More Than Money
Issue #34

The Art of Giving

Table of Contents

“Culture: Creating a Giving Culture”

An Interview with Bernard Lietaer

Interviewed by Pamela Gerloff

Is it natural to be generous and to share our resources? Maybe, says Bernard Lietaer, author of 10 books, including The Future of Money: Creating New Wealth, Work, and a Wiser World (Century/Random House, 2001) and Of Human Wealth: Beyond Greed and Scarcity (ACCESS Foundation, 2003), but it goes against our cultural norms. And that, he maintains, is the fault of our money system. Our money system shapes us, fostering particular emotions and behaviors, thereby affecting fundamental aspects of society. To create a giving society, change the way our money system works. Sound impossible? Not to Lietaer. He says it's perfectly do-able, and within a single generation, too.

MTM: Is this an entirely new way of thinking about money?

LIETAER: I believe it to be a new angle. The reason is that I have been exposed to money systems from a variety of perspectives, in a way that few people have. My friend Willis Harman, who was the founder of the Institute for Noetic Sciences and a mentor in my life, said I had been trained for 25 years to look at money systems as no one else has. Most people believe that the existing system is the only one possible. The image that comes to mind is that humans are to money like fish are to water. Fish are born, live, and die in water. That is why it is so difficult for them to understand the nature of water. Similarly, we humans live within our money system and it is generally transparent to us. But I've been tossed around a few times and become a flying fish, so I've been exposed to our money system from the outside. That's why I may have a different perspective on money.

MTM: If what you say in The Future of Money is true, the ideas you introduce are startling in their ability to get at the root of core social problems, such as poverty, the breakdown of the family in Western society, and even, perhaps, violence. They can also make us more generous people.

LIETAER: Yes. Our money system affects, in particular, our emotions and relationships. Money systems can promote greed and scarcity or generosity and abundance. Therefore, different money systems have predictably different effects on individuals, communities, and societies.

MTM: And this is not theoretical; it is based on empirical evidence?

LIETAER: Yes. In the world today there are several thousand communities that are experimenting with non-conventional money systems operating right alongside conventional money. These exist in places like the United States, Europe, China, and Japan. And we now have considerable evidence that different currencies create different behavior patterns and relationships among the people who use them.

MTM: What are some of those behavior patterns and relationships and how can a money system do all of that?

LIETAER: Let me start first by defining what money is, and is not. It is not a thing, though it may appear to be one. If you have a thing-say, a pen-and you go off to a deserted island, you still have a pen; it will still function as a pen on the island. In contrast, money is an agreement within a community to use something as a medium of exchange. Therefore, when you take money to your island, the money becomes simply a piece of paper or metal or whatever. But it is no longer money because on your island the agreement has become meaningless.

Because money is an agreement within a community, we can design money to be almost anything we want it to be. For example, it can be a piece of paper, a coin, practically any item, or a service performed. When we agree to consider something an acceptable medium of exchange, we have established a form of currency.

MTM: And because money is an agreement, it exists only where relationships among people exist.

LIETAER: Yes, the very existence of money implies a community within which the medium of exchange is acceptable to all. The community could be a group of friends who meet to play cards and use tokens as money. The community could be a temporary one, such as soldiers on the war front who used cigarettes as a medium of exchange. Or it could be the world community in which an exchange agreement is reached by treaty, as in the case of the Bretton Woods agreement in 1945, which made the dollar acceptable reserve currency worldwide.

MTM: You say that the kinds of relationships that result from money exchanges are different, depending on the currency system you're using.

LIETAER: That's right. When you go to a store and buy a pack of batteries, you pay with dollars and the transaction is over. It's complete; something has been exchanged for another thing.

However, in what is called a gift-giving economy, when you make a transaction, something very different occurs. Let's say you're on your way to the store to buy some AA batteries. Your neighbor, sitting on his porch, sees you. You stop to chat and he says, "Oh, I have some extra batteries. Here, you can have a couple." Now you have the batteries; you have made a transaction. But it's an "open transaction" -a reciprocal exchange has not occurred. So you now have a connection to your neighbor that, as a human being, you are not likely to ignore. Perhaps the next time your neighbor runs out of milk, he'll knock on your door and ask if he can borrow some. A relationship has been formed or strengthened.

MTM: And when relationships are formed, community is built.

LIETAER: Exactly. Gift exchanges actually build community. In fact, the word 'community' derives from the Latin cum munere, which literally means, "to give among each other." So in our language itself, there is the recognition that community is related to the act of giving to one another.

MTM: It seems that the idea of reciprocity is important to your concept of community and gift-giving. In community, there is a giving back and forth. The giving isn't in only one direction.

LIETAER: Yes, gifts tend to become reciprocal. When I give you something, someday you will give something back- either to me or to someone else in my community. In contrast, commercial money exchanges are a closed transaction, so no ongoing relationship is formed. I give you the money and you give me the item or service and we're done. Neither of us owes anybody anything. It's an effective means of exchange, but it doesn't tend to lead to community building.

MTM: And this is true within the family as well?

LIETAER: Yes. We used to live in extended families. In fact, we can still observe such extended families in southern Italy and South America, where a familia typically consists of 70 or 80 people. But, gradually, there has been a systematic worldwide trend toward replacing extended families with nuclear families. Why? Part of the answer is that we now have money exchanges within the extended family. When Granddad moves in, we expect him to pay for his housing with his pension. When our children do household chores, we pay them for their work. Such monetized exchanges fail to create relationships of reciprocity. The parents have given their children the gift of life, the gift of education, and so many other things. If the children don't have the opportunity to give back to their parents, they are unable to participate in an essential aspect of true community.

MTM: The "giving among each other."

LIETAER: Yes. So when you start paying your son to cut the grass, you may unwittingly undermine the family.

MTM: So how do we restore families and communities through our money system?

LIETAER: Many communities now are using "local currencies" that create and reinforce community. There are various systems in use. One of the simplest is time-dollars, where the unit of account is the hour of service. For example, for every hour you give in service to someone in your community you are entitled to receive an hour of service from someone else.

Another system is in operation in the town of Ithaca, New York. There, they have created a paper currency called "Ithaca Hours," which is intentionally limited in its circulation to approximately a 50-mile radius around Ithaca. Many local businesses accept payment in both Ithaca Hours and conventional money. Keeping the currency local ensures that the money remains within the local economy, rather than being spent elsewhere. It also tends to create ongoing relationships among community members.

These local currencies, used in conjunction with our conventional money system, allow communities to solve many of their problems without relying on conventional money to do it. This means that scarcity of money is no longer an obstacle to solving social problems.

MTM: In The Future of Money, you give many examples of non-conventional currencies throughout the world that have had very positive social effects. If these currencies are so effective, why don't we replace our conventional money system with them?

LIETAER: I don't believe we should discard the money system we currently have. For one thing, it is so deeply embedded in our social and economic system that it would be very hard to do. But the deeper reason has to do with the necessary complementarity between cooperation and competition within a society. There has to be a balance between "gift-giving" and "monetized" economies.


  • money -an agreement within a community to use something as a medium of exchange.
  • gift economy -exchanges in which people offer gifts, or their skills and talents, to others without receiving conventional money in exchange.
  • monetized economy - an economy where informal gift exchanges have been replaced by exchanges using conventional money. The United Nations uses this criterion to define a "developed country."
  • conventional currency - a money system that uses conventional money as the medium of exchange. In a conventional currency system, money is issued with interest, through bank-debt; by definition, the money must be scarce and therefore elicits competition among it users.
  • complementary currency - a means of exchange other than conventional money, used in local communities to link unmet needs with unused resources. Complementary currencies do not have interest, and elicit cooperation rather than competition among users.
  • I use the Taoist concept of yin-yang to articulate this idea because English does not have adequate words to express it. Using Chinese words may seem exotic, but the concept of yin-yang is a very precise construct for which Western language simply has no equivalent. It means more than just opposites co-existing together. It contains the idea of transcending polarity to reach a higher unity.

    In Chinese philosophy, yin represents the feminine energy, and yang represents the masculine. They are not opposites; they are complementary elements of a whole. Both are needed to have a balanced system. Each element of the whole has its own characteristics. For example, yin diffuses, flows, and creates networks; yang centralizes, concentrates, and creates hierarchies.

    Our "normal" or conventional money is an extreme yang construct. It is centralized and hierarchical. It is created by bank-debt through an authority-the Federal Reserve and the banking system. As economists Jackson and McConnell correctly state: "Debt-money derives its value from its scarcity relative to its usefulness." In other words, conventional money has to be scarce or it will become valueless. Furthermore, it is always created with interest, which further concentrates money; by definition, interest flows from those who don't have money to those who do. Finally, everybody needs to obtain this money because it is the only one the tax authorities accept in payment. So people have to compete among each other to obtain that scarce currency. In short, every feature of our conventional money system is yang.

    A yin money system is the opposite. The currency is not issued by a central authority. In the time-dollar system, if I do something for you I get a credit and you have a debit; the money is created by the people who use it. And there is always enough of it. If we agree that I do something for two hours instead of one, we create enough currency to reflect that fact. We don't have to compete to obtain this currency, and I don't have to borrow it from somewhere and pay interest on it.

    The potlatch model of the Northwest Indians is an example of a yin economy. In that system, those who are most admired and respected are those who have given the most. They spread their wealth out among the community through the potlatch ceremony. In our yang economy, we tend to view people who have concentrated wealth as being the ones to admire.

    MTM: What you're saying makes a yin economy sound more desirable than a yang economy.

    LIETAER: I don't see yin as "good" and yang as "bad." My point is that we need both in proper balance. There is a role for competition and concentration of money and a role for cooperation and flow of money. However, I do maintain that in our modern society, the fact that we have a monopoly of yang currency systematically distorts that balance.

    In the Taoist system, when there is an imbalance toward yang, the solution is not to get rid of the yang, because that would only create excess yin-which would be another kind of imbalance. Instead, whenever there is excess yang, Taoists always recommend that we "calm the yang and activate the yin."

    Among the Northwest Indians- who lived in what is today Washington, Oregon, and Northern California-the potlatch ceremony was a ritual through which gifts such as food and clothing were distributed to members of the community. Those who shared their wealth in this way were regarded with admiration and respect.

    MTM: How do we do that?

    LIETAER: One powerful way to "calm the yang" is to give some of your money away when you have more of it than you need. In a yang economy, this takes effort because you're operating 'out of the box,' from a yang perspective. If, for example, you're giving money away for reasons other than to avoid paying more taxes, you're abnormal in such a monetary system. But giving away money will help create a balance in the overall system, because it is dispersing some of the currency, which has been overly concentrated in one place.

    A good way to "activate the yin" is by introducing what I call complementary (or yin) currencies into local communities.

    MTM: What are complementary currencies?

    LIETAER: They are currencies that link unmet needs with unused resources. Such currencies don't have interest, and elicit cooperation rather than competition among the people who use them. Complementary currencies-when sufficiently developed-counterbalance the effects in a community of the conventional currency.

    In Bali, for example, there is a traditional "dual currency" system-one is a gift-giving currency, where people offer their skills and talents to others; the other is the conventional national currency. Typically, an adult Balinese spends about 30% of his or her time in the complementary- currency (yin) economy, and the balance in the conventional (yang) economy. People who have visited Bali and have been able to appreciate the quality and joy of life of the ordinary Balinese will have some idea of what a world in balance might feel like .

    MTM: Would you say more about what happens when we don't have a balance of currencies?

    LIETAER: A society that operates exclusively with a yang currency will tend to "starve" all yin functions: for example, community building, and taking care of our kids, our elderly, and the environment. It will also suffer from various dysfunctions, which even those who have a lot of that currency will experience.

    MTM: Such as?

    LIETAER: Well, the countries that are most "developed" are those that are the most "monetized;" that is, they have replaced informal gift exchanges with conventional (yang) currency exchanges. They are also those that, by many measures, have the least healthy community functioning; they have very high levels of despair, suicide, and social dysfunction.

    On an individual level, I know some wealthy people who are truly happy, but they are rare. In a discussion I had with several financial professionals who advise multimillion-dollar families about what to do with their money, unhappiness was one thing those advisors could say that their clients had in common. Unhealthy family relations was another.

    MTM: And you attribute this to our currency system?

    LIETAER: An extreme yang currency system has a shadow phenomenon, in the Jungian sense of shadow; it is the manifestation of something that is repressed. For a long time, I asked myself, "What is the difference between a society that is using only conventional (yang) money, and a society using a dual (yin-yang) money system?" It took me six months of research and four months of living in Bali to realize what the answer is.

    MTM: What is it?

    LIETAER: The short answer is trust. In a society with dual currencies-which is therefore in greater yin-yang balance- people trust the universe to be supportive; they trust their community to be helpful when needed; they trust the family to be there, whatever happens; and they trust the future. In a society where the yin is repressed, people lack trust.

    In our culture, the most typical dysfunction within wealthy families is distrust. This lack of trust manifests in a pattern of four concentric circles, which psychologist Bernice Hill calls "the sacred wounds of money."

    The outer circle represents the social level. Let's say I am known as a person of wealth in my community, and I make a reservation at the restaurant down the hill. There is a whole set of expectations that comes into play even before I arrive. People at the restaurant will expect me to come with a specific type of car, a specific type of woman, and a specific type of interest in food, because of my financial reputation and status. This is known as "the burden of expectations." I, Bernard, do not exist anymore as an individual. I am everything that goes along with the label of me as a wealthy man. Of course, because I am a wealthy person, I'm supposed to leave a big tip, even if I didn't think the service was good. If I don't, I'm a bastard. So I can't trust the feedback society gives to me about myself and who I am.

    The second circle represents the lack of trust among my friends. One of the major questions people of wealth have is, is he or she really my friend? If I were no longer wealthy, would this person be my friend? So, people who are wealthy have trouble trusting their friends.

    Then there is the family level. Let's say my brother is being very nice to my grandfather. I wonder: Will that create a problem with my inheritance? (Will he get more than I will?) Or perhaps my father says to me, "If you marry that girl, I'll disinherit you." So my family interactions are tainted by money, which makes it difficult for me to trust my family.

    Finally, there is the individual level- and this shows up particularly among those whose wealth is inherited. Who am I? Am I only a bank account? Is there something about me that's me and not just my money? In the end, I have no clue. So I don't quite trust myself.

    These are the shadow sides of money. Loss of trust is the core of the problem. And the first reaction that people who are not wealthy have is, "I wish I had that problem"-which is absolutely not understanding the depth of the issue. The cliché, of course, is that money doesn't buy you happiness, but even that doesn't address the deeper issue of loss of trust.

    MTM: Lack of trust does seem to be a pervasive phenomenon.

    LIETAER: All of that is from the perspective of an individual with wealth. From a broader societal viewpoint, the distrust manifests as the breakdown of community. If we believe we can address social problems by throwing money at them, we are not addressing the issue of people not being able to trust each other.

    In a society using exclusively conventional money, money typically gets concentrated at the top of the social system. If you have money, you get more by just having it. Then you find that others are jealous of it, so you need police and an army to protect it. In such an environment, people can't trust anyone or anything.

    So, by introducing local (yin) currencies into an excessively yang conventional currency system, we begin to recreate community. It's like weaving a tapestry. When I give to another person, I weave a community strand by creating a relationship with the particular community member I am giving to. We are becoming interdependent.

    If I am using a time-dollar system, I am weaving strands a little differently. I am still creating strands within the community, although not with the particular individual I have given to. It is, instead, a multilateral process. I give something to one person, that person gives something to another, and eventually, someone else gives something to me. It is the combination of all these interactions-all these many strands-that completes the tapestry. This is what it means "to give among each other." And this is how we build community. The role of the gift is greater than it may appear.

    The bottom line is that we need to realize that our current conventional money is not value-neutral. We now have evidence that complementary currencies create different types of relationships than conventional currencies do. We can promote competition, greed, and scarcity, or cooperation, generosity, and abundance with our money systems. The choice is ours.

    For 25 years, Bernard Lietaer has been active in the domain of money systems in an unusual variety of functions. While at the Central Bank in Belgium he codesigned and implemented the mechanism for converting Europe to a single currency system (the ECU). During that period, he also served as president of Belgium's Electronic Payment System. His experience as a consultant addressing monetary issues spans four continents and ranges from working with multinational corporations to governments of developing countries. He co-founded one of the largest and most successful currency funds, becoming its general manager and currency trader. Mr. Lietaer was a professor of international finance at the University of Louvain and is currently a visiting professor at Naropa University in Boulder, Colorado. He is the co-founder of ACCESS Foundation, an educational non-profit organization that focuses on disseminating best practices in the domain of complementary currencies.

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