Thursday, February 21, 2013

Money and collapse



Paula of Mythodrome has examined the "Solari" concept of money management in a post full of interesting ideas and insights. Before getting to Paula's text, however, some comments from me (U.B.). 



Money does not really exists. Borrowing a metaphor developed by A. Mitchell-Inness, think of a concept such as a "kilogram," a unit of measurement of weight. You can say that a certain object weighs one kg, but you can't have a "kilogram" in your hands any more than Bodhidharma's disciple could show his soul to his master to have it pacified. The same is true for money, which is a unit of measurement for the concept of "credit" and, as such, has no embodiment, alone, in the real world.

Yet, we tend to think that dollars or euros can be somehow owned, hoarded and conserved. It is as if we were seeing ourselves as small Fafnir dragons sitting on our gold hoards, waiting to battle the next Sigfried arriving. That's an illusion creating us endless troubles: money cannot generate anything more than what society can generate. If the society collapses, money collapses with it. The reverse is also true. What we are seeing nowadays is the interactive reinforcing of two elements: the financial crisis and the resource/climate crisis. 

Much work is being made about new forms of money and new ways to manage money. We have local money, ethical finance, alternative currencies, and more. Whether these ideas will work is all to be seen, but they may give us at least a fighting chance to soften the effects of the next financial collapse. In the following, Paula of Mythodrome examines in detail the "Solari" idea developed by Catherine Austin Fitts.


Revisiting Catherine Austin Fitts’ “Solari”


Introducing The Venerable Ms. Fitts


One of the people whose post-9/11 work I most admire is Catherine Austin Fitts. Vocationally she’s an investment banker which, in a lot of peoples’ minds, should automatically make her positively evyle; however, her approach to money and finance is very different from the vampire squid with which we all contend.

I got to meet her at the 2006 Local Solutions conference, and at one point while chatting informally about various ways local communities could finance their own needs without the help of the vampire squid, she exclaimed with a big smile, “I love money!”

Up until that point I would have been horrified at such a blatant declaration of greed. I mean, if nothing else it’s just in really poor taste. But for whatever reason it clicked in my head differently at that moment and I saw that there was not anything like standard bankster greed in her statement. For Fitts, money was not something to hoard out of fear. For her, money was a creative medium. Not a destructive or extractive one. It was a tool to be used for creating beauty and social justice, for healing the Earth, for bringing corruption to heel, for building a door out of our crumbling economic edifice and into the real world of fresh air and living souls. She spoke with the vocabulary of banksters but the words had a different meaning. Fitts was an artist and her medium was money: infinitely useful, infinitely malleable, limited only by our own failure of imagination.

Like all wage-slave types, money for me had always been bondage. And indeed that is how our monetary system is set up, a system of slavery whereby only a few ever gain freedom and everyone else is doomed to flush their lives down the time-card toilet with only two weeks per year to enjoy life, plus another 10 years at the end before death. But after my brief conversation with Fitts I began looking at money and finance differently. Money is indeed useful and malleable; it can be made to behave on any scale, and no special lobbying or social movements or legislation is required. It is the master’s tool that can dismantle the master’s house.

One of the most important things I gleaned from Fitts’ work, though I don’t believe she ever addressed this directly, is that the illusory nature of money is both its great weakness — of which most of us are aware at this point, I’m sure — and its great strength. It is a shape-shifter that can be formed into anything, and can appear or disappear in an instant. It has no shape of its own and it has no allegiances. Indeed, money is so slippery that even under a monetary regime designed for slavery and death it can be turned into life in the hands of an adept practitioner.

Money As Magick


I choose the phrase “adept practitioner” quite deliberately. Money doesn’t really exist — even if it is in the form of gold or other concrete object, its value as money exists only in one’s mind. Money is, ultimately, intention. Harnessing and directing the power of intention is the definition of magick.

While Fitts herself probably wouldn’t like that analogy, I’m going to use it here because I suspect anyone reading this will have dabbled more in magick than in finance.

Like any magick, the key to using money is in learning how to direct intent. In magick, this is done by first identifying your intent; next, gather various objects and/or substances that correspond to your intent; and finally, assemble these into a ritual that sharply focuses your intent and gets it out of your head and into the universe. The ritual process creates a morphic resonance within your morphic field that brings about synchronicities in line with your intent. There are two basic types of intent: sending stuff away from you (yang), and pulling stuff toward you (yin).

The monetary system functions like a morphic field; what you do with your money is akin to a ritual, and the consequences of your financial decisions are like synchronicities within the morphic field. Money obeys the basic intent types: you can send it away from you (yang), or pull it towards you (yin).

For the sake of comparison, let’s say there’s something in your life you want to send away from you… a nosy neighbor perhaps. So what you want to do is a mild banishing spell (you don’t want to kill anybody). For your ritual you collect a black candle and some sage oil, both of which correspond to banishing intent. For the ritual itself you rub the sage oil downward on the candle to symbolize “away from me,” light it, and while it’s burning visualize your neighbor ignoring you. When the candle burns out you collect up the wax scraps, wrap them in a blue cloth to symbolize “peace,” and place these in your freezer to symbolize “chill out.”

Now let’s say you have some money stream coming in that you want to banish. Because money is intent already out in the universe, you do not have to go to the trouble of putting it there; you can work with it directly. Your banishing ritual will involve shutting down whatever is the source of that money. On the flip side, if you want to pull money toward you, your ritual will involve opening up a channel through which it can flow.

In magick, it is crucially important to be very clear about your intent, because if you identify it wrong you’re going to get results you don’t want. In the nosy neighbor example, what you want to banish is not the neighbor but her unwarranted attention; if you get it wrong, you may end up banishing her from her house through fire or foreclosure or whatever. The same is true with money, and I think this is where people start getting tripped up — certainly this is something I have trouble with. Since money is already intention out in the universe & within your morphic field, its results are immediate — resonance need not be established, it is established already. And that means there is no behind-the-scenes, mysterious, invisible process working to manifest your intention; this part you have to do yourself. You may never know what circumstances motivate your nosy neighbor to leave you alone, but if you want to open a channel through which money can flow to you, you have to map out that process from beginning to end and spend the money accordingly on each individual step in order to make that step manifest.

Now all of that might seem like a silly detour, but I’m laying all this out to try to get Fitts’ solari idea into a context that might be more easily understandable than finance-speak.

Money As Magick Applied


Right now our monetary system is set up so that money flows from the less-wealthy masses into the coffers of corporations and billionaires. It does this through various codifications of the principle like attracts like. The most obvious example of this is usury, otherwise known as interest. If you have money, usury causes it to attract more money. If you do not have money, usury depletes whatever money does happen to come your way.

Another example would be that of the P/E ratio, or price-to-earnings ratio. On the stock market, the price of a company’s stock is determined (in part) by dividing the company’s earnings by the total number of its existing shares — and then multiplying — multiplying! — that number again and again. That multiple is the ratio. The multiple is determined by stock traders in the process of buying and selling the company’s stock: if they think the company is awesome they will drive up the price of the stock, and therefore its multiple, by trying to outbid each other to buy those shares. Higher earnings makes people want to buy, thereby increasing the multiple and the value of the company; lower earnings makes people want to sell, thereby driving down the multiple and the value of the company. Like attracts like.

The most pernicious example would be simply this: the rich get richer, the poor get poorer. Like attracts like.

Fitts’ genius is in her ability to align positive intention with money’s properties of immediacy and like-attracts-like. Like any adept practitioner, she isn’t constrained by notions of fixed space, fixed time, fixed matter; or as in the case with money, notions of fixed value or fixed availability. Her basic idea, as I understand it, boils down to this: money’s like-attracts-like positive feedback loop can be attached to anything, so let’s attach it to the good and the just. Once that attachment is made the upward spiral will take care of itself.

And this is the point where she lost everyone. Because figuring out how to do that attaching requires entrepreneurship — dirty, filthy capitalism. Overcoming the capitalism heebie-jeebies and actually learning to become an adept money practitioner is too much for most self-respecting people of moral principles, but it’s across that chasm that the fun really begins.

For example: in any given community, there are going to be a bunch of people earning .5% on their CD savings accounts, and a bunch of other people paying 20.5% on their credit cards. The bank has the like-attracts-like thing set up in its own favor, ripping off its customers at a 20% spread. Getting the feedback loop working in the peoples’ favor is, in this instance, really obvious: the people with savings lend their money to the people with credit card debt at 10% interest. Bang zoom, problem solved. The savers are earning back an un-fucking-believable rate on their investment, the debtors are paying off their debts at half the standard usury rate and twice as fast as before, and everybody’s extricated from the bank’s feedback loop.

The peoples’ feedback loop fires up when their neighbors find out what’s going on and want to get in on the action. Now more people are extricated from the bank, more savers are earning higher interest and more debtors are getting out of debt faster. Then maybe someone else duplicates the idea somewhere else; then it happens again somewhere else, then somewhere else still. The bank’s feedback loop is shriveling and the peoples’ feedback loop is blossoming. Like attracts like.

Here’s a somewhat bigger example. Say there are a half-dozen independent businesses on Main Street that are struggling in the bad economy. Normally these businesses would go to the bank and establish lines of credit at 15% interest in order to pad the slow times so that they can meet their monthly bills, payrolls and such. Those businesses don’t have the ability to issue stock to raise money like big publicly-traded companies do. What they could do, though, is band together to form a special kind of umbrella business called a Limited Liability Company (LLC) and sell “memberships” — which, for all intents and purposes, function just like stock shares with dividends and the like, but can’t be traded. Now suddenly everyone who’s bought memberships in the LLC has a vested interest in making sure those Main Street businesses do well. The LLC members shop at the stores and encourage others to do the same, because they’ll get bigger dividends, and now suddenly Main Street is prospering again like it hasn’t in years. Then soon enough other businesses want in on the LLC because that’s a fucking awesome setup. Then eventually someone duplicates the idea on some other Main Street; then another and another; and thus the Main Street feedback loop fires up too.

(Aside: the LLC is a really interesting kind of business organization. It’s like a hybrid public-private company with all the advantages of both and none of the disadvantages of either. It can be organized just about however you want. See Chris Cook’s article on the UK’s version of the LLC, called an LLP, and some ingenius ways it has been used for sustainable development. Chris Cook was main architect of the Iranian oil bourse and another of my filthy-capitalist collapse heroes.)

Solari


But Fitts’ crowning achievement, in my opinion, was her blueprint for the solari, a for-profit community financial corporation.

In order to really get how a solari would work, it’s important to understand one thing: information is worth money, and information about money is worth more than money. When Facebook went public, it was valued at something like $100 billion — and that is definitely not because of the money it makes on advertising. It’s because Facebook owns what is arguably the largest database on individual people in the world. That kind of detailed knowledge is phenomenally powerful.

A solari works on the same principle, only its database is filled not with ducky-face photos and cyberbullying, but with detailed information about money flows within its given community. The information is collected from public records, voluntary surveys, various public entities’ budgets and the like. Crucially, it would also include all the black- and gray-market information it could track down. Like Facebook, the solari’s database would grow over time, revealing an ever more detailed picture of the community’s wealth.

Based on this information the solari then identifies areas in the community where cash flow can be optimized in the community’s favor. So for example, say the city hires a big national firm to handle garbage collection; meanwhile, a bunch of people in need of jobs are sitting around fretting about how they’re going to pay rent. The solari would negotiate with the city for its community to opt out of the garbage collection contract, and would rechannel those funds toward hiring some of the unemployed locals instead. So now, the community has saved money and decreased its unemployment rate and, potentially, provided some health insurance for people who otherwise wouldn’t have any. The solari has optimized the community’s cash flow and everybody wins.

And of course, these types of actions go into the database, increasing the database’s value. It is not in the solari’s interest to do things that hurt the community, because a database full of financial failure is worth just about jack shit. The solari’s database is valuable only to the extent that it is successful at contributing to improving the community — in whatever way, shape or form that may take. Thus the solari profits not by extracting wealth from its community, but rather by increasing wealth in the community. This is precisely the opposite of how the economy currently functions.

Once per quarter, the solari publishes a report on the financial health of the community and the projects it is working on. Feedback from people on the ground would be crucial — these folks are the solari’s eyes and ears on the street, and if they are not benefitting, the value of the database is compromised.

The solari raises money for its various projects by selling stock against the value of its database, just like Facebook does. There are two stock tiers: tier A stocks can only be sold to people who live in the community, are very limited in number, they confer voting rights, but do not pay dividends. There is no direct financial gain with A-stocks; any gain to A-stock holders is indirect, by improving the community. Tier B stocks can be purchased by anyone, do pay dividends, but do not confer voting rights. Financial gain is direct in the form of the dividend checks, but because they confer no voting rights, there isn’t any way for B-stock holders to manipulate the solari’s projects for their own advantage over the community.

With this tiered stock system, the solari is able to pull in money from potentially all over the globe to build up the community, while the community itself spends that money wherever it determines some improvement project will benefit the community as a whole. The money can be used for quite literally anything: to bolster failing schools, to clean up an abandoned lot and plant a public orchard, to invest in cottage industry and mom-and-pop businesses, maybe build a local solar-powered electrical grid, set up a low-cost health care clinic, fix up or tear down blighted properties. Anything that improves the community also increases the value of the database, making further B-stock sales more attractive, and bringing in more money.

Because the solari is a standard, run-of-the-mill financial corporation, there’s no reason its stocks can’t trade on a secondary market. In this scenario, the whole community is able to benefit from the P/E ratio madness described above. So, say the earnings of the community as a whole is $10 million, and the secondary market determines the stock to be worth 10 times earnings. Now suddenly the solari — and by extension, the community — is worth $100 million. $100 million! Just like that! A valuation like that makes all kinds of outside investment in the community very attractive indeed, thereby bringing in even more outside money.

In this way, the solari completely reverses the financial drain in a community. Instead of money flowing out of the community and into the coffers of supranational corporations, money flows in, causing more money to flow in, and then more and more. The like-attracts-like positive feedback loop is attached to the community as a whole and everybody benefits.

Solari And Preparations


It is plainly obvious to me that in terms of collapse preparations, a solari is almost infinitely more useful than a Transition initiative. Anything at all that can be done at the community level to slow the descent — that is, to extricate the community from the sinking globalization ship — will contribute to the feedback loop. How about a neighborhood-based solar-electric grid that is not tied to the main grid? How about buying a half-circle of vacant property around the perimeter of the community to establish a public permaculture space? How about a distributed gray- and black-water bioprocessing system that is not tied to the public sewage system? How about a jubilee in which the solari flat-out pays off the consumer debt of its community members?

Even more important is the ability to adapt, and quickly, to whatever black swan event might strike. The solari makes enormous sums of money available at any given time, providing the opportunity for immediate adaptation when required.
None of these things are even remotely possible under the Transition banner. They’re just too expensive, and even if the money were available, would require so much “consensus” on every little detail that nothing would ever get done.

You know, it makes me angry and very sad to survey the level of opportunity lost since Fitts first began circulating her solari ideas. That was long before the economic crash and so much could have been done to cushion the blow. All that was lost, was lost because people did not want to relinquish their notion that money is evil and bad, and they didn’t want to corrupt themselves by even learning about it, much less putting it to use. Solari is the ultimate relocalization; when relocalization got usurped by Transition is right about the time Fitts withdrew behind her paywall. I wonder now if she didn’t simply see the writing on the wall. Transition is just not flexible enough in its ideology to accommodate something so blatantly capitalist as a community financial corporation; there really isn’t any room there to discuss such things, let alone take action on them. The anti-capitalist bent of those with the collapse megaphones has succeeded in cutting off preparations’ nose to spite its face.

Conclusion


Solari represents not just a buffer against collapse, but a complete reconfiguration of how money works. It cannot stop climate change or peak oil; however, what it can do is fund a real and meaningful transition — small “t” — to a way of life that is adapted to the new realities and can thrive more-or-less happily within these. Should the idea catch on at a large scale — unlikely, but not out of the realm of possibility — it could form the basis of a fully adapted, and adaptable, economy. Resilience would become a moot point, because it would simply be built right in.

Maybe it’s not too late for Fitts’ solari ideas to take root. Maybe enough people understand now that “collapse” means financial collapse first and foremost. But given what I have seen, I’m not holding my breath. Old habits of mind are too hard to break.





13 comments:

  1. Ugo-You make an interesting point of how the soul and money are both social control circuits that seemingly don't exist, yet there they are modifying our actions. The importance of the money control circuit taking over that of the soul with the rise of fossil fuels.

    Meadows points out that we should be pushing the levers in the opposite direction. Communities should be impoverishing themselves instead of enriching themselves like Wall Street. During Rome's fall, the marginal cultural societies were the ones that performed the best like the Welsh. It is better to have a utilitarian self made clay pot than a beautiful pot from a skilled artisan no longer available. In the US, the self impoverished Amish will probably do the best in a distant post peak world. In the end the whole argument of resilience vs localization is reminiscent of the primacy of Christmas vs Easter. Though, Orlov recently (http://cluborlov.blogspot.com/2012_12_01_archive.html) revived the argument to show the superiority of Russia over the US. Not that he isn't right, but that old arguments of people on nearly the same side of an issue will die hard.

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  2. Ugo
    It is nice to see Paula back - though I did not know until today that she has been writing again for a year now!

    Money is not exactly equivalent to 'credit' - but it does follow the intentions of those who issue it. Here is a quote from IMF Research Department's Michael Kumhof. http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf
    (Kumhof is also brilliant on Peak Oil, by the way.)
    Any debate on the origins of money is not of merely academic interest, because it leads directly to a debate on the nature of money, which in turn has a critical bearing on arguments as to who should control the issuance of money. Specifically, the private trading story for the origins of money has time and again, starting at least with Adam Smith (1776), been used as an argument for the private issuance and control of money.
    Until recent times this has mainly taken the form of monetary systems based on precious metals, especially under free coinage of bullion into coins. Even though there can at times be heavy government involvement in such systems, the fact is that in practice precious metals tended to accumulate privately in the hands of the wealthy, who would then lend them out at interest. Since the thirteenth century this precious metals-based system has, in Europe, been accompanied, and increasingly supplanted, by the private issuance of bank money, more properly called credit. On the other hand, the historically and anthropologically correct state/institutional story for the origins of money is one of the arguments supporting the government issuance and control of money under the rule of law.


    Kumhof's references inspired me to find a copy of Zarlenga's The Lost Science of Money and read the well-argued explanation for the way we are. And as Kumhof et al show with their modern modelling of the 1930s 'Chicago Plan' (not to be confused with the more recent Chcago School) we could do much better!

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  3. Can there really be people who believe that money is in some way inherently evil and that they are all the purer for not touching it?!

    It's just a kind of ghetto-ism or tribalism - makes be think of the kids from the state schools who tried to beat us up all those years ago because we were 'rich and posh' and went to a different school.

    Remove from life all the systems,mechanisms and ideologies and people whom you feel poison and distort it, and you will have to face the greatest evil: individual mortality. Money is the least of evils.

    'You say your problem is this person, that thing, pollution, 'slavery' (a term so often misused these days in social criticism), capitalism, marxism, etc? Your real problem is being - only just - human.'

    'Be in the world but not of it': so why not use money and pay attention to it?

    If this article helps people to see this, it can only do good.

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  4. I meant to add, S.Bardi, thank you for an excellent site!

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  5. Hi Ugo,

    I have seen your recent comment on TOD on Louis de Sousa piece on solar energy - and I have no registration there, so I am posting here :-)

    I think solar energy is mitigating peak oil only when it replaced electricity generation from oil, and mitigates climate change when is replaced coal (but that is questionable)

    The same for wind. So can we possibly think of solar+wind as a peak oil mitigation, or not at all? I know B Hirsch claims it is not the case unless we have electric transporation...

    Alex

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    1. Well, the whole point is whether we'll still have electricity after collapse. If we do, we can salvage at least something. Wind and PV (and a few others) can survive collapse, since they don't need fuel to be extracted and transported. So, they can provide a certain amount of mitigation. Maybe it is not what people would like to think of in terms of "mitigation", but it is way better than any other energy technology.

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    2. Ugo,

      it we dont have electricity after the collapse, then I am not sure if I wont to be still alive at that time... but there is small chance everything starts to disintigrate *after* I am gone :-)

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  6. As chance would have it, I just yesterday visited a community based "Tauschring" = barter circle, which uses its own currency to enable over-the-corner exchange of services between its 300 or so members. This number of people is small enough to still know many - if not most - of them personally, but large enough, to find anything from craftsman, computer aid, household aid to reiki session or councelling.
    Many problems of the big money cycle appear in small scale. E.g. there are some members with big debts and difficulties to work them away and others with big fortunes. Also there is a small tax to care for administration work.
    The money in the circle is generated in a very interesting manner: after each unit of work, say 1 hour, the person who receives the work issues a cheque to the person who did the work. In the clearing office, a debt and a credit are recorded. When the worker herself gets helped for an hour by somebody else, her credit is transferred to this somebody, and so on.
    Its like charge transfer in a semiconductor. The amount of "money" existing at one point in time equals the number of open work-exchange-unit-circles, analog to the amount of (by some arbitrary process) generated electron-hole-pairs. Credit units = drifting electrons and debt units = holes can move on their own and serve to transfer work units = charge units.
    The sum of all credit - and debt units happens to be zero, but this needs not to be so. E.g. if somebody collects a large nuber of credit units and then goes away, the rest of the community is "indebted". The sum isn't zero any more. Like in calculus, where the integral is determined by the sum of all infinitesimal differences *plus an unknown constant*, or like in solid state physics, where the numbers of electrons and holes need not to be - and mostly are not - equal, the system works just as good with people exchanging more debts ore more credits.
    So money can be created here not by a single person, but by any pair of people, who agree to an exchange of a work unit.
    As the cheques are not exchanged themselves, credits and debts are always in units of work, and your capital consists completely in your ability to give work. So there is no money crisis.
    Now if we look in the big economy at what we call money crisis, it's a work debt crisis disguised.

    Concerning the Solari concept, I am not so enthusiastic, which doesn't mean, that it is a bad idea completely. Basically, it's a "community efficiency improvement company". Not all information is valuable in itself. There is a broad consensus, that facebook has been grossly overvalued by the usual stock exchange oaf hype. Much of the info it could gather is already at hand of the community decision makers, in the unemployment statistics e.g.. It is questionable, if deep data mining miraculously reveals structural inefficiencies hitherto unknown, which can be expoited. And of course, whith centrally gathering all these data, a possibility of misuse is created.

    Dominik

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  7. Money does not perform any magic. But money production is profitable, especially with a monetary monopoly.

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  8. This is a very good post; I would like to make a number of comments:

    “One of the most important things I gleaned from Fitts’ work, though I don’t believe she ever addressed this directly, is that the illusory nature of money is both its great weakness — of which most of us are aware at this point, I’m sure — and its great strength”

    What are some of the Strengths and what are some of the Weaknesses? (mainly summarized from the post itself with the number of quotes below)

    But first what is Money? (fiat currencies) and what is a (centralized) fractional reserve banking system? Money: http://en.wikipedia.org/wiki/MoneyFractional Reserve Banking: http://en.wikipedia.org/wiki/Fractional_reserve_banking

    From the above it also becomes clear that “money is created out of thin air” (and can also vanish into thin air)

    The current system of money:

    Weaknesses:

    - “The most pernicious example would be simply this: the rich get richer, the poor get poorer. Like attracts like” ; “right now our monetary system is set up so that money flows from the less-wealthy masses into the coffers of corporations and billionaires”.
    - The current system also allows borrowing against the future (future resources) and the accumulation of gargantuan amounts of debt which cannot be repaid, cannot be defaulted on (without bringing down the system) and can be monetized, but at a significant collective cost
    - Money (but also gold) is easy for authorities to confiscate (also using pretexts) as the most recent example of Cyprus demonstrates: http://campaign.r20.constantcontact.com/render?llr=rbut8ocab&v=001T68Z-93cJFYKFEQ4742eNm8YRhXwU4GuZ82q7Rz0fPsRujbcGUJQvl1Ito8O76zLfxcuTmpQmuKZ835rScCLh24c2OhJEx-WAcn0klLGAv4qe9p3Zk8gmA==

    Strengths:

    - “Money is indeed useful and malleable; it can be made to behave on any scale, and no special lobbying or social movements or legislation is required. It is the master’s tool that can dismantle the master’s house”.

    - “Because figuring out how to do that attaching requires entrepreneurship — dirty, filthy capitalism. Overcoming the capitalism heebie-jeebies and actually learning to become an adept money practitioner is too much for most self-respecting people of moral principles, but it’s across that chasm that the fun really begins” (dirty filthy capitalism also can allow start-ups and other businesses small and large to thrive, providing a channel for human innovation (and one kind of contribution to society), and providing various streams of goods and services) (n.b. but very well-regulated distributional dirty filthy capitalism that also internalizes externalities is much better, and it also reduces some of the dirt and filth) (both social and environmental)

    Analysis of the current crisis (nationally and globally)

    “What we are seeing nowadays is the interactive reinforcing of two elements: the financial crisis and the resource/climate crisis”.

    I would add that between finance and financial systems and resources and resource supply systems, stand economies and the economics used to describe and analyze them; they too are in crisis. And as a partial result, politics (and governmental and business policies and strategies) and many political systems also are in crisis. (CONTINUED BELOW)

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  9. Antonio Turiel describes some of the above nicely in an interview he gave to Catalan TV in November 2012 (“Una Entrevista Muy Singular”) (which is in Spanish) where he summarizes well many of his ideas about resources, peak oil, peak other resources, and economies. http://crashoil.blogspot.com.es/2012/11/una-entrevista-muy-singular.html Personally I think the above is indispensable reading. (along with some of Gail Tverberg’s articles talking about similar things)

    The Solari Approach (to transitioning out of the above crisis) and other Solari-Like decentralized and local money ideas and systems:

    “In this way, the Solari completely reverses the financial drain in a community. Instead of money flowing out of the community and into the coffers of supranational corporations, money flows in, causing more money to flow in, and then more and more. The like-attracts-like positive feedback loop is attached to the community as a whole and everybody benefits”

    “Anything at all that can be done at the community level to slow the descent — that is, to extricate the community from the sinking globalization ship — will contribute to the feedback loop”. And as Ugo Bardi says:
    “Much work is being made about new forms of money and new ways to manage money. We have local money, ethical finance, alternative currencies, and more. Whether these ideas will work is all to be seen, but they may give us at least a fighting chance to soften the effects of the next financial collapse”

    It is also useful to remember that all money systems (as well as banks) started out (historically) as local systems. They gradually extended and became centralized systems. Because such local systems happened during various periods of past history we know less about them (and their precise “lessons of experience”) than about the current centralized systems. (regarding which we have however far less historical perspective)
    Governmental and administrative systems more broadly also started out locally and gradually became centralized (and then some of them also became imperial and then devolved back into national systems, city states and etc. which then later re-centralized)

    There is a creative historical tension between centralization and decentralization (governmental and administrative as well as bureaucratic and managerial, and also financial) which has been present in human affairs for a long time.

    There are advantages and disadvantages to both centralized systems and decentralized ones. Typically human systems have moved back and forth between one and the other pole (centralized and decentralized) much like a pendulum swinging or trying to find some right balance to maximize (or enhance) the advantages and minimize (or mitigate) the disadvantages of each form or pole of social (or political, economic and financial) organization.

    For an analysis of this see the following articles by Silverman (on decentralization of government financial systems) and Rondinelli (on decentralization of governance)
    i) http://books.google.co.th/books?hl=en&lr=&id=I94I6t7GieMC&oi=fnd&pg=PR9&dq=jerry+silverman+administrative+decentralization&ots=HLTaEQl-
    ii) http://books.google.co.th/books?id=4pqGAAAAMAAJ&q=dennis+rondinelli&dq=dennis+rondinelli&hl=en&sa=X&ei=jhlRUYHiEs7jrAe87YGIAw&ved=0CDYQ6AEwAQ

    A system (or systems) like Solari also will need to be implemented and adjusted within the context of a larger centralized system. It is difficult to know in advance how both will respond (or adjust) to each other in the “real world” (even if money is illusory)

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  10. Here in this post the focus is termed on the fact that money doesn't exist where as my approach for the monetary segment is some what different. I believe that the monetary part of any process does keep importance to help get a better derivative end result. For a better end result I have been using the expense reporting software from Replicon (http://www.replicon.com/olp/expense-reports.aspx) which manage the things in a strealined fashion and manage the approach to get the end result strategically.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)