[p2p-research] Re Energy Standard

Sun Mar 15 04:33:15 CET 2009

Dear Thomas and Ludwig,

I've added both your statements as comments to

http://blog.p2pfoundation.net/does-money-need-a-back-up-the-petro-as-value-standard/2009/03/17

On 3/15/09, Thomas Greco -- thg <thg at mindspring.com> wrote:
>
>  Dear Chris,
> I thought we understood each other better but we keep stumbling over the
> same point.
>
> You say,
> "A Currency is a Value Unit which people regard as acceptable in
> exchange..."
>
> That is a de facto reality ONLY because legal tender laws have been imposed
> that make political currencies self-referential. Such laws have obliterated
> the distinction between the measure of value and the political currency as a
> means of payment.
> *As I've said before, a currency is NOT a value unit. A currency is a
> means of payment that is DENOMINATED in a value unit.* Just as cloth is
> measured in yards or meters, a currency is measured in dollars, euros, yen,
> etc.
>
> To understand this one needs to think back to the time when the dollar, for
> example, was defined as a specified weight of silver. Any banknote
> denominated in dollars could then be evaluated in terms of that definition.
> If a currency issuer were to abuse their note issuance, their notes might
> pass in the market at a discount from face value, or be refused as payment
> entirely. Political currencies have been protected from that natural
> consequence by the imposition of laws that prevent discounting or refusal.
> Thus the objective standard is obliterated and the currency itself becomes
> the standard. But this is not the natural state of affairs.
>
> We need to define and use (despite legal prohibitions) a value unit that is
> based on an objective standard. An energy standard is fine with me but you
> will need to define it in such a way as to make it operational. A *market
> value* is what we're talking about, so what energetic commodity is
> actively traded that can be used as a value benchmark?
>
> I dealt with this entire topic in part III and appendices of my book Money
> and Debt, which is available on my website.
> Also, Riegel made some clear statements about valuation.
>
> regards,
> Tom
>
>
> ----- Original Message -----
> *From:* Michel Bauwens <michelsub2004 at gmail.com>
> *To:* chris cook <cojock at hotmail.com> ; Peer-To-Peer Research List<p2presearch at listcultures.org>
> *Cc:* Tom Greco <circ2 at mindspring.com> ; Margrit Kennedy<margritkennedy at monneta.org>; Ludwig
> Schuster <schuster at livingcity.de> ; Bernard Lietaer<blietaer at earthlink.net>
> *Sent:* Friday, March 13, 2009 05:15 PM
> *Subject:* Re: Re Energy Standard
>
>
> Great explanation Chris,
>
> I will publish on the 17th in the p2p blog,
>
> Michel
>
> On Fri, Mar 13, 2009 at 5:03 PM, chris cook <cojock at hotmail.com> wrote:
>
>> Dear Michel
>>
>> *Value Standards*
>> First, there is a requirement for a Unit of Measure or "Value Standard",
>> as I prefer to call it.
>>
>> This is purely an abtract Unit (ie "One"), but in my opinion it must
>> necessarily be something to which people can relate. ie the question is, One
>> What? A metre is a Unit of measure of length: a kilogram is a Unit of
>> measure of weight, and we need a Unit of measure of Value in order to enter
>> into exchange transactions at a price measured in that Unit.
>>
>> Value, like Beauty, is in the eye of the beholder, of course, but I think
>> there are three universal sources of Value.
>>
>> (a) Location (space) - which has a Value in use, and in fact over two
>> thirds of money in existence is backed by the use value of land, since it
>> was created as interest-bearing  loans secured over land/location and the
>> buildings built on it.
>>
>> (b) Knowledge - also has a value in use, whether the inherent intellectual
>> capital we accumulate over time (ie experience, training, knowledge) and
>> which dies with us,or the timeless objectified Intellectual Property which
>> we may leave behind us;
>>
>> (c) Energy - has a value in use, and on the one hand, is routinely
>> invested in Location/Land (often in very profligate ways eg cement/concrete)
>> and is also the "Unqualified Labour" which an individual may bring to bear,
>> and which he uses his "Intellectual Capital" to deploy to best advantage.
>>
>> I believe that Energy is the Value Standard to which most people will be
>> able to relate and by reference to which they will exchange Value objects
>> aka "Currencies".
>>
>> But of course, it's not  a matter of "either/or": people always have used,
>> and always will use, the Standard that makes most sense to them, and the
>> evolution of a Standard will be an "emergent" process, I think. ie it's
>> about "What Works".
>>
>> *Value Units*
>> The Value Standard involves the relationship between Subject (me) and the
>> Object - the Value or "Money's Worth" which I exchange *by reference to*the Value Standard.
>>
>> A Currency is a Value Unit which people regard as acceptable in exchange
>> ie it is "fungible". The question then is what is the extent of that
>> fungibility.
>>
>> I believe that the "Global Reserve Currency" will be a Unit redeemable in
>> energy value - lets call it an "Energy Dollar".
>>
>> Energy Dollars will be exchanged by reference to an Energy Standard I call
>> the "Petro".
>>
>> The platform on which this exchange takes place will the "International
>> Energy Clearing Union", and transactions will take place on credit terms
>> subject to a mutual guarantee.
>>
>> Both holders of positive energy balances (energy creditors)  and negative
>> energy balances (energy debtors) will pay an amount into an "Energy Pool",
>> and this Pool will constitute a fund available to make the necessary
>> investment in energy savings and renewable energy production to rectify the
>> imbalances. This is of course exactly parallel to Keynes' International
>> Clearing Union, and his Gesellian approach to the (centrally issued "fiat"
>> currency) Bancor.
>>
>> The "Global Reserve" I am referring to will be an "Energy Pool",
>> constituting the Pool of future global energy production, both renewable and
>> non-renewable.
>>
>> My strategy for Iran, and indeed other countries who are (temporarily)
>> rich in non-renewables and are profligate in their use, is to monetise this
>> energy and issue it as an Energy Dividend to the population.  In this way
>> they will have to pay the "Global market price" (in a new global market not
>> dominated and manipulated by middlemen) but will be compensated with the
>> issue of units redeemable for energy (denominated in Petros) which they will
>> be able to exchange for something of value - from anywhere in the world.
>>
>> Note that these fungible Energy units cover only a part of the value in
>> circulation.
>>
>> There is then a question of "National Reserve Currencies".
>>
>> As I have outlined  here
>>
>>
>> http://www.slideshare.net/ChrisJCook/equity-shares-a-solution-to-the-credit-crash-presentation
>>
>> I believe that the only viable solution to the Credit Crunch is to
>> "unitise" the rental value of property. The effect of this will be to create
>> Currencies redeemable in land rental value and the creation of a "Land
>> Rental Pool" which may be monetised in order to develop and maintain
>> economies. These, of course, have "exchange control" built in, since while
>> they may be acceptable in other countries because they may wish to use them
>> to acquire godds and services form the issuing country in due course, they
>> are *redeemable *only in the country of issue.
>>
>> Finally, there is the individual as source of Value, and he (individually)
>> or they (collectively within "enterprises" defined by a protocol) may also
>> issue Units redeemable in Value, being a combination of unqualified Labour
>> value (energy again), Intellectual Capital, and Intellectual Property.
>>
>> So the future as I see it is of a network of  networks of communities
>> within which Units of Value are exchanged by reference to a Value Standard
>> on a generic International Clearing Union platform (incorporating a
>> "transaction engine" -an Apache Money messaging server if you will) and *decentralised
>> *"shared transaction and title repositories" - Riegel's "Ledger of
>> Ledgers" wherein is accounted who has what obligations to whom, and who has
>> rights of use in what.
>>
>> I believe that it is the Energy Standard to which most people will be able
>> to relate.  Moreover, I believe that the Energy Accounting implicit in the
>> clearing of transactions using an Energy Standard will give us a simple
>> route to transition from a carbon energy economy to an economy based on
>> renewable energy.
>>
>> Key to it all is the "Not for Loss"  consensual partnership-based
>> framework - the cross-border legal XML tying together semantically the
>> disparate jurisdictions and enterprises instead of hardware and software -
>> within which the platform and the participants will operate. There is no
>> "profit" and no "loss" within a partnership -merely creation and exchange of
>> value in all its forms.
>>
>> Sorry to have answered your question (if I did!) at such length, but it
>> stimulated something of a "brain-dump"!
>>
>> Best Regards
>>
>> Chris
>>
>> ------------------------------
>> Date: Thu, 12 Mar 2009 09:11:16 +0700
>> Subject: Re: FW: Re Energy Standard
>> From: michelsub2004 at gmail.com
>> To: cojock at hotmail.com
>> CC: circ2 at mindspring.com
>>
>>
>> Dear Chris,
>>
>> I would like to publish your letter here, but it would need some
>> contextualization.
>>
>> As I understand it from Tom, there is a difference between backing up a
>> currency with something objective, and merely expressing it as a value
>> standard? But I would still be at a loss to explain this myself.
>>
>> So I wonder if you could introduce this for laypeople, with an extra
>> paragraph or two?
>>
>> Michel
>>
>> On Thu, Mar 12, 2009 at 12:47 AM, chris cook <cojock at hotmail.com> wrote:
>>
>>
>> Hi Michel, Tom
>>
>> This FYI
>>
>> Chris
>>
>> ------------------------------
>> From: cojock at hotmail.com
>> To: frank_churchill at mac.com
>> Subject: RE: P2P
>> Date: Wed, 11 Mar 2009 17:37:41 +0000
>>
>> Dear Frank
>>
>> Indeed there is a need for a global reserve currency and the presentation
>> I made in Iran envisages a Unit of energy as what I call a "Value
>> Standard".  I call it a "Petro" as a working name, and in terms of
>> specification I use the energy released from the combustion of 1 litre of
>> n-Octane at 20 degrees celsius.
>>
>> It could as easily be the energy released by the decay of x gms of y
>> isotope, or the energy output of the average bloke in an hour when
>> shovelling sand. The point is that it needs to be something that people can
>> relate to in their everyday experience.
>>
>> Note that the Petro is not a redeemable Value Unit (ie a fungible quasi -
>> currency) . It is the Energy Standard by which exchange transactions
>> -whether in goods and services generally, or of "Value Units" redeemable in
>> energy or land rental values - are *priced*. The outcome of using an
>> Energy Standard is essentially of energy accounting, with which I am sure
>> you are familiar
>>
>> http://en.wikipedia.org/wiki/Energy_Accounting
>>
>> My strategy in Iran (who with Qatar and Russia are the key founder members
>> of the Gas OPEC) is to work towards implementation of a global market in
>> Natural Gas - using the "Clearing Union" approach - and to "unitise" Natural
>> Gas through the simple expedient of introducing Units redeemable in natural
>> gas. These will not actually *be *Petros, but they will have a constant
>> value expressed in Petros, as will other carbon-based fuels eg gasoline,
>> kerosene, diesel, heating oil.
>>
>> Equally, electricity will have a constant value expressed in Petros.
>>
>> Now, using the "Energy Pool" approach I advocate, and will touch upon
>> tomorrow, it is possible to monetise the energy value of renewable energy
>> (by selling production forward) and even energy savings (NegaWatts) by
>> selling energy savings forward. Energy economics using energy accounting
>> turns conventional assumptions on their heads, because we may obtain value
>> now for something which will cost us nothing to redeem in the future.
>>
>> It also opens the way to a viable policy of a *carbon levy *(as opposed
>> to a carbon tax) into a "Carbon Pool" which is used to invest in renewables
>> and energy efficiency at nil cost to the carbon user (who receives an
>> "energy dividend in "Units" from the Pool), but incentivising reduced energy
>> use.
>>
>> Where the Technocrats went wrong IMHO is that they ignored the value of
>> the exclusive use of location/land  (which underpins some two thirds of the
>> money in existence) and of course the use value of the individual's
>> "Intellectual Capital" (as opposed to his calorific labour value).
>>
>> Because there is a great deal of energy value actually invested/embedded
>> in location/land, and also because many jobs are underpinned by actual
>> energy/work, then I believe an energy standard is in fact the logical
>> candidate for the necessary clearing utility.
>>
>> In particular, I believe that it is only through monetising the *energy
>> value* of carbon - as opposed to the complete fatuity of monetising by
>> fiat something with no intrinsic value, such as CO2 emissions or carbon
>> credits - that we will successfully make the transition from non-renewable
>> energy to renewables (and this informed an energy startegy document I
>> prepared for Iran's Majlis Energy Commission).
>>
>> Indeed, nowhere is this more necessary in Iran, where there is monstrous
>> waste of carbon-based fuels (and horrendous environmental problems) because
>> of the current massive subsidies. The solution I propose solves the subsidy
>> problem through the issue of Units redeemable in gasoline/ natural gas (and
>> priced against the Petro) which will be generally and equitably issued, but
>> will incentivise energy conservation because this *literally *saves
>> money.
>>
>> Worthy though Bernard's Terra is, I see it as inherently complex,
>> difficult for individuals to relate to, and very much more difficult to use
>> to address the climate change issue.
>>
>> Finally, the architecture you have in mind is, would, as far as I can see,
>> lead to an intermediated architecture with a Credit Object (eg the Terra, or
>> Keynes' Bancor) issued by an issuing authority, which would be all too
>> likely to end up as a bureaucracy, or as part of a bureaucracy. The approach
>> I am taking entails framework agreements governing bilateral issue, rather
>> than centralised issuing organisations.
>>
>> I look forward to meeting you tomorrow.
>>
>> Best Regards
>>
>> Chris Cook
>>
>>
>> ------------------------------
>> From: frank_churchill at mac.com
>> To: cojock at hotmail.com
>> Subject: P2P
>> Date: Wed, 11 Mar 2009 15:55:18 +0000
>>
>> Dear Chris,
>>
>> Looking forward to meeting you tomorrow.
>>
>>
>> I've had a chance to look at your slideshows. What you propose is not
>> dissimilar to my own ideas, which in turn adopt the WIR/Bartercard model of
>> multilateral barter mediated by an alternative medium of exchange (the *
>> WIR*, and *Trade Pound* respectively), in which the exchange medium acts
>> as a catalyst to trade within a mutual credit-structured network.
>>
>>
>> One quick question though. Both the *WIR *and *Trade Pound* use their
>> host currencies as the unit of account. While this approach has the
>> advantage of simplicity and transparency for participants, it's main problem
>> is that it makes the medium vulnerable to the vicissitudes of the host
>> currency.
>>
>>
>> The alternative is to use an different unit of account, such as basket of
>> commodities, or a 'reserve' currency such as the *Terra* proposed by
>> Bernard Lietaer (http://www.terratrc.org/) <http://www.terratrc.org/%29>.
>>
>>
>> I'd be interested to hear your thoughts on this issue.
>>
>>
>> Regards,
>> Frank
>>
>>
>>
>>
>>
>>
>>
>>
>>
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>>
>>
>>
>> --
>> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
>> http://www.dpu.ac.th/dpuic/info/Research.html -
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>>
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>>
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>>
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>
>
>
> --
> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
> http://www.dpu.ac.th/dpuic/info/Research.html -
> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>
> Volunteering at the P2P Foundation:
> http://p2pfoundation.net  - http://blog.p2pfoundation.net -
> http://p2pfoundation.ning.com
>
> Monitor updates at http://del.icio.us/mbauwens
>
> The work of the P2P Foundation is supported by SHIFTN,
> http://www.shiftn.com/
>
>

-- 
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

Volunteering at the P2P Foundation:
http://p2pfoundation.net  - http://blog.p2pfoundation.net -
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Monitor updates at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
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