Libertarian.ie

Money and Finance

History and Theory of Money

• http://szabo.best.vwh.net/shell.html
  Shelling Out -- The Origins of Money
  New theories on the origins and nature of money
  Copyright (c) 2002, 2005 by Nick Szabo
  Permission to redistribution with attribution and without alteration hereby granted.
  Abstract
  The precursors of money, along with language, enabled early modern humans to solve problems of cooperation that other animals cannot -- including problems of reciprocal altruism, kin altruism, and the mitigation of aggression. These precursors shared with non-fiat currencies very specific characteristics -- they were not merely symbolic or decorative objects.
  ... as engineers would say, barter "doesn't scale". Barter works well at small volumes but becomes increasingly costly at large volumes, until it becomes too costly to be worth th effort. If there are n goods and services to be traded, a barter market requires n^2 prices. Five products would require twenty-five prices, which is not too bad, but 500 products would require 250,000 prices, which is far beyond what is practical for one person to keep track of. With money, there are only n prices -- 500 products, 500 prices. Money for this purpose can work either as a medium of exchange or simply as a standard of value -- as long as the number of money prices themselves do not grow too large to memorize or change too often. (The latter problem, along with an implicit insurance "contract", along with the lack of a competitive market may explain why prices were often set by long-evolved custom rather than proximate negotiation).
  Barter requires, in other words, coincidences of supply or skills, preferences, time, and low transaction costs. Its cost increases far faster than the growth in the number of goods traded. Barter certainly works much better than no trade at all, and has been widely practiced. But it is quite limited compared to trade with money.
  Primitive money existed long before large scale trade networks. Money had an even earlier and more important use. Money greatly improved the workings of even small barter networks by greatly reducing the need for credit. Simultaneous coincidence of preference was far rarer than coincidences across long spans of time. With money Alice could gather for Bob during the ripening of the blueberries this month, and Bob hunt for Alice during the migration of the mammoth herds six months later, without either having to keep track of who owed who, or trust the other's memory or honesty. A mother's much greater investment in child rearing could be secured by gifts of unforgeable valuables. Money converts the division of labor problem from a prisoner's dilemma into a simple swap.
  The proto-money used by many hunter-gatherer tribes looks very different from modern money, now serves a different role in our modern culture, and had a function probably limited to small trade networks and other local institutions discussed below. I will thus call such money collectibles instead of money proper. The terms used in the anthropological literature for such objects are usually either "money", defined more broadly than just government printed notes and coins but more narrowly than we will use "collectible" in this essay, or the vague "valuable", which sometimes refers to items that are not collectibles in the sense of this essay. Reasons for choosing the term collectible over other possible names for proto-money will become apparent. Collectibles had very specific attributes. They were not merely symbolic. While the concrete objects and attributes valued as collectible could vary between cultures, they were far from arbitrary. The primary and ultimate evolutionary function of collectibles was as a medium for storing and transfering wealth. Some kinds of collectibles, such as wampum, could be quite functional as money as we moderns know it, where the economic and social conditions encouraged trade. I will occasionally use the terms "proto-money" and "primitive money" interchangeably with "collectible" when discussing pre-coinage media of wealth transfer.
• http://www.monetary.org/
  The American Monetary Institute (AMI) is a publicly supported charity, founded in 1996 to present the results of our research in a manner understandable by the average citizen; leading to monetary reforms which bring forth a greater level of economic justice and a more equitable and efficient functioning of government.

Alternative or Community Currencies

• Ithaca Hours, NY, USA
  http://www.ithacahours.com/
  Here in Ithaca, New York, we've begun to gain control of the social and environmental effects of commerce by issuing over $105,000 of our own local paper money, to thousands of residents, since 1991. Tens of thousands of purchases and many new friendships have been made with this cash, and millions of dollars value of local trading has been added to the Grassroots National Product.
  We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars. Ithaca's HOURS, by contrast, stay in our region to help us hire each other. While dollars make us increasingly dependent on transnational corporations and bankers, HOURS reinforce community trading and expand commerce which is more accountable to our concerns for ecology and social justice. Hometown Money Starter Kit and video available by mail.
• http://ripplepay.com/
  Ripplepay.com is a payment system where you can be your own banker. Connect to your friends, family, and associates and your credit with them becomes a fully-functional currency.
  Ripplepay.com is a part of the Ripple project to develop a peer-to-peer network protocol for making decentralized Ripple payments between users on different computers.
• http://www.libertydollar.org/
  NORFED has introduced an alternative currency that is 100% backed by .999 fine silver. This currency, The Liberty Dollar, is central to a grassroots effort to return the US to a currency backed by gold and silver, not national debt. Not long ago, the US government issued a national currency backed by a redeemable commodity; The Liberty Dollar returns America to this kind of value - one dollar a time.
  Surprisingly, it's legal to issue your own currency like NORFED's new Liberty Dollar. The new Silver Certificates fit in the cash register and function in the marketplace on a dollar-to-dollar basis with Federal Reserve Notes.
  ... "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation... Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process."
  --Alan Greenspan
• http://www.rhd.org/equal.html
  Equal Dollars is a legally structured community based currency and trading system, enabling communities and members to enjoy US Dollars savings and creatively/cooperatively share resources. To create an additional means to exchange services and products based on a currency accessible to people of all incomes. Equal Dollars' philosophy and basic operations recycles wealth and promotes a community based, economically supportive environment for participants.
• http://www.e-gold.com/
  e-gold is integrated into an account based payment system that empowers people to use gold as money. Specifically, the e-gold payment system enables people to Spend specified weights of gold to other e-gold accounts. Only the ownership changes - the gold in the treasury grade vault stays put.
• http://www.timedollar.org/
  Time Dollars: A New Kind of Money That Builds Trust and Community
  One hour of contribution = one Time Dollar. That's it! With Time Dollars, everyone who gives can earn, and everyone has something to give. I help you, you help another, and that person helps another. Soon there is a web of caring, a new network of support. For those who are well-off as much as those who are poor, Time Dollars bring a new quality of community to daily living.
  Time Dollars have a social justice dimension, too. When they are earned by those who have been written off by society, they have the potential to alter social welfare systems, health systems, educational systems, and justice systems. And they have an added message: 'No More Throw-Away People.'
• http://www.pioneernet.net/chab/timedollars.htm
  *Time Dollars: Creating a New Currency to Build Community
  by Edgar S. Cahn
  Building social infrastructure and assessing community assets have been key elements in past efforts to rebuild communities. Time Dollars add a third piece. Time Dollars are a currency to record, store and reward transactions where neighbors help neighbors. People earn Time Dollars by using their skills and resources to help others (by providing child or elder care, transportation, cooking, home improvement). People spend Time Dollars to get help for themselves or their families, or to join a club that gives them discounts on food or health care.
  Time Dollars enable human beings for whom the market economy has no use to redefine themselves as contributors, and they give society a way to value activities that the market economy does not. Time Dollars empower any person to convert personal time into purchasing power, stretching limited cash dollars further. Time Dollars reinforce reciprocity and trust, and they reward civic engagement and acts of decency in a way that generates social capital, one hour at a time.
  In the process of developing applications for this new medium of exchange, the Dollar Institute has seized upon a fourth element Ŵ one that is even more basic, more fundamental than Time Dollars. It is called Co-Production.
• http://www.unilets.org/
  UNILETS ONLINE
  2600 LETS timetrading systems in 53 nations
  How does it work?
  Local Exchange Trading Schemes/systems (LETS) are barter systems through which a community can exchange its skills or services, without using any currency/money. There are many schemes operating throughout the world, the locals are listed in our search.
  Local trading systems bring the local community together and put local people in touch with local skills. They are first line regeneration systems as they keep hard currency in the local community and bring people from all walks of life together. Unilets unifies the locals to allow our little planet to prosper.
  It is "globalization" done by the people for the people and without any government intervention.

Social Credit

• http://en.wikipedia.org/wiki/Social_credit
  Social Credit
  From Wikipedia, the free encyclopedia.
  Social Credit is an economic theory and a social movement which started in the early 1920s... Social Credit was originally an economic theory developed by Scottish engineer Major C. H. Douglas. The name Social Credit came from his desire to make the betterment of society (Social) the goal of the monetary system (Credit)... Social Credit theory proposes that because the amount of money available under capitalism is necessarily lower than the total cost of goods produced, there will always be insufficient money to pay a realistic, sustainable price.
• http://www.mondopolitico.com/library/socialcredit/socialcredit.htm
  Social Credit, by
  Major Clifford Hugh Douglas
  ... if the money supply is not increased, dollars/pounds become more valuable, such that prices drop. But, if the money supply is increased just enough, the value of each dollar/pound - hence prices - can be left unchanged. Finding it desirable to keep prices unchanged in this way, Douglas then explains that, essentially, a decision has to be made about who gets the additional dollars/pounds. Under our current fractional reserve system, the banks do, by creating and lending out extra credit. Under a "social credit" system, the extra dollars would be divided up and given to all citizens in equal portions as a "dividend".

Interest-free Banking

• http://www.yesmagazine.org/article.asp?ID=526
  YES! Magazine
  Fall 2002 Issue:ÊÊLiving Economies
  Saving Together
  by Richard Douthwaite
  Interest is among the most pernicious causes of concentration of wealth and devaluation of the future. What if we got rid of it?
• http://www.jak.se/
  The JAK MEMBERS BANK
  THE INTEREST-FREE SAVINGS AND LOAN SYSTEM
  JAK is operating an interest-free savings and loan system since 1970. A bank licence was obtained in 1997. Formally JAK is a co-operative bank. We are 27,000 members and the growth is 9 percent per year.
  We regard payment for labour and risk taking as legitimate but not for the mere ownership. In our opinion it is unethical to lend money against interest when there is no risk and no labour involved.
  The use of interest also has negative effects on the society. It turns up in the prices of services and goods when producers add to the price of the sales to cover their cost of interest on loans. In an interest economy money is moved from those who have less to those who have more and thereby concentrating the assets in the hands of the few.
  Finally, since our modern monetary systems are debt based and practically all money is debt that has to be repaid with interest, we have a money stock that grows exponentially. Anything that grows exponentially will eventually reach a breaking point. Today we have exponential growth in both real and financial assets including money.
  For these reasons the ultimate goal of JAK is an interest free economy. In order to promote interest free economics we deliver bank services based on an interest free savings and loan system (see above) support the JAK Community Dialogue.

Microcredit and more

• http://www.smallisbeautiful.org/share.html
  SHARE Micro-Credit Program
  The Self-Help Association for a Regional Economy (SHARE) is a model community-based nonprofit that offers a simple way for citizens to create a sustainable local economy by supporting businesses that provide products or services needed in the region. SHARE makes micro-credit loans available at manageable interest rates to businesses that are often considered "high risk" by traditional lenders ? usually because of their credit ratings or the unique nature of their business ideas. Local SHARE members make interest-earning deposits in a local bank, which are used to collateralize loans for local businesses with a positive community impact. SHARE depositors live in the same community as the business owners they support ? bringing a human face back to lending decisions.
• http://www.ex.ac.uk/~RDavies/arian/local.html
  This page of links to resources on microcredit systems, local and interest-free currencies is one of a number of pages on Money - Past, Present and Future maintained by Roy Davies.