Thats great! It would be incredible to achieve a world without poverty and where everyone has their basic needs met.
Sure, definitely best to keep on topic. Thanks for the convo
-All the best
In terms of engaging with the existing system, the one I like most is a variant of C. Bucky Fuller said it best:
In order to change an existing paradigm you do not struggle to try and change the problematic model. You create a new model and make the old one obsolete.
Letting the new grow up amongst the old until it replaces it outright. This is exceedingly difficult, because the old system is always demanding its tribute. But I do believe that we can carve out small pockets of regenerative, non-adversarial economic activity and hopefully grow them over time. For my own part, I’ve been lucky enough to have lovely in-laws who are letting us stay at their place for pretty good rent. It’s allowed us to transfer a fairly large part of our economic lives from the dollar economy into the squishy realm of gift/reciprocity/trust. Cooperative gardening, shared meals, occasional babysitting. I know not everyone else is in this position, but I hope that our relative privilege will allow us to be in a better position to offer the same gifts to other people by virtue of the freedom we’re gaining.
Anyhow, we’re talking about mutual credit, so I’ll stay on topc. Just felt like there were ties to the human economy and my own experiences in it.
One thing I’m still not sold on is the whole ‘trust’ things. There’s no way for me to trust my immediate counterparties immediately; trust is like a multidimensional spectrum where I can trust someone 95% in some cases and 3% in others. The thing I struggle with re: trustlines is that I hope my friend/neighbour/aunt is being honest with me, but FWIU each of their trust pairing has its own ledger. This prevents me from having good visibility into their overall credit risk, which is an important factor in determining how much risk I personally want to take on by extending credit to them. While I agree that I shouldn’t extend any more credit than I’m willing to lose, the fact of the matter is that I’m also basing my decisions on the assumption that I usually won’t lose that credit in the end. And that requires me to have a broader picture of their level of risk.
That’s why I like the idea of each person having a single ledger – their own ledger – that’s publicly visible and protected from tampering by a ‘cloud of witnesses’. I do have a grave concern about this – privacy – although I think this is partially solved by @matslats’ Credit Commons idea. Small mutual credit networks, where members connect to people in other networks via ‘steward’ accounts operating in networks one level of hierarchy up. It’s mutual credit + multi-hop, something halfway between the polar opposites of a global mutual credit network and the atomised network of Ripple.
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gotta love Bucky
and that’s eloquently stated Paul, I’d have to agree
Exactly! I only meant lose on an individual basis, while incorporating the proper risk of ruin. Should have clarified that my reference was to the Kelly Criterion. It’s best to diversify risk over a large enough sample size, which can only be calculated by having access to all the necessary information. The more available metrics the better, imo
EV = SUM i [ net((% chance)(amt gain)) - net((% chance)(amt loss)) ]
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No worries; I understood you as being concerned about lack of access to good data about other people in a trustlines-based network, and was agreeing/continuing on with a comparison to community mutual credit.
I think what I’m seeing here is that there is no perfect silver-bullet solution. Each solution optimises for some things at the expense of others. Trustlines are wonderfully elegant but don’t offer much built-in support for collective intentions, of the sort Matthew Slater describes. (I don’t say it prevents it; it’s just that it doesn’t have that principle baked in, so you have to do extra work.) Community mutual credit, on the other hand, is more fiddly but embodies the idea of the collective in its very design. And that fiddliness pretty much necessitates a bit of extra complexity such as a centralised server or some sort of peer-to-peer witnessing protocol (Holochain or blockchain).
Each one for its purpose; I have strong philosophical attraction to collective, bottom-up action that’s more intentional and overt than the ‘invisible hand of the market’, so I’m sure you can figure out which one I lean towards 
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Taking trust down to the lowest level, one-on-one relationships, minimizes that risk (the risk is larger when you trust at bigger scales, including traditional mutual credit community concept. ) But it isn’t removed completely. Nor is it for any relationship.
I think a better way to look at it is as a mutual thing. The credit is actually the income to the person accepting the IOU. Both parties benefit, and both have a mutual responsibility to know what their credit limits are. And yes people can lie deliberately and fuck others over but that is social suicide in a culture that isn’t built on manipulation. Since most of us these days live in cultures that are built on manipulation we just tend to forget that. So since both parties want to actually set accurate credit limits it should work out pretty naturally. This is the good thing about a relationship based system, that both parties relate to one another.
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I think I can get behind that, yeah. Takes a paradigm shift, but that’s gonna be necessary anyway if we want to get healthier as a civilisation.
As a side note: a comment on that video says and I quote
“it doesn’t make sense. if Carol borrows money from David, then she already trusts him.
here’s a scenario…
-Carol owe’s David,
-Carol gets hit by a bus
what now?!”
For God’s sake, just don’t be that silly… ever! LOL
Imagine what would happen if a company like Google were to get hacked so horribly that the parent company Alphabet declares bankruptcy! Being the monopoly that it is, such an event would definitely cause a domino effect throughout the market (for instance, even Netflix would go down as an aftereffect). Why then do we (service providers, such as Netflix) not worry about such an event happening? Simple. We’ve made such trust that we mostly take for granted so so implicit that we don’t even talk about it, let alone calling it “trust”. But guess what? Not calling trust “trust” does not magically eliminate it; rather it only renders you unprepared (by having a very low margin of safety that you wouldn’t have kept that low had you whole-heartedly accepted your assumptions as a “trust” being placed and kept a realistic worldview thereby)…
In fact, even possessing dollar bills in your wallet implies that you trust the dollar; and that’s no different from extending credit to the Fed, if you think about it. Consider an example: Bob does some sweat work for a week, only to be later paid 500 dollars for his labour. Now, out of the blue, news emerges that the Fed’s mainframe’s hard-disk got old and stopped working (they have no backup, by the way; LOL)! Boom! All data lost! Dollar plunges to zero! In this case, Bob has lost the product of his hard work. Now Bob is regretting having extended credit to the Fed’s dollar! He should have asked his employer to be paid in Gold… See… Do you notice some correspondence?
Now, I do admit that personal one-to-one kind of trust that Ripple advocates is actually a recipe for disaster (imagine having conflicts every other day with your friends about their credit-worthiness, about how you were rethinking about their financial condition and possible risk of bankruptcy last night). Given sufficient time for systems like Ripple (or Vril) to settle into equilibrium, people will emerge who expertise in trust-building and convincing the population in their credit-worthiness; guess what they would be called? Entrepreneurs! All examples of Alice and Bob should better be substituted (by the reader himself, of course) by Alicia Corp. and Bobby Ltd, for example. However, explainers are biased towards giving the simplest examples that strike the best, and that’s totally understandable. (At least that’s the case with me; I guess I overuse analogies a bit too much, to the point that it divorces from the message intended to be conveyed…)
Doesn’t that make sense?
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I feel really great about Holochain, I’m thankful for the community and honored to be here.
Thanks for the ELI5 vid this will save me alot of time explaining ^^
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I see Holochain offering many cool features for DAG’s and mutual credit Sovereign Accountable Commons
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Private source chains are neat and cryptography is fun 
I wonder what amazing decentralized Holochain applications (dHapps) the community will design for mutual credit.
Zomes and membranes are really cool https://developer.holochain.org/docs/concepts/
@The-A-Man I think I partially follow you but I’m also feeling thick today. I hear you saying that we generally put ourselves at high risk (low margin of safety) by virtue of the fact that we don’t usually think of money and credit in terms of trust; we just coast by assuming that ‘the system just works’. Am I right?
As I’m thinking, one thing that comes to mind is that, although open-ledger mutual credit doesn’t remove the need for (and cognitive exhaustion of) assessing a person’s credit-worthiness, it does greatly simply the amount of signal we have to process. AND it causes Alice to not be too worried about Bob’s risk of default, because the economy absorbs it, not Alice. (Which I guess is both a good thing and a bad thing.)
And while I’m chewing on this, I’m reminded of @mwl’s contributions to the thread. On debt/IOUs vs true mutual credit:
[quote=“mwl, post:30, topic:807”]
IOU means I Owe You - in which frame A’s transfer to B is NOT considered payment and a debt still exists. Which is NOT money as I know it - it’s just another form of debt-factoring.
And I consider that LETSystems (and other such form of mutual commitment) are money, issued by users. No debt happens.
The problem is compounded when the interests of those in “credit” are presented as entitlement to be paid, and applicable (in theory) to any on the negative side of the ledger.
For me that breaks autonomy, accountability, choice, contribution, pattern, purpose, ethics and adds in reification of risk and accelerates extraction.[/quote]
and on mutual credit as mutual commitment:
and it also makes me think harder about trust, and I recall this thing that @mwl said in another thread:
I have to be honest that, at first, that grated against me. Aren’t we supposed to learn to trust people?! But now I think I know where you’re coming from @mwl – are you saying that LETSystems recognise that human trust is fallible and burdensome (both for the truster and trustee) even when everybody’s being honest – you never know when someone’s going to get hit by a bus or fall on hard times and render a piece of credit unredeemable?
One thing I’ve never been able to grasp (and I think you know I’ve struggled with this) is, what purpose does the open ledger serve? Is it meant to be an information source to help inform decision-making re: engaging in a transaction with someone? If so (or if not), how?
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https://letsystem.org/schedule.html says it all (almost all). Section 2 - Values is all inspired by Eric Frank Russell in his “And then there were none” novella - http://droppdf.com/v/p7Dr9.
The option to publish an open ledger is mainly included to help nervous players who feel they have (or should have) some control over the behaviour of others.
In some systems - for example high value multi-stakeholder networks - it may serve some purpose, but not much - imho - in any m/c systems presently of interest to me.
I propose that the paradigm described here of money, credit, currency, debt etc is the old incumbent flawed one, which cannot be used as a competent basis for realising the full potential of holochain for designing and implementing a competent economic transaction system that will displace the existing bankrupt central banking system and its next fraudulent incarnation.
The first error is locating the origin of economic purchasing power[1] in the domain of exchange (i.e. trade), instead of locating it in the domain of production.
NOTE 1: Purchasing power is known popularly as “money”, i.e. in-ledger credit as “money of account” (i.e. bank money) or off-ledger credit accounting tokens in the form of coins and notes known as “currency”.
Before anything can be exchanged/traded it has to be produced. Human economic production is a cooperative process based on added-value supply-chains which give rise to evolutive ecosystems of production and consumption, based on the specialisation of human work and its organisation, according to the inherent abilities and interests of economic producers (i.e. not autarkic producers who subsequently trade or exchange).
Even under primitive technological conditions, autarkic production cannot support human life. Mutualisation of specialised abilities among members of primitive hunter-gatherer societies was a condition of individual survival. A system of ensuring reciprocity between production and consumption within these primitive societies was not needed due to their small population size and primitive technological development, wherein unmeasured economic transaction (known as the “gift economy” was sufficient. Barter was never a precursor of accounting systems for economic transaction.
A unit of account to measure the relative value of commodities or work, originated in primitive societies as a means of allocating compensation for injury done to members of a tribe, or for religious atonement / sacrifice. This is the origin of debt as a publicly notarised accounting entry that had to be settled / redeemed by the payment of a measured amount of goods or services. The unit of account was often expressed in terms of livestock (head of cattle), but the compensation payment could be made by other means, so long as their value corresponded to the value of a given number of livestock that represented the unit of account.
Early legal systems originated as public records of the amount of compensation to be paid to redeem “crimes”/sins, by which the amounts of compensation were expressed in terms of the agreed unit of account.
Once human technological development reached the stage of settled agriculture supporting large population urbanisation, economic reciprocity between production and consumption could no longer be maintained on a gift economy basis, due to the massive increase in the specialisation and scope of the economic ecosystem, based on ever more complex and extended added-value supply-chain networks.
The innovative solution was to enumerate the commodity and labour inputs of a large scale ultimate supply-chain production (such as a public works irrigation system and food storage facility), and allocate a reciprocal amount of purchasing power to requisition the commodities and labour required to complete the final production. This was done by using the unit of account used since ancient times within the legal system, which ensured codified measures of compensation for the redemption of debt for various injuries / sin caused.
In other words, scribes would firstly list the total material and labour inputs for a public infrastructure that would significantly increase the economic potential and prosperity of the society. Then each budget item on this list would be enumerated using the unit of account from the legal-compensation system. The enumerated production budget would then be totalled, and notarised on the debt side of the double-entry accounting ledger. A reciprocal amount of requisition rights (purchasing power) would then be inscribed on the credit side of the legal system ledger.
The production enabling rights on the credit side of the ledger were then transferred off-ledger to physical tokens, which were unconditionally transferrable, thereby enabling the producers of existing inputs to give up their surplus production in exchange of such requisitional tokens that they could use as unconditional purchasing power, enumerated according to the societal unit of account. The first tokens were made of clay and had no “intrinsic value”, because they were instruments in a legal-accounting system to ensure economic reciprocity between enabling production rights, issued against (counterparty to) a notarised production obligation.
As Aristotle remarked, “money by nature is law”. Since ancient times the Greek word for money is “nomos”, which means “law”. The word economy comprises the Greek works “oikos” (eco) and “nomos” (law). Oikos signifies “household” as well as the wider notion of a social unit or polity (such as a city state). Economy therefore transliterates as the law of the polity that regulates reciprocity.
Fungible commodities such as precious metals were not used within domestic jurisdictions, but as a means of settlement between monetarised jurisdictions (i.e. for international trade). The use of commodity money within domestic jurisdictions is a sign of the breakdown of law, usually caused by war, where foreign mercenaries were employed and paid in precious metal coinage.
Today with the use of ATMs, we can still see the original link between different but interlinked accounting systems of purchasing-power: in-ledger purchasing power (credit in a bank account) and off-ledger purchasing power (coins and notes).
The incumbent central banking system is a fraud which requires the creation of the extractive speculative financial market system. The first fraud is that enabling rights (credit) to fulfil a notarised production obligation (debt) can only be issued to a bone fide producer who has undertaken such notarised production obligation (debt). However, the banking system steals the producers credit, and claims is as its own “asset”, which it then “lends” (rents out) at a compounding rate of interest. All bank credit is therefore counterfeit, especially when it is issued to non-real economy producers.
There is a lot more to say, but I need to take a break. My intention is to restart this thread in the hope that we can discover the right paradigm of “money”, and thereby use holochain in the most powerful way to free humanity from financial slavery. We have to go beyond the present concept of “mutual credit”, so that we can architecture a system for regulating economic reciprocity that is decentralised. The ultimate “capital” (as a means of production) is human creative discovery and production. That capital exists within the sovereignty of each individual. Each one of us is therefore the true investor of our innate talents. That is why we need a decentralised banking system. Banking is a system of accountancy on the scale of economic ecosystems. As Max Plank said “when you change the way you look at things, the things you look at change”.
Thanks for your interest. I hope my input can be of use.
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While this may have been true in the past, do you not think that given our advances in technology, both for automation but also for knowledge transfer, that this is possible today? Perhaps not 1:1 self-sufficiency, but much much smaller scales than the global production networks required to support today’s modern consumer lifestyle. When knowledge is easily and freely shared, and the human being is unlocked to perform the multitude of tasks that it’s learning brain is capable of (instead of being mechanized into specialization), could we not refocus back onto the original question of just quantifying the “labor and resources” required for production?
Thanks Jak for your reply. Regarding the notion of “specialisation”, I didn’t mean it in the sense of an assembly line for industrial mass production, where human beings are treated like mechanical robots performing soulless and mindless work, contrary to their innate creative nature.
I meant specialisation according to our innate individual talents and nature that arise from the soul of our being, which naturally leads to a social ecosystem of mutual sharing, as is described in the New Testament at 1 Peter 4:10 - “Whatever talents you have been gifted, use them in service to one another, like good stewards dispensing the grace of God in its various forms”.
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The programming of human beings and societies for nihilistic consumption and the simultaneous consequent degradation of both the biosphere and humansphere resulted from the very nature and DNA of the economic operating system comprising a nexus of fraudulent banking and speculative financial market extraction.
That system and its legacy “consumer lifestyle” is finished and is only being artificially extended whilst a significantly more egregious replacement is being brought on-line using distributed ledger technologies. See: Raul Diego, The Bits and Bytes of The Great Reset: COVID-19 and the Scaling Up of Data-Capitalism https://lnkd.in/ggBgcYD
Here is an extract of Diego’s analysis to give you a general idea:
“Having squeezed every last drop of “value” from the earth, and with no more land to settle or markets to discover, capital’s approaching apotheosis finds it looking for a lifeline by creating a virtual copy of itself, where intellectual property supplants physical property and human biological and behavioral processes are recast as a grotesque form of human labor.
Efforts are now underway to “translate” the real world into a digital counterfeit that can provide financial markets with the figures and statistics it needs to execute the contracts of the incipient human capital markets – an insidious new form of capital assembled from our genetic code and other kinds of data that will form the basis of a financialized wonderland, enforced by blockchain technology and constantly monitored and updated through the burgeoning biosecurity state.
Led by the world’s most powerful hedge funds and transnational corporations, the so-called Great Reset amounts to little more than a campaign to turn humanity into datasets, which they can use to create more profits for themselves and their clients.”
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@raymond, thanks for clarifying. I can see now that we are very much on the same page, and it has helped give me more context for your original post. I’ll think a bit more on this and try to coalesce your perspective with my own.
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Yes, we need to share knowledge to “unlock” ourselves and humanity from being harvested by an oligarchical economic operating system that commodifies human beings and nature.
For centuries we have been tricked out of our innate money power and given it away to a dynastic sociopathic oligarchy.
Our money power is intrinsically distributed, because as I wrote in my original post:
The ultimate “capital” (as a means of production) is human creative discovery and production. That capital exists within the sovereignty of each individual. Each one of us is therefore the true investor of our innate talents.
The Indian philosopher, Sri Aurobindo, well described the nature and action of an oligarchical sociopathic consciousness, which for a long time has captured and perverted our individual and collective cognition regarding the money power within us, thereby enslaving us and diminishing our human potential. Aurobindo called this misanthropic consciousness the Asura Nature.
Aurobindo re-cognised the spiritual dimension of our money power, and the challenge facing us regarding the liberation of our money power, and therefore ourselves, from the domination of self-destructive ignorance coming from our lower egoic nature:
“Money is the visible sign of a universal force, and this force in its manifestation on earth works on the vital and physical planes and is indispensable to the fullness of the outer life. In its origin and true action it belongs to the Divine. But like other powers of the Divine it is delegated here and in the ignorance of the lower Nature can be usurped for the uses of the ego or held by Asuric influences and perverted to their purpose.” - SOURCE
To conclude, Aurobindo summaries the nature and path of our mission as follows:
“In the supramental creation the money-force has to be restored to the Divine Power and used for a true and beautiful and harmonious equipment and ordering of a new divinised vital and physical existence in whatever way the Divine Mother herself decides in her creative vision. But first it must be conquered back for her and those will be strongest for the conquest who are in this part of their nature strong and large and free from ego and surrendered without any claim or withholding or hesitation, pure and powerful channels for the Supreme Puissance.” - SOURCE: sriaurobindostudies[…]money-and-the-supramental-creation/ (the url is from the same site as the link above, but I have abbreviated it as I’m only allowed 1 link per reply)
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This is a fascinating concept and not so easy. I want to share my views and examples here:
In the Gitbook I explain how I would solve the scaling problem of the mutual credits ecosystems by implementing a decentralized insurance organism.
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