politics–global

the human niche: towards an ecological politics

DarwinWhen life was new on Earth, it invented photosynthesis. Photosynthesis takes light from the Sun and captures it as useful energy. It also produces waste oxygen.

We like oxygen, because we breathe it, but we forget that chemically, it’s pretty nasty. Oxygen gas is implicated in lots of bad things, from rust to explosions. It’s not stable, and it’s highly chemically reactive. It sits on the periodic table next to fluorine, and if you know anything about fluorine, you know you should stay away from it. And when photosynthesis first evolved, oxygen was deadly to most life on Earth.

And in fact, once it started reaching high concentrations in the atmosphere, it wiped a lot of that life out, in what we now call the Great Oxygenation Event. But then other organisms evolved to make use of that oxygen. They produced waste CO2, which the photosynthetic organisms used. So a cycle emerged, and an ecological balance came into existence. And here we are.

We talk about nature’s harmony and balance as though it’s eternal, but that’s wrong. These sorts of balances and cycles are older than humanity, but they are born in time, in the process of evolution. They are dynamic, and they shift with changes in the Sun and solar system, and with the things evolution invents as it progresses.

We are one of the things evolution invented. There is an idea that humans exist somehow outside nature, and that we create things and environments that are ‘artificial.’ I think that’s misguided. The problem is time: if you make enough of the very most toxic things humans produce, and then give nature enough time, it will invent processes that will make use of them, or render them harmless somehow.

It’s less a matter of ‘damaging nature’ than incurring a debt to Darwin: creating ‘waste,’  or unlooped materials, substances that nature doesn’t yet know what to do with. And time really is the problem: we don’t have the millions of years to wait around while evolution figures out what to do with our garbage.

Personally, I don’t think it’s within our power to threaten all life on Earth. Life has endured worse things than us. It might be in our power to extinguish all human life, though humans are pretty hardy: we have existed in a lot of environments, from the Arctic to the Sahara to the Amazon, for many generations. It would be possible to render our current civilization untenable. I think that’s the track we’re on now.

To get off that track, we need to think about humanity in the context of broader nature. We often talk about other species as occupying an ‘ecological niche,’ a role in nature. Wolves are hunters, at the top of the food chain; wildebeests are ruminants, eating grass, pooping fertilizer, and feeding alligators. But we don’t talk much about the human niche.

We do talk about our ‘footprint,’ but that’s still non-ecological thinking: everything in our ‘footprint’ is assumed to be artificial, damaging, an interruption in nature; everything outside is assumed to be harmonious, balanced, and ecological. When we seek to ‘reduce our footprint,’ we seek to reduce the damage we do. But we don’t seem to focus much on legitimate ways for humans to participate in nature.

Notice we never ask: what is a wolf’s ‘ecological footprint?’ It’s hard to apply the logic of ‘footprint’ when we assume an organism is already operating in a way we see as ‘natural.’

the human niche

So what would a human niche be? Being humans, we have some choice in the matter. We probably can’t become ruminants, because we can’t digest grass (unless we modify our own biology, or the biology of the grass), but there are so many things we can do. The only question is, how long can we do them? If we don’t consciously choose to participate in ecological cycles, we can only persist doing what we’re doing so long. Our current role is probably short-lived, one way or the other. So for a longer-term role, we need to be inventive. Here are a couple ideas that come to mind:

ecological designer

So what can humans do that other species can’t? The closer we look at that question, the shorter that list is, but we do seem to be pretty good at designing things, and we do seem to have some ability to be reflective. So if we combine those and look at our role in nature, it’s logical that we could find  a long term role as ecological designers, creating and participating in new natural cycles.

And clearly, to create a natural cycle is to participate in it. You might not execute all the steps yourself, but you can cooordinate with others, humans and other species, to close your loops and eliminate your debt. Bill McDonough talks about it in detail in Cradle to Cradle.

OK, then: what does it mean to do good ecological design?

A lot of what comes to mind should be familiar: closed loop recycling, balanced capacities for generating and using waste products, complete recycling of the entire waste stream. Some might seem pie-in-the-sky, but we’ll have to get there at some point. I’m reminded of this Ted talk by Michael Pollan. A couple new things (to me) do come to mind:

managing debt: parsing waste as debt brings to mind all the financial tools related to debt, as well as all their risks and rewards. You can build up debt in planned and unplanned ways. You can pay down debt. You can work with it in a strategic way. Which I think would be useful in moving towards a more sustainable society.

But debt can also mess up your life, and on a large scale, your society. Ask a Greek how they feel about debt right now. Poison in the groundwater,  waste CO2 in the air, can cause us and a lot of other organisms problems. Like I said above, maybe if we had a few million years, we could wait around for nature to adapt our debt to its use. But in the time scales humans care about, we need to take some kind of action.

beauty: the dimension of time is central to the idea of sustainability. For humans to continue to make choices that benefit an ecology over long periods, they must develop a heritage of an appreciation of that ecology. So beauty is more than a good thing we should all want, it’s also a material priority.

It’s part of what persuades others to join us, and part of what binds the next generation’s way of life to ours. We don’t expect them to live the same way we do, but we do need to persuade them that what we create for them is worth sustaining and building upon. And if what we create is beautiful, and we can show them how to appreciate that beauty, that will be easier.

infection agent

Terraformation is a staple of science fiction. But from the viewpoint of Earth’s ecology, it’s infection: spreading Earth’s life to other worlds. Mixed with the ‘ecological designer’ role, it means we could be a vector for life in general, inventing new ecologies that could persist in diverse environments. Freeman Dyson speculates that we could even make species ‘native’ to space itself. It’s an interesting idea. One open question: how do we get off Earth in  a harmonious way? Launching payloads into space requires enormous concentration of energy in one place, far more than nature generally does. And the scale of terraforming would require truly massive launch capability, or very long timeframes.

biome protector

Another staple of science fiction is the comet strike. Protecting the Earth’s life from comets could be an important ecological role for humans to play.

conclusion

I guess what I’m saying is: we can participate in natural cycles deliberately or not. Not participating is not an option.

We’ve built a civilization that we value. If we want to operate in a civilized, conscious way for the extended future, we need to include nature in that vision of civilization. If we don’t deal with broader nature on the best human terms, it will deal with us on its own.

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money hacking: gamification

This is the third article in a series. The previous ones are

Computer technology opens up some interesting possibilities in the design of currency. When currency is bound to paper, it can only do the things paper can do, but if you have computers at your disposal, you can add interesting behaviors and dynamics.

These are some interesting ideas one could apply. I like a couple of them, and one I haven’t decided about.

the you standard

This is a concept from Thomas Greco’s ‘The End of Money and the Future of Civilization.’ My name, his idea. This is not all of his idea. His book has a lot more interesting details. I highly recommend it.

The ‘you standard’ is a modification of mutual credit. In the you standard, when your balance goes negative, you are actually issuing a currency you back with your own goods and services. You are obligated to accept your currency at full face value. No one else is. This diagram shows how currency would flow:

Adapted from Thomas Greco's 'The End of Money and the Future of Civilization'

Bob wants to buy a drum set from Dave. So Bob initiates some new currency, and pays him with it. Dave buys dinner at Penelope’s restaurant with Bob’s currency. Penelope buys something from Xavier, and so forth, until the currency circulates back to Bob, who is obligated to accept it and retire it. Bob can then issue new currency. The rest of the chain has no obligation, but if they trust that Bob will make good on his obligation, they should accept it.

Note: no interest paid, no growth imperative. If Dave makes better drum sets, he can charge more if he likes, but if not, there’s no dynamic in the economy to force him to. If Xavier has kids who grow up and start circulating currency, the economy also grows. But if he doesn’t, no one goes bankrupt.

currency rating

With the you standard you would have a currency rating system. When someone buys from you, they give you a rating. This rating gives others a way to judge the value of your services and whether your prices are reasonable. If your customers think you aren’t giving good value for their money, they can give you a low rating, which will reduce the value of your currency. Likewise, if they think your prices are reasonable and/or your services are excellent, they can give you a high rating and increase the value of your currency.

And if you refuse to accept your own currency, the buyer can mark you as ‘in default’ and crash the value of your currency. This would need to be a little complicated–you’d have to be able to reverse it, for example, if there was a misunderstanding, that kind of thing. It would need to be verifiable and auditable.

When you pay in someone’s currency, your electronic wallet checks the ratings online and proposes a payment, based on the issuer’s rating. The seller doesn’t have to accept it at all, and they don’t have to accept the default values, but it should be easy to transact.

A given transaction might use currency issued by a number of people. There would need to be an easy user interface to review those currencies and accept the default proposal, or begin negotiations on that basis. There’s an example below.

If you happen to accept a lower-rated currency, that would give you an incentive to reach out to the issuer and see if there’s any way you can help them improve their rating. The system could include social networking facilities to help people support each other. This would constitute a cooperative incentive.

Fairness of ratings is a cultural issue. In your community, you would need to establish a culture of trust, and establish standards for ratings. You would also want  to provide some kind of meta-moderation mechanism–some way for a community to establish and maintain fairness in ratings.

I’ve thought about allowing ratings above 100%. I’m not sure it’s a good idea. It’s a subject for experimentation. I think of 100% as a rating of ‘satisfactory or better,’ and anything lower as an indication of some kind of problem. That would be a way to head off the inevitable ‘grade inflation’ problem–define an upper limit, and define the semantics of different ratings well.

design for recirculation

The system could also include a social network that would know the network of relationships, including the seller and the issuer. Part of the buying process would be to find the currencies you hold that are issued by others in the seller’s network, and default to spend the ones with the shortest chain of relationships.

Maybe that’s confusing.  Here’s an example:

Say Dave wants to buy a stereo from Alice for $80. Dave holds $30 issued by Petula ($Petula30), $60 issued by Bob, and $50 issued by Xavier. Bob and Xavier are in Alice’s network, but Petula is not. Xavier’s rating is 100%, but Bob is at 92%. Say Dave’s smart wallet offers Alice $Bob60 and $Xavier24.8o, for a total of

60 * 92% = 55.2

+   24.80 *100% = 24.80

= $80.

Dave’s smart wallet would automatically generate the offer. Thus the system would try to circulate someone’s currency back towards them, so they could retire it and issue new currency easily. If Alice had had bad dealings with Bob or Xavier, she could counter with a lower rating or refuse their currency altogether. Most of the time you’d accept the default offer.

One problem such a system would need to solve at some point is insurance: if an issuer dies or goes out of business for some reason unrelated to its ability to deliver, you’d need to have some way to make the holders of their currency whole.

separation of measure

OK, so we all can circulate our own currencies together. We need a common yardstick for everyone to measure their currency against, so we can exchange it conveniently. Initially, you’d probably use the local currency (dollars where I’m at). That would allow sellers to post prices in one currency, and would minimize the mental adjustment as people got used to circulating a new currency. If (when) the local currency became unstable you’d have to switch that measure to something else, probably some commodity.

Note: I’m using the word ‘measure,’ not ‘standard.’ A ‘standard’ implies backing–someone somewhere has an obligation to accept your currency and give you gold or dollars or services or whatever, on demand. ‘Measure’ is just, well, a measure. You’re saying ‘I’d exchange this amount of gold for this amount of currency in an open market.’ And you’d be free to make that exchange.

The other nice part about measuring value that way is that you can have different kinds of currencies circulating within a system, and still allow people to post a single price, if they so choose. People could even exchange currencies of different designs on that basis, and apply discounts to values in negotiation as they saw fit. It would make for an experimentation-friendly system. Think you have a good idea for a currency system? Implement it with a separated measure and plug it in to the broader system.

It would be useful to have some of the measured commodity in circulation, to ensure stable prices. It’s one thing to say ‘I’d exchange this currency for some commodity’ in the abstract, but quite another if you could go down the street and get some of it. If you’re using dollars, that would be easy (now), but with silver, for example, you’d probably want actual coins widely available.

loop finding

Loop finding would help a new currency expand in a population. Basically, as people join, they identify buyers and sellers they already do business with in the network, and others who aren’t in the network, and recruit people to close loops of circulation.

demurrage

Bernard Lietaer describes the counterintuitive appeal of demurrage better than I can. Basically, it’s currency that decays in value over time in a scheduled way. So if I pay you $100, in a month’s time that money would become, say, $99. This creates a ‘hot potato’ effect on currency–people don’t want to hold it long, they want to spend it, which forces circulation, and discourages hoarding. I think there are pros and cons to the concept. I haven’t decided at this writing whether I endorse it or not.

It’s a controversial idea. Some have said it’s ‘not capitalism,’ which is not something I feel strongly about either way. Basically, it drives the value in the economy towards assets other than money–in demurrage, money is for exchange of value, not storage of value. I think of it as sort of the purest notion of  ‘monetary system as social operating system,’ emphasis on ‘social.’ I haven’t decided if that’s a good thing.

It’s comparable in effect to inflation, though its effects are more evenly distributed. If it was all that was in circulation, it might be successful, though people might tend to circulate other things as currency. In a mixed-currency, experimentation-friendly environment (which I do endorse), I’d predict people would be reluctant to accept it. It might circulate at lower than face value.

I like the idea of a currency that models the depreciation of things. It would tend to make the $5 in your pocket approximate the value as the $5 thing you wanna buy, not just now, but in the future. That would make the relationship between buyers and sellers more equal. I like that, but I’m not convinced demurrage is the best way to do that.

The next chapter: money hacking: my politics.

money hacking: the origination problem

This is the second article in a series. The first one is Money Hacking. [a note: this post could easily be a book, or an entire library. My intention here is to point in what I think is a good direction for creative response to current events, not to explore these topics exhaustively.]

So you and your friends have gotten together and want to start your own currency. You have to decide, where will it come from? Within this economy you are creating, how will these amounts be born in the system? How will you acknowledge the value you create for each other? There are a lot of options. It’s important to know about different ways to originate currency, and how conventional systems do it. Here are a few options:

the world we live in–fractional reserve banking

Most of the dollars we know and love are not ‘printed’ into existence, by the government or anyone. ‘Printing money’ is a profoundly misleading turn of phrase. Almost all dollars are loaned into existence.

So, when you go to a bank to get a loan, the amount in your account goes up, but there’s no other account that goes down by the same number somewhere else in the bank’s computers. The bank has its own cash reserves to cover basic operation, so if you withdraw from your account, there’s something there to pay with. Generally, they’re supposed to have enough cash on hand to cover about ten percent of all the deposits. They rely on the trust of the community to continue operation. When that trust is lost, we call it a ‘run on the bank.’ That’s what the FDIC is there to deal with. But the  point is, all currency systems are founded on trust, including the dominant one.

Here’s some information on how the fractional reserve system came into being.

So, for almost every penny in the economy, someone somewhere is paying back a loan with interest on that money. That means that for the economy as a whole, there’s more money needed than exists. So either someone goes and gets another loan, and expands that demand, or someone goes bankrupt. It forces growth, whether or not there’s some other reason for it in the economy. If growth fails for some other reason, it breaks down: people can’t make loan payments, loans start going bad… sound familiar?

Forcing economic growth has good and bad effects. On the positive side, its forced expansion has lifted people’s standard of living, and created a lot of wealth for society, however it’s distributed. Jordan Macleod compares it to a booster rocket, lifting the economy from the ground into the orbit we now enjoy.

But it also means that the economic growth criterion outweighs all others. Depleting natural resources? Can’t stop the engine of commerce. If it stops growing it starts dying.

Fractional reserve banking also makes an economy with two kinds of people: people paying interest and people making money on interest. Remember, you pay interest even if you have no direct debt. Interest payments are a significant component of every consumer expense:

  • the mortgage on the shop you bought that TV in,
  • financing on all the warehouses and boats it occupied on the way from China to your place,
  • whatever small loans the companies and suppliers got to smooth out the bumps in their cashflow,
  • and the loan that originated the money itself.

Here’s a chart from a German website demonstrating the dynamic pretty well:

comparison of interest paid & gained

This is from Germany in the 1980s, but I don’t know a reason why the US in 2010 would be different (worse, maybe, but not a different pattern.) [If anyone can find a more up to date chart, maybe with American data, I’ll post it.] Note how much more interest low income folks pay than they receive, and how much more interest high income folks receive than they pay.

Kinda puts the whole debate about ‘redistributing wealth’ in a new light, eh? It’s a massive transfer of wealth from the poor to the rich designed into the currency itself. You don’t need the Trilateral Commission to explain this. No conspiracy theories necessary, just a basic understanding of how money is created.

There have been a lot of comparisons between Wall Street and Las Vegas lately. But they usually miss one important similarity: the house always wins. And this is how that works.

Other problems with the concept are well documented.

[If you’re paying attention to the news, you know the  Federal Reserve created $600 billion dollars recently through ‘quantitative easing,’ which basically does amount to printing money. That has its own problems, including inflation risk. It’s not common practice, but if it started happening more often, it would not be a good sign either.]

the ‘gold standard’ and commodity-backed currencies

Commodities are the oldest form of currency.  Some are valuable because they’re rare, like gold. Some are useful: the ancient Egyptians used certificates backed by stores of wheat. So, the farmer would bring their wheat crop in to a municipal store, receive a receipt, and those receipts became a medium of exchange.

Commodity currencies have pluses and minuses. Pluses include basis of value: there is a value to the currency that is not arbitrarily assigned. Whether you use wheat as money or not, you can also eat it, so when you’re exchanging your wheat receipt for goats, you have a way to sensibly bargain with your seller. There’s always an element of barter in commodity currencies.

But again, it divides the economy into two parts: the part that produces the commodity, and the part that produces everything else. If you find a new gold deposit, but the rest of the economy doesn’t grow, you get inflation, and the value of people’s savings drop. If someone invents some new product category like computers, but no one finds a new gold deposit, then the rest of the economy suffers when people buy computers instead of, say, repairing the roofs on their houses. For a commodity economy to work well, the commodity has to grow with the rest of the economy. Maybe (maybe) for an agrarian economy wheat can work, under certain circumstances.

For an information economy, gold is probably not a good candidate. Gold’s growth has very very little to do with the production and exploitation of new ideas, unless those new ideas are about how to produce more gold.

Also, in a commodity economy, finding or creating that commodity is the most important thing you can do. If your gold mines use heap-leach mining? If that’s what’s most efficient, then that’s the best way, whatever the cost. If they fail, no economic growth for you, whatever else is going on in the economy.

barter

Barter is great… when I have something you need and you have something I need, and we happen to be in the same place at the same time, when we both have those needs. Otherwise, it doesn’t really work as an operating system for a modern economy.

mutual credit

In a mutual credit system money is spent into existence.

The system begins with every account at zero. Then, imagine someone buys a sandwich for five currency units. The buyer’s account goes down five units, and the seller’s account goes up five units.

The overall balance is zero. Negative balances are not charged interest. And there’s no intermediary to convince that you will repay the debt. Mutual credit systems do not have a ‘bank’ to create money.

In mutual credit, a negative balance is not inherently worse than a positive one. It’s just your balance in the system. If your balance is negative, then you have created money to circulate. If it’s positive, you’ve received money.

By itself, that isn’t enough–because everyone in the system is empowered to issue currency, it requires the trust of everyone in the system. And people could issue a bunch of currency and buy a bunch of stuff and then just walk away. Those flaws can be mitigated with a couple modifications:

  • charging people who walk away from the system–if you run a negative balance and then don’t accept the currency in exchange for your own goods and services over enough time, the agreement would allow the currency operator to bill you in dollars, if the dollar economy still works. If the dollar economy has problems, walkaways are not going to be a problem;
  • limiting people’s negative balance, based on the overall circulation in their account.

One big advantage of mutual credit is flexibility. Because mutual credit is a pure agreement, there are a lot of possible ways to modify it. There are ways to include some of the positive dynamics inherent in the other systems, and add other useful dynamics. That will be the subject of the next post–Money hacking: gamification.

One final note: I need to remind readers, I’m not an authority on currency systems. There are others who know more, and if I’ve missed anything important or there are any other categories of currency systems I should include, let me know. This is about lighting candles, not cursing the darkness. 

references

Margrit Kennedy: Interest and Inflation Free Money, at http://userpage.fu-berlin.de/~roehrigw/kennedy/english/

money hacking

Global warming is a concern for a lot of people. I’m one of them. There’s this dawning realization that puny humans can affect the big world in big and (as far as we’re concerned) permanent ways, that minuscule increments of waste CO2 (parts per million) can affect the world for a very long time. It’s a problem, and a lot of people are trying to figure out how to fix it (while all of us are busy making it worse, but still, it’s on our minds. Better than complete unconsciousness, though not by much).

We used to think of nature as this thing that was so big, and we as humans were so small, that exploiting what we found seemed acceptable, and wasting what we used was fine. There was a mindset that didn’t concern itself with a systems role for human actions. We didn’t worry about ‘closing the loop’ because we didn’t think we wasted or used enough to worry about it.

Now we think we’re so smart when we build with FSC certified lumber and bike instead of drive and try to measure and reduce our carbon footprint. And I think it’s a great thing.

But we don’t bring that same kind of mindset to all the areas we could, in particular economics. Even fairly sophisticated news sources don’t deliver important aspects of the big picture.

We talk about money the same way people of the 19th century talked about air:

  • it’s this stuff out there, that comes into and goes out of our lives;
  • we need it to survive;
  • it’s undifferentiated, all the same stuff. Different countries use different currencies, but it’s all the same basic idea, mutually exchangeable;
  • it’s always been there. No one invented it. It seems like part of how the world works, and how it should work;
  • we never ponder what it is, how it’s created, or how it’s destroyed.

And what’s saddest, I think, is this: if we developed some sophistication in our thinking about money, it would open up large opportunities for people to develop and sustain meaningful, durable prosperity for everyone.

We leave economic sophistication to, well, economists, but also bankers, traders, analysts: people whose business is money. The financial industry. But money is the business of all modern humans. It’s the very operating system of our civilization. Modern humans can’t function without money in a modern way. Many of us would starve and die.

And you haven’t read the manual. Or even skimmed it. You wouldn’t know where to find it. After all, it’s someone else’s job to know that stuff and handle it. They’re taking care of it… right?

Right?

No, they’re not. That’s what we call the ‘Great Recession.’ Blame Wall Street, blame Fannie Mae/Freddie Mac/the government; from the right or left, someone was too cravenly greedy or incompetent or shortsighted or all of the above.

And when we said ‘Let the financial people worry about all that complicated stuff,’ we trusted them. We did more than take out loans we couldn’t pay (though some did); we let them design the very architecture of our economy to enrich themselves at our expense. We let them assume a parasitic, heads-I-win, tails-you-lose role in the economy. When they do well, they profit. When they screw up, we have no choice but to bail them out, and they profit. Not a bad racket.

So what can you do? If you’re not willing to look into what’s going on and ask some questions about how money works or how it could work, not much. Maybe you’re a survivalist waiting for the big SHTF, and you’ll buy some land out in the country and a bunch of guns. Maybe you think the decline will be punctuated but slower, and you’ll scramble to get yourself on the happy side of the rich/poor line. But either way, you’re writing off any possibility of a future where prosperity is broadly shared.

I don’t think that’s necessary. If you’re smart and thoughtful, and you’re willing to do some homework, you could turn this crisis into an opportunity to help you and the folks around you get through the next few years. If enough folks do, maybe there’s hope for us all.

I don’t pretend to have all the answers. But I think there are some good ways to think about the answers people are coming up with, and I think it’s smart to educate yourself about the options. I think it would be smart to take action soon.

what is money?

This is the core question. If you don’t think a bit about what money is, you are left with the ideas of others, including all the fine-print aspects they’d rather you didn’t think about.

Money is: an agreement. There’s this stuff, maybe it’s paper with numbers on it, maybe it’s numbers in a bank’s database, maybe it’s strings of shells collected on a seashore. Whatever form it takes, there’s an agreement that it has value, and people accept it in exchange for things.

Sometimes that agreement has the force of law: that’s what ‘legal tender’ means. If someone pays you with a sufficient amount in dollars in the US, you can’t sue them for nonpayment. A court of law in the US won’t accept that.

Now, that doesn’t answer a lot of questions. Like, where does it come from? How does it get created/enter/exit the system? What does it do along the way? Are there different forms? How do they interact?

But it’s useful to think of it as an agreement because we make agreements all the time. ‘Let’s meet at the Cultural Center at six.’ ‘I’ll watch the baby while you go to work.’ ‘I’ll give you $60 for those shoes.’ It’s possible to make our own money agreements with your friends and business associates. Which basically means, starting a private currency.

Whoa, John. Is that legal?

Well, it depends. In some countries, no. Germany, for example, though there are some projects they are allowing to proceed. In the US, a few things are important:

  • make sure it can’t be confused with US dollars–currency notes should be visually distinct. I wouldn’t even use the word ‘dollars’ at all. We aren’t talking about counterfeiting;
  • don’t use the words ‘Legal Tender;’
  • pay your taxes. You’ll probably have to pay them in dollars (at least for now). If you can get a local taxing body to join your agreement, all the better.

That’s as much as I know about it. If you’re concerned about getting in trouble, consult a lawyer. IANAL.

wait–money is an agreement?

Yes. That’s it.

Maybe it’s pervasive. If you’re surrounded by people who don’t accept the same currency you do, that would be hard to keep up, unless you’re a survivalist. Maybe under ‘legal tender’ laws the word ‘agreement’ isn’t quite right, because you’re not really free to decline. But with the way things are going these days, you might want some other choices available to you. And anything you and your friends and  business associates come up with will have to be just that, an agreement. Possibly a legal one.

But just to be clear: when you and those you do business with agree on a price, you’ve just defined the value of the currency you’re transacting in. That’s where that value comes from as a currency, and nowhere else. You can use dollars, strings of beads, cows, gold dubloons, or anything as long as you all agree to it.

If you use a commodity currency, your currency may have use-value, about which more later.

what does money do?

Money, as we currently use it, has three basic functions:

  • it is a store of value. So, instead of storing all the food you’re going to need after you retire, you have money in a retirement account to buy food to eat after you retire;
  • it is a measure of value. So, you can use it to compare value between items. An orange has a value of some number of dollars (in the US). A car has another value. You can compare them and assess the relative value of the two things;
  • it is a medium of exchange. So, if I have the right amount of dollars and you have an orange, I can exchange my dollars for your orange.

There are problems associated with using the same tool to do all those things, and different ways to deal with those problems. More on that later. Bernard Lietaer’s transaction.net goes into those issues in some depth.

Next: Money hacking: the origination problem.

references

These are books and sites I have found useful in beginning this thought process. If you have suggestions, please post them in the comments.

Bernard Lietaer’s transaction.net, especially Community Currencies

Thomas Greco’s The End of Money and the Future of Civilization

Jordan MacLeod’s New Currency: How Money Changes the World as We Know It

metacurrency.org has some interesting ideas about a generalized concept of currency

the Cyclos project

a complementary currency plugin for Drupal

geekcred p2p digital currency

the calibration of fear

One of my favorite thinkers on the subject of security, Bruce Schneier, wrote this great blog post recently. Schneier has a very solid, rational approach to the subject; I think of him as the economist of security, because he tends to present security in economic terms: trade-offs, costs and benefits. He coined the term “security theater,” meaning security measures that don’t provide actual security, and that may exist to further some other agenda than security, or secure a different resource than claimed.

But here he is, rationally (and compassionately) defending the practice of security theater in certain circumstances:

We make smart security trade-offs — and by this I mean trade-offs for genuine security — when our feeling of security closely matches the reality. When the two are out of alignment, we get security wrong. Security theater is no substitute for security reality, but, used correctly, security theater can be a way of raising our feeling of security so that it more closely matches the reality of security. It makes us feel more secure handing our babies off to doctors and nurses, buying over-the-counter medicines and flying on airplanes — closer to how secure we should feel if we had all the facts and did the math correctly.

Of course, too much security theater and our feeling of security becomes greater than the reality, which is also bad. And others — politicians, corporations and so on — can use security theater to make us feel more secure without doing the hard work of actually making us secure. That’s the usual way security theater is used, and why I so often malign it.

But to write off security theater completely is to ignore the feeling of security. And as long as people are involved with security trade-offs, that’s never going to work.

This so reminds me of another security expert I admire, Gavin de Becker. De Becker wrote The Gift of Fear, my second-favorite security book (after Schneier’s Beyond Fear). De Becker’s approach is nicely complimentary to Schneier’s: he addresses those moments when that primal part of your brain (the amygdala, I suppose) is saying “Something is wrong here…” His work is about tuning into, educating, and using that part of your mind to protect yourself in bad situations.

Schneier’s work is more about the situations when that part of your mind is a bad fit for the problem: it can save your life in a dark alley, or save you money in a bad business negotiation, but it won’t help you assess the security measures for your company’s network, or think sensibly about national security. When you aren’t confronted with visceral, accurate signs of human malice, Schneier clarifies things immensely. When you are, de Becker is your man. Problems occur when the wrong part of the mind is used to make security decisions.

I think there is important work to do around that boundary, between times when our primal minds will save us, and times when our rational minds will do a better job. In his post, Schneier is talking about a subtle point of detail in that boundary. I think it would be useful, socially and politically, for these two to get together. If Schneier and de Becker worked together, they could create some really useful mind-training, to help people use their entire mind-stack effectively to address the real threats we face.

In my own work, I have the responsibility to create complex systems, and then help my customers navigate those systems. I often must help people who are overwhelmed by complexity, and aren’t dealing with it well. I see this reflected in the world at large, and nowhere do I see bigger problems matched with worse thinking than in the field of security, on a political scale.
How ’bout it, guys?

a way out of Iraq

I think I’ve got an idea of how to extricate ourselves from Iraq. It might not be a good idea, but I think it’s better than Bush’s current plan:

First, draft orders for immediate and complete withdrawal, as fast as possible. If you gotta leave some equipment behind, so be it. Get them complete and initialed, to the point where a single presidential signature will start the process. Make it as few pages as possible, for the President to carry around. I’m calling this the sword of Solomon document;

Get all the regional powers together, everyone with an interest other than chaos. Exclude those who would profit by chaos. Their interests may conflict, but none of them will be happy with the hell-in-a-handbasket scenario. There are those who would be happy with that: don’t invite them. Include Syria, Iran, the Saudis, Turkey, Jordan, the Kuwaitis, and all the appropriate internal players: al-Maliki, al-Sistani, and so forth;

Threaten them with the document. “We are leaving. We can leave now, or we can leave later. The choice is yours. You have x number of weeks to make a deal. If at any point, I lose faith that you are going to come up with something that will be stable, lasting, and as just as we can manage for all concerned, including the Sunnis, I will sign this, and we will let you people deal with the mess.”

“We’ll work with you. We’ll provide support for peaceful directions. But we have to move in accordance with the patience of the American people, and we also have to do our best by all of the Iraqi people.

“And we have to deal with the realities of spheres of influence that will interact over time here. Better to be up-front and diplomatic now than shedding blood in the shadows for years to come.

“If partition is the direction of history, then so be it. Those who want a unified Iraq have to stand up for it, now. This is probably your last stand.”

It would require balls, and statesmanship–if the next president does have to sign the Sword document he/she will have to answer to the American people for $100/barrel oil. But you know, the president serving from 2008-2012 will probably be a one-termer anyway, so they might as well step up.

Liberty begins in the heart, not the law

Liberty begins in the heart, not the law. A mind clouded with fear cannot know it rights; it will not use them. A heart filled with hate will not respect them in others. So in these moments, when we are weak and thrown to hate and fear, we must return to that highest mind, the mind that gave us these rights inalienably, and our deepest heart, the heart that demands we respect them in others. By whatever name, we must reconnect with the universal source of dignity.

Only there do we find the strength to be free in difficult moments. Only there do we find a way to truly defy terrorism. And only from there can we truly defeat it.

The true guardians of liberty need more than guns and bombs. All human beings know hate and fear: true guardians of liberty know them, have them, but guard against their yoke.

In that mindfulness there is a gift. A liberation not only of will, but of spirit. And a liberation not only of spirit, but of mind. A wisdom and a sensibility emerges: is the building on fire? No? Then take a deep breath. Calm down and think. What’s the real threat here? How do we deal with it sensibly, rationally? How do we manage our minds to bring our best to the problem?

So look carefully at those who would lead you. Know that those who lead by fear are themselves led by it. They are not fit leaders of free people. They do not have what it takes to be free in times like these. They deserve your compassion, not your allegiance.

In every dictator, there is a scared little boy, too afraid to face respected equals; in every backslider in the cause of liberty, a panicked, overwhelmed individual, compromising when they know they shouldn’t. Fear puts these simple principles out of their grasp: it is as important to know when to trust as not to. A nation’s greatest power is the goodwill of its people. And while security is important, respect for human dignity and basic freedom is both the deepest foundation and highest expression of that spirit.

So when you choose your representatives in the coming election, ask yourselves this: what kind of civilization do they stand for? How deeply civilized are they? How well do they think when their civilized nature is tested? Do they fixate on barricades, or do they seek ways to leverage the best of our nature to make our world both safer and freer? Free people must demand no less.

talking to Iran

News piece in NYT today about the debate within the administration over direct talks with Iran.

I’d love to see them try to justify military action without trying direct talks. That would be funny:

“We’ve tried everything possible before taking this action…”

“Did you talk to them?”

“Well… our friends did.”

“But did you?”

“Um, no…”

The scary thought is that they might do it as a formality, just so they can avoid this conversation.

They wage war because they are so inept at waging peace

I suspect we would have to go to war with Iraq at some point. Now is not the time. It only looks like it is the time because we started the credibility clock: when you start banging the drum about the credibility of sanctions and the UN, you force the action forward, whether or not the time is right.

We have paid enormously in international credibility and goodwill. The diplomatic ineptitude of this administration will cost us for decades to come. We will pay in allied relationships, in moral authority, and most importantly in the safety of our people. It may very well be the beginning of the end of the American era.

The Iraqi regime is terrible. Saddam is a murderous sociopath, living a sociopath’s dream. but there are others who are also terrible, at least one of whom has acquired nuclear weapons.

I could write a litany of second-guesses. The Bush administration should have stayed involved in the Israeli-Palestinean confict, and participated in a more even-handed way. They should have–and still should–sustain better focus on Afghanistan. I mean, “We forgot to put it in the budget?” Come on. I could go on.

What matters right now is that the Americans finish their business in Iraq as quickly as possible, and with minimum pain. It matters that the aftermath is handled under international auspices.

I saw Thomas Friedman talk about the aftermath prospects on Jim Lehrer’s show. He said words to the effect that “This could be a very good move, if we handle it right.” I don’t think the Bush administration has handled it right so far. I don’t think there’s evidence that they will do so in the future. I dread the next several years.

And I’m very clear that we have to replace the Bush administration in 2004. Just or not, his election was an historic mistake, and must be corrected.