Vancouver Island on the west coast in the
1970s. The best known is the LETSystem for which Michael is most famous.Although he lives in London, I met Michael Linton in Canada, which is
appropriate because it was in that
country that he began designing currency systems as part of the boom in new
economy ideas that flourished on Vancouver Island on the west coast in the
1970s. The best known is the LETSystem for which Michael is most famous.
Few in the environmental movement would deny that money is the device that maintains inequality in the world and the war, poverty and environmental destruction that follow in its wake. Most Greens also believe that it is the oppressive power inherent in conventionally created money that allows these injustices to persist. For many, however, tackling this issue feels just a little bit too big and too dangerous.
That is where big thinkers like Michael Linton come in. He told me all about his grand new designs in a Thai restaurant in Montreal, after we’d shared a few beers and a joke about the fact that the Canadian 20-dollar bill has a picture of the common loon on one side and the Queen on the other. Money works because a community of individuals wishing to exchange place confidence in it. In the case of the dollar or yen that confidence derives from a state imprimatur. In the case of a LETS system it grows out of confidence in each other. In Michael’s new open money system this confidence will extend progressively outwards towards the region and eventually the globe.
As Michael points out, where you live is an important part of who you are, so your local LETS will continue to represent a large share of your trading. But it is only part of who you are. We all have other interests, skills and networks. Each one of these needs a currency to facilitate interaction between its members. I recently gave up a job working as a copy-editor for academic books because the pay was atrocious and the employment conditions worse. I may, however, consider taking on similar work for the new medium of exchange, lets call them ‘pubs’. So I will have ceased to be an Aberystwyth-based editor but will have become an international publishing worker with contacts in Japan, Indian and Namibia. I will exchange with other writers and publishers across the globe. Perhaps I will also join the opera-lovers currency system, buying accommodation in Kiev or Sydney (for Pavs, perhaps?), or the cooperative activists’ currency, swapping skills with others in Canada or Kuala Lumpur. We will all build up new systems of overlapping global identities to replace the threatening identities of nation and consumption we use as shields against the alienating force of the globalised economy.
It helped me to grasp the idea by comparing it to the development of the internet. The present money system operates more like telephone calls: an exchange between a limited network which is controlled by an outside agency who profit from the exchange. Open money will operate more like the internet. People are free to trade with whomever they choose on a global basis. They will create their own currencies to suit their own needs without control from any authority. A currency Darwinism will decide which currencies flourish on the basis of their popularity, just as the internet does with websites.
There are two obvious questions which Michael had to answer. First, how would traders be sure they could trust the person they wished to exchange with? In a LETS system you tend to know the people you trade with, and word usually gets around in the community about who does not provide an adequate service. With open money a similar system of reputation would be likely to build up, and perhaps this could be facilitated via the operation of on-line feedback along the lines of the Amazon book review system. Michael points out that it is not really a question of trust but rather of performance. If the trading partner delivers, then I pay. My partner has to decide whether he has enough comfort or confidence in the value of the currency, not in me personally.
So what about the odd occasion when we wanted to trade in a market whose currency we do not trade in regularly, such as when I need to find a builder but have only Pavs, pubs or Owens? This situation requires the possibility of trade between the currencies, which Michael sees as being facilitated by an Ebay-style online trading system. Currencies themselves could be swapped at a rate of exchange agreed between the traders.
Like many a good idea when I first thought about all this I decided Michael was completely mad. My mind was, in Galbraith’s famous words, repelled. But I’ve been on the fringe long enough to know that rational minds often treat the best ideas this way, so I let this one swill around my jet-lagged head for a while. This led me on to consider the many collateral advantages that open money might generate, as most creative human developments have a tendency to. I can already imagine its impact on our identities, which will at once become more diffuse and more defined, counteracting the alienating effect of globalisation. It will have other unforeseen psychological consequences for those who are attributed little value by the conventional market; and its political impact in terms of major withdrawals from the banking system can only be dreamed of.
For those of you with a respectable job, a monthly cash income in a state currency paid into a bank account, all of this may seem like economics for Zogons. But many people in the Green Party and the wider environmental movement carry out valuable work for no reward because it is not valued by the conventional economy. Open money could facilitate these exchanges, reducing the risk of disillusion and activist burnout. Remember with open money currencies will be created by us to meet our needs. The only limit is your imagination.