3DN Sample Transactions
- Lets say that we wanted to have a local currency that would facilitate exchanges of goods and services that do not now take place due to a lack of money. In most plans I have seen, the function of the currency depends on the trust of those who accept the currency for goods and services that they will be able to exchange the currency for goods and services of value to them. Alternative currencies are not common due to the lack of that trust.
- However, it does not take money to create value. Everytime you clean your house or cook your own food, you create value equal to what it would have cost to have someone do that for you. Money is only a convenience to exchange value when I have nothing to offer you in exchange for what I want from you. If there are, in any community, unmet needs and idle hands capable of meeting those needs, then there should be a way that exchanges can be facilitated.
- I want to explore whether or not we could "sell" such a currency into existence. For the purposes of this exercise, I have imagined an organization called Community Investment Enterprises (CIE).
- A group of people could agree to purchase goods wholesale, in bulk, and thereby reduce the cost to them for those goods. The participant has purchased a right to receive goods and the value of that right, to the participant, is the difference between the cost of the right and the cost to purchase those same goods in the retail market. To make that right into a currency, we would need a market in which the holder of the right could exchange the right to receive those goods in exchange for a service, such as lawn mowing or house cleaning.
- In the exchange of that right, the service provider receives value equal to the retail value of the goods received and the holder's cost is the price paid for the right to receive goods, or the wholesale value. Therefore, the holder of the right has made a profit that is difference between the cost of the right to receive goods and what it would have otherwise cost for the service.
- Formative Eval from Larry: I have read the above paragraph many times and can't seem to get my old mind around it. Is it that the RETAIL cost of the good received by the service provider is equal to his RETAIL cost for his service, if provided in the general economy. What does the service provider gain for his/er self such that s/he is already using the system? How would this alter if the CIE also established a labor pool of members? This effort reminds me of my M2M [Mission 2000 of America, Inc.] in my 1976 manuscript. In the following TOC, go down to Stage 3 and read about MISSION 2000 OF AMERICAN, INC. and the seven sub-projects. At: http://home.comcast.net/~nucoms/MISSION2000/index_c.htm
- Note that I had no knowledge of alternative currencies and the personal computer was not imagined.
- This is essentially a purchasing coop. Does it make sense to invest in more goods than you would use if you could exchange the unused goods for services at a profit? The goods are backing the exchange in the same way that gold used to back the dollar. Will that be sufficient to create the required trust in the medium of exchange?
- This is also the theory behind Membership Warehouses. However, a membership warehouse will never offer more than a marginal benefit, and is not suited to use as a base for a currency, because the interests of the owners in profits will always conflict with the interest of the members in savings.
- I have explored how poor people could pool their resources to bootstrap economic security in the Self-help Corporation (SHC Short Form Outline).
- I am now wondering whether we could use the marginal profit described above to stimulate community participation in such a development. In addition to the direct financial benefit to the investors, the community would benefit from private sector providing food, shelter (1), clothing, health care (2) and education (3) to additional members of the community with resulting reductions in crime, cost of public assistance, taxes and need for charitable contributions.
- Lets suppose that a basic CIE facility and start up cost, such as described in SHC Short Form Outline, could be purchased for $500,000 (Maybe an old strip mall in a neighborhood housing the working poor. We then find 500 people in the community to invest $1,000 each in exchange for shares in CIE. CIE issues additional shares to the un(under)employed to work in the grocery, restaurant, laundry, day care. People who pay cash for those services also receive shares equal to the difference between the cash cost of the services and the cash paid.
- Anyone holding shares in CIE is entitled to exchange those shares at the grocery, restaurant, laundry, day care. The more shares paid to CIE, the fewer shares outstanding and the more valuable the shares as a function of liquidation value of assets held by CIE. The more shares paid out by CIE, the more value is contributed to the community that would not otherwise have been contributed.
- 1.The difference between CIE's cash receipts and its cash costs is available to invest in additional facilities such as a dormitory and/or other affordable housing.
- 2.CIE could contract with doctors to provide preventive health care to CIE workers in exchange for shares. The doctors and the doctor's staff (if the doctor distributes the shares as additional salary) can lower their cash cost of living by spending shares instead, or obtain goods and services that they would not otherwise be able to afford. A similar arrangement could be made with the local hospital for catastrophic care.
- 3.Education and job training could be arranged through potential employers in those fields, or government assistance might be available. CIE could hire retired persons to work part time in early childhood programs and after school programs for older kids. CIE could invest in a community center featuring computers with internet access for those who cannot afford access. See NU Educational Services.
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