[p2p-research] Fwd: Could a liquidity scheme be a brake on climate mitigation?

[Michel Bauwens]

---------- Forwarded message ----------
From: chris cook <cojock at hotmail.com>
Date: Mar 17, 2009 5:24 PM
Subject: RE: Could a liquidity scheme be a brake on climate mitigation?
To: Michel Bauwens <michelsub2004 at gmail.com>, Ludwig Schuster <
schuster at livingcity.de>

Michel

>>
But one key argument makes sense:

- that even with demurrage-based currencies, the productivity and
competition logic is such, that it would still be market by perpetual growth
(higher productivity of the best competitors forcing everyone else along)
>>

One of the points which is often missed is that while compound interest is a
driver of economic growth, and a source of system instability, it is not the
only one.

*Demurrage*
I believe that demurrage in terms of a charge on *positive* balances acts as
a counterbalance to interest (a charge on *negative *balances) and would
thereby rid us of fluctuations (boom and bust) caused by unsustainable
one-sided debt. Keynes understood this, which is why his Bancor and
International Clearing Union proposal included charges on positive and
negative trade balances.

However, the result of incorporating demurrage may (indeed, undoubtedly
would) give rise to stable - but nevertheless unsustainable - growth, which
is the subject of your question.

*Profit*
The reason is that there is another driver for growth - and this is also the
source of the productivity and competition logic - which is the "For Profit"
operation of transaction-driven intermediary businesses. I believe that, in
fact, inflation is almost *by definition* driven by the profit motive. Not
that anyone in power would ever admit this, even if they understood it. Yes,
that's right, the principal cause of inflation is the profit motive.

This profit motive is made pathological by the "free" limitation of
liability enjoyed by "For Profit" Corporations. I have come to the
conclusion that the solution lies in new - partnership-based - legal and
financial frameworks I call "Open" Corporates. These are essentially a form
of "legal XML" which link disparate jurisdictions and enterprises rather
than disparate hardware and software. Law is Code.

*Within *a partnership there is no "profit" and no "loss" (and no rentier
intermediaries) -merely the mutual creation and sharing of value in all its
forms. The accounting requirement is for a "shared transaction and title
repository". In other words, double entry book-keeping becomes redundant in
a Peer to Peer world.

With the profit driver removed, it is possible to arrive at a global market
structure where participants cooperate together to make the best use of
resources and to share the savings they make.

That is exactly what I am proposing in the context of a new global market in
natural gas. Indeed, it is the only way such a market could evolve at all,
since conventional oil market structures cannot work. I will not bore you
with the reasons.

Even if no explicit carbon levy is made (and I think it is a viable
alternative to both a carbon tax and a deficit-based "fiat" carbon credit
solution), the guarantee charges collected on carbon energy trading balances
would fund direct investment in renewables and energy efficiency which would
act to rectify the imbalances, through transition from carbon energy to
renewables.

Best Regards

Chris




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