transcripts‎ > ‎

Portland open money project

Portland open money on blogtalkradio dec 11, 2008

with collin ferguson (cf) and katin imes (ki) in portland
michael linton (mwl) and ernie yacub (ey) in the comox valley

ustreaming as well but the stream turned out silent.

4:03 collin introduces cascadia commons - the community way program is very interesting to a lot of the charitable organizations right now especially with the economic downturn - very worried about losing income in the next couple of years as money resources tighten up, so community way is very attractive

malcolm best - sustainable cascadia

6:30 mwl - lets go with the questions...
cf - some very interesting things are coming up because of the economic downturn, changing of the guard...atlantic monthly this month has a very interesting article titled "be nice to the countries that lend you money" in reference to the 2 trillion dollars the us owes china - my first question would be about where we are now with the current monetary system in which one country lends money to another and the political tension that's cause, i wonder if you could speak to that.

7:30 mwl - well, yes and no, i can speak to it, looks like another fine mess but that's about all i can say really - that's way out of the range of issues that i feel i have any influence over - maybe if i wrote a great book and won 6 nobel prizes and and and, then one could have some effect on that - the thing i notice is that machine has particular characteristics - a credit system that is used to create  conventional money .... ramifications in international patterns such that it's hopelessly unstable and that instability is encouraged by the greed factor and opportunism of our so-called leaders - basically, a pox on all their houses or good luck to all of them depending on which way you look at it - it's not within our realm which is exactly why we need to be looking at things that are within our realm - the work that we can do to create economies of significant function, common wealth for our communities - an economy the externalities, so often created by these international trade games are no longer swept under the rug or pushed out to sea or forgotten - we become more responsible for our work in our own communities using our own monies - that's the name of the game - that's about all i can say about that collin, i hope that answers your question.

9:22 cf - that thoroughly answers the question - one of the things that fascinates me about open money is the concept of multiple currencies but there have been attempts in the past to introduce dual currencies - i wonder if you can speak to what's gone on in cuba recently (ref nyt "the end of the end of the revolution") - "cuba has 2 currencies, one for communism and one for a limited state capitalism..."

10:48 mwl - there are wonderful lessons to be learned from cuba, none of them have to do with money except insofar as to indicate the absolute inadequacy of dual currency, good money bad money style - the history of conventional commodity currencies and the two currencies under discussion in cuba are both commodity currencies - commodity in the sense that there's so much of it and it's issued by the governments, organizations, central banks, and then we the users are just playing with this commodity - in this graphic (ustream) of the bucket chain, the blue money comes in and out and goes away and you have no control - what they've done in cuba is they've added a second blue bucket...two parallel inadequate systems - 2 bad systems is no better than one bad system...

11:50 mwl - and what can happen, lets get out of cuba and get to portland, if you were to create a sincle portland currency intended to solve portland's problems you'd be doing the cuba problem again - you'd be going back to one system as an alternative or as a complementary...that's a thoroughly deficient attitude - for a start, that single substitute is never going to quite compare in people's experience with the hard u.s. dollar goes everywhere - it will always look like a poor cousin, an inadequate thing...

12:42 mwl - what's powerful about open money is the capacity to create money, to be sovereign with our moneys in our own communities and that sovereignty is enhanced as more and more of them emerge - this is the sort of distinction between the metcalfe law of life and money and reed's law - metcalfe says the bigger the network the better...if you can be in the internet instead of just portland, bigger market more connectivity - trouble is there is no patterning, no cellular behavior in that sort of form, it's like if you have a tray and you carrying a pool of water on the tray, and each little tilt it sloshes off to one end and off the edge - that's what happens when you have huge currencies - what you need are many smaller, intricate currencies, hundreds in the portland area whereupon the multiplicity of those currencies creates an entire context for human behavior - where one so-called alternative or complementary currency would look like a lame duck, a snowflake on the sidewalk - it's not going to last and survive and it will absorb an awful lot of time and energy to persuade people that it's a good idea - it isn't a good idea, it's a bad idea.

14:10 cf - is that like current hour systems that we see in play now?

14:17 mwl - the first issue is that conventional money goes through, you need money that will go round and round, that when you spend them they somehow come back - cascadia hour, ithaca hour have some sense of that last quality of recirculation inside a small community, but they lack the autonomy of the individual, and they put you back straight away into the quantity of money problem - how much money should be out there to effectively empower this little economy we're creating - hence you get into all this stuff about negative interest being a stimulant for transactions, form a committee to decide on amount of money that should be in this network, they you're back to the greenspan nonsense, the wise person on the hill who decides exactly how happy we should all be or something - you don't want to go there.
15:18 mwl - if you are going to create localized currencies the ithaca model is basically the national one brought down to scale with all the costs, consequences and problems and no range for diversity - you can't effectively have a bunch of cascadia hours around, too many coloured pieces of paper scattered about, you get confusion, counterfeiting, a considerable lack of credibility - if you're going to be credible base the money on businesses that are issuing, potentially mutual credit - they're making promises in the public domain for the redemption of the money that they issued - that gives you a solid money, convertible, substantial - that is, the volume of money that you can get into effect with a community way program would be about 2 orders of magnitude more than the cascadia/ithaca hours models can produce before they start going sideways and blowing apart - get real, get multiple, go forth and multiply.
16:35 cf - how might open money become a dynamic force for the realization of personal aspirations
16:50 mwl - the key point about an open money in a mutual credit closed loop, up and down lets like network, which is the predominant one, the easiest one to implement, to administer, handle the software, infrastructure level - the thing about such a currency is that it enables me, as a user, to spend myself into employment - very simply, i start at 0, i spend 1000 bucks, i'm minus a thousand, the rest of the community as a whole is aggregate plus 1000 - the money i created and injected into the economy is there and looking for me - if i'm willing to work the money that i've injected and the money that others have injected into the community economy is available and i'll get work.

17:50 mwl - compare that with hard cash - you go spend $1000 hard earned cash, it's gone, it's out of town - we cannot spend ourselves into employment - local governments can't spend themselves into economic revival, state and national governments can't afford to do it any more - it used to be in the 30's and 40's, the theory of Keynesianism, when the economy goes south, spend tax dollars into circulation on infrastructure, make-work projects, and that would kick start the economy - no it won't, it will just shift more money to walmart, to china.
18:35 mwl - if we're going to kick start our economies, we've got to do it with money that doesn't leave town - in a network of 100 people, i spend a thousand, everybody feels a little bit, 10 dollars per person - if i spend that 1000 in the portland regional network and there's a hundred thousand people in it, that's about a thousandth of a cent per person - the bigger the system the floppier the feedback of my injection - if i want to have tight, autonomous, self-supporting currencies, i should look to neighborhoods, to localities, specific sectors, my professional trading world, might be only a few hundred people involved in that, if i'm a musician i should start using my music money for my music world so that i can refocus the energy inside there and support that focus for other musicians - extend that through the whole panoply of human behavior, the whole spectrum of societal groups, the collage of neo-tribalism

19:53 cf - we often hear that the current model that we're in is a fear economy - in considering what you've just said there, how would open money eliminate the fear economy and instead allow for recognition of true value?

20:13 mwl - the fear factor in the normal economy is based on the barrel in the middle, my tank of gas, fuel, water, whatever it is i'm thinking of, the money comes in, i need it, i'm scrambling to bring it in, i spend it and it's gone - that's continual deprivation, continual anxiety, archetypal for the creation of an addiction to have somebody be dependent on something and give it a variable source of supply - if i said you can have some bread tomorrow, maybe, and maybe the day after, but i'm not going to promise it you would probably get quite addicted to bread quite quickly - if i said the same thing about air you would get addicted in a few seconds.
21:29 mwl - people who have difficulty swimming are usually trying to keep their head above water, as high as they can, which of course is counterproductive, you sink harder, struggle harder - how does that relate to the fear/greed cycle we see people .....with money, very
similar - ok now you have these additional currencies where you spend them and they come back, you spend it, it comes back, seems effortless - this is like lying on your back in salt water where you can float impeccably, no problem, just lie back and breathe.

22:08 mwl - the fear and greed are driven by the addiction and scarcity - when you don't have the scarcity, you don't have addiction - both the fear and the greed can be gradually shed - look we're floating and nobody's trying to drag me under - these are the experiences in the conventional economy - there's an old australian theory about how to keep a crab in a bucket - put another crab in with it - 2 crabs in a bucket and neither of them is going to get out - because as soon as one of them gets up the edge a little bit the other will drag it down and climb over it - that's just built into the system - that's how conventional monetary world works - my fear is your problem, baby, cause i'm going to take your business or steal your car - the things that people do that are consequent upon our need to have that money are despicable, stupid...

23:23 cf - for the realization of open money what specific aspects should we focus on, what behaviors should we emphasize?
23:33 mwl - the first thing is demonstrating reality - you can talk forever, our basic premise is that conventional money, you spend it and it's gone, no argument, no problems, in principle, perfect cause that's what it's meant to do but it leaves us without money going around - the answer, lets get money going around

24:33 mwl - you create community money by the act of declaring a donation to a community project
substantial promises issued by each business to each charity or community group or project that wants to benefit - thousands and thousands of community way dollars - now the charities or community groups use those or exchange them with their supporters for hard cash - it gets into the general consumer public, the consumer public then becomes loyal to the businesses that started it - one two three sectors, gain gain gain for each - look at this, we created a money it went around and around, we won, they won, we all won - 3 way win
25:20 mwl - the concrete and simple nature of that demonstration is the royal road to getting the comfort levels up so that people can flourish into the multiplicity of the open money opportunity - not everybody who gets involved with this idea will buy it - a lot of people will think it's too weird, barack hasn't said it's a good idea yet, I don't know if I believe in it, i'll wait - of those who get into community way, a lot of them will say this is interesting or good but I don't want to step out into the wider frame - only a smaller proportion will say hallelujah, this is great, we need a currency for the bike club, a currency for the new mothers, a currency for the old greeks, a currency for retired loggers - not everybody is going to do that for a while - you don't need to worry about that, what you want to do is just make it available and let it be adopted at a level that people feel comfortable - put your effort into community way, partly because of the optics, partly because of the impact, the benefits you will generate for nonprofits, that as you pointed out collin, are facing increasingly difficult situations these days, but thirdly, it will give you juice so that you can have perhaps a dozen people working on this full tilt and getting paid - nothing is going to move it forward faster than a bunch of people working on it full tilt and getting paid - a primary good reason for getting community way going - it's your meal ticket.

27:11 cf - with all of that, what does the future look like with open money? how will the socio-economy better reap, harvest, multiply and nurture?

27:28 mwl - the pattern process is that the way money moves is the way things move - If you take the economic transactions that we count in our financial recording process, the generalities so-called formal economy are, I give you a loaf of bread, you give me a piece of paper, then I take that piece of paper to ernie and he cuts my hair, he takes the piece of paper and he gets his car fixed - the piece of paper is a carrier that identically matches the pattern of exchange of goods and services - the goods and services won't move without the paper and the paper won't move without the goods and services - that is I can say to you give me bread but you say i'm a mechanic, there's nothing to move - I want bread and you don't have it, so it won't move - the thing won't move without the paper and the paper won't move without the thing, the two move together - substance of the real economy matched by the symbol of the information ticket, piece of paper, account record

28:40 mwl - the problem we have at the moment, and to describe how the economy can be under open money, we have to describe how the economy is in closed money - the pattern of closed money is in, through the community and out again- therefore, it supports predominantly transfer of products and goods across boundaries - portland exists because it sells things to the outer world so that it has the money so it can buy things from the outer world that it doesn't create itself - the in and out side of the regional economy is driven by the dependence of this money to be going in and out - it has no loyalty to portland, it's off to China, it's off to bahrain, the bahamas, it's off to the subprime market with crunch recovery process - wherever it's going, it ain't here - the consequence is deprivation and patterning of people in strife and struggle - how do you get money around here? hell knows, I may steal it from my neighbour, but once i've got it i've got it - the morality is low, the compulsion is high, the efficiency is appalling, the direction is abominable - with open money you can set off all of those things - the possibility then becomes....i can only really spend a community currency if somebody else in the community is willing to receive it and feels good about providing the goods and services i'm asking for - there's no coercion or compulsion in a community currency, it's much softer.

30:23 mwl - first of all, the sort of events that are encouraged by this parallel layer of community currencies, parallel to the hard money, are going to be differential applications of our human effort, our time, our skills, and our resources, but those are going to be more directed towards convivial, consensual acts between people and businesses, businesses and businesses, and people and governments - all the events that take place with open money will be softer and more consensual, they will not driven by coercion and compliance - they will tend to quickly diminish the externalities and begin to address them - in hard cash, i'll clearcut the hillside because i'll get a buck or two but in my local money I won't be paid to clear cut the hilllside - simple little shifts like that will determine a difference in how people live their lives - choices will be there and the choices will be basically between the quick hard drug and quick benefit which ultimately is a disaster or a cost to everybody else and is a non-perpetuating event - by comparison I can have perpetuating event that is convivial and consensual in the community - I know there will be a strong need for people to keep themselves secure in the hard cash side, so it's not going to go away but it's going to be significantly tempered by the opportunity to augment and enhance and redirect our lives and our common wealth from within the community currency open money platform - we'll be working better, we'll be working less, working to more effect, working more socially - the pursuit of my own self interest in a community currency will serve the mutual interest of that community - we can afford to be greedy, generous certainly, we can be greedy if we like, it does no great damage, in fact it probably stimulates the economy quite nicely on a localized level - greed without fear quickly dissipates - perhaps the core issue of a community that operates with open money is that there will be a hell of a lot less fear - you can draw your own conclusions for where that will go - it's a broad answer, but it really comes down to, start your engines. until this baby is cooking, nothing is going, we're still stuck.

33:34 cf - katin, you still there - i've always admired your work in technology and one of the interesting correlations that I have seen develop so far with open money is how open money seems to reflect the advancement of technology and web 3.0 - you talked about the leaderless organization, the starfish and the spider

34:36 ki - I think the book I would recommend for that would be clay shirky's "here comes everybody" - the starfish and spider presents some real interesting group dynamics that are going on, more of a wrestling match between, maybe because we're transitioning from the industrial age to the information age, not sure, but we've still got a heck of a lot to learn about this stuff, but the specific forces that are being applied to technology and growth - in clay shirky's book, he grasps the exact concepts that have shifted from the industrial age to the information age and has given specific examples of how that has changed on the net, how that applies to open money, well, open money is a natural extension of that - as the record industry has changed, as newspapers have had to change and are changing, so money will also change - money is basically an information technology and we deal with information technology differently now we have the internet than we did 25 years ago.

35:52 mwl - you've encapsulated all the pieces there - if you look at what happened between web 1 and web 2 - web 1 everybody thought it was like billboard advertising in virtual space and then emerged behaviour that was identified as web 2.0 stuff where people's behaviour reflected the technology and the opportunities, so social networking boosted very strongly - then the next happened was architectures based upon that behaviour - facebook, twitter, they started augmenting on the basis of what people's behaviour was.

36:43 - tech time out - humbuz sound

37:23 mwl - we're now into this level of architecture in the new space is being designed to reflect the behaviours that were emergent in the first level, hence web3 - what clay shirkyy is pointing to is that here comes everybody is beginning to shift into, here come all sorts of people and there are fascinating distinctions - it's again this business of the metcalfe concept versus the reed multi-networks inside the same space - shirky was basically saying, look in the last five years, particularly in the last three, particularly in the last one there's been conglomeration and expansion of all the pieces - now they're beginning to differentiate.

38:41 - and there's a concept has emerged in the last few weeks called assymetric follow which is that somebody on twitter may be following 50 people but being followed by 500, other people are following 500 but are only being followed by 2 or 3 - this differential use of the system is becoming a relevant factor in how it propagates - check out confusedofcalcutta for some opening leads in that -

39:30 mwl - we're beginning to see the emergence of a self-aware organism called the community of the internet - that's the autopoeisis of the process when the organism starts strategically exploring it's own capacities - we've seen that with the internet and the parameters around it, we're about to see it with money

39:57 mwl - open money is to conventional money as the internet is to maybe the old telephone systems in some respects - the shift is huge - when you think that internet grew remarkably quickly because it bootstrapped on its own development, expanded ....
same for community money - we'll have the capacity to do the open money network with the prior existence of internet as the carrier for it - think how fast bit torrent went as compared to kazaa - bit torrent went out like a bullet and we're going to see the same thing around open money once tangible substantial hardware systems are in place, software and systems, it's going to go very fast indeed because all the components for its propagation are in place.

41:00 cf - my last question has to do with living systems theory - cascadia commons is a bioregionalist advocate - we are choosing to look at the pacific northwest as composed of its parts, watersheds, the common fauna, and the people that inhabit it, all the living beings that inhabit it, a total system - what is the emergent of this living system and how does web 3.0 technology and open money facilitate that?
(left a bit out)
43:33 ...web 3.0 technology as that kind of system?

43:40 mwl - well I don't know that web 3.0 is necessarily biologically compatible - it includes that capacity but I think that the abstract patterning, the opportunities available in the internet are in many ways utterly inconsistent with the real world - a tree can only be in one place at one time, water is exactly the temperature it is, these things cannot be changed immediately, on the other hand, in the space of information, information can be in many places at different times and can be changed all over the place - there's such a different context - now the tools that emerge because of that flexibility in the web may be applied to achieving a sympathetic flexibility between our economy and the natural world - the problem with conventional money is that it's a hammer and its going around looking for nails all the time - there's only one tool in the financial arsenal, and that is me first, screw you, more is better, if I can ignore the tailing ponds or the co2 i'm putting in the atmosphere or the mess I leave for my neighbors, or the problems I am creating with my behaviour, and we can ignore those because the dollar rules and the person with the dollar does what they damned well like and the people who don't have it, put up with it and suffer - not just the people, but the environment.

45:24 mwl - ok, now web 3.0 and open money, major work arounds and opportunities become available - we can become in our socio-economic behaviour at least approach the subtlety of the real world - our conventional money world is exquisitely unsubtle - its brutally simplistic and monotonic? very boring, coercive, compulsive and destructive - when people have other roads to travel and we don't have to be on the same freeway at the same time competing with hummers on our bicycles, the world is different and i'm just looking to the point where we are increasingly able to withdraw from our pull down of our environmental resources - the destruction of the petroleum reserves in a mere generation or two will be looked back on in a few hundred years time as one of the most insane and immoral acts of the human race - just casually mortgaging the future generations to the greed of the immediate moment - that's going to slow down, i'm not saying its going to stop tomorrow, but we can take some of the heat away from it - when you're trying to put out a fire you can take away the fuel you can take away the oxygen, you can take away the heat - those three components are necessary - essentially, we're taking the heat out of this economy, we're going to stop it being the best action to screw everybody else in your own interest, which is the way conventional money works - its nicer if you can make everybody happy but that's so rare, its impossible for most people so they don't bother - screw you, i'm going to win - it's a rough life, and who loses? future generations and the current environment.

47:50 ki - the term web 3.0 is kind of a dubious term at this point - when I hear you say that i'm thinking the semantic web or mapping web results and web searches to individual words and phrases rather than pages, granularity is getting better and I think you're including the emerging effects that michael was talking about, the ability of social networks to reflect reputation - now there's a new cost to harming the environment, a new transparency and visibility that we can supply ourselves with this kind of networking - that's a powerful force and again i'm going to recommend clay shirky's book for more ideas on how that gets managed and applied - its not a panacea, just having the technology to the standard human behavior that we're all in is no fix - we're going to have crazy stuff happening in that sphere as well...

49:13 mwl - in information systems there's a concept called variety matching which says that if you're going to control some system or interact with it the tools that you use for the interaction should be as subtle, and flexible and include as much variety as the object you're trying to manage - the comparison would be that in old sailing boats, the captain could stand there and tell the helmsman to move 2 points to starboard, you can issue orders that way - you can't fly a jet aircraft onto the deck of an aircraft carrier with the admiral telling the pilot, no no a little higher or a little lower - the variety of information cannot address the complexity of the task - we've been using a money and social institutions which are utterly inadequate to the complexity of our living economy, particularly when you bring in the natural world - well the granularity, the complexity, the subtleties, the varieties we are now able to bring in will give us a better shot at it - they don't solve the problem, they just give us a chance to address the problem rather than continue to exacerbate the problem without any hope of solving it at all.

50:38 cf - my last question has to do with barriers to open money - I recently read a document issued by the chicago central bank called modern money mechanics - it's a rather fantastic description of conventional money but in the world of open money, is there a home for conventional money? or is there a way that conventional money can evolve to embrace the concept of open money?

51:18 mwl - nope, no way that conventional money can be open - there will be changes in the way that conventional money operates as a consequence of the countervailing effects of open money - we expect to see things being tempered, the heat coming out of the credit market both on the upside and the downside but you've got to look 10 maybe 20 years ahead before you can be definitive about how one affected the other
flat earth theory is interesting for people who work on the flat earth and these guys do - they have no concept of what we're talking about and the difference between in control of a monetization which is about imposing value on a thing that has no value in itself is so divergent from what we're talking about - the recognition of the value of our relationships, our capacity to give and receive - these do not compute with each other - the effect of open money will take the heat off central banking - its been always my theory that banks are not our opposition - they're going to be so glad that we've saved their sorry asses - and we can, not to say that we will or that it will happen that way - bankers are pretty stupid when it comes down to core ??? - I don't mean that they're lacking gray matter, that they're unintelligent beings, thinking feeling people, i'm just saying they're stupid, like a deer caught in the headlights, like, bonk, what do I do now? they haven't a clue what to do, that's the most intelligent thing about them is that they realize they haven't a clue - the idiots who still think they can do something are truly demented - the sociopathology is pretty strong.

53:55 cf - i'll sum up by saying something about cascadia commons, we are a bioregional advocate
and we completely believe in open money and it's future - we have a very exciting meeting here in portland on january 6, starts at 6:15pm at madison's grill and you can check out our website for more information - if you're listening and able attend that would be fantastic - i look forward to your collaboration - we're continuing to investigate this and hopefully in the coming months we can get a program launched - i want to thank you michael for your time and your wise words about the development of open money.

54:55 - the curious thing about our world is that act of appreciation is fundamentally the core of a community currency based upon how people speak of each other - you did something for me, can't pay you any cash, don't have it, but I think that was a 400 dollar deal, thank you very much collin for your 400 dollar contribution to my world, to my well being - that statement is all there is to it, acknowledgment of the gift - the gift went from you to me, the acknowledgment went from me to you - now if that acknowledgment is a movable, fungible currency we're home - basically we're empowering the benefit of saying what is so - this is all about speaking truth, our own truth about our interactions and making that a very simple, very transparent, very convivial monetary model - its available, its easy, its right here, no big deal, lets just get on with it.

56:12 cf - wonderful....

57:15 mwl - we're eager to move forward on the technology as well as the social and financial aspects of this project - we look forward to all participation from interested parties but remember, if you're going to be interested in open money its open money we want you interested in - conversations are welcome but we won't want to talk about anything except open money its ramifications, its implications, its development - it may be very interesting to talk about other issues but there are other places for that, here, we're on the open money trail and you're welcome to join us.

58:00 ey - if anybody wants to get in on these conversations, we're on friendfeed and twitter and email - i'm ernie at and michael is mwl at - we love having these conversations live, on the air.