The LETS models are still possession-based: they do not resolve any of the underlying problems. They are, at best, a short-term fix that might help to tackle some few of the immediate problems, though seem likely to create new ones – particularly ‘currency-exchange’ issues. Unless you can demonstrate a clear migration-path from your model to the long-term requirement, your ’solution’ will be of little real use, and is at a high risk of being worse-than-useless.

The key point, as I have repeatedly tried to explain to you, is that you are tackling this from the wrong direction: you are attempting to go from the end that does not work, futzing around with small detail-tweaks, without any clear path to what does work. You have mocked me repeatedly for attempting to do this the right way round from an enterprise-architecture perspective, namely to go from the high-level requirements back down towards the detail-layer.

If and when you have any grasp about how to to create an economic model for a large organisation, I will be pleased to discuss this with you. Until then, please stop wasting everyone’s time – including your own – with these pointless petty game-plays?

Thank you!

It’s been tried already.

Might just-about work if it was a fixed quantity and in guaranteed permanent circulation, but unfortunately practice shows that neither of those would apply. It’s still possible to mine the stuff, which means that those countries that still have reserves of it in the ground (Australia, South Africa, Russia, to name a few) are potentially ‘rich’ – which means either that they can game the system, or other countries will try to take them over to game the system. And a currency only works if it literally flows, hence stockpiling (e.g. Fort Knox) provides an easy means to hold the economy to ransom (literally) and, again, game the system.

As I said above, “A single currency sounds a great idea until you realise that that too will almost inevitably be ‘gamed’ by whoever acts as the central banker”. Unfortunately I didn’t make it clear enough that any currency in a possession-based economy will be gamed. The only way out of that mess is to have no currency at all, and to move to a responsibility-based model instead. (Yes, it’s possible to game a responsibility-based economy simply by avoiding responsibility: but proper transparency protocols make that a non-viable option in the longer term.)

Hope this makes sense, anyway? – and thanks again.

Again, excellent article.
Mark

On your (1), yes, strongly agree that there will not be a ‘one-size-fits-all’ solution – which is what the current money-system purports to be. An economy is made up of a vast number of intersecting ‘enterprises’, each of which – in a possession-based model – needs its own distinct ‘currency’. But the obvious problem that then emerges is how on earth we transfer between each of these local economies? – because as we know all too well from the long history of ‘money-changers’, that too is easily ‘gamed’.

So in practice, to make a global economy work, we either need a single currency that crosses everything, or we have to dump the concept of currency altogether. A single currency sounds a great idea until you realise that that too will almost inevitably be ‘gamed’ by whoever acts as the central banker: to give just one example, look at how the usage of the US dollar as a secondary currency in large parts of Latin America has helped those countries very little, but in effect kept them as vassal-states under US hegemony; whilst I for one cannot see any chance that the US will relinquish currency control to any other state, or (perhaps especially) to the UN. Which in practice means that just about the only viable option in the longer term will be to find a complete alternative to currency-based economies. The local-currency concept pushed by CCmag etc is a useful short-term kludge, but it’s really important to recognise that that’s all that it is: to find something that works, we do have to go much deeper into what ‘economy’ actually means.

On your (2), much the same applies: yes, we do need to acknowledge to acknowledge and celebrate the real work that’s been done so far (though I note the presumably-unintentional irony of the phrase “give credit where credit is due” ).

Remember that I’m coming at this from the perspective of an enterprise-architect: and one thing that we do very definitely know from that field is that whilst experiments are always interesting, they need to be constructed and run within the aegis of an overall architecture if they’re to contribute anything of real practical use. This is why I keep hammering away at the need for a better understanding of what an ‘economy’ really is, because that’s what would provide the contextual framework in which experiments with currency and the like can make practical sense.

To give just one example, look at the number of people who’ve assumed, without any actual in-depth question, that some kind of ‘currency’ must be ‘the answer’? We already know that it isn’t ‘the answer’ in most families, in most social/volunteer contexts, in the internals of any functional organisation – so why on earth should we assume that it ‘must’ be ‘the answer’ elsewhere? This is what worries me most of all: there’s a whole mass of really fundamental re-think that just hasn’t been done yet, and because that hasn’t been done, almost everyone is leaping in to construct the same old mistakes in yet another form. We must do better than that – and urgently, too.

But thanks again, anyway – and hope also to continue this conversation elsewhere.

Yeah, we’d kinda noticed that… – and a very nicely rigged game (in their favour) it is too…

“I loved your discussion of economic restucturing as enterprise architecture.”

Thanks! But it’s actually not an analogy – it is a straightforward application of whole-of-enterprise architecture. What we do in EA is model the overall economy of an organisation in relation to its ecosystem (’extended-enterprise’); and the principles are entirely recursive, applying in the same way at any scale. So if you think about it for a moment, you’ll recognise that this is exactly the same, just at a larger scale – it is enterprise-architecture.

That’s what I’ve been trying to explain to the IT-centric and, now, business-centric ‘EA’ folks for several years: it’s all one continuum, it’s all linked together, so you can’t just deal with one small part in isolation. You’re one of the few EA folks I know that grasped that point pretty much straight away – for which I was, and am, profoundly grateful. Thank you!

“I have nothing intelligent to add here” re the financial industry/economics, you say: if so, bluntly, neither have they. (Neither have I, for that matter. ) The whole thing is jury-rigged out from some of the most dumb assumptions I’ve ever seen (’rational actor’ theory, anyone?) – what you wrote in those two posts was a darn sight more intelligent than most so-called ‘economists’ these days. Humph.

On cross-posting, sure – but I probably need to edit it somewhat first, because there’s quite a bit there that would apply only to that specific conversation, and my somewhat overly-disparaging opinions in places about others’ work don’t really need a wider audience…

Thanks again, anyway – I really do value what you’re doing and how you do it.

I talk to so many people who say things like, “Bernard von Nothaus introduced me to sound money” or “integrating e-gold into our Egyptian web business made us a success” lots of great advanced have been made in the past few years and they have quietly sunk back into obscurity. There is no one solution that will fit us all, so take each successful advance and build-build-build.

Great article, we’d like to reprint this one in CCmag.net

Mark

the financial industry/economics has always been rather baffling to me, so unfortunately i have nothing intelligent to add here, but i’m glad EBD was able to be a platform for you and others to engage in some debate over the issue. i hope you can channel this energy towards initiatives that will help create the next step!

- @venessamiemis