The Caret System

an economic model for small scale sovereignty

In this episode, I describe the crisis in parenting that led me to develop something I called the point system when my daughters were young. I compare this to the system of community carets in my book, How to Dismantle an Empire. Both encourage 'adulting' and taking responsibility for homes, businesses and each other. On Robert Malone’s Substack, a post called Enabling a Decentralized World has prompted a lively conversation, and I conclude with an astute comment from it.

The word economy comes from the Greek ekonomia that means management of the household. Before a system can scale up, it should be shown to work at the smallest level of community there is—the family. The principle of reciprocity is the same whether it’s designed for three people or three hundred thousand, which might be the optimal size of a commonwealth.

When my oldest daughter, the one who just got married, was at the end of second grade, we were in a battle of wills and I was losing. I’m sure many parents can relate. What the books tell you is to design consequences that are related to the transgression but if you can think that fast, you’re smarter than me. These are, after all, Machiavellian midgets with nothing better to do than figure out how to get what they want while thwarting what you want—which is for them to be their best self.

It came to a head when I returned from a piano camp in Vermont. I’d left my engagement ring at home, so I wouldn’t lose it by taking it off when I played. It was in an ornate tooth fairy box that I kept on the piano in the garaj mahal. When I opened it on my return, there was a glittering pipe cleaner ring in its stead.

The girls, led by Veronica, had wanted to surprise me and taken the box outside despite my admonition not to touch it. They didn’t remember a ring falling into the grass. We tried a metal detector without luck. In truth, I’d been doing more research into the diamond industry in South Africa and wearing one made me a little queasy. But it wasn’t just the ring.

There were times when the consequence of not listening could have been much, much worse, like running over a cement floor while carrying her baby sister. I felt this was a warning that whatever I’d been doing wasn’t working. I threw away her Pokemon collection and took her out of an after-school program, so we had time one-on-one. A mentor-mom of three daughters once told me that when you really don’t want to be around one of them, the answer is to spend more time. As usual, she was right.

But most importantly, I developed a home economy I called the point system. Points were earned by around 15 minutes of music practice or workbooks. It could be anything they’re doing for you but shouldn’t be related to school, which they’re doing for themselves, or chores, which they’re doing as a family. Points, however, could be taken away for chores not done on time, being told a third time to do something, or doing something told not to.

Points had a variable exchange rate to dollars depending on what they were spent for. Toys or candy were 1:1, books were 3:1, fair trade clothing might be 5:1 or donations to some cause 10:1. Instead of asking us to buy something, they would ask for a ‘deal.’ They rarely lost points without warning; nail polish spilled on the rug is the only example that comes to mind. When they did lose them, it hurt but they could earn them back. They knew they could get whatever they wanted, with enough effort.

In high school this transitioned to watching Democracy Now and documentaries I’d assign or listening to podcasts while gardening, painting, cooking, cleaning. In addition to an immediate value, every point also added a chunk of savings towards college or a down-payment on a house. No one took me up on the latter.

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How does this relate to the caret system of mortgage-backed community currencies I’ve described in other episodes? Home ownership isn’t a passive investment, it’s taking responsibility for the upkeep on a property and everything in it, the land around it, and the surrounding neighborhood and community. Unlike renters, there’s no one to call if the sewage system clogs. It requires work, skill, money and relationships, or just lots of money—which no homeowner I know seems to have once the mortgage, property taxes, insurances, utilities and energy bills are paid.

What the caret system does is take the aggregate money paid in for these things and distribute it equally as targeted subsidies. In the digital currency of community carets, these pay others for the “chores” of the community household: taking care of people, taking care of homes, passing on skills and knowledge, and providing food that also feeds the soil. I categorize these as wellcare, home improvement, teaching and food production.

Some people who work for corporations or government, or are retired, will be pure consumers in this system. And that’s great because it provides more money for others to earn! It guarantees that the money in local circulation will be equal to the cost of housing expenses for those who work there.

In another parallel with the point system, carets have a variable exchange rate with dollars, depending on how they’re spent. All housing is priced in carets and requires $2 to buy ^1. However residents who still earn dollars are given a $1 to ^1 exchange rate up to a monthly limit set by the community relative to the local cost of housing. When these carets are spent on local goods and services, including housing, they incur no income or sales tax, only the pension contribution of Social Security. But if spent on the adult equivalent of foreign-made toys and candy, they’re taxed at 50%.

Even the college or home downpayment part of the point system has its equivalent in the caret system. In addition to Social Security contributions, residents can contribute to their own long-term savings and get a high rate of interest. This can be withdrawn or returned at any time, with parental parameters for their contributions, with no penalty but only the loss of the interest in the interim.

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One of my readers has the byline, “What else are they lying to us about?” I think that could be the mantra for our age. Fear has been used both to manipulate us and move us closer to what we fear: pandemics, climate crisis, war, economic collapse, nuclear armaggedon. Yet some things like, “If you fall on the cement, your sister’s head will smash like a pumpkin,” are just too big to think about.

What the caret system does is enable incentives for putting one foot in front of the other in small positive steps. It gives us a hundred ways to feed each other while reversing climate change as a side-hustle. We can teach anything someone else wants to learn. We can restore old houses and make them safer with planning departments handing us money to help out. And people providing alternative healthcare can go direct to willing clients.

The disincentives for business as usual are also small and incremental, unless you’re a multinational bank or investment fund, in which case the extraction of wealth from communities may slow to a trickle. For individuals whose necessities can be paid for with no income or sales tax, spending double for luxury import items is a small price to pay.

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To return to Veronica and the lost diamond ring, years after I attended the wedding of the woman who had been my housecleaner at that time. I noticed that her daughter, who used to work with her, wasn’t there. In a private conversation she told me her daughter had developed an addiction in high school, when she had an older boyfriend imprisoned for felony theft. Looking back, I realized she would have been the one to clean the garaj at that time. Possibly, Veronica was falsely accused.

But by then I was already saying that I’d lost a diamond to gain a gem of a daughter. We now cleaned the house as a family, and there was no one up to Veronica’s standards. In addition, she became the most perceptive and thoughtful person I know. And fortunately for me, the most forgiving. She’s utterly incompetent at holding a grudge.

I think the time when diamonds will lose their luster for all of us is coming, when our relationships will be real gems. A woman named Bettina commented today on Robert Malone’s post Enabling a Decentralized World:

Yes, one can feel it in the air... Only when the time is right, such changes can happen. On the contrary, if time is not right, one can try as hard as possible but nothing happens. I believe it is out of our control when the time is right, there are so many influences natural and supranatural, earthy and galactic. As [Robert] recently wrote, a volcano erupts and changes climate, a butterfly just claps with its wing and suddenly changes are born—this time more globally then ever it seems to me...

Looking forward to meeting you all on the other side!

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In preparation for this change, here is Socio-Spirituality & Small-Scale Sovereignty:

I define socio-spirituality as looking with open-eyes at the reality in the world and questioning with an open mind the reality of the world. I distinguish its purpose, not as giving comfort, but giving the power to change the world. Its one dogma is that I'm no better than anyone else, followed by four beliefs and one suspicion. How these relate to small scale sovereignty is the topic of my book, How to Dismantle an Empire.

And this is We Need to Agree to Agree, for developing a process:

As Ukraine and the Great Reset wreak havoc, we need to share a purpose, a process to separate truth from lies, and a plan. And perhaps, like the Queen in Alice in Wonderland, we need to consider six impossible things before breakfast. I look at things I never thought I'd question, like climate change and Elie Weisel. I debate good vs evil, big vs small, Franklin vs Hamilton, and Trump vs no one. And I wonder how to bring together the dozen journalists left who aren't deluded: Matthew Ehret, Robert Malone, Aaron Mate, Matt Taibbi, Glenn Greenwald and Russell Brand.