Basic income currencies

As a complementary currency engineer, I come across basic income ideas of social justice all the time, but I don't see them as my territory. It is a way of sharing wealth which we collectively own or create. Ideally it would be enough money to reduce or eliminate the imperative on people to sell their labour, say, a few hundred Euros per month.

That means basic income is very difficult for grass roots organisation or NGOs to practice, because it necessitates finding enough money to do something meaningful, giving it away to the people least qualified to handle money (for some reason the 'trials' that happen are always on the poor), and then a more-or-less subjective impact assessment. So most of the few experiments afforded in the west are financed by governments, such as the current trial in Finland and the coming trial in Barcelona. Another strategy I admire is a German crowdfunded lottery in which the prize is basic income for a lucky individual for one year.

Some projects though like Grantcoin (soon to be relaunched as 'Manna') or Gradido, GroupCurrency are trying to implement basic income by simply issuing currency (or cryptocurrency tokens) to all participants. This has the advantage that they at least don't have to commandeer vast amounts money, or change government policy, but raises the problem that the tokens come into existence with no spending power. Consequently all these projects seem to me a bit ill-conceived. Take the Occcu, launched in 2012 and silent ever since.

I'd like to point out some common problems with this approach in case anyone is reading.

First of all inflation. Basic income implies a monthly distribution of tokens into the economy. If the tokens aren't being removed the from the economy using, say forced taxation, negative interest, transaction fees, fines etc, and if members aren't saving these units up for a rainy day or speculating on their future value, and if membership is not reducing, then the purchasing power of the tokens should constantly decline. One current project, Duniter copes with the growing volume of tokens in relation to goods and services by declaring a fixed rate of inflation as a fact of life. This is actually a sound mechanism, but counter-intuitive and calculated to raise the hackles of every eminent economist and middle class citizen. The same effect could be achieved with a constant token supply by say, adjusting all wallet balances half way back to 100 on the first of each month.

Secondly most alt-currencies and cryptocurrencies do nothing to foster the development of a marketplace. What I've learned in all these years of creating complementary currencies is that a currency without a marketplace is not even a currency in the sense that it has nowhere and no reason to flow (although that doesn't stop speculators pumping up the price). To justify its existence, a currency must direct energy and/or resources which otherwise would have lain idle or gone elsewhere. This was the breakthrough of the LETS model - it incorporated a not only a system of accounting but a directory of member-2-member services. Further, I would argue that marketplaces must exist before currencies and that currencies are tools that have utility only in the context of an existing marketplace. Creating a currency without a marketplace is all-but guaranteed to fail. And that is even without stressing the marketplace by redistributing stuff from producers to non-producers via a basic income.

Redistributing the community's resources, which basic income necessarily does, requires not only that resources be traded in the marketplace but that somebody has the authority to take from some and give to others. This is how the national economy already works but complementary currencies have voluntary membership and no enforcement, so the sales pitch to the rich is much harder.

Too many people who discover the problems with fiat money imagine that citizens can design a superior currency and the people, in the face of the the most efficient, acceptable, powerful, supported, habitual, liquid and legal currency, will vote with their wallets. Some people use Bitcoin this way, seeking to earn and spend it, and telling their friends, but after 8 years and loads of PR, and tens of billions market capitalization, most cryptocurrencies are used for for speculation, not their intended functions. For me a currency needs to have users and trades going on during the design phase, not to seek a market after being released! Inventing a complementary currency as a vehicle for basic income is absolutely the wrong way around.

In conclusion I think that basic income is only meaningful when done with 'current' money, i.e. widely circulating money and that only government has the legal and political tools to redistribute resources in an organised and socially just way. Basic Income is a policy instrument which sits on the shelf next to public services, welfare and tax rebates. That's why this tweet caught my attention, more than the projects linked above.

"Universal #basicincome paired with a local cryptocurrency is the way forward." - candidate for mayor of Detroit https://t.co/sglKL9hih7 pic.twitter.com/t7wmFcYgxv

— Scott Santens (@scottsantens) August 6, 2017