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Adventures in mutual credit
Lucas Huber suggests that the Interledger Protocol would be a suitable technology for implementing the credit commons. This post is a space to explore that more fully.
For a long time I have marvelled at the elegance of the Ripple protocol, which allows members of a network to extend trust to one another and for payments, or at least virtual payments, to ripple through the resulting mesh along pathways it finds.
Ripple was originally designed as a sort of abstraction of mutual credit. Instead of people forming groups, each account extends a line of trust to several other accounts to form a mesh. Each account is then in its own virtual group.
I sat down with Athens' newest Timebank, Vrilissia, and Luke Flegg to talk about cooperation in Austerity-riddled Greece.
This was published at: https://www.community-exchange.org/docs/smalladsrfi.html
Greetings Alumni of the Money and Society MOOC,
Jem and I decided to keep in touch with you with this new Biannual newsletter. It includes some headlines I found interesting, and other tidbits about what Jem and I are doing.
The MOOC will continue as long we get new people, and we think the best promoters are the people who have done it. Please have a think about which of your friends, colleagues and social networks should know about the MOOC, and send them to this link.
Students of economics are taught that money has three main functions, a unit of account, a store of value and a medium of exchange. On closer examination we find that these three sit uneasily together. For example, a store of value should increase in value over time, while a medium of exchange works best when the value is decreasing. All the while the unit of account should stay the same value!
My understanding of money came initially through LETS and the beautiful, simple mechanism of mutual credit. Working from the principle of balance, mutual credit accounting begins and ends with no debts and no money. Money is just an imaginary intermediary that keeps account between all the members of society, enabling them to 'split the barter', giving and receiving with different people at different times, but always in balance.
It is tempting to view all money in those terms.
About four years ago I realised that my work with local exchange systems could be much more impactful if I concentrated on commercial business barter rather than on LETS and time banks.
I am often told that money is like energy; that it flows around the community creating economic activity remaining essentially the same, never being destroyed. But this metaphor doesn't satisfy me. it works quite well for cash whether fiat or backed, but most of our money is not cash and in fact behaves very differently.