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A practical trading method in a moneyless economy

Change is occurring at a phenomenal rate and a heck of a lot has happened since my last post on here. With the now global Occupy Movement, there is a discernible shift from protest to developing ideas for a New Society. A new global society would be very different from the "New World Order" proposed by the neocons.

There is absolutely no reason why any form of currency is necessary to be the catalyst for major development. However, it is useful as a means of incentive for people to work, particularly at jobs that don't have a lot going for them funwise. However, any currency must be based on something real and of true value. Even basing currency on something as allegedly stable as gold has obvious drawbacks (as we have discovered in the past). 1. It can be hoarded, thus manipulating the value of circulating currency. 2. It is scarce (hence its value) and 3. Apart from the recent discoveries in which small amounts of gold are used in technology and medicine, it is comparatively useless. In short: its face value is largely fictional based entirely on its scarcity.

Let's assume we have a society in which everything that is necessary is free. Food requirements for the week or even on a daily basis are selected online according to availability. This doesn't have to be severely rationed but the system could ensure that no one 'stockpiles' excessively so that distribution is equal. Then it can either be delivered or, for those who like to go out and shop, picked up.

Houses belong to the land on which they are situated. We can use land but we cannot own it. Residents register occupancy and the house becomes their home and they are wholly responsible for its upkeep and maintenance and are free to make alterations, improvements, extensions etc. as they would with a 'property' they own (remember that all materials would be free). If they decide to move, they simply check for availability of vacant houses in the region they want to move to and, when they are ready, register the vacancy of their old house. While a house is registered to them, it effectively belongs to them even if they go away and vacate the place for extended periods.

Clothing: a range of clothing is produced by the state and available free at various outlets and online.

So we now have a situation in which everyone is secure. No one has to work to live because would be slavery. But how do we get folks to work in the production and provision of resources? Well, we pay them just as we do today. But not with money because there is none. Instead, we use 'smart cards' on which can be recorded specific values of 'Travel Miles' (TMs). Travel is not free. it has to be paid for in TM vouchers. Because travel is a facility that almost everyone will want in order to enhance the quality of their lives, they would be readily exchangeable for other goods and services. This allows for smaller levels of trade in goods and services that, although not essential to a reasonable standard of living, enhance the quality of life. People can set up trading in fashions that are a cut above the clothing available to everyone free and, for these, they can charge a price in TMs. Things can be bought at cost price and sold at a profit just as if we were using money and this would encourage the variety, innovation and creativity we enjoy in a free market society.

This system is infinitely flexible and safeguards need to be put in place to prevent the kind of manipulation and abuse we have seen with our monetary system. One simple safeguard would be to decriminalize debt. This doesn't prevent individuals lending in return for an agreed interest. but such an agreement could only be struck between those who trust each other because there would be no legal recourse if the debt is not honored. They would be regarded as "debts of honor" and rely solely on trust. This would, of course mean that people would only lend to those they trust to honor the debt because such agreements are not supported by law. That means it would not be viable to set up any kind of business based solely on lending and charging interest. No debt could be legally enforced so no one need ever be plunged into inescapable debt.

Just as a currency based on gold can only be "redeemed" for gold but can be spent on anything, TMs can only be redeemed on travel but can be spent on anything.

Many are put off by the concept of a moneyless society because they want the opportunity to improve their lives and they like the concept of trade. This would enable those who choose to become comparatively wealthy but no one would be in poverty. If one were to lose everything, they would not lose their home or go hungry.

I would be interested in any feedback on this idea.

Tags: economy, new, society

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Replies to This Discussion

Permalink Reply by David Eggleton on December 7, 2011 at 7:57am

I'm surprised to be writing this on this site: what's the energy basis of "your" moneyless society?

Permalink Reply by Ron Tocknell on December 7, 2011 at 8:39am

"My" moneyless society? I don't think proposing an idea defines me as the 'owner' of society. I'm not sure what you mean by "energy basis". Could you clarify that a little for me?

Permalink Reply by David Eggleton on December 7, 2011 at 4:26pm

By "your" I meant the one you envision. By "energy basis" I refer to the ability to do work (classic definition) upon which an entity of any scale relies. So, what will power the moneyless economy/society?
I believe all visions and proposals now should state assumptions about energy.

Permalink Reply by Ron Tocknell on December 7, 2011 at 6:44pm

I don't share your belief that money "powers" anything. The only part that money plays in any transaction is to give permission for it to occur. When we have the skills and the equipment and the will to do something, what practical part does money play in bringing that about? I know you will say that the equipment has to be paid for but it will still work if it isn't. You'll say that the labour has to be paid for but muscles still work even if it isn't. All these things only have to be paid for because we are conditioned to think that it must be so. Everything works just as well if it isn't paid for.

The advantage of money is that it provides an incentive to do work you would want to do without some kind of incentive. But the problem with money is that it isn't backed with anything. It is created out of thin air as debt but then more debts have to be created to ensure there is the money in circulation for some of the debts to be repaid. But it would not be possible for all the debts to be repaid because there is not enough money in existence to do that. The only way of creating more money would be to create more debts so it is a global debt that can never be resolved. You might call that an "energy base" but I can't agree with you.

If we returned to the Gold Standard, even if we banned gold jewellery etc. to ensure stocks, there is now a use for gold in technology and medicine so consumption would steadily deplete stocks and besides, the "value" of gold does not reflect its usefulness (true value) but its price (fictional value) so that isn't sound either.

Travel is not a thing or a substance. It cannot be mined or grown. It is a facility and because it is a facility that the majority want access to, it has a universal value.

The state doesn't need the permission of money to do things. Food can be provided free (in fact it is immoral to allow someone to starve because they don't have money to pay for food so it has to be free). Houses can be provided free and all the essentials can be provided free because the state should not need an incentive to allow people to live. However, as long as the essentials are free, we need some form of basic currency to (a) give individuals an incentive to provide the workforce. Nobody HAS to but work should be a matter of choice (if it isn't, it is forced labour). Those who do work are paid in "Travel Miles", which can be exchanged for other things because travel will always have universal value. this will allow trade and innovation and variety because people can provide things and services that are not essential to life but enhance the quality of life.

Money has never been an "energy basis". It was conceived as a convenient means of exchange. A donut is far more valuable than a dollar or even ten or twenty dollars because you can eat it. But we pretend a dollar is worth a donut and, as long as everyone agrees to play along with the pretense, you can always get a donut for your dollar. People will often say that the value of their home has gone up or down but the "value" is the shelter and comfort and the number of people it will accommodate and so on. Value only changes when you do something to structurally change it. PRICE may go up or down but value is constant. The PRICE of a loaf of bread is higher than it was ten years ago but the VALUE of a loaf that will feed six is the same as the value of a loaf that will feed six a thousand years ago.

The energy basis is people, ingenuity, creativity, and labour. This has always been the energy basis of any society.

Permalink Reply by David Braden on December 8, 2011 at 6:57am

Ron writes:

The energy basis is people, ingenuity, creativity, and labour.

I agree with the first part of your argument. The way I say it is, 'It does not take money to create value. It only takes money to exchange value. So, if the problem is not enough money, we ought to be smart enough to figure out a different way to do things'.

I have two problems with the details. First, is the "the state" deciding how many houses and how much food, and second, the probability of being able to implement something like you propose through a political process. It would be an interesting experiment to base a currency on the right to travel, but I don't see attempting to implement that as a practical way to address the problems we face.

The idea behind Community Sufficiency Technologies is that we do not need a medium of exchange if we are producing for our own consumption. There are limitations to what we could produce on a community level, but not many, and we could certainly produce the food, clothing, shelter, education and health care our children need to thrive at that level. Participating in that kind of community production gives you a right to partake of what is produced and an ownership in the capacity to produce it. I think that provides the right incentives.

Best of all, you do not need anyone's vote or permission to start.

http://www.organiclandscapedesign.org/content/community-sufficiency...

Permalink Reply by Ron Tocknell on December 8, 2011 at 7:59am

By "State", I am not referring to a centre of power as such. At the moment, we have the famous "pyramid of power" structure (as portrayed on the US dollar). This is the model of every civilisation in history and regarded as stable because a pyramid is the most stable structure. But it is not a pyramid of "power". It simply illustrates the distribution of people who share each level of power, with the majority of people at the base and the minority of people at the apex. However, the majority of power is at the top and the minority of power is at the base, giving an inverted pyramid, which is anything BUT stable. What happens when the minority of people have absolute power over the majority of people? Exactly what has happened to every other civilisation in history.

Here is where many US readers will make the sign of the cross and sputter the 'C' word: "Communism!" Actually, I'm not proposing any kind of "ism" although the model I would propose is closer to Marx than to Rothschild:

A while back, I thought of an idea for a cooperative business in which everyone at the production end was an equal partner... say a bunch of engineers making widgets. They are all excellent engineers but none of them are really skilled in marketing or business management. This is where most cooperatives that don't make it fail. Instead of engineers trying to combine this role with shop floor duties, why don't they employ a managing director and a marketing & sales team? The marketing and sales team advise the manager, the manager directs production and the engineers focus on the nuts & bolts end of the business... just as in any other company. The difference here is that the director is "boss" only inasmuch as it benefits the company. The workers take orders from the director because it is in the interests of their company to do so. But the director cannot fire them... in fact, they can fire the director. If the director fails to perform well, the workforce can replace him or her without ever having to come out on strike. No one on the workforce would give less than their all because they own the business. They're not going to demand unaffordable bonuses or perks that are not cost-effective. The workforce and the management would be working together because the director is a role rather than a status. If the director makes demands that are not practicable, the workforce can point this out without fear of being "insubordinate" and alternatives can easily be agreed upon.

This is how I see society running. The people are the workforce and the architects of their own society. Everyone has an equal share of decision-making power. From this, administration officials are elected. Administration officials oversee the infrastructure, resource capabilities and distribution, law and order and makes proposals which then go to referendum. The various options are laid out and the people vote accordingly. Rather than relying on the judgment of one person who may have other agendas, the deciding power is spread over the whole with the primary objective of benefiting the society as a whole. This also applies to laws so that no law can be passed that exploits the masses and benefits the few. The Administration has the AUTHORITY to enforce the laws that have been agreed but this is not to be confused with POWER. Likewise, the law enforcement agencies (police) have the authority but do not have the power to step outside of that generally agreed remit.

So the administration as a whole has more power than the police although any individual police officer has the authority to arrest any member of the administration if he or she steps outside of the laws that the people have approved. The people are subject to the laws they have approved and must abide by them but the people as a whole have power over everything. This makes for a fair, equal and harmonious political and legal system and is closer to the true concept of democracy than has ever been actually exercised in any civilisation. The lust for personal power has always been the downfall... as it is in the collapse of our civilisation we are witnessing at present.

Now is the time for people to start focusing on what kind of society they want. A lot has been said about what is wrong with this society and a lot of energy is spent on protest. We identify "enemies" such as bankers, politicians, the "Illuminati" and so on but this is barking up the wrong tree. If you realise you are on the wrong road, do you just keep reiterating the fact that you are on the wrong road and keep pointing out examples that prove you are on the wrong road and bicker about whose fault it is you are on the wrong road.... or do you stop and get out a roadmap?

Permalink Reply by David Braden on December 8, 2011 at 8:57am

Yes, I like the concept of getting out the road map. Worker ownership is one approach and most people cite the Mondragon Cooperatives as the example. There is another example from EF Schumacher's work with the Scott Bader Company:

http://www.organiclandscapedesign.org/content/scott-bader

Both of those examples are based on an enterprise engaged in seeking monetary profit in the global market. I personally don't have a problem with people doing that. The point is that the market is insufficient to do every thing we want from our systems because it treats humans as commodity, which means that it does not recognize value in an individual except through the amount that can be earned through their employment.

The interesting parts about the Scott Bader example are the investments they made in the capacity to produce goods and services for consumption by the worker/owners. We are experimenting with that process in Community Sufficiency Technologies.

Permalink Reply by Ron Tocknell on December 8, 2011 at 10:48am

Yes. I agree that profit-driven industries are actually counter-productive to the needs of society. I think main industries should be state-owned. As it stands at the moment, production depends on high consumption so cars, telephones, domestic appliance, computers etc. are designed to start to deteriorate after a couple of years or so to ensure regular consumption. If industries are value-driven instead of profit-driven, these things could be built to last a lifetime. That would generate considerably less waste. While everything in our society has to be "cost-effective" it means the workplace has to be designed purely for production. Without that restraint, the workplace could be a joy to work in.

Money or its equivalent need not be an issue with major production and this is why I suggest the 'travel miles' as a form of low level currency. It can be exchangeable for luxury items, entertainment venues and so on (and, of course, traveling), which, in turn creates a market for individual entrepreneurs, which, in turn, creates an outlet for creativity and innovation. The critical point is that no debt is legally binding. The only reason it has to be in our society is to enable banks to operate. We don't need banks so we don't need to legally recognise debt. Lending and charging interest can be confined to private agreements made on trust and the obligation to honour such agreements should simply be a moral obligation but not legally enforceable. It is better to be cheated out of something you could afford to lend in the first place than be plunged into debt from which you can't escape.

Permalink Reply by David Braden on December 8, 2011 at 12:57pm

That brings us back to the first point Ron. We could argue eliminating debt and state owned industry but what good would it do? The kind of top down change you advocate is unlikely to happen in a democratic process where almost all voters have something to lose from the proposed change. By definition, every one who is getting by is doing so because they rely on the existing system in some way.

We are working with bottom up solutions for people left out of the market economy that are new ways to produce what we need and do not depend on taking anything away from anyone else.

Permalink Reply by Ron Tocknell on December 8, 2011 at 1:50pm

Well, taking away the power of the corporations to drill where they want is taking something away from someone who will oppose such a move. Taking the almost absolute power away from world leaders who tend to abuse if for their own ends is taking something away from those who would oppose us. Taking away the excessively wealthy's continued ability to accumulate wealth is also taking away. If you have three tonnes of bricks on one end of the scales and one tonne of bricks on the other and you want to achieve balance, you've either got to find another two tonnes of bricks somewhere or do some taking away.

This has to be a top down change because, in order for it to happen at all, the power of those who would certainly oppose any change to the status quo has to be neutralised. Already laws are being introduced to restrict the right of farmers to grow organic food. People have been arrested for attempting to close their bank accounts in protest and now various police departments are being militarised. It's going to be tougher in the US than in the UK (so far) but this rapidly expanding power balloon at the top has to be stopped very soon.

I don't agree that "almost all voters have something to lose" by the changes I propose. Those who are doing very nicely will have to consider a change of mindset but the majority are crippled with debt, fighting to keep their homes or already have lost their homes. You think they have something to lose by the changes I propose? You think that the thousands of single mothers living in trailor parks have something to lose by these changes?

I'm certainly not advocating throwing people out of their homes. Their homes are static anyway so, if they choose to move, it simply means that they just vacate the old house ad take up residence elsewhere. If they want to stay in the home they grew up in, I don't see any reason why they shouldn't.

What do you mean by "something to lose? What would "almost all" voters lose by changing to the system I propose?

Permalink Reply by David Braden on December 8, 2011 at 2:51pm

What I am writing next will sound wrong to you but it is the truth . . .

The only conscious power in the system is the power of choice in the individual.

No organization exists except for the choice of individuals to participate, therefor, no leader has power except for the choice of the organization's members.

We do not get power by taking it from someone else. We don't accumulate wealth by taking it from someone else. It is, however, possible to learn to exercise your own power and begin to accumulate your own wealth. All other speculation about how we might make someone else do something differently is just that . . . speculation.

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