If you are an unpaid subscriber, like me, at least go over to YouTube directly and click “like” and post a comment. This will raise the visibility of these ideas, in a way that clicking through to her video here doesn’t.
Thanks for that suggestion, Elizabeth. I haven't enabled paid subscribers either place, intentionally, so you're in good company! I have noticed that views on this site don't show up on my YT count but sometimes it's easier to listen and read on the same page (for those with that level of multitasking, which isn't me.) It is great to connect the viewers on each platform, though, which are both such interesting groups. Without me monetizing, does YT still show ads? And do those ads not show up if you watch on Substack? I've been curious about that.
From Wiki: A local currency is a currency that can be spent in a particular geographical locality at participating organizations. A local currency acts as a complementary currency to a national currency, rather than replacing it, and aims to encourage spending within a local community, especially with locally owned businesses. Such currencies may not be backed by a national government nor be legal tender.
There are several hundred complementary currencies, here is a link the those in the United States:
I joined seeds but made the mistake of joining them for a call and was quickly bored out of my mind and repulsed with their internal management discussion.
Most people just want a currency they can use – and do not care about the mechanics, the reserves, nor the operational issues. It is enough to have general agreement with the philosophy, and know someone else that is trusted is taking care of these things. So, you are back to a democracy to measure trust.
I’m enjoying your writing. No criticism, but – but you missed an opportunity to remind people to original meaning of eco is home – economics originally mean the system of running the household.
Great minds and all that, Elizabeth ;-) My book has one subsection on the eco-nomos (rules) vs. the eco-logos (purpose) from Susan George, and I start my book with the management of the household, and talk about that in some YT (before or after my Substack, I'm not sure.) That's always been very significant to me from Wendell Berry's Home Economics, and because management of the household is, I think, the prerequisite for designing a system that scales up.
I also have a section that critiques community currencies and traces Michael Shuman's 'multiplier effect' to show $100 dollars diminishes to $1.20 after three exchanges once taxes and housing percentages are deducted--both extracted from the community, neither payable in the community currency.
Local businesses subsidize community currencies by adding value, so it costs them more, defeating the purpose. Rather than housing backing the credit system, as mine does, local producers and vendors use their labor to back it and give the bankers their profits for free with every mortgage payment.
If the purpose is to support local providers without it being traceable or taxable, cash is the best local currency--which is why they're trying to abolish it.
Another thought provoking column. Clearly I need to read your book, ass I still feel hazy on many of the details but I had multiple reactions.
First, I believe that we are approaching a time when we will focus more on friends, neighbors and local communities. The need for more resilience and sufficiency will cause greater reliance on neighborhoods and trade/barter of skills and products. I would prefer to live in an anarchy, as you describe it, than in chaos or feudalism.
On the other hand, Winston Churchill said, “Anyone who is not a socialist at 30 has no heart, and anyone who is still a socialist at 40 has no brain.” I deeply appreciate your approach which recognizes the role of “stivers”.
Tereza, you didn’t explicitly draw this out, but spending any length of time living in a country that has operated under a non-capitalist system for a generation or more causes the visitor to “grok” or deeply understand that capitalism is, at its essence, a set of assumptions about what motivates people. Those are assumptions and can be changed. And there are places where they understand the world differently.
For example, in Romania in the 1990’s, a CEO could not assume that the CFO would pay the electric bill.
Why would he use scarce cash for that? The government’s focus was employment, so the government would force the local power company to provide electricity either way. Btu the essential materials for the company’s products might or might not be a government priority or available on the open market. It might be opera tickets given to a friend of a friend that lubricated the transaction that resulted in the key materials the company needed to make its products, which then would be available to friends of the firm or its executives. That what the CFO needed to know, track and pay for. And that’s how socialism, 20+ years in works.
A monetary system, and individuals who strive to do more, make more and are aggressive in seeking to benefit from the monetary system are an essential driving force. Your system allows and encourages that type of behavior.
Nothing makes me happier than going off to do something else, knowing I have a juicy comments to dig into on my return. Thank you! And I will surely bring you my book the next time I go up to visit my daughter or you come down to visit your dad. We're getting into hyper-wedding mode for that daughter, so things are getting hectic!
I think you saw the Russia: Wrench in the Reset Gears? episode. In Putin's St. Petersburg speech, he talks about passing on a good name and how much more that does for your heirs than money they'll just piss away.
On another comment thread, a responder was just talking about the problem of accumulation. I answered with this from my plan: "If housing and education are priced in local 'carets', as I term them, the rich and super-rich can accumulate all the dollars they want, but they can't buy our property or lives. My plan puts a limit on how much accumulation local residents can convert into carets each month, in line with the cost of housing. Beyond that limit, it charges $2 for ^1, so rich outsiders or investment funds pay twice as much for property, and it taxes carets to dollars at 50%, so outside purchases cost twice and outsider profits are half."
So your comparison to 1990's Romania is apt. If the CEO could never make more than, say, ^6000 per month, with ^900/mo. to Soc Sec and up to ^900/mo. @ 4% interest in long-term savings, she can max out her family's lifetime needs pretty quickly. After that, she can only give money away, in civic projects or wages or just gifts.
But any resources, like land, water or built infrastructure, would be 'leased' to the CEO by the community, incurring either a debt or a share of profits. And, before starting my economic model, I'd rate all businesses as predatory (diminishing the value), extractive, sustaining or regenerative, and assess property taxes on that basis. Nice to be talking to an economist who 'groks' all these details!
I spent a few weeks consulting in Romania with a brokerage firm. The government was distributing “social capital” But the locals had no idea what to do with it.
The gypsies were buying it for pennies on the dollar. Given local prejudice that virtually guaranteed it would never be turned into something meaningful for the holders.
Off topic: I’ve never had any talent with languages, so in preparation I read Romanian history. Pick any point in the last thousand years, and the story is the same it was bad… Really really bad… And then it got worse.
This is the country that supported the allies for the first half of WWII, then cut a deal with Hitler, Disqualifying them for participation in the Marshall plan. Since 90% of the skeletons you can see for miles from the walls of Stalingrad were Romanian soldiers, but didn’t get much help from Russia either.
One more true story, since I don’t do languages, I opened the phrase book on the flight over. I swear this is true, the third phrase was “Help, I’ve been raped.”
Fortunately, I had no mishaps ... but all the stories you’ve heard, infants dying of AIDS, etc. are all true.
Capitalism IS one particular set of assumptions about what motivates people.
GeoCap has problems and we as a species are self-destructive, while we as individuals try to live our lives as best we can.
We need to regain our power as individuals while changing the way our species behaves. The key to that is going to be in awareness of ourselves as part of a species, not just as individuals.
That's so interesting, Elizabeth, I know nothing about Romania. I'm glad to be getting so much education thanks to you finding my Substack.
Thank you for the good wishes with my daughter's wedding. You and Joan were able to get married? My neighbors, the hip gay grannies, were finally able to get hitched also. It is a powerful thing.
Ciao, Bella! Just discovered you yesterday when catching up on reading Ellen Brown's Sheer Post entitled "Achieving Self-Funding Local Sovereignty as Global Food Systems Collapses." Have read three posts of yours and am fixin to get your book.
Elizabeth wrote, "A monetary system, and individuals who STRIVE (emphasis added) to do more, make more and are aggressive in seeking to benefit from the monetary system are an essential driving force. Your system allows and encourages that type of behavior."
Nowhere in this post or the video (which I liked) did I hear anything that would encourage strivers. In fact, your reply reiterates that in your system people would presumably vote for a Maximum Wage that would effectively discourage striving that could contribute to the "problem of accumulation".
I certainly get that the puppet masters (aka Mount Hermon Mafia) promoted paradigms that glorify wealth accumulation to support their recruitment of individuals with an unhealthy desire for wealth and power. However, my experience with folk from the seed of the woman, who do not suffer from such desires, is that they would not be encouraged to strive by a Maximum Wage, and would not vote for it because it has no basis in the "people's history of the Bible".
The laws of nature and nature's God allow for people to be lazy and suffer the economic consequences, which they could learn from and recover from through the Jubilee blessing. It also allowed Job, Abraham, Lot, Boaz, Joseph of Arimathea, et.al. to accumulate wealth through their striving without it being a problem because they did not have the desires of the seed of the serpent. Those strivers would have been able to employ the lazy ones until they decided to change their ways and were given the opportunity to start again through the Jubilee.
Thank you for your love of your fellow man, and that which was created; as well as your brave ideas and thinking, and for your striving to produce your writings. We are all looking for a way to return to a right way of living that yields the blessings we were intended to experience in harmony with the created order...and free from the destructive force of the adversary.
I look forward to getting a better understanding of whether your system depends on a Maximum Wage or could work without it.
Welcome, Steve! Thanks for reading three posts and wanting to get my book. I'm glad something good came out of those comments on Sheer Post, where I've wondered how the brilliant Ellen tolerates the constant mansplaining of how economics really works. Sheesh!
And you're right that my plan doesn't encourage striving, which I think we do way too much of. More loafing, that's what I'd like, especially spent eating and talking ;-)
I forget if I talk about it in this episode but what my plan does is set up the framework for how you can create a concurrent economy and what the formula is to make sure your spending can't exceed your monthly income. Basic budgeting.
After that, how you design your fiefdom is up to you. However, your success (and how you're going to sell it to your fiefmates) is based on how many times you can get your local credit to change hands--generating new goods or services--before it gets sucked out into dollars or whatever imperial currency runs your country. And that shouldn't be an opinion but based on a simulation model with rules that match the way things are now.
So one of those rules is that we bid against each other for houses based on how much debt we can repay. The higher our income, the more debt we take on or we get outbid. That ups the ante on our striving but doesn't actually increase our wealth--it's the same house whether it's $200K or $800K.
And the higher houses go, the more money everyone needs to make, so all your goods and services go up. It creates a rat race rather than increasing the cheese ;-)
What I would propose for my fiefdom is that every family or household is also a corporation. As a corporation, they can earn an unlimited amount of dollars and hold them untaxed in their corporate account. From that account, they can pay each member in a 1:1 trade for dollars up to a certain limit each month, with parents having custody over kids' accounts. In addition, each member would get targeted subsidies.
What my plan does is put a lid on striving so you can say, good enough! You're providing something that other people value, whether it's a thing or a service. You don't have to be insanely lucky (as I was) to own a home. You can just be a normal, hardworking schmo or schmoette.
But I also limit the hourly wage someone can make who's earning other people's subsidy payments in wellcare, education, food or home improvement. That makes sure they can't be siphoned off and monopolized in their first go-round. If someone's not accepting subsidy payments, they can charge whatever they want.
Jul 31, 2022·edited Jul 31, 2022Liked by Tereza Coraggio
That’s a really great explanation of anarchy Tereza; I appreciate and support its goals. I’m less keen about the peripherals.
“The next problem you’ll face are the Naive Do-Gooders, or NDGs as I call them. They’ll want you to solve all the problems that capitalism created, and you’ll be inheriting a lot of them. NDGs are, imo, more dangerous than the psychopaths in charge because they’d never get away with it without well-meaning, caring self-righteous people.”
It’s less than obvious to me that becoming a nonchalant or even malevolent uncaring prick would inhibit the psychopaths any more effectively or bring about capitalism’s demise any sooner. Some NDG’s recognize that capitalism imposes inequitable suffering, and as much as we wish it were otherwise, it isn’t going away for a while. Many well-meaning, caring, self-righteous people in the meantime want to militate the misery instead of watching it while waiting for a better future.
“One popular policy is Universal Basic Income, so let’s examine that. If you issue $1000 per month to everyone in your country, within ten years, this will raise the cost of housing by $1000 per bedroom, since we bid against each other for the maximum debt we can absorb.”
That doesn’t seem obvious to me either. In our current economic system, more money in peoples hands means more people can afford homes which leads to the making of more homes. Those building more homes receive wages for making them which - except for that portion appropriated by the rentiers - is spent on things the people buying homes produce for their own wages. Inflation won’t necessarily accompany a UBI unless there are no additional homes brought to market as the UBI is spent.
“Now let’s look at another popular policy—student debt forgiveness followed by free education because education is a human right, like food, healthcare, housing. So if you’re going to make all these things free, who are you going to make your slaves?”
That’s why education should be free: so students aren’t graduating into indentured servitude.
“And debt forgiveness will have a discrepant impact on students who went to a less expensive college or not at all or worked their way through, and on parents who took on a second mortgage or saved.”
I paid off all of my student loans long ago, and I was fortunate enough to put my daughters through university educations - one public and one private - without they or me incurring any debt. I didn’t want my girls to become slaves. Certainly other people love their children as much as I do; why in the world would I or anyone else not want everyone’s daughters and sons to be debt-free?
Student debt forgiveness wouldn’t negatively impact me or my daughters in the slightest. On the contrary, this NDG will celebrate the day everyone is liberated from the debt bondage, student or otherwise.
“You want to build up your reserves so the amount in circulation exceeds your debt by a factor of four. According to Benjamin Franklin, no more than 20% of the currency should be created through debt, the rest should be spent into existence by the government.”
So? Ben was a really smart guy, but that doesn’t mean we should just take his word for it.. Why 20% Why not 25%, or 250%, or 15%? He picked a number, but that doesn’t make it correct.
“When something is subsidized, it becomes as expensive as the deep pockets of the state.”
If so, then the street on which I live, the fire station down the road, the new high school, and the hospital in which I work would all cost $10,000,000,000,000.00 or more. Shortages more than government subsidies drive up prices.
Yay, Doc! There's nothing I like better than a good juicy comment I can sink my analytical teeth into. Thank you!
I'm forgetting whose Substack I lured you here from. Matt Taibbi? Aaron Mate? Oh, it was Aaron because you posted something questioning him about Putin's alternatives, wasn't it? Whatever it was, I remember your comment being the opposite of an NDG. It was really well informed, so much that it was adding new information to the author. And Aaron is as far from a naive source as is possible.
Sticking with Ukraine, an NDG is gung-ho about shipping them weapons because Ukraine=little and Russia=big and that's about as far as their analysis goes. And I don't need to tell you the results of that, not just on Ukranians but on Europeans without fuel for the winter and one story I'll tell in my YT later today.
Now I'd like to say it's possible to do good in a non-naive way but I've been giving that some serious thought today. I don't think I can convey what a turnaround this is for me without virtue-signaling, but I've spent my life developing strategies for charitable giving and activism. I've been pretty damn obnoxious about it. Did it make a difference? I don't know.
So on to the relationship between UBI and housing costs. For one generation, women won the right to work outside the home, giving them more choices. Then, because we bid against each other, the cost of a house went up to two incomes, and women lost the ability to NOT work outside the home. You can't support a family on a single wage, because of the cost of what I call the Unaffordable 4H--housing, healthcare, higher education and hope for retirement. They've all gone up exponentially.
When I went to college, back in the Dark Ages, I had a full scholarship for $1000/ yr. That school now costs $50K a year, which I know because they want me to donate to their scholarship fund. Are they paying professors 50X more? Just the opposite. Now there are lecturers and online tutors correcting homework. I think we should bring this cost down and make it affordable for everyone rather than subsidize it based on need.
When you live in a house someone else built or get an education, it should incur a debt--to society, not the bankers. You owe it to the previous generation to enable them to live out their lives in dignity and to the next generation to pass on the gift in a better form. Community money makes that reciprocity fair and enables choices.
In your fiefdom, the banking situation you're starting with is that 200% of the money is created through debt. Because the debt creates the principal but not the interest, twice as much money will be coming out of your economy as goes in. That's created the situation of 2008 and where we are now, when they're dropping the pretense of home ownership and buying up houses directly so we'll all be renters. There's not enough money in existence to pay the debts.
So that's why you're going to start out by putting as much money into circulation as it takes to pay the debts, which are owed to you. If you don't have at least 100% of the money in circulation to pay the debts, you'd be throwing away the labor that could be doing useful things for your community and instead forcing people to work for the rich, as they have to do now.
You could keep it at that and not issue carets at 2:1 against your dollar reserves. But why? You'd end up paying in dollars to people outside your community for things you could do yourself. If people pay an average of $1000 per month for mortgages + student loans, do you want all the money in your economy sucked out on the 1st of every month? If you had ^3000-^5000 per person in circulation, ^2000-^4000 would continue to create more goods, services and security.
Last, does your town have a ten trillion budget? The odds are good that they borrowed money from a bank to build that new HS. And to cover their risk for the variable rate loan, they probably got an Interest Swap Derivative from the same bankers. As I write about in my chapter on Detroit, It Takes a Pillage, there but for the grace of Goldman Sachs goes every city infrastructure project, every school district in the country.
But under the public banking model, you can make that a loan to yourself. And debt is good when it organizes labor for a community project, because you can use it when issued and when repaid to create jobs. Whew! A treatise in a nutshell. What do you think?
“Last, does your town have a ten trillion budget? The odds are good that they borrowed money from a bank to build that new HS. And to cover their risk for the variable rate loan, they probably got an Interest Swap Derivative from the same bankers. As I write about in my chapter on Detroit, It Takes a Pillage, there but for the grace of Goldman Sachs goes every city infrastructure project, every school district in the country.”
I'm not sure if we're disagreeing, Doc, or where that starts. I think we agree that we want an economy that serves families and communities, enables us to produce for ourselves, and I think we agree that self-governance means looking at the policies that would facilitate that. So our discussion is just about logistics, not about ideology. We both want the same outcome.
Michael Hudson is a major influence on my book, especially the section World on FIRE. Ellen Brown, founder of public banking, too. The part that I add to their models is the ability to issue and tax a local currency backed by the mortgages and student loans, which are the two forms of debt backed by local assets and labor. Although Hudson is for MMT, he keeps control at a national level--an arbitrary size from 100s of thousands of people to over a billion. I think smaller is better.
I woke up thinking about your example of higher education. I read somewhere that a higher percentage of people over 50 have student debt than those under 25, and the average debt for the former is $41K and $14K for the latter. So students themselves are turning away from those debts and possibly higher education too, although the ballooning of the debt could make both amounts equal in 25 yrs.
We don't disagree about issuing each person up to ^1000 per month (depending on your economy and if it can support that according to the formula of Debt + Tax + 2X Cash). I just put that money to work rather than handing it out.
So let's say you refinance all existing student debt at 0% interest over 10 yrs, with a maximum repayment of ^300/mo. So anything over $36,000 is absolved. If payments are missed, the length of time is extended but it's never more than ^300/ mo. In my system, I'm issuing an education credit for ^200/mo. With that applied to the repayment, only another ^100/mo. is needed. Someone who chooses to do school FT upfront can do that and pay it back.
But maybe someone else decides to spread their education over 10 yrs and beyond. The maximum wage for anyone accepting payment in carets means that classes are affordable, maybe ^200 per credit. That student might take two classes at a time while working to pay for the other, or being a TA--since teachers will need to spread the money around, especially if they're teaching large classes. Or they can teach their own class.
What I've seen with my daughters is that college has become a stressful, unhealthy way of life, and that was even before it went to isolation in a bedroom with online classes. It burned the curiosity and desire to read right out of them. I'd like to improve the model, not just replicate it. Your thoughts?
We’re mostly in agreement Tereza. I just think education is a public good, as are roads and fire and police protection: it should be free at point of service. Other countries much less wealthy than the US, from Mexico to Germany, don’t charge students for public university, why should we? We pay for a soldiers education and provide him with housing, medical care, clothing, and a small wage even though he isn’t producing any consumable goods or services. Education is an investment in our future; I believe we should be paying our public college students a living stipend during their studies whether or not they are wearing a uniform.
I think a UBI is putting money to work. In my opinion, no one better than the people doing the shopping and making the purchases know how best to disperse it. The money they spend will go back into the economy where it can do the most good.
In your fiefdom, students will get free education and a living stipend. Do your schools accept everyone for as long as they want? Do their stipends depend on certain grades? And who's qualified to teach and receive whatever you deem their instruction to be worth? Who produces the food that their stipends buy? People in other fiefdoms, who are your servants, or people within your own, who are your servants? If there's an intellectual class that gets paid to study, some class need to support them rather than studying themselves.
What you're designing depends on centralized control that separates the haves from the have-nots. If your purpose is to make education available to everyone, manual labor needs to be part of everyone's life too. Otherwise, some people are doing the manual labor to enable others to get an education.
Answers to your questions have already been provided by Germany, Finland, Australia, Turkey, Austria, Greece, New Zealand, Iran, The Czech Republic, and many more. These and other countries provide tuition-free college/university for their citizens, some have gone further and make it tuition-free for international students, and some pay their college and graduate students a stipend while they study. https://worldpopulationreview.com/country-rankings/countries-with-free-college
We don’t have to reinvent the wheel Tereza. Same goes for universal healthcare, daycare, and housing. Other countries provide these things; the US can too.
I've never heard anyone speak of a Maximum Income: interesting concept. While I could go on for pages decrying the dangers of Early Doctrination (at the cost of a person's childhood), I feel even more strongly about higher education and student debt.
As Affirmative Action policies have watered down the curriculum of all colleges, as niche degrees such as Women's studies and WOKE history have made college educations worthless, it is time to make public schools educate children instead of simply graduating them to make room for more non-reading and non-thinking drones. College standards (with the rare exception of Hillsdale) have declined to the point that American students graduate with a far worse education that those of most other countries. If rigorous standards were established and students were expected to study and to think, there would be far more dropouts and, consequently, far less student debt. The payoff would be that college educated people would actually know things.
Thanks for responding, Charles! Yes, we talk about a minimum wage but if someone wants to work for you for $1 an hour, why not? If their other choice is to work for themselves, they're a free agent.
In some of my YT episodes (pre-Substack) I cite John Taylor Gatto, author of Dumbing Us Down and An Underground History of American Education. He shows how mandatory schooling was inflicted and children were often taken away from 'unfit' parents who didn't agree. I think you'd like him. I talk about his concept of reading for power in From FOMO to JOMO: the Art of Missing Out https://www.youtube.com/watch?v=5ZGY7uPs8K4.
On education and indoctrination, I think that children, from toddlers up, should 'earn' their right to go to school by being an asset to their own household. Kids are much more competent than we hold them responsible for. If school was a privilege they'd earned, they'd learn for pleasure. And I don't think we'd need to control what they should learn. Here's the section of the episode that reimagines education:
"I look at repossession of college campuses by cities and towns, and why education is wasted on the young when it should be a lifetime endeavor where we all travel and study for three months at a time. I suggest five years when everyone stays home and uses the mortgage-backed local currency (carets ^) to make their hometown into a place where people want to visit and stay, a learning center with shared passions and specialties. At the same time, those wanting to travel-study should develop skills that will make them an asset to the community they want to visit."
Haha! It definitely could, Bill, because I think the two are closely related. In my first (pre-Substack) video on metaphysics, Bankers vs. Bunkers, I ask why the idea of surviving nuclear annihilation had more appeal than changing the system to inconvenience a few bankers and saving everyone. On a spiritual level, the belief that the world controls us is, I think, at the heart of why we imagine ourselves as impotent, 7+ billion people against a handful of bankers. Here's that link, iyi: https://youtu.be/-w8v7xr5WY8. Thanks for reading/ watching and responding!
An external locus of control is what authoritarians depend on. Lower-case 'L' libertarians support an internal locus of control. That is the great conflict - authoritarian v libertarian, not democracy v autocracy, not Red/Blue, not Let/Right, not Democrat/Republican, not capitalism/socialism, but purely authoritarian/libertarian.
Yes, exactly. I say that there's only been one war in history: empire vs. sovereignty. Other synonyms for small-scale sovereignty are community self-governance, libertarianism, anarchy, and even Balkanization. On the false dichotomy of capitalism/socialism I posted Need, Greed & the 3P (for the Third Paradigm of a system of reciprocity):https://youtu.be/6Qu5zCxafWU.
And good luck with the wedding planning. Society’s final stress test for the couple before they formally become a family unit.
We, Joan and I, attended many a protest hoping for the right to get married someday. It’s a powerful thing, for your daughter and her community.
If you are an unpaid subscriber, like me, at least go over to YouTube directly and click “like” and post a comment. This will raise the visibility of these ideas, in a way that clicking through to her video here doesn’t.
Thanks for that suggestion, Elizabeth. I haven't enabled paid subscribers either place, intentionally, so you're in good company! I have noticed that views on this site don't show up on my YT count but sometimes it's easier to listen and read on the same page (for those with that level of multitasking, which isn't me.) It is great to connect the viewers on each platform, though, which are both such interesting groups. Without me monetizing, does YT still show ads? And do those ads not show up if you watch on Substack? I've been curious about that.
The ads do not show up on Substack and I tune them out on YouTube, so I didn’t notice.
I asked my friend who is active in Blockchain 4 Ecology is local currencies were DAOs. I bet they interface with them.
I have 5 local currencies - San Francisco, Berkeley, Sonoma, Fairfield and Bolinas. And a friend at the Fed.
Lots of opinions to gather
Second think of thinking
From Wiki: A local currency is a currency that can be spent in a particular geographical locality at participating organizations. A local currency acts as a complementary currency to a national currency, rather than replacing it, and aims to encourage spending within a local community, especially with locally owned businesses. Such currencies may not be backed by a national government nor be legal tender.
There are several hundred complementary currencies, here is a link the those in the United States:
https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States
There are several near me, so I have some homework to do.
Are any of these tied to your ideas? How does this relate to Seeds? https://joinseeds.earth/
I joined seeds but made the mistake of joining them for a call and was quickly bored out of my mind and repulsed with their internal management discussion.
Most people just want a currency they can use – and do not care about the mechanics, the reserves, nor the operational issues. It is enough to have general agreement with the philosophy, and know someone else that is trusted is taking care of these things. So, you are back to a democracy to measure trust.
I’m enjoying your writing. No criticism, but – but you missed an opportunity to remind people to original meaning of eco is home – economics originally mean the system of running the household.
Great minds and all that, Elizabeth ;-) My book has one subsection on the eco-nomos (rules) vs. the eco-logos (purpose) from Susan George, and I start my book with the management of the household, and talk about that in some YT (before or after my Substack, I'm not sure.) That's always been very significant to me from Wendell Berry's Home Economics, and because management of the household is, I think, the prerequisite for designing a system that scales up.
I also have a section that critiques community currencies and traces Michael Shuman's 'multiplier effect' to show $100 dollars diminishes to $1.20 after three exchanges once taxes and housing percentages are deducted--both extracted from the community, neither payable in the community currency.
Local businesses subsidize community currencies by adding value, so it costs them more, defeating the purpose. Rather than housing backing the credit system, as mine does, local producers and vendors use their labor to back it and give the bankers their profits for free with every mortgage payment.
If the purpose is to support local providers without it being traceable or taxable, cash is the best local currency--which is why they're trying to abolish it.
Another thought provoking column. Clearly I need to read your book, ass I still feel hazy on many of the details but I had multiple reactions.
First, I believe that we are approaching a time when we will focus more on friends, neighbors and local communities. The need for more resilience and sufficiency will cause greater reliance on neighborhoods and trade/barter of skills and products. I would prefer to live in an anarchy, as you describe it, than in chaos or feudalism.
On the other hand, Winston Churchill said, “Anyone who is not a socialist at 30 has no heart, and anyone who is still a socialist at 40 has no brain.” I deeply appreciate your approach which recognizes the role of “stivers”.
Tereza, you didn’t explicitly draw this out, but spending any length of time living in a country that has operated under a non-capitalist system for a generation or more causes the visitor to “grok” or deeply understand that capitalism is, at its essence, a set of assumptions about what motivates people. Those are assumptions and can be changed. And there are places where they understand the world differently.
For example, in Romania in the 1990’s, a CEO could not assume that the CFO would pay the electric bill.
Why would he use scarce cash for that? The government’s focus was employment, so the government would force the local power company to provide electricity either way. Btu the essential materials for the company’s products might or might not be a government priority or available on the open market. It might be opera tickets given to a friend of a friend that lubricated the transaction that resulted in the key materials the company needed to make its products, which then would be available to friends of the firm or its executives. That what the CFO needed to know, track and pay for. And that’s how socialism, 20+ years in works.
A monetary system, and individuals who strive to do more, make more and are aggressive in seeking to benefit from the monetary system are an essential driving force. Your system allows and encourages that type of behavior.
Nothing makes me happier than going off to do something else, knowing I have a juicy comments to dig into on my return. Thank you! And I will surely bring you my book the next time I go up to visit my daughter or you come down to visit your dad. We're getting into hyper-wedding mode for that daughter, so things are getting hectic!
I think you saw the Russia: Wrench in the Reset Gears? episode. In Putin's St. Petersburg speech, he talks about passing on a good name and how much more that does for your heirs than money they'll just piss away.
On another comment thread, a responder was just talking about the problem of accumulation. I answered with this from my plan: "If housing and education are priced in local 'carets', as I term them, the rich and super-rich can accumulate all the dollars they want, but they can't buy our property or lives. My plan puts a limit on how much accumulation local residents can convert into carets each month, in line with the cost of housing. Beyond that limit, it charges $2 for ^1, so rich outsiders or investment funds pay twice as much for property, and it taxes carets to dollars at 50%, so outside purchases cost twice and outsider profits are half."
So your comparison to 1990's Romania is apt. If the CEO could never make more than, say, ^6000 per month, with ^900/mo. to Soc Sec and up to ^900/mo. @ 4% interest in long-term savings, she can max out her family's lifetime needs pretty quickly. After that, she can only give money away, in civic projects or wages or just gifts.
But any resources, like land, water or built infrastructure, would be 'leased' to the CEO by the community, incurring either a debt or a share of profits. And, before starting my economic model, I'd rate all businesses as predatory (diminishing the value), extractive, sustaining or regenerative, and assess property taxes on that basis. Nice to be talking to an economist who 'groks' all these details!
I spent a few weeks consulting in Romania with a brokerage firm. The government was distributing “social capital” But the locals had no idea what to do with it.
The gypsies were buying it for pennies on the dollar. Given local prejudice that virtually guaranteed it would never be turned into something meaningful for the holders.
Off topic: I’ve never had any talent with languages, so in preparation I read Romanian history. Pick any point in the last thousand years, and the story is the same it was bad… Really really bad… And then it got worse.
This is the country that supported the allies for the first half of WWII, then cut a deal with Hitler, Disqualifying them for participation in the Marshall plan. Since 90% of the skeletons you can see for miles from the walls of Stalingrad were Romanian soldiers, but didn’t get much help from Russia either.
One more true story, since I don’t do languages, I opened the phrase book on the flight over. I swear this is true, the third phrase was “Help, I’ve been raped.”
Fortunately, I had no mishaps ... but all the stories you’ve heard, infants dying of AIDS, etc. are all true.
Capitalism IS one particular set of assumptions about what motivates people.
GeoCap has problems and we as a species are self-destructive, while we as individuals try to live our lives as best we can.
We need to regain our power as individuals while changing the way our species behaves. The key to that is going to be in awareness of ourselves as part of a species, not just as individuals.

That's so interesting, Elizabeth, I know nothing about Romania. I'm glad to be getting so much education thanks to you finding my Substack.
Thank you for the good wishes with my daughter's wedding. You and Joan were able to get married? My neighbors, the hip gay grannies, were finally able to get hitched also. It is a powerful thing.
Ciao, Bella! Just discovered you yesterday when catching up on reading Ellen Brown's Sheer Post entitled "Achieving Self-Funding Local Sovereignty as Global Food Systems Collapses." Have read three posts of yours and am fixin to get your book.
Elizabeth wrote, "A monetary system, and individuals who STRIVE (emphasis added) to do more, make more and are aggressive in seeking to benefit from the monetary system are an essential driving force. Your system allows and encourages that type of behavior."
Nowhere in this post or the video (which I liked) did I hear anything that would encourage strivers. In fact, your reply reiterates that in your system people would presumably vote for a Maximum Wage that would effectively discourage striving that could contribute to the "problem of accumulation".
I certainly get that the puppet masters (aka Mount Hermon Mafia) promoted paradigms that glorify wealth accumulation to support their recruitment of individuals with an unhealthy desire for wealth and power. However, my experience with folk from the seed of the woman, who do not suffer from such desires, is that they would not be encouraged to strive by a Maximum Wage, and would not vote for it because it has no basis in the "people's history of the Bible".
The laws of nature and nature's God allow for people to be lazy and suffer the economic consequences, which they could learn from and recover from through the Jubilee blessing. It also allowed Job, Abraham, Lot, Boaz, Joseph of Arimathea, et.al. to accumulate wealth through their striving without it being a problem because they did not have the desires of the seed of the serpent. Those strivers would have been able to employ the lazy ones until they decided to change their ways and were given the opportunity to start again through the Jubilee.
Thank you for your love of your fellow man, and that which was created; as well as your brave ideas and thinking, and for your striving to produce your writings. We are all looking for a way to return to a right way of living that yields the blessings we were intended to experience in harmony with the created order...and free from the destructive force of the adversary.
I look forward to getting a better understanding of whether your system depends on a Maximum Wage or could work without it.
Ciao, Bella
Welcome, Steve! Thanks for reading three posts and wanting to get my book. I'm glad something good came out of those comments on Sheer Post, where I've wondered how the brilliant Ellen tolerates the constant mansplaining of how economics really works. Sheesh!
And you're right that my plan doesn't encourage striving, which I think we do way too much of. More loafing, that's what I'd like, especially spent eating and talking ;-)
I forget if I talk about it in this episode but what my plan does is set up the framework for how you can create a concurrent economy and what the formula is to make sure your spending can't exceed your monthly income. Basic budgeting.
After that, how you design your fiefdom is up to you. However, your success (and how you're going to sell it to your fiefmates) is based on how many times you can get your local credit to change hands--generating new goods or services--before it gets sucked out into dollars or whatever imperial currency runs your country. And that shouldn't be an opinion but based on a simulation model with rules that match the way things are now.
So one of those rules is that we bid against each other for houses based on how much debt we can repay. The higher our income, the more debt we take on or we get outbid. That ups the ante on our striving but doesn't actually increase our wealth--it's the same house whether it's $200K or $800K.
And the higher houses go, the more money everyone needs to make, so all your goods and services go up. It creates a rat race rather than increasing the cheese ;-)
What I would propose for my fiefdom is that every family or household is also a corporation. As a corporation, they can earn an unlimited amount of dollars and hold them untaxed in their corporate account. From that account, they can pay each member in a 1:1 trade for dollars up to a certain limit each month, with parents having custody over kids' accounts. In addition, each member would get targeted subsidies.
What my plan does is put a lid on striving so you can say, good enough! You're providing something that other people value, whether it's a thing or a service. You don't have to be insanely lucky (as I was) to own a home. You can just be a normal, hardworking schmo or schmoette.
But I also limit the hourly wage someone can make who's earning other people's subsidy payments in wellcare, education, food or home improvement. That makes sure they can't be siphoned off and monopolized in their first go-round. If someone's not accepting subsidy payments, they can charge whatever they want.
What do you think for your fiefdom, Czar Steve?
That’s a really great explanation of anarchy Tereza; I appreciate and support its goals. I’m less keen about the peripherals.
“The next problem you’ll face are the Naive Do-Gooders, or NDGs as I call them. They’ll want you to solve all the problems that capitalism created, and you’ll be inheriting a lot of them. NDGs are, imo, more dangerous than the psychopaths in charge because they’d never get away with it without well-meaning, caring self-righteous people.”
It’s less than obvious to me that becoming a nonchalant or even malevolent uncaring prick would inhibit the psychopaths any more effectively or bring about capitalism’s demise any sooner. Some NDG’s recognize that capitalism imposes inequitable suffering, and as much as we wish it were otherwise, it isn’t going away for a while. Many well-meaning, caring, self-righteous people in the meantime want to militate the misery instead of watching it while waiting for a better future.
“One popular policy is Universal Basic Income, so let’s examine that. If you issue $1000 per month to everyone in your country, within ten years, this will raise the cost of housing by $1000 per bedroom, since we bid against each other for the maximum debt we can absorb.”
That doesn’t seem obvious to me either. In our current economic system, more money in peoples hands means more people can afford homes which leads to the making of more homes. Those building more homes receive wages for making them which - except for that portion appropriated by the rentiers - is spent on things the people buying homes produce for their own wages. Inflation won’t necessarily accompany a UBI unless there are no additional homes brought to market as the UBI is spent.
“Now let’s look at another popular policy—student debt forgiveness followed by free education because education is a human right, like food, healthcare, housing. So if you’re going to make all these things free, who are you going to make your slaves?”
That’s why education should be free: so students aren’t graduating into indentured servitude.
“And debt forgiveness will have a discrepant impact on students who went to a less expensive college or not at all or worked their way through, and on parents who took on a second mortgage or saved.”
I paid off all of my student loans long ago, and I was fortunate enough to put my daughters through university educations - one public and one private - without they or me incurring any debt. I didn’t want my girls to become slaves. Certainly other people love their children as much as I do; why in the world would I or anyone else not want everyone’s daughters and sons to be debt-free?
Student debt forgiveness wouldn’t negatively impact me or my daughters in the slightest. On the contrary, this NDG will celebrate the day everyone is liberated from the debt bondage, student or otherwise.
“You want to build up your reserves so the amount in circulation exceeds your debt by a factor of four. According to Benjamin Franklin, no more than 20% of the currency should be created through debt, the rest should be spent into existence by the government.”
So? Ben was a really smart guy, but that doesn’t mean we should just take his word for it.. Why 20% Why not 25%, or 250%, or 15%? He picked a number, but that doesn’t make it correct.
“When something is subsidized, it becomes as expensive as the deep pockets of the state.”
If so, then the street on which I live, the fire station down the road, the new high school, and the hospital in which I work would all cost $10,000,000,000,000.00 or more. Shortages more than government subsidies drive up prices.
Yay, Doc! There's nothing I like better than a good juicy comment I can sink my analytical teeth into. Thank you!
I'm forgetting whose Substack I lured you here from. Matt Taibbi? Aaron Mate? Oh, it was Aaron because you posted something questioning him about Putin's alternatives, wasn't it? Whatever it was, I remember your comment being the opposite of an NDG. It was really well informed, so much that it was adding new information to the author. And Aaron is as far from a naive source as is possible.
Sticking with Ukraine, an NDG is gung-ho about shipping them weapons because Ukraine=little and Russia=big and that's about as far as their analysis goes. And I don't need to tell you the results of that, not just on Ukranians but on Europeans without fuel for the winter and one story I'll tell in my YT later today.
Now I'd like to say it's possible to do good in a non-naive way but I've been giving that some serious thought today. I don't think I can convey what a turnaround this is for me without virtue-signaling, but I've spent my life developing strategies for charitable giving and activism. I've been pretty damn obnoxious about it. Did it make a difference? I don't know.
So on to the relationship between UBI and housing costs. For one generation, women won the right to work outside the home, giving them more choices. Then, because we bid against each other, the cost of a house went up to two incomes, and women lost the ability to NOT work outside the home. You can't support a family on a single wage, because of the cost of what I call the Unaffordable 4H--housing, healthcare, higher education and hope for retirement. They've all gone up exponentially.
When I went to college, back in the Dark Ages, I had a full scholarship for $1000/ yr. That school now costs $50K a year, which I know because they want me to donate to their scholarship fund. Are they paying professors 50X more? Just the opposite. Now there are lecturers and online tutors correcting homework. I think we should bring this cost down and make it affordable for everyone rather than subsidize it based on need.
When you live in a house someone else built or get an education, it should incur a debt--to society, not the bankers. You owe it to the previous generation to enable them to live out their lives in dignity and to the next generation to pass on the gift in a better form. Community money makes that reciprocity fair and enables choices.
In your fiefdom, the banking situation you're starting with is that 200% of the money is created through debt. Because the debt creates the principal but not the interest, twice as much money will be coming out of your economy as goes in. That's created the situation of 2008 and where we are now, when they're dropping the pretense of home ownership and buying up houses directly so we'll all be renters. There's not enough money in existence to pay the debts.
So that's why you're going to start out by putting as much money into circulation as it takes to pay the debts, which are owed to you. If you don't have at least 100% of the money in circulation to pay the debts, you'd be throwing away the labor that could be doing useful things for your community and instead forcing people to work for the rich, as they have to do now.
You could keep it at that and not issue carets at 2:1 against your dollar reserves. But why? You'd end up paying in dollars to people outside your community for things you could do yourself. If people pay an average of $1000 per month for mortgages + student loans, do you want all the money in your economy sucked out on the 1st of every month? If you had ^3000-^5000 per person in circulation, ^2000-^4000 would continue to create more goods, services and security.
Last, does your town have a ten trillion budget? The odds are good that they borrowed money from a bank to build that new HS. And to cover their risk for the variable rate loan, they probably got an Interest Swap Derivative from the same bankers. As I write about in my chapter on Detroit, It Takes a Pillage, there but for the grace of Goldman Sachs goes every city infrastructure project, every school district in the country.
But under the public banking model, you can make that a loan to yourself. And debt is good when it organizes labor for a community project, because you can use it when issued and when repaid to create jobs. Whew! A treatise in a nutshell. What do you think?
“For one generation, women won the right to work outside the home, giving them more choices.”
That’s one way to look at it. Another way is that - as the US slowly deindustrialized and its economy was financialized, mean incomes - when adjusted for inflation - flattened: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/. Median household income increased over the same period as more women went to work, but it didn’t come anywhere close to doubling as more households went from one to two incomes: https://fred.stlouisfed.org/series/MEHOINUSA672N#0 https://www.bls.gov/spotlight/2017/women-in-the-workforce-before-during-and-after-the-great-recession/pdf/women-in-the-workforce-before-during-and-after-the-great-recession.pdf. Two incomes have became necessary to maintain the standard of living one income afforded in the 1960s.
“Last, does your town have a ten trillion budget? The odds are good that they borrowed money from a bank to build that new HS. And to cover their risk for the variable rate loan, they probably got an Interest Swap Derivative from the same bankers. As I write about in my chapter on Detroit, It Takes a Pillage, there but for the grace of Goldman Sachs goes every city infrastructure project, every school district in the country.”
No government at any level should be at the mercy of private creditors in my opinion. I think banks and finance are a public utility, and should be run by and for the public, not for the benefit of the wealthy elite. https://www.nakedcapitalism.com/2022/07/michael-hudson-the-end-of-western-civilization-why-it-lacks-resilience-and-what-will-take-its-place.html
I'm not sure if we're disagreeing, Doc, or where that starts. I think we agree that we want an economy that serves families and communities, enables us to produce for ourselves, and I think we agree that self-governance means looking at the policies that would facilitate that. So our discussion is just about logistics, not about ideology. We both want the same outcome.
Michael Hudson is a major influence on my book, especially the section World on FIRE. Ellen Brown, founder of public banking, too. The part that I add to their models is the ability to issue and tax a local currency backed by the mortgages and student loans, which are the two forms of debt backed by local assets and labor. Although Hudson is for MMT, he keeps control at a national level--an arbitrary size from 100s of thousands of people to over a billion. I think smaller is better.
I woke up thinking about your example of higher education. I read somewhere that a higher percentage of people over 50 have student debt than those under 25, and the average debt for the former is $41K and $14K for the latter. So students themselves are turning away from those debts and possibly higher education too, although the ballooning of the debt could make both amounts equal in 25 yrs.
We don't disagree about issuing each person up to ^1000 per month (depending on your economy and if it can support that according to the formula of Debt + Tax + 2X Cash). I just put that money to work rather than handing it out.
So let's say you refinance all existing student debt at 0% interest over 10 yrs, with a maximum repayment of ^300/mo. So anything over $36,000 is absolved. If payments are missed, the length of time is extended but it's never more than ^300/ mo. In my system, I'm issuing an education credit for ^200/mo. With that applied to the repayment, only another ^100/mo. is needed. Someone who chooses to do school FT upfront can do that and pay it back.
But maybe someone else decides to spread their education over 10 yrs and beyond. The maximum wage for anyone accepting payment in carets means that classes are affordable, maybe ^200 per credit. That student might take two classes at a time while working to pay for the other, or being a TA--since teachers will need to spread the money around, especially if they're teaching large classes. Or they can teach their own class.
What I've seen with my daughters is that college has become a stressful, unhealthy way of life, and that was even before it went to isolation in a bedroom with online classes. It burned the curiosity and desire to read right out of them. I'd like to improve the model, not just replicate it. Your thoughts?
We’re mostly in agreement Tereza. I just think education is a public good, as are roads and fire and police protection: it should be free at point of service. Other countries much less wealthy than the US, from Mexico to Germany, don’t charge students for public university, why should we? We pay for a soldiers education and provide him with housing, medical care, clothing, and a small wage even though he isn’t producing any consumable goods or services. Education is an investment in our future; I believe we should be paying our public college students a living stipend during their studies whether or not they are wearing a uniform.
I think a UBI is putting money to work. In my opinion, no one better than the people doing the shopping and making the purchases know how best to disperse it. The money they spend will go back into the economy where it can do the most good.
In your fiefdom, students will get free education and a living stipend. Do your schools accept everyone for as long as they want? Do their stipends depend on certain grades? And who's qualified to teach and receive whatever you deem their instruction to be worth? Who produces the food that their stipends buy? People in other fiefdoms, who are your servants, or people within your own, who are your servants? If there's an intellectual class that gets paid to study, some class need to support them rather than studying themselves.
What you're designing depends on centralized control that separates the haves from the have-nots. If your purpose is to make education available to everyone, manual labor needs to be part of everyone's life too. Otherwise, some people are doing the manual labor to enable others to get an education.
Fun to see you on Aaron's Substack!
Answers to your questions have already been provided by Germany, Finland, Australia, Turkey, Austria, Greece, New Zealand, Iran, The Czech Republic, and many more. These and other countries provide tuition-free college/university for their citizens, some have gone further and make it tuition-free for international students, and some pay their college and graduate students a stipend while they study. https://worldpopulationreview.com/country-rankings/countries-with-free-college
We don’t have to reinvent the wheel Tereza. Same goes for universal healthcare, daycare, and housing. Other countries provide these things; the US can too.
I've never heard anyone speak of a Maximum Income: interesting concept. While I could go on for pages decrying the dangers of Early Doctrination (at the cost of a person's childhood), I feel even more strongly about higher education and student debt.
As Affirmative Action policies have watered down the curriculum of all colleges, as niche degrees such as Women's studies and WOKE history have made college educations worthless, it is time to make public schools educate children instead of simply graduating them to make room for more non-reading and non-thinking drones. College standards (with the rare exception of Hillsdale) have declined to the point that American students graduate with a far worse education that those of most other countries. If rigorous standards were established and students were expected to study and to think, there would be far more dropouts and, consequently, far less student debt. The payoff would be that college educated people would actually know things.
Thanks for responding, Charles! Yes, we talk about a minimum wage but if someone wants to work for you for $1 an hour, why not? If their other choice is to work for themselves, they're a free agent.
In some of my YT episodes (pre-Substack) I cite John Taylor Gatto, author of Dumbing Us Down and An Underground History of American Education. He shows how mandatory schooling was inflicted and children were often taken away from 'unfit' parents who didn't agree. I think you'd like him. I talk about his concept of reading for power in From FOMO to JOMO: the Art of Missing Out https://www.youtube.com/watch?v=5ZGY7uPs8K4.
On education and indoctrination, I think that children, from toddlers up, should 'earn' their right to go to school by being an asset to their own household. Kids are much more competent than we hold them responsible for. If school was a privilege they'd earned, they'd learn for pleasure. And I don't think we'd need to control what they should learn. Here's the section of the episode that reimagines education:
"I look at repossession of college campuses by cities and towns, and why education is wasted on the young when it should be a lifetime endeavor where we all travel and study for three months at a time. I suggest five years when everyone stays home and uses the mortgage-backed local currency (carets ^) to make their hometown into a place where people want to visit and stay, a learning center with shared passions and specialties. At the same time, those wanting to travel-study should develop skills that will make them an asset to the community they want to visit."
https://thirdparadigm.substack.com/p/reversing-the-reset
Let me guess - this comes under the metaphysics heading?
Haha! It definitely could, Bill, because I think the two are closely related. In my first (pre-Substack) video on metaphysics, Bankers vs. Bunkers, I ask why the idea of surviving nuclear annihilation had more appeal than changing the system to inconvenience a few bankers and saving everyone. On a spiritual level, the belief that the world controls us is, I think, at the heart of why we imagine ourselves as impotent, 7+ billion people against a handful of bankers. Here's that link, iyi: https://youtu.be/-w8v7xr5WY8. Thanks for reading/ watching and responding!
An external locus of control is what authoritarians depend on. Lower-case 'L' libertarians support an internal locus of control. That is the great conflict - authoritarian v libertarian, not democracy v autocracy, not Red/Blue, not Let/Right, not Democrat/Republican, not capitalism/socialism, but purely authoritarian/libertarian.
Yes, exactly. I say that there's only been one war in history: empire vs. sovereignty. Other synonyms for small-scale sovereignty are community self-governance, libertarianism, anarchy, and even Balkanization. On the false dichotomy of capitalism/socialism I posted Need, Greed & the 3P (for the Third Paradigm of a system of reciprocity):https://youtu.be/6Qu5zCxafWU.