Sustainable currency and the green economy: An Irish perspective


It is tempting to define the ‘Green Economy’ as a portfolio of ‘green technology’ solutions for Irish business developers to pursue in order to contribute to the export-led growth objective the country has set itself as recommended by the Troika.

We should not question the case for government support along these lines, because such technologies are an important part of a national response to the convergent crises we face as a nation. But limiting our response to ‘greentech’ alone overlooks two important macroeconomic issues that are the subject of increasingly fierce debate and where fundamental economic changes/ reforms look increasingly likely:

i) the acceptance that debt-based money issue is at the heart of primary systemic monetary dysfunction leading to adverse national and international economic and environmental consequences, leading to a reassessment of the pros and cons of bank-created money versus government created money with all the political controversy that this entails

ii) the impact of globalised supply chains on local/ regional economies and the challenge of rebuilding local competences with due regard to and respect for the market economy and its power

The first of these can be considered as a National Monetary Policy issue; the second as an opportunity to reappraise Local Economic Development models.

We can envision possible ‘sustainability’ objectives for each.

National Monetary Policy

Ireland is under pressure from two extreme and opposite positions, each of which questions the legitimacy of the country even having a National Monetary Policy.

On the one hand, as part of the Eurozone Ireland has trusted the management of its currency to others. Others are now dictating a substantial part of national economic policy and all the main political parties are committed to seeing this partnership through to calmer waters. Ireland has no sovereign control of the money supply and cannot imagine such control without exiting the Euro.

On the other hand, Hayek’s argument for denationalising currency – for allowing a free market among competing currencies – is enjoying a renaissance [1]. This rebirth is informed firstly by the dysfunction of existing fiat currencies and their systemic role in the crisis; and secondly by the disruptive emergence of privately issued digital currencies and the prospect of multiple co-existing ‘designer currencies’ [2].

In the existing political landscape, Ireland’s freedom of action here might seem limited, particularly since any public acknowledgement of the consideration of national monetary alternatives is seen as damaging (though this danger is probably over-estimated by proponents with a strong vested interest in the status quo). But if we accept that fundamental changes are more than likely, it will not pay any nation to put its head in the sand, and early movers are likely to set the agenda for subsequent international dealing.

In that context, Ireland might usefully constitute an institutional response – a thinktank with close access to policy levers and the true implications of their use, a presumption of transparency and a sustainability remit. The design of such an instituition would be a challenge, but would in itself be a constructive stage of delivering a sustainable economy.

Local Economic Development

Critics of Local Economic Development models complain about the over reliance on attracting multi-nationals or major retailers with subsidies because these companies have no real long term connection with the locality and disrupt genuine locally rooted business both on the way in and on the way out of the local economy.[3]

There is good evidence that local currencies can play a role in increasing local liquidity – primarily by increasing the velocity of circulation of money – but they have one major limitation. If local supply of particular goods or services simply does not exist – having been stripped out of the local economy via centralised supply chains – the economic circuits that are needed for continual monetary circulation are interrupted, and money flows out of the area to the centre or abroad.[4]

A better understanding of the key missing goods and services (energy may be a good initial example) would help to inform and direct a more targetted model of Local Development.[5] Currencies with local council sponsorship (i.e. councils accepting payment of rates, taxes and charges in the currency) can then work to rebuild economies in the context of a local plan.