[p2p-research] excellent contribution on flow money by Martien van Steenbergen

[Wittel, Andreas]

Dmytri,

The Robinson Crusoe story is interesting and in many ways a real
eye-opener. However Gesell's core argument that interest is
intrinsically linked to money is not persuasive in my view. I want to
point out two things.

First, it is true that objects in general lose their value over time.
What Gesell does not mention however is that the value of objects which
are used deteriorates quicker than the value of objects which are not
used. A pair of shoes that stays in the cupboard for three years clearly
has more value than a pair of shoes being worn on a daily basis for the
same period of time. Gesell does not reflect at all on this issue.

The second point is more important. Gesell's theory can only work in
small and local settings. If two people on an island develop exchanges,
they do not need money or any other mediators to measure exchange. Thus
they do not need to implement interest. However they would have to
negotiate by when Robinson is supposed to get back the clothes and the
sacks of wheat that he gives to the stranger. If they don't talk about
time for reciprocity the stranger might decide that he could return
clothes and wheat 40 years later, and til then keep borrowing things
from Robinson. In an extremely localised setting (two people on an
island) this negotiation does not need to be formalised, it would sort
itself out eventually (at some point Robinson would stop lending if he
doesn't receive anything back.

Let's assume a non-local market, where control over all transactions and
exchanges becomes impossible for the individual participants. Let's
assume they don't have money. In this setting the framing of reciprocity
with respect to time becomes very important. If it is not established by
when the clothes and the wheat given to a person should be returned,
individual participants (with no interest in fair trade) could play the
system, and borrow clothes and wheat from person A in one year, and
froom person B the next year, and keep going borrowing without ever
returning. As this non-local situation is not a commons (with the
possibility to control the behaviour of all people involved)
participants would need to establish rules that guarantee reciprocity.

They would have two choices. They could either set up a deadline by when
the clothes and wheat has to be returned, or they could introduce the
notion of interest. The first possibility is not very practical as this
contract would have to established for every single transaction. The
second one (interests) is much more practical. It would make sure that
the one who receives goods makes sure that he or she returns them as
quickly as possible. Interest in this non-monetary system would work as
an incentive to give back sooner ratherv than later.

Interest, I would argue, is not intrinsically linked to money as such,
but to the idea of measurement. Any model of exchange that operates on
the basis of measurement (of the commodities and of labour) is bound to
end up introducing interest. The problem is that there is no just way to
measure the value of individual labour. 

Only those economic models that are established on the idea that
everybody should contribute with as much labour as he or she wishes to
donate to the commons could avoid operating on the basis of interest.
Obviously in this economic model individual participants could also play
the system. But would they? This is a question about human behaviour.

Andreas



-----Original Message-----
From: p2presearch-bounces at listcultures.org
[mailto:p2presearch-bounces at listcultures.org] On Behalf Of Dmytri
Kleiner
Sent: 26 May 2009 18:39
To: Ryan Lanham
Cc: Peer-To-Peer Research List; Martien van Steenbergen
Subject: Re: [p2p-research] excellent contribution on flow money by
Martien van Steenbergen


On Tue, 26 May 2009, Ryan Lanham wrote:


>       The reasons people "own" money is that we store consumption
>       until when it is advantageous.
> 
> Yes, that is one of the most useful traits of money: it abstracts 
> trade from time and space. That is, you don't have to trade 3 chickens

> for a ham at the exact time and place, you can sell your chicks and 
> buy something else from someone else at some place and some time. 
> Let's keep that trait.


This is one the most destructive traits of money, real wealth can not be
stored at no cost, or actually negative cost (positive interest), to the

owner. Such a form of wealth can only extend from granted privilege,
most likely 
enforced by state violence.

This feature of money, money as a store of value, is esentially a
transfer of wealth from future producers to current owners.

This theft of future value from it's producers is among the sources of
the great inequality of the world, and any form of exchange based on the
ability to "store" consumption at no loss or risk would perpetuate
inequality.

That is why Gessellian "friegelti," i.e. stamp scrip, has demmurrage 
(negative interest) as a feature.

I'm jumping in late, so appologies if this has already been covered.


-- 
Dmytri Kleiner, aspiring crank:

http://www.telekommunisten.net

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