Readers,this is a draft of the first part of the proposal I am working on. Please, offer constructive suggestions if you have any. thanks,
The draft below is as of July 12th 2012 Tadit
Introduction to the Community Reserve Exchange, Being the change...
version 4.5, post July 12th, 2012
This proposal has three fund-able projects with a small contingency for a combined total of $15,000.00. All are pieces of an ongoing effort toward increasing public economic literacy done locally, regionally, and by way of the web site: Re-Imagining Economics at www.economic.arawakcity.org has operated for over three years as a virtual organization the core being one person acting as the primary and two volunteering support in different ways. and collaboration with others of a compatible nature and via other venues. One such collaborator is Alanna Hartzok of the Earth Rights Institute.
The core of this work also dates back to prior involvement in adult education including the history and issues of cooperatives, environment, peace, and community building. Part of this is reflected in the web site library of Re-Imagining Economics tri-fold flyers and archive. Because Re-Imagining Economics is not formally incorporated we will be operating with "The Neighborhood Network." a local non-profit, with similar interests in culture and media, will serve the fiscal agent. for this funding. (cf appendix A)
A recent project involved in constructing a mobile mixed metal carillon and installing it at the local Columbus Community Festival both for people walking by during the general festival hours and then it was central to the major friday evening drumming circle. The intent was to create a collection of percussive value found objects so that people would be able to simply walk up and make music together with people you've never met before. In a strong sense supporting the cultivation of a cooperative culture. Toward the end of the friday debut we had had several skilled and talented percussionists participate and there was an estimated fifty people dancing in a circle around it and/or waiting their turn to use some part of the carillon. The not direct participants part of the gathering was perhaps five hundred people. It is expected that the cumulative appearances of the mobile mixed metal carillon will aid toward a more cooperative local culture and as a means to promote culture shifting.
1. On site research visit to the Twin Oaks Intentional Community near Louisa, Virginia, U.S.
2. The second fiscal request is for support toward funding the computer programming necessary to establish the Community Reserve Exchange (CRX) as an open source utility.
3. the third related expense is for incorporation fees and related attorney consultation toward full incorporation of the Community Reserve Exchange as an LLC
4. Allowance for contingency adaptation and unexpected costs
totaled as listed = $17,000.00
The first listed expense is for support for an in person visit by Tadit Anderson (resume attached appendix B) to the Twin Oaks Intentional Community near Louisa, Virginia. Specifically to cover the travel expenses, per diem costs, and some appreciation to the Twin Oaks Intentional Community. The results of this visit will be provided in a summary report, and the material will be added to the resulting narrative about Twin Oaks in the CRX operations manual and a s a project toward intentional commun ity. The objective for this visit is to deepen the description of the related community context and history of Twin Oaks regarding their public purpose economics as a community. One of the hardest things to do in advocating for deep economic and political reform is to actually demonstrate the real world utility of new ideas melding with congenial old ideas. Under direct experience and practical optimism that a way of living in community as an economy was possible, the TOIC developed their labor credits system as one of their major means of defining the public purpose. This system shares a high degree of analogous structures with modern monetary economics, functional fiscal policy, and its macroeconomics.
The on site visit is intended as direct field research. This will include digital audio recorder and a number of hours if not days worth of interview material. The interviews will cover the evolution and adaptation of their labor credit system. The primary interest is in the TOIC labor credit system and as it works with the other existing accounting functions as they define the public purpose at Twin Oaks. The TOIC labor credit and accounting systems together is by its total structure the most like the economic and fiscal model largely fitting the description of the reforms addressing the errors and fallacies of neo-classical economics. The integration of the labor credit system with existing other accounting functions, such as vendors and suppliers external to the Twin Oaks community. This is not an incidental request to the themes of the manuscript or to the intent of the CRX. At the least, Twin Oaks has a long term investment in the process of community building. The contrast of the context at Twin Oaks to the urban context provides an additional value.
One of the primary reasons that the TOIC is so important as an example is to demonstrate that the reforms that are called for in the reform of economics, monetary practices, and fiscal policies, both globally and nationally have already been applied and have been proven to be valid and sustainable in defining the public purpose. At the least the Twin Oaks Intentional Community represents a comparably sized example of the application of the implicit and explicit reforms. Of great interest as well is whether Twin Oaks has ever done a complete audit of its accounting processes, including the labor credits system.
The second fiscal request is for support toward funding the computer programming necessary to establish the Community Reserve Exchange (CRX) as an open source utility. This is all also in the context of collecting and developing methodologies of intentional and progressive culture shifting. The following listing of scientific and logical errors and misrepresentations was borrowed in part from Professor Steve Keen and George Davies. Much of the same though more obliquely stated by others who are part of the Modern Monetary Theory/Functional Fiscal policies (Insert link)This list is not necessarily complete, and it is at least a "to do" list and a place to resume the reforming. This can then be developed as a set of expectations of functional social science. In a limited sense, this is the inverse of the faith based conjurations of positivistic "social science." The distinction is simply a matter of majority rule distinctions and triangulated political pay-offs as contrasted to a commons centered culture.
The resulting manuscript will serve in part as a design review process and as an operator's manual for the CRX among other culture shifting methodologies. The estimated cost of the development may be variable depending upon in kind collaboration with open source programmers who may be interested in this project. In the event of volunteered programming support from the open source community we need to also assume that there will be additional costs related to project coordination that will need to be absorbed. To establish programming of the Community Reserve Exchange as an open source program utility. The intent is also to include a basic level of accounting related software to analyze and audit the performance of each specific installation of this program. To the best of current knowledge no local exchange trading system or local currency has been established long enough to have an audit and examination. Many of the accounting reports, metrics, and processes involved need to be transparent at the beginning.
What has been typical is that when the community currency and exchange experiment is established there is little thought given to actually managing the whole process including the ability to audit the entire accounting process.
Programming Work $12,000.00
There is also a strong theoretical and historical dimension which includes confronting the conflicting ways of defining and doing social science. Presuming neutrality alone does not address the conflicting histories, convictions, or the core departures between the "logical positivism" and the standards that are barely allowed to illumined by unscientific materialism. The related errors are listed based upon the advocacy for a functional economics and fiscal process. and toward an authentically scientific economics. This review provides a useful basis to define different assumptions,solutions, reforms, and policy alternatives in service to the public purpose. The reforms that are suggested are based upon the listed points as a critique at least represents grounded proposals toward a functional economic sociology and a commitment to an intentional public purpose and the commons. In order to apply the CRX model as a programmed utility each local needs to be separately incorporated and organized.
incorporation fees and related attorney consultation $1,500.00
Cooperation and Defining the Public purpose.
"Intentional community" can also be occupied based upon little more than a slogan and a vacuous objective. As such it serves as a "honey" trap for the newly enthusiastic. It can also adopt the tradition of mutual aid societies, also known as co-operatives, though sometimes diminished in practice. In a retail context, mutual aid can be measured by the year to year stability and optimism that somehow can tolerate far below a good faith standard. There need to be relevant metrics to interpret the functionality of their intentions in support of community public purpose. Having a residential community provides large advantages over less concentrated, non-residential voluntary associations and more weight toward developing a body of related methodologies and folk-ways. At one level this will place the CRX as an educational tool among kindred means to entail and detail intentional community and as part of methodologies that can be used to promote a more wholly functional approach to doing social science.
In the imperfect reproduction of the current identities and in the examination of most social and hard technologies, using a positing sociology wedded to a demand side/functional/authentically scientific economics will undermine the nature of the public purpose. Along the way we need to meld a progressive and authentically scientific sociology measured in delivered utility toward the public purpose. In exploring these capacities we need to first recognize them as available alternatives.
Setting out on the process of re-imagining economics, a good place to begin is in the debunking of economics. Appreciation and resonance with Steve Keen of the Debt Watch web site and author of the book Debunking Economics. Further, the current broad spectrum academic endorsement of neo-classical economics has substantially narrowed the public discourse. This is downstream of the involvement of corporate sponsorship endowing specific curricula and particularly in the "neo-classical economics" petting zoo, and thereby predictably "safe" for the endowing investors and rentiers.
the sociology of socializing change
In studying the patterns of development and history of socializing movements ranging from the adoption of technologies, the periods of intense innovation in less cultural pursuits often marked by periods of cultural intensification and technological innovation. Hannah Arendt noticed a similar pattern in the political cultural intensification that was widespread in the northern British Colonies formerly the Massachusetts Bay Colony down to the Charleston area.
Another point she made in On Revolution was that the cultural shifting began well before the periods of the highest levels of innovation, discovery, and invention. The deeper history of the US Civil Rights movement which actually began in the late 1930's. The model of doing social activism as supported by the Highlander Folk School and then the Highlander Research Center taught by practice was a significant departure from oligarchy and its assumptions of authoirty. By the mid 1950s there were about 40,000 people mostly from the south who had been through the culture centered "training" process at Highlander. This in turn made the forthcoming rise of the US Civil Rights Movement as a socializing movement possible.
Taking these observations further, organizing to promote reform needs to be based upon coherent cultural change. By the conventional sociology it is supposed that the celebrity level leadership is necessary for a socializing movement to have a measurable effect the capacity to support an alternative culture needs to be established. The model used by the Industrial Areas Foundation as established by Saul Alinsky et al tended/tends to focus upon issues and changing occupants in the political policy making positions. What has tended to happen is that the newly elected representative from the community will in time adapt to the established political culture, rather than acting to change the political culture.
Another source which does a good job in observing the dynamics of social movements is Beyond Revolution Dan Foss and Ralph Larkin. Its core summary follows:
"The difference between a social movement and episodic dissidence is that it builds upon itself in a process of intensification, wherein the hegemonic(dominating) ideology(world view) is rendered problematic(challenged) by dissidents. This "reinterpretation of reality" provides the subjective basis for further- and more drastic- action. As social reality is reinterpreted in the struggle, movement participants attempt to reclaim those aspects of human subjectivity that have been alienated from themselves as part of their socialization to positions of social subordination. So long as these three aspects of a social movement are a mutually reinforcing totality - intensification of a conflict, reinterpretation of social reality, and the redefinition of the self and its capacities - a social movement is ongoing. Their fragmentation signals the point of the incipient decline has been reached, Such phenomena must be viewed as a whole, since there are often temporary defeats and retreats within the process of intensification of a social movement, as well as phases of overt conflict alternating with cultural (or subjective) intensification." from Foss and Larkin, Beyond Revolution(1986)
One omission by Foss and Larkin is that they do not distinguish between socializing and anti-social, "social" movements. They also don't address co-existing contradictions and agendas which often rise to undermine the socializing movements they have occupied to supply in part a substitution. Even so, the kernel of their theory seems to have higher levels adequacy, applicability, validity, and reliability, than demonstrated by 'the white knight riding by' narratives reproducing feudal relationships. This substitution serves to dis-empower citizens who would be rejected by the corporate media because a self empowering population is apparently considered to be threatening to the reproduced myths of linear causality and the over-rated importance of established or aspiring elites.
Critical to this context is the importance of cultivating the mutually re-enforcing reality and to redefine the capacities of our selves and of our association. The legacies can be instructive and a moving discussion about our capacities will be productive. So this discussion turns to ways to support the reinterpretation of the social realities including the processes of social subordination.
Being the change, or not
Most adults as neighbors and citizens will express some "concern" about the nature of their communities. This will expand outward from safety in your own home, to the number of vacant houses in the neighborhood, the level of unemployment, the newest panic button issue, and the availability and conditions of public, soft and hard, infrastructure will support everyone toward a more productive and social culture. As concern morphs toward participation in the political and economic life of the community, a more direct personal participation in the budgeting process will become an ordinary part of life.
Declarations of good intentions alone are not adequate to serving the public purpose. Establishing meaningful metrics and objectives will be a substantial start. As a polity defining the separation of personal interests from the public purpose by at least close to a full consensus. Under imagined crisis and inadequate preparation, most often the "familiar" will be given priority over the unknown, and cronies will be installed as an interpretation of "cooperation." This demonstrates the value of having a broader stock of experience where simulating alternatives means to serve the public purpose. This is as much the result of ignorance of capacities as much as by a lack of planning.
One at a time citizens will develop some interest in the real world effects of their own participation or non-participation in the decision making. This will be particularly true when participation is part of the culture. Harsh economic times are at least an invitation to review the nature of public governance in the public purpose. A basic level of economic and fiscal literacy is a matter of understanding how public resources can be abused to extract wealth from the majority and diverted from actually serving the public purpose. The application of some diligence to learn directly, or provisionally deferring to those who have. Surrendering instead to a validation of the veneer of democracy by a too comfortably uninformed majority rule seems like a version of flying blind.
In advocating for a culture change we need to understand the relative distance between expectations and realized objectives. In lieu of direct economic and fiscal literacy, there needs to be recognition of the existing perspectives of related professionals balanced against their apparent self interest. Next these need to be compared for their history and capacity to address the errors of conviction, as well as the success demonstrated in describing and predicting the performance of maor economic institutions.
Wishful thinking or informed alternatives.
The primary issue is whether there is knowledge accessible that offers an alternative to the neo-classical, money manager form of capitalism. The short answer is "Yes," and due to the recent economic history, high and low, far and wide, people are looking for different forms of political economy. Are we still convinced that there is no alternative to the unscientific materialism of the neo-classical economics as personified by Peter Peterson, Milton Friedman, Margaret Thatcher and the current deficit terrorists by plundering the commons? Are costly bailouts for financiers and brutal austerity for most other people is the best that we as human beings generally can imagine? More specifically, are the social sciences generally and economics specifically up to performing with measurable standards of responsibility as an applied science? Perhaps it is the dismal expectations of economics which have been used as a deterrent to public literacy and expectations of professional levels of competency
A useful definition of "progressive" is moving in favor of the public purpose. The hinge issue here is having some understanding about how behavior is counted, measured, and aggregated over time, place and culture. At some point perhaps it will be conceded that much of the phobia toward economics has been exactly because of the counter rational explanations that seem to not relate to real life.
More narrowly, what can self identified progressives do? First there needs to be a commitment to an interest in understanding economic history and policies, and alternatives with a measurable intent to serve the public purpose. It is a huge multi-dimensional domain, so find an intersection of interest and start nibbling. Understand also that there are alternative view points and bodies of theory to the neo-classical, positivism franchise. Some of these theoretical models have a higher level of success rate in predictions and in describing current behavior. Those models that produce a higher level of performance toward the public purpose should receive their due consideration.
At this point increasing fiscal and economic literacy has to begin with the self identified practitioners, professors, and the would be political leadership. A secondary barrier is that the fashion statement level of "progressive" political leadership is fearful of exposing their own deep ignorance or of making a commitment to any sort of fiscal policy in particular that might be convenient to be denied later. Professors with their tenure and recognition at risk and acceptance by convention corrupted profession are clearly invested in sustaining the academic dynastic,"gift economy." Of equal concern, is that in the other less credentialed promoters of prosperity by recipe.
Second, does the "capitalism," as we have known it, have a realistic potential of reform toward serving the public purpose or continuing toward extreme and deepening inequalities of income, wealth, and political and cultural power? The short answer is yes, if only because we have suffered from massive capitalized fraud before, and at least modestly recovered enough to validate historical alternatives.
Do these obstacles call for resignation and the acceptance of criminal banking fraud, because there is really no alternative? No, the problem is that the absence of an informed discourse results from the exclusion of alternative perspectives and economic models. The obvious subversion by the occupation of the economic and fiscal portions of the public discourse, is still secondary to what degree the economic, monetary, and fiscal policies do and do not produce a net positive or better to a functional service to the public purpose.
The errors and the misassumptions of neo-classical economics
The neo-classical macroeconomic model has demonstrated that it is invested in numerous errors of accounting, logic, evidence, perception and theory. Many of these errors have been been recognized for decades, but only by a dissenting fringe of economists and others similarly informed persons. The majority has made Neo-Classical economics the catholic doxology and creed. The message that there are opposing and reasoned points of view, has been drowned out by the aggressive pressure to conform to mainstream "free-market" convictions. The attendant PR chorus to the bandits of Wall Street have generally attempted to drown out those who actually did predict the still deepening failures and fraud of the neo-classical macroeconomic model. The first error is the constraint of informed discourse at non-partisan level leads to a higher level of science, and thereby also a higher level for the related public discourse and policies.
Though many are uncomfortable with economists‘ pronouncements, and some are aware of some of the errors, few seem to realize how many and how basic the errors are, and how far-reaching the implications are. Most seem to be willingly bullied into conformity or at least silence. These same theoretical, methodological, and policy reforms can serve to define an exchange commons based upon voluntary association. The decontextualized use of mathematics in modeling and in descriptive disclosures has been constrained to fit the preferred theoretical model or for the same reason to not apply more congruent models. The use of the null hypothesis process is a very weak form of argumentation against direct observation and stronger models.
Misrepresentations of data due to a very dated and sorely static view of economies are commonly more used for their persuasion value than taking responsibility of measuring up to public standards. One example is the Gross Domestic Product. The current conventional measure of macro-economic performance is the growth of the Gross Domestic Product. Yet the GDP is simply the total of all activity involving money, with no account taken of whether the activity is useful, useless or harmful. Clear evidence of poor performance relative to the public purpose is ignored in favor of a metric that does not actually describe the conditions.
The massaging of the unemployment statistics is another variety of mis-representation. Further, economic metrics, particularly in their official forms are usually twisted to produce confusion and accomplish a narrow political agenda, rather than producing clarity and serving the public purpose. The remedy here is to expect a higher level of transparency and accountability, including industry standards set by the public At the level of methodology this is the misrepresentation of qualitative and quantitative comparisons, as if more precise interpretations and assumptions were not available. This effectively inserts techno gibberish for its persuasive effect rather than for the factual value of its interpretation The GDP is only one example of similar mis-appropriations of metrics in the descriptions and predictions of a more scientific economics.. This is the second area of problems, the use of descriptive statistics to confuse and mask the actual metric, also known as the mis-aggregation of data.
The third is a domain of conceptual errors related to the theoretical error of money and debt being typically excluded from the neo-classical economic models. Money is excluded largely because these economists treat economic exchange as barter, and claim that money is only a neutral intermediary. Debt is also excluded from analysis because private debt is also claimed to have little influence on macro-economic performance. Conventional economists claim that “one person’s debt is another person’s asset.” Under that theory net purchasing power is not changed by loans. The "pop" level of economic and fiscal literacy tends to accept the neoclassical economic model. It also generally reproduces a form of currency that is debt based rather than asset based. This dynamic also reproduces a similar level of intentional blind-ness and conflation of intention and practice.
The remedy here is to include money, banking, and debt in the economic model, and to restore the sovereign power to issue currency debt free based upon public assets and infrastructure, as the public occupation of the commons. These errors of conviction, over a functional purpose. have driven the huge speculative bubbles in mortgage based and derivative based insecurity investments. This has resulted in massive levels of systemic fraud, and the resulting fiscal and the economic personal and public wreckage. This is a direct result of the money supply being used to serve the profits of the financial sector by the privately controlled US Federal Reserve and other central banking operations
The fourth domain of errors of "free market" or neo-classical economics, is that the neo-classical economic model is in part based on assumptions that are absurd or have been shown by other disciplines to be untrue. Among the absurd assumptions it is assumed that our collective guesses about the future are accurate. The myth of comparative advantage being the sole basis of international trade, as in the Free Market/Trade convictions. This economic model also assumes that the economy will always be close to equilibrium. If that were true, the model should exclude sudden changes, which by its assumption of equilibrium should only occur in response to large external events like natural disasters or wars. The remedy here is that these assumptions need to be redefined or trimmed to fit into a non-positing and non-behaviorist social science. It needs to have a more functional and less of an ideological validation
It is also assumed that people are innately individualistic, competitive and coldly “rational” calculators. However psychologists have clearly documented our tendency to favor cooperation by punishing cheaters, even at a personal cost. This model also assumes that there are no economies of scale beyond a point of diminishing returns. Economies of scale, baring other factors, allow the biggest firms to undercut other firms and grow faster, until it dominates a market. The remedy here is that the applied economic model needs to be applicable and adequate to historical behavior foremost rather than primarily to its ideology.
The fifth domain of errors is that the neo-classical economic model also pretends that to be oblivious to the existence of the wealth derived from land as value resulting from the surrounding community and commons. This is the value that accrues to a property when a neighboring property or properties are developed. The additional value is due to the proximity of neighboring developments, and is in addition to individual investments values. It therefore belongs to no individual, but to the community as a whole. Yet this community value is allowed to be captured by individuals as unearned profits. This is one of the major sources of inequality.
In combination with excessive credit/debt creation by banks, this leads to land speculation, asset bubbles, and financial crashes. The solution to this domain of errors involves the application of a whole range fiscal and monetary priorities supportive of and regulating the use of various commons elements of community to the benefit of the communities. Along side of this is the recognition of labor as a full
participant in the economic life of the community. The assertion is that a community involves the participation and support of the community and that the economy of a community needs to serve the public purpose. This domain of errors is corrected by addressing the economy of a community as an important perspective upon the commons.
The sixth domain of error is the ideological over-reach of political convictions. Markets are powerful, but they need to be carefully managed, because there is no assurance in either theory or practice that they automatically yield good outcomes. Gresham's dynamic describes the process by which businesses can be taken over by unethical and usurious standards of performance. This pattern has been recognized in Biblical stories, and no doubt the literature of other cultures. Yet, it is only rarely discussed or integrated into the general macroeconomic model. Those businesses which are unethical in their in their behavior regarding the public purpose, will drive ethical businesses and money out of the particular market. In an unregulated market fraud pays well. This can also be framed as the true "tragedy of the commons" by hedging and establishing free rent. The conclusion here is that the economy needs to be actively managed to serve the public purpose.
The seventh domain of neoclassical error is in the details of its "scientific" methodologies discourse. The discourse of economics needs to be fundamentally retooled. Free-market theorists think they are doing science because they use mathematics to boost the credibility of their convictions. This amounts to a confidence fraud. For authentic scientists, most notably in the physical sciences, mathematics includes methodologies to model, estimate, and describe. The misappropriation of mathematics is on an equal level to the mis-appropriation of economic history in the presentation of the neo-classical economic model. Only be addressed by insisting on a higher level mathematical and historical literacy needs to be demanded beyond persuasion by misrepresentation and mis-association.
The essence of authentic science is the perception of patterns in the world, which can be expressed as hypotheses and theoretical models. These hypotheses are then tested against the standards of scientific discourse including new observations of that domain. The perception of a pattern is often less a rational process than a creative process. Unsupported convictions, though they might be widely held and contribute to personal wealth and prestige, do not qualify.
Mathematics is also useful to draw out the implications of hypotheses after they have been defined and formulated. When conventional economics misappropriate sophisticated mathematics as the tokens of science and completely ignore the majority of the related valuable discourse regarding the findings and the testing of the methods and means.
Adequacy, applicability, validity, and reliability are well acknowledged standards of scientific discourse, and settled in opposition to the convictions of sciencism, aka phony science. "Adequacy" refers to the success of the model described by the theory in describing and predicting certain patterns of behavior. Applicability refers to applying to the range of applicability to the domain of groups by category. Validity refers to the logical structure of the theory. Reliability refers the predicted results being able to be reproduced under similar conditions elsewhere.
The expectation of economic equilibrium clearly fails the testing of its hypotheses against the economies and histories of everyday life. This is also amply demonstrated by the historical facts of market crashes, the factual absence of equilibrium, and the dynamics of economies of scale. To continue with the failed theoretical models of economics and science is to practice pseudo-science. Theories based on inappropriate assumptions or based more upon convictions than fact will only have a coincidental resemblance to or utility in addressing economic reality and in defining functional fiscal responses.
Through the misappropriation of the mathematical methodologies used to describe economic models that can be made more humane and less destructive, and economists can return to their proper place and process serving the actual public purpose. They can even be made compatible within the living world, on whose health our survival totally depends. As bad as the neo-classical economic model is, the level popular level economics tends to be even lower, and less informed and concerned about departures from the real world, though equally invested in self interest and faith based convictions.
By promoting these various methodological and theoretical errors, and ideological convictions, mainstream, largely institutions and the profession of economics have tended to reinforce and even encourage the asocial and anti-social behavior of some people. The idea of cultural transformation or of methodologies related to supporting constructive cultural change is not even imaginable within the positivistic occupation of social science. Applied science within the social science domain is barely imagined except in service still to ideology and entitlement. Deregulation as a social good is possible but unlikely except where standards are enforced and actually shared.
The consequences of these errors are not trivial, they radically distort our perception of the behavior of real world economics. Free-market theorists will allow that there are “market imperfections." They also don’t appreciate that abandoning any of their central assumptions leads to radically different predictions of a wholly different basis for evaluating economics and the fiscal necessity of it being conducted to serve the public purpose.
If we use assumptions, reforms, and practices more aligned with what we could expect as objectives, then a quite different kind of system will be produced. This level of modeling will present a complex self-organizing system, that is always far from equilibrium, and that serves the public purpose. Such systems are neither static nor so prone to dramatic booms and busts. They are also more like living systems in being unpredictable in detail, yet having a fairly clear and stable general character. To be effective, economic management needs to recognize these different points of intervention and outcomes.
Political literacy meets Economic literacy
The purposes of groups and the individual interests of their members can coincide but at points can also conflict. The pursuit of similar individual goals or purposes by different people at the same time can cause conflicts as people compete over available social and natural resources. Politics, which in larger groups is most often attached to government, is a means to determine what is the aggregate interest of a given social group. Polities, the social groups where politics occurs, have historically originated by shared language, common ethnicity, or other bond. Politics and the institution of government are the means of social coordination that can under many circumstances avoid open violence and bloodshed, restricting or regulating anti-social tendencies that are also part of the human constitution.
The attempt to isolate an “economics” independent of politics or the term of the day "political economy." started in the early 19th Century by its deliberate self mis-representation as an authentically scientific profession, and has distracted economists from being involved in the rational consideration of the role of politics and the institutions of government defining the economy, as well as the interaction of their policy prescriptions with the political realm as it actually exists. This clearly with the intention of some other set of interests being allowed to enter the policy process.
Without decisive political leadership, well-designed and implemented regulations and taxation regimes designed to orient market participant behavior towards broader social goals, markets in the capitalist economic system encourage self-seeking behavior and tend to exaggerate social and economic inequality.
This involvement of the political process requires the addition of a political literacy whereby the public purpose can be dynamically defined. Because of the tendency towards concentration of wealth and assets in capitalism, there is also a tendency towards shortfalls in overall demand for goods and services, as wage levels stagnate or diminish yet continued economic growth requires increased buying power.
summary of errors and assumptions
Roughly described there seven domains of error in the basis, theory, and practice of conventional neo-classical modeling.
1. the constraint of informed discourse
2. the use of descriptive statistics to confuse and mask the actual metrics
3. the omissions of money and debt, and thereby banking as held as private franchise from the neo-classical macro-economic model
4. absurd assumptions, rationalization of greed vs the social values of "fairness and community". the assumption of equilibrium and of accurate predictions, denial of economies of scale beyond the first level of diminishing returns
5. free market rationalizations // ideological over reach
6. Mis-representation of the standards of scientific discourse and discovery.
7. lack of capacity for complexity
8. the substitution of electoral based discourse versus out come based polities
Beginning the Change
Wanting to be somewhere else is easy enough to understand, yet that desire barely defines an objective. The repetition of various values and priorities is emptied without some correspondence to the ordinary. The typical community currency initiative is long on the promotion of those values and light on understanding why the current variety of capitalism represents a psychopathic culture. It also invites the reproduction of the corporate context with the recycling of its convictions presented as fact and misrepresenting its principles as benign.
In expecting a functional economy for the general majority without prejudice, there needs to be some specific competence as defined by transparency, integration and functionality. The relative degree and distribution of inequality is one example. Addressing the issues of theoretical and methodological adequacy, applicability, validity and reliability as a scientific discourse needs to be remedied. The listed domains of errors are also focal areas of economic and fiscal reform.. It seems obvious that a program of economic, monetary, and fiscal reform needs to address these errors of science, logic, practice, and convictions.
In the completed manuscript the history and practices of the Twin Oaks Intentional Community also provides a fully developed example of both the intentions to develop a practical and alternative community, and defining a similar set of economic and fiscal principles. It is also at a large enough scale it will be comparable to the development of the CRX model as a programmed unit. That TOIC also has an industrial relationship to the rest of world also has an important significance.
If the decision process is only reduced to a rejection of a family of choices with only implied choices rather than a specific proposals, then the discussion has only just begun. The major problems become rapidly obvious when there is a disconnect between the political as the assertion of slogans and the political of practice and outcomes. A profound piece of cognitive dissonance in principle but the courtiers are reliably predictable in favor of self dealing, and accepting of the harassment of others. To paraphrase Michael Meade, 'I would rather wander lost for a while, than staying lost by using a map made by tourists.' Taking Hyman Minsky's comment that 'there are 59 different flavors of capitalism,' then there are several that might better serve the public purpose.
In a very direct sense, 'being the change you want to see in the world' seems like more than just a good idea. It can also be read as an advocacy for a broad set of methodologies supporting functional transitions. "Functional transitions" here assumes due diligence in favor of the normally democratic values as an ongoing outcome and in favor of economic sustainability. Depending on the scale of the changes you want to make, the process can be either simple or it will require a greater investment, incremental engagement, support, and reflection. To a major degree this also defines the difference between command and control assumptions under one mode and working together under the standard of constructive and mutual aid under a wholly different mode of culture.
Once the fictions of assumed equilibrium and money as barter are removed, the process becomes a matter of having useful information and being able to work through a problem solving process. The path between a need for problem solving and probable solutions can be either short or long depending upon the applied details, skills of reasoning, assumptions, known and covert, and often simply applying related prior experience. The key is that often there is no final solution other than perpetual effort to manage the outcomes of dynamic and complex systems. Still, advocating the processes of progressive management provides a baseline process of adaptability. Increasing the variety of practice and vocabulary will similarly increase the social capacity to coordinate.
the democratizing and evaluating congruence of popular level economics, micro, meso, and macro-economics
History still has numerous examples of functional fiscal cultures. A few examples will also be covered in the manuscript as relevant historical examples. The development of the House of Hancock during the colonial period of the later United States, is rich example of the development of an economy in a context which grossly under-served by the convictions of British mercantilism and colonialism. the democratization of state currency has several examples within western economic history. Part of the process will be to validate The advent of currency systems in the west included temple/bazaar/agora markets.
The use of a currency in this context had a strongly democratic value that was stifled by the "gift/tribute" economics. Currency made buying in smaller lots possible to define the retail context. Much of Asia Minor served as the big box version of Silk Road network of merchants and trading ventures. Outside that immediate zone the protection of the local law and empire became affected by various other groups such as contract naval protection services and the land/slavery based piracy. The Persian Empire was based on keeping the trade routes cleared of free lance bandits.
It was quite probably the democratic effects of the merchant cultures in that region which caused Mycenaean Greece to be mistaken as an example of cultural creativity, high intellect, and democratic culture. National pride often being both forced and a hazard. The core piece of the integration, is that we have been interpreting that era based upon Euro-centric forms and roughly modern assumptions which tend to be preferred it seems to the pre-Christian assumptions and culture internalizing that the domain we are interpreting now as "Greece" did not share that relatively modern identification.
Culture shifting methodologies.
The CRX is one example of culture shifting methodologies. It is designed to model the best modern monetary economics in due resonance with related narratives from economic history, actual current practices, and cultural shifting. The Community Reserve Note is the sovereign currency of the Community Reserve Exchange. The CRX will be incorporated as a voluntary and mutual aid association. The CRN is valued based upon a relative "Living Wage." As a currency it is produced by volunteering into the community. and then serving the common interests of the community limited by a budget. It is also extinguished based upon the policy of keeping the currency in circulation as taxation or as fees for service as public infrastructure. No one goes into debt so that the currency is put into circulation. Excess reserves can be pulled into member revolving loan funds, or taxed if left idle too long.
One very simple example is a party game using a pad of paper and a pen/pencil/marker. Each person is allowed to contribute one line in turn, a line being defined as a continuous mark from where the marker touches the paper to when the contact is broken. In turn this can demonstrate the connectedness of the process as a single project. Even if the result is unintelligible it also serves as a metric of that social context. As the level of "play" rises an ad hoc ethos of design and collaboration evolves. There are additional variations possible.
Often it is difficult to collect together a sufficient number of people who are experienced enough to understand the values and practices needed to embody the changes anticipated. Teamwork is skill that is usually acquired through practice. It is generally not the product of public malfeasance, but largely by a lack of experience outside of the corporate culture. There is a prevailing substitution of what is recognized as "normal" and assumed to be functional to the context and intentions. Experience suggests that the association of functionality based upon the familiarity with related alternatives is weak.
It seems that in the majority of examples the preferred process reproduces the default assumptions of authority and leadership, with the additional problems in the active misrepresentation of difference in practice change. This adds more levels of resistance by assumption of entitlements. This also suggests that interactive simulations and group problem solving. Thereby, and when it matters most, refurbishing the old order with new occupants. We need to review this process and make a few changes. In the context of intentional community at the scale of TOIC from there to the next higher scale in terms the number of participants. Goldschmidt studies are useful here. At issue there was toward giving preference by right of citizenship rather than by ownership in quantity/corporate.
One alternative is to use a scripting process as a means of presentation and approach. The "day in the life" scenarios come with the assumption that although there may be no one time "happily ever after" ending, there is some degree of predictability perhaps on a day to day basis and in the reduction of conflicts of purpose. An alternative strategy is to script simulations or otherwise demonstrate work centered co-operation and a mutual aid culture.
The efforts of Myles Horton, Septima Clark, and the Highlander Folk Center represented a revelation for adult education and for intentional social change. The major process of knowing how to collaborate as a peer in a constructive/mutual aid context. This spirit was also reflected in the work of Wilhem Reich, Hannah Arendt, Carl Rodgers, Paul Douglas, Harold Garfinkle, Antonio Gramsci, and others. Mary Parker Follett described her interests as being an application of a science of cooperation.
The CRX as a culture shifting methodology
The next step is to take the recommended changes in methodology, assumptions, and construct utilities and embed them into the details of a voluntary association. The problem is in the extent to which the neo-classical occupation of economics has contributed to the public being immersed by large quantities of dys-information. In sustaining the privatization of the sovereign power to issue currency largely by the public not understanding the how these dysfunctional assumptions inter-relate and sustain the extraction of wealth from our communities. It is a high priority for the public to have a level of economic, monetary, and fiscal literacy equal to the needs of their community. Part of this advocacy has relied on the public to believe the various tall tales, fish stories, and ritual based incantations which are still being used to intimidate and confuse the civic discourse about economics and fiscal policy.
The major change would be that the public through its discourse and representatives would expect that the economic and fiscal policies be applied with strong preference for the commons and building the wealth of each community, rather than primarily extracting wealth from our communities.
There is a high irony in the monetary and fiscal reforms being advocated by creditable sources call for how the banking sector and reserve accounting actually works, contrary to the faith basis of neo-classical economics. This is not consistent with how the lobbyists and pundits for hire tend to make the topic inaccessible in a public discourse. The details of the structure of the CRX are based upon both credible analysis and advocacy for monetary principles and fiscal reform being applied to serve the public purpose, rather than serving to create private and public debt to produce private and corporate profits. Under current practices
The necessary monetary reforms could be accomplished by way of simply enforcing the relevant parts of the US Constitution by executive order. Having the US Treasury issue debt free currency spent into circulation to support the public purpose would support the demand side of the economy rather than starving and plundering our communities. Currency as created within the relative sovereignty of voluntary association of the CRX is the closest alternative and intermediate to the reform of the national monetary and fiscal policies that is possible, short of having a much higher level of economic, monetary, and fiscal literacy. The CRX becomes a means for simulating a reformed monetary and fiscal process, and thereby a means to a higher level of economic literacy within the public discourse.
The Methodologies of Economic Sociology
The general postal code for economic sociology is closely related to what was once known as "political economy," before it took the name "sociology. Before that vault into the known, there was an ongoing interest in the principles of intentional communities, community currencies, a higher level of economic literacy within the general population. More recently models for community exchanges and currencies and for "monetary reform" seem to be based upon the repetition of various default and neo-classical assumptions and libertarian slogans of how monetary and economic systems should perform. Affirmation of the public purpose as imported as the default principles as established by the neo-classical economic and monetary fictions. These are not actually authentic alternatives at all, and regarding the promises of the restoration of the public purpose and represent a substitution of authentic reform in a process of bait and switch.
The current dominant "alternatives" seem at best only weakly based upon informed economic history, economics, or monetary reform. In short the promoters of these systems are very much like the economists and pundits promoting wealth extraction on national and international levels and also rely on the general low level of public economic literacy for the acceptance of these proposals. This is the same process of misrepresentation by false association, that is used in the perpetration of fraud. Developing practical and informed alternatives to the currently dominant economic and political narrative/ideology requires a deeper process of re-imagining and culture shifting.
Self serving ideologies tend to project their entitlements of the present upon both the past and the future. Usually these projections are promoted by the current crop of oligarchic interests and their courtiers. Often there is a strong assumption of historical determinism, which attempts to fortify the current entitlements and directions of wealth extraction as the obvious outcome of divine will and "natural" selection. Closer to the truth is that we must either concede to this domination by ideology and cultural capture, or choose to clear away the self serving fictions for a methodology and model that is motivated by a broader sort of democracy measured by its public purpose.
Finding a useful means to support societal change can be eliminated well before any forward motion can even be established. Hannah Arendt described working to change human institutions while assuming that human nature was unchangeable was a lot like trying to jump over our own shadow. Using these same discontinuous assumptions to explain how we can transit from persistent fictions, social problems and applying familiar values, policies, and world views has resulted in predictable patterns of value. This approach is fundamentally different by being focused toward the capacities of human experience, rather than toward socialization by conformity. This perspective addresses the processes of social change and the resistance to cultural change as in large part the result of the process of human conditioning and the various bonuses for corporate loyalty .
Understanding how human culture is conditioned and how societal change actually happens becomes the very important first step in defining the functional means and strategies to support societal change. To a large degree this perspective can be described as being the change that we want to see in the world. One pattern that arises is the discontinuity between the espoused values and the practiced values within that voluntary association. Attempting to posture against the current cultural default assumptions and conditioning which serves the current special interests, and then smuggling the default assumptions back on board, falls far short of establishing meaningful and constructive cultural change. It becomes a root issue how the process of cultural change is even imagined.
As a public education utility
Regarding the CRX as a public educational utility, only a very small percentage of the population are willing to assimilate the history and economics related to this project and then convert abstractions into practical application. One major reason is that economic history is generally not taught within the current academic context and the related public discourse is reduced to clumsy fictions. Another reason is that the theoretical basis of Modern Monetary economics is only taught in a very few college level economics departments. Another reason is the dismal nature of positivist/neo-classical economics. The educational value of the CRX is that it can serve as a context where participants can experience directly the implications for intentional institutional economics alternative As a a practical utility it also integrates the supporting historical and economic material.
Historically innovations of currency and of the exchange process are based upon an existing association or communities of interests. Further the repetition of certain cycles of economic collapse and dys-function indicates an enduring investment in the default assumptions and strongly tends to reproduce the same patterns of entitlements and then Ponzi schemes and other confidence scams. Alongside this discussion it is important to recognize that history is not destiny, but the product of various interests and objectives, some of which are not entirely friendly to community interests or based upon democratic outcomes.
Expecting to design a community currency or exchange without an understanding of the relevant economic history and the theoretical possibilities, is very much like the adage of the six wise blind men. The congruence between one realm and another is likely to be difficult. Trusting in the repetition of aphorisms and comforting slogans as an adequate replacement to economic and political literacy to guide the way seems dangerously uninformed. Douglas Rushkoff, a contemporary cultural critic, has stated that we must either be involved in the programming of our cultures or we will be passive to it being programmed by interests dis-interested in our values and goals. We must either program or be programmed. This fits well with many of Hannah Arendt's insights. In terms of culture, economics, and the basis for political decision making we need to understand how the different possible values, details, and assumptions limit or expand the capacities of our communities.
We need to also take seriously the guidance of Abba Lerner and his "functional finance" or the kindred instrumental approach by Adolph Lowe in placing economic science in service to community and the commons. We have to first stop pretending that there are no controls to produce a more stable and sustainable economy without direct management
What has gone before: economic History Near and far.
Studying the writers on monetary reform and those economists who have a sincere scientific interest in promoting a more stable and sustainable economic model and a more balanced distribution of income is nearly at start. In the measuring of outcomes and results, change needs to be something more substantial than a new wrapper for the same old oligarchic sausage.
Prior Efforts To Model Monetary Economics and function Fiscal policies
Two years ago we approached the Community Forge group asking for access to the programming they use to support lower level models for community currencies. Part of that utility includes basic classified functions and ordinary accounting and clearing functions. We were refused that access apparently because we were not interested in adopting the lower level of value relative to economic and monetary literacy that it applies. That they chose to both refuse a conversation and constructive engagement and refused to consider the existing recommendations for economic, monetary, and fiscal reform seems to reflect a proprietary expectation toward acquiring clients for their hosting services and a clear dis-interest in the more informed discourse seems perverse and intentional.
outline of details the CRX\\ connect to errors better