Dear Community Forge,
When the support team 'sent' me to Montreal, they left me free to decide what to accomplish there! So I stated my intention to discover other networks of communities who are trading and exchanging with each other. Not necessarily because we have free software for them, but because we want the freedom to exchange with them. This year I co-authored with Tim Jenkin from Community Exchange Systems a paper describing the credit commons which is a protocol to enable exchange-relationships regardless of the software used, and with which we might make a global trading network independent of governments and banks. So its time to start identifying those networks!
I was lucky to be offered free accommodation out of town and thus spent the week with a cluster of Canadian activists.
Day 1. Registration. After a Skype call with some of you at the Rencontres, which was organised by supporters of Community Forge, I went to a coworking space ocuppied by the P2P Foundation, where I bumped into the Transformap team. They have been working three years to aggregate online mapping projects into a super-map of the solidarity economy. This is a hard intellectual challenge because each one of the hundreds of maps they are working with its own category system. We are envisaging a marketplace for all the SELs, and we shall face a similar problem, so we had a good conversation.
Day 2 I went to a talk organised by RIPESS, a global organisation trying to coordinate the solidarity economy. Amazingly the conversation turned to the question of money and exchange, and I was able to speak for 1 minute about the paper! I handed out several copies and several people gave me their cards.
Day 3. I planned to go to the second RIPESS session but I couldn't get into the city in time, and then for the rest of the afternoon I didn't know what to do, so I ended up attending the session by several of my co-habitants - the Universal Alliance. Coincidentally, they are designing structures and processes for communities including supporting the practice of exchange. Finally I attended a talk by free software advocate Richard Stallman.
Day 4 started with my running the trading floor game 'La Corbeille' which I created at the 2012 Poisy Rencontres with Sybille Saint Girons - it helps players to think about money in a new way. The venue was a bit out of town, but we got just enough people (9 for it to work). Then I went to a session on 'trans-local currencies' run by the local currency project in Geneva. There again I spoke for oine minute about the credit commons and all my copies of the white paper were snatched off the table! Then I had coffee with Jason from RIPESS. He said that more monetary awareness and tools were needed and invited me to meet the steering committee in their next Skype meeting. Then I had coffee with a board member of the Accorderie, a Canadian Timebank project which has also spread to France. I learned that it does much more than timebanking; the model includes several mechanisms for support and mutual support of the poor. Since 30% of their members don't have internet, they don't regard software as a high priority.
The last day, Saturday, was a trade fair, and many many stalls were selling alternative health products, handicrafts, sustainable tourism, or showcasing their campaigns or technologies. I was looking for trading networks, and found none, but I did find the stall of Jeu, Jardin d'Echange universel this is like a global LETS, using account books and no computers - it relies strongly on trust because it is a lot of work to check the integrity of someone's book.
Besides what I've said here, there were many interesting and valuable conversations, but with less relevance to Community Forge. Several things happened which could bear future fruits. It is very hard to measure the value of them, especially now, and especially with only my perspective. Lets see how much I refer to this week in future reports!
Greece Workshop Report
During the last week of June I conducted a weeklong workshop and colloquium on Innovation in Exchange and Finance at the Alexandros campus of the Kalikalos Holistic Summer School on the beautiful Pelion peninsula overlooking the Aegean Sea in Greece.
I had planned this to be a collaborative, interactive and problem-centered workshop that would bring together skilled and accomplished people to produce significant innovations in the areas of exchange, finance, and economics. We were fortunate in being able to draw together an excellent cohort of participants having diverse knowledge, skills and experience. Nine of these were full-time and several more participated in various parts of the workshop, particularly the June 25-26 weekend when we had a number of Greek participants from Volos and Athens. The Volos contingent shared their experiences over the past four years in creating and operating the Volos TEM trade exchange. It was very useful for all of us to hear about their difficulties and false starts and the lessons they have learned which will be applied as they move forward into the next phase of their project.
In addition to the registered workshop attendees who came from Australia, India, Ireland, Serbia, Sweden, the US and the UK, several Kalikalos staff members participated in some aspects of the workshop. We were disappointed however that one registrant from Saudi Arabia was unable to attend because his entry visa was denied by the Greek government.
Our work sessions were loosely structured to allow space for each person to share not only their questions but also their experiences and insights, and for the spontaneous emergence of ideas action plans. In addition to my presentations of foundational concepts using slide shows and videos, the format included a number of participatory exercises. Participants had opportunities to showcase their ongoing or planned projects and receive feedback from the group, and as is usual in any such gathering, informal discussions and networking were an important part of the experience.
Kalikalos has invited me to return again next year to conduct another similar workshop on monetary and financial innovation. It will be scheduled in the general timeframe of the second week of June (exact dates to be determined soon). My colleague Matthew Slater, one of this year’s participants who has particular expertise in IT, crypto-currencies, has agreed to assist me in that workshop, and over the coming months we will be working to further develop the format and the program.
I am hoping to once again attract participants who are ready, willing and able to put their knowledge and understanding into action. As Malcolm Gladwell points out, it takes mavens, connectors, and marketers working together to make a project successful, but most of all I think it takes entrepreneurs who are able to bring harmony to the mix, to hold the vision and to dedicate themselves fully to its realization.
As the time approaches, we and the Kalikalos team will be asking you to help us get the word out to our target groups— trade exchange operators, social entrepreneurs, local government officials, serious students, and enthusiastic agents of change.
In the face of the ongoing global economic and financial crisis and increasing political uncertainty, the creation and deployment of innovative decentralized mechanisms for reciprocal exchange and equitable finance are becoming ever more urgent and the opportunities have never been greater. We are now on the brink of ushering in a new more just and sustainable economic paradigm that will enable small producers and local enterprises to thrive, and communities to gain more control over their own destiny and quality of life.
Before and after my workshop I spent an additional three weeks at Kalkalos living in community at the Kissos campus. That in itself was an enlightening and enjoyable experience.
Upcoming presentation – Malaysia
In October I’ll be presenting at the International Forum on Inclusive Wealth (http://www.ifiw.my/) in Kuala Lumpur, Malaysia. I’ll be outlining my revolutionary plan for a decentralized global exchange network based on direct control of credit by producers.
“IMF admits disastrous love affair with the euro and apologises for the immolation of Greece“
In a July 29 article in The Telegraph, journalist Ambrose Evans-Pritchard dissects a recent report by the IMF’s Independent Evaluation Office (IEO). He says the report, “goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system.”
He concludes that “The injustice is that the cost of the bailouts was switched to ordinary Greek citizens – the least able to support the burden – and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness – the root of so much bitterness in Greece – is finally recognised in the report.” Read the full article here.
Recommended reads and views
Michael Hudson interview: The new global financial cold war
Basic Income gaining ground:
- Europe: 64% of People in Favour of Basic Income, Poll Finds
- Canada Is About To Start Giving Away Free Money
General Wesley Clark, former Supreme Allied Commander of NATO, testifies in this 2-minute video that the US planned to overthrow seven countries after 9/11.
Wishing you a relaxing and enjoyable summer,
David Stockman, who was Budget Director under President Ronal Reagan, makes a great deal of sense in this essay which is about much more than Donald Trump’s “domineering and authoritarian personality” and his scary authoritarian inclinations (he accuses Trump of being and “incipient police statist.)” Stockman also presents facts that belie the justifications for insane government policies like monetization of government debts, the war on drugs, and foreign interventions, as well as the illusions created by the sensationalist media. I recommend reading the entire article but here are a few excerpts.—t.h.g.
Donald Trump’s Demagoguery—–The Dangers And Digressions Of It
By David Stockman
“…both parties are fully onboard, of course, with the massive fraud that has become central bank policy both here and around the world.”
“The Fed has actually purchased $4 trillion of Treasury debt and GSE securities since the year 2000 and funded it with credits conjured from thin air. This has been a monumental act of “something for nothing” economics in which the trillions Congress has wasted on war and peace have been financed with digital money magic.”
“The purported crime and terrorism wave, in fact, is essentially a figment of cable news version of reality TV, and most especially the CNN War Channel and its perennial Black versus Blue &White race narrative. …According to the FBI data there has been an astonishing 50% reduction in the U.S. violent crime rate since the early 1990s.”
And regarding the supposed increase in targeting of police officers by criminals, Stockman points out that, “In fact, the actual rate of intentional, felonious killings per 100,000 officers has been plummeting for decades. During 2014 it was actually 71% lower than the year Ronald Reagan left office.”
“At the end of the day, the overwhelming message of the data is that there is no crime wave nor an eruption of police violence on either the giving or receiving end.” —More
I don’t usually put much energy into partisan politics but comes the time when opportunity knocks and we all must stand up and be counted. That time is now.
The US has been on the road to fascism for a long time. Both Democrats and Republicans have for decades been advancing the same agenda of ceding power to transnational mega-corporations and the global banking cartel. So called “free trade” agreements are simply ways of allowing capital to more freely exploit labor and the environment and forcing governments to guarantee their profits.
Changes in financial regulations, like the repeal of Glass-Steagall under Bill Clinton in 1999, have enabled banking companies to grow to monstrous size (“too big to fail”) and to more easily cheat the clients they are supposed to serve. In this article, James Rickards places the blame for the 2008 financial crisis squarely where it belongs and demolishes the arguments of the big bank apologists: http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis.
Many countries are caught in the debt trap and are being forced to sell off government owned assets which further concentrates wealth and control of “the commons.” Those who control the creation and allocation of money are able to control politics, economics and virtually everything else.
When political and financial pressures prove inadequate, the US military is used to bludgeon countries into line with the global financial regime which is the most anti-democratic force in the world today. General Wesley Clark, former Supreme Allied Commander of NATO, testifies in this 2-minute video that the US planned to overthrow seven countries after 9/11: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. A thorough account of General Clark’s story is told by Glenn Greenwald here: http://www.salon.com/2011/11/26/wes_clark_and_the_neocon_dream/.
Under Bush, Cheney and Rumsfeld, the Pentagon came up with a new organization–the “Proactive, Preemptive Operations Group (P2OG) to carry out secret missions designed to “stimulate reactions” among terrorist groups, provoking them into committing violent acts which would then expose them to “counterattack” by U.S. forces. Those “violent acts” would also be used to justify regime change in countries accused of harboring the terrorists. This article from 2002 clearly described the causes of the mayhem we have seen unfold in the years since then: http://www.counterpunch.org/2002/11/01/rummy-s-plan-to-provoke-terrorist-attacks/. A little research will make it clear that the US and NATO are responsible for the turmoil in Syria and the consequent refugee crisis.
Hillary is clearly in the pocket of the banking/corporate elite and will continue to promote their agenda, just as Obama has. We were sold on Obama with promises of change and the feel-good idea of electing the first black President. Hillary is being sold to us as the non-Trump candidate together with the feel-good idea of electing the first woman President. I’m all for making the oval office accessible to minorities and women but what we have gotten is a lot of broken promises, a continuation of the Clinton-Bush policies, and an escalation of US interventions in other countries and a rekindling of the cold war against Russia.
Trump appeals to people’s fears and outrage over being misled by both parties. He promises what he cannot possibly deliver, while pandering to the religious right with his selection of a running mate whose policy positions seem diametrically opposed to much of what Trump says he is for. That makes his promises as unbelievable as Hillary’s and leads me to wonder if he has even a glimmer of understanding of the geo-political facts of life. I can only conclude that he is a megalomaniac to whom winning is everything.
So, what can we do to stop this madness?
We can continue to bide our time, watch the chaos unfold and hope for the best while waiting for new opportunities to emerge, and working to make our communities better and more resilient in spite of it all.
But maybe we already have an opportunity to make a change at the level of national politics. There is a viable third choice, and it is on the ballot in every one of the 50 States. It is the Libertarian Party ticket of Gary Johnson and Bill Weld. Johnson is a former businessman and Republican governor of New Mexico, and Weld is a former Republican governor of Massachusetts, US Attorney, and head of the Department of Justice Criminal Division. In this short twitter video they make a strong pitch for their progressive social and anti-war agenda. https://mobile.twitter.com/GovGaryJohnson/status/748320273754165249/video/1. It sounds good to me.
This ticket should have broad appeal, especially among Sanders supporters who cannot bring themselves to vote for Hillary and Republicans who cannot bring themselves to vote for Trump. With the Republican Party in disarray and Hillary’s vast unpopularity among voters, this may be the year when a third party candidate can win the White House and upset the pattern of politics as usual.
With virtually no advertising, a recent CNN poll shows Johnson already with 13% support (and the Green Party candidate Jill Stein at 5%), and a CBS/New York Times poll had Johnson at 12 percent. According to the Libertarian Republic, “If Johnson, former governor of New Mexico, polls at least 15 percent in five national public opinion polls before the first presidential debate, he’ll be eligible to appear on the stage with the Democratic and Republican nominees.”
If Libertarians, Greens and all the rest of us who are dissatisfied with the state of politics in America can get behind the Johnson/Weld ticket, we can have the much needed Second American Revolution before this year is out.
Are we the people ready to govern ourselves? The power elite think not; let’s show them that we are.
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No, it’s not xenophobia, as the elite propaganda machine would like us to believe. It’s the same phenomenon we’re seeing in American. Quite simply, people in Britain, America, and elsewhere are finally getting wise to the neo-liberal agenda which seeks to disempower people and their elected governments and place power in the hands of the unelected, undemocratic, global banking and corporate elite. As I said in an earlier post (What do Trump supporters and Sanders supporters have in common?), people are sick and tired of:
- Politicians who promise one thing but deliver another.
- “Political correctness” that interferes with our ability to debate the deeper issues and concerns.
- The rich getting richer and ever more powerful while the middle class is being destroyed.
- Big banks that are “too big to fail” yet refuse to provide adequate financing to small local businesses.
- Legislation that favors big corporations over small and medium-sized enterprises.
- Fiscal policies that reduce taxes on corporations and the rich while forcing states and municipal governments to assume ever greater burdens.
- Trade agreements that cede power from sovereign governments to transnational corporations thus undermining democratic government, the rights of labor, and environmental protections.
- A disastrous foreign policy of interference in countries around the world that kills thousands of innocent people and stirs up hornet’s nests of resentment that manifest as massive displacements of people and acts of terror against the U.S. and its European NATO allies.
And as I concluded in another recent post, “Since the debt crisis of 2008, Americans of all classes and ideologies have finally begun to wake up to the facts that the game is rigged against them and that they have been manipulated and exploited by the Wall Street-Washington nexus. The next American revolution will happen when liberals and conservatives, Republicans and Democrats, Americans of all religions and races, stop being seduced by “hot-button” rhetoric and come to realize what their common interests are and are able to work in harmony toward the common good.”
In the following video, British filmmaker John Pilger expresses similar thoughts with regard to Brexit:
Lucas Huber suggests that the Interledger Protocol would be a suitable technology for implementing the credit commons. This post is a space to explore that more fully.
Credit commons was originally conceived as a ledger between the all the ledgers on all the separate platforms of the complementary currency movement, and the actual function of the interledger protocol is the same, to ensure that one transaction in one ledger is equivalent to another transaction in another ledger, thus that money/credit are not created/lost by mismatches in ledgers.
However when we regard money as credit relations between members of a trusted group, rather than as a commodity actually changing hands then the interledger protocol seems less suitable to me.
- With the mutual credit approach, there is really only one ledger in the middle which embodies the single contract which all members have entered into. But I think Interledger implies that connectors have to be set up between every possible pair of ledgers. As the network grew, an exponentially growing number of connectors would be needed. That means only within Community Forge Community Forge that would mean managing potentially thousands of connectors, many of which would never be used.
- That array of connectors would then need to be running a with a common policy around minimum and maximum credit limits, which would need to be updatable.
- Since Interledger doesn't create a ledger of ledgers, the nesting described in the Credit Commons white paper would be impossible.
- Interledger uses escrow methodology and assumes that transactions are irreversible, which is how money-as-a-commodity works in law. This approach just seems inappropriate for managing credit relations.
For a long time I have marvelled at the elegance of the Ripple protocol, which allows members of a network to extend trust to one another and for payments, or at least virtual payments, to ripple through the resulting mesh along pathways it finds.
Ripple was originally designed as a sort of abstraction of mutual credit. Instead of people forming groups, each account extends a line of trust to several other accounts to form a mesh. Each account is then in its own virtual group. This takes away the mutuality, and effectively puts each user their own circle.
In Ripple, mutual credit systems can be simulated when an account is created to sit in the centre, and all members trust that account according to an agreed formula and that account trusts them. This was all a bit inelegant and to be implemented with surety would have required some script to be able to control the trust vectors of other users' accounts.
For this reason I stopped asking how we would implement the Credit Commons in Ripple and started dreaming instead about what the credit commons requirements actually were. This was productive because it allowed me to to develop the governance ideas better.
But in recent days I was pulled back to the question. Ripple bypasses the governance problem by letting each user be responsible for their own credit - wouldn't it be much easier just to plug everybody in to Ripple and forget about circles within circles of mutual credit?
And today the answer came to me. No. Governance may not be needed for individual transactions, but different rules apply accross the network as a whole. Any system of exchange needs a way to manage situations when reciprocation isn't perfect and credit/debt start to clog up the system and reduce liquidity, which eventually leads to defaults. If every Ripple account was equally connected to every other account, as in the diagram on the left, then the onus would be all on individuals to give and receive in equal measure. However in the real world we would expect the network to have clusters of people trading with each other, as in the diagram on the right, and for clusters collectively to have reciprocation issues.
So if my balance is way above zero I may be able to trade it down, but if all my usual trading partners are also approaching their upper limits they won't be able to sell me much. It becomes incumbent on the whole cluster to spend outside the clusters, preferably towards other clusters who are collectively below zero. Ripple provides no way to identify these clusters, so they could communicate or formulate trade policies to solve the problem.
The current credit commons proposal puts each account in one and only one group and invites groups to create meta-groups until payments could go between any two account holders in the same top-level group. This is much more restricting because individual accounts can only be issued credit by members of their immediate group. But it also means that, at each level of grouping, there is a space for policy and relations with neighbouring groups.
With the LETS and timebanks and business barter systems that will be fine, because they already work like that. In the wider economy however, solidarity, self organised groups are rare, which is of course a large part of the original problem!
So I think current fractal design for the Credit Commons is appropriate, but I'm reminded that members will need to be educated about how to use it.
It’s very difficult to know what the tactics and specific manipulations of the global elite might be from day to day. The Brexit vote surprised almost everyone, including me. But it’s hard for me to imagine that Brexit might be something the elite want because they have engineered the terms of European union to concentrate ever more power in their own hands, which is what they’ve been up to for decades, if not centuries.
Therefore, I expect a lot of foot dragging and I do not expect the referendum to be acted on with any haste. Instead, terms of union will be renegotiated with the apparent, but not real, return of some sovereignty to the Brits. Then “stay” will be sold to them and another referendum held to legitimize remaining in the union.
In the meantime, the ongoing financial crisis is approaching another tipping point which may throw the banking system into a chaotic state with which governments will be unable to cope.[i] It may then be a case of “every nation for itself” as people demand that their respective governments “do something” to prevent breakdown of their domestic economies, and to hell with EU regulations. That will mark the de facto disintegration of the European Union.
Of course, I may be completely wrong, but it will more likely be an error of timing, as I see the breakup of the UE and the demise of the global money and financial regime as inevitable. –t.h.g.
[i] According to a recent IMF report, “…Germany’s contribution to ensuring the success of the new European financial stability architecture is crucial for fostering its domestic financial stability and the success of the European reform agenda.” (IMF Country Report No. 16/189. GERMANY FINANCIAL SECTOR ASSESSMENT PROGRAM, FINANCIAL SYSTEM STABILITY ASSESSMENT). But an analysis of that same IMF report by Tyler Durden, (http://www.zerohedge.com/news/2016-06-29/imf-deutsche-bank-poses-greatest-risk-global-financial-system) concludes that “Deutsche Bank poses the greatest systemic risk to the global financial system.”
Society is Exchange! – Frederic Bastiat.
All the perplexities, confusions and distresses in America arise not from defects in the Constitution or Confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit and circulation.
– President John Adams, from a letter to Thomas Jefferson (1787-08-25), in The Works of John Adams
As the time grows near I want to remind everyone that my workshop on innovative finance and exchange is set to begin in about 10 days time at Kalikalos Holistic Summer School in Greece (http://www.kalikalos.org/exchange-finance). It will start on the evening of 24 June and conclude on the morning of 1 July.
While it is described as a “course,” the format will be that of a workshop/colloquium in which everyone plays an active role in an intensive process of inquiry, discovery, sharing and collaboration aimed at:
1. achieving a deeper understanding of sound principles of credit, finance, and the exchange process, and,
2 developing action plans for the design and implementation of robust systems that can be widely proliferated and quickly scaled up to global dimensions.
3. assembling a knowledge base that can provide guidance to others on the same path toward achieving more equitable and sustainable economic structures.
There is still space available for those who feel moved to participate.
Details about the course, fees, and booking are at http://www.kalikalos.org/exchange-finance.
Some of the areas that we will explore include:
- The essence, function, and forms of money
- The concepts of currency, credit, credit clearing, liquidity, monetization, and basis of issue
- Various models of private currencies and moneyless exchange
- Value measurement and units of account
- Exchange networks and inter-trading
Don’t let finances stop you as will be able to offer a limited amount of bursaries. Please write an application for that to our team at firstname.lastname@example.org.
We offer Greek participants who take part in the week-long workshop a discount of 30%.
The weekend Saturday, 25 and Sunday 26 is being offered to Greeks on a Gift Economy basis which means that you offer what you are able to give. If you want to participate on these terms please send a mail to: email@example.com.
I look forward to working with you. –Thomas
I have long argued that the likelihood of getting government to do anything “good” about the money problem is near zero because the controllers of the present monetary regime are able to buy the kind of government they want that will keep in place the system that enables them to consolidate their power and increase their wealth.
Even if your proposal to restore the Greenback could be legislated into actuality it would only be a stop-gap measure and there would be negative side-effects. FDR ameliorated the 1930s crisis in a somewhat similar way and managed to get some progressive legislation passed, and WWII provided the excuse for massive government deficit spending (along with rationing and “bond drives” to control consumer demand).
Massive increases in productivity enabled a flood of consumer goods to enter the market after the war, and people had the money to buy them.
But in today’s world the old tricks will not be sufficient. We need a totally new system of money, banking and finance, one that is decentralized and interest-free. This will emerge by the design and deployment of relatively small credit clearing exchanges in which it is possible to build trust through personal relationships (verified identity and reputation of all parties, along with organizational transparency), and to allocate credit to members based on that and the market value of their output. At the same time, these credit clearing exchanges can be networked together to enable non-monetary payment on a global basis–a payment system that I describe as “locally based but globally useful.”
We will have an “exchange revolution” that is analogous to the IT revolution. Our micro-computers were initially isolated and had limited capabilities; now we have tremendous power right at out fingertips to do many useful things, and our local devices are linked through the internet giving us unprecedented access to each other almost anywhere and anytime, and almost unlimited amounts of information on most any subject.
Realization of this vision is close at hand.–t.h.g.
I’m excited to be back in Greece and reconnecting with my colleagues here. The mood here seems to be more subdued as the people try to cope with asset privatization, wage and pension cuts, higher taxes and other conditions imposed from outside. I’m told that mortgage foreclosures will begin soon, which may trigger some popular reaction. The metro workers in Athens have announced they will be striking for several hours each day over the next few days. Fortunately the hours of service disruption have been posted so one is able to plan accordingly.
All of this underlines the urgency of designing and implementing systems that are capable of devolving power to the national, community, and personal levels. For me, the most effective strategy seems to be reclaiming the “credit commons”. That is what we will be working on during my workshop on innovation in exchange and finance from 24 June thru 1 July, 2016 at Kalikalos Holistic summer school near Volos, Greece.
Space is still available if you would like to participate. Details about the course, fees, and booking are at http://www.kalikalos.org/exchange-finance. Don’t let finances stop you; we will be able to offer a limited amount of bursaries (Please write an application to our team firstname.lastname@example.org).
Special arrangements for Greek participants provide them (1) a discount of 33% on the full course, or (2) for those who can participate only on the weekend of 25/26 June, an invitation to do so on the basis of a free will offering.
This will be a workshop/colloquium in which everyone plays an active role in an intensive process of inquiry, discovery, sharing and collaboration aimed at:
- achieving a deeper understanding of the principles of credit, finance, and the exchange process, and,
- developing action plans for the design and implementation of robust systems that can be widely proliferated and quickly scaled up to global dimensions.
# # #
This was published at: https://www.community-exchange.org/docs/smalladsrfi.html
This request for information is seeking partners and friends to work on an open directory of ads to support grass roots economies. The requirements are almost exactly the same as my 2011 RFI, but now with the added weight of CES.
Greetings Alumni of the Money and Society MOOC,
Jem and I decided to keep in touch with you with this new Biannual newsletter. It includes some headlines I found interesting, and other tidbits about what Jem and I are doing.
The MOOC will continue as long we get new people, and we think the best promoters are the people who have done it. Please have a think about which of your friends, colleagues and social networks should know about the MOOC, and send them to this link. http://iflas.blogspot.co.id/2014/12/money-and-society-mooc.html Thanks!
Last month I published a white paper showing what a decentralised credit network would look like using modern technology and pointing out that such a thing could be built from the grassroots up and would be highly appropriate during a time of recession. Check out the 16 page pdf on the Credit Commons web site.
I've been working with Alumnus Pal Graabein on a new HTML5 media format for the MOOC, so that we can be more open source and interoperable and consistent. We have drafted up lesson 1, but all the slide contents need to be transposed by hand into the new format and beautifully arranged. I reckon anybody who is good at moving files around in windows explorer could do it. Would someone like to volunteer a few hours to do that?
This winter I read Felix Martin's book, Money: The Unauthorised Biography, and learned lots of new things! As a classical scholar he describes how money originated as a combination of the accounting systems in Babylonia and systems of social obligations in Greece, entirely avoiding slavery and conquest so prevalent in David Graeber. He also explains the origin of the bank of England very well, as a marriage of the Sovereign's need for credit with the need of commerce to issue credit with the ultimate backing, taxes!
Money & society news
The way that money works in society is changing all the time, now especially as the zero-interest regime is becoming the new normal. Mixed up in that discourse is the need to eradicate cash, and all the privacy and convenience that cash implies; obviously the banking system would collapse the moment everyone tries to withdraw cash because bank credit loses value. There are many arguments being made against cash but few for. Cash is expensive to handle, carries diseases, enables money laundering (by non-bank actors), and would be hoarded out of circulation if bank deposits have negative interest.
Yannis Varoufakis the former Greek Finance Minister, is very busy these days promoting a new vision for Europe. In this important article he says we should pick up Keynes' model for a global economy which was rejected at Bretton Woods.
UK do-gooder celebrities Joanna Lumley and Brian Blessed participated in an anti-cash PR campaign. The language is very interesting. Don't forget that credit card companies 'lose out' on 2-3% of the transaction value whenever we pay in cash. Here is a robust defence of cash from an Austrian perspective.
Catalonia is flexing its separatist muscles, here seen threatening to use its debt to the Spanish government as a bargaining chip, or even a weapon. Bloomberg calls it a game of chicken: if Catalonians defaulted their banks and cash machines would quickly lose access to Euros. To withstand such an attack they would need an alternative currency. Unfortunately the one we know about isn't getting much traction.
Not only Portugal, Ireland, Italy, Greece & Spain, Puerto Rico and Catalonia are having 'liquidity' crises, but Saudi Arabia is suffering from low oil prices. As a last resort, the government might issue IOUs, which some would say is what all governments should have been doing all along.
Finally here is an attempt to hack banking and money from a legal point of view. It will take you a good 10-20 mins to get the idea. References to 'off-planet helpers' aside. could there be any substance to such attempts? Does it depend on their ability to win something in court, or on their ability to create belief?
All for now,
An academic study from the European School of Management and Technology highlights the utter futility of the bailout programs in pulling Greece out of the quagmire of debt bondage and economic depression.The report concludes:
“This paper provides a descriptive analysis of where the Greek bailout money went since 2010 and finds that, contrary to widely held beliefs, less than €10 billion or a fraction of less than 5% of the overall programme went to the Greek fiscal budget. In contrast, the vast majority of the money went to existing creditors in the form of debt repayments and interest payments. The resulting risk transfer from the private to the public sector and the subsequent risk transfer within the public sector from international organizations such as the ECB and the IMF to European rescue mechanisms such as the ESM still constitute the most important challenge for the goal to achieve a sustainable fiscal situation in Greece.”
See Rocholl *, J., and A. Stahmer(2016). Where did the Greek bailout money go? ESMT White Paper No. WP–16–02. http://static.esmt.org/publications/whitepapers/WP-16-02.pdf
There has been lots of chatter lately about bitcoin, blockchain technology, and crypto-currency. Everyone, including me, is trying to wrap their head around it all. This is what I’ve come up with so far:
- Bitcoin is a virtual commodity that is created by running some obscure algorithm. The people who get rewarded are the “miners” who burn up enormous amounts of computer time and electricity to create Bitcoin. That makes it akin to mining gold or silver—not a very useful pursuit, and like any commodity, people will prefer to use it as a savings medium or hedge against inflation rather than circulating it as a currency. Bitcoin is NOT the answer to the money problem.
- The important thing about blockchain technology is what it can do, what functions it can perform. You hear a lot about “smart contracts” and a secure trail of transactions. It seems to be something that is needed when using digital forms of contracts and transactions conducted over the internet, but provides no new functions compared to what has always been done with paper trails and records, but maybe I’m missing something.
- The term “crypto-currency” is ill defined and there is much confusion about the characteristics of such a currency and what it can achieve.
- The fundamental principles of reciprocal exchange still hold. The substance of a currency or payment medium is CREDIT. Claims still need to be authenticated and promises need to be guaranteed.
My grand, audacious vision is this:
TO ENABLE ANYONE, ANYWHERE TO USE WHAT THEY HAVE TO PAY FOR WHAT THEY WANT.
What they might have is skills, abilities, products, services and credit that is advanced by a circle of people who know them and trust that they are ready, willing, and able to deliver value on demand in the near term.
I have argued that the truly disruptive technology of exchange is a global network of small credit-clearing circles that provide “a means of payment that is locally based and controlled yet globally useful. It makes money and banks, as we’ve known them, obsolete.
My talk in Malaysia in October at the International Forum on Inclusive Wealth (http://ifiw.my/) will be on that topic and will build upon the framework that I laid out in my book chapter, https://beyondmoney.net/excerpts/chapter-17-complete-web-based-trading-platform/. –t.h.g.
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