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

[Martien van Steenbergen]

Personally, I prefer the term ‘flow money’ over ‘demurrage’,  
‘liquidity tax’ or ‘negative interest’. Technically it is a negative  
interest. However, ‘flow money’ denotes the effect and impact this  
negative interest has: it makes money flow. You tend to spend money  
early and often when there is a small percentage of your debet flowing  
into a commons fund. You better spend it now so you can enjoy its full  
purchasing potential, rather than later when it has diminished.

If someone has an sound project proposal, chances are great that it  
gets pre-financed! Just open a bank account specifically for this  
project, and money will start flowing in from believers in the  
proposal (if no money flows, the proposal or marketing or both  
probably need work). They rather have it bear fruit there, than have  
in trickle away from their accounts. The project owner in turn will do  
her best to quickly get the human and material resources to realize  
the project, as she enjoys the same trigger.

And since flow money is a technically a negative interest, it dons  
your ‘far-sighted glasses’, making you focus on the long-term and  
sustainability rather than short-term profit, since flow money  
reverses the discounted cashflow (Net Present Value). Discounted Cash  
Flow = Discounting the Future.

Compare these to graphs (from Lietaer's The Future of Money). First is  
current view by financial analist, with positive compound interest.  
Second graph is monetary system with ‘flow money’ in place.


The only other this we need to change is to make money always exactly  
sufficiently available, just like centimeters or inches. I.e. remove  
the ‘saving’ or ‘collectible’ property from the monetary system by  
creating the money at the moment of transaction (i.e. not by fiat- 
money created by banks).

Succes en plezier,

Martien.


On 17 Mar 2009, at 16:06 , Michel Bauwens wrote:

>
>
> ---------- 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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>
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