I see churches at local, denominational and international levels and in ecumenical cooperation as great potential means of infrastructure and human, spiritual and natural resources. Imagine this: What if churches backed their own currency with the rental value of their properties and issued the currency as a thank you for voluntary service? In cooperation with locally owned and operated or member affiliated businesses, credits earned or given in gratitude or compassion could be used as discount coupons which circulate within the local and denominational community. Food banks, thrift stores, community gardens etc. which sell at big discounts or give away their products could accept payment with such a currency.

I would like to see something that weans us from our dependency on national, debt-based and violently maintained currencies. Perhaps bringing back bearer bonds in a non profit form would be a way to receive and invest Caesar’s coin and eventually transform it into a different kind of money.

An energy efficient, electronic means of utilizing and exchanging such a faith-based currency would be a huge blessing to the church and its mission, moving us away from paternalistic care of disadvantaged people and toward a more sustainable and mutually empowering model of ministry with one another.

We prefer to honor lots of other world-wide-web web pages on the web, even if they aren’t linked to us, by linking to them. Beneath are some webpages worth checking out.

With taxes, for sure its very helpful to have government support for a currency, but i think the monetary politic of the federal reserve bank is much more important. If the money is inflated too much, people can easily change their money with the current electronic banking methods and then pay their taxes on demand just in time. So they would not need to hold any inflated currency to pay taxes. In our time software could do that automatically, so you hold the currency you want the rest does the payment / conversion provider.

It was actually Marloes and Matthew who wrote the article. I just posted some sceptical comments!

I did follow the Freicoin link when I first saw it and it looks like an interesting project … though my reservations about OurCoin apply equally to Freicoin. (One point I’d take serious issue with in the Freicoin explanation page is where it talks of people saving ‘real wealth (gold, silver, bitcoins, real estate, artwork and fine wine, for example)’. That includes real estate – something that none of us can live without – in a list of things which are completely discretionary! Monopolisation of land is even more pernicious than hoarding money.)

I nearly asked Matthew what extra benefit OurCoin would bring but my comment was long enough already. Personally, I’m a bit dubious about the notion of competing monetary systems; money is intrinsically network dependent and its value rests absolutely on confidence that somebody else will accept it in payment. For that reason, I think that whatever the state accepts in payment of taxes will always tend to drive out other currencies. I regard it as important that the state should not prevent the use of other forms of money but I think it’s only when government monetary policy is very seriously awry that they’re likely to thrive.

As I suggested in my original comment, I think effective monetary reform will have to start by changing the unit of account that government uses. If you’re interested you can read more about that on my own page on monetary reform.

https://freicoinalliance.com/profile/11-arcurus/?wr=eyJhcHAiOiJjb3JlIiwibW9kdWxlIjoibWVzc2FnaW5nLWNvbW1lbnQiLCJpZF8xIjoxMzAsImlkXzIiOjE0ODR9
https://freicoinalliance.com/

I agree technological risks exist with such systems, but we are moving to a place where so much infrastructure is going online, that if the secure web fails, then it all goes! That’s not an argument in itself for putting more eggs in that basket, but then again, if we are committing so much vital infrastructure to the digital domain, we can expect efforts will be made to make it durable – and of course, there should be good reason for putting it online, which we suggest, could be far more effective governance methods, with all the benefits those bring.

As for your hope that representative democracy in its “less-digital” form can/should be fixed, I wish you luck and, indeed, our support in that. I don’t deny that it can be done, but in light of my experience of that, I’m more optimistic about other approaches. I hope that one or both of us are right!

“discovering, a priori, what an ideal monetary system is”

I’m not sure that analysis rooted in observation of how monetary systems have worked over the centuries can really be described as ‘a priori’! I see it more as synthesis of the lessons that can be learnt from the experimentation that has brought us to where we are.

But, in the current political climate, your comment about ‘expecting a good government to implement it’ is certainly fair. Though that is why my main focus is on how we might bring about good government.

I also didn’t intend to deny the possibilities presented by technology because I can certainly see it adding considerably to a well-designed political system. I would, however, be strongly against making it the foundation of a political system because of the risk of the technology failing (particularly when so much of it relies on energy sourced from other parts of the world). From that perspective, I’d say that representative democracy is probably the only system that can provide a resilient foundation for a mature society.

You say that the defects of representative democracy are grossly apparent but what we see at the moment are the defects of its present manifestation, with all its flaws, and there are a number of possible improvements which could transform it (some of which make up the manifesto for the reform party I’m currently preparing to launch).

In response I’d reiterate that it seems to me, in spite of what you say, that one might realistically hope to collectively find solutions to 1) through informed experimentation in the sort of hands-on democratic fashion we describe in the article. I think that’s at least as likely to work as discovering, a priori, what an ideal monetary system is, and then expecting a good government to implement it.

I agree that a lot of the discussion about what a good money system looks like should be had in thoughtful measured circumstances, but ultimately, whether those circumstances involve traditional government process, followed by regulation to put them out in the world, or whether you take our approach and attempt to simply build them into a living currency, monetary policy in the real world is always an experimental discipline. Mistakes and successes are likely both ways.

Another pertinent point we make in the article is that, whether or not the process of designing monetary systems in this way seems like the right method to you, it is happening regardless. Bitcoin practically demonstrated new properties of money, and those are not going away. In that case, action spoke louder than words, and our contention is that such a process can be expected to play out again. We would like to take part in that.

You say: “the key question is primarily political: can we design a political system which allows us to properly hold our representatives to account, and provides a framework that encourages deliberation?”

The assumption that representative democracy is still the best means of deciding such matters, and that “in practice, participatory democracy…will almost certainly lead to government by those who have most time, resources and inclination” is to deny the possibilities presented by a whole raft of technologies that promise to make participatory, or delegative democracy, simple, powerful and (more) fun. They also effectively enable forms of representation (by delegation) which reduce the degree that time-poor individuals need to be active to take part – I can delegate my vote to an expert who I trust, much as I do by voting for my MP, although MPs are rarely as expert in most matters as anyone would like.

Representative democracy, from a technical perspective, is deeply anachronistic and its defects are grossly apparent. We can do away with these middlemen, and regain a more appropriate, fine-grained connection to policy and law – that’s likely to be an attractive and inevitable approach before long.

When that moment arrives, I expect you’ll see far more people engaging in the debates, feeling they have some actual and intimate effect on the decisions made for them, and subsequently understand the trickier elements of government, such as money, with the degree of interest that someone who can actually change the system pays.

In response I’d reiterate that it seems to me, in spite of what you say, that one might realistically hope to collectively find solutions to 1) through informed experimentation in the sort of hands-on democratic fashion we describe in the article. I think that’s at least as likely to work as discovering, a priori, what an ideal monetary system is, and then expecting a good government to implement it.

I agree that a lot of the discussion about what a good money system looks like should be had in thoughtful, measured circumstances, but ultimately, whether those circumstances involve traditional government process, followed by regulation to put them out in the world, or whether you take our approach and attempt to simply build them into a living currency, monetary policy in the real world is always an experimental discipline. Mistakes and successes are likely both ways.

Another pertinent point we make in the article is that, whether or not the process of designing monetary systems in this way seems like the right method to you, it is happening regardless. Bitcoin practically demonstrated new properties of money, and those are not going away. In that case, action spoke louder than words, and our contention is that such a process can be expected to play out again. We would like to take part in that.

You say: “the key question is primarily political: can we design a political system which allows us to properly hold our representatives to account, and provides a framework that encourages deliberation?”

The assumption that representative democracy is still the best means of deciding such matters, and that “in practice, participatory democracy…will almost certainly lead to government by those who have most time, resources and inclination” is to deny the possibilities presented by a whole raft of technologies that promise to make participatory, or delegative democracy, simple, powerful and (more) fun. They also effectively enable forms of representation (by delegation) which reduce the degree that time-poor individuals need to be active to take part – I can delegate my vote to an expert who I trust, much as I do by voting for my MP, although MPs are rarely as expert in most matters as anyone would like.

Representative democracy, from a technical perspective, is deeply anachronistic and its defects are grossly apparent. We can do away with these middlemen, and regain a more appropriate, fine-grained connection to policy and law – that’s likely to be an attractive and inevitable approach before long.

When that moment arrives, I expect you’ll see far more people engaging in the debates, feeling they have some actual and intimate effect on the decisions made for them, and subsequently understand the trickier elements of government, such as money, with the degree of interest that someone who can actually change the system pays.

In response I’d reiterate that it seems to me, in spite of what you say, that one might realistically hope to collectively find solutions to 1) through informed experimentation in the sort of hands-on democratic fashion we describe in the article. I think that’s at least as likely to work as discovering, a priori, what an ideal monetary system is, and then expecting a good government to implement it.

I agree that a lot of the discussion about what a good money system looks like should be had in thoughtful measured circumstances, but ultimately, whether those circumstances involve traditional government process, followed by regulation to put them out in the world, or whether you take our approach and attempt to simply build them into a living currency, monetary policy in the real world is always an experimental discipline. Mistakes and successes are likely both ways.

Another pertinent point we make in the article is that, whether or not the process of designing monetary systems in this way seems like the right method to you, it is happening regardless. Bitcoin practically demonstrated new properties of money, and those are not going away. In that case, action spoke louder than words, and our contention is that such a process can be expected to play out again. We would like to take part in that.

You say: “the key question is primarily political: can we design a political system which allows us to properly hold our representatives to account, and provides a framework that encourages deliberation?”

The assumption that representative democracy is still the best means of deciding such matters, and that “in practice, participatory democracy…will almost certainly lead to government by those who have most time, resources and inclination” is to deny the possibilities presented by a whole raft of technologies that promise to make participatory, or delegative democracy, simple, powerful and (more) fun. They also effectively enable forms of representation (by delegation) which reduce the degree that time-poor individuals need to be active to take part – I can delegate my vote to an expert who I trust, much as I do by voting for my MP, although MPs are rarely as expert in most matters as anyone would like.

Representative democracy, from a technical perspective, is deeply anachronistic and its defects are grossly apparent. We can do away with these middlemen, and regain a more appropriate, fine-grained connection to policy and law – that’s likely to be an attractive and inevitable approach before long.

When that moment arrives, I expect you’ll see far more people engaging in the debates, feeling they have some actual and intimate effect on the decisions made for them, and subsequently understand the trickier elements of government, such as money, with the degree of interest that someone who can actually change the system pays.

My view is that the second presupposes a satisfactory answer to the first. In other words, I don’t think we can do anything useful, by way of monetary reform, to break free of the current flawed system unless we have a clear idea of how money should function within a healthy political system. So my comments below focus on that.

From that perspective, many of the points the article raises are independent of the specific technology and of the specific issue of money. For example, in various places it talks about governance (“The community could democratically decide …”; “With OurCoin It would be possible for all users to vote, policy by policy, on the precise mechanics of the system”) but in a healthy polity these are not likely to be useful features of a monetary system.

Or perhaps I should say the question of whether they’d be useful depends on the answer to a more general question on the relative merits of participatory and deliberative democracy. The fact that, technically, all citizens can vote, policy by policy, sounds good from within a rotten system but, in practice, participatory democracy of that kind will almost certainly lead to government by those who have most time, resources and inclination. Most of the public don’t actually want that level of engagement; they’d rather delegate governance to people they can trust to do it competently and with integrity – which brings us back to representative democracy.

So, the key question is primarily political: can we design a political system which allows us to properly hold our representatives to account, and provides a framework that encourages deliberation? If we can find a satisfactory answer to that, the ability to integrate those functions into the design of money becomes irrelevant. If we can’t find a satisfactory answer to that question for the political sphere as a whole, we’re unlikely to find one for specific spheres like money; the fact that, technically, everybody could contribute won’t change the fact that, in practice, probably only a small minority ever will.

A fundamentally healthy political system would also negate the need for other aspects that you mention. For example, I’d say your bullet points 1 and 5 (on inequality and debt jubilees) are only really relevant in a fundamentally flawed system and, as you’ve floated them, they would introduce an arbitrary element into something that ought to be governed by well defined principles.

A healthy political system would address the underlying factors which lead to excessive inequality and hence the need for debt forgiveness. Establishing sound principles of inheritance, for example, would solve many of the
problems which stem from excessive accumulation of wealth.

Having said that, there is a wholly monetary factor which is a major cause of inequality – the rentier aspect underlying the phenomenon of positive interest on savings – and there the demurrage feature you mention in your bullet point 3 would be essential (though I prefer the term ‘negative interest rates’ because it’s more obvious what it means).

However, the root of the rentier problem lies in the fact that money in its current form serves multiple functions which are not wholly compatible with each other: as medium of exchange its value depends on it circulating at a reasonable rate, while its value as a store of wealth depends on individuals being able to take it out of circulation (and its function as a standard of value constrains monetary authorities’ ability to issue it freely). The fact that money can be used as a store of wealth means that anyone who has a surplus effectively has the power to hold the medium of exchange hostage and can therefore charge others for the use of it. That’s the reason people are paid when they put money aside for future use. In a world where all forms of real wealth have a ‘carrying cost’ it is absurd that money doesn’t; in a rational system, saving would be seen as a form of consumption which people would expect to pay for.

A healthy monetary system would separate the practical functions of money: it would have a medium of exchange which would be easily transferable but wouldn’t hold its value indefinitely; and it would have a medium of saving which would hold its value but not be directly transferable, and would incur costs when it was bought and sold.

But it’s not the ‘billions currently held, unproductively, by large global corporations’ that present a problem (even though they’re the main beneficiaries) because large corporations are unlikely to hoard significant amounts of physical cash. They do certainly hold excessive liquidity but that’s always in bank deposits on which it would, in principle, be very easy to impose negative interest rates. The true problem lies in the fact that, if negative rates were charged on bank deposits, many small savers would choose to hold their savings in cash, which would lead to a shortage of currency in circulation. This is the primary technological challenge: making physical cash in a form that will lose value if it stops circulating but cannot be easily forged.

So I’d say the demurrage charge should be treated purely as a device for keeping the medium of exchange circulating at an acceptable rate, rather than as a levelling device. It’s important that the design of the monetary system does not itself create unfairness (as the current system does) but it’s not the job of the monetary system to try and produce a fair distribution of wealth when it is other factors which are making it unfair.

Regarding your points 3 and 4, on how currency is put into circulation and how people are encouraged to use it, I think it’s again worth thinking first about what would happen in a healthy society.

My starting point here is that the value of any currency rests on people’s willingness to accept it. As far as I can see, what underpins the acceptability of established currencies is governments’ obligation to accept it in payment of taxes. That creates an incentive for private individuals and businesses to accept it in payment for goods and services (because they know for sure that they’ll be able to use it).

So, in a healthy society, all that needs to happen is for governments to spend the currency into circulation through its normal purchase of goods and services, and remove it from circulation through taxation.

Which brings me to a question the article doesn’t go into: how to maintain a stable value for a currency in an economic environment that is in constant flux.

The conclusion I’ve come to is that one of the most serious flaws in our current system is the fact that government’s fiscal accounting is based on a unit of account whose value is arbitrary and, for practical purposes, determined by the activities of private interests. One of the reforms I’d like to see is the introduction of an official unit of account based on minutes/hours of passive labour.

That would allow an inversion of the whole taxation/government spending narrative. Instead of governments constantly adjusting budgets to fit what they feel they can squeeze from the taxpaying public, they could determine a total spending budget on the basis of x number of hours per month/year for every adult and issue an amount of currency to suit. That would establish a limit for the amount of medium of exchange in issue, and its velocity in the economy could then be managed by adjusting four factors: the rate it loses value when it stops circulating; its latency time (how long it can be held before it’s deemed to have stopped circulating); and buy and sell rates for the savings medium.

All of that, of course, requires a more enlightened government than our present system shows any sign of giving us. I’m dubious, however, whether private monetary innovation can make any significant beneficial impact on society’s economic health in the absence of major political reform. It might perhaps be useful in setting up a parallel society (which at one time I did think was the only way meaningful reform would come about). But, post-Brexit, I think the chances of radical political reform are much greater than they were before and my focus now is on how we can seize the constitutional moment.