P2P Foundation

The Foundation for Peer to Peer Alternatives

¿Is there is such a thing as peer money?

In this article, Michel Bauwens says that such a thing as peer money exists based in something like a russonian social contract.
We will not argue this fact, though we think that is very difficult to get it to work this way.
Recently I´ve been working around Adrian Bejan´s works about the constructal theory that says "For a finite-size (flow) system to persist in time (to live), its configuration must evolve such that it provides easier access to the imposed currents that flow through it."
We can consider money as the fluid of the economic system . The economic system controls its fluxes as it is scarce. I think that in the abundance system fluxes do not have to be “control”, thy have to be “institutionalised” to preserve the common from depredation and that´s all.
So in terms of fluxes, our system must be constructed in a “constructural” way, in that case no accumulation, and no interference of the fluxes are permitted.
I don’t think that such a thing as money, in the way as we think in money today, will coupled with the constructal law.
In countries like our´s, Argentina, inflation makes money loose it´s value, and in that way accumulating money in an inflationary economy is not worth, so it tends to flow until it dies out. There are many barter clubs, in the ´02 collapse they flourished around here, that emits money (shares) that last fore a finite lapse to encourage the flow.
Perhaps we need to start to talk about flows, goods flows, services flows, productins flows and all other flows that can treated in a way to provide them with an easier access to the imposed currents.

Views: 141

Comment by Michel Bauwens on May 11, 2009 at 4:55
Hi Carlos, I must admit I'm not specialist enough to understand your comments. So a few extra questions perhaps.

1) Could you explain what a russonian contract is

2) your approach based on flow seems very similar to the metacurrency project. Is that so?

Comment by Sepp Hasslberger on May 11, 2009 at 9:33

Argentina was the birth place of a monetary theory developed by Silvio Gesell which is capable of overcoming the problems of accumulation and interference with flux in the economy. Gesell achieved those results by providing his money with a built-in circulation charge, which resulted in the availability of disposable income to the state (or monetary authority) and at the same time made interest unattractive, while keeping the economic flows going.

Perhaps this is a piece of monetary history to look into.

His work - The Natural Economic Order - is available on the net in English, Spanish and German.

English: http://www.appropriate-economics.org/ebooks/neo/neo2.htm

Spanish: http://www.silvio-gesell.de/html/el_orden_economico_natural.html

German: http://userpage.fu-berlin.de/roehrigw/gesell/nwo/
Comment by Michel Bauwens on May 11, 2009 at 11:56
Hi Sepp,

Are you saying that Gesell was able to apply his theories? The book you refer to is a proposal, but has it ever be applied?

Comment by Carlos Boyle on May 11, 2009 at 14:21
Michel orget about Rousseau, I think that your defense on money (currency) relies strongly on social contracts. That’s my appreciation about your model. But that is not the point. What I´m trying to figure is a currency model based on fluxes, not on contracts.
Silvio Gesell was a clever Swedish immigrant that lived in Argentina for some time, part of his families stayed when he return to his country. What Sepp figures out is just what I war trying to model. All barter clubs (clubes del trueque) where based on Gesell´s theory, they emitted currency that there where called “bonos” or “creditos” (credits) that had three months value, after that period thy where replaced whit a new emission.
Our experience, not mine but many people’s, was very positive, but the system collapsed when the Argentinean economy reflourished in 2004. The creditos weren’t able to be changed in the real economy so the clubs became more and more closed on their own and slowly died out.
On the other hand, that micro system moved a significant part of the every day economy for a period 2002-2003/4. The real economy had it as a real competitor and tried to pull them down and they did it. Is like having a Cuban economy coliving simultaneously with a neo liberal economy.
If you ask me about the global results I think very positive about then. They in fact worked for more than a year in a destroyed economy. Though I can point out two facts that that I think could made them collapse, I´m not a specialist. First, the fact that I figured out about the creditos, I think that it is possible to improve it. The second is about the club people, they couldn’t make through the diversity of the offer of goods, nearly all of them med the same products, so there were an over offer of perfumes, and cooked food and very little of personal hygiene articles.
I am friend of the local clubs president, a chemical engineering, I will try to get him to write something about his experience in front of the club.
Some more links in Spanish:
http://www.autosuficiencia.com.ar/shop/detallenot.asp?notid=565 also en English
http://ar.geocities.com/solardepiedra/trueque.html Typical club´s page, anchored in the 02´s
http://www.diariodecuyo.com.ar/home/new_noticia.php?noticia_id=332742 a reacent news about new barter club in Mendoza, not based on creditos.
Comment by Carlos Boyle on May 11, 2009 at 15:26
Gesell was Belgian and when he returned to Europe he returned to Swiss
Comment by Michel Bauwens on May 13, 2009 at 3:22
Dear Carlos,

Thanks for your input, I now understand the reference to Russonian ... I'm not aware myself of how my ideas may be rooted in his social contract theory, but it is of course possible ..

As for Argentina, see the report by Thomas Greco and Sergio Lub:


Both went on an investigate trip there and here are some of their findings on 'what went wrong':

"It must be understood, first if all, that there were a multitude of trading clubs in operation. Some of these, particularly the ones outside of the Buenos Aires region, were operating as isolated and autonomous entities, but the majority of the clubs were connected in a loose network. There were also a multitude of different currencies that were being circulated and accepted at the trading fairs. As early as 2001, some irregularities and falsification of currencies had been observed and some of the currencies were being refused, and there was a growing factionalism among the various leaders and organizers of the movement. Between that time and mid-2002, many clubs adopted the currency of the PA.R. and their currency became the dominant form. With this centralization and the attendant weakening of the social bonds and protocols of the local clubs, the stage was set for trouble.

During our visit to Argentina in March 2003, we met with and had discussions with many of the core people in the Trueque movement. We received conflicting accounts from various people and it is difficult to uncover a clear picture of what happened. Nevertheless, when all is said and done, we feel we are able to offer the following opinions.

The fundamental problem that led to a general collapse of the social money movement in Argentina was FAILURE TO RECIPROCATE, which arose from:

* 1. The lack of a clear agreement with those to whom credito notes were distributed,
* 2. Probable appropriation by the management group of large amounts of notes for their own gain (there seems to have been no accounting for how much they paid themselves for their organizing and administrative efforts),
* 3. The absorption of large amounts of creditos that were issued as political gifts to supporters of various candidates,
* 4. Selling creditos for pesos at huge discounts as a private money making scheme,
* 5. The allocation of creditos in “starter kits” to everyone and anyone without a clear agreement of rights and responsibilities or the usual commitment to a local solidarity group,
* 6. The injection into the economy of huge amounts of counterfeit credito currency .

Failure to reciprocate is what causes inflation, which leads to loss of confidence, which causes producers to stop participating, which leads to currency collapse.

The underlying structures that allowed it all to happen were:

* 1. Issuance by a central authority,
* 2. Secret books and lack of accountability to users,
* 3. Primary reliance upon paper currency without adequate safeguards against counterfeiting and falsification, and,
* 4. Failure to take appropriate and timely action when problems became apparent.

It is extremely important to know who is issuing a currency, and on what basis. That, of course, does not rule out the anonymous transfer of the currency between others who are not part of the issuing group. There are many advantages to using credible bearer instruments.

Some people were able to acquire creditos at little or no cost and then sell them on the market for whatever price they could get in official money. If the notes had been properly issued on the basis of a solid commitment and the exchange of real value, no one would have been willing to sell them at much of a discount.

In general, it can be useful for someone to "make a market" in a private currency. The market price of a currency will reflect the adequacy or inadequacy of the currency's underlying structures, and will provide a bridge or semi_permeable membrane between the community currency economy and the formal economy, allowing those with earning power in one economy to spend in the other. That's the way it works when we travel to a different country. For example, we earn in the USA but we want to spend in Argentina, or Ecuador, or Europe, etc. That requires the exchange of one currency for another.

The PAR group (former RGT), in their rebuilding process, has not adequately remedied the structural defects. From our conversations with them, it seems they intend to hold on to the power and are not planning to open up the information. Also, their exchange plans will carry over the inflation of the old notes into the new. "
Comment by Carlos Boyle on May 13, 2009 at 5:36
What I can say is what the people in my village, Venado Tuerto 70.000 souls, said on those days.
From the first set of points the first is true, the common was not clearly defined so the agreement, the institutionalization of the common never happened. There were always complains towards those who distributed the credit notes.
In cities like ours, as I now, points 2 or 3 did not existed. On the other hand, points 4, 5 and 6 did occurred, especially at the end of the loop, at least there where complains.

I can subscribe all the second lot. It´s curious that I hadn’t take notice about the Trueque movement as a common until today. In fact what the authors point out about “what went wrong” is in fact, what goes wrong in all administrations of the commons that go wrong since Garret Harding.
From a distributed network point of view, the central authority, the secret or total lack of accountability are lethal to the institution to be created. Elinor Ostrom says that the governance of the commons must emerge from representativity and what thy point out is just the opposite.
I´m writing a new book about fraternity and the first chapter is about the commons, this is a good example to illustrate it. http://p2pfoundation.ning.com/profiles/blogs/el-siglo-de-la-fratern...
Thanks for the article.
Comment by Sepp Hasslberger on May 13, 2009 at 10:58

yes, the theory of Gesell's "rusting money" was applied in a few places. Perhaps the best documented and most well known instance of this was in pre-WWII Austria, in a community called Woergl.

Here is an article with links to various references:


Thomas Greco has a deeper analysis here:

Comment on the Wörgl Experiment with Community Currency and Demurrage

Comment by Michel Bauwens on May 14, 2009 at 9:41
Thanks to both of you for the illuminating comments.


Add a Comment

You need to be a member of P2P Foundation to add comments!

Join P2P Foundation



© 2024   Created by Josef Davies-Coates.   Powered by

Badges  |  Report an Issue  |  Terms of Service