Bitcoin and the new fascism...

Guiseppe Volpi, Mussolini's Finance Minister

Like this from Izabella Kaminska:

Currencies of the realm represent a social contract between citizens and the government. Not only are they mandated as official tender, they end up being inherently superior to other units because of that government affiliation. This is because the government is the one common denominator between all participatory agents in the economy, all of whom at some point have to pay taxes. Why would you accept settlement in BP shares, when you know that ultimately your liability to the government is in national fiat.

That currencies exist because we have to pay taxes is not only untrue but a misrepresentation of the point of currency. Indeed, the liberation of money from state monopoly must be one of the objectives we strive for - monopoly is always bad and doubly bad when it exists solely for the purpose of allowing the government to take that which is ours by main force.

The other reason this is nonsense is because the direction we are travelling is away from government not towards it - thus it is no surprise that governments dislike systems of exchange they don't control. Moreover the size of government requires that these initiatives be stopped - if they are not then government cannot sustain itself (other than by debauching the very currency that Isabella claims is 'inherently superior'). That superiority is simply a consequence of government's monopoly of effective force rather than anything inherent in some mythical 'social contract'.

But then the writer here compounds the misperception by revealing her prejudice:

This is because it is still based on anti-social instincts and the pursuit of personal gain over the common good in a nefarious and unproductive way for society. 

Now - given that the writer claims some economic knowledge - I'm not going to talk about Adam Smith and that famous bit about the butcher's self-interest. Rather I'm going to ask who defines the 'common good'? If (as I suspect is the case here) the definition is 50%+1 then we are simply living in a tyranny and creating the circumstances for the rebirth of what Finer called the 'oikos' state. And the tyranny would be a platonic one - the great and good, the heads of that 'oikos' would decide the common good. Anything - such as a private currency - that would threaten what those heads determine is 'good' must be stopped. As our author puts it:

At its heart the currency is founded on anti-social tenets, which will always tempt capital that wishes to be used unproductively, especially in an economic environment where the only productive use of capital is increasingly through government spending.

Or as Benito Mussolini would have put it:

Everything within the state, nothing without the state.

Welcome to the new fascism folks!

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I wish Bristol well with their 'pounds' but it won't work

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I'm a big fan of alternatives to money. Especially in this age of governments debasing the currency year after year and pretending it's all for our good (rather than as a favour to their pals in banking and property development or to cover up their past mistakes). So the Bristol 'pound' sounds like a great idea - here's the BBC bigging the idea up:

More than 350 firms in the city have signed up, making it the UK's largest alternative to sterling. Unlike previous schemes which have relied on paper, the Bristol Pound can be used online, even by mobile phone. 

So that's progress. The problem is that the motivation for the introduction of the Bristol Pound isn't escape from the tyranny of state controlled money but a rather righteous desire to 'keep more of the money in Bristol'.

"If you lock the money into the area, rather than it going into the international finance system then you keep more money actually working in the city here."

This is - in effect - an attempt to game the local multiplier. But the problem with the Bristol Pound is that there's not incentive to play. For sure, the trader (or other user) is locked in because there's an exchange fee of 3% to turn Bristol Pounds into Sterling. So why should the trader go to the bother of converting real pounds into Bristol 'pounds' knowing that there's a built in loss and there are only 350 businesses who will accept them. Businesses that don't include any suppliers outside Bristol.

When we look at successful alternative currencies they either fill a real need (for example Linden dollars in Second Life) or else contain a strong sales promotional element. The Bristol Pound would have a lot greater consumer purchase (if you pardon the pun) it it offered discounts at the 350 businesses rather than simply trying to pretend that there really is a "local multiplier effect" and you can game it with a make believe currency.

I hope I'm wrong - perhaps Bristol Council (I'm guessing it's the City's biggest employer) will offer pay rises to staff only if they take them in Bristol Pounds. Or perhaps offer an incentive on personalisation payments for social care - 110% of value if 20% is taken in Bristol Pounds. If something like this happened then there's a chance that the new currency will work. Otherwise it will splutter and struggle on without really making much of a difference in the City.

Finally the lesson from LETS type currencies is that you need a big area - the successful Chiemgauer system covers the whole of Bavaria for example.So the whole of the South West is a better basis for success than just the fine city of Bristol.

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The mist....

The mist wanders like some slightly inebriated ghost across the water as the sun - what little there was - falls down in the sky. The water is still - unblemished by ripple or splash. Revealed is a new wonderland - there reflected in the mirrored surface.

Moon, stars, trees, birds, buildings. And around the corner - beyond the edges of your eyes? Maybe there we'll find naiaids, kelpies and the wonderful water dragon. This isn't just the world of imagination - it is the twilight world we glimpse just occasionally when we stop our mad parade, our obsession with numbers, with facts, with the stomping prose of business.

That world contains something of the truth we are missing. The reason we are unfulfilled, unsatisfied by the pleasures the modern world lays out on its counter.

Which is why we look at the South Pennine views - at Ogden Water - take a breath...and feel the strains and stresses of life tumble from our shoulders. We buy the wonder, the magic. Not with the currency of modern commerce but with an older currency. A currency of blessings, of tears, of touching hands. A money we can't see but know is there.

Pennies we can store up but can't spend - except when we stop, take in the view and soak up the magic.

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