Money is the problem: Mechanism Design for currency
Money Is The Problem: Mechanism Design for Currency
Thursday 21I
Convener: Grace Rachmany
Notes-taker(s):
Tags for the session - technology discussed/ideas considered:
Discussion notes, key understandings, outstanding questions, observations, and, if appropriate to this discussion: action items, next steps:
Main points of the talk:
Money is a mechanism we invented and it’s a figment of our imagination. We have the opportunity to create anything we want. Now with cryptocurrency there is an opportunity to completely re-invent money but most tokens have not done that, they are the same kind of money than we already have.
In this presentation I will attempt to represent the most extreme case to put into contrast with our existing beliefs. It’s not necessarily my precise opinion but gives a perspective to shake up your assumptions. Money represents transactional value which is anti-human values. Anti-air, anti-relationship. Most money today represents EXTRACTIVE value that has collateral damage or “externalities” that are not accounted for.
Extractive includes: Extracting resources from the earth Extracting labor from people Extracting food from living animals Extracting data from people
Polluting people’s brains with disinformation (advertising/persuasion) Money today is created by debt. This is an arbitrary invention of our system. 97% of money is created as debt by banks, not by governments. Today we see governments taking out bonds and loans in order to print money… so it’s not really even printed. It’s created in the form of debt.
The result of this invention of money by debt is that GROWTH is the main engine of the economy. Because governments, businesses and individuals are eternally trying to service this debt, we must have growth. You don’t have to imagine the consequences because we see those consequences now-- everyone suddenly defaults on everything and the results are tragic because this debt is not serviceable and never was. It was a kind of a huge ponzi scheme and increasingly we were seeing how we could never get out of it..
Other ways to create money include mutual credit, commodity backed, time banks. We probably don’t know what is possible in this realm but we can start to think about it.
Our current system brainwashes us to think money can solve problems. We have to re-adjust our minds to think about resources rather than money. When we think about resources and value rather than money, we are able to come up with creative solutions. The current system pushes that without money you will die--but money is just a means to get those resources and it doesn’t have to be.
Money as we use it today is transactional outside of membranes. Inside of membranes, you don’t use money. In your family you don’t pay for food. In IIW you don’t pay for knowledge or speakers. That’s the membrane agreement. In other conferences it could be difference -- the speakers could be paid or the speakers could be paying to shill to you. Whatever the terms for entering the membrane, once inside the membrane money is not used for transactions.
In that sense, you NEED money to the extent to which your existing membranes don’t meet your needs. You want money to the extent to which your membranes don’t provide your wants.
Rather than UBI, we could talk about food the same way we talk about healthcare, that is, it’s a service and universal right. That way instead of distributing money to people in a membrane, we would have a way of distributing food. (shelter/education/whatever) What are those membranes? Right now it’s nation-state, but any shape of membrane could be possible.
Question: what about free riders? who will do the work to produce that food?
Opinionated answer: The system we are in was designed in a scarcity economy where the scarcity was food. If you lived in a sustenance society, if one dude/dudette didn’t help with the harvest, then someone went hungry. That’s a free rider problem. You actually truly needed every able-bodied person to contribute to the survival of all. Today’s reality is different. 10% of the workforce could create enough food for all. We would have to pay farmers and every society would decide for itself. In some communities maybe everyone would take turns. In other communities we might give them special awards in ceremonies. In most societies, we’d pay them and they would have money that would allow them to buy luxury goods.
Q: who decides what a luxury good is?
A: That will also vary from membrane to membrane. Every society will have different values. Maybe in some societies nobody pays for everything and they have some cool 3D printer that recycles everything and produces everything for zero nominal value, maybe everybody gets everything free and money is only used when you travel.
Fungibility could also be in the form of different certificates. For example, it might be enough to show a credential that says you are in good standing in your community in order to get a hotel room in another community. Those communities might not exchange fungible money but just “in good standing” certificates, and give the hotel rooms based on a ranking basis during peak times… this would all be community interchange.
Reputation may end up to be a more important form of exchange, particularly for goods that are digital. For example, a group of scientists might invent a cure and give the formulation to everyone except anti-vaxxer communities. These kinds of exchanges could be based on any type of currency.
When thinking about new forms of exchange and reputation and currency, we should be thinking in terms of biodiversity rather than having the right answers. Societies and membranes have their own values and will have different ways of exchanging value and signalling values. Regarding free riders, if survival is not a problem, free riders are not a problem. The guy sitting under the palm tree playing the ukelele isn’t bothering anyone and if he has no extra cash, he isn’t burning up fuel by travelling or buying plastic toys. He’s just bumming around consuming less than the hard worker.
Some (many) people will want to work not just to buy stuff but because they like to.
The following is by Arthur Brock of Ceptyr/ Metacurrency/ Holochain.
Please see this for an explanation https://finnern.com/2014/07/06/wealth-a-living-systems-model/
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New currencies can think about all these different types of wealth in designing different types of currency flows and measures for their communities. We have a richness of opportunity now and we need to try many things to find out what works. The first step is realizing how stuck we are in our thinking about money, and this talk has been a first step in breaking those thoughts and allowing us to let in some new ideas. It’s probably unimaginable what money will be in the future -- this is only a start.
Zoom Chat Transcript:
23:03:22 From Kalin : I am in europe, late night and kids sleeping;
23:04:04 From Kalin : I am here for the great topic - little known on MONEY
23:13:54 From Elias Strehle : Central banks are not "the government", and they are the ones responsible for monetary policy.
23:19:11 From Nicky Hickman : Has anyone read Dave Birch's book 'Identity is the new money'
23:19:59 From Nicky Hickman : And also Nigel Dodd's 'The Social Life of Money'
23:20:37 From Kalin : Dave Birch has consolidated 5 years of forum exchanges and ideas, often times not his, and signed his name on it; also - half-baked IMHO
23:21:27 From Kalin : DEBT - the first 5,000 years is a good departure point of current monetary system
23:21:42 From Nicky Hickman : Thanks will check it out
23:21:58 From Kalin : http://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
23:26:16 From Nicky Hickman : I have just finished some anthropology studies and Grace just touched on the difference between perceived social value (as part of gift exchange) and the difference between that and economic exchange. Actually they are closely related rather than being in opposition to each other I think
23:29:26 From Kalin : if we address Maslow’s Pyramid, then inevitably we end up in a situation of supply and demand, which is econ101, and back to WHO WORKS, while others rest and benefit; human nature will kick in to quickly wean off the free riders…
23:29:54 From Kalin : sorry, cannot use audio
23:31:49 From Nicky Hickman : Check out http://en.wikipedia.org/wiki/Kula_ring for a completely different way of looking at gift exchange, trade and wealth creation
23:32:04 From Nicky Hickman : or even value creation
23:33:36 From Kalin : Thank you, Nicky!
23:39:39 From Kalin : Society is just an oversized membrane, so there must be some record-keeping of how wealth, food and housing is distributed… One may argue that societies/nations have outgrown the reasonable, which might explain why we are swinging away from globalization to local-first… truth is, MONEY is such a vast network of rabbit-holes, as deep as culture, habits and deep-rooted inertia that unpacking it is vastly more difficult from “lets just build a better one”
23:40:02 From Kalin : Amen to FUNGIBLE, @Nicky
23:41:09 From Elias Strehle : +1
23:42:20 From Nicky Hickman : This is the RSA stuff http://www.thersa.org/action-and-research/rsa-projects/economy-enterprise-manufacturing-folder/the-future-of-work
23:43:24 From ChristianHildebrand3000 : I am here in the IIW (as well as this session) to learn how to forward the vision that we are developing around the acti
23:43:30 From ChristianHildebrand3000 : vity
23:43:47 From ChristianHildebrand3000 : valueinstrument.org
23:44:15 From Karen Advocate : Has more to do with how we define "success" individually. In capitalism having more money and stuff is most important. Whereas you cannot eat money or stuff, redefining success as the most oppressed member of a community thriving is a different values-based definition of success.
23:44:29 From Kalin : separating humans from subjectivity @Elias? Great one
23:44:30 From ChristianHildebrand3000 : this project aims to allow anyone, any group and network to experiment with new forms of money
23:45:49 From Elias Strehle : Who decides what is enough? Who defines what is a luxury item?
23:47:56 From Nicky Hickman : your project sounds really interesting would love to experiment on a project for homeworkers in India making PPE!
23:50:37 From ChristianHildebrand3000 : cool, lets figure it out!
23:53:09 From Kalin : on the topic of reputation as money, I suggest you watch the NOSEDIVE episode of Black Mirror = http://en.wikipedia.org/wiki/Nosedive_(Black_Mirror)
23:54:41 From Kalin : in summary - the crowd is the worst Central Bank you can imagine (and there are some awful examples to benchmark agains)
23:55:28 From Nicky Hickman : I was trying to be deliberately provocative - in fact one person walked out because they said I was 'a bloody communist'
23:55:42 From Kalin : HAHAHAHAHAHAHAHA
23:55:52 From Kalin : if this is what communism looks like, sign me up
23:56:12 From Nicky Hickman : your little red book is on its way
23:56:27 From Karen Advocate : Money is a TOOL - not a measure of success. Would be interesting for 6 figure working from home folks to change employment, housing, pc/phone, access to healthcare benefits and internet with minimum wage grocery store and building cleaning workers surviving pay check to paycheck for a few months? In WA state, . one of my clients is the faith community who advocates for people experiencing homelessness and holds poverty immersion workshops to get people to understand that people do not choose homelessness. http://www.councilforthehomeless.org/poverty-immersion/
23:57:37 From Kalin : if we keep crossing each other so often in so many different places, we might just spin our very own rebellion @Nicky
23:58:26 From Karen Advocate : Argue that Congress subsidizes fossil fuel, industrialized agriculture, essentially corporate socialism, which the US is built upon.
00:14:25 From Elias Strehle : An excellent book: "The Politics of Bitcoin" by David Golumbia
00:22:55 From Grace Rachmany : COALA
00:24:41 From Grace Rachmany : http://coala.global/
