Date: Wed Apr 30 09:09:02 1997
From: Richard.Kay@uce.ac.uk (Richard KAY)
Subject: Democracy makes many currencies inevitable
To: email@example.com, firstname.lastname@example.org
Bernard Lietaer writes:
BL: Money is *not* a thing, it is simply an agreement within a
community to use something (almost anything has been used
historically) as a medium of exchange.
RK: This definition is interesting in the sense in which it casts
light on the topical issues of multi-currency and intertrading. If
money is simply an agreement within a community to use a particular
medium of exchange it follows that given the existence of certain
freedoms (association, expression and to make agreements or contracts)
there will be many such agreements involving many groups of people.
The number of such communities, with their own distinctive agreements
concerning exchange media, is estimated to have been increasing by at
least 40% per annum in recent years. You estimate currently 1200.
Proposals to reduce this rapidly expanding number of distinctive
currencies appear not only to be trying to put the genie back into the
bottle but also to ignore the fact of the basic democratic freedoms
which makes this expansion possible.
The proposed future existence of one single world currency must
logically assume a dictatorship which denies the basic freedoms which
make entirely different arrangements not only possible but inevitable.
JCT: Though the generalization that centralization has become a
dictatorship which denies the basic freedoms in old world usury
financial networks, it is erroneous to extend that general conclusion
that all centralization confers power to centralization of a perfect
Since I am advocating a Global LETS clearinghouse which I claim
holds no power and is incorruptible, I'd better settle this issue once
and for all.
I have already explained how any interested independent
LETSystems may use my account to register inter-system trading.
I'm going to let Richard be the Governor of the Bank of Global
LETS and provide a newsgroup called lets.global.transactions - after
we've extended the Big 8 categorires of newsgroups to a Big 9 - where
Andy Ryrie and Maureen Mallinson decide to trade archives.
Andy's Canterbury LETS deposits #60=10Hours into their Global
LETS bankers account and posts notice of it to the newsgroup with a
copy to Maureen's LETS asking that $120=10Hours be taken from their
Global banker's account and deposited to the Greendollar Quarterly
account. Maureen mails the information to Andy.
Then Maureen's New Zealand LETS deposits $120=10Hours into their
Global LETS bankers account and posts notice of it to the newsgroup
with a copy to Andy's LETS asking that #60=10Hours be taken from
their Global banker's account and deposited to the Greendollar
Quarterly account. Andy mails the information to Maureen.
How have you, the central banker who did nothing at all derive
any power over them to the extent that your dictatorship denies them
any basic freedoms?
You may not have believed me when I said that middling their
transactions confered no dictatorial power on me at all as third party
but you should certainly realize it's true now that you see it would
not confer any dictatorial power on you either.
That's the power of LETS. No one can tell anyone what to do other
than to agree to the two necessary conditions of a common time
standard and public notices. Those who want their units to be
blueberries but not Hours will simply not be able to communicate with
other systems who trade but one standard commodity.
RK: Attempts have been made to form agreements
between a few currency
communities to enable intertrading (i.e. mutual acceptance of currency
between distinctive groups)
JCT: And if you ask them how they managed to do that, they'd have
to answer that they reduced it to the standard value of time.
RK: but I have not heard of anywhere such
intergroup agreements have
been included in the basis for the agreement which members within each
group have with each other.
JCT: No agreement is necessary if the tokens are initially based
on the same standard. There is no agreement but I'll take someone's
Ceasar's Palace chips even if I'm at the Taj Mahal. That's the whole
point. Hours systems which base their units on the same standard don't
need complicated agreements?Once on the same standard, the casino
cashiers don't have any power over anyone. LETS is liberation software
because abolishing interest rates changes the game.
RK: It would appear in this situation where
all such members have not
explicitly agreed to this particular kind of multi-registry system
that this practice invalidates the agreement which members of a
community have with each other, which provides the internal basis for
JCT: Not if the basis for the tokens is the same at all casinos.
RK: I am all in favour of multi-registry
systems where their users
have separate accounts and agreements from those operative in the
within-registry systems so long as everyone in the multi-registry
system has the same agreement for the latter.
JCT: Sounds like the compulsion that everyone in Global LETS have
the same agreement is the same compulsion that everyone in the multi-
lets have the same agreement and they've not had their basic
democratic rights violated by having to agree on the multi-lets
central standard, why would it be different for Global?
RK: However I don't see a possible future
economy comprising millions
of currencies, the largest perhaps serving a few million people,
being able to operate flexibly enough without currency exchange
dealing between currencies enabling people to earn in one currency
what they spend in another.
JCT: Neither do I when one useful standard of time is sitting
right in front of our faces means it doesn't matter what they call
RK: Introducing enough friction into the
currency exchanges so these
don't destabilise more productive aspects of the economy is
another problem however, which can possibly only be dealt with
through some form of tax applied to all transactions. The same
consideration applies to promoting long-termism within
stock exchanges. Best regards, Richard.Kay@uce.ac.uk
JCT: I've always wanted LETS to elimiate friction in the currency
exchanges. Besides, what kind of friction can slow down currency
a comment to John Turmel