The LETS Transaction booklet
>Date: Thu Feb 18 10:54:52 1999 >From: email@example.com (Paul Dumais) >Subject: [lets] Re: the LETS Transaction booklet >To: firstname.lastname@example.org >>Tom J. Kennedy wrote: >>Please explain to those of us working with GIFCG where and how we >>can get the LETS Transaction booklet that you mentioned in the email >>attached below. >I'm interested in finding out more. JCT: I have no doubt that the transaction booklets work since I accept that it would have worked to replace the currency in my gambling casino. After every pot, the traders would simply register to whom they send some credits and those who receive them register where they came from. In my youth when I was a student playing Poker at Carleton, if we didn't have any chips or if for some reason we could not use chips, one of us would keep a page of accounts which worked like this: We all owed 1 chip as an ante. If a player folded, his account went down 1 bet. As players folded, their accounts went down the number of bets put into the pot. Finally at showdown, all the negative accounts are added up and the winner has a positive for that number added to his account. The only difference between this and transaction booklets is that booklets are held by each individual while here, all accounts were on the same page. So, it's obvious that transactional records do work. Yet, we choose to use chips because we don't want to be bothered with all the bookkeeping. Same reason governments provide "cash" so that we can avoid all the bookkeeping. It's all the bookkeeping that has been responsible for the slow growth of LETS around the world. It's taken me a decade to finally get most LETSers to admit that physical tokens are of great value. Only recently are they starting to admit that merchants don't like transaction slips and telephonic transactions and like physical tokens because they're used to dealing with such tokens. Of course, some LETSers insist that it's worth the bookkeeping effort to be able to tell how much action is going on. I find this of dubious value. I could want to know how much action my casino was doing but not at the cost of reducing such action.
>Is there no way to examine everyone's accounts? As for examining everyone's accounts, I myself find that this is not a proper function for a LETS cashier. It is one of the major reasons that the Ottawa LETS is so moribund where Terry Cottam insists on the prying into everyone's business and barring transactions he does not approve of. Given the cost of not only all the transactional bookkeeping but also of a LETS police force for checking into members' trading, is it any wonder that the Ottawa LETS has shown such a dismal growth rate. The condemned activity in question was that some members wished to use their LETS accounts for their multi-marketing activities. Since those activities when using federal cash had no effect on the utility of federal cash for my purposes, I also accepted that those activities when using Green cash would have no effect on the utility of Green cash for my purposes. Yet, this whole subgroup of possible LETS traders were deterred from using LETS and offering their goods and services to the whole for a totally irrelevant reason: that Terry and his pals didn't like multi-level trading of Amway soap and home products and had the power to control those accounts, a power they would not have had if they were using paper tokens. My point is that LETS should be no more than a token system and its cashiers should have no other interest in members' accounts than to make sure they balance. Obviously, if the tokens are not physical, then such supervision is possible but when the tokens are physical, then petty tyrants like the Ottawa LETS trading police cannot arise. One of the greatest plusses of using physical tokens is that people like Terry Cottam can't stick their noses into everyone's business but as long as LETS currencies are non-physical and all accounts can be viewed, then these types of dictatorial abuses seem inevitable.
>If so this would be a problem because the members of a global >currency must manage the risk in an open and democratic manner. JCT: There is no reason for the token cashier to be dealing with or worried about such risks. Of course, if a LETS were so successful and profitable that it could afford to build up bureaucracy in order to handle such considerations, that would be their decision. Yet, the whole point is that cashiering the tokens is not something that need be done democratic. As the bank manager at the Casino Turmel cage, Tom Kennedy probably handled hundreds of thousands of dollars in transactions every day, millions in a week, and probably several hundred million and I doubt that these considerations were raised once during the 3 years he was in charge.
>If the risk is not managed centrally by elected representatives >according to a policy approved by the members, then individuals >would have to be trusted to carry out transactions according to an >established policy. JCT: Of course, credit limits were established but no other central management of the casino cashiers was necessary.
>If problems with "inflation" occurred it would be difficult to >resolve the problem without confiscating everyone's booklets. Thanks >for your info. JCT: Economists just measure inflation and guess at what caused it because they do not have an equation for it. They just measure it after the fact. We have an equation for inflation(J), I/(P+I), where P=Principal and I=Interest which promises that when I=0, J=0. I'm sure Tom can explain why the millions in chips transactions never once suffered any inflation while he was in charge because there was a one-to-one relationship between the collateral and the chips. So no more talk about of inflation in an interest-free system. -------------------------------
The LETS Transaction Booklet #2
>Date: Sun Feb 21 03:02:39 1999 >From: email@example.com ("Paul Dumais") >Subject: [lets] Re: TURMEL: The LETS Transaction Booklet >To: firstname.lastname@example.org >>JCT: Economists just measure inflation and guess at what caused it >>because they do not have an equation for it. They just measure it >>after the fact. We have an equation for inflation(J), I/(P+I), where >>P=Principal and I=Interest which promises that when I=0, J=0. I'm >>sure Tom can explain why the millions in chips transactions never >>once suffered any inflation while he was in charge because there was >>a one-to-one relationship between the collateral and the chips. So >>no more talk about of inflation in an interest-free system.
>Actually, no more talk of inflation in an interest-free system which >has a stable valuation of collateral and a clear policy on >issuing/denying loans. We must recognize that it is possible to have >non-systematic, one-time inflation/deflation whenever we change our >system of collateral valuation or change our loan issuing/denying >policies. If you need some more examples of how this can happen just >let me know. JCT: The collateral valuation will remain fixed to an Hour of labor. The loan issuing policy will remain fixed to each Hour of labor. Sure I'll recognize that if you want to change these fixed policies, then you can generate inflation. But I'll also recognize that there's no logical reason to want to generate inflation by changing them. The whole point of not changing them is that we do not want to generate inflation. If you want to generate inflation, then sure, change the cashier's policies. If you don't want inflation. leave them alone. Accepting that changing the policies responsible for no inflation would cause inflation is not a great step forward. -------------------------------
>Date: Tue Feb 23 16:34:48 1999 >From: email@example.com (Paul Dumais) >Subject: [lets] Re: TURMEL: The LETS Transaction Booklet #2 >John Turmel wrote: >>JCT: The collateral valuation will remain fixed to an Hour oś labor. >What does that mean? If I tell the cashier I have a farm tractor worth >$150000 "hours", does she take my word for it? Or does she require an >inspection report from a reputable person? When such people inspect a >piece of equipment they compare it to the market at that time. If the >market changes so does the "hours" that the equipment is worth. The >willingness to borrow will effect the scarcity of hours which will >effect what the market valuation is for my tractor. This variation of >price caused via a change the availability of the currency is defined as >inflation/deflation. > >>The loan issuing policy will remain fixed to each Hour of >>labor. Sure I'll recognize that if you want to change these fixed >>policies, then you can generate inflation. But I'll also recognize >>that there's no logical reason to want to generate inflation by >>changing them. The whole point of not changing them is that we do not >>want to generate inflation. If you want to generate inflation, then >>sure, change the cashier's policies. If you don't want inflation. >>leave them alone. Accepting that changing the policies responsible for >>no inflation would cause inflation is not a great step forward. >So what you call "fixed" will depend on the mood of the person making >the valuation on my collateral. I agree with you in the sense that >whatever policy we choose we must keep it as fixed as possible. This >might riquire a standardization of collateral valuation via a permit >granting body to give permits to those who will do valuations of >collateral for the democraticly controlled currency group. >Just to pound my point home regarding democratic control - the Soviet >Union wanted to give benefit to the worker via centralized control of >the means of production. Millions of people died as a result. Lets not >let something as important as currency issuing fall under the control of >any "benevolent" dictator. Surely we won't be voting to kill ourselves >by the millions via a well-run democratic process which determines how >we run the most important thing to us all - our system of exchange for >goods and services. >-------------------------------
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