The Local Multiplier Effect Always Counts
The Local Multiplier Effect (LME) is a very valuable, hidden feature of our economies. The term refers to how many times dollars are recirculated within a local economy before leaving through the purchase of an import. Famed economist John Maynard Keynes first coined the term “Local Multiplier Effect” in his 1936 book The General Theory of Employment, Interest and Money.
Over the past 50 years, the expansion of national businesses into local domestic markets has diverted this vital monetary stream and redirected it to centralized corporate coffers. There it is spent on large capital expenditures, overseas goods and all too frequently inflated executive salaries. This interception of funds has depleted local towns and cities across our nation of an important source of funds: recirculated income.
The Local Investing Opportunities Network (LION) of East Jefferson County, Washington, is a group of citizens who create opportunities for local businesses, individuals, and local investors to network.
LION is not a loan or investment fund, and it does not make collective investment decisions. Our membership consists of local citizens who want to invest their money locally, thereby putting their investing money to work within our community.
Keeping funds local facilitates greater economic self-sufficiency, job growth, economic development, and a dollar-multiplier effect whereby a dollar kept within the community can be spent many times over for a far greater benefit than a dollar invested away from our community.
Reliable Prosperity demands a new approach to the economy. By placing equal emphasis on environmental stewardship, social equity and financial returns we will build a more resilient system that pays dividends far into the future.
Working along with natural principles of development, expansion, sustainability, and correction, people can create economies that are more reliably prosperous than those we have now, and that are also more harmonious with the rest of nature.
– Jane Jacobs, The Nature of Economies
Think you know what big business looks like? Think again.
According to Charles Gould, Director-General of the International Cooperative Alliance, cooperatives are poised to be the fastest growing business model by 2020. Values-based, community-supported and member-controlled, modern cooperatives have grown steadily since their inception in the late 1800s.
Today, the top 300 cooperatives, or Global 300, generate as much revenue as the world’s ninth largest economy, or the economy of Spain. Meanwhile, new research shows that cooperatives worldwide have three times as many members as traditional businesses have shareholders — and provide 20% more jobs.
Bartering Helps Greeks Survive Economic Crisis
The entire country of Greece is currently facing economic ruin. In case you haven’t been keeping up with news of the Greek debt crisis, here’s CNN’s take in a nutshell:
“Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the eurozone.”
Tired of inflated prices and devalued money, Greek communities have begun to ressurect an alternative economy from past centuries. In the two years since Greece’s economy has been in really bad shape, more than a hundred networks which deal in non-currency transactions have sprung up across the country.
Instead of tapping into already stressed bank accounts to pay for clothes, food, or even a much-needed respite like art or yoga lessons, people are using their own time and talents to facilitate trades with others in their community.
How Steve Keen Saw “It” Coming
The two intersecting lines of supply and demand penetrate economics textbooks like Einstein’s mass-energy equivalence penetrates physics textbooks. The theory behind the two lines is inherently flawed, says Steve Keen. It is not possible logically to derive from individuals and their preferences the aggregate demand and supply curves presented in economic textbooks – unless one is willing to make a host of unrealistic assumptions, such as that all people are alike. That is why the theory is flawed.
On the Cusp of Collapse
The systems on which we rely for our financial transactions, food, fuel and livelihoods are so inter-dependent that they are better regarded as facets of a single global system. Maintaining and operating this global system requires a lot of energy and, because the fixed costs of operating it are high, it is only cost-effective if it is run at near full capacity. As a result, if its throughput falls because less energy is available, it does not contract in a gentle, controllable manner. Instead it is subject to catastrophic collapse.
Can we find patterns today that point to the future?
On Monday, October 24, Michel Bauwens of the Foundation for Peer-to-Peer Alternatives spoke at the Institute for the Future (IFTF) in Palo Alto about how the innovations and values of P2P are enabling a third revolution in human productivity and transforming capitalism. In a talk presented by Shareable and the IFTF, Bauwens argued that the Fordist model of managing society has reached its end and that the P2P model represents a much more productive and egalitarian system of production.
The Political Economy of Peer Production
Not since Marx identified the manufacturing plants of Manchester as the blueprint for the new capitalist society has there been a deeper transformation of the fundamentals of our social life. As political, economic, and social systems transform themselves into distributed networks, a new human dynamic is emerging: peer to peer (P2P). As P2P gives rise to the emergence of a third mode of production, a third mode of governance, and a third mode of property, it is poised to overhaul our political economy in unprecedented ways.
Community Energy Finance 2.0
In a world where income disparity is increasing and social regression is inherent in the current structure of the UK’s Feed-In Tariff (FIT), we need to rethink how community renewable energy projects are structured & financed to ensure full community benefit lies at the heart of the process and that energy reduction is still focused upon as part of a community “power down” process.