually bring it back to recycle. But you can do that by giving people 10% off their next toaster if they bring in the broken one.
Manda: And these are people for whom price is everything, so they still want their toast, they’ll bring you the toaster and remake it.
Paddy: Exactly. And these kind of ideas, of course, can be transferred to loads of other products as well.
Manda: Yeah, Yeah. It wasn’t just toasters, but it’s an interesting set of design thoughts of where we’re all going to have to go with the stuff that we’ve got to get to a circular economy.
Manda: So let’s move on. We’re probably going to have to leave circularity quite quickly, but did you want to talk about Teemill very briefly?
Paddy: Yeah, and if you like. So Teemill, they’re a circular t shirt cotton company. And basically it was started by a couple of guys in the Isle of Wight, in their twenties, 10 or 15 years ago, who wanted to have stylish but environmentally friendly clothing. And they worked at various things and they had a t shirt company, but they wanted to make it part of the circular economy. So they redesigned their t shirts, basically, in terms of the the way in which they’re sewn. I’m not sure exactly how you call it, but the way in which they’re made, so that they could be recycled endlessly. Because the problem with cotton is as the fibres get shorter, they can’t be recycled. So they had to make new types of t shirts in order to make this work. And they did do this. And it’s quite inspiring, because they started with, as they put it in an interview, they started with £200 and a garden shed and obviously a lot of determination as well. And after a few years of work, they found this new way of creating cotton t shirts and they haven’t found a limit to how many times the t shirts can be recycled. And so now it’s a massive company and they’ve got it so other people can make t shirts using their technology and that kind of thing. And so this kind of shows that while there are lots of products, for example, denim or, you know, loads and loads of products, that at the moment can’t be recycled or not recycled very well. If we put, or companies put, or people put their resources, their intelligence and time into working out how to bring those materials into the circular economy, then it’s very likely to be possible. You know, these guys did it for cotton t shirts starting from essentially nothing.
Manda: So what else could we do it with?
Paddy: Exactly. So it can be done with loads of things.
Manda: Yes. I just want you all to know that I am wearing my sweatshirt made by this company as we record this interview. All righty. Let’s move swiftly on to you had your three sets of frameworks and then businesses and then monetary and finance. And it so happens that Riversimple fits a little bit of circularity and fits into the model that you were talking about earlier of future guardians. That as far as I can see, there is no reason why every single business that actually wants to be different and to be part of the change rather than simply greenwashing could take this on tomorrow and make it work. So tell us about the future Guardian model and how that works.
Paddy: Yes. So the future Guardian model, as you say, this is being pioneered by Riversimple, which is a hydrogen fuel cell car company in Wales. And I think this is a very exciting technology because, as you say, it’s something that other companies can take on tomorrow if they want to. And I think it really has a lot of potential to, over the next few years, transform business. Because as companies become future guardians, they can have so much more positive impact that it can really affect the whole business ecosystem. So I’ll just explain how the Future Guardian model works. First of all, I’ll just give a bit of explanation about how companies are functioning at the moment, the thing that they’re replacing. So companies have a kind of constitution which is called the Articles of Association, which describes the overall systems through which companies are run, the kind of framework for the running of the company. And this is governed in the UK, so this is all in the UK, but it’s similar in other countries; as Riversimple are in the UK I’ve used that as the example. So the articles are governed under the Companies Act 2006. There are default articles which are standard ones that most companies use. And the way that they are written and how the companies act works, results in the companies being run on behalf of their shareholders or investors. Which is generally interpreted to mean that they have to maximise shareholder value in monetary terms; so profit maximisation.
Paddy: But the Companies Act says companies are allowed to write their own articles so long as they follow a few basic guidelines. And if the company’s articles say that the company has a different purpose, then that purpose can override profit maximisation. So Riversimple have used this to rewrite their articles to have a new kind of a purpose. And they’ve also built a system of custodians and stewards, which are people to make sure that it’s put into action in the company as well. And so what they’ve done in their articles is that they’ve got a legally constituted purpose, which in Riversimple’s case is to build and operate vehicles while systematically pursuing the elimination of the environmental impact of personal transport. So that does have a kind of social impact based aim. But for a general future guardian company, it doesn’t need to be that. So an example I gave that I just made up in my book, is that a low cost furniture company could have a purpose to provide durable and desirable furniture that’s affordable to at least 95% of adults in each of our markets. Most companies have this kind of purpose on their website, but it’s not legally constituted, so they’re actually designed to maximise profits. But any company could easily work out what its purpose is in these kind of terms and put it into its articles.
Paddy: And then the Future Guardian articles say the company will pursue the purpose while balancing and protecting the following benefit streams, which are essentially mini statements of purpose, one for each of six stakeholder groups. And these actually kind of define the stakeholder groups. So the stakeholder groups are the employees, the customers, the commercial partners, the investors, the community and the environment. So, for example, for the employees, the benefit stream is to provide steady and fulfilling livelihoods. And the articles specifically say that the company should balance and protect these and not give primacy to one over any others. So they have to give them equal weight. So this means that because the investors are one of the stakeholder groups, they still do want to get profit for the investors, that’s one of their interests. But that’s no more important than improving their environmental impact, having a good effect in their local communities, treating their employees well and so on. So this really changes the logic within which businesses work. And at the moment, as I say, Riversimple is pioneering this. Apparently there is another organisation that’s looking into becoming a future guardian and there are a few. I’m kind of following a few leads on how we might be able to get it used more. So if anyone’s in a company that’s interested in using the future Guardian model or learning more, then please do get in touch.
Manda: Yeah, because it still seemed to me that the B Corp people, you know, they’re very keen, they’ve got the B Corp, they’ve got however many thousand corporations. But this is a step beyond B Corp because B Corp is still about making profit. And this, I can’t see a single reason why they wouldn’t take this on. If we could get to the right people and if they understood what it was. Because the fact that profit is still a thing, but it’s one of six. And you explained a little bit nearer the top of the podcast, but I think it’s worth explaining again how the stakeholder system works. So you’ve got people representing each of these streams. And this is one of the questions that I didn’t fully understand. Let’s suppose I was the stakeholder for the environment. How do I do that? How do I learn how to represent the environment in a way that counts? I have a friend, this is an aside, but I’ve got a friend and we were just talking about the fact that they’d been on a year long process of the Joanna Macy Council of all beings and they were representing, let’s say, the sea. But it took a year. And a year in a room with other people who were all representing, say, mountains and trees. And you’re going to be in a room with somebody who’s representing investors, who’s probably had quite a lot of experience of representing investors. And you’re there representing the environment. Have you any idea how they facilitate the conversations that happen around this?
Paddy: Yeah. So the main thing is, as you say, there are the custodians that represent the stakeholder groups and they are drawn from the stakeholder groups, and they work for well, it’s been half a day a week, but it’ll probably go up to one day a week, as a custodian. But they’re only kind of overseeing it. So there’s also the stewards. The company’s run by the operating board, just like in a normal company. But the operating board should be running the company under the Future Guardian model. And then the custodians kind of oversee this. But the there are the stewards between the custodians and the operating board to ensure a good flow. Technically, the stewards are supposed to be like a judicial thing for the custodians to go to if there’s a problem. But in reality, practically, they’re as much as anything kind of information flows and helping the custodians to understand how they can represent their groups and what the company is doing and so forth, and just making sure it all works.
Manda: And is there one of those for each of the stakeholder groups as well, or is there a different number?
Paddy: It’s just a separate group. It’s like a separate board.
Manda: Yeah, right. I would love to sit in on some of these just to get a sense of how it works. But maybe I need to set up my own company and make it a future guardian company, just to see that happen. So there’s a lot else in the book. It’s really well worth anybody who’s interested coming to read this, because this genuinely feels to me like one of those things that could very quickly and absolutely, radically change the way that the whole world does business. So now, because Paddy is super bright and thinks about these things, you have thought about a Future Guardian economic model. Do you want to say a little bit about how you thought about that and how you think it would look?
Paddy: Right. Yeah. So I think what you’re probably referring to is I’ve thought of a strategy for transition to a kind of future guardian economy, for essentially spreading the future Guardian model. And that involves a few organisations. And I think this general idea of finding transition strategies rather than just hoping things are going to happen, can be applied to loads of other things as well. Particularly in the decarbonisation area of, you know, kind of building strategic coalitions to create some kind of a transition. And so with the example I gave in my book, the issue is Riversimple is a very small company. And assuming they do become a big company, it’s going to take quite a while. So if we were to wait for Riversimple to become a big famous company and demonstrate the future Guardian model on that kind of scale, it’ll be too late.
Manda: It’s going to be too late. We haven’t got time.
Paddy: So in order to get it done more quickly, the strategy involves partly Riversimple, but also a large well known company. I give the example of Patagonia
Manda: Because they’re already on the path.
Paddy: Exactly. Yeah. But there are loads of other companies that could fulfil that role and a network organisation. And I give the example of B Labs, which you brought up earlier because they are already in this general area. But again, it could be that people set up a network organisation specifically for future guardians, or maybe there are others that can take on the role, etcetera.
Manda: Ellen MacArthur Foundation. If something big like that were to take this on? They’re already working with some huge, huge companies. Yeah, it could flow out at a serious level.
Paddy: Exactly, Yeah. So the idea is that, first of all, a large company such as Patagonia takes on the Future Guardian model. And in doing so, they would both make it famous and demonstrate how much positive effect it has. Obviously Patagonia already has lots of positive effect, but undoubtedly under the future Guardian model, looking at all of their stakeholders in this way would help them unlock more positive effect. And show how good the model is, and even more so if the company is one that currently doesn’t already have loads of positive effect. So and then the second part of the transition strategy is that a network organisation encourages more companies to become future guardians and fosters a kind of community. And B Labs have done this really well for B Corp’s. So there are a lot of strategies that B Labs have already come up with that could be applied to a future Guardian community. And then looking further forward, at the moment B Labs have already advocated to enable B Corp in countries where it wasn’t allowed before, and now they’re advocating to have legal changes so that all companies have to have some consideration of their stakeholders. So the next stages to get to a future guardian economy would be to advocate for the future Guardian model, to become enabled in countries where it isn’t already. And then eventually, as there are more future guardians, legal changes so that it becomes the default model. But through that there’s loads of stages of getting more companies. And as more companies take on the model, people see how good it is and it can spread.
Manda: And I can see it’s spreading a long way. But I get to the ‘what happens if Shell?’ Or any other fossil fuel company were to be future guardian? Because I think quite quickly the stakeholders of that would be: the only way that you can fulfil your remit to all of us is to shut down. And I am wondering in the world that we’re heading into and I’m wondering, have you thought about this or have you done the thought experiment? How much of our current economy is based on basically making stuff that nobody wants or needs and then spending millions of pounds persuading us that we both want it and need it, and that if those companies were to take on a genuine future Guardian model, closing down within six months would become the imperative. And somehow we need to facilitate that happening. Because it seems to me, however circular we get, however wonderful future Guardian models are… Let’s take carbonated fizzy drinks. One of the big fizzy drink companies, I’m being very careful because I don’t want to name them, was on LinkedIn the other week about we’ve gone all green. We’re recycling or we’re using electric vehicles or something. And I thought in the world we’re heading into, I’m sorry electric vehicles to run gallons and gallons of carbonated sugared water around the world is just not where we’re heading. You actually just need not to exist anymore. Can you see a world where we are able to provide a ramp down for carbonated fizzy drink companies, so that they no longer need to exist and their employees can go elsewhere and that that will be okay?
Paddy: Yeah. So I haven’t specifically thought about carbonated fizzy drinks companies, but I have thought about oil companies. So is it alright if I use that as an example?
Manda: Oh, absolutely. Whatever you thought about, use it.
Paddy: So one thing to say is that I personally think that it’s better that companies that are already wanting to have a positive impact are the first ones that become future guardians, because they can set out the kind of level that’s expected of a future.
Manda: They can road test it and find out where the humps are.
Paddy: Exactly. Because otherwise if like Shell or something became a future guardian now, they would just greenwash the whatsit out of it and stop it from being useful. But assuming that it spreads first and then they take it on. What would a good oil company do? Well, there is actually an example of one massive oil company that has done very well, which is a company that was called DONG, Danish Oil and Natural Gas, which I think were state owned, but they were an oil and natural gas company. And they realised the climate change issue was a major issue. So they transitioned out of oil and natural gas completely and they’re now Orsted, the biggest wind turbine producer in the world.
Manda: Oh, excellent.
Paddy: So Orsted used to be an oil and natural gas company. So that’s one example. Companies could just become other companies.
Manda: So there is a model, in fact.
Paddy: Yeah. And then another side of it is that at the moment we do need petrochemicals. We can’t just stop tomorrow for sure. And as people like Nate Hagens go into quite a bit, there’s well, I think he calls the the carbon pulse. So the amount of oil that we’re using at the moment, this is a one time thing, because there won’t be any more for millions of years. And what’s left is very hard to get out, kind of thing. So we should be using it responsibly, right? So we should be using what oil and natural gas we have, to transition to a decarbonised economy. And maybe having stores, so that we can use it for specific things in the future. If we understand how to do genuine taking carbon back out of the atmosphere, then maybe in like 50 or 100 years time we can have a budget of oil that we use. Right? So another responsible way for an oil and gas company to behave, would be to provide cheap oil to organisations that are building the decarbonised economy, decarbonised society, and not provide it to people who are just wasting it. And then the oil fields that are left they can basically steward and make sure that it’s used sensibly and not in ways that cause problems. And there would be a role for that kind of thing. And the Future Guardian model can allow these kind of things and it can even allow companies to close themselves down, because the investors is one of the stakeholder groups. But if the other stakeholder groups are like, Yeah, basically, clearly this company shouldn’t really exist, right? Then they can use financial instruments to wind down the company in such a way that investors still get a reasonable return back, as it’s wound down. So one example, this is an idea that I’ve had, I’m not totally sure how it would work in reality.
Manda: Let’s go for it.
Paddy: A lot of companies use share buybacks, right? Where in order to prop up their share price, they buy shares for the company itself using their dividends. So this is generally used because companies are in problems or getting smaller or whatever, and they want to keep the share price high for the shareholders. But a similar kind of thing could be used, I think the same mechanism should be able to be used, to basically buy them back off investors. So the investors aren’t invested in the company and then the company can just not have those, you know, can can just dispense with that value in the company and have a staged reduction.
Manda: A ramp down. It kind of depends on them having liquidity. Let’s not go down that rabbit hole too far, because it sounds a really interesting idea, but…
Paddy: I think there are possibilities. So companies that are working on that would be able to do it, like future guardian companies would find ways of doing it.
Manda: Oh, this is sounding so much fun. All righty. And time is moving on. We now need to move on to finance and all the fiscal things, I think. Unless there was still something that you wanted to talk about within the previous technologies?
Paddy: No I Mean there’s loads and loads of things there. The regenerative organisations is a chapter that we haven’t touched on at all, but I think that’s got a lot of potential, because it restructures organisations completely so that they’re decentralised, I use for example. So that would be great.
Manda: Do you want to talk a little bit about that? Let’s talk a bit about that because I think it goes with the Future Guardian model, that sense of business being part of the solution. I think a lot of businesses are frozen like rabbits in the headlights because all they know how to do is make a profit. And the fact that there are models of other ways of being would be enormously encouraging. So talk a little bit about regenerative organisations.
Paddy: Yeah. So I use four examples in my book and go into them quite a bit of detail and they’re all approaching different issues, but they’ve structured their organisations in order to help them reach their goals. And the common theme is that they’re all structured in a quite decentralised way, not necessarily completely but quite decentralised way. So that they regenerate local economies while facilitating and connecting them through global networks. So that this provides a kind of collaborative development dynamic, so that, for example, Fab Labs is one of them, that’s makerspaces. There are thousands of them around the world. And whenever something is designed in a fab lab, the design is uploaded onto the fab cloud and then people in any other fab lab around the world can use them.
Manda: Open source instantly.
Paddy: Exactly. And they’ve got loads of other aspects of their organisation. There’s a fab academy and super fab labs that build fab labs and all sorts of things. They’re really well organised in order to build this up. And so they’re not a business organisation, they’re for makerspaces. But the same kind of structures can be used and adapted and applied to businesses. And I think this has a lot of potential. I combine this with the Teemill circular clothing in the conclusion, to describe a potential new model of development, which involves basically regional circularity. So you’ve got a factory the size to serve a town or a city, and in the example of cotton t shirts, all the cotton that flows around and fills the material cycle. So there’s cotton in the factory, people wearing t shirts, in the shops, in all of the parts. And this changes the dynamic completely so that that town becomes essentially self-sufficient in cotton and cotton t shirts. With a small amounts of inputs because there’ll be slight leaks.
Manda: But far, far smaller than the current cotton market.
Paddy: Exactly. The the overall dynamic becomes one of self-sufficiency. And then if these small factories are linked through a Fab Labs style regenerative organisation network, with all the other ones around the world, so then they have this collaborative development dynamic. And I think this and other people do as well, think this kind of dynamic has the potential to replace the capitalist dynamic of individual corporate companies that are trying to increase their own capital.
Manda: And holding on to all their information because it’s a competitive advantage and instead we’re just removing the need for competitive advantage and sharing best practice, because we’re doing it in service of the whole, which seems much healthier.
Paddy: Yeah. And so in my book, because I was so focussed on practical things, I steered cleared of isms. I don’t even mention capitalism.
Manda: No, you don’t. It’s very good.
Paddy: I’m describing a potential new system to replace capitalism. And I kind of vaguely knew when I was writing it, but didn’t look into it much, but I’ve since seen much more that this kind of dynamic that I described with the collaborative development and regenerative organisations, is actually called Cosmo Localism. And it seems to be very fringe even in the new economics area, but there are people working on it. I’m reading at the moment a really good book called The Cosmolocal Reader, which is a compendium of essays about cosmolocal things. So yeah, I think that’s got a lot of potential. There’s loads of Cosmo localism in my book as well, I just don’t use that name.
Manda: Yeah, I need to read that though, because I know The Alternative and Indra Adnan are really interested in Cosmo Localism but hadn’t realised there was a new book on it. Yay. More books to read. Okay, so time is moving on. And. And we still haven’t looked at the last two of your technologies. All of this is really exciting. I was about to say they were really exciting, but every part of it is really exciting. So let’s really edit the highlights of sovereign money. And the question that you have at the top of that chapter is who should be allowed to create new money and what should they be allowed to do with it? And and speaking as a kind of wannabe economist, that feels to me like one of the absolutely crucial questions of our time that very few people bother to look at, because who creates the money at the moment is an obscenity and it should not be allowed to continue. So, Paddy, please run riot with who should be allowed to create new money and what should they be allowed to do with it? Over to you.
Paddy: Yes. So I’ll try and explain this quickly. The creation of money isn’t something people really think about. But at the moment, the majority of money is created by private banks as debt. And this is how the Bank of England explains it. The Bank of England says 97% of money in the UK is created by private banks as debt, and this means that: A) that their interest bearing. So new money is interest bearing; so the people who get the new money need to find more money to pay back the banks. But that also means that the banks self interest, which is basically all they’re interested in, is to make more loans and bigger loans, which both pushes economic growth and results in them putting loans into mortgages. So increasing the housing bubble, and other financial asset bubbles. And there’s also loads of other obviously, issues with the financial system, such as when there’s bad debts, then that can spread as a contagion throughout the economy. So the sovereign money system, the specific one that I talk about, was developed and proposed by Andrew Jackson and Ben Dyson at Positive Money. But there are various other sovereign money systems as well. There’s a general idea, but they’ve developed a really good one. And this changes how money is allowed to be created so that the central bank creates new money and then some of it is loaned to private banks for them to loan on. But most of it is given to the government to put into the economy. And the way that the system that Jackson and Dyson proposed, and they’ve gone into a lot of detail
Manda: It’s a very lenghty document. I Will put it in the show notes, but read the book. It’s a much shorter version and um.
Paddy: The way they’ve structured it also stops things like the contagion spreading, because of the way they’ve done the funds and what have you. And so just making this change. And it’s the kind of thing that can be done immediately without disruption, with minimal disruption kind of thing. It’s obviously very unlikely to be done by somewhere like the UK that’s got a massive financial system, but it can be done by any country that’s interested. So two countries that have looked into it in a lot of detail are Iceland, the Prime Minister got a report on it a few years ago, and Switzerland that had a referendum on a sovereign money system a few years ago as well.
Manda: Yes. And I have a question on that, because both of those… So let me just take a step back. Because I think still the fact that private banks make money out of nothing and then sell it to us, nobody else in the world is allowed to print money and then charge you for having it. And the fact that this has happened seems to me extraordinary. How did anybody ever allow that? And then somewhere like Switzerland has a referendum and they lost, You know, the private banks kept going because somehow they persuaded people that carrying on making money out of nothing and selling it to people was a good thing. And I wonder two things. I wonder a lot of things. But the two that leap out at me are why do we need private banks at all? Would it not be much better to just close the private banks tomorrow? And if we did that, what’s the downside of that?
Paddy: Right. Well, I mean. The thing is, there is a lot of the system relies on banking at the moment, so we’d have to have a good system in place.
Manda: I’m not suggesting we don’t have banks. I’m suggesting that we don’t have Goldman Sachs. And instead we have a system of of smaller local banks that aren’t investment banks and will hold your money for you because it’s safer than putting it under the bed. And besides, now it’s not even we’ve got the bank vault that the guys with the six guns can’t break into, because it’s all numbers on a spreadsheet. Your bank doesn’t have to be very big. It just has to be the place that can centrally collate all the numbers on the spreadsheet and then we’ll lend it to the people that we know are going to be reliable and who need the loans. Why do we need actual Lloyds or Barclays in the middle of all this?
Paddy: Yeah, so I basically agree. I don’t think they should be closed tomorrow because that would be very disruptive. But that is essentially part of the sovereign money system. It changes the role of banks so that they do just make loans using actual money that people have put into investment accounts, rather than the current way of just creating money out of nothing by changing account balances. And there’s also one of the regenerative organisations is a community banks network in Australia. And there are loads of possibilities for regional banks and I think future guardian banks should happen as well.
Manda: That would be interesting, wouldn’t it? Oh yes, hadn’t thought of it. Yeah.
Paddy: But it’s the kind of thing where changing from one day to the next would cause massive amounts of disruption, and loads of people would be complaining about it, be up in arms about it and would be able to persuade the rest of most people that that was a terrible idea. Basically you need to go at it strategically and step by step.
Manda: I just think, well, you’d have to prepare it a bit. But you give everybody a card that’s basically the same colour as the card they’ve got at the moment and keep the pin number the same. They wouldn’t notice.
Paddy: Well yeah, this is essentially part of what the sovereign money system does. But so as I said and you mentioned, that Switzerland had a referendum about this, but they said no. But they did get I think it was about 30%, 25-30% said yes. Which isn’t great, but the central bank itself and the government were campaigning against it. They have a lot of referendums in Switzerland and it got brought by a campaign group and the central bank, the head of the central bank said that he thought it was a bad idea, because they would be the only country in the world with a sovereign money system. It’s very risky. They’re not too sure what would happen. So clearly it’s useful when it’s such a big change towards the central bank for them to be on board. And that argument is essentially saying, well, no one’s done it before, so it’s a big risk, right? So this is why a small country, where the government and central bank understand how it works. And it is something that’s advocated by Martin Wolf, the chief economics commentator of the Financial Times. And so if a small country, was to take it on like he was hoping Iceland would in 2016.
Manda: Switzerland is quite small, though. It’s just Switzerland’s got a lot of banks.
Paddy: It’s got a lot of banks and a country where the central bank actually wants to do it basically. Then they could demonstrate that it is a good system and basically be the kind of experimenter on behalf of the rest of the world. Other countries would be more likely to do it after the first mover and then when, presumably, there’s going to be another financial crisis, the solution of a sovereign money system would be there for countries with bigger financial systems like the UK to take on. Once it’s already been proven in small countries.
Manda: Yes, although it was around as an idea at the last financial crisis and I didn’t notice anybody really picking it up. But yes, we can hope. We can definitely hope.
Paddy: Yeah. But once it’s been put into place by small countries, then it’s not just an idea, it’s proven to some extent. So then it’s much more likely to be just very risk averse in those kind of ways right there.
Manda: And they know which side their bread is buttered. Germany’s got a fantastic system of local banks. I can’t remember what they’re called. Anyway, Germany weathered the global financial crash better than any other European country because the local banks decided to lend locally, while everybody else was crashing. And the economy kept very, very stable. And someone suggested that in the UK and George Osborne said, no, we’re not taking Germany as an example. So they won’t take Germany as an example. I strongly suspect they won’t take Iceland as an example, if it suits them not to. But we can hope. You know, what you’re doing is showing what’s possible and opening up doorways, so that as and when we manage to create the momentum for change, then we’ve got ideas of where we’re going.
Manda: We could spend the entire podcast in sovereign Money. I would really enjoy that. But I think the listeners might get slightly bored. So shall we move very rapidly through the concept of complementary currencies? Because I don’t think we’ve really got time and I want to give a few minutes at the end to how you see all of this knitting together and where you think we could get to if all of this was implemented.
Paddy: Yes. So complementary currencies focus on local level monetary systems. So actually quite a few of them got set up in response to the financial crisis for precisely the reason that you just said; local areas still needed money to be flowing and complementary currencies are a very good way of doing this. And they can also solve specific economic problems. So they’re ways of designing new types of money that solve specific economic problems. One generally thinks of money as just a thing that’s there, but actually it’s an invention and it has various properties. And so new kinds of money can be designed that change those properties. And complementary currencies, as the word complementary suggests, they’re not trying to replace national currency, they’re just used in specific circumstances, and there are loads of different types of them.
Manda: I think we’ve only got time for one, but could we do the one in Ghent, the torekes? Because that struck me as a really interesting concept and it was invented by one of the people who was really caught the concepts of complementary currencies.
Paddy: So this was the torekes currency in Ghent, a city in Belgium. And it was designed by a guy called Bernard lietaer who’s now died, but he was one of the greatest experts on complementary currencies. And it was in a particular area called Rabot, that has a lot of immigrants. It’s very, very poor area with a lot of first generation immigrants who didn’t really know each other and spoke different languages and that. So there wasn’t much of a community kind of feel. So they brought in Bernard Lietaer and gave him the challenge of building community and greening the neighbourhood, in the sense of making it look more green, have more vegetation. So the first thing he did was he spoke to the residents to find out what it was that they wanted. And they said they wanted land to grow their own food. So the council found a bit of land they had and set up allotments and then they made a token currency, where you could get the tokens with which you could buy allotment or rent allotment space, by doing community activities that greened the neighbourhood. Such as keeping up neighbourhood, you know, like pavement plant pots and flowerpots.
Paddy: And so this is like a token currency where you’re incentivised to do one thing, the neighbourhood flowerpots, by being enabled to do another, the having an allotment. But then lietaer designed this to grow into a social currency, so by increasing the ways in which torekes could be earned and spent. So they could be earned by more community activities such as reading to children at school, or cleaning up the neighbourhood sports pitch or working in a social grocery store. And then they could be spent in more ways as well. Such as in a social grocery store or local bakery and all that kind of thing. So by growing those specifically, it enabled more and more interactions that built community. And there were various specific aspects of this that made it work better. And I go into those in my book. And one of them is that they allow people in the community to ask to be able to pay for their activities in Torekes.
Manda: So you could define. Your babysitting, could be paid in Torekes, for instance, if you wanted it to.
Paddy: Um, yeah, I’m not sure about that. It would be more like if you had a babysitting service, I don’t know, like community activities, things that are positive for the community. It’s not just anything. So basically, if you’ve got some kind of a community thing you want to do and you need volunteers, then you can pay the volunteers in Torekes, right? To make it easier to get them basically, and to reward them. But one issue or not an issue, but one factor in this kind of currency is that it does need money, national money, to kind of pay for it, because the people who are paid in torekes at the bakery or whatever.
Manda: Okay, they need actual money.
Paddy: They need actual money. Yeah, exactly. So it does cost a bit to make one of these work.
Manda: But, but it wasn’t a huge amount. Because as I understand from your book, everyone was paid the same amount. And it was basically €2.5 an hour, in torekes, which was 25 torekes an hour. So it wasn’t as if there was a huge inflationary state of torekes around it. I am assuming that the Ghent governance got more back than it cost them to create the torekes, because in terms of creating social cohesion and greening the neighbourhood and people growing their own food, if they had been paying some kind of social benefits, they probably were able to pay a lot less, because people were emotionally, physically and mentally more connected. Is that fair?
Paddy: Yeah, I think that is completely fair. Yeah. And it’s more like kind of a reward or repayment for voluntary activities, rather than actual jobs, like, you know, occasional voluntary.
Manda: Really inspiring. I would love to go back to Ghent and see how that’s working, because if it was lietaer set it up, then it’s been going a while, I would think. Do you know if it’s still going?
Paddy: Yeah, it is still going. Unfortunately, I couldn’t get in touch with them when I was writing the book. I tried but the email didn’t work kind of thing. But there’s, you know, a website that’s kept up and has things going at the moment and what have you. So yeah, as far as I can tell, it’s still running. Yeah.
Manda: All righty. There’s so many other examples of really, really inspiring things and I was terribly sad to see that the Bristol one isn’t still running. But let’s leave all that, because we are way over time. But I do want to give a little bit of space to where do you think if we were to put all this together, if all of the companies in the world became future guardians, if everybody took sovereign money, if we worked within the doughnut. How do you see the world that’s arises out of all of those good choices being made?
Paddy: Well, that’s quite a big question. So the main thing is that with these kind of changes, they’re structural changes and they enable us to put our time, intelligence, resources collectively into having positive impact. So at the moment, there are billions of people, the majority of whom put their time, intelligence, resources into essentially profit maximisation through their work.
Manda: Running on the hamster wheel of predatory capitalism going nowhere.
Paddy: Exactly, yeah. I suppose probably not all around the world, but for many, many millions of people at the very least. Whereas if all of these are put into action, then this changes so that people are putting their resources, time, intelligence, etcetera, into actually having a more positive impact. And I went through briefly the way in which this could change material development. I discussed that in terms of cotton t shirts, but it could equally well be applied to most consumer goods through 3D printing technology and so forth. So that could really change the mode of development quite significantly and in a way that builds community quite a lot more. Especially with mechanisms to get the local factories into community ownership. And so to give one example; in the conclusion I go into how the overall financial system could change, but that’s a bit complicated to discuss now. But I’ll give one example of a specific change that might happen, new possibilities that get opened up by all of these technologies. With the cotton t shirt example as well. So if you’ve got the idea with the local factories that and regional circularity with the cotton going around the system, so if this was in the sovereign money system, governments can put money into the economy directly.
Paddy: So if they could use this in one area, to build a cotton t shirt factory and fill the material cycle with cotton, so cover all of the capital costs. Then future guardian model companies in the area, who want to help their local community, they could pay for the running costs as their contribution to the community. So the people running the factory, the energy that goes into it, that kind of thing. And then, the government or the community, it would be a community owned system, could set up a complementary currency that they might call Threads, because it’s related to clothing. Where everyone in the town gets, say, 100 threads each year and they can buy clothing like that, so long as they bring old clothing back. So if you’ve got an old t shirt and you want to get a new t shirt, you take your old t shirt in, you pay your ten threads or whatever it is, and you get a new t shirt. So you don’t pay any actual money and your threads are topped up each year. And this could be applied to all of clothing potentially. So this would be a way of clothing becoming a right of people in the town. They wouldn’t have to pay anything at all.
Manda: Universal basic clothing.Love it.
Paddy: Yeah, exactly. Basic clothing income or something like that. So that’s an example of the kind of possibilities that are currently just completely ridiculous, but would be opened up by putting all of these things into action.
Manda: Brilliant. Thank you. We are so far out of time, Paddy, honestly. So what can people do? People listening. Other than reading your book, which totally everybody needs to do, what can people actually go out and do tomorrow?
Paddy: Yeah. So throughout my book there are loads of examples of what people can do. I specifically wrote it in order to try and get people doing things, and for people throughout society. So I’ll run through a few of the examples of what people in different positions can do. So first of all, for people working in a company, then the overall aim is to try to move it towards the future Guardian model. However, that’s only realistic for people in certain companies that are already progressive and wanting to move in that kind of direction. So in those companies then definitely try and get it happening, and as I say, get in touch with me if it’s a serious possibility, because I’m keen to get it going. But for people in other companies, it might be a more realistic short term option to get the company to become a B Corp, which we mentioned a little bit earlier. It’s a lower level of stakeholder improvement kind of thing. And there are already over 6000 B corp’s around the world. So it’s a very reasonable aim. And then a kind of more general push, is to spread knowledge about changing what the Doughnut Economics Action Lab calls the deep design of business. So things like the governance structures, the ownership, the finance, purpose networks and so forth.
Paddy: And then another thing to do for people in companies is to challenge greenwashing in a strategic and kind of positive way. So a lot of companies make public claims about what they want to do, but don’t necessarily try and do them very well. So a way to push on that is to suggest politely but firmly that they do walk the walk. And show how the company could actually put into action the things that they claim they want to do, like come up with actual solutions and be like, well, let’s do this. And if the company pushes back saying, Well, no, because it doesn’t make us enough money, then you can use that as an introduction to the deep design of business and the Future Guardian model. Explaining, Well, look, if we change these things about the structure of the company, then we will be able to do these things because we don’t have to maximise our profits all the time. And then one last thing to do if you’re in a company, is if the company really isn’t going to make the kind of positive changes that we need, then it’s a good idea to think about changing jobs or maybe even industry to have a more positive impact. And clearly this might involve strategizing. People have responsibilities, families and so forth, but begins strategizing. Work out how to get into putting your time and intelligence and resources into doing good.
Paddy: And so then other people in local government and community organisations. So one good thing for them to do is to understand complementary currencies and when, how and why to use them and essentially have them as part of your toolbox and then use them, put them into action when it is appropriate. So understanding those. And another thing for people in local government is to make links with. Local organisations such as the Transition Network, the Doughnut Economics Action Lab, and of course there are loads of others. Loads of examples in my book. In order to help them with your local government policies or whatever, and to begin using the doughnut. I actually saw a couple of days ago that DEAL has just released a like a tool for local councils. I think it was something like 70 local councils are trying to use the doughnut, and they’ve got all of these examples and they’re helping people to do it. So look into using it in your own area as well. Um, another kind of person is a kind of wealthy person. So this obviously includes multi-millionaires, but not just those, just people who are well off. For example, if you’re retired and you’ve got a couple of hundred thousand in stocks and shares or something that you’re not expecting to use, you’re going to pass on as inheritance or whatever, then maybe 20 grand out of that, you could take out and use philanthropically to help accelerate our transition to a new economic system.
Paddy: And it wouldn’t make any difference to you or your children who are inheriting or anything. You know, it’s just a relatively small amount, but it can have a big effect. For example, funding one of those complementary currencies like the torekes currency or funding a local tool library, or places like DEAL and Transition can always use money very easily as well. There are loads of things to use money for.
Paddy: And then another kind of person on my list, I just put living person, Like anyone can do this kind of thing, is to join or start a local doughnut or transition group in your area. Look up whether they’re in your area. If they’re not, then you can start one yourself there. You know, these organisations are designed to try and get people to start these. Get involved in local fab labs and tool libraries, complementary currencies. There are open source initiatives like the open source Ecology is one I have in my book and there are loads of other community organisations.
Manda: Huddlecraft we spoke to recently and they’re very keen and they are already working with DEAL and things. So yeah, join a huddle or set up a huddle.
Paddy: Yes, there you go. Exactly. There are loads of options. I’m just giving the ones that are specifically in my book and of course there are loads of others as well. And then another thing that I think is a very important kind of attitude for people to have, that’s applicable, particularly to people who are in a position to start a new project. So for example, young people or someone who’s doing a career change or something like that, and this is to look at the world and see what you would like to exist but doesn’t exist and then make it happen. So I got this idea through friends who in their 20’s became entrepreneurs. And that was basically what they did. They they saw that there was something that they wanted to exist, but it didn’t. So they were just like, Well, I’m going to do a company that makes this thing, whatever it was. And they did that within the entrepreneurial kind of paradigm and making money in that. But exactly the same logic applies to the economic transition. Even more so because there’s so many things that need to be done. So do exactly that. If you think, well, we don’t have a tool library in our area, then start a tool library. If you think, well, it would be good to have an organisation that links people who are trying to do such and such a thing, like increase food security or something like that, then start that organisation and look for ones that are already there as well. But you know, get going. And then something that’s a game for everyone, is to talk about it. To understand what the new system we can get to is, how we can get there, and discuss it, spread the word about it to your friends, your family, your community. Because we really can build a much better economic system. And it’s really important because otherwise we’re going to get absolutely mothered by climate change and the environmental crisis, etcetera. But it’s essential that we do this.
Manda: It’s urgent now. Yeah.
Paddy: And in order to do it, we really do need lots of people to put themselves into doing it. And it’s only going to happen if we actually make it happen. So mobilise. Understand the system, read my book and tell people about it and. Get into action. Let’s make a better economic system.
Manda: Let’s make it happen.Yay!
Paddy: Let’s make it happen. Exactly.
Manda: Brilliant. Okay. Thank you. I think we’ll call that a wrap at that. Paddy, thank you very much for coming on to the Accidental Gods podcast.
Paddy: Well, thank you very much for having me. It’s been awesome and yeah, great. Thank you very much.
Manda: So there we go. There was quite a lot of that, but it felt really useful and it does give you a flavour of the book, although the book goes into much more detail of many more examples and of the ways that they can interconnect. And it does seem to me that Paddy has put his finger on the things that we could do. If you work for a business and you could move it to the Future Guardian model, everybody in that business, regardless of where they stand on all the various tribal political bastions that we have just now, would be impacted and would, I think, see that it was useful. And if you don’t work for a company, can you bring the future Guardian model into anywhere else in your life? And if that’s not possible, can you begin to expand some of the other ideas, particularly the complementary currencies and how they are used to build community? Brilliant, brilliant ideas. And the book is really very easily read. It flows, it’s got good language. So another book, highly recommended. Go out and get it and share it with your friends.
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