<div dir="ltr">Interesting. A few fine points that seem to be bugging me though, and some terms that need to be defined better.<div><br></div><div style>Seems to me that you can factor the "ecological sustainability" into the more traditional models by assigning a value to "ecosystem services" in just the same way you can assign value to real estate or other natural resources. The way a wetland filters storm water runoff or protects a coastline from hurricane damage can be assigned a value in whatever currency you choose.</div>
<div style><br></div><div style>I have to object to the statement "<span style="font-family:arial,sans-serif;font-size:13.333333969116211px">the ultimate outcome of an economy is necessarily a steady state". This is clearly not true based on both the past history of human society, and an understanding of system theory in general. There are plenty of systems that never reach a steady state. Some systems oscillate and some systems have chaotic behavior. Systems that converge to a steady state are sort of a special case, and I see no evidence that human economic systems are one of those cases.</span></div>
<div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br></span></div><div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px">Coming at it from a systems engineering point of view, I think that "investing" or "speculating" means that someone believes that they have a model which can predict future behavior of the system based on some known inputs, and chooses to use that model to bet on some future outcome. I'm not sure exactly what the difference is between investing and speculating. Perhaps someone can help flesh that out?</span></div>
<div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br></span></div><div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px">"Manipulation" seems to mean that not only do I have a model for the future behavior of the system based on its inputs, but that I also have control over some of the inputs.</span></div>
<div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px"><br></span></div><div style><span style="font-family:arial,sans-serif;font-size:13.333333969116211px">steve</span></div></div><div class="gmail_extra">
<br><br><div class="gmail_quote">On Sun, May 5, 2013 at 9:38 PM, GtwoG PublicOhOne <span dir="ltr"><<a href="mailto:g2g-public01@att.net" target="_blank">g2g-public01@att.net</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div bgcolor="#FFFFFF" text="#000000">
<br>
<br>
Sonja, Rabbit, Ryan, and Yo's-<br>
<br>
Re. alternative currencies: I've given a lot of thought to this
subject over the years.<br>
<br>
<br>
A currency is not only a transaction medium but a measure of wealth
in an economy: real resources that have economic value. There are
basically three types of resources: natural resources, labor, and
capital. <br>
<br>
Natural resources include: Renewable energy sources (solar, wind,
geothermal, tidal, biomass), non-renewable energy sources (fossil
fuels, uranium, thorium), minerals (nonliving matter that's taken
from the ground), and agricultural products such as food.<br>
<br>
Labor includes: casual labor, unskilled and skilled occupations, and
licensed occupations.<br>
<br>
Capital includes: natural capital (land, monetized resources),
industrial capital (e.g. tools, plant & equipment), inventoried
goods, and financial capital (equity and debt instruments). <br>
<br>
I'm inclined to treat real estate as a limited natural resource
(land) or as natural capital generally. Today it is often treated
primarily as a concretized form of financial capital, which leads to
speculative bubbles such as the one that produced the present
depression.<br>
<br>
A sustainable economy, in the purely economic sense (ecological
sustainability is a different axis of measurement), is one that is
largely resilient against manipulation and fraud, and boom and bust
cycles. Boom & bust economies are like bulimia: binge &
barf, inherently unhealthy and harmful. <br>
<br>
Ecological sustainability isn't dealt with by conventional
economics, which works on a "flat Earth" model: as if the Earth is
an infinite flat plane. This is the most important fatal flaw of
conventional economics, and it leads to the myth of infinite
growth. The most important foundation for a new economic paradigm
is the recognition that the Earth is not flat, not an infinite
plane, but is a Euclidean solid with a finite surface and therefore
with finite resources. From this, the rest follows. <br>
<br>
From this, two other things follow that are "taboo" in conventional
economics: the ultimate outcome of an economy is necessarily a
steady state, that can be anywhere on a spectrum from the most
egregiously exploitative (e.g. a slave economy with a hereditary
aristocracy) to the most equalitarian ("from each according to
ability, to each according to need"). The most likely outcome of a
steady-state economy is the inexorable demand for economic justice
or "distributional equity," with its center of gravity in a
sustainable middle class, and viable paths to economic sustenance
for all. <br>
<br>
The role of currencies in building economic resilience is: a) to
provide negative feedback loops in the economy, that prevent the
positive feedbacks that cause booms and busts, b) to minimize the
occurrence of fraud and manipulation, and c) to provide isolation or
compartmentalization that enables "quarantine" of economic damage:
such as preventing a local economic crisis from going global, and
preventing a global economic crisis from affecting every locality.<br>
<br>
<br>
Currencies, with those points in mind:<br>
<br>
A viable economy would include three levels of currency: global,
national, and local/regional. The global currency handles
transactions between nations. The national currency handles
transactions between localities within each nation-state. And the
local/regional currency handles transactions that occur wholly
within the scope of local/regional economies. <br>
<br>
The ideal global currency would be denominated in energy, for
example in joules as Rabbit pointed out. Ultimately, energy is the
foundation of all economic transactions: the global common
denominator. <br>
<br>
National currencies tend to be based on arbitrary measures of value,
whether gold or the credit of national governments. But in general
they tend to represent the wealth of nations, plus or minus the
effects of speculation. If I was setting up a national currency
from scratch, I would value it in terms of natural and industrial
capital: real capital wealth. <br>
<br>
There's been much discussion of the proper foundations for local
currencies. In the Bay Area there is a group that is working on the
premise of a local currency denominated in the food production of
local agriculture. But one of the most successful local currencies,
"Ithaca Hours," is based on the value of local labor. To my mind
this is correct: because labor is the one resource that is reliably
available in every local economy. <br>
<br>
I've studied the Ithaca Hours system in some depth, and I'd suggest
anyone who's interested in local currencies do likewise, starting
with a keyword search.<br>
<br>
The major value of a local currency to any local peoples (such as
ourselves) is that it enables us to maintain functioning economies
when the global or national economies are in crisis. By analogy
it's like having rubber tires and shock absorbers on a bus, to
insulate the riders from bumps and potholes along the road. All
other factors equal, you don't want to ride on a bus where a bad
road translates to a bone-crunching ride. <br>
<br>
Even where many or most of our transactions are not local, the
ability of a local currency to insulate certain parts of a local
economy from national and global economic crises, translates to the
difference between having to tighten your belt vs. not being able to
eat, or having less work vs. having no work.<br>
<br>
<br>
Re. the IRS: <br>
<br>
The question always comes up: what does the IRS have to say about
this? As it turns out, the IRS takes a practical attitude toward
local currencies. They have two requirements, that are entirely
reasonable:<br>
<br>
One, that the exchange rate between a local currency and the US
Dollar must be public, must be arguably reasonable, and must not
subject to insider manipulation. <br>
<br>
Two, that income earned in local currency must be declared for
purposes of income tax, translated to US Dollars at the current
exchange rate, and the taxes paid in US Dollars. <br>
<br>
If we do those things, we're good to go. <br>
<br>
<br>
Re. Bitcoin: <br>
<br>
I'm highly skeptical of Bitcoin, precisely because it has
demonstrated a tendency toward bubbles and busts, speculation, and
manipulation by questionable actors. These characteristics do not
make for a stable holder of wealth or a stable medium of
transactions. <br>
<br>
The primary usefulness of Bitcoins is that they facilitate anonymity
of online transactions. This is all well and good, but can also be
accomplished by creating online financial institutions that
anonymize transactions made in US Dollars or other currencies. By
analogy think of Gift Cards, that are issued by Visa and Mastercard,
but that aren't tied down to your legal name. <br>
<br>
<br>
Anonymization without speculation & manipulation:<br>
<br>
In the type of institution I have in mind, account holders would
have accounts in their legal names as they do at any bank or credit
union. Transactions would occur in two steps: one occurring in your
personal or business account, and one occurring in the institution's
account.<br>
<br>
For example you buy something online. A payment goes from your
account to the institution's common account, and another payment
goes from the institution's common account to the person or company
you're paying. The latter payment is anonymized: it is made between
the institution and the person being paid, and assigned a
transaction number that you and they can use to track it. <br>
<br>
For example you sell something online. The buyer makes a payment to
the institution's common account and obtains a transaction number
and gives you that number. You use that transaction number to move
the payment from the institution's common account to your personal
account. <br>
<br>
The question has been raised as to whether this could be used for,
or seen as, a form of money laundering. I believe the answer is No,
because the institution itself would maintain records of every
transaction, and these records would (only) be accessible for lawful
uses such as investigating crimes or as evidence in civil lawsuits.
The important difference is that the transaction records would be
private aside from those two exceptions (criminal and civil cases),
and not be accessible to Big Data, so your purchases of (for
example) consenting adult porn, or your reading habits in general,
wouldn't become part of your dossier. <br>
<br>
As far as Porn-O-Mat or Amazon, Ebay or iTunes, or any of those, are
concerned, they are doing business with another business entity (the
Cyberia Credit Union or whatever we call it). They have no need or
desire for a "person name" for every transaction, any more than
Staples.com does when they sell office supplies to a company that's
an incorporated entity. They are not going to turn down
transactions just because they don't have the legal person-name of
the soft squishy human body that sits in the hypothetical office
cubicle for which the office supplies (or porn, best-sellers,
flea-market goods, songs, etc.) have been bought. <br>
<br>
In other words, we can get the most important benefit of Bitcoin,
without sticking our hands in the shark- and piranha-infested waters
of speculation and sabotage that have become Bitcoin's habitat. <br>
<br>
So: is anyone here interested in creating a labor-based currency,
and/or an online credit union for anonymous transactions?<br>
<br>
-G.<br>
<br>
<br>
===== <br>
<br>
<br>
<br>
<div>On 13-05-05-Sun 12:09 PM, Sonja Trauss
wrote:<br>
</div>
<blockquote type="cite">
<div dir="ltr">+1<br>
</div>
<div class="gmail_extra"><br>
<br>
<div class="gmail_quote">On Sun, May 5, 2013 at 11:53 AM, Rabbit
<span dir="ltr"><<a href="mailto:rabbitface@gmail.com" target="_blank">rabbitface@gmail.com</a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div dir="ltr">
<div>Someone was proposing a currency denominated in
joules which would represent the ability to generate
that much energy in the future.</div>
<div><br>
</div>
<a href="https://medium.com/armchair-economics/183c2ad47b50" target="_blank">https://medium.com/armchair-economics/183c2ad47b50</a><br>
<div><br>
</div>
<div>The exchange rate between Bitcoiny CPU cycles and
joules would be pretty straightforward to figure out.</div>
<div><br>
</div>
<div>But: would this be more prone to speculation and
bubbles since it's based on our estimation of what will
happen in the future? And what happens when everyone
tries to cash in their joules at the same time?<br>
</div>
<div><br>
</div>
<div><br>
</div>
</div>
<div class="gmail_extra"><br>
<br>
<div class="gmail_quote">
<div>
<div>On Sun, May 5, 2013 at 10:44 AM, Ryan
Bethencourt <span dir="ltr"><<a href="mailto:ryan.bethencourt@gmail.com" target="_blank">ryan.bethencourt@gmail.com</a>></span>
wrote:<br>
</div>
</div>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div>
<div>
<div dir="ltr">Hi All,
<div><br>
</div>
<div>I've been reading/following the whole
evolution of bitcoins as currency and I'm
still a bitcoin skeptic (I prefer potential
rather than spent processing power :) ).</div>
<div>
<br>
</div>
<div>So I was curious, has anyone in the past
tried to create a virtual currency based on a
resource value, like future usage of CPU time
(i.e. $1 would equal an equivalent amount of
electricity and hardware wear and tear for x
number of CPU cycles, which could be exchanged
either for the cycles, at a super computer
bank or for other currencies)?</div>
<div><br>
</div>
<div>To me it seems that bit coin is like a
spent CPU resource rather than a future
resource and by flipping the equation to
future rather than past value a currency based
on this type of commodity would be useful...
any thoughts?</div>
<span><font color="#888888">
<div><br>
</div>
<div>R</div>
<div><br>
</div>
<div>
<div><br>
</div>
-- <br>
Ryan Bethencourt<br>
<br>
<span>Tel: <span title="Call with Google
Voice"><a href="tel:%28415%29%20794%206463" value="+14157946463" target="_blank">(415)
794 6463</a></span></span><br>
<a href="mailto:ryan.bethencourt@gmail.com" target="_blank">ryan.bethencourt@gmail.com</a><br>
<br>
<a href="http://www.bamh1.com" target="_blank">www.bamh1.com</a><br>
<a href="http://www.linkedin.com/in/bethencourt" target="_blank">www.linkedin.com/in/bethencourt</a><br>
<a href="http://www.logos-press.com/books/biotechnology_business_development.php" target="_blank">www.logos-press.com/books/biotechnology_business_development.php</a><br>
</div>
</font></span></div>
<br>
</div>
</div>
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