What kind of open money do we need?

[Michel Bauwens]

Users of the P2P Foundation wiki will know that we focus part of our attention to the emergence of open money systems.

The logic for me is undeniable:

1) just as we can now peer produce content, software and now designs, I think it is a logical conclusion that we can also produce civil society based money;

2)the current money system uses protocols that induce pathological behaviours and ultimately destroys the biosphere.

Once we have said this though, things get a little more complicated, as there seem to be quite a plethora of open money or 'monetary transformation' proposals out there.

I'm familiar with the following:

- Bernard Lietaer, former Belgian central banker, who takes a macro view of change, building on the existing, but transforming it to a different logic. He proposes a four-tiered monetary system, combining local and affinity based open monies with a global Terra to replace the dollar and any other sovereign currency that may aim to take its place.

- Thomas Greco, who has studied extensively the experience with alternative currencies (and their failures, for example in Argentina ), stresses the mutual credit function, but also wants objective safeguards to maintain the value of such new money

- Michael Linton, who stresses that money is only trust, and has written money to easily create such open source money systems, on a local and affinity basis

As you may guess, various people are criticising the weaknesses of other proposals, and though I would wish for an integration, it is beyond my skills to offer it, so I'm hoping for the next best thing, opening up a dialogue.

Here are my own a priori assumptions:

1) I'm partial to Lietaer, because he covers all the different levels and recognizes the existing world structure to inform strategies of change

2) Thomas Greco is very precise about why local currencies fail. Having myself been familiar with LETS, I see it as a high effort alternative that cannot structurally replace what we have now. From Greco we can learn what is needed to make such initiatives work better and grow into a real alternative

3) Michael Linton has done and is doing what needs to be done to have open money tools at our disposal

What prompted my initiative is that I was contacted by Michael Linton, who is proposing a podcast conversation on the issue, at Blogtalk Radio's Open Money channel .

He described open money as an expression of our capacity for social agreements - money systems are systems of agreement and varieties are virtually unlimited - almost any practical community can enhance its process with appropriate community money systems / measures / records.

Practical requirements for open money include

1) an accessible operating platform that enables users to form or join networks generally rather than one by one

2) an intelligible social organization for collaboration on naming accounts, systems, registries

3) a menu of standard cc systems and provision for variations

4) ideally, some education, maturing and appreciation

Michael Linton and co-conspirator Ernie Yacub say that "generally, open money means we can end monetary poverty - quickly, and for ever."

They believe that "community way systems will soon demonstrate the engine of open money with sufficient clarity for others to replicate - software matters, and will matter more as networks emerge and populate - open money tools will become increasingly used in open source projects, media ventures, creative processes - carbon counting cards are coming ."

[Jeff Mowatt]

Before reading this and the Wiki, Michael, I was aware only of Chris Cook's open capital and the well trodden LETS systems and variants. Chris introduced me to some software platforms, opting for XO from New Zealand as a hosted platform which operated on a dual currency basis.

In our coversation, hosted by the Omidyar Network which is no more, we came across Olivier, the French pioneer of the barter engine, an interesting future development according to Chris.

http://www.openbarter.org/

[Michel Bauwens]

Very interesting Jeff, I wasn't yet aware of that one!

Michel

[Josef Davies-Coates]

I'm involved with http://opencoin.org which I think holds great promise :)

"The OpenCoin project is about creating anonymous virtual tokens, by providing a set of standards (formats and protocols) and a GPLed reference implementation of these standards. Tokens can be used for different kind of purposes, including online payments and voucher systems."

We may end up (I hope so) working closer with Ryan Fugger of Ripple too.

Josef.

[Josef Davies-Coates]

PS - I think the work Michael and Ernie are doing is very important, but wish they had a little more respect for people with very similar goals but with differing perspectives of priorities and/ or different implementation strategies.

In my experience they are both far too quick to rubbish other people's projects and can be somewhat contradictory; they want tools to enable a vast ecosystem of diverse community money systems, acknowledging the the need for requisite variety etc. but also claim that some of the existing and most successful community money efforts (e.g. berkshares, totnes pound etc.) are counterproductive because they don't live up to their own ideals (not very open).

Their proposed model, Community Way, is a good one. But I don't see how it is so different from Berkshares, Totnes Pounds, Salt Spring Island dollar etc that they so often criticise. Ultimately both are sold to consumers consumers and used like "normal" pounds or dollars with businesses that agree to accept them.

Community Way adds the potential of mutual credit, which is v good, but has to date also been much less successful in the real world (as compared to projects that just try to do one piece of the puzzle, eg. Totnes Pound, Bartercard).

I will follow with interest the latest Community Way iteration in Portland. Lots of good stuff happening there so perhaps that will be the place it will work...

(I wasn't too inspired by Alan Rosenblith's interview on blogtalkradio - he and whoever else is leading this in Portland will need to get a lot better at enthusiastically explaining it to outsiders).

[Michael Linton]

Dear Josef,

It's particularly instructive that, regarding community way and the various pseudo-cc you cite - berks, totnes - that you "don't see how it is so different".

I presume you could see a difference between a live horse pulling a cart, and a cart pulling a dead horse? And how the order and condition are important?

In the paper-sub monies, the organizers are saying - "you can trust this money, it's not really community money, it's just paper underwritten by normal money, and so you can cash it when you like".

In community way, the businesses are saying - "we are issuing promises and you can consider them money."

Notice any differences yet?

If not, then perhaps you could try thinking this one through.

People in this town often mark bills with a distinctive stamp. The banks are not impressed and refuse to accept them. So they tend to stay in town, circulating as you might suppose, from hand to hand, from till to pocket, from sock to shop etc etc.

Q1) Does this make any difference to the pattern of transactions we might call the "local economy"?

(In case you're in doubt, the answer is "no, none whatsoever - no more than if we never used $10 bills, or only used $10 bills and loose change - the pattern of buying and selling is not at all altered. Or perhaps you think it is? If so, you might explain your views, but please don't try the "plugging leaks" nonsense)

Q2) When is a berk any different?


I have talked with some advocates of berks, etc who have accepted, sometimes readily, sometimes not, that they are essentially meaningless - except, they will say, as "an example, an encouragement, a way of getting people thinking."

But to use something so transparently trivial as some sort of direction to something useful, and therefore necessarily different, seems close to 100% counter-productive, at least to me. It certainly takes plenty of time and money, and can hardly add anything but misconception and confusion in an area where clarity is critically important. And so clearly lacking.

In short, while berks etc can look to some as though they are new money going round, actually it's just the same old stuff in "new and improved!" wrapping, and it's still just going through. Community way and other mutual credit are new money, and they go round.

So what is judged "successful" depends on who is looking, and how well they can see.

Ernie and I are indeed dismissive of useless distractions, particularly when it is asserted that they are actually doing something when they are most certainly not. Peter Medawar, in similar circumstances, wrote -

* Yet the greater part of it, I shall show, is nonsense, tricked out with a variety of metaphysical conceits, and its author can be excused of dishonesty only on the grounds that before deceiving others he has taken great pains to deceive himself.
o Review of Teilhard de Chardin’s The Phenomenon of Man, Mind, 70, pp 99 to 105.

Capice?

As for your other assertions - that we are "too quick to rubbish", "contradictory" and "not very open" - we're firmly of the belief that rubbish is better rubbished than revered, that what you see as contradiction is merely your own extensive confusion; and we have reviewed your view of "open" on several previous occasions and as far as I can see you haven't yet grasped the basics, so let's just leave your opinions (too quick perhaps?) to stand for the record.

I hope, Josef, you will in time find how the respect you earn comes from the respect you learn. Maybe listen in when we have a session with Michel on blogtalkradio next week?

[Josef Davies-Coates]

I'd be interested to hear what you think isn't open about http://opencoin.org ?

[Josef Davies-Coates]

Our first planned implementation of opencoin vouchers will be for The Hub Network http://www.the-hub.net - an inspiring international network of people working on projects for a radically better world, serviced by The Hub Ltd who invest in shared infrastructure and provide physical and virtual spaces for work, play and collaboration.

[Jeff Mowatt]

Josef, on the subject of other people's projects, where does the hub come from? It would appear to be congruent with the kind of things I'm doing, but none too obvious how one might participate nor does it make it too obvious that one is welcome to do so.

Jeff

[Josef Davies-Coates]

Hi Jeff, The Hub started in London but is spreading to major cities across the world. Its very similar to the whole coworking stuff.

The existing website is somewhat of a stop gap measure (because something better than was there previously needed to be in place in time for the launch of a new venue in London next month).

It should become more obvious how to get involved but if you've any specific question let me know and I'll do my best to answer (I'm a part-time member of the London and tech teams)

[Jeff Mowatt]

OK, Well I run a profit for social purpose software development business who develop bespoke database driven web applications and supply a facilities reservation and room booking product which has funded our work in Eastern Europe for the past 4 years. We've existed as an advocacy for localised people centered economic development since 1996 and have leveraged a microfinance bank in Russia. We delivered the 'Marshall Plan for Ukraine' as a strategy paper in October 2006.
From what I see, the organsations represented by The Hub have congruent ideals, but seem to be a closed group. I want to know if they want to include us among those they promote, particularly in Bristol which is close to our location.
Jeff

[Josef Davies-Coates]

Jeff, I'll reply to you about this in a message because I feel we've drifted off topic somewhat :)

[Michael Linton]

Dear Michel,

A "plethora .. of proposals" covers a wide range of monetary initiatives, but surely there's no need to align them? Certainly not those you cite specifically - the different directions taken by Bernard Lietaer, Tom Greco and open money developers.

While there are major distinctions, is there a need to chose? Why not "all of the above"?

For instance, Tom believes that backed trade currencies are realistic, viable etc and will be important in the emergence of community currencies. I agree entirely, and I'm quite sure Bernard does too. But both Bernard and I are putting our energies into other ideas.

It's probably fair to say that Bernard and I have similar views on each other's work - that we each have strong reservations about the practicalities, as we see them. But neither of us is (I believe) in any opposition to the other. Personally, I wish Bernard every success in his designs, but I see little point in adding my efforts to his - indeed I would probably more hinder than help. And Bernard has made similar indications on his part.

So - "each to his own" seems the reasonable approach at this point.

I have however one immediate correction to make. You wrote, "Michael Linton, who stresses that money is only trust,.." and I decline that completely, although I can readily see where you would draw that conclusion given that I argue that backing, whether in kash or kind, is not always necessary, indeed often entirely counter-productive.

But I have always argued, since '83, that "trust" in money is utterly misplaced and certainly not a substantial basis for any but such currency systems that believe in courting distrust and the consequent risks. Perhaps a small point, but really quite crucial to the understanding of open money.

Don't trust any money - particularly a community currency. And don't place the burden of trust on any other person, organization, institution, culture or concept unless you are fully prepared to have that "trust" abused. Asking others to be "trustworthy" in your terms is to put them in a demanding position and that can be quite unethical.

Use all moneys - particularly open moneys, community currencies, etc - with continual attention to the possibility that they will prove worthless at some point - and that if they do there will be nobody to blame, not even ourselves. myob - mind your own business - is the most important understanding in all work on our money.