Also, I completely fail to understand what Douglas Rushkoff is suggesting here: open source currency.
Do I need to read his books or something for this concept to make sense? He seems to be suggesting that we need money that isn’t controlled by the government, and that a model of money that is based on abundance rather than scarcity will enable an economy of collaboration rather than competition. What? Can someone point me to articles that will give me more specifics? (Naturally I will also be trying to Google this myself.) This article is just too vague for me to make sense of it.
One of the things Rushkoff is referencing (without actually saying so) something that’s been happening in Ithaca for awhile.
Hope this helps.
Re: Ithaca HOURS
oops – You’ll want to start here, I think:
Re: Ithaca HOURS
I couldn’t tell from the website exactly what sort of control their Board exerts over HOURS. Is it it much less control than the FED exerts over dollars?
Their website is pretty confusing. At one point, they say “Once listed [in the directory], you may then begin to accept HOURS as a medium of exchange” (so you can’t accept HOURS without their permission?–that’s a lot of central control), but other things they say make me think they don’t really mean this. Oh well.
Also, HOURS seem tied to the dollar so that one HOUR _necessarily_ is $10. Are businesses not free to treat them differently?
All of my econ BS-detectors are flashing red and screaming their hypothetical little lungs out. I don’t have time for a detailed posting, but remember that money is supposed to be a store of value; a central authority that guarantees that the currency you have today will be worth approximately what it’s worth tomorrow — and has the strength and competence to back that up — is a feature (possibly the feature), not a bug. Also, any economic theory that assumes abundance in any good is suspect at best, automatically contradictory at worst.
Preliminary conclusion: this guy is a crank, using “open source” as a buzzword to promote his pet theory with no real science behind it.
Sure, there actually is a scarcity in the world of oil or coal or gold, but when looking at human effort, there starts to seem to be more of an abundance. Imagine a neighborhood or any other group of people that have very little, or no money. They’re a bit stuck in terms of exchanging their human effort with each other. Alternative or targeted currencies can encourage a flow that otherwise would be difficult to achieve.
Taking your comment sentence by sentence.
Is your effort abundant? Before you answer, consider whether you would be able to hold down three full-time jobs. How about working 60 hours a week while taking five Swat seminars? If you just mentally recoiled at the effort involved in those scenarios, or indeed if you’ve ever thought “I don’t have time to do all this!”, you know, or ought to know, that human effort is scarce. It is a renewable resource (so long as the humans are fed, watered, and sheltered), but it is finite.
As to the village with little money, it can acquire money by selling its valuable labor. Also, barter and gift economies are hardly unknown in such situations, although they are less ideal for building wealth and trade. For stimulating economic activity in poor and relatively isolated places, you may want to read up on microcredit.
The village with little money might not have anything that the outside world wants, but could very happily trade internally, but for lack of currency. That’s the pont. They don’t even need outside credit. Mutual credit will do the trick just fine.
If that’s the case, then they can establish their own currency system. It can work the same as any other successful currency throughout history.
Note that this is with the stipulation to the rather incredible statement that the village doesn’t have anything the outside world values; the demand for labor has not yet been superceded by technology.
Heard this before. All I can say is that it sure as fuck went sour real fast when Jackson tried to move us in that direction, and those were Americans that were supposedly more rugged and individualist and bred-on-freedom than us modern-day milksops — and, what is more to the point, the economy moved at a much *slower* rate on much *smaller* scales where market shocks were much *less* of a threat than they are today. This is why the U.K., which was, back then, the actual economic superpower of the world, was never so insane as to try it.
If wildcat banking could send the U.S. into a constant boom-bust cycle for a whole century back then, imagine what it would do to today’s economy. (And, keep in mind, this is money that’s still technically promissory notes linked to a gold standard, not completely free-floating currency like we have today.)
I didn’t read the article you’re referring to (but I will, and I probably should have before I respond, but…yeah), but I can point you in the direction of other people that are talking about similar concepts.
There are two books that are decent in describing ‘alternatives’ to the national monetary currency that almost all economies are based on today. They are: “Money: Understanding and Creating Alternatives to Legal Tender” by Thomas Greco. The second is: “The Future of Money” by Bernard Lietaer (Which is only available thru Amazon.uk) Both of these books are rather academic in their approach to understanding the current monetary system and other approaches to monetary currencies. Lietaer was a world banker and co-designer of the Euro, so he is regarded as knowing a thing or two about money systems. Greco tends to be very passionately against the current system, and that is communicated in his book – which is still quite good.
Those two tend to be considered the best reading about the faults of our current monetary system and possible alternatives.
So, to briefly address the things you mentioned above:
Almost without exception, all national currencies are debt-issued currencies that bear interest – meaning that for every dollar in circulation, there’s at least another dollar (sometimes 2) owed back in interest. Because it’s a fiat currency (created from nothing by the Federal Reserve, in the case of the US), it is designed to be scarce to keep its value. There’s not enough money to pay back the debt owed by everyone participating in the system. This is what he’s referring to about scarcity.
There are those (like myself) that believe that currencies have very specific characteristics – there design creates specific behaviors (like the behaviors of a market). We operate in a monetary system that has to be scarce, by design. I think the author is referring to behaviors of greed and competition as being the natural effects of using a scarce currency. So, if you create currencies of abundance (in the case of monetary currencies, you could use “mutual credit” or “zeroed” currency, where the currency is created at the time of the transaction through debits and credits to individual accounts and the overall total balance of the currency within the system is always “0”) a natural result will be more cooperation.
I think that’s the shortest explanation I’ve ever tried to give on this subject, but there ya go.
If you are really interested in this, you should read one of those two books. The Future of Money has a cool ‘money primer’ in the back which elegantly explains our monetary system, who actually controls it (it’s not the government) and why it’s not necessarily the best option for creating a free flowing market, among other things.
ACK! I misspelled “there” there! It should have been “their!” I hate people who do that! I can’t edit it! ACK! 😉