How Do You Get $1 Million to Do the Work of $100 Million?


Complementary currencies can magnify the effects of educational dollars and solve seemingly insurmountable problems along the way.


Here's a way to make a $1 million grant to a school district do the same as a $100 million grant.

  1. Create a complementary currency that is backed by the $1 million grant.
  2. Give the complementary currency to 3rd graders.
  3. The 3rd graders pay 4th graders to tutor them. A teacher records the transaction.
  4. The 4th graders use the currency they've received to get tutoring from 5rd graders.
  5. This continues on up through the grades until the complementary currency ends up in the hands of the high school seniors.
  6. The seniors can use the currency to pay college tuition to participating colleges.

Because the complementary currency propagates through the entire school system before it's redeemed for US dollars, you get far more mileage out of the original grant than would otherwise be possible.

Complementary currencies can solve social problems without more taxes, bonds, levies, government regulations, or even charity.

How This Works

Cognisaya, LLC is developing software that can issue digital currencies. You can create your digital currency and tailor it to specific uses. In the case of this example, suppose a state gives a school district $1 million to improve its failing educational programs. The district can spend the money on traditional programs, or they can try something new.

Imagine that the state connects to our web site and creates a complementary currency called LearnBucks. This currency is completely digital and is backed by the $1 million educational grant. The currency is designed so that all transactions must be recorded through the web site. Forcing transactions to be performed through our web site is not a feature of every digital currency our software issues. But it is an option that customers can select.

Why would the state want to force transactions involving LearnBucks to be done through the web site?

First, it prevents any outside parties from accepting the currency. No "black market" can form around this currency.

Second, it means that bullies can't beat up kids for their LearnBucks. The LearnBucks are only transferred from student to student when a teacher sees that the tutoring has been performed.

The state then gives the LearnBucks to a school district. The distinct, in turn, hands out the LearnBucks to its 3rd graders. The 3rd grade students use the LearnBucks to pay 4th graders to tutor them. The tutors have to have the permission of their parents and teachers to participate.

The 4th graders accumulate LearnBucks and use them to get help from 5th grade tutors. This propagates all the way to the seniors in high school. At the end, the seniors can use the LearnBucks to pay their tuition at participating colleges, technical schools, apprenticeship programs, and other post-secondary educational institutions within the state. The only ones who can redeem LearnBucks for actual money are the post-secondary institutions. Even if someone else obtains LearnBucks, they can't spend them or convert them into US dollars.

Why This is Needed

A number of trends are converging to make our educational system less effective for our children. Here are just a few.

Outmoded Classroom Design

Our educational system was designed in Prussia (now Germany) specifically for the purpose of creating good soldiers. At the time, fighting was done primarily on open fields with soldiers moving in formation. Every soldier needed to be in lockstep with everyone else in their formation. If a single soldier in the formation accidentally turned the wrong way when the order was given to come about, the entire formation could be broken and everyone killed.

As a result, the Prussians undertook to produce young men who were excellent in rote memorization. They also wanted to eliminate creative thinking and individualism. Johann G. Fichte wrote in "Address to the German Nation" that "brash, undisciplined students went on to become disobedient and rebellious soldiers."

In 1819, the Prussians established a compulsory school system that would produce dutiful, compliant children who followed orders.

After several decades, the US government sent Horace Mann, who was heavily involved in education in this country, to study the Prussian system. Mann returned and raved about the Prussian schools to all who would listen. The US school system was then patterned after the Prussian model.


For more information, see Beyond ADD: Hunting for Reasons in the Past and Present, by Thom Hartmann (Underwood Books).

Right Brained Children, Left Brained Classroom

Recent advances in learning have demonstrated that the brain's left and right hemispheres process information in different ways. And each half of the brain seems to specialize in particular types of information. In short, we use our left and right brains to accomplish different things.

The Prussian educational model, which is still the dominant style of education in the classroom today, primarily focuses on left brain learning. To this day, children learn endless lists of information that they have to regurgitate on tests without learning how that information can be useful. Very little creative thinking is taught. In fact, it is often punished when it does occur.

Unfortunately, an increasing number of students are visual learners who are extremely right brained. This is particularly true among boys. A number of sources indicate that this is occurring because excessive exposure to TV and video games develops the visual cortex far beyond what has been normal in the past. Also, video games seem to develop intuitive, right brained thinking to a greater degree than would be normal for children.

Without passing any judgments on TV or video games, it's important for us to realize the magnitude of the shift that's taking place. Our centuries-old, left brained educational model is simply unable to teach today's increasingly right brained children.

Effective Teaching, Effective Learning

The worst way to learn something is to receive a lecture about it. In a lecture situation, only about 5% of the material presented will be remembered. Things get slightly better with material that you read. You'll remember about 10% of that. If there's a demonstration of the concepts taught, recall will go up to about 30%. Both discussion groups and practice by doing also increase retention.

But the best way to learn something is to teach it. In that case, retention goes up to 90%.

If a state were to implement a complementary currency like the LearnBucks, it would quite simply create a phenomenal jump in the amount of material that kids retain.

Also, it's often the case that our schools have more gifted underachievers than gifted overachievers. Our left brained classroom environments can't reach such students and engage them in learning. However, one-on-one tutoring is extremely effective for right brained learners. So using a program based on a complementary currency can provide tremendous help for both the tutors and those being tutored. Kids who are currently failing can often be brought back from the brink of dropping out. They in turn can become tutors and help others like themselves.



For more information, see New Money for a New World by  Bernard Lietaer and  Stephen Belgin.

Summary of Benefits

On average, when a program like this one is introduced, there is a fivefold minimum leverage increase because of the learning multiplier. That's a fancy way of saying that the same money gets used to educate multiple kids because it passes up through the grades.

In addition, there's a tenfold increase in learning retention. Actually, it ranges from ninefold to about twentyfold.

So the short version is that money spent in this way can make $1 million do the work of about $100 million spent on normal programs.

Solving Problems without Raising Taxes or Redistributing Wealth

As you can see from this example, problems that seem insurmountable can often be addressed by the use of complementary currencies. Cognisaya, LLC is producing software to make the use of such currencies easy, intuitive, and straightforward.


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