Sepp Hasslberger: Economy Archives

Bashkir farmers' local demurrage currency recognized by Supreme Court

The original of this article is in Russian and this translation of it isn't professional, but I think the news of this is of importance for us and should be shared even if imperfectly.

Chances are, you have not heard of the Republic of Bashkortostan. It is one of many individual States that were part of the old Soviet Union, the USSR, and that now are part of the Russian Federation which formed after the Soviet Union dissolved. Wikipedia has an article on history and more here: Bashkortostan The people of Bashkortostan are the Bashkir.

Ufa City, capital of Bashkortistan (image from Wikipedia)

It seems the farmers of a Bashkir village were successful in creating a workable demurrage-based currency and to have its legality recognized by their country's Supreme Court. Quite a feat, which incidentally has eluded us in the West ever since the Austrian Supreme Court shut down Silvio Gesell's and Mayor Unterguggenberger's successful currency experiment in Wörgl 80 years ago...

So now that we have some context, here is the article. The original in Russian is also available.

Bashkir farmers who invented their own currency have created an economic miracle

The Supreme Court of Bashkortostan allowed the villagers of Shaymuratova to pay in "shaymuratikami." It is a kind of local money - or rather, trade coupons. They can buy products only in one village. A system of mutual settlements is offered by local farmers. But the local prosecutor sought to prohibit this kind of currency .

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Posted by Sepp at 7:24 PM | Permalink | Comments (1)

Occupy Economy: The case for soft money

Money is a tool to facilitate exchange.

Money follows, like everything else here on this physical plane, the principles of yin and yang. There is "hard" (yang) money and there is "soft" (yin) money. At this time, the world is dominated by yang money. My purpose with this article is to convince you that we need to find a better balance in matters of exchange and economics.

Do we need money at all?

There are two systems that have historically been used and that are - to varying degrees - still in use today, that allow us to exchange the fruits of our toil and those we appropriate from nature, without the use of money.

There is the gift, which does not require an immediate return. Actually, it's nuanced. Some gifts are freely given without any expectation of return, but if we are talking about a "gift economy", usually the expectation would be that everyone, in some way or another, plays ball. That means, you can't just be a freeloader. Even in a gift economy, there is some expectation for all participants to pull their weight, meaning to participate in the giving. People who only receive and never give will find themselves marginalized, and rightly so. Flows do need to be balanced. If you only inflow (receive) and never get to the outflow part (the giving), things tend to get stuck. The inflow will stop sooner or later. The point is that, even in a gift economy, the principle of exchange cannot be violated with impunity.

Sacred Economics with Charles Eisenstein - A Short Film about the gift economy from Ian MacKenzie on Vimeo.

Then there is barter. In a barter economy, we also need no money. The exchange is direct. The needs of one are matched with the offerings of another. It is rather cumbersome at times to find a match, and it isn't always successful, but barter has been with us throughout history. It has served us well where money was not available or its use was not practical. Today, there are various initiatives to revive the barter economy. Computers allow us to provide better tools to match offerings and needs. Some of those tools merely let you choose from a larger number of diverse offerings. Others extend the barter concept from a one-on-one exchange to a circle of linked exchanges. A gives to B, who gives to C, who gives to D, who in turn gives to A. Circle closed. Barter has one big problem though. It generally has no time dimension. It is not easy, in a barter economy, to receive something today and to give maybe next week, or to provide your fruit to someone today when you actually don't need anything of theirs right away. That is where money comes in...

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Posted by Sepp at 4:10 PM | Permalink | Comments (15)

The Economics of Spaceship Earth

"Fifty Island" or "Isla Cincuenta" is a tale of economics by Francisco Ortega Martinez - a small island economy, based on human values and a continuous re-distribution of money. The story, in two parts, tells us about the economic life of the island community and their hypothetical experiment in finding a new way of living together. It is made in the form of a powerpoint presentation, (Chapter I and Chapter II) which can be downloaded either in English or in Spanish from this page:

"Fifty Island", a tale to understand axiological economics.

Axiology, of course, is the philosophical study of value - a study of human values based on aesthetics and ethics. ( Axiology )

The story is an explanation, in simple terms, of a real experiment Francisco Ortega has developed, and for which he wrote a program (in php) that can be installed on a server and made accessible to any group of participants wishing to do the experiment. The program, and some information about it, can also be found on the "Fifty Island" page as linked above.

Both the story and the program are based on a paper by Kenneth E. Boulding titled "The Economics of the Coming Spaceship Earth".

Boulding states that our human economy is part of, and must exist in the context of, the ecology of its surroundings. The ability of those surroundings, the ecosystem in which we live, to provide inputs of material and energy, and to absorb outputs of pollution, is limited by the fact that planet earth is a sphere with finite capacities of regeneration. It is as if - borrowing Buckminster Fuller's concept - we lived on a spaceship and while traveling on our common journey had to make do with the resources that are available on the ship.

According to Boulding, humanity is due to take an evolutionary step away from the "cowboy economy", the free-for-all of production and consumption, towards what he calls the "spaceman" economy, where production and consumption give way to continuous reproduction.

The paper by Boulding, discussing an ecological approach to economics, is an very interesting read, and I found it here on the site of dieoff.org:

THE ECONOMICS OF THE COMING SPACESHIP EARTH

I have brought a copy of that paper here to this blog, to have it available for easy reference and also to correct some of the typos that crept in when the paper was scanned...

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Posted by Sepp at 2:50 PM | Permalink | Comments (4)

David Korten: Taking Back Our Lives from the Wall Street Mafia

David Korten, author of "AGENDA FOR A NEW ECONOMY - From Phantom Wealth to Real Wealth" discusses what's wrong with a Wall Street dominated economy, and how to take back our lives...

"Trying to fix Wall Street is like trying to fix the Mafia so it's not quite so destructive..."

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Posted by Sepp at 11:43 AM | Permalink | Comments (1)

How patents prevent rather than promote adoption of new technologies

Michel Bauwens of the P2P Foundation recently excerpted an article that argues patents might not be the clear-cut technology promotion tool they are hyped up to be. The article itself, by Boldrin, Levine and Nuvolari makes the case that improvements in steam engine technology during the time between 1772 and 1852 show that the protection afforded by patents is not associated with vigorous technological development. Their article is titled

Do Patents Encourage or Hinder Innovation? The Case of the Steam Engine

and it was published in The Freeman.

Image is of "the green steam engine" found on PESWiki

Excerpting from Boldrin's introduction into the patent controversy:

"Today one of the most controversial issues in economic policy is that of patent law. Is a patent just an extension of property rights to the realm of ideas? Or is it an unwarranted interference by the government into the rights of individuals who have purchased goods and services to use them as they see fit? Should the Western system of patents be extended worldwide? Or should we get rid of patents entirely? Is the patent system responsible for modern miracle drugs? Or is it to blame for the millions dying of HIV in Africa? Do patents lead to greater innovation and economic growth? Or do they kill the goose that lays the golden egg?"

"The issue of whether patents are genuine property rights or unwarranted government interference cannot of course easily be answered by a natural experiment. We will leave that discussion to philosophers. The impact of patents on innovation does have an objective answer. In this case history instead of nature has been kind enough to provide us with a wonderful natural experiment. This experiment took place in the county of Cornwall, England, between 1772 and 1852. It was there, in the extreme southwest of England, in the wet depths of the Cornish copper and tin mines, far removed from the supply of coal in Wales, that the steam engine was pioneered."

I recommend reading the full article and, if you're interested, also the comments which give a diversity of views.

Some of you may know that I have written on the subject of patents a good 20 years ago. The article is available on my 'historical' site www.hasslberger.com and is the first one in the Technology and Patents category. In introducing The Inventor and Society, I wrote "Patents are, at times, a block to technological progress, acting to discourage inventors who have found ways to circumvent the dearly held "natural laws" of thermodynamics and of conservation of energy. Why not use a different system that ensures protection of the inventor but does not require him to provide a theory for his invention to register it."

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Posted by Sepp at 1:39 PM | Permalink | Comments (7)