towards a monetary ecosystem workshop
DESCRIPTION
Towards a Monetary Ecosystem Workshop. Madison, WI March 30, 2013. Objectives of Workshop?. Next level of Complementary Currency Implementation Becoming Financially Sustainable in US$ + Develop a Long-Term Resilient Governance. Objectives => Proposed Solution. - PowerPoint PPT PresentationTRANSCRIPT
Towards a Monetary EcosystemWorkshop
Madison, WIMarch 30, 2013
Objectives of Workshop?
1) Next level of Complementary Currency Implementation
2) Becoming Financially Sustainable in US$ +3) Develop a Long-Term Resilient Governance
Objectives => Proposed Solution
Next level of Complementary Currency Implementation => Towards a Monetary Ecosystem
Becoming Financially Sustainable => Monetary Ecosystem includes a B2B currency (« US$ Cash Cow »)
Develop a Long-Term Resilient Governance => Managing Currency as a Commons
A Tale of 3 Cities
• Santa Barbara, CA• Tucson, AR• Madison, WI
Complexity Theory
• Breakthrough: Sustainability is measurable with a single metric as an optimal balance between “efficiency” and “resilience”.– Scientifically Solid:4 Peer-reviewed articles– See www.lietaer.com/research
Sustainability
Towards stagnation(Too little efficiency)
Towards brittleness(Too little diversity)
Greater Efficiency (streamlining) Greater Resilience
Diversity & Interconnectivity
Optimal Balance
100%
0%
Sustainability in Natural Ecosystems
Sustainability
Towards stagnation(Too little efficiency)
Towards brittleness(Too little diversity)
Greater Efficiency (streamlining) Greater Resilience
Diversity & Interconnectivity
Window of Viability
Optimal Balance
100%
0%
Real-life sustainable ecosystems
Sustainability in Natural Ecosystems
Complex Networks
• Diversity and interconnectivity are 2 structural variables => applies to all networks with similar structure, including money system!
• Structural variables are independent from what is being processed in network– biomass in an ecosystem, – electrons in electrical circuit, – information in immune system, – money in an economy…
Resilience
Efficiency
Balance in Natural Networks
Efficiency
Resilience
(In)Balance in Our Financial Network
Sustainability
Towards brittleness(Too little diversity)
Greater Efficiency (streamlining) Greater Resilience
Diversity & Interconnectivity
Optimal Balance
100%
0%
Window of Viability
Current operation of financial system
Application to Monetary System
Sustainability
Towards brittleness(Too little diversity)
Diversity & Interconnectivity
Optimal Balance
Window of Viability
Survival, Very Diverse
InefficientExchanges
After a CrashRecovery in Natural Ecosystems
How natural systemsrecover
Sustainability
Towards brittleness(Too little diversity)
Diversity & Interconnectivity
Optimal Balance
Window of Viability
Collapse ofFinancial system
Survival,Barter
Exchanges
Re-establishment of monetary monoculture
After a CrashReinstating Bank-debt Monopoly
Connectivity c
Sustainability Optimum
0%
100%
Diversity n n
3D Views
Phase 1: Proposed Legal Structure• L3C: Low-profit Limited Liability Company
– Corporation with a social purpose– Low ceiling on profit (e.g. max dividend 2%)
• First legislation in Vermont on April 2008– Now 9 states available for L3C incorporation
• 26 other states interested– Can operate anywhere in US– January 11, 2013: 711 active L3Cs are in operation
• Qualifies as investment for Foundations • Requires a viable business plan (« Cash Cow »)
• Phase 2: Viable business plan• Phase 3: Identify social purpose systems• Phase 4: Governance• Phase 5: Legal Incorporation• Phase 6: Software Adaptation• Phase 7: Implementation
Evaluation as « Cash Cow »
• Advantages– Simple– Choice of softwares
• Disadvantages– US$ come from outside the system
• US$ Income from membership fee and transaction fees• Transaction fees discourage use of system
– No possibility for acceptance in taxes
The Problem of being small…
Cash or30 days
$100K90 days
100KC3
C3 Solution: Phase 1
$100K90 days
100KC3
US$Minus interest + fees
C3
C3 Solution: Phase 2
C3 Solution: Phase 390 days have passed…
US$100K
oodUS$No interest costs
Evaluation as « Cash Cow »
• Advantages– US$ come from inside the system
• US$ Income from exit fee and potentially demurrage• Both fees encourage « good » behavior
– Possibility for acceptance in taxes
• Disadvantages– More complex– Requires participation of insurance company and bank– Initially requires use of Cyclos software
Currency as a CommonsElinor Ostrom’s 7 Criteria for Managing
Commons1) Clearly defined boundaries2) Congruence with local conditions3) Hyper-democratic: Most individuals affected can participate
in modifying the operational rules.4) Monitoring: Monitors are accountable to Users or are Users.5) Conflict-resolution mechanisms: rapid access to low-cost
local arenas to resolve conflicts6) Graduated sanctions: Users who violate operational rules are
assessed graduated sanctions by other Users, by officials accountable to these Users, or by both.
7) Minimal recognition of rights to organize: No contradictions with State of Federal Laws
Sequence of Next Steps
• Prepare Proposal for 3 cities• Find an Insurance Company for C3• Prepare business plan for « Cash Cow » • Agree on Governance Structure• Legal Incorporation, probably in Vermont• Invite participation of all relevant parties • Take Off…