I have revised tyaga.org’s mission to be more concise and clear – please visit the About page for a quick look. I realize that not everyone agrees 100% with the scope of work or strategies that are outlined in this site. For those who agree with the practical aspects of Tyaga’s IS Plan, feel free to use any idea or code that you find useful. I am also very open to collaborating with those who appreciate tyaga.org’s envisioned goal, path and tools.
Even for those who take exception to tyaga’s approach, there might be room for common lines of actions if only we stay open-minded, as discussed in a related post. I am more than willing to change tyaga’s direction based on evidence gleaned from practical experience. At this point, there is little in the way of actionable results from other projects that would justify a revision of the Tyaga IS Plan.
While currency traceability to a specific issuer brand is not a cure-all for all of the world’s ills, recent news stories continue to show its importance in relation to currency design. If, for example, madoffholdings.com and somebroker.com are each expected to publish corresponding currency outflow and inflow record copies, then it would have been much more difficult for Madoff to run an undetected Ponzi scheme for so long. The potential for fraudulent schemes will never be eliminated, but transparency and technology could help lead the way in deterring and catching such occurrences.
Traceability would also be extremely valuable in enabling targeted noncooperation with disreputable market entities. In light of AIG’s woeful neglect of its responsibilities , those who disagree with AIG’s intent to award bonuses to its executives could easily refuse to accept AIG’s currency brand in interentity trades – if currency is indeed to be traceable to independent currency brands. Without currency traceability, those who end up accepting any payment from AIG’s executives would be unaware that their products and services are being redeemed with inappropriately earned, anonymous currency.
The past year marked a gradual shift in priorities for me. The following thoughts are common-sense stuff, something the I felt that I needed to articulate to myself in order not to get lost in all the cliches.
Self-Regulation before Self-Sufficiency: I have written about self-regulation since starting this blog, and I do not want to repeat the points that I have already made. However, it might be worth mentioning that the perspective shift was not the result of mere mental exercises, but also of trying to actively seek a more self-sufficient lifestyle such as through organic gardening. It became readily apparent to me that only a minority could become fully self-sufficient through organic gardening or farming. Market specialization is a fact of any modern economy, and as market boundaries disappear, self-regulation is a more practical goal than self-sufficiency and has a more viable chance of spreading.
Inside-Out before Bottom-Up Change: In a flat world, there are no higher ups or bottom dwellers, and it is counterproductive to think of the marginalized as powerless. There definitely are people with more influence than others, but I believe it would be misguided to seek power itself to effect sustainable change. Change that starts from within has more chance of lasting, as other types of change involves numerous factors that are not under an individual’s direct control. For example, this approach is reflected in my effort to develop a system where I could simply declare my willingness to accept ledger-based currency, without preconditions of belonging to certain communities or payment networks.
Duty before “Harmlessness”: This prioritization is bound to be misunderstood; I’ll explain by relating the two through my own search for a peaceful vocation. In the process of trying to move away from working for corporations, I tried to avoid looking into technology-related careers and instead leaned towards more “natural” professions in agrarian, education and healthcare sectors. However, one’s temperament and lifetime of experience cannot be easily ignored — to do so would imply being constantly at war with one’s natural tendencies. And so despite the numerous down-to-earth paths that one could follow, a natural profession for me means following my interest in information/documentation systems, even though such profession could be easily dismissed as being elitist or being disconnected from everyday needs.
With all the news and opinions on the recent US financial bailout effort and bill failure, I would like to offer some insights on how the satconomy framework could have helped prevent this potential for widespread market collapse. The keyword is self-regulation, but distinguished from the common, unsustainable free market version as follows:
Accountable Self-Regulation: It is true that public companies regularly publish their financial and market results, but those reports are very difficult to decipher for regular market participants. In particular, it is very difficult to perform online audits and inter-entity reconciliation of reported revenues and expenditures, which would go a long way towards preventing overstated profits or understated spending. When entities such as Worldcomm, Fannie Mae, AIG or Merrill Lynch have had to restate billions in cash flow summaries, it shows how current accounting models are not adequate for tracking self-regulation in very large market entities.
In contrast, satconomy promotes the use of the OCAUP accounting model that standardizes the declaration of self-determined limits, currency lifecycle and the publishing of inter-entity transactions that are openly reconcilable. With more eyeballs able to view and audit simplified financial reports in public, it is hoped that self-regulation issues do not have to go undetected for years which could help prevent problems from getting uncontrollably intertwined.
Independent Self-Regulation: As the massive bail out plan points out, everything is intricately tied together in the current free market version. As a financial entity gets larger, the impact of its collapse on the whole market becomes significantly more adverse. This type of dependency makes it difficult to analyze for root causes and target solutions.
Ideally, a healthy market could and would simply accept and survive the natural demise of irresponsible entities that failed to self-regulate. This is the idea behind the cultivation of independent currency brands in satconomy. The more diversity there is in independent currency brands, the less potential there is for undesirable dependencies between market entities. There would still be inter-entity needs for specialization and product flow in satconomy, but the reliance on a shared currency brand as a transaction instrument is eliminated. There will be more isolated segment fluctuations in contrast to wild swings affecting the whole market.
Influencing Self-Regulation through Non-Cooperation: One of the main reasons that the $700 billion bail-out plan failed to gather enough votes is the perception that it would lead to long-lasting government intervention in the operation of free markets. With current socio-economic platforms of conservative versus liberal ideals, the practical result is that the market is either (a) left alone to the whims of moneyed investors and lenders, or (b) monitored by powerful regulators that present bureaucratic and selective responsiveness issues. In other words, the options could be framed as a choice between the influence of big money or big government.
Satconomy offers a vastly different option, that of harnessing the cumulative influence of market participants in accepting or rejecting a currency brand in a market transaction. Any entity could issue its own currency brand to support its goals and members, which other entities are free to accept or reject. Market entities and activities that are represented by popular currency brands will thrive, while unpopular entities will feel pressure from sellers that are unwilling to accept disreputable currency brands. This dynamic is not much different than today’s public companies reacting to stock prices. In satconomy, however, public opinion has a more direct impact on purchasing power: it does not matter how much currency you have stashed if you could not spend any of it.
A mock-up of an independent currency brand (ICB) index is available here. The demo ICB index has example market performance charts and news. I hope the demo gives more insight into one of the more popular post category in here, that of currency “brand evaluation.”
A market entity may be viewed as a species that performs a ‘niche’ role in an ecological system. So, for example, a farmer cooperative perfoms the role of food producer, while a clinic or hospital seeks to address the market’s health-related needs. Since each market entity has a particular niche or specialization, it is only reasonable to expect that none could become completely self-sufficient since, in this scenario, everyone is only able to concentrate on addressing a limited set of human, social or market need. In short, the general goal of a market entity is not self-sufficiency within itself and exclusive of others. Rather, an entity seeks to cultivate a self-sufficient market by contributing to the diversity of product choices in it and by influencing how resources are used for the production of ‘desirable’ products.
Of course, no one can summarily dictate what products are to be offered by market entities, or which products are desirable for whom. It is simply hoped that goods and services would naturally be produced by entities who see a need for them, and market participants would self-determine those products that they need and the choices that they prefer. It would seem that this expectation could lead to resource exploitation and unmet needs, and there might even be support for that viewpoint with the current state of market economies where, for example, one person could live in a 40 bedroom estate while hundreds are homeless on the streets.
However, the satconomy market framework is designed to offer active feedback to a market entity through the acceptance or rejection of its currency brand by other entities. This is different than current market situations where sellers blindly accept ‘generic’ currency regardless of how that money was earned. In satconomy, currency is traceable to a specific market entity and its activities. If market sellers are not willing to accept an entity’s currency brand due to its reputation, members of that entity are likely to run out of product choices, and without employees or members, that entity is destined to failure or extinction. Therefore, each and every entity in a satconomy framework is expected to actively regulate itself against public opinion in order to promote and maintain its market reputation. Please note that there is a similarity between this expected form of self-regulation and the current stock-price-oriented management of a publicly owned company.
In order for this feedback regulation in satconomy to work as expected, market participants must have reliable access to timely and accurate information that they could use to evaluate whether or not to accept someone’s currency brand. Even now, companies regularly update investors with financial results and ‘stewardship’ performance. Market entity information is also currently available as a constant ticker of stock symbols and price fluctuations. All that needs to happen in order to implement satconomy on a wider scale is to adapt existing information technology to serve the need for performing currency brand evaluation. I am not implying that it will be easy, only emphasizing that all of the ingredients are already available – we just need cooks in the kitchen. Or, perhaps more appropriate in the current analogy, new entity species simply need to evolve and take on a niche in this market ecology – its easier to establish a new currency brand before more competition arrives.
Hardly anyone should be surprised with the notion that all currency units are issued ‘out of thin air’. In traditional currency systems, the ability to create new currency units for circulation in the market is restricted to banks, at the time that they issue loans to borrowers. In most complementary or alternative systems such as LETS, the ability to create new currency units is decentralized; the system participants expect to be able to issue currency units at will to complete a transaction.
However, a currency system that sets limits on its participants’ ability to accrue debits cannot fulfill the expectation for spontaneous and independent currency creation. For example, when a currency administrator sets a maximum negative limit on a member’s LETS account, that limit effectively becomes currency that has been pre-issued when the member joins the system. When a member issues credit to another account, that member is simply re-assigning or re-allocating the limits that has been originally assigned to his or her account. That is, no new currency units are created by members since the total spendable limit does not change within a currency system that assigns a debit limit to its members’ accounts.
(Mathematically, a debit limit in a LETS system is equivalent to a pre-assigned X quantity of credits, where -X is then used as an offset factor for calculating an account’s credit balance. When debit limits are viewed as pre-assigned credits, it is easy to see that the total number of credits, or X*number of accounts, does not increase or decrease in a LETS system through member transactions.)
In pointing this out, I am not arguing against a currency administrator’s duty to set reasonable and practical limits to its member’s accounts. I am simply trying to highlight the fact that alternative currency administrators, when they set debit limits, should not advertise their system as enabling its members to become independent currency issuers. Such a claim would be misleading – a LETS member’s ability to issue currency is dependent on the debit limit that has been pre-assigned to his or her account. It would be more accurate to say that a LETS system, as a whole, could act as an independent currency issuer, while its members has the ability to only re-assign currency or limits within that system.