The purpose and motivation of the Social TRade Network of projects is: “To develop and promote sustainable economic models for a world full of development opportunities, high quality of life, cultural and environmental diversity, based on sustainable production and consumption.”
Innovative monetary methods can help to lessen poverty and underdevelopment, both in the North and in the South. Renowned economists such as Silvio Gesell, Irving Fisher and John M. Keynes pointed out that lack of money (or liquidity) and the high cost of borrowing money (interest) lead to the persistence of poverty and inequality. Unequal access to scarce money and interest based money creation favor those people or countries which have (too much) money, at the expense of those that have too little. In other words: the rich get richer, while the poor get poorer. This is illustrated by the huge debts of many developing countries, which only seem to grow bigger no matter how much they repay. Relatively huge interest payments (direct and hidden inside the price of imported goods) prevent economies from developing and make it very difficult for poor groups to break free of their debt dependency.
Budget cuts caused by financial obligations to service the debt burden lead to reduced expenditures, unemployment and reduced purchasing power, thus reinforcing recessionary tendencies and obstructing measures to promote an economic recovery. This can lead to a vicious downward spiral, in which (local) governments spend less, receive fewer revenues and spend even less, etc. In order to break out of this vicious cycle, Social TRade advocates the introduction of local exchange systems that create additional purchasing power and credit for low-income groups and small enterprises with limited working capital. Social TRade brings about conditions within the local market place in which purchasing power shifts its preferences towards locally produced goods and services that are produced by unemployed and underemployed micro-entrepreneurs or SMEs (Small/Medium sized Enterprises) with ‘spare capacity’.