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We’ve been having a robust discussion around the idea of social capital over the past few days, and as the thread now contains over 100 great, thorough comments, I just want to create the opportunity to keep the thoughts flowing. For anyone just jumping in, if you’d like to get the background context, grab a coffee and read through Social Capital is not the same as Whuffie. If you’re short on time, here’s a brief summary:
Social capital is a term to describe the embedded value within a network. Some can be misled to assume it has a direct exchange-value because of our current association with what “capital” means. In fact, it cannot be the property of a single individual, but rather the property of a network, a commons, or a community – however you’d like to think of it. So what is it? Think of it as the foundation upon which a healthy, collaborative society is built. It’s comprised of trust, connectedness, interdependence, reciprocity, and social norms. (For instance, If you think of the current lack of trust society has in our financial institutions, you’ll see the correlation with the stability of our economic system.) Individuals contribute to the strength and depth of a society’s social capital through their actions and behaviors, but cannot individually possess it.
So if we hit the reset button, wipe away our assumptions, and think about a truly new economy – what is the mechanism for us to exchange value?
Some food for thought: Here is a recent clip of Douglas Rushkoff speaking at the Web 2.0 Expo, where he gives a brief history of currency and explains why we need a new system:
Essentially, he says that the operating system for money is obsolete in a hyperconnected world, and we need alternative models for directly exchanging value with each other. (peer-to-peer exchange) He says cash is artificially scarce, and has lost its utility value as it’s been ‘sucked out into investment capital and into the speculative marketplace.’ What we need now are new modes of currency based in abundance rather than scarcity. He gives a few examples of alternative currencies currently in experimental phases, which I’ll list here:
Time Banking – Creating Social Change by Weaving Community: This is an alternative currency system to be used in local communities. On their site, it’s described as follows:
At its most basic level, Time banking is simply about spending an hour doing something for somebody in your community. That hour goes into the Time Bank as a Time Dollar. Then you have a Time dollar to spend on having someone doing something for you. It’s a simple idea, but it has powerful ripple effects in building community connections.
ITEX Payment Systems – a small business community and barter network: This is intended to be a marketplace for cashless transactions between small business owners.
Superfluid: The Liquid Economy: This is another model experimenting with a virtual currency system, called ‘Quids’:
superfluid.biz is a b2b barter environment consisting of diverse business entities coming together to exchange services and products for fair value
Another site that was just brought to my attention via Twitter (thanks @matttrichards), The Metacurrency Project, is a great resource center for understanding the requirements of an Open Source Economy. Some great questions have been asked there so far, and I wonder how much more we can flesh out here.
This post is really just a primer for us to keep the ball rolling, so let’s discuss. 🙂
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Update: Resources from the Twittersphere:
@openmoney: recommended Community Way – Open Money in the Comox Valley
@VTExchange: recommended VBSR Marketplace
@ethnobot: recommended The Idea of a Local Economy by Wendell Barry
emergent by design 
My $.02 .
One frame is that the money has always been a method of turning time into symbolic form that can be freely traded. As capitalism continues to evolve the exchange of symbols also continue to evolve as new technology emerges. The Ascent of Money looks at the political history of the West through the lens of money creation, circulation and banking. Definitely work the look.
To see where the new forms of money are emerging, I think it’s worth looking at frequent flyer miles, coupon rebates to lower the cost of goods. Most interesting is the recent use of cell phone networks and book keeping systems to raise money for Haiti. It might point to telecoms moving into the space presently occupied by credit card companies.
What is the knowledge in between our ears could be indexed, vetted, valued and traded. Would knowledge then become a trade-able asset? If trade-able how could we make it into a “currency” to buy and trade for other things?
Don’t we use knowledge now to gain and give value? Aren’t we simply paid by what we know and how we use it? The currency of payment is simply a “promise bill” exchanged between others because we say it is worth something. In reality the dollar is a figment of our belief system backed by securities we believe are their and worth something. Could it be a simply mind meld that we all, globally, have bought into? If so could be create a new mind meld?
Deep thoughts for a Tuesday morning…….
Jay, What if “knowledge” doesn’t really exist “between our ears.” Maybe a better way to look at is that “knowledge” only exists in the act of exchange. It’s a little quantum, but might clarify some of the convo.
I’ve come to define knowledge is the interface between information and action. With this definition, with meaning and value between information and action, I think we can begin to apply view knowledge across networks and nested systems.
Excellent point Michael, it’s the communication, sharing, and/or execution of that knowledge that gives it great social value.
(I wrote on this in the ‘Whuffie’ thread, but it’s worth repeating here.)
I believe we need to be a bit more courageous about this – a lot more courageous, actually. What it comes down to is this: the usage or construction of any form of currency is evidence of a failed society. We need to be thinking much more deeply about social models which do not depend on any form of currency.
Specifically, money and other forms of currency represent a failure to trust: it’s actually a type of contract, a symbol of the absence of trust – trust either in in self, in others, or in the complex social/economic/gawd-knows-what-else processes that underpin what the old Christians used to describe as ‘providence’.
(Apologies, this is not easy to describe or explain… especially as there’s such an easy fallback to ‘an alternative to money’, which likewise cannot work in a sustainable fashion in the long-term… probably half the words that we need to describe this are straight-out missing from the entire language… gaaaah!! 😦 )
A currency is an intermediary marker for barter. In essence, that’s all it is.
The core of all social structures is trust. (Reputation is actually a kind of second-hard/third-party form of trust, so it comes down to the same thing in practice.)
Trust leads to respect. Many sub-cultures regard respect as a form of currency, which can be traded on but cannot be traded in itself – which means it can’t be used as currency.
Respect leads to attention – which is finite, in the sense of availability of time, and hence can also be mistaken for a form of currency. Again, this can be somewhat traded on, but cannot actually be exchanged with anyone else – so it can’t be used as a form of currency.
Attention leads to transactions. There are at least four asset- dimensions involved in transactions – objects, ideas/conversations, relationships, and purpose. Of these, only one type – physical objects – is transferable, exchangeable and alienable: the mandatory requirement for a stable, structured form of barter. Therefore only that type of entity is fully amenable to currency-type (low-trust/contract) transactions. And it requires that both parties agree to the value of the intermediary-entity represented by the currency – in other words, it has an agreed and ‘fair’ meaning on either side of the transaction. (If it isn’t ‘fair’, it’s called ‘theft’, or at best ‘deception’.)
For any other type of asset-transaction, the currency concept will inherently and inevitably break down. So-called ‘intellectual-property’ only works when it is bundled with a physical entity (a book, a disk, a seat in a cinema): if we transact it in its ‘native’ non-alienable form (“if I give it to you, I still have it”), the balances required in the currency-model will automatically fail. (In effect, we’re trying to use a model for something that is finite (physical property) with something that is infinite (duplication of information), which clearly cannot balance: producing more copies of the imaginary entity assigns further ‘rights’ to physical resources, eventually reaching a point where the physical-resource management via currency-exchange breaks down. Unfortunately, this is what banks now do every day…)
The same applies to relational-assets (aka “our people are our greatest asset”) and aspirational-assets such as brands, morale and hope. (The extreme absurdity is that a group of people called ‘the shareholders’ genuinely believe that they ‘own’ the lives of others, since those others supposedly are ‘the assets’ of the company. The only time that works is when all those ‘assets’ are slaves…)
The barter-economy – and thence the money-economy as a standardised proxy for barter – is a side-effect of a psychological delusion called ‘possession’. We do not and cannot ‘possess’ anything: that fact should be obvious the moment we look at anything from social perspective, from a global/environmental perspective, or from a time-perspective longer than, so a single ‘financial quarter’. What we can do is accept responsibility for something – in fact for any and every kind of asset, physical, conceptual, relational and/or aspirational. In short, a functional economy of any form, at any scale, can only be based on responsibility – not ‘possession’.
A currency is an artefact of a possession-based economy: and we literally cannot afford to continue with that kind of delusion any longer.
What we really need to do here is have the courage to look a lot deeper, beyond ‘currency’. Forget the notion of ‘currency’ in any form: by the nature of possession-economies, there will always be a way to ‘game’ it, and it cannot be sustainable in the long-term, so it does not and cannot work. Instead, we need to understand how to get a responsibility-based economy to function not just at the scale of the family, or the work-team (where it already must flourish, in order for anything to work at all), but at the scale of an entire planet, for any timescale we may need.
I just hope that this conversation can help that happen, rather than fall into the same old trap yet again.
you mention people as assets… i saw this the other day – lifetime indentured servitude (i.e. slavery)?
Entrepreneurs offer their life’s future earnings for an investment
as to the rest of the post – what you’re proposing sounds pretty radical and utopian. my question is, how would we get there? thinking about a world like that makes me misty eyed for sure, but it would require a social agreement from ALL of society. how to do you grassroots this? for instance, i’m sitting here thinking about what i really need in order to live a comfortable happy life. and let’s assume i want to maintain the standard of living to which i’m accustomed. where does my money go? i need to pay my mortgage, my utilities, my cell phone, my internet, heat, and gasoline. i can’t pay for any of those things based on the strength of my character. what do you suggest here? or do you think we’ll have several currencies in tandem – the ‘government approved version’, and then everything else?
it’s not servitude. that’s the first reaction a lot of people have. i’m one of the first investors. it is a way for the founder to leave a non profit and have it in good shape when she leaves and go on to a startup again vs. being in maintenance mode.
it might help to make the distinction that was made, not be me, in the previous convo. People are NOT an asset. The relationships between people are the organization’s asset. People are just people.
Hi Venessa / Kevin – ‘People as assets’ – we talked about this in the Whuffie’ thread. The only time when people are assets is when they are slaves. Instead, the relationship with the person is the asset. And it needs to be treated and maintained as a real asset, too: once you make that crucial change of metaphor, the rest of asset-management falls into place behind it.
And ‘our people’ also link to the company via aspirational-assets such as morale, a sense of being valued, a sense of purpose, and so on. To answer Kevin’s point, that’s what makes it not ‘servitude’ – or, perhaps more to the point, the absence of which makes it feel like ‘servitude’ even if technically it isn’t… 😦 Again, those are genuine assets, too: but they cannot be traded as such, because they’re not directly exchangeable – they’re embedded in feelings and beliefs, not in exchangeable objects.
There’s a lot more that I could explain about how all this works, especially within a whole-of-enterprise architecture, but this isn’t the place, and there isn’t the space, anyway. 😦
On ‘moisty-eyed’, yup, I’m well aware that at first it’ll sound ‘utopian’ and the like. But I’m actually being very strictly pragmatic here. We don’t try to run a family or a work-team on strict monetarist lines: we know that it doesn’t work. So to turn this round, what is it that works in a family or a work-team when ‘the money economy’ is clearly not the game in play? A bit of brief depth-analysis shows us that these contexts also fail when anything else else is used as a substitute ‘currency’ – ‘respect-trading’, for example. So how do they work? What are the factors that make them work or not-work. This is of real, urgent importance in my work as an enterprise-architect: but there’s no reason at all why we should not extend what does work up to a larger scale, rather than trying to force the current societal kludges that don’t work down into areas where they really don’t work, such as the actual operation of family or a business.
The other point is to remember that ‘market-sequence’:
reputation -> trust -> respect -> attention -> transaction [ -> barter/money -> abstracted ‘profit ]
Barter/money arise solely from the parasitic ‘possession’ add-on to the rest of the economy, which is essentially responsibility-based. Why on earth should we waste vast amounts of effort trying to work out new kludges for the parasitic part – which does not and cannot work in the long-term, for a myriad of reasons, some of which I’ve described above – when we still don’t yet understand how the upstream-factors work? Seems much more sensible to work out what’s going on upstream, surely?
As for ‘pay the mortgage’ and the rest, all I can say is “tell me about it, sunshine…” 😦 My ‘real work’ is doing this kind of thinking: yet, like all futures-work, it has no monetary value, because monetisation only occurs at or very close to the point of transaction – which in my case is probably decades or even centuries away. So the only way I can ‘make a living’ is by not doing my ‘proper work’. But unless that futures-work is done, there is literally no future. Which kind of reinforces my point about the dysfunctionality of a money-economy, yes?
So: which would you prefer? Waste effort on trying to build yet more kludges? Or put the same effort in learning to understand what does work, and then work out some workable paths ‘from here to there’? I know which one I choose; what about you?
i feel like 2 things are necessary as a precondition for this to work: free land & free energy.
if i had those 2 things – a plot of land free of property taxes and being off the grid – then i’m free. THEN things could get interesting. then i could imagine a huge group of like-minded people deciding to do a social experiment (or what they call “intentional communities“) and see how we can co-create value without any ties. then you could really experiment with a local currency without being penalized by the larger system.
i actually just had a thought – how awesome would this be – to host a workshop/course/open university, like an ongoing TED conference or something, except that everyone is participating, so no one “pays” – everyone is concurrently exchanging value.
a friend of mine and i were just talking about how our ideal life would be like recreating Plato’s time, where we could all engage in intelligent discourse about pushing humanity forward, and then make things happen.
i think i would be ultimately content and dedicated to that life. i guess i already am, i’m just not wearing a toga.
Venessa – Hmm. Remember that Plato’s culture was explicitly based on a slave-economy, and the position of women weren’t great neither. :wrygrin: – if you don’t want those, you’d better be sure of that ‘free energy’ supply. Which brings us back to a little problem called ‘global warming’, brought on just by fossil-fuels but by using a heck of a lot more than our annual energy-budget (it’s called ‘the sun’ 🙂 – several hundred thousand times more than our annual energy-budget, in terms of fossil-fuels. Which is why this gets verrrra complickated, real quick…
To simplify it right down, deconstruct the notion of possession. Right at the core is a notion of ‘rights’ – which actually aren’t real, in fact they’re social fictions based on mutual social responsibilities, except that the notion of ‘rights’ too easily becomes interestingly non-mutual… So – just as a thought-experiment – let’s drop the notion of ‘rights’ completely (yup, I am serious) and instead explore the underlying responsibilities.
Take your hypothetical block of land: you own it because you are responsible for it. No other factors need be involved – money, taxes, anything. How do you demonstrate that you are being responsible for it, about it, respecting its present, its past, its future? Would someone else be better at that than you? If so, is it time to move on? If it’s time to move on anyway, how do you find someone else to take on that responsibility? Those are typical ‘transactions’ in a responsibility-based economy.
If you already ‘possess’ a musical instrument, you’ll have a very clear idea of how this works. If not, think about any pets, or your photo-album: it’s a very different kind of ownership than ‘possession’. Explore that in more depth, extend it outward as if to a community, then broader again. That’s the kind of thinking we need here, long before we get down into the fine-detail of where trust fails, where some kind of ‘currency’ might be needed.
Not easy. But never said it was, did I? 🙂
(Don’t you just love typos? 😦 There’s a rather-important ‘not’ missing above – should be “brought on not just by fossil fuels” etc. Apologies.)
As we all sense, there is a HUGE opportunity opening up for us. The dollar is vulnerable and a new currency is inevitable. This means that other’s will conjure a new one into existence, or we could do it.
Here is a simple reality to consider. The dollar is backed by debt. Debt is a promise of FUTURE productivity. Innovation is also a promise of future productivity. Therefore, a currency backed by innovation represents the exact same thing as a currency backed by debt: future productivity. The great opportunity is that the two would be convertible.
Now we all recognize that social currencies are a better representation of our future productivity than money. Otherwise, teachers and engineers would be paid as much as football players and hedge fund quants. I think everyone gets this.
Information, knowledge, and innovation are related to each other and the question becomes how are they related?
If we can influence this relationship, we can influence a currency. We need to redefine these terms – they were invented by the industrial revolution – if we can do that, we can build a currency around the fact of future productivity of communities exercising social priorities.
Tom,
You make very good points, but I have to disagree with “the usage or construction of any form of currency is evidence of a failed society.” From my point of view it is precisely the emergence of “currency” that is the first necessary step to getting to evolving civilization. 2me, the state of a Darwinian reality is to not-trust. It would be good if this were not so, but there it is.
Let’s frame humans as animals that are able to make symbols and tools. Some of the tools allow cooperation to proceed more quickly. The “magic” of currency is that allows a reasonable expectation of future behavior of the other party to exchange. That reduces the risk of exchange and gets the risk/benefit mechanism to decide on the basis of benefit.
A good analogy is the emergence of standards in the IT world. Standards, like money, help mitigate the risk of exchange.
Michael – I have a really strong suggestion for you: drop the Darwinist delusion. It’s based on really bad biology; in present-day biology it has little or no factual basis; in essence it’s little more than a crude political kludge cooked up more than a century ago to justify theft and murder on a grand scale. Drop it. Drop it. Only then will you have any chance to be able to think more clearly about what’s actually going on here.
If you can’t drop it, fine – that’s your choice. But it does not work: and trying to cling on to something that does not work has serious consequences, often for others as well as for you.
That really is all I can suggest for you at the moment.
I’d be glad to have this convo, but not in this thread.
Michael – thanks for the Twitter convo – much appreciated. Quick summary: “red in tooth & claw” etc is scientism, not science – a misuse of (very early) science by a particular cult/culture to ‘justify’ its own violence – and carries so many hidden-assumptions that it’s dangerously misleading for this kind of discussion.
And thank you for a vigorous exchange. I find the “marketplace of ideas” works very well on twitter. I think it helped both of us to more precisely define an apparent disagreement. And thus come to agreement.
Your summary is very well done.
Michael,
Thanks for the comments – I really appreciate the time you have taken to look deeper into our work – it is technical and we speak a slightly different language but we are also not keeping any secrets either. So thanks.
The education system is an excellent example; especially college degrees (invented in the 1300’s). A college degree is like walking around with a 100,000 dollar bill and trying to buy a $2.00 cup of coffee. It’s not the price of the coffee, it’s that fact that nobody can make change for a 100,000 bill. As a result, they devalue it until they can.
The way we inventory knowledge needs to be split into finer categories. That will greatly increase the probability that we will find a match between supply and demand. If we are clever, we will start with at least 3 broad categories called social capital, creative, capital, and intellectual capital because these are the “Factors of production” of today’s economy (Land, Labor, and Capital are no longer relevant).
These are the things that we allocate to a market to make things happen. That’s the best place to start in specifying a future currency
Dan,
I am in the very fortunate position of being happily retired with lots of time on my hands. I sincerely believe you are just on the right track. The thought model of social, creative and intellectual capital, coupled with the research and thinking you’ve done about financial model would allow the “debate” about reinventing formal education as increasing all these forms of capital could, in my never humble opinion, a game changer.
Please get in touch to let me know how I might be able to help.
Fascinating view on the growing information economy without currency Tom. I don’t see this at odds with a physical economy, both can coexist, and this is probably the easiest way to ease these thoughts into aspects of our society.
We already do so, when we share our thoughts freely. When we altruistically give of ourselves, without any requirement of recompense. Thanks Tom, I had some notion of this before I began the long journey of my first startup last summer, Monetization for Web 2010.
I’m in favor of a “stalactites and stalagmites” approach to alternative currencies.
I understand that many of the community currency initiatives have required initial buy-in by a critical mass of users. This takes time, big-picture planning and implementation.
A more direct “bottom up” option is to start with individual action, in the form of unilateral “gift certificates” of donated time or goods for good causes of one’s choosing.
As you’ll see in the summary (and the image of a 19th century example) in the link below, these offers can be as general or targeted as one wishes:
http://buildership.ning.com/profiles/blogs/how-ningintegrated-personal
Over time, self-organizing networks could evolve to support multiparty transactions, along the lines discussed in the above link.
We’d love to have ideas/inputs on how to develop a free and open source solution useful to ideal-animated communities (virtual and actual) for this.
Best,
Mark
@openworld
Very nice write up Venessa & great feedback thus far! Very interesting to hear everyone’s thoughts on this issue.
My thoughts:
I agree with Doug Rushkoff. We need to utilize non scarce currency to effectively price and therefore compensate appropriately non scarce commodities like information. This will empower the anarconomy to take the next step in its evolution by compensating open source and original content contributors. This compensation will have two effects:
1. Decrease traditional/scarce income pressures for contributors
2. Companies that want to be competitive in this new landscape will start compensating for contribution (instead of by the hour or salary) in both traditional and open money.
The implications of this on both the future of technological development and the way we live our lives is enormous.
Tom – while I’d like to agree with you, I simply cannot see how we get from here to there. I’d like to hear your thoughts on how this can occur.
@Matt – “Tom – while I’d like to agree with you, I simply cannot see how we get from here to there. I’d like to hear your thoughts on how this can occur.”
I don’t have any instant answers either. But until we’ve done the work to find out a lot more about what ‘there’ really looks like, how the heck can we usefully build a ‘roadmap’ from ‘here’ to ‘there’? 🙂
(Not that this is unusual in other contexts either, such as in business: I come across would-be enterprise-architects all the time who try to do this and then wonder why it doesn’t work… 😐 )
Some suggestions for places to look:
– successful families
– successful work-teams
– ‘markets as conversations’ and ‘markets as relationships’ where mutual value is created but monetary transactions are not involved
– tribal societies, especially those that use explicit responsibility-based economies (e.g. Aus Aboriginal concept of ‘singing the site’ as a demonstration of personal responsibility for place)
– also any contexts where intrusion of possessionist concepts causes economic breakdown (e.g. families or work-teams that become dysfunctional)
There’s nothing new or different about this: much of it is perfectly routine requirements-analysis, for use in setup for Agile-style development. Just that very few folks seems to have bothered to do much thinking about it since the days of the Diggers and the like, nearly four centuries ago. (I wouldn’t even include Marx in that list – he wanted to changed who did the ‘possessing’ but not possession itself. Some interesting folks in the business space, though, such as Charles Handy and the ‘Tomorrow’s Company’ crew. But I digress.) Kinda worrying, really… 😦 🙂
Tom,
I think you are missing some things about the nature of the new money. What you say about not needing currencies is true for the examples you mention, because those situations involve small groups who can be aware of each other continuously and remember a whole history of past interactions.
Human culture developed systems to support hierarchical organization, writing and later scarce money systems to create pyramidal collective intelligence structures. Rushkoff hints at this by pointing to the rulers of the pyramidal system who stopped the budding local currencies. And Rushkoff also points out that it is hard for us to see we are embedded in a particular system and constrained by its rules, just like a fish doesn’t see or recognize the water, it is just the way the world is.
Many of the comments here are arguing from the old architectures. We don’t have a good feel for how it is to live in a gift economy because we have never experience one. The metaphor of exchange is downplayed, and the idea of giving through being who we are meant to be and trusting that this ethic is infectious so that we will not want for food, shelter and company. This shift is essential to creating abundant social capital, and when we have abundance, getting mine at the expense of growing ours does not seem so attractive.
Also, Nobel prize winner Elinor Ostrum says that when people can see each other and communicate effectively, they can work out any systematic problems. Local users of a resource, for example a fishery, know that their future generations depend on not depleting the fish stocks and work out diverse systems to address their specific issues. Free riders can be shamed into compliance and many already do contribute great works to the commons for recognition and appreciation.
The aims of the metacurrency project take all of this into account and we are developing protocols and systems that will allow great flexibility to local currency designers. We are designing these systems to support “tradable” currencies, but we don’t think these are the most important ones, the ones about appreciation and gratitude are the ones that really help build social capital.
I really recommend that others take a look at Geoff Cheshire’s “Regenerosity” as a currency system that is almost all about gratitude. Currencies don’t have to have rules that mean the bank takes your house when it goes wrong, and that enable rich people to just sit on piles of paper wealth. As Rushkoff tells us so clearly, that system was designed with a different purpose. Even the image of an account like a bucket that give nothing after it is empty is specific to certain kinds of wealth. We need new thinking about money all the way around.
Also, check out Alan Rosenblith’s film, “The Money Fix”. His second film is in the works and will have a lot of material from a metacurrency workshop that took place in January.
The problem with Doug’s analysis is how will he pay for the airplane that carried him to the conference? Again, you can’t just replace the current financial system; people will starve and cities will burn.
There is however, an itsy bitsy flaw in the current financial system that can be corrected if we are clever. We can create a parallel currency that looks like a buck, walks like a buck and quacks like a buck – but is not really a buck.
It needs to be a currency backed by innovation. Remember; innovation and debt represent the exact same thing: FUTURE PRODUCTIVITY. That means that such a currency would be easily converted into and out of dollars. What would you rather trade; an currency backed by innovation or a currency backed by debt?
First, however, we need to redefine innovation as follows: “Innovation is proportional to the rate of change of knowledge”. Then we need to redefine knowledge as follows: “Knowledge is proportional to the rate of change of information”. Then we need to redefine information as follows: “Information the rate of change of data”.
I know this sounds obtuse and there are lots of reasons to disagree with it, but if we can do this, we can build a currency that reflects social priorities over Wall Street priorities. that’s all we really need to accomplish.
is this the general idea behind the Thrust Fund? (http://www.thrustfund.com/)
Thanks, great site. Organizations like Thrust Fund need to exist as an artificial correction to the flaw. Yes, they correct the flaw, but they still need to be propped up with the adage; It takes money to make money (money today to pay for innovation tomorrow).
The reality is that innovation yesterday is responsible for the money that exists today. Or, innovation always precedes economic growth. We are going about the process of globalization as if economic growth can precede innovation. It’s backwards.
A currency backed by innovation would allow innovation bankers to calculate future cash flows associated with predicted innovation rates. They could then cut that cash flow into bonds that they would sell on the open market.
So instead of buying corporate bonds for your 401K, you could buy community innovation bonds to fund social entrepreneurs. They would be diversified for risk and would likely do a whole lot better than 7% S&P 500 returns and employ more people in better jobs.
That infrastructure does not exist, but it could exist very easily….if we are clever.
re local community bonds. Data points suggest it’s moving in that direction: with CDD bonds. the link: http://ilnk.me/1e2a
A snippet:
Fast-growing states like Florida, Colorado and Texas have all adopted legislation allowing the use of “special districts” to help meet the infrastructure needs of residential and industrial growth. In each case, a local unit of government is created that has as its primary purpose the issuance of bonds to fund the roads, water, wastewater plants and other projects needed to build homes, retail centers and industrial parks.
Venessa – Thanks for the pointer.
Took a brief look, and nearly threw up: in economic terms, I don’t think I’ve ever seen anything quite so overtly obscene. In one single web-page it illustrates absolutely every fundamental failure of our current economic models – especially its inability to support purposeful work without entrapping people into (in this case literal) servitude to parasites.
And this is purported to be a ‘good thing’??? Yuck… 😦 😦
First you have to do some work to know about the kinds of wealth that there are. It isn’t clear that innovation is wealth by and for itself. Typically innovation is all about ideas to “make money” and hopelessly trapped in the old money metaphors.
As pointed out in the main article, wealth is not balances in a bank account or stock certificates. Those are only symbols, signs, tokens of wealth. Actual wealth is productive capacity and maybe more importantly in the networked age, it is “expressive capacity”.
New currencies provide for new ways of “speaking wealth”, for putting measures and markers on the creation and flow of social and other forms of wealth tangible or otherwise. These are of the nature of expressive capacity and are wealth in their own right. One of the reasons we can’t just jump right now into the new economy is that we have not yet built this new expressive capacity. All the work represented by the projects linked above are a start, but there is a lot of learning that has to go on first.
It is interesting that nobody is really questioning Doug’s assertions about all the wealth being created in the late middle ages. When people are getting more productive and have a currency system that is wealth generating, of course there is rising general wealth. The endpoint of rising wealth, abundance, should free people from striving after basic needs, but that undoes the control mechanisms, reward and punish, of the pyramidal system.
It isn’t the anarchy of the masses with wealth and freedom that is to be feared, it is the few whose rank is dependent on scarcity and control who will do whatever it takes to maintain that control. They will destroy wealth to do it. They have to, destroying most of something abundant is the only way to create scarcity.
General comment: In addition to Cory Doctorow’s “Down and Out in the Magic Kingdom” (the origin of ‘Whuffie’), another really useful fictional source is Ursula le Guin’s “The Dispossessed” – describes an imaginary anarchist society (‘Anarres’) and contrasts it with a capitalist culture (‘A-Io’ – clearly based on 1970s USA) and, briefly, a communist one (‘Thu’ – ditto 1970s Soviet Union). The subtitle “an ambiguous utopia” should make it clear that there’s a lot of thought gone into how a true responsibility-based culture would work, and what structural and other problems it would face. Strongly recommended.
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The currency of which we speak is right under our noses. I’ll describe it but first let me make the point that we cannot simply scrap the current financial system – people would starve and cities would burn. There is however, one tiny little flaw in market economics that is extremely easy to correct such that social priorities may take priority over Wall Street priorities.
This can happen if, and only if, we are very clever and don’t get caught up in philosophical differences. There is a science to this and it is rigorous, we’ll need to follow a specific path.
Money does not represent gold, silver, or oil – it represents human productivity. Where money is divorced from human productivity, economies fail. We’ve seen this with corruption, CDOs, and totalitarian regimes.
In the US, Money is now backed by debt – that is, the promise of FUTURE human productivity. Not quite a divorce but getting there. Innovation is also a promise of future productivity – invent a light bulb today and future generations can produce stuff at night.
As such, a currency backed by innovation and a currency backed by debt represent the exact same quantity – future productivity. Therefore, two such currencies could be easily converted. A reboot of the economy would be simple and painless. Again, we need to be really clever about how we do this but the window of opportunity is cracking open.
Yes there is a language for all this; it is the language of finance, economics, Calculus, Prob/stats, AND social media, etc. We are doing the bast we can at putting this into simpler language – but we can only go so far. I know it’s tough to read our research but please try. Also we are looking for people to translate it into easy speak. Let me know if this is interesting to you. Ican put together a on-line presentation if interested.
It is the singular objective of the Ingenesist Project to communicate how we can correct this simple anomaly of Market Economics.
ingenesist,
I took a look at the site and sent a couple of tweets your way. For whatever it’s worth, I think you’re exactly on the right track. Please @ or DM to continue the convo. I’m particularly interested in how to take the ideas your team has developed to the education reorganization that is now going on in the States. Short story is that I think it’s the “low hanging fruit” and the time is precisely now, while the Obama education initiatives are working there way through the system.
Interesting topic & convo.
@Tom Graves – I agree with some of your concepts (the need to have more trust) and disagree with some (i.e the ‘failed societies’ part – linking currency usage to failed socities is a leap of faith). More importantly, even if I agree with everything you said I don’t think in reality we are going to be rid of “currency” in our lifetime or even the next (for one, there is the huge challenge of how you are going to address the existing “rich and famous” folks who will not be too willing to give up their life of luxury just to make this a better world). Keep in mind that for everything we propose (even the rules of “possession”), we also need to have a method to address those who currently are at top (folks who already have all the land, riches, and anything else we can dream of – as those folks still have the lobbying power to influence the direction that our society takes; not to mention the uproar from the various currency rich folks who are intellectually below the poverty line). Else, any new idea will remain theoretical and academic or at best isolated to pockets of population using it and never become truly global in nature.
@Venessa – I really like the direction of this discussion and the need to move beyond physical currencies. I am not (yet) totally bought on the examples 🙂 – I feel whether it is Timebanking, ITEX dollars, or Quids – folks can still game the system and the last two are not much different from the physical system we have today (only in how you obtain it). Speaking my thoughts here – I think it would be good to have an intermediate stage where the current currencies can co-exist with the new digital/social tenders while we create the system. Now what those new digital/social tenders should be, well, that is an all important question but I would say one of the components have to be ‘relative value’. And the other important question is how do we expand and accumulate these tenders.
Sorry – I know I have more questions and cynical assessment than solutions, but this discussion has provided a good food for thought – yet to be digested.
Ned – many thanks.
@Ned – “linking currency usage to failed societies is a leap of faith”.
Not really:
– currency is a contract
– contract in effect represents lack of trust between individuals
– lack of trust represents failure within society
– money represents trust placed in institutions rather than individuals
– money-based economies (especially combined with monetarist politics) represent structural failure of trust throughout the society
– (and failure of money-system represents collapse of trust in institutions – i.e. really serious social failure)
Where’s the ‘leap of faith’ there? – the sequence is anchored every step of the way, surely?
@Ned – “I don’t think in reality we are going to be rid of “currency” in our lifetime or even the next”
I have no idea if/when we will be rid of currency. All I’m concerned about is that we get our thinking straight before we rush in the replicate the same mistakes that led to this current mess. ‘Economics’ literally means ‘the management of the household’: at present most people here are talking about money as if it’s the only factor in economics, when any parent will tell you that money is the easy part of managing a household. 😐 Any alternate currency is merely an intermediate step to managing just one part of economics: before we even take a look at that, we need to get clear about what a real economics would look like, because the present one sure as heck ain’t working, and we know it… 😦
@Ned – “rich and famous … folks already at top” etc.
Yup. Well aware of that one. Every change has its resisters (though if we get our thinking/etc right, actually it’s not as big a concern as you seem to think it is). What I’m more concerned about at present is that if we don’t think about this right now, we won’t have time to think about it when the change is forced upon us – and given the environmental and other problems we’re facing, that could literally be any day now. (Yes, it’s perhaps more likely to be decades, but not many of them: to give just one factor, our present consumption-based ‘economics’ already requires at least six planets, and we only have one – we’s gonna go right over that cliff real hard real soon if we don’t change direction, and the only way we change direction is if we re-think the fundamentals of our economics, real serious, right now. Hence this discussion, yes?)
@Ned – “I think it would be good to have an intermediate stage where the current currencies can co-exist with the new digital/social tenders while we create the system”
Yup. In enterprise-architecture parlance that’s part of what’s called a ‘roadmap’ – “how to get from here to there”. Yet an alternate currency is, as you say, an intermediate stage – but to where? Right now it feels like I’m to be the only person here who’s asking serious questions about what ‘there’ looks like – why the heck is everyone else so keen to get lost in the side-alleys? To me this makes no sense at all… 😦
Once again, a currency represents a failure of trust, such that the society’s economics actually embodies and creates lack of trust. Any reference to an alternate currency merely reinforces that structural failure. Is this a wise move right now? Wouldn’t we be better off trying to strengthen trust instead?
Tom – thanks for clarifying your point. You said “currency represents a failure of trust”, however, how is real “trust” possible at scale? Trust is something earned on a personal level and the same level of trust we feel on a personal level could never be replicated on an anonymous/reputational/algorithmic level. Humans are only capable of maintaining ~150-200 relationships where trust can play a role in that relationship. This therefore sets a very finite limit on the commodity transfer in the future or a very serious degradation to trust as we now know it. Please enlighten me if you have another way of scaling this system.
Mark – I make no pretence to have many or even any of ‘the answers’ here – right now I’d be happy if we can get close to the right questions. 🙂
How does trust scale? From an individual point-to-point perspective, it doesn’t – that c.150-200 limit is real, and well-documented. Beyond that limit, we typically rely on reputation – i.e. a network-effect, rather than a point-to-point effect – as a direct proxy for trust (hence the example of ‘Whuffie’). That then enables ‘pre-trust’ sufficient to allow ‘pre-respect’ sufficient to allow preliminary attention, and so on through the market-sequence.
For a currency-model, we typically rely on some kind of institution as a common ‘trusted intermediary’. But if the institution itself loses societal trust – which is essentially the situation we have at present with the banks (and, to a lesser extent, with government in general) – we then have a serious societal problem, because the main mechanism we have for scaling trust won’t work. Historically, that’s the kind of problem that causes complete societal collapse.
The alternative is to look much more closely at how trust (and its proxy as reputation) is managed and transferred as a network-effect via channels other than through explicit institutions. That’s what I would suggest we most need to look at right now, because that’s what any ‘alternative currency’ would need to depend on. There’s no point in trying to create any ‘alternative currency’ without any understanding of its foundations, surely?
We also need a much better understanding of how trust and resource-management and the like play out over longer periods of time, and over a broader scale: most of our existing mechanisms are short-term point-to-point, and don’t really explore or explain how those larger-scale ‘transactions’ actually balance out.
One of the reasons for optimism is that we do now have a much better grasp of the science and sociology of network-effects than, say, even a decade or two ago. And with the spread of the internet and other shared-telecoms networks (still not yet complete, but a lot more widespread than you might think – e.g. use of mobile-phones for micro-banking in Africa), we have the ability to create test-bed experiments to gain better understanding of the networks’ social-complexity. That means we have a much better chance to create something that actually works. 🙂 But again, a ‘currency’ needs to be a fair ways down the track from that: and we’ll also need some solid means to resolve the economic needs of “the parts that other economics cannot reach” 🙂 – otherwise we’ll only be replicating in new forms the problems we already have.
Certainly reputation will be a factor in the future of money. My point here is that there will need to be some sort of accounting mechanism outside of reputation and that’s where currency comes in. If its all simply reputation, then that opens the system to serious abuse and therefore will never take off. Cultural change doesn’t happen in leaps, it happens in increments. If we could simply press the reset button on culture and programming, then maybe a purely reputation based system could work, but unless we uncover that magic button hidden somewhere, I just don’t see it happening.
Entirely agree, if we were to be talking about ‘accounting systems’.
But that presumes that we retain the existing system almost intact, with all its fundamental flaws and failures. The whole point of a responsibility-based economy is that we bypass the need for accounting – and we need to be able to scrap it, because:
a) that’s where the system gets gamed
b) accounting is the exact antithesis of trust
c) that’s where most of the waste occurs (a quick back-of-the-napkin calculation suggests something like a third of all ‘work’ in our culture is tied up partially or wholly with keeping track of money), and
d) accounting can only keep track of the parts that can be counted, which is only a minute part of the actual economy
To be able to reach that point, we first need to understand how a functional economy actually works, without any presumptions about currencies that both presume and guarantee that it does not and cannot work.
For my money ( 🙂 ), the future of money isn’t in money at all: it’s in pre-schools – the place where people first learn about responsibility and sharing, and how actions/inactions have complex consequences. But that’s another story. Probably. 🙂
But to come back to the point, can we first please get our thinking straight on the ‘upstream’ requirements, without reflexively rushing off into the implementation-details of something that probably won’t be able to fit any of those requirements at all?
Where the vetting mechanism fails, markets fail. We saw this with Enron, Dot.Com, FAA, Federal reserve, Wall Street, etc. On the other hand, where vetting mechanisms are effective, markets are efficient. Ebay, Craigslist, Yelp, Social Media owe their existence to their respective vetting mechanisms.
At Ingenesist, we discuss a concept called the “Last Mile of Social Media”. We all know that Facebook and Twitter keep us in touch with people all over the world. However, the real tangible value of social media is in the last mile, that is the localized community, the neighborhood, the schools, and institutions. This is where the rubber meets the road, This is where social priorities can challenge Wall Street priorities.
And in the unfortunate event that a financial reboot comes to pass, these are the assets that will be most valuable to you. That is your accounting system – from which the term “accountability” comes from.
Thanks for “Last Mile of Social Media. FYI so then I tweeted:
The Last Mile of Social Media http://ilnk.me/1e23 <- MUST read to see going forward value of #Print via @Ingenesist
After 30 years producing and selling print, then 7 years teaching designers how to produce print, "the last mile" is a precise way to capture what I've been trying to say.
Thanks Michael; Google it and you should find some of my articles on the subject
@Tom I am not sure if this is the right platform for our discussion. Each of the points you mention (from ‘currency is a contract’ to ‘structural failure of trust throughout the society’) is a lengthy debatable topic by itself. I respect your views and opinions on this – and just so that you know my “leap of faith” statement was alluding to the difference between correlation and causality. It is like some of the logic problems we have done as children – If A—>B and B—>C, then it would appear to be that A—>C; but in real life there are scores of influencing and moderating variables affecting a particular outcome and the point I was trying to make was that I don’t think the “failure of the society” can be attributed to currency. In effect (and I know I am getting into a philosophical debate here), your statement implies that if a society does not use currency, they would be successful- which is not true.
As to the different views expressed, I don’t think me or some of the other folks are “keen on getting lost in the side-alleys” – it is more about being pragmatic. If the goal of this platform is to encourage free-thinking ideas from a theoretical and academic perspective, then we are doing okay as I see some excellent diversity of inputs here. However, if the goal is to come out with ideas that can actually be executed on, then we are going down the wrong path. As I have said before, realistically we just cannot rip off the “currency-based” economic and financial system that is in place and replace that with an utopian model. The way I look at it, the “alternative currency” we are talking about is not an intermediate stage but more like a final-stage for phase-1. One thing I do agree is that we have to take a broader view of this whole currency aspect — else we will end up with a cluster of alternative-currency models with not enough momentum to push forward any one of them. Also, I have been through many change-management situations and can tell you that if a person or group is not ready for a change then your efforts are wasted – you can take the most logical, rational, and sanest idea and beat them over their head and they will still stubbornly refuse to accept, adapt, and change. So if we really want success in this area (alternative currency), we have to scale back our scope and take small steps in the right direction — and I don’t think of these as side-alleys 🙂
Ned – Agreed, this is a conversation that needs much more depth, and this isn’t the right type of platform for it.
To me virtually all of this discussion so far is ‘blind alleys’: for example, to date I’ve only seen one post that acknowledges network-effects – which are central to any economy, exactly as per the previous Whuffie thread – and none have tackled the ‘excluded-actor’ problem (children, parents, elderly etc).
All of the rest is exactly like the mess that we see in IT-development every day: partial, incomplete and (bluntly) half-assed would-be ‘solutions’ rushing around trying to find any ‘problem’ that would fit. I wouldn’t call that ‘pragmatic’ at all – would you? You say you come from a change-management background: would you let anyone loose on a real-world project in this way? I would desperately hope that the answer is ‘No’…
Again taking a leaf from the IT change-management book, yes, the matter is urgent, so yes, we do need to tackle this like an Agile methodology, with multiple experiments and explorations, and an expectation that we’ll have plenty of ‘failures’ before we find what works. But the key point about Agile is that it isn’t a random free-for-all: to make it work, you need more understanding of and engagement with the requirements, and a much more solid grasp of the context’s architectures. Do you see real evidence of any of that happening here? I don’t: I see little more than a ‘discipline-free zone’, cluttered with what Australians would call ‘headless chooks’ milling around at random and running off down blind-alleys, going nowhere of any use at all.
The only way we’re going to get somewhere useful is to start off with some serious thinking about what an economy actually is. It’s only after we’ve done that that we might – might – have some use for some kind of ‘currency’. But until then, everything else here looks exactly like pre-schoolers’ games with play-money in kindergarten…
I know I’m being somewhat rude here to a lot of well-intentioned folks, but what’s (not) happening here is so amazingly frustrating and pointless that it’s very difficult to be otherwise… Oh well. 😦
@Tom – You mention the agile methodologies in a couple of places – I am familiar with the concept and have worked with it too for product launches. However, the fundamental concept of Agile is (a) take baby steps, (b) do frequent iterations, (c) be disciplined, adaptive, and collaborative (making it very simple). My previous posts are suggesting exactly this – let us not dream of the next BIG IDEAL concept but instead scope it down to manageable chunks which can be ‘tested’ and ‘released’ for the society to adapt. One thing I agree with you is that we shouldn’t be coming out with a solution and then looking for a problem to solve with it; we should have a through grasp of where we want headed (in the immediate next phase) before we start tinkering for solutions. In terms of your comment about solutions being half-assed; well, I guess that would depend on what angle you are looking at it from (pun intended).
@Ned – Your description of Agile is correct except for one key point: an understanding of the aims of the overall architecture is essential, to ensure that each iteration adds something to the whole. Otherwise what we get is experiments at random, futzing-about with whatever idea comes up – always interesting, but possibly worse-than-useless in real terms – which in essence is what we’re seeing with all these ‘alternative currencies’.
An architecture for Agile is not about ‘Big Requirements Up Front’, but about getting a clear understanding of the overall direction that we need to go, so that each experiment has something that it can be compared against. In other words, identify and describe the core questions before rushing off to find ‘the answer’. Do you see much evidence of that essential kind of thinking happening here? I don’t – that’s what I’m worried about.
Whatever currency is, it is certainly not a contract. It is more of a social convention. Contracts often involve money awards and damages, but the money is not the contract.
There are some legalisms of “legal tender”, but there is no requirement that a contract be written in terms of US$ or any other fiat currency. Courts in the US may make judgments that are denominated in currency even without any pre-standing contract.
I am currently doing some systems work for an “issued currency” that is issued by the organization that the work supports (http://thetransitioner.org), and we are still building the currency systems that will support these currencies (http://flowplace.org). This is a tradable currency denominated in fiat currency units (Euros or Dollars), but there is no contracts involved, just the participants trading, working for and issuing these “WEs” as we call them.
The main problem that can surface with this type of issued currency is that sometimes organizations want to issue it and not redeem it for value. This is not to say that The Transitioner agrees to redeem my WEs if and when I present then, but rather that it produces value (workshops, research, community projects) which can be acknowledged with WEs. So if I organize a Collective Wisdom seminar in my community and want to pay for several colleagues to participate in this seminar, I have a lot of WEs and can use as many as they will take (one principle in this is that The Transitioner may set a minimum in fiat currencies for things like plane fares, food and paying for a venue, etc.
And I don’t have to redeem my WEs directly either, once I have some, I can pay some out to acknowledge work or support given to me, and those WEs flow around in the system like a fluid returning to The Transitioner from another direction altogether.
If I’ve annoyed a few people, my apologies, yet we do need to get back to the root-question, which is not solely about currency:
@Venessa – “think about a truly new economy – what is the mechanism for us to exchange value?”
I would actually go back one step, and say that if ‘economy’ is literally ‘the management of the household’, then an ‘economy’ at a societal scale is how a culture manages, shares and makes best use of all of its available resources. ‘Exchange of value’ is only one part of that: we need a means to manage those resources, and the exploitation and usage of those resources, over societal timescales which should typically be measured in centuries at least.
So: step 1: what are the resources in scope? We could summarise these in terms of four distinct dimensions:
– physical: independent-existence, alienable, transferable, often destructively consumed
– conceptual: semi-independent existence, non-alienable, transferable, non-destructive consumption
– relational: existence is between two entities, non-alienable, non-transferable
– aspirational: existence is from an entity to a conceptualised ‘Other’, non-alienable, non-transferable
Many (most?) real-world entities combine these dimensions: e.g. book = physical+conceptual, shared narrative-knowledge = conceptual+relational, etc. A society’s resource include not just physical ‘things’, but also many other entities such as ideas, social-networks, beauty, art, hope and faith.
Because of the fundamental differences between dimensions, a ‘currency’ will typically only work well with one dimension. Trying to use a currency in another dimension than that for which it was designed causes serious problems. (I assume that’s obvious? – if not, I’ll give examples in a separate post.) Monetary currencies fit well with physical (alienable) objects, but don’t fit well with non-alienable entities; ‘time’-type currencies don’t work well with physical objects, especially manufactured objects that accumulate embedded-time; and so on. All currencies tend to create individual-focussed ‘double-entry life-keeping’, which blocks resource-flows at a societal scale, especially over longer timescales.
Step 2: How does the economy serve the needs of everyone in the society? For example, several groups who are excluded from the money-economy:
– children: in general children do not have abilities sufficient to take part in cultural effort/resource exchanges; hence someone else – typically parents – must act as their proxy
– parents: parents cannot take much part in cultural effort/resource exchanges because much or most of their effort is taken up in looking after children
– elderly: the elderly typically have reduced ability to take part in cultural effort/resource exchanges – yet this occurs inversely with their likely resource-needs
– carers: carers looking after elderly or disabled cannot take much part in cultural effort/resource exchanges for much the same reasons as parents
In effect, children, childrearing adults (mainly women), the elderly or disabled, and carers (again mostly women) are excluded from ‘money-type’ exchanges by the nature of who they are and/or what they do. However, they are real members of the society, and cannot and must not be excluded from the society’s resource-management and resource-sharing. This is a fundamental problem that no currency-model as yet has addressed.
That’s why I insist that we need to go much further back into understanding what an economy actually is and how it works, before we start any discussion about ‘alternative’ currencies.
At the very least, we need a clear model of:
– what parts of the economy the currency will address
– what parts of the economy the currency will not address
– a clear plan or description of how overall economy will work with the currency in place, including how the parts not covered by the currency will be managed
If we can’t do that, we’ll not only be wasting our time here, we’ll actually be making things even worse than they are at present.
Tom,
I’m all for efforts to explore root causes.
But I guess that I draw much different conclusions that you do from the following:
>> – contract in effect represents lack of trust between individuals
>>- lack of trust represents failure within society
If this “failure” a wakeup call for the whole network/society to understand and fix? If so, I think you’re going off on a path that shreds trust in practice.
Why?
Centralizing – rather than dispersing – the decisions on trust makes societies vulnerable to huge downsides.
The first problem arises when (the not-yet-trusting) individuals in the society begin viewing others in a new light. No longer are they seen primarily as part of an agora that offers paths to earn trust through mutually rewarding P2P exchanges.
Now, individuals have to worry that others in the society are out individually – or on an organized basis – to turn your process for diagnosing and “fixing” trust problems to private advantage.
This isn’t an idle worry. As societies centralize power in ways that can steer resource flows (in practice, if not via declared intent) to private advantage, power struggles happen. And the more that resources fall under political sway, the more rewards are gained by the most successful factions in the power struggles at the expense of others.
I don’t know any more effective way to shred trust than for societies to take an organic/integralist/corporatist path to find and fix trust problems.
The other path, as Oakeshott, Hayek, Toqueville, Rand and many others have well recognized, is to create open systems in which people can make voluntary exchanges of all kinds (contractual and noncontractual) in pursuit of their aims, provided that they do not transgress against the persons or property of others.
This is the bottom-up path to trustbuilding and social capital creation in societies. It is a path (Ithink) deserving of far more trust than the one that Rousseaus and Robespierres throughout the ages have tried to get us to take.
Best,
Mark
@openworld
@Mark – “Centralizing – rather than dispersing – the decisions on trust makes societies vulnerable to huge downsides.”
Agree entirely, but I have no idea how you got there from anything that I’ve said above, because that isn’t what I’m saying at all.
If we view reputation/trust as a network-effect, then centralising ‘trust’ – as in a bank or similar institution – changes it from a network to a hierarchy. Which shreds the network-advantages, and creates the system-gaming problems that are all too obvious today. (In effect a centralising institution is an extreme example of ‘gaming’ a mesh-network, acting as a rent-seeking between-taker’ – the literal translation of ‘entrepreneur’.)
The way we make a network-effect work is by protecting the openness and transparency of the network – again, the exact antithesis of the ‘anti-transparency’ processes on which Wall Street currently depends. It also protects the ‘bottom-up trustbuilding processes’ that you rightly say this will need.
I suspect we’re talking somewhat at cross-purposes here, and unfortunately this is not a good medium for disentangling that type of confusion. But I’ll still stand by what I said earlier: in a strict literal sense, a contract represents a lack of trust, and lack of trust (more specifically, inappropriate management of trust, as ‘response-ability’) represents societal failure. The only strategy that works is personal responsibility linked to a solid awareness of mutual responsibility: anything else will guarantee ineffectiveness and resource-failure in the longer-term.
Tom,
>>”I have no idea how you got there [seeing calls for a centralized response to trust problems] from anything that I’ve said…”
You’ve earlier urged society to set up –
>>a clear plan or description of how overall economy will work with the currency in place, including how the parts not covered by the currency will be managed
Managed by whom?
And by ending a (possession-grounded) “rights” system in favor of one based on responsibilities, you open the door to scenarios where society will force people to move from their lands as and when their occupancy deemed “irresponsible.”
How else to interpret this statement?
>>How do you demonstrate that you are being responsible for it [the land you are on], about it, respecting its present, its past, its future? Would someone else be better at that than you? If so, is it time to move on? If it’s time to move on anyway, how do you find someone else to take on that responsibility? Those are typical ‘transactions’ in a responsibility-based economy.
And how will you achieve the following in a non-hierarchical way, to avoid the gaming problems that arise when societies set up centralized regulation?
>>we [society] need a means to manage those resources, and the exploitation and usage of those resources, over societal timescales which should typically be measured in centuries at least.
Hope this makes clear why I interpreted your earlier posts as calling not for a network-based system of horizontal relationships and agreements, but a hierarchical, non-contractual (and thus unaccountable?) system of power that would erode trust.
Best,
Mark
Hmm. Oops: created lots of room for misunderstandings there, haven’t I? 😦
This is not a good medium for this kind of detail, given that half the terms mean different things to different people, and all squeezed into narrower and narrower columns. 🙂 Any suggestions for a more appropriate venue where we can work our way around these kinds of confusions?
(BTW, many thanks to Venessa for triggering and hosting this conversation!)
Tom,
Here’s a suggestion — why not go to Debategraph.org, and create an issues diagram?
Then you could post the link here and on other sites (e.g. http://www.AThousandNations.com) that may be interested.
Best,
Mark
@openworld
Mark – debategraph is very pretty, but I fail to see how it helps. What we need here is depth as well as breadth, and debategraph provides only the latter (in a way that actually seems very difficult to follow, but never mind).
Can’t think of other alternatives at present – apologies. (Also must at some point get back to paid-work… and yeah, acutely aware of the irony of that…) Will come back to it when sanity/etc permits.
Mark make a number of very good point, Tom, and I don’t think you have listened to this post deeply enough.
Is it possible that you would reach different conclusions from different assumptions? Trust and sharing are natural and basic to human beings. Sometimes it can be hard to tell because it is suppressed by dominance patterns that are raised to prominence by a social system, hierarchy controlled by scare money and violence, but if you look at altruistic behavior, it is way more important that the “nature red in tooth and claw” advocates would suggest. Cooperation builds wealth, so if there biases toward cooperation are what enable humans to band together into collectives that are more powerful that any individual. This can be broken down by dominance patterns, and those are more in evidence from a long history of control based cultures, but it still survives in the small working group, in families and tribes.
Ken-
Mostly I agree. Using words that are not precisely defined adds to the noise as opposed to clarifying the signal. Here are some of your words that I disagree with :
“in general children do not have abilities sufficient to take part in cultural effort/resource exchanges”
“‘time’-type currencies don’t work well with physical objects, ”
“the elderly typically have reduced ability to take part in cultural effort/resource exchanges ”
This thread is not optimized for this convo. You can choose the venue, but this is a convo I would welcome.
Thanks – would indeed welcome that convo.
As per my reply to Mark above, any suggestions for a more appropriate venue?
I think Tom and I had a pretty good experience on twitter. If you want to try there, just @ToughLoveforX.
I’d like to ignite discussion from a different angle.
Clearly our world view is changing. Although little visible in the main stream media, in every corner of society, from big enterprises to individuals, artists to workers, thinkers to doers (all people after all), we can observe a change of mindset.
Maybe it’s just my (and of some other’s) wish-thinking, but aren’t we moving towards:
– collaboration
– sharing
– open source
– collective intelligence
etc.
Let me summarize it as the P2P-society for now, for later reference.
Language is powerful and molds our thinking. “Alternative currencies”, “Currencies”, even “Social capital” (although I absolutely endorse your view at it, @Vanessa), reflect the still prevalent mechanistic, monetary world view.
What if we try to think of an economy apt for a P2P society? How would we work together, how do we exchange, interact?
My take is that if we take collaboration and sharing seriously, then I agree with Tom that “possession” does not exist. I can’t possess a resource, because it’s shared.
Thus, such an economy could be based on sharing. That is radical, if we think about it. It will have considerable consequences.
To not only toss out words, but also some suggestions (I apologize, my thinking is very much immature and evolving yet, and a patchwork of ideas by many others), I see:
– Systems (online and physical communities) where individuals join and earn RIGHTS to access the resources in that system through contribution. Contribution is valued by the other members of that system through reputation. (E.g. my work is being “rated” by other members).
– Needs are collaboratively weighted by the community, and individuals work to fulfill those needs. If a community needs an organic gardener, that work will be highly valued; if a community needs a programmer, accordingly.
– We take part in many communities.
– Exchange between systems happens through some global exchange facilitator, like the TERRA.
Another example: imagine a global work group implementing some kind of work. Every contribution earns some right on the produce of that work (e.g. kWh, hours, could be even hard currency in transition times). Refer to Chris Cook’s work on this.
This view would need some fresh ideas about credit. How do we encourage and make possible innovation? How do we make new things happen? I agree with ingenesist, money is human productivity. We can create whatever we want through our imagination and work.
Not finished recipes, just thoughts.
Fabio – great points. 🙂
Except there’s just one thing:
“Systems (online and physical communities) where individuals join and earn RIGHTS to access the resources in that system through contribution. ”
(Takes deep breath…) There are no rights. (Yup, I said it…) Rights are a fiction: they have no reality, anywhere, in any form. If you try to build anything based on a notion of rights, it will fail. Period. End of story.
(Well aware that that’s utter anathema to many people, especially in the US, but just bear with me for a moment, okay?)
The notion of ‘rights’ tells us nothing whatsoever about how to achieve those ‘rights’, or how to deal with the unintended consequences of those ‘rights’. (“Right to bear arms”, anyone? Firearms death-rate literally hundreds of times higher than any other ‘civilised’ nation?) In reality, what we think of as ‘rights’ are actually the desired-outcome of interlocking mutual responsibilities. If we start from the concept of ‘rights’, the invariable result is a belief in ‘entitlement’ to those purported ‘rights’ – which guarantees failure. Instead, we must turn it round, and always start from the mutual responsibilities – not the rights.
So in your example, what are the responsibilities? (It’s often easier to see if you re-rame it as ‘response-abilities’.) What are the mutualities, checks, balances and appropriacies? How do the responsibilities interlock – such as via network-effects – to create the desired-outcome? What happens when response-ability is low, or when it fails? What can be done to help increase response-ability amongst the various actors? What forms of monitoring and governance will be needed?
It’s okay to use the concept of ‘rights’ only as shorthand for ‘desired-outcome’ – but that is literally all that it can and should be used for. Nothing else. At all. Ever. Otherwise you guarantee failure.
(Yup, I’m well aware what that means for a lot of cultural commitments and cultural beliefs, especially in the US. My apologies to be the bearer of bad news, but that great gift to the world is what will also destroy us all unless we find some way to put the genie back in the bottle. That’s real, solid, concrete fact: we can’t afford to ignore that fact any longer. I’m not a US citizen, so I can’t help you much there: you’ll have to find your own way round it, I guess. Sorry. 😦 )
Tom,
If there are no rights, how does one protect the powerless? The big deal to me about America is the fierce protection of minority rights. Not always evident, but it’s at the base of our social contract.
@Michael – “If there are no rights, how does one protect the powerless?”
By focussing on mutual, interlocking responsibilities.
@Michael – “The big deal to me about America is the fierce protection of minority rights.”
Yup. And the point is that you get there by focussing on the mutualness of responsibilities.
@Michael – “Not always evident, but it’s at the base of our social contract.”
Yup, that’s one of the great things about the US. Except it’s not a contract – it’s a recognition of mutual, interlocking responsibilities.
You don’t need to introduce ‘rights’ anywhere into this, other than as a possibly-misleading shorthand for ‘desirable-outcome’. The moment we introduce the ‘rights’-discourse, it fails. ‘Rights’ don’t work, responsibilities do. So focus on the real responsibilities as the way to reach the otherwise-fictional ‘rights’.
@Tom
Yes, But power naturally moves to extend it’s power. No blame. Just the way it is and has always been.
“Except it’s not a contract – it’s a recognition of mutual, interlocking responsibilities.”
It is based on mutual, interlocking responsibilities. But contracts are precisely the enablers of the disincentives to power. Currency is a contract in the sense that one can trust, because it is enforced by the power of the state. my POV – contracts – are what enables the creation of social capital.
Michael – Where is ‘the social contract’? Who are the signatories? Did you sign it?
Yeah, right: it doesn’t exist, as such. But you’re well aware of the the implied responsibilities in that imaginary ‘contract’. And you commit to it because you recognise the mutuality of those responsibilities – even though it’s your nominal ‘right’ to ignore them – because you know that it can’t work unless you do acknowledge those responsibilities.
So start with the responsibilities: not with the ‘rights’ – or the money! 🙂
Just a quick word on how to get there:
IF this is what we are evolving to: a shared, collaborative, collective intelligence society, then your @Vanessa worries (and mine and of most others) are futile.
Because we will just get there, eventually. Proof enough is that we are writing about here and the countless projects and initiatives going on worldwide. Emergence, after all…
Yup. Except that conversations like these are part of that process. If we don’t engage in them, the change doesn’t happen. Which would indeed be futile. Which is why we’re doing this. Which is how emergence works. Kinda circular, but there ’tis. 🙂
My $.02 No doubt to me that the radical change is happening now. Financial meltdown is only the most visible evidence. Frankly, I think the notion that we have the power to create change is hubris.
But, the trick is to help in whatever we can to manage that change to minimize the risks. eg. French revolution was going to happen. It got out of control. Capitalist financial revolutions continue to happen. In the last 20 years, they’ve gotten out of control. Growth naturally happens. But so does Cancer. The problem is trying to channel normal evolutionary growth to minimize unintended consequences.
I did a series on the future of money last year: http://drp.ly/zpbdC
Extract from the conclusions:
“I have talked to futurists, scifi writers, artists, and all manner of folks deeply involved in looking at money, and in the final analysis, money looks like a constant, not a variable.
There have been some very interesting advances in economic exchange, especially among the unbanked, with the proliferation of low-cost networks, like cell phones. In particular, the possible uses of cell minutes as a alt-cash is promising. Cell minutes can be transferred from one party to another simply by passing along codes: no physical exchange needs to happen, and the codes never have to be on your person. It makes them hard to steal, hard to track, hard to tax.
But the anonymity and trust associated with most fiat currencies make them very resistant to being displaced.
[…]
So I give up on the search for an abracadabra coming from future forms of cash. It is up to us to redistribute value and exchange, to decide which parts of our world should be outside of economics and which should be in.?”
@Stowe,
Not to clog the thread, but from my POV “in the final analysis, money looks like a constant, not a variable.” is not correct.
Ditto to Michael’s comment here. If we use a depth-analysis, it’s clear that ‘money’ is not merely a ‘variable’, it’s a dangerous irrelevance.
i don’t know if this topic is just a fluke, or if this blog is evolving into being a place where people really want to engage in intelligent discourse about things that matter, and carry on the conversation to more depth and action.
if so, i’d like to ask if anyone has suggestions of what i could do to help. would adding a forum to the site be helpful? a wiki? or any other suggests of something that could help this to build out further?
– venessa
@openworld just made this suggestion:
Here’s a suggestion — why not go to Debategraph.org, and create an issues diagram?
Then you could post the link here and on other sites (e.g. http://www.AThousandNations.com) that may be interested.
Apologies for the overlap w/earlier Tweets, but here are features I’ve love to see —
1. Debategraph issues diagram (overview of key issues the blog and forums are exploring)
2. Mindmeister templates (based on PKM or other categories) for people to start creating and sharing profiles
3. Pledgebank.org postings to raise $/volunteer time for open source tools you’d like to see developed
4. A (curated) clearinghouse for microjobs to enhance the EBD commons (tagging Tweet archives, creating Debategraphs of convos, etc) for students and volunteers around the world to do as work-study projects.
It would be cool to see a feedback/karma point/socnet currency could be launched in tandem with$ 4) above, to help incomers build reputations by enriching the commons.
And later – Innocentive or XPrize contests for socent breakthroughs?
Best,
Mark
@openworld
Best,
Mark
that all sounds great. if someone wants to take iniative to set any of that up, i’ll integrate it here so this site can be a resource center for all those things.
If we could collaborate as a team of interested parties then the “knowledge assets” of the team could be applied to specific task to move this dialog forward with a defined plan of “action”.
Before we run and set up a community maybe we ought to spend time and effort defining its purpose
With purpose we could get definitions of related intentions around the purpose
With defined purpose and intentions we could then ask for “knowledge contributions” around each intention
Once the contributions get added then we could ctaegorize said contributions around intentions
Desing the site functions and features ought to be done around purpose and intents. Just a suggestion.
What would be the mission?
What would be possible sequential actions?
Would the mission and actions move towards the purpose?
Could the community come to “agreements?” and if so on what?
How would the community be used to create value for others?
What would the “knowledge tree” look like that matches the purpose and intentions?
Just some stupid questions that we may want to consider answering before we simply launch yet another community of “conversations” that may end up going nowhere. Someone once said “begin with an end in mind and discover what the real end ought to be during the journey”. This journey will take time, attention and contributions. Maybe we ought to consider how to optimize the productivity of the journey so we can reach relevant milestones before we jump to an undefined end.
Please keep in mind I am just another contributor with different perspectives on how efforts ought to be organized and applied to the “production” of something valuable, knowledge. A guy I used to know taught me that “production of anything is a system. Unless you design the system efficiently and effectively all you will produce is wasted effort and cost”. His name was Deming and I had the honor to work with him.
I’ll be happy to give time and effort is this can be a team effort with an agreement on the purpose, the intent and the system design before we start contributing to something undefined. Shoot it down or move it forward 🙂
perhaps people could benefit by channeling this energy to the P2P Foundation – there is a wealth of information already being aggregated there (including pages on open money). I’m glad this blog could be a catalyst to get conversation going, maybe we can keep the ball rolling over there.
there is also a google groups mailing list for metacurrency and open money:
http://groups.google.com/group/metacurrency?pli=1
Jay- i like the idea. Here’s what I would like to do:
What would be the mission?
Help get high school dropout factories in the States fixed faster rather than slower.
What would be possible sequential actions?
Identify the High Schools in poor neighborhoods that work.
Figure out precisely what about their cultures make them work.
Define the underlying principles that can be taken to broken schools
Brainstorm and publicize minimally invasive interventions to improve outcomes.
Would the mission and actions move towards the purpose?
Yes.
Could the community come to “agreements?” and if so on what?
What are the fundamental deployable insights to make drop out factories suck a little less.
How would the community be used to create value for others?
Through example, Social media and create local networks of pockets of social capital to go the last mile.
What would the “knowledge tree” look like that matches the purpose and intentions?
That’s above my experience level for now. If it means the social networks that bring the right knowledge to the right people at the right time, my vote is twitter and whatever other social media tools are available. If it gets down to last mile implementation and mentoring and advising local communites, I vote for basecamp.
For virtual currency: it looks like you have opened up a channel that was previously compressed in the comments section of your blog 😀
From my perspective, there should be a plurality of choices and approaches for currency, including not using currency at all, but perhaps instead using systems that simply track flows of resources between participants in systems, and transformations of those resources as they flow through networks.
We don’t need one-to-one exchanges in every case (systems like bittorrent confrim this, which does not track one-to-one exchanges of bits, but instead looks at real-time sharing and prioritizes based on system need. The biology of a tree works the same way, sending resources where needed based on current conditions).
I think P2P Foundation would gladly welcome discussion at http://p2pfoundation.ning.com/
As you mentioned, Metacurrency is also a good space for the metacurrency discussion.
@Sam – “We don’t need one-to-one exchanges in every case (systems like bittorrent confrim this, which does not track one-to-one exchanges of bits, but instead looks at real-time sharing and prioritizes based on system need. The biology of a tree works the same way, sending resources where needed based on current conditions).”
Great! (and yes, I mean it). From how I’ve seen this conversation, this is the first suggestion here that has actually acknowledged network-effects within the economy. Everyone else has been chasing off after yet another mechanism for single-context point-to-point ‘double-entry life-keeping’, which will not work, because such mechanisms take no account of network effects, long timescales, ‘excluded parties’ or many, many other fundamental factors.
I will admit I’m feeling very frustrated at the IT-like tendency here to rush off and create something new without any apparent thought at all about scope, applicability, unintended consequences, system-scale interactions, or anything else beyond the immediate. This is the first post I’ve seen that gives me any hope that something useful may come from this. Thank you!
“what is the mechanism for us to exchange value?”
If everybody does the same as me, say “I accept the Time Standard of Money and will return any Hours I owe to the community,” open a simple http://johnturmel.com/unilets.htm personal do-it-yourself online LETS timebank account, the UNILETS Millennium Declaration C6 to restructure the global financial architecture with an alternative time-based currency will have been engineered.
As to Douglas Rushkoff’s quote from Norbert Weiner: How to cope when robots are doing all the work? Social Credit Engineer Major Clifford Hugh Douglas said that “as the lever of technology gets longer and longer, man’s burden will become lighter and lighter, so work can be replaced by leisurel, the wage will be replaced by the national dividend.” Since then, I have never feared unemployment by robot production because a share of the robot’s paycheck will replace the wage when there’s little work left to be done.
5:00 Doug Ruskoff: “And where do you get the interest? You have to borrow that too.”
Jct: But if the banks refuse your new loan to pay the $10 interest on your old $100 loan, they foreclose and take everything. Better to restrict the banks’ computers to a pure service charge for bankers’ time and zero the interest charge for money’s time, usury. Borrowing 10 to owe 11 with interest causes a mort-gage musical chairs death-gamble that borrowing 11 to owe 11 with service charge does not.
The Time Standard of Money does respect labor with credits ready to go in abundance as fast as new collateral is pledged. And yes, the next big thing make money genuine peer to peer exchange mechanism where I’ll be able to roll over my now do-it-yourself account.
One-line response: how exactly will Time Standard currency work for those who need time but cannot ‘repay’ it – such as children, parents, the elderly, the disabled and their carers? They need resources, but they cannot ‘repay’ – so for them how exactly is Time Standard any real improvement over the mess we currently have?
Short answer: it isn’t.
I’m going to be rude here: I know a lot of people have worked very hard on this, but like all of the ‘alternative currency’ proposals, it’s a kludge that solves nothing. (Okay, almost nothing: it’s slightly less easy to ‘game’ than money, but that’s about it.) That should have been obvious within a matter of minutes, and I find it deeply worrying that it apparently still isn’t obvious to far too many otherwise-sensible people…
One-line summary: it doesn’t work. So we don’t need to waste any more time on it. End of story, okay?
So can we now spend a bit more effort going back to first-principles about how an economy actually works, instead of rushing on to the ‘build-phase’ before we have any clue of what we’re trying to do?
Tom,
There are many ways that kids (via peer learning/tutoring), the retired or disabled (via telework) can and do create value through time-based services.
But I think we should all feel a sense of responsibility not to inundate Venessa’s blog with long back and forths over these issues.
As you offered earlier, why not find a place to hash out the issues you’ve raised with others who are so inclined? DebateGraph.org and Ning.com offer free solutions for doing so.
Best,
Mark
@openworld
Tom Graves: “One-line response: how exactly will Time Standard currency work for those who need time but cannot ‘repay’ it – such as children, parents, the elderly, the disabled and their careers? They need resources, but they cannot ‘repay’ – so for them how exactly is Time Standard any real improvement over the mess we currently have? Short answer: it isn’t.”
Jct: Short answer, it is but you don’t see it yet. Just like everyone chips in to rebuild the barn after the disaster of a fire knowing everyone else will chip in and help you in the same way, we’ll all chip in after the disaster of a sick child dying in the negative. But I’ll bet more people die in the positive where we all get a small chip out than die in the negative where we all have to chip in. Same with house and auto insurance, the database could be used to chip in after the fire, instead of up front, so no premiums. Isaiah 55: You who are hungry and have no money, come buy and eat.” What would you do, let them starve? Isaiah says to lend them what they’re short so they can later lend you what you may be short.
TG: “like all of the ‘alternative currency’ proposals, it’s a kludge that solves nothing. (Okay, almost nothing: it’s slightly less easy to ‘game’ than money, but that’s about it.)
Jct: King Henry I split sticks in two with half the tally and half the stub of his money. His uncounterfeitable chips were never gamed. And how are you going to game your online account when everyone can see your balance and your transactions http://johnturmel.com/unilets.htm
TG: “That should have been obvious within a matter of minutes, and I find it deeply worrying that it apparently still isn’t obvious to far too many otherwise-sensible people… One-line summary: it doesn’t work. So we don’t need to waste any more time on it. End of story, okay?
Jct: One line summary: it’s working. With Africa trading with mobile-phone minutes, Arabia trading with mobile-phone card credits, with Hours being traded in Ithaca, with Greencredits being traded in LETS, the banks get no interest. And the movement to cut the middleman out of the usury is growing. With Facebook, Twitter, Craigslist, offering social currencies to their databases, the use of new social credits around the world is undergoing unheralded growth as the slower use of old anti-social credits in a social banking network make the news. Once they all link to the Time Standard and become compatible, the loanshark banks will collapse. They’re already collapsing. And there’s no reprieve. Liberation is on the move. And the adoption of the interest-free time-based currency is key.
Jct – Yes, you can show that it’s sort-of working now, as a short-term kludge to try to bypass the banks. But what happens after that? The deeper problems haven’t been addressed at all: you’re trying to push upstream from what doesn’t work, rather than going back to the source (the functional-core of a society’s economics) and flowing downstream from there.
Intermediate-kludges look great on the surface but hit a whole raft of hidden problems very quickly indeed. For example, the whole point of government ‘value-added taxes’ (common throughout Europe and elsewhere) is that they first ‘value’ the work being done in money-only terms, then demand a cut (the literal meaning of excise’). Which places you right back where you started, having to monetise everything.
The problem is that however you repackage it you’re still clinging on to the same dysfunctional concept of a currency, when that concept itself is what doesn’t work. It’s still based on a notion of ‘private possession’, which does not work as a model for a whole economy. Possession-based currencies only deal with point-to-point transactions, not network-effects over time; and they can only be optimised for a specific context, which means they create huge economic-translation problems elsewhere.
I appreciate that you’re really trying to make something work in the here-and-now: but unless you do also think hard about about the upstream processes – of which I still see almost no evidence as yet – all you’re doing is shifting the same problems into a different part of the overall economy. Can’t you see this?
Tom:
“Possession-based currencies only deal with point-to-point transactions, not network-effects over time”
It’s been said that finance is the nervous system of the economy. I tend to agree. Nail Ferguson’s Ascent of Money is a good read in this context.
Re” interest” turns out that’s the secret sauce. Medici’s, Stock companies in Netherlands. The problem is the State. As more local communities gain the power to capture their going forward value in the form of interest bearing debt, the changes we’re exploring here go much faster.
Michael – Let’s just say I disagree?
Information-flows are the nervous-system of a culture – not finance as such. Finance is merely one type of information, and one that – as we all know – carries huge overheads and embeds and entrenches very, very serious cultural, societal and economic problems.
Finance is just a habit, just like cocaine is to a drug-addict: looks great at first, feels great at first, but it’s not a good idea in the long run…
So can we please just drop the entirely unfounded assumption that finance is ‘the answer’, or that some kind of currency is ‘the answer’, and instead start thinking properly about other information-flows that would work at a whole-of-economy level?
Not the answer. Just the symbols that make it visible.
Tom Graves: “So can we please just drop the entirely unfounded assumption that finance is ‘the answer’, or that some kind of currency is ‘the answer’, and instead start thinking properly about other information-flows that would work at a whole-of-economy level?
Jct: Look around and everywhere, lack of finance is the problem. So if the problem is with finance, why would you think the answer is not in financial reform? Name me one problem we couldn’t fix if we had enough money to mobilize the manpower?
And the finance system is the brain of the economic engine. It tells people what to do, so reforming other areas you prefer do no good without reform of the master control system making everything malfunction.
And how does one do about close-minded, strident people who will try to fill the information flows regarding mutual responsibilities that you want to replace finance?
I’m interested in exploring this after you have a Ning group set up to continue the conversation there.
Best,
Mark
@openworld
typo – “do about” should be “deal with” in my reply above
(I’ve just moved this question to a better place in the thread)
Tom,
And how would you propose that communities deal with strident people who will try to dominate the information flows on mutual responsibilities – the information flows that you want to replace finance?
The signal to noise ratio on the Internet is bad enough what it is. I can just image what it would be like once zealots, cranks, and well-intentioned but close minded folks decide to “negotiate” what responsibilities we have regarding who gets to use what resources.
I’m interested in seeing whatever breakthroughs you may come up with to ovecome the challenge, but not in trying to make headway on it here. Please let me know when you have a Ning or other site launched to continue such conversations, as you earlier offered.
Best,
Mark
@openworld
Folks-in-general – I just want to say “Oh for heaven’s sake!”… This is gettin’ utterly insane…
I don’t have the answers, okay? Unlike some other folks here, I don’t make that pretence. What I do know is that we haven’t even begun to ask the right questions yet. That’s the part that I’m trying to work on. Once we get that right, the answers we need will fall out of that just fine – just like they always do when we ask the right question.
In short, why is everyone in such a goshdarn hurry to rush towards ‘the answer’, when we all know darn well we don’t have freakin’ clue as yet about what questions we need to ask?
Like I said, I’m backing out of this one. When you want help with the questions, gimme a call, okay? But I won’t waste any more time with your time-wasting after ‘answers’ that you already know cannot and do not work.
Tom Graves: “Yes, you can show that it’s sort-of working now, as a short-term kludge to try to bypass the banks. But what happens after that? The deeper problems haven’t been addressed at all”
Jct: No interest means no involuntary unemployment (voluntary unemployment is called leisure when the robots are doing all the work and we’re all getting a share of the robot paychekcs), and no inflation of the chips. What problems to you think once we’re running money on Earth as it is in Heaven?
“The problem is that however you repackage it
Jct: Packaged as interest-free poker chips, not having-money-babies Mammon.
“you’re still clinging on to the same dysfunctional concept of a currency,
Jct: The dysfunction in our 1/(s-i) bank accounts is the “i” so if I get rid of the only instability in the control system of the banking system, it’s not dysfunctional any more. Interest makes chips dysfunctional, makes them enslavement devices.
“when that concept itself is what doesn’t work.”
Jct: I don’t know what concept you’re talking about that doesn’t work. I’m talking about the community currencies that are making news around the planet by working!
“It’s still based on a notion of ‘private possession’, which does not work as a model for a whole economy.
Jct: Your “ism” has something against “private possessions?” My Social Creditism does not.
“Possession-based currencies only deal with point-to-point transactions, not network-effects over time; and they can only be optimised for a specific context, which means they create huge economic-translation problems elsewhere.”
Jct: Poker chips deal with P2P transactions, sure. As for whether poker chips “do not deal wtih network-effects over time, I can’t decipher. And I didn’t know can only be optimised for a specific context so I’d appreciate you eplaining why poker chips “create huge economic translation problems elsewhere.”
“I appreciate that you’re really trying to make something work in the here-and-now:
Jct: LETS is already working in the here an now, I just want to extend UNILETS to the whole world.
“but unless you do also think hard about about the upstream processes – of which I still see almost no evidence as yet – all you’re doing is shifting the same problems into a different part of the overall economy. Can’t you see this?
Jct: You see little evidence of my thinking hard about the upstream processes related to poker chips? Poker chips are shifting the same problems into a different part of the economy? Poker chips are getting rid of the interest to banks that’s enslaving the economy.
Michael / Jct – I’m sorry, but it’s clear you’re refusing point-blank to look at this, and I have no idea why. All I can do is reiterate my opinion that you’re still stuck on a fundamentally lethal delusion, that some kind of currency will help. It won’t: ‘money’ in any form is the core problem – not the ‘solution’. But you won’t allow yourselves to see why it’s such a dangerous delusion, so there’s nothing more that I can do to help you.
Best I duck out of this discussion at this point, I guess. My apologies.
It’s very easy to say “you’re not looking at it the right way” when you aren’t offering any suggestions on how to do it the right way. Saying we don’t have the answers and then giving up because “we aren’t even asking the right questions” is not only counterproductive, but insulting. Thanks for ducking out of the discussion.
Jct: Usually I have flash the cash, bet $100 they’re wrong, and then say: bye bye trash as they back down. Here the guy who cannot see ran away before those of us who can see could show it to him.
Matt – I’ve given you suggestion after suggestion, and example after example, yet it’s clear you haven’t listened to a single damn one of them. And you complain about ‘counterproductive’ and ‘insulting’? Hmm. I think I have a much stronger claim to that call, if you don’t mind…
I’ve shown you, very clearly, that you’re stuck in a delusory loop with regard to any form of ‘currency’: yet I cannot help you get out of it if you choose to stay there. So don’t blame for your own failures, please? Thank you.
Given the human condition, there is no way to avoid a currency/ accounting mechanism of some kind without bringing society back to tribalism. I asked you how a system based on trust/reputation/networking can scale with the principle of trust remaining intact and you had no answer. So unless you can help us understand how to overcome this fundamental flaw in your argument I think we’ll just continue our “delusory” discussion. Thanks.
Jct: You believe you can ‘flash the cash’ and the problems will magically run away? My gods, you really don’t get it, do you? 😦 Oh well…
There’s no point in wasting energy on people who refuse point-blank to look at the real problems we face, but for those who are interested, see a high-level overview at ‘Economics as enterprise-architecture’. Comments, suggestions and constructive criticism welcomed.
To Graves: “Jct, you believe you can ‘flash the cash’ and the problems will magically run away? My gods, you really don’t get it, do you? Oh well There’s no point in wasting energy on people who refuse point-blank to look at the real problems we face..”
Jct: No, by flash the cash, I meant that every time I stated that you were in error, it meant I was betting you $100 that I’m right, you’re wrong. It helps because people don’t have to know what we were arguing about, all they have to know is that you backed down as I flaunted: Flash the cash, bye bye trash. You can say I don’t understand as many times you as you want to but as long as you never say “I bet,” it lets us safely ignore your input as not worth betting on.
Hmm. Since you’re essentially stuck in circular-reasoning, no doubt your purported ‘proof’ that am ‘in error’ will be exactly the same. In that kind of game, the only way to ‘win’ is to not play.
And did it perhaps not occur to you that the use of the word ‘bet’ indicates just how little you grasp the concept or problems of money? I rest my case.
Tom Graves: “And did it perhaps not occur to you that the use of the word ‘bet’ indicates just how little you grasp the concept or problems of money? I rest my case.”
Jct: And I’d bet no one knows what you’re talking about, and when only you know what you’re talking about, and no one else, time to re-learn your English. My use of the word “bet” rests your case? Har har har, the case you can’t bet on?
So every time I said you were wrong in our past debate, I bet $100. And let’s assume that so far, you’ve backed down from all of them. Unless you’d like to take one point where you say I’m wrong and say “I bet.”
I must admit to being shocked to find such astounding childish behaviour in what is nominally a technical debate. That is all I will say on this matter.
Tom Graves: “I must admit to being shocked to find such astounding childish behaviour in what is nominally a technical debate. That is all I will say on this matter.”
Jct: I must admit that as a graduate engineer, I too am shocked by the childish behavor in what is a technical debate on banking systems engineering by the low-tech non-engineer Tom Graves. That is all I will say on the matter.
Will money exist in future at all? Although the most likely answer is no, if we must use it now, it is quite obvious that our understandings of money yearn for changes:
Alternative Economic Approach To Sustainable Development
@ Ned
Just to add a yes to
:”If the goal of this platform is to encourage free-thinking ideas from a theoretical and academic perspective, then we are doing okay as I see some excellent diversity of inputs here.
However, if the goal is to come out with ideas that can actually be executed on, then we are going down the wrong path”
Both are worthy tasks. Just have to keep them separated. Check out Jay Deragon’s post on March 10 above. It’s pretty close to what I was hoping to get some traction on the Wenovski thread about the CoCreating the Service Design conference in Berlin. http://ilnk.me/1e55
also agree.
this place just gets the conversation started. i don’t know what part to play in the “what next” phase.
Just an FYI.. I’m continuing my pursuit of “what to do now about situations like Central Falls High School in Rhode Island on twtter. I think we’ll just to have to see where it goes.
As for what “part to play.” My $.02 : Just keep doing what you’ve been doing so amazingly and don’t get distracted. From my way of thinking, you keep creating amazing value just by doing what comes naturally. 🙂
I’ve been watching the exchanges and ideas and please allow me to throw in my “two sense”….if you know what I mean.
ALl each of us have is time and knowledge assets and unless used productively we are actually be non-productive. While enjoying the conversational exchange around this very important subject matter starting yet another “community” built on sophomoric technology will only make us more non-productive.
How much time do you have to read through dozens and hundreds of post? Then try and “connect” the knowledge reflected and subsequently create a “logic tree” based on past knowledge, ideation, innovation and new knowledge? Not enough time in the day. At 51 I am only interested in making progress and learning but doing so productively…..how about you?
Starting a Ning, or any community using existing technology does not enable us to build a taxonomy or any “onomy” that connects the disparate knowledge being expressed, shared and created.
Ultimately what we need is a “community” built on significant smart databases that parses contextual terms centric to the purpose of any given discussion or topic. Said databases could then stored, categorize, assimilate and place relevant and relative “knowledge assets” into whatever “onomy” is designed by and for the stated purpose.
Siad technology is already underway but yet to be public until it is fully built and tested. Until then we are throwing “content” into the wind. While for the moment the content and dialog may be somewhat rewarding it really is non-productive accpet for the few who decide to spend “time and effort” adding and sharing content to the “few”.
This subject matter has significant implication to the “many” and as such we ought to first understand how to create a system that enables the many to understand so the subject matter can be better understood.
Until then a few can decide to add content that simply goes no where in time but to a few for the moment.
Last count I had there are over 8000 communities discussing “knowledge management, social capital, innovation” etc etc….all which are disconnected with no system enabled to “connect” the relevent knowledge assets. Sounds like a lot of wasted time that no one has time to follow all of it. The walls of communication still reside in the current internet design of silos but a few are aiming to tear them down so all “knowledge” can be connected and used by the many.
What say you?
I have been following the exchanges here and in earlier post relevant to this subject matter. Please allow me to add my “two sense” 🙂
I don’t know abut everyone else but at 51 I have limited time and I try and use it productively. Last I checked there are over 8,000 communities around the globe discussing “knowledge management, social capital, economics etc etc…..” Each of these communities are using existing technology that does not enable “knowledge, ideation, innovation and conversations to be inventoried, categorized, vetted and automated into a taxonomy or any other “onomy”. In other words the current state of the internet isn’t very productive thus sucking our time, attention and knowledge inventory into non-productive silos.
There is movement to change all this but until then all our time and effort is but for a moment of learning which doesn’t enable “mass learning” and adoption of new knowledge. Rather today’s “communities” are but for a few who have the time to read through the dozens, hundreds or even thousands of post to make sense of anything. There is no “logic tree” to attach anything to and using “key words” and categories is meaningless to the cause of advancing knowledge.
While some may want to start yet “another community” many would prefer to leverage advancement that make all “communities” contribute to a “knowledge inventory” that all can access and use efficiently and effectively.
The very conversational threads in this blog provide value for a few at the moment of engagement. The overall opportunity for this subject matter to create real and lasting value for the many cannot be realized until the technology advances accordingly. That time isn’t far away but until then we, the few, have to decide where we spend our time, energy and effort to be productive in whatever we do.
I just contributed my time hoping to increase productivity or reduce non-productive efforts for us older folks 🙂
What say you?
I’ve been watching the exchanges and decided to add my “three sense”. Sense was intentional 🙂
The subject matter being discussed in these recent threads has significant influence and value to everyone’s future, even those not in the thread. However the internet, in its present state, is not design yet to properly facilitate advancement of knowledge for the masses. The few can advance knowledge threaded in conversations of the moment but the many cannot effectively or efficiently access “knowledge assets” in a productive way.
While the internet has advanced some productivity in many ways it is still very non-productive. There are 1,000’s of communities discussing KM, SC, Economics etc etc etc. None of which are able to inventory relevant and relative “knowledge assets” and parse them into “smart databases” for use for the many.
We are still stuck with key words and categories which are meaningless. The context of content loses meaning without being tied to a taxonomy or any “onomy” of sort. Subsequently content is for the moment because who has time to read and create a “logic tree” from dozens, hundreds or thousands of “post” wrapped in irrelevant containers.
Things will change soon but until then all of us have to decide what is and isn’t productive in terms of use of our time and individual knowledge assets.
The subject matter presents opportunity to transform markets, minds and people. It seems that with such significance we ought to step back and “think” before we go and create yet another unproductive effort to create and improve productivity (productivity and economics go hand in hand).
A few could continue the dialog but unless said dialog can actually advance how “knowledge” is created, accessed and used then words for and from the few cannot be actualized efficiently and effectively. Knowledge is the essence of any economy and when applied it fuels innovation which is what fuels the next phase of an economy.
Anyhow, just my “three sense” and while enjoying the exchanges here at 51 I want to be productive and do things that make a significant difference for the many with a few.
The next phase of the internet will be driven by “knowledge inventories” create by individual knowledge assets” which can be accessed systemically rather then rest in silos of meaningless context which are very non productive.
What say you
What say you?
I’ve been watching the exchanges and decided to add my “three sense”. Sense was intentional 🙂
The subject matter being discussed in these recent threads has significant influence and value to everyone’s future, even those not in the thread. However the internet, in its present state, is not design yet to properly facilitate advancement of knowledge for the masses. The few can advance knowledge threaded in conversations of the moment but the many cannot effectively or efficiently access “knowledge assets” in a productive way.
While the internet has advanced some productivity in many ways it is still very non-productive. There are 1,000’s of communities discussing KM, SC, Economics etc etc etc. None of which are able to inventory relevant and relative “knowledge assets” and parse them into “smart databases” for use for the many.
We are still stuck with key words and categories which are meaningless. The context of content loses meaning without being tied to a taxonomy or any “onomy” of sort. Subsequently content is for the moment because who has time to read and create a “logic tree” from dozens, hundreds or thousands of “post” wrapped in irrelevant containers.
Things will change soon but until then all of us have to decide what is and isn’t productive in terms of use of our time and individual knowledge assets.
The subject matter presents opportunity to transform markets, minds and people. It seems that with such significance we ought to step back and “think” before we go and create yet another unproductive effort to create and improve productivity (productivity and economics go hand in hand).
A few could continue the dialog but unless said dialog can actually advance how “knowledge” is created, accessed and used then words for and from the few cannot be actualized efficiently and effectively. Knowledge is the essence of any economy and when applied it fuels innovation which is what fuels the next phase of an economy.
Anyhow, just my “three sense” and while enjoying the exchanges here at 51, I want to be productive and do things that make a significant difference for the many with a few.
The next phase of the internet will be driven by “knowledge inventories” create by individual knowledge assets” which can be accessed systemically rather then rest in silos of meaningless context which are very non productive.
What say you?
Jay, I say this:
While the internet keeps evolving and refining, the best way to organize and move knowledge forward is in Print. A wise and very succesful entreprenuer once told me ” Never underestimate the blind spot that web techs have for the value of Print.” It’s been a very useful lesson to see opportunities that are often overlooked by very, very smart people.
The underappreciated reality is that print technology has now matured to a stage that it is ready to resume it’s place as the “last mile” for knowledge organization. The meme that seems to be gaining some traction is the printernet. To see what I’m trying to say in printing geek language -> http://ilnk.me/1232
Consider the reach and possible knowledge sharing and creation that would be enabled it if someone did a remix of this thread, appropriately designed and published in Print.
that’s actually a really cool idea. we could retool this into an eBook on slideshare that might travel well.
Tom Graves: “‘money’ in any form is the core problem – not the ’solution’. ”
Jct: Chips are not the core problem. What do you propose using as a medium of exchange? Bartering a jet for a chicken?
@KingofthePaupers
I followed a path through some of your links. All new(2me) and very interesting. Do you have a twitter persona? That’s my social media of choice, these days.
Jct: No, twitter’s 140 characters aren’t enough for my purposes so I use my http://facebook.com/john.turmel wall as my comment blog.
just discovered: Regenerosity – seems to be some interesting stuff there
Geoff is really cool. His work is excellent, and connected to Metacurrency and Openmoney indirectly.
Venessa and Gerry, thank you for your kind words. Coming from brilliant folks like yourselves, those are quite some compliments! And Tom, don’t lose heart: I hear you and appreciate the wisdom in what you’re saying.
@MichaelJ I very much like the idea of “Printerneting” the ideations generated by a forum like this (or Wenovski). Too often a topic is thrown out (like a bone to a dog), and folks bite at it at from different directions to generate a good conversation and some great ideas. However, as the next one is thrown out and the next and the next — the super cool knowledge generated in the previous posts are almost forgotten – unless someone is searching for it or the author does a fine job of bringing it up in other threads. Specific to this post, Venessa does a fantastic job of constantly coming up with great convo starters and asking the right questions and pulling in the right info links – but I think it would be a cool excercise to remix the info into a ‘Emergent Printernet BOK’ (book of knowledge) — kidding with the name here, couldn’t resist :-).
Ned…
I think so too. I’ll follow up on twitter and see if I can get some of the global print cos involved. It would be pretty cool to have it for the Service Design Conference in Berlin.
thanks again to everyone who has chosen to bring their ideas and perspectives here on this topic. it was suggested to possibly turn the content of the post & comments into an ebook or “package” of some sort that could be shared with others. to that end, i created a wiki, and have emailed all of you with access as writers. if you want to cut and paste the content, reorganize it, and build on it, there’s a workspace for you to do so. if not, also fine. up to you.
http://emergentbydesign.pbworks.com/
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Wow, I learnt so much from the comments.
What do vampire bats and birds have that we don’t – they almost practice reciprocal altruism
What are the conditions (and survival) of the life of vampire bats, and birds compared to humans.
http://en.wikipedia.org/wiki/Reciprocal_altruism
“The concept of “Reciprocal Altruism”, as introduced by Trivers, suggests that altruism, defined as an act of helping someone else although incurring some cost for this act, could have evolved since it might be beneficial to incur this cost if there is a chance of being in a reverse situation where the person whom I helped before may perform an altruistic act towards me”
“Stephens shows a set of necessary and jointly sufficient conditions “… for an instance of reciprocal altruism:[2]
– the behaviour must reduce a donor’s fitness relative to a selfish alternative;
– the fitness of the recipient must be elevated relative to non-recipients;
– the performance of the behaviour must not depend on the receipt of an immediate benefit;
– conditions 1, 2, and 3 must apply to both individuals engaging in reciprocal helping.”
“There are two additional conditions necessary “…for reciprocal altruism to evolve:
– A mechanism for detecting ‘cheaters’ must exist.
– A large (indefinite) number of opportunities to exchange aid must exist.”
BIRDS
“It has been shown that predators learn specific localities and specialize individually on prey types and hunting techniques. [9][10][11][12] It is therefore disadvantageous for a bird to have a predator eat a conspecific, because the experienced predator may then be more likely to eat him. Alarming another bird by giving a warning call tends to prevent predators from specializing on the caller’s species and locality. In this way, birds in areas in which warning calls are given will be at a selective advantage relative to birds in areas free from warning calls”
VAMPIRE BATS
“The bats feed each other by regurgitating blood. To qualify for reciprocal altruism, the benefit to the receiver would have to be larger than the cost to the donor. This seems to hold as these bats usually die if they do not find a blood meal two nights in a row. Also, the requirement that individuals who have behaved altruistically in the past are helped by others in the future is confirmed by the data. [13] However, the consistency of the reciprocal behaviour, namely that a previously non-altruistic bat is refused help when it requires it, has not been demonstrated. Therefore, the bats do not seem to qualify yet as an example for reciprocal altruism. However, a closer look at the data shows that – except for a single interaction – all instances of feeding happened between individuals of the same group, who are on average cousins.[13] Thus, it seems much more probable that this example is a case of kin selection than reciprocal altruism.”
What I’m getting here is that the life of birds and vampire bats have certain conditions that make cooperation necessary to survival.
Is it that humans don’t have these conditions so we don’t feel we have to cooperate? I don’t think so, we are raping the planet. I think we innately look out for each other..it’s just that when our conditions change and our outlook changes we may lose this behaviour.
If a species of birds multiplied for some reason and became massively populated, would they still practice reciprocal altruism.
Most people don’t care deeply enough as we are sidetracked by the illusion of life (what we have made life to be). We increasingly live in cities (pigeon holes) rather than villages…we all have our own agendas…all this doesn’t lend to cooperation being on the top of the list.
Why has this happened? Not sure, but we are enslaved by economics, which is a game, not a natural science.
http://www.edge.org/3rd_culture/rushkoff09/rushkoff09_index.html
Maybe money, materialism, greed, over population is depleting the humanness out of us…are “we” the antichrist?
In the workplace we practice barter out of need, we have to rely on each other to get stuff done…so in a way a team, an informal network, a village needs to rely on each other for the well being of the shared resource.
But when you scale this to the world, and it’s million agendas, it just doesn’t work. Tom is right we need to abolish currency altogether, as money is not longer just the exchange, but has become the aim. eg. My aim in life is to make money so I can afford to live and consume…what kind of illusion are we living?
Here’s a podcast with Verna Allee on informal network of barter in the workplace, and how intangibles/social capital are the real value
http://johntropea.posterous.com/uc-berkeley-webcasts-video-and-podcasts-ids-1
Here’s another
http://johntropea.posterous.com/it-conversations-meshforum-verna-allee
This comment kind of crosses over into your other post
https://emergentbydesign.com/2010/03/06/social-capital-is-not-the-same-as-whuffie/
@John: “But when you scale this to the world, and it’s million agendas, it just doesn’t work. Tom is right we need to abolish currency altogether, as money is not longer just the exchange, but has become the aim.”
Many thanks indeed (and likewise Venessa and others of the few above who did get this point).
The actual requirement is for a means of guiding and monitoring inter-person, intra-community and inter-group exchange, such that resources are managed equitably and, as far as practicable, sustainably into the indefinite future across an entire global scale.
A really quick summary is this:
– point-to-point barter works very well in small communities for relatively small and simple needs
– community-barter (e.g. barn-raising) works very well in small communities for larger needs
– barter does provide limited mechanisms to deal with social-obligations in time (e.g. pay back a bequest), via social policing of commitments and ‘promises made’
– however:
— barter can only be used for ‘exchangeable items’ (products and/or services)
— requires that each party be able to provide exchangeable-items (e.g. often excludes children, active-parents [esp. mothers], elderly, disabled etc), requires that exchange is desirable
— is dependent on/policed by direct personal social-obligation, hence does not scale well beyond a small group
— etc
– token-based currencies (e.g. money) attempt to tackle the scale problem and the point-to-point problem
– token-based currencies permit ‘universal’ exchange (i.e. act as an intermediary to enable complex multi-way exchanges)
– however:
— the currency may become an aim in itself [as John describes above]
— token based currencies may be easily ‘gamed’ in many different ways
— possession of token-based currencies (especially when gamed) may lead to situations where the currency is deemed to confer ‘rights’ to resources that do not actually exist
— token-based currencies tend to become dissociated from the social-obligations that are the actual basis of the currency
— etc
– time-based currencies attempt to tackle the unintended-consequences of token-based currencies, and/or as a subsidiary mechanism to extend and/or police social-barter
– time-based currencies appear at first glance to be ‘fair’ in that, in principle, every person has the same amount of time
– however:
— the assumption that everyone has the same available/exchangeable time breaks down in many ways in practice (e.g. children, parents, elderly, disabled etc)
— the assumption that time has the same meaning for each person breaks down in practice (e.g. actually rewards inefficiency; also the truism that “if you want something done, give it to the busiest person you know”)
— assumes that everything can be broken into discrete time-units (which makes no sense in practice for most forms of non-physical work)
— assumes that time can be linked directly to exchangeable-items, and vice-versa
— in effect assumes that each person has the same amount of life-time, expended in the same way, with the same choices
— etc
In short:
– barter is limited in scope, and does not scale
– token-based currencies can scale, but are limited in scope and have huge and ultimately-fatal unintended-consequences
– time-based currencies can sort-of scale, resolve some of the unintended-consequences of time-based currencies but introduce others, and are limited in scope
In even shorter:
– barter cannot satisfy all of the requirements
– token-based currencies cannot satisfy all of the requirements
– time-based currencies cannot satisfy all of the requirements
My suggestion is therefore to stop focusing on barter or currencies, because we know they cannot work. At the scope and scale we need, all of them create more problems than they solve; all of them are premature quick-fix ‘solutions’ to a set of problems that have still not yet been adequately described.
Instead, we would be far wiser to expend our effort on _understanding the problem_. Once we find what the right questions are, the answers that we need will arise automatically. All we know at present is that none of the current ‘solutions’ are it.
First, if any of you decides to visit my blog, accept my apologies in advance. I’m a newbie and just started to build it.
Second and on the matter. The convo is amazingly huge so I’m not sure that I got all the points but I’ll touch on the ones I think you guys did mention. ‘Money has become the aim’ I agree and also agree that such situation needs to change. However, that any and every type of currency is an indication of failure in society, I don’t agree. Neither I think that an economy should work only on the basis of the intangible. Both the intangible and the physical have real value, and focusing just in making an economy be efficient on one of the two, by completely neglecting the other, I don’t believe is the wisest thing to do.
Not sure but I didn’t see any comments on Mutual Credit Systems or LETS, which are, as far as I know, the most common of the complementary currencies. All currencies, including time banks and mutual credit systems are created out of debt. The difference is on who issues the money. In the current mainstream economy, there is a monopoly on the issue of money. In the complementary systems design to build economy, there is still an authority but the aim is to ensure local circulation of the currency. In complementary systems like time banks and mutual credit systems, each person issues the money at the time of trading. You gave me ‘X’, therefore you debit my account and credit yours and there you have money.
Mutual credit systems are of my preference because they imply a change in the mind set regarding money. Trust is encouraged because you can have negative balances…that is, you don’t need to have money in order to obtain what you need. Please read Thomas Greco on this topic.
Bernard Lietaer has a series of articles that argue that both physical and non physical need to exist in order to ensure sustainability. If you go to my blog, the only discussion topic that I’ve written so far, has my thoughts on this. The idea that all should be worked out in terms of knowledge or the intangible is I think, very valid one. However, I’m not sure whether we can reach that state by skipping the one when we reassess the use of money and explore other options of currency.
Money is not bad per se. I think it is rather our relationship with it what is in conflict. In the end, if we see money as just an information system, then the problem is reduced in great deal.
Actually, Lietaer doesn’t exactly talk about physical and non-physical but of order and disorder, efficiency and diversity, which I associated to tangible and intangible, 1 and 0, yang and yin. If you take one out of the game, you lose the whole…my perspective
hi tatiana,
thanks for your comments. would you like to talk more about this sometime soon on skype perhaps? my username: venessamiemis
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