alt.cash and the DIY society

One of the central ideas behind my Graphic-novel-in-progress is the idea that technology is making it easier to build an alternative society. I define society as being composed of various forms of infrastructure linked together in a hierarchical manner, which reflects and reinforces the power balance. The gist of my idea is that rather than protest against the prevailing powers/infrastructure, in a democratic society there is nothing to stop us from simply walking  away and building an alternative. What is that alternative? Well, treat the situation like an engineering problem - break it down into manageable components - what forms of infrastructure are necessary? The basics are that we need food, we need power and water, and we need a form of currency with which to trade for the things we don’t have. On top of these we build other structures, jobs, education, cultural activities, however these all come later, and in fact feed into each other - the jobs are provided by growing/tending the food, infrastructure and education etc. Each of these aspects is a vast subject in itself, but for this post, I want to focus on the financial exchange aspect of the problem - actually, I should be more precise - we can break money down into three constituent parts - a means of exchange, a measure of value, and a store of value, so I should specify that here I am only considering the problem of means of exchange, the most pressing issue in building a functioning DIY society.

Central banking - the idea that a Government-backed bank holds a monopoly on the issue and regulation of the money supply - has become so prevalent in the past century that the majority assume it is the only way to provide financial services. Not so, however, as finance is at heart simply a form of trust - people are willing to accept any form of currency as long as they are secure in the knowledge they can redeem it conveniently with no loss of value. The alternative to Central Banking is called Free Banking, where any bank or company can issue its own currency, and that currency is successful or not based upon its trustworthiness in a free market. We then have the power to decide whether or not to accept it in payment. There are many recent examples of successful free banking in countries from Europe, to the US and UK (check this this wikipedia page for examples), i quote here based upon study of the Swedish free banking systems of the 19th Century: “Erik Lakomaa (The Quarterly Journal of Austrian Economics, Summer 2007), has demonstrated that the Swedish experiment in free banking was successful. It reduced booms and busts. Only one bank went bankrupt for 70 years, an event related to fraud and not to excessive lending as has happened wherever central banking has been practiced.”

Anyhoo, I’m not an expert - i read a couple of books - Douglas Rushkoff’s ‘Life Inc.’, and Thomas H. Greco Jr.’s “The End of Money and The Future Of Civilization”, but enough for it to sound viable. The main point I see is the taking back the control from the Government, who would no longer have the power to deflate the money supply as they do at the moment by continually printing more money to service their debts. 

Over various encounters and conversations in the past few months while babbling away my comic ideas, I was surprised to discover how many alternative - and complimentary - currencies are actually in use today. The first I heard about was the Totnes pound, from Devon here in the UK, introduced in 2007, which now, when i look up more details, I find out is part of something called the Transition Towns concept - “a community in a process of imagining and creating a future that addresses the twin challenges of diminishing oil and gas supplies and climate change , and creates the kind of community that we would all want to be part of” - wow! Two other British pounds have turned up since - the Lewes Pound in 2008, and then the Stroud pound in 2009.

Next I heard about was the Detroit Cheer, which Chris was telling me about at a BBQ couple weeks back. There are now four local currencies in the US according to this USA Today article - the Detroit Cheer, Ithaca Hour in New York, Plenty in North Carolina and BerkShares in Massachusetts, which began in 2006. The article explains it more articulately than me: “The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.”

Great as these are however, their paper-based locality keeps them too niche for wider usage. Forms of digital currency have been an ongoing area of research, and we now widely accept systems such as Paypal and Google Checkout, however these all conform to a centralised system architecture which suffers the same problems of control as central banking. An alternative distributed peer-to-peer system I discovered recently is called Bitcoin, a cryptographic-based currency, which sounds close to perfect. 

“The Bitcoin economy is still small relative to long-since established economies and the software is still in the beta stage of development. But real goods and services, such as used cars and freelance software development contracts, are now being traded. Bitcoins are accepted for both online services and tangible goods. The Electronic Frontier Foundation and Singularity Institute accept bitcoin donations. Traders exchange regular currency (including US dollars, Russian rubles, and Japanese yen) for bitcoins through exchange sites” (From wikipedia article)

Whether it catches on is really the question, but the fact that its out there and being used already (supposedly with a valued economy of 13 million USD) is quite astounding. I also read today about the Ripple Monetary System however, it sounds more like an idealized architecture than a functioning system…

More details/ideas/reading at:
http://rushkoff.com/</a><br />http://www.huffingtonpost.com/2009/04/06/communities-print-own-cur_n_183497.html</a><br />http://troco.ourproject.org/</a><br />http://www.goodreads.com/book/show/647328.Splintering_Urbanism</a><br />http://www.goodreads.com/book/show/7019973-the-rise-of-the-network-society</a></p></div><p>the future is here, bring it on!