Date: Wed Apr 30 09:09:02 1997
From: Richard.Kay@uce.ac.uk (Richard KAY)
Subject: Democracy makes many currencies
inevitable
To: blietaer@earthlink.net, econ-lets@mailbase.ac.uk
RK: Bernard,
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
financial network.
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
their currency.
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
their units.
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
exchanges?