Catalonia: Economic Reform from the Ground Up

Autogestio: Adventures into the New Economies of Catalonia

Enfable (2015)

Film Review

Autogestio* begins with an update on Spain’s modern Robin Hood Enrique Durand. In 2008, Durand borrowed a half million pounds (around $700,000) from 38 banks and donated it to various Spanish anti-capitalist organizations. When he defaulted on the loans, the banks took him to court, where he called numerous expert witnesses to explain no banks had lost any money because they created the loans out of thin air. Despite the fact this is where all money comes from – banks create it out of thin air – the court dismissed the witnesses and Durand went into hiding.

The documentary is based on a June 2015 visit Devon activists made to Durand’s home region of Catalonia to study Cooperativa Integrale Catalonia (CIC). The latter is a coalition of work and and mutual aid co-oporatives created by Catalonian activists seeking to build an alternative economy outside the corporate money system. Many of the activities CIC engages in are technically illegal, such as occupying abandoned land and buildings as living space or to grow food, start cooperatives or provide various community services. However through the years, they have discovered a number of creative ways to turn these squats into legal tenancies.

At present there are 26 local currencies in use in Catalonian communities. Some have been created by CIC and some by other eco-groups seeking to strengthen their local communities. The beauty of local currency is, unlike fiat (bank-created) currency, it can’t be spent outside the community that creates them. This means it can’t disappear into the pockets of billionaires or distant corporations.

In addition to promoting the use of local or “social” currencies for local transactions, the CIC promotes the use of Fair Coin for national and international transactions. Fair Coin, a type of cryptocurrency,** is an eco-friendly alternative to Bitcoin.

The filmmakers challenge the popular misconception that the Bitcoin isn’t central controlled like fiat currency. In actuality, Bitcoins are controlled by a handful of people who have computers powerful enough to “mine”*** Bitcoins, by unlocking the algorithms needed to create new block chains. These and other individuals are constantly speculating in Bitcoins, driving up their value. Because they can’t be traced, they are also widely used on the Dark Web to pay for illicit drugs and other activities (such as hired assassinations).

Unlike Bitcoins, it’s impossible to speculate in Fair Coins because their value is carefully regulated by a network of cooperatives to main a relatively stable value. Fair Coop, the group that monitors and regulates Fair Coins, was started by Enrique Durand and anyone can become a member.

At present Catalonia is seeking independence from Spain – via national referendum or otherwise. See Catalonia Independence Referendum

*Autogestio is a Catalan word meaning collective self-management.

**A cryptocurrency is a digital or virtual currency that uses cryptography for encryption for security.

***Bitcoin mining is the process through which bitcoins are released into circulation. It involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain, and receiving a reward in the form of few bitcoins.

A Warning on the Bitcoin Bubble

A Bitcoin is a type of alternative, computer-based currency known as a cryptocurrency because it uses cryptography (i.e. specialized digital security technology) to make it difficult to counterfeit. Up until a few months ago, interest in Bitcoins was limited to computer nerds seeking to opt out of the bankster-controlled monetary system. In the last few months, Bitcoins have become a hot investment as the value of a Bitcoin has shot up from $43 (when I first blogged on Bitcoins back in March) to over a thousand dollars. The value of a Bitcoin peaked at $1,200 on Dec 4. It has since dropped to $917.10

Below are three short videos presenting differing perspectives on Bitcoins.

The first is by Bill Still, the filmmaker who produced Money Masters and The Secrets of Oz. According to Still, the main reason the value of Bitcoins has gone through the roof is because China is investing its trade surplus in Bitcoins and other cryptocurrencies rather than dollars. Back in November China announced  it would cap future purchases of US dollars and treasury notes. At present, China owns $1.3 trillion of US debt.

Prior to April 2013, China was using a substantial proportion of their trade surplus to purchase gold. However after Chinese State TV aired a documentary on Bitcoins in April, the Chinese have been really bullish on Bitcoins. The video is in Chinese. To view English subtitles click on the YouTube icon to view in YouTube. The subtitle icon is fourth to the right at the bottom of the screen.

Still is obviously really bullish on cryptocurrencies, particularly the quark. In contrast the following video by Storm Clouds Gathering warns that the Bitcoins is in the throes of a speculative bubble. It also has a basic design flaw that will eventually squeeze small Bitcoin traders out of the market.

The design flaw? To enter into any transaction involving Bitcoins, a client is required to download a block chain consisting of every single Bitcoin transaction ever made. With the surge of interest in Bitcoins in the past two months, the size of the block chain reached 11 gigabytes in November. It’s expected to reach 250 gigabytes in two years. Eventually it will reach a terabyte, and small users will be totally shut out unless the system is totally restructured. At some point, it will most likely be centralized in super nodes requiring massive industrial sized servers. These super nodes will essentially function as banks, totally defeating the purpose of starting a decentralized currency.