The Future Of Money: Conclusions

At the end of a series of interviews and an equally wide exploration of new thinking on the future of money, I find my thoughts line up pretty closely with those of author Neal Stephenson in a 2005 Slashdot interview:

[via interviews.slashdot.org]

7) Money - by querencia

[...]

You've obviously spent a lot of time thinking about money lately. Is there anything going on in the modern world with monetary systems (barter networks, for example) that you find particularly interesting?

What do you see on the horizon with respect to money?

Neal:

Actually, what's interesting about money is that it doesn't seem to change that much at all. It became fantastically sophisticated hundreds of years ago. Back before people knew about germs, evolution, the Table of Elements, and other stuff that we now take for granted, people were engaging in financial manipulations that seem quite modern in their sophistication. So if I had to take a wild guess---and believe me, it is a wild guess---I'd say that money and the way it works is going to be a constant, not a variable.

I give up on the search for an abracadabra coming from future forms of cash.

I have talked to futurists, scifi writers, artists, and all manner of folks deeply involved in looking at money, and in the final analysis, money looks like a constant, not a variable.

There have been some very interesting advances in economic exchange, especially among the unbanked, with the proliferation of low-cost networks, like cell phones. In particular, the possible uses of cell minutes as a alt-cash is promising. Cell minutes can be transferred from one party to another simply by passing along codes: no physical exchange needs to happen, and the codes never have to be on your person. It makes them hard to steal, hard to track, hard to tax.

But the anonymity and trust associated with most fiat currencies make them very resistant to being displaced.

More than anything else, I have come to believe that complementary or local currencies will go nowhere, at least in the presence of strong fiat currencies. Much of the heat around local currencies is strongly linked to 'transitional thinking' as Alex Steffen of Worldchanging.org styles it:

[via Transition Towns or Bright Green Cities? by Alex Steffen]

All over the world, groups of people with graduate degrees, affluence, decades of work experience, varieties of advanced training and technological capacities beyond the imagining of our great-grandparents are coming together, looking into the face of apocalypse... and deciding to start a seed exchange or a kids clothing swap.

Transition thinking seems obsessively focused on coordinating individual actions (like helping people barter their free time or connecting people who want to garden); even at its most ambitious, it generally focuses on building alternative systems (say, starting a local currency scheme) rather than reforming the larger systems that shape life all around us (say, starting an actual credit union or rewriting banking regulations).

My inquiry into the future of money was subsidized by Neo.org, a non-profit whose principals envisioned a great deal of transitional coordination: a digital alternative currency intended to act as a means of lubricating the friction involved in time barter around good works.

200 One Dollar Bills, Andy Warhol

And in a way that is strangely paralleled by Steffen's two paragraphs, above, I become (briefly) involved in the Slow Money Association, acting as a temporary editor of their blog and helping to coordinate a social media policy. My most basic recommendation to the Slow Money founders was that they drop a variety of fragmented activities, and start a credit union. A credit union is a direct way to harness the financial power of a large group of people who share common purpose, and based on the money invested in the CU, loans can be made to members at very low interest rates. This is a lot better, in the long run, than advocating that people should visit farmer's markets regularly, or that the soil is a resource to be husbanded, not washed in chemicals.

I had entered into this project thinking that I would find some magic wand, a spell that could revitalize local communities, increase social capital, and make communities more resilient. The answer to that is not is some alternative currency, or in small scale projects like Steffen's clothing swaps. Instead, we need grassroots activities that can scale into national policy.

We need to scream at the local level about food policy: school lunches, public support of local agriculture, and ending food deserts. But we need to do this in a form that can scale, like credit unions, and organizations where local chapters collate their efforts with others.

So I give up on the search for an abracadabra coming from future forms of cash. It is up to us to redistribute value and exchange, to decide which parts of our world should be outside of economics and which should be in. For example, who says that health care should be dominated by market controls? Why should its dynamics be driven and shaped by making a profit? If we believe in public education, administered by the government and controlled through public means, why don't we believe in public health?

This topic is a bit off tangent for /Message, as well. The digital aspect of new money systems made it seem like a good overlap, but if I were starting this project today, I would have run it at my Ambivalence blog, where I deal with politics, green issues, and society in the large, not just social tools.

Alt Cash isn't a social tool, at least no money I have seen. And until it is, look to me writing about it there, and not here.

The Future Of Money series is sponsored in part by Neo.org

Comments

[Bryan Menell]

The exchange of value is a constant, but fiat currencies seem to have a limited lifespan.

[KingofthePaupers]

"a digital alternative currency intended to act as a means of lubricating the friction involved in time barter around good works."

Jct: It's already been done. Do-it-yourself interest-free community currencies are spreading around the world. With Africa trading with mobile-phone minutes, Arabia trading with mobile-phone card credits, with Hours being traded in Ithaca, with Greencredits being traded in LETS, the banks get no interest. And the movement to cut the middleman out of the usury is growing. With Facebook, Twitter, Graigslist, offering social currencies to their databases, the use of new social credits around the world is undergoing unheralded growth but the use of interest-free time-based currency is key.

"start a credit union. A credit union is a direct way to harness the financial power of a large group of people"

Jct: A credit union piggy bank needs cash deposits before it can lend. A LETS casino-style timebank needs no deposits before it can issue tokens in exchange for promised time or assets.

"I had entered into this project thinking that I would find some magic wand, a spell that could revitalize local communities, increase social capital, and make communities more resilient."

Jct: And now you've found out how interest-free currencies revitalize local communities, increase social capital, and make communities more resilient.

"The answer to that is not is some alternative currency, or in small scale projects like Steffen's clothing swaps. Instead, we need grassroots activities that can scale into national policy.

Jct: The time standard of money provides that international effect out of local reform.

"So I give up on the search for an abracadabra coming from future forms of cash."

Jct: And now you can appreciate the abracadabra coming from future forms of interest-free time-based IOUs.

"It is up to us to redistribute value and exchange, to decide which parts of our world should be outside of economics."

Jct: Yes, and you need your own no-tribute medium of exchange to redistribute your value and exchange.

"Alt Cash isn't a social tool, at least no money I have seen."

Jct: Hope you've seen the big picture now. When the local currency is pegged to the Time Standard of Money (how many dollars per hour of volunteer labor, children too) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours. You can too.
U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
See http://youtube.com/kingofthepaupers on growth of the international time-trading network.

[Alan Rosenblith]

Hi Stowe -
Thanks for your invite to comment on twitter. First, I do think the currency movement has struggled to find its footing, and so I understand (and in some ways share) your skepticism.

IMHO, much of this lack of progress has been due to a lack of awareness among currency practitioners about how culture has radically shifted towards a network orientation. For too long, there has been an undercurrent of isolationism in the currency movement that plays into people's unconscious xenophobia. If we want the currency movement to have any real momentum, we must look at creating a rich interconnected web of community currencies rather than a bunch of siloed systems.

What is the difference between zoos and ecosystems? Both have biodiversity, but in ecosystems, complex relationships can spontaneously form that support the further development of the various actors. The World-Wide-Web was an ecosystem, and in so being brought the Internet into popular consciousness.

This approach is what we need in the currency world. We can only reverse the destruction that monocultures create by creating ecosystems. Today's money is a monoculture of the worst kind, but no sensible alternatives will be possible until we think of creating numerous diverse currencies connected in a matrix of emergent relationships.

This is what the metacurrency project is trying to foster. You can think of it as a world-wide-web for currency.

Hope this makes some sense. For more info check out: http://blog.newcurrencyfrontiers.com/

Thanks for your highlighting of this issue!
Alan Rosenblith

[mwl]

"I spent the $100 and upgraded. I deserve it after the past few weeks." Stowe, I really think you deserve another upgrade. Your conclusion is truly sad, dismal enough to be academically respectable.

I've been followed this thread with the diligence due - about 20 hours reading, watching and researching so far and up to this post, it's been very good value for money, thank you. Given all you've covered/uncovered here I agree with you entirely. "Alt" money hasn't a chance / displacement of current fiat just isn't an option / money as we know it is here for the duration, and we should accept it. I know I do, whenever I can.

I also think the current localism trend sentimental and utterly unrealistic, mostly driven by simplistic theories, politics and fashion. It's all just cargo culting at this point. And while some reputation currencies may catch hold somewhere, and may make money in some games and spaces, they aren't going to buy beer or bread any time soon where I am. And it will be longer still before whuffies address any significant social issues. Case closed, on the evidence examined.

But you haven't covered it all, at all - you've missed much that matters. You've seen why a lot of things that don't work and clearly aren't ever going to. But not noticed things that have worked, are working, and will work progressively better - and most importantly noticed what it is that drives these.

It matters of course what we're looking for. All your analysis seems (to me) to be looking for moneys to be things of value in themselves, and that value to be independent of the users. That is the conventional model, of course, and it comes with its limits. On that side of the bridge, I agree entirely with your analysis and your dismissal of "complementary" currencies, "alt" money etc. I think you're entirely right, in that particular context.

Nonetheless, your (declared) wild guess that "money and the way it works is going to be a constant, not a variable" is only true on the conventional side of the bridge. Elsewhere, there is much more variety. Those writers of fiction and fantasy - Stephenson, Sterling and Cascio - who don't imagine this in their world(s) or this are really missing the point.

However, given incommensurable idea sets, and how futile it is to try to argue across such gaps, why not instead briefly cross the bridge and take a walk on the really wild side? Then we can see how that context might further inform your views?

Please do try our $100 open money upgrade (to you, there's no charge - you've already paid).

It comes in three questions, two for the head, one for the heart (for clarity, answers are included):

1) where does your money go when you spend it?

(answer - it goes away, and it doesn't come back)

2) would you like to have money that does come back?

(answer - if it buys stuff, why ever not?)

3) if you could, in your community, with $100:

a) give it to a community project you value ---- invest
b) get cw$100 redeemable at supporting community businesses --- spend
c) empower thereby a persistent cw$100 circulation in your community --- sustain

... would you?

(answer - mind your own business, that's my choice)

In my community - http://communityway.ca - we can, and increasingly we are so doing. We are still in our first few months of this opening $1m phase of this program, but cw$100k has now been created by the businesses in donations they have directed to community projects and causes; now, as we invest our can$ in those projects, we get cw$ 1:1, which we can spend and thus keep this community wheel spinning. Invest, spend, sustain - these three, but the greatest of these ... is really a matter of your perspective.

In August, while we were getting our local show on our local road, we talked with you for an hour or so about this, and planned to talk on record in the future on this future of money. I'm sorry Neo.org has shut off the flow - a common problem with money - but maybe it's worth doing it anyway to see how it goes? As a meme mover, the short q&a may be enough in itself for some, but additional commentary is likely to add value well worth the price of admission - mainly a matter of time and a measure of attention.