The Wall St. Journal: The coming currency revolution

I think this is a great video showing the organic emergence of currencies around the world and how technology is helping to spread them. I think this speaks a lot about the future and the rise of this as a new economic space. It will bring value to things that have not been recognized as valuable in the past. However, I don't agree that value is all about scarcity. The idea of scarcity as the driving motivation for value in my opinion is flawed and is exactly why we have landed up in such an environmental crunch. We need to think about how to design currencies for abundance. How do we get abundance to be recognized as valuable? This to me is the big question.

I do wonder again about what this means in terms of scarcity and a system that only responds to things that are scarce - surely the freeing up of information and its increasing cheapness due to abundance is not a loss of value. The increased abundance of information is increasingly valuable to society. The more information, the more value this has to us. This is the same question to be explored around the environment and questions of abundant and healthy eco-systems.

I do think what these currencies raise is the question of democracy as Douglas Rushkoff points out the democratization of economics and of money is a movement we are steadily heading towards. However, we have to understand democracy in the way that it has been used to enable capitalism and the role that ideas of scarcity and representation play in limiting the power of the citizen. Perhaps, this currency movement will both highlight questions of scarcity vs abundance and representation vs participation.

However, I love seeing these discussions entering mainstream. I think at some point there is going to be a serious challenge from the state as it attempts to regulate and claim control over the currency space. This is important because our entire capitalist democracy that we live under is dependent on the control over the creation of money. The future will be interesting as is the current moment.

Theory Matters

I remember having an argument with a really good friend of mine (well
maybe argument is a bit strong of a word) about the importance of
theory. It was while I was getting my undergraduate degree at
Berkeley and I found myself completely enthralled by theoretical
thinkers - everyone from Doreen Massey to Weber to Marx to Gillian
Hart and onward. I wanted to be spend my life engrossed in
contributing to our theoretical world. It was then that I realized I
really wanted to be an academic, a thinker, someone that gets paid to
think and give those ideas back to humanity.

For me it is hard to see the distinction between this world of
physicality and our theoretical interpretation of it. I see nothing
more important then theory. Everything for me is in someway grounded
in theory. Call it ideas, call it perceptions, call it your lens into
life. It is all bound up in a theoretical understanding.

For an academic the hardest part is articulating ones theoretical
ideas. I think my blog may give this away to my readers. I struggle
to articulate my ideas, my theories. I have many and often I wish I
could just sit down and vomit them out onto paper and truly express
them. Sometimes words just seem to stumble me - and I think of myself
often as an artist. I like to think of papers that I write as
paintings. I start with a blank canvas and by the time I am finished
I hope to have a story (picture) that others can relate to and that
my sense, my message, my interpretation is clearly expressed and
shared and transferred.

For me the value of theory becomes even more important in the world
of socio-political-economy. How we understand the meaning of economy,
of democracy, of money or any other social construct - these are
things not like trees or water, but things that we as humans have
theoretically constructed and actualized into a having a material
impact on us - is of critical importance.

I am in the throws of writing my Mphil dissertation. I have sat with
it for many months, unable to write anything clear and cogent. Though
I know what I want to say, I have had conversations, written many
many notes and random scribblings but have failed to put something
together that can be called an academic piece of work.

Well, now I am writing it. I sit in my office 35 hours a week in
North Berkeley attempting to write. Sometimes not getting much done
but other times it flows out.

Anyway, back to my original point. The point I wanted to make about
the importance of theory/ideas. I have been reading about democracy
and democracy as it is understood and came to be constructed in the
USA. It is quite incredible when you realize that a word as powerful
and commonly used as "democracy" has had profound shifts in
theoretical understanding that have had massive impacts on our socio-
economic lives. That the theory of democracy matters is beyond doubt.
Understanding how it has changed, why it has changed and the fact
that it can change again is something that I believe truly empowers us.

We can always change our minds. We can always change the way we think
about ourselves, about our lives and those around us. It of course
becomes much harder when that change has serious impacts on our
individual or collective material lives. This is why I believe
certain ideas become stuck and do not change. This is also why
moments of "conjunctural change" (an idea I got from Prof. Gillian
Hart) are of such importance. Those moments represent incredible
opportunities to insert and change theoretical ideas.

I believe we are in one of those conjunctural moments. I believe most
clearly this can be seen in our financial system. What happens next,
what type of money we create and what type of political-economy that
results in will be driven by theoretical understandings.

I hope that I am able to contribute something of value to that debate
and impact the way that we theoretically construct our lives and our
economies so as to actualize new material conditions, through the
creation of powerful theoretical ideas.

In the mean time I hope I can get this dissertation done!

Saving Global Capitalism - IMF and the SDR as a Supra-National Currency

I want to make a prediction.

The global capitalist economy will be saved by the creation of a
supra-national currency housed in the IMF and will in some way be
designed along the lines of the SDR.

Though, I am pretty sure it is not a novel prediction and that there
are others out there that have and will make the same prediction. The
future of money will move towards the SDR (Special Drawing Rights
which allow nations to increase their foreign exchange reserves
without money being borrowed or lent. This facility is provided
through the IMF). What this means is that new money will be created
through the fund replacing the dollar as the anchor currency and
relieving the pressure on almost all states with regards to their
sovereign debt. This will almost certainly be the only way to satisfy
the "markets" (I hate to use the term markets in this way but I do
not want to get into that discussion). Because the SDR will be backed
by the global economy, and not one particular economy, it will return
a certain amount of security and confidence to the global markets.

I can not say exactly how it will look. You can read more about the
SDR on Wikipedia and several other blogs and websites. What I can
predict is that several countries will gain a bigger say in the role
of the IMF - such as China, India, Brazil and most interestingly
South Africa. We have already seen these countries demanding a bigger
say on the IMF over the past 10 years.

This creation of a supra-national currency will change the role of
individual sovereign states and may usher in a completely different
political climate ending a certain mercantilist type of economic
thinking. This is because no one nation will control money and the
global economy. The longer term impact is of course hard to predict
and I am sure that this will raise the heckles of many of the
conspiracy theorists - those that believe in the New World Order or
other such ideas. However, I believe it is the only way we will
ultimately save our global economy from a massive and devastating
collapse that would match or exceed the Great Depression.

The importance of this is hard to over-state. As the work of Karl
Polanyi showed in his book, The Great Transformation, the last time
our global economy collapsed it lead to fascism and global war. We
all want to avoid this possibility especially in a nuclear world.

What it will raise, this shift, is a discussion of money and how we
understand its creation and purpose (by this I mean what type of
political-economy do we want). There are many discussions going on
around the world dealing with the question of the creation of money.
Some of the most interesting look at creating a range of currencies
that serve a range of purposes and a range of spatial communities.
Bernard Lietear is one of the pioneers in this thinking - raising the
importance of building a system of multiple currencies that act from
the local community to the global community. There are deeper
questions of the impact of debt, scarcity and the like. That is all
for another discussion - some of which I have already dealt with in
other blog posts.

In the end saving the global capitalist economy will rest on the
creation of this global supra-national currency.

The Gulf Oil Spill

I have a theory about monetary value. The need for a system that recognizes that which is priceless, that which holds infinite value. That which no money can buy nor pay for. The Gulf oil spill is a very real example. We try to put a price on the cost of this spill. Sure, there are the economic impacts of the loss of business and perhaps of fisheries. This is a real cost that will affect peoples real lives. 

BP may land up paying billions of dollars in damages, but will this replace the ocean? Will this buy us new plankton, new dolphins, fish, whales and most importantly a clean ocean? It most certainly won't. It can not do this, it is an impossibility. Once you pollute something like that it is polluted, no amount of money can fix this. Once the air is polluted that is it, it is dirty. Once the eco-system is destroyed a value that never was recognized in the monetary system is lost. Something priceless has been lost. 

Money has no ability to accept this. It can not deal with that which holds infinite value because infinity is about abundance while money is about scarcity. The two work in direct opposition to each other. This is why we allow drilling in the bottom of the gulf because we actually have not priced in the value of the clean water. If we were to do this, it holds the potential of destroying the very pricing mechanism that enables the drilling of oil.

At the end of the day BP will pay huge fines and then go back to drilling. But, something will have been lost. We will try and put a price on it but in the end it won't even come close to the true value of this disaster.

It is time to recognize that there is value in the abundance of a clean and healthy eco-system. That this value is infinite and that our monetary system fails at taking this into consideration. It is time to innovate and develop a monetary system that knows how to recognize the value of things that are priceless. 

How do we do this? I wanna know! It is something that I puzzle over daily while knowing it is critical to our future as a healthy species. Infinite value and abundance.

Democratizing Money - My Thesis Proposal for my Mphil at UCT

Democratizing Money - Saul Wainwright MA Proposal

Introduction

I am trying to write a thesis. I am trying to sort out my many ideas around money. I have never chosen simple ideas, I never see it as simple, perhaps that is a weakness in my thinking. But, as a political-economist I can not ignore the complex social and historical specificity of all institutional developments. I am exploring money, I want to understand money as something that has been constructed to serve a specific purpose. To do this I have to place it into a specific political history. Money, today's money, is built around a set of particular political-economic needs. I will continue to explore these ideas in the coming weeks and months while writing.

This was a small introduction that I wrote a few weeks ago. It is very loose and will most likely change radically in its final drafts but I think it gives a good launching pad into my work. My first chapter of my thesis is looking at the USA and the way in which the creation of the US constitution reworked the very ideas of democracy away from its original concept of direct towards what can barely be considered democratic - namely a form of representative democracy. Which is essentially built on the idea that our rights as individuals and communities is some how alienable - that we can give them to some one else who can then represent us in some sort of abstract way. This shift in thinking about democracy is not my idea, it is an idea that has been well developed by other academics. My point is to highlight this so that I can then illuminate the way in which money has been theorized and presented within this form of democracy and show how the democratization of money has been built around an effort to support what is known as a capitalist democracy. Ultimately this will allow me to ask what it actually means to democratize money - a claim that many advocates of community currencies make.

Here is the intro as written thus far:

The Finance Lab

I cam across The Finance Lab prospectus today while sitting in my
office (actually a friends apartment). This got me sooo excited. This
is exactly the idea that I recently proposed to a contact at Global
Business Network and am still hoping to continue the conversation.

I hope that I can get my skills into these sorts of discussions. I
hope that I can find a place for me in something like this lab or
something similar and be part of a team of people thinking,
theorizing and putting into action the resulting policy ideas that
lead to innovation and change in our financial system.

I think I can do this. It is all slowly coming together - my deep
interest in political economics, economic development, environment
and sustainability, scenario planning and most importantly financial
systems.

Please let there be an awesome job for me in this space that allows
me to utilize my creativity, my intellectual knowledge and my
passion :-)