Alternative currencies to the rescue?

Knowledge Collection Better Money
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jacky, thanks for these posts. You’re good at explaining this stuff in simple, clear terms, that is, good at understanding it … . Had some bright moments reading.

As for the “Intra-European Net claims”, I guess you refer to the Target2 system? I’m following the per-nation totals of these in long term charts over at querschuesse.de (see auto-translated English version). Provides the best coverage of this that I’m aware of. So I get a bit more freightened every month as the numbers come in :wink: and have a rough idea how this system works, but I’m lost when it gets to details and effects. Looked at your arxiv paper and got nicely reminded of my own time with pdfLaTeX :slight_smile: but lack the time and resources to dive into all this. A part of me wants to, and I’m always happy to understand a bit more when explained like you do, but then, it’s not my area of expertise …

(That’s also what makes me such a fan of these “simple” alternative currencies … it’s hacker ethics to only use a system you understand. You seem to share similar values, as you build models of what’s happening in the current system …)

Back to Target2. Do you think the current Target2 situation can have any major (crash style) consequences, or will it “just” cause bank liquidity problems like now? From what I understood from Stephan’s (above linked) site, negative Target2 balances are essentially accumulated national current account deficits (coming from trade deficits inside a too inhomogenous Euro zone, unable to be prevented by devalueing national currency as before). If so, then there are several hundred billions of debts out there that cannot be repaid from southern to northern national central banks via the ECB. And I wonder if that has potential for a new financial-economic crash? Over here, this is still a fringe topic and most economists seem not to care and / or not to understand …

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Thanks

I hadn’t seen the querschuesse.de site before - thanks.

Yes, I think so. I have the same reaction you do to trying to follow the details, especially on the “left hand”/central bank clearing side.

I’ll just put this here - and warn that it would need a lot more work to substantiate - but the clearing relationships are really a legacy of the older gold standard relationships, and effectively represent the vestigal statistical multiplexing that used to go on between gold and physical notes. When i inadvertantly  built a simulation of the banking system that didn’t include them (so bank transfers were just direct transfers of deposited money) the system was a lot more stable. However, whether it would be practical to implement that, and what it would do to the economy is anybody’s guess.

But yes, i think it’s vital we understand this system properly - especially if we’re going to be asked to periodically bail it out to the tune of billions, and i don’t honestly think we do right now.

I’m not really sure at this time, exactly how the behaviour of the multiplexing arrangement between the bank’s clearing mechanisms, and the customer deposits, really interacts with the economy. My strong suspicion is that it mostly acts as a rather artificial bottleneck on whatever would have happened anyway, but I need to build a more detailed simulation to explore that.

The bottom line though, is that it’s relatively easy for the central bank to intervene to sort out the liquidity problems that the Target2 represents, and it’s also comparitively cheaper owing to the leverage between the clearing mechanisms and the customer deposits in the systems. (Although i think it also raises a huge, what is money? question as well.)

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Another fun read.

I also strongly recommend for sheer entertainment value if nothing else, a section from an 1830’s description of American Banking in a book by W. William Wells (an escaped slave) which describes the free for all in Michigan during the 1830’s and 40’s (p92 on):

http://tinyurl.com/bp8lpzq

p95

“At this time money matters in the Western States were in a sad condition. Any person who was permitted to raise a small amount of money was permitted to establish a bank, and allowed to issue notes for four times the sum raised. This being the case, merely long enough to exhibit to the bank inspectors, and the borrowed money was returned, and the bank left without a dollar in its vaults, if, indeed, it had a vault about its premises. The result was that banks were started all over the Western States, and the country flooded with worthless paper.”

He then goes on to describe how he starts his own bank from his barbershop issuing “shinplasters”, and then experiences his rival engineering a bank run on him.

It’s worth remembering when examining alternate currency proposals that its not just the monetary unit. It’s all the things that surround it, including and quite especially the quite extraordinary ability people seem to have of figuring out ways to exploit it.

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Drupal Mutual Credit Tool and Hosting

Hi Mathias,

if you like, we can ask Matthew ( or I can ask him as I am in touch with him ),

the developer of the drupal mutual credit module you mentioned,

to open up a new account for Edgeryder purposes of time banking. ( or any other units useful in a mutual credit )

See :

http://communityforge.net/

http://matslats.net/

note : unless the Edgeryder’s online platform we are using is built on drupal, and that it is easier to integrate it on here directly ?

note 2 : the community forge module now also enables inter-trading ( between different local exchange networks )

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Small world

Hi Dante - awesome that you know him! Actually I found the mutual_credit module by pure chance some days ago. The whole big CommunityForge portal was unknown to me, I somehow managed to not find it during my earlier research on timebanking software … . And yes, Edgeryders is Drupal based, so it would be a perfect fit to use the module.

However, we’re not quite into implementation yet; instead gathering people, opinions and support around this idea and see what can be done. Feel free to contribute further, and thanks for your hints and offer!

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Ah, the good old days

Once upon a time, I spent most of a year getting my salary paid in e-gold. It was a fascinating experiment, and I was always glad that I’d done it, although things did get pretty hairy at one point!

I look forwards to meeting you, I bet we’ll have a ton to discuss at the conference. You are coming?

Vinay

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Defintely a ton

Yes, I will be at the conference and I already have a ton of questions and topics in mind to discuss with you :slight_smile:

You were into e-gold? Interesting, and way way before my time. Do you have any desire for a little alternative currency project or experiment that we could make happen here on Edgeryders? If so, what would be your porposal? I’m currently collecting ideas … . Maybe timebanking, maybe a little hands-on workshop at the unconference? So if you have any idea, or a pointer who else to ask on Edgeryders, very welcome …

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That’s a story I definitely want to hear

…or better still, I want to read it. Getting paid in e-gold? Come on, Vinay, tell us all about it!

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I’m not sure I would like a system in wich you receive some form of compensation or can gain it through beahving or doing things for others.

It would be very useful in crisis situations, but in “average” periods I think that it could lead us to miss the point of what doing things for others is.

I think that collaboration and sense of community are things that should be taught, not  inserted as an opportunity in an economic process.

And this is not about the fear that someone could try to take advantage from it, it’s about the concepts that stands behind it. I know, of course, that the intentions are good, but it’s something that I don’t know if I would be comfortable at :slight_smile:

Instead, I’m gonna learn more about BitCoin!

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Legitimate concerns

Well I can see the logic behind your reservations (and I’ve read your admirable “extreme volunteering” mission report). And indeed there might be a danger of monetarizing even the rest of community spirit that is left today … . On the other hand, barter / time bank projects regularly emerge from community spirit, founded by people who desire to interact more with each other in the local neighborhood, and to help each other out. The formalized currency-like system seems needed to promote more interaction than would happen by pure informal organization (i.e. based on personal relationships and personal trust only, without any accounting).

Persoanl example: in one case of neighborly help, I’m happy to have such a time-banking system in place. Because the work volume is large enough and our sense of appreciation of received services is different enough so that informal, unaccounted “friendship help” would definitely lead to social friction or involuntary exploitation in the longer run. That is, I would simply not do that much work based on “good faith” alone, but the time-banking makes it possible. Still, your taste may vary.

P.S.: The Bitcoin bounty is still unclaimed :slight_smile:

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Accomodating styles

Hi,

I just added a comment to my post on “one is glad to serve” which is about contributing generously vs scratching an itch vs stimergy.

http://edgeryders.ppa.coe.int/help-fellow-edgeryder/mission_case/one-glad-be-service#comment-2002

I think currencies are, at the core and among other things, a language for collaboration.

We need to accomodate all dialects and styles and situations.

I really loved it when I read Andrius Kulikauskas, a Lithuanian mathematician who started Minciu Sodas and a couple of other endeavours (where btw I met Marcin of opensourcecology and Vinay of hexayurt, and where I fell in love with public domain) say that there were activities in which we went in to gain … and others in which we went in to lose.

Maybe it’s a matter of making currencies “transparent in percentages”. Like when you’re working with layers in photoshop-ish software: you can have some layers that are 5%, 50% or 95% transparent. “Vaguely there.”

If I’m well fed, I’d rather have money “transparenced out” so I may focus on action. Others will focus on interactions. Etc.

So maybe we’ll have ways to do that, in some instances, at some point in time.

“Voluntary cooperation for to win” is what I’d like to see. Brainy ants solving world’s problems and accessing world’s opportunities, one ant-bite at a time, with instant karma and joy. With currencies transparented-out as much as each ant feels like.

Or maybe not, of course. :-?

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Modern Monetary Theory, Semantic Web, etc

I personally like to see debt as just meta-data, created out of the data of a contract.

I can imagine a variety of units of debt - not necessarily a debt fiat currency monopoly.

I can imagine the developments of protocols related to the Semantic Web, or even a compatible IEML

( http://fr.wikipedia.org/wiki/Information_Economy_Meta_Language ) to support such variety of contracts, while also offering further information regarding the contexts in which such choices / contracts can be enabled.

I also see beyond debt, other forms of meta-data increasing in importance, such as ( non transferable ) reputation, supporting transactions and contributions.

I also wish for a variety of relational dynamics to be enabled , making it possible to support through the emergent governance of individual choices the access to contextualized information offers.

Some topologies of relational dynamics are expressed by Fiske ( and others ) - see :

http://p2pfoundation.net/Relational_Model_Typology_-_Fiske

( also see a video presentation made by a friend , more specifically around “reputation” :

http://www.youtube.com/watch?v=Fybh4-iavYo )

The use of alternative and complementary forms of metadata to current interest bearing debt money can, in my view, facilitate further the support of, for example, the commons ( “les biens communs” ),

facilitating communal sharing and various forms of gift economics,

within an emergent global brain - also see pdf - programming the global brain - MIT : http://cci.mit.edu/publications/CCIwp2011-04.pdf

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As for discussions around current monetary creation,

I also suggest reading what Modern Monetary Theory has to suggest ( Post-Keynesian ? ) :

http://p2pfoundation.net/Modern_Monetary_Theory

also see a group on FB : https://www.facebook.com/groups/156161594445160/

and also the Geoists ( as I understand it : single tax on land / reducing speculation , and potentially guaranteing the state issuance of money with land )

http://en.wikipedia.org/wiki/Georgism

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Completely forgot that I offered that! Well, for the record, this offer is no longer active. Nobody took it up at the time … what a pity, they’d have 4000 EUR by now :astonished:

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@ErikBjare