Currency Quips for Later Development

[Reposted from New Currency Frontiers]

I wrote these responses in the comments thread on this article about The End of Social Movements. There are some currency issues in them that I want to capture for later deeper discussion, so I’m reposting here so I’ll know where to find them.

Money and Power Pathologies

Will - I think you make a good point that they’re ability to fool us, does not make them the same thing in essence. And I even like your lunch money metaphor.

So consider this: We start making alternative lunch money. It is only accepted at our own food carts, and participation is completely voluntary. The corporate thieves/bullies/thugs/raiders can only use it for lunch in that community and there’s only so much lunch they can eat.

However, if they can’t use it to buy up real estate, bribe politicians, make speculative investments, build their empire of power an anonymity, then it isn’t worth their time and energy to steal.

Humans are susceptible to a particular kind of magical thinking that verges on pathological. Specifically, it has to do with having a magical item that gives you a kind of universal power. For alchemists and conquistadors it was gold. For modern Americans it is MONEY.

You can hold it in your hand, and use it to get ANYTHING! This is a temptation that attracts the greedy, the power hungry, the corrupt. Heck, it attracts almost all of us, but some go too far while under its spell.

The sooner we learn that we actually do NOT want our currencies to be universal power objects, the sooner we can get back to having those currencies be designed to fill different niches and meet the needs of our distinct communities and repel the “conquistadors.”

Rushkoff didn’t say it in this piece, but much of this boils down the the corporatization of our money. It’s time to think for ourselves about currency. They’ve sold us a bogus bill of goods about money which is designed to feed their power hunger and increase their wealth.

We can learn a lot from from nature. Notice that each organism has its own currency / circulatory system. And that the lifeblood is mostly not interchangeable. Human blood is not the same as dog blood or tree sap. The more universal items of value (such as water and air) are not scarce.

What would currencies and economies look like if instead of being designed to benefit a few power-mongers, they were designed to support diverse communities and people?

On Gift Economies

Mika, Rushkoff isn’t saying Pirate Bay doesn’t function well as distribution system, but that it is more anonymous than he’d prefer. He already has the Internet as an efficient distribution system and will give the book to whoever asks for it. Pirate Bay doesn’t particularly increase that efficiency.

This whole article is about being connected on a human level, staying grounded, not being swept into abstract movements or corporate entities. So his desire to be connected as a human to the people that want his book is completely consistent with his thesis.

I can’t speak for Douglas on this point, but I can speak for myself.

Gift economies function according to different principles than commercial economies. In a commercial transaction no relationship is required nor inherently created. Anyone with 3 bucks can buy a box of nails at the hardware store and remain anonymous if they choose to. It is a tit-for-tat exchange which ends the moment it is done.

However, if I walk across the street and ask my neighbor for a handful of nails, it is a completely different transaction.

It requires relationship. If I’m a bad neighbor he may not go out of his way for me.

  • It is a GIFT, not an exchange. Don’t fall for that lazy thinking that everything is an exchange. He doesn’t want me to hand him 3 bucks or to bring a handful of nails back next week after I bought more. He’s not trading it for the “feel-good” or to have me personally indebted to him.
  • It is an investment in a SOCIAL CONTRACT. Gift economies function by social contract. If you’re a good “citizen” according that contract, then we’re good with each other. My neighbor is investing in a neighborhood ethos where we do this stuff for each other. It’s a pay it FORWARD, ACROSS and only occasionally BACK economy.

So… why does this matter. Because social contracts exist between PEOPLE WHO KNOW EACH OTHER. Given our current paucity of robust reputation currencies, they have not traditionally scaled beyond family/tribe/village.

But this is a core part of the economic shift we are undergoing! We are using information age technology to create wide-scale social contracts, reputation currencies and gift economies! This completely breaks out of the box of all traditional “economic” models which assume everything is about exchange.

Anyway… these are my words not Douglas’, but I’ll bet the spirit of it is at the core of his desire to have an actual connection with people he gives his book to.

Anyone who wants to remain anonymous and disconnected can feel free to BUY a copy. But… What’s possible if we stop hiding behind money pretending to be independent and start acknowledging our joyous interdependence?

When we set money-making aside, we tend to take pretty good care of each other.

Money and Anti-Inflation

Lastly, this one is a response on a Facebook discussion to a question about value reference currencies.

One of the primary applications of money is as a MEASURE of value. All other measures have a reference standard which define them. That is why we don’t worry about inflation or deflation of meters, inches, liters and grams every year.

By pegging a monetary currency to some standard (whether a sophisticated basket of commodities like the TerraTRC or an everyday commodity like an egg or loaf of bread) we can eliminate one of the vagaries of today’s fiat currencies (value fluctuation). This is the primary reason that so many people (Austrian School of Economics and more) want a gold standard.

However, there is a difference between requiring that money actually be backed by a scarce commodity and pegging a currency to a value reference. Just because there is an official meter rod kept in a controlled environment in a laboratory, doesn’t mean that you can trade your own meter stick in for it.

When we make a shift toward currency models designed for sufficiency instead of scarcity which don’t vary drastically in supply, then currencies can be pegged in practice to eggs without having to actually be redeemed for them. (e.g. mutual credit systems which always have a net zero units in circulation yet the “supply” expands or contracts based on demand as we extend credit to each other).

Specifically to your original question, I find it difficult to believe that corporations will use actual Terra because of its demurrage aspect. You could write an international contract and use Terra as a value reference without ever needing to be in possession of a basket of commodities which is decreasing in value. I think that approach may have greater chances of success in being adopted.