One way to identify what you want to promote is to specify what you want to dissociate from. That’s the Deprecated Domain. And it’s OK to progressively withdraw from it. In the latest in a series of related articles on the Feasta blog Graham Barnes makes a case for doing just that with the mainstream financial system. @GrahamJBarnes
Money can likely never be a ‘neutral facilitator of exchange’ (as assumed and required by orthodox economics). It is therefore quite legitimate for currency designers to explicitly define a scope of operation for their currencies – a Preferenced Domain – as a means of encouraging, preferencing or rewarding specific transactions, behaviours or outcomes. In defining such a domain, we automatically define its counterpart – the Deprecated Domain – the transactions, behaviours and values that we are seeking to discourage, avoid or exclude from the remit of a specific currency.
Reform & Diversity
As the nature of monetary dysfunction becomes better understood, activist responses have tended to split into two camps – the reformers and the diversifiers. In so far as tension exists between the two, it generally revolves around their respective assessments of the likely success of the other camp. It’s not good to agonise over these differing assessments, because all work on monetary change is grist to the mill, whether it be aimed at influencing policy or designing and implementing alternatives. But for the purposes of this article we need to ferkle around a little.
Reformers may have a problem with the limited scope and apparent scalability of existing ‘alternative currencies’. Implied in that position is an assumption that future currencies must have the scope and characteristics of existing fiat currency. They should be near universal means of exchange and capable of functioning as a measure of value while retaining a store of value. While this is an understandable long term ambition, insisting that every design step on the way towards nirvana has these characteristics will limit the imaginative possibilities. For example, and to be topical, Bitcoin is criticised as being a poor means of exchange because of its current dollar-value volatility. It’s a reasonable point but Bitcoin (and altcoins) are evolving currencies. We are not in a position yet to see the endgame.
So we need to leave space for the Diversifiers to introduce their ideas, and ‘let a thousand currencies bloom’.
Non-violent currency resistance
In a previous article I described some selected examples of the Great Separation – examples of a move away from a Deprecated Mainstream. The painful realities of an imperfect world leave us with the options of acceptance, confrontation and disengagement. Here (without dismissing the first two) we are concerned with the last of these, as it applies to currency design.
First of all it is important to assert that it’s OK to disengage. Buddhism emphasises the right to ‘cut-off’ – to absent ourselves from painful situations. We do not always have to fight or argue it out. If we find certain circumstances distressing we can walk away from them and feel fine about doing so. Standing up for what you believe in does not always mean direct engagement. We do not have to engage with representatives of a Deprecated Domain if we think they are beyond redemption. We can walk away and define our own contexts.
In currency terms we can choose not to cater for, or to actively discourage/ penalise certain behaviours or types of transactions.
The analysis of a Deprecated Domain can take place alongside, alternately with, and informed by a more traditional objectives-based design process. So the detailed definition of such a Domain will be linked to specific currency objectives.
Three particular facets of ‘disengagement design’ are worth special consideration – values-based dissociation, complexity and strategic vs tactical dissociation.
Not all Designer Currencies will be obviously values-based. Some of the ‘flowers that bloom’ will be commercially motivated, though it would be a mistake to assume that all of these will take an undiluted capitalist approach – they may for example be keen to share benefit up and down the value chain and into associated communities.
For those that are values-based, a major challenge will be to extract meaningful actionable objectives from more generally expressed statements of intent. A second level challenge will be in the assessment of Deprecated Transactions – a process that implies some form of trusted assessor and transparent criteria. (It’s not quite the same, but some parallel examples of trusted mediation are surfacing in the ethical investment movement and in the MoveYourMoney campaign.)
One specific relevant differentiation may be between commodity transactions mediated by money, and money chasing money via the mechanism of an intermediate store of value. This might be a first step towards meaningfully signifying deprecation of the financialised economy versus the real economy.
The progressive division of labour has facilitated the production of more and more complex product. But in doing so it has, arguably, relegated the worker to a ‘fragment of themselves’ whose ‘stationary life .. corrupts the courage of his mind’ .
Perhaps the best received of the ‘alternative currencies’ are timebanks – currencies where there is no division of labour and the object exchanged is the time of the participant. If new Designer Currencies are to eventually assume the scope that the Reformers require of them, they must in due course extend into the set of transactions that facilitate the co-operative production of complex product.
Strategy and Tactics
Clearly whatever the nature of the expressed Deprecation, there will be a sliding scale from abhorrent to objectionable, and tactically speaking isolating a currency from a whole imperfect world is self-defeating. Therefore the balancing of strategic objectives against tactical, operational decisions is likely to be an important success factor. Stagnation and compromised success are the Scylla and Charybdis of currency design.
In particular exchangeability with fiat currency is likely to be a central tactical consideration. In an open-market world, it will be difficult to prevent the development of currency exchanges, but the resulting ‘fixing’ of exchange value (and its possible volatility) will be a challenge to manage. Some form of ‘damper’ or discouragement of exchange may be helpful, depending on the lifecycle stage of the currency.
: Adam Smith: The Wealth of Nations 1776 http://www.pitt.edu/~syd/ASIND.html
Featured image: Circuit board. Source: http://www.freeimages.com/photo/1377653 Author: Petr Kratochvila
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Graham Barnes is a Currency Innovation Strategist. He is a Director of Feasta and co-organiser of the Feasta Currency Group. He holds a PhD in Computer Science and worked at a senior level in IT and online marketing in a previous life. His current projects include the design and delivery of currencies to be sponsored by a local authority; by a social entrepreneur to complement and enhance a well established sustainability methodology; and by a restaurant chain.