Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I see Money as value-in-motion or Dynamic Value which exists only in the transient instant of exchange - the "Transaction".

Capital, or "Money's Worth", on the other hand, I see as Static Value or potential Money.

Conventional Economics is based upon the assumption that Money is Credit, and is either interest-bearing credit created by Banks, or non-interest-bearing notes and coins minted by governments.

That's bollocks of course, like other axioms of conventional Economics.

While credit aka "time to pay" is a necessary element of a monetary system it need not be Money and as rdf pointed out, it historically was not.

The truth of it is that wherever a barter system incorporates "time to pay" or credit between seller and buyer, then the result is a monetary system.

As I have pointed out several times recently, the Swiss WIR business to business barter system is just such a system, where money's worth of goods and services changes hands on credit terms. Settlement of credit is not in Swiss Francs, but in "Swiss Franc's Worth" of goods and services.

ie transactions are not settled for official "fiat" Swiss Francs either in bank-note form or entries in bank ledgers, but by reference to Swiss Francs as an abstract Value Unit.

The reason for the longevity and sustainability of the WIR has been that the pragmatic Swiss do not leave settlement of credit to trust alone, but secure trust by mandating that members give security over their property. ie the WIR is a property-backed monetary system.

That's fine for businesses, but in order to extend such a system to Joe Public you need forms of "Money's Worth" which businesses (and other Joes) will find acceptable in exchange, and a trust framework as well.

Here I advocate Units redeemable in (say)

 Energy - in 10 Kilowatt Hour chunks

which would be pretty much universally acceptable.

Or, most importantly, in the right to exclusively occupy land for a period of time such as

Equity Shares

These would necessarily be geographically constrained I that you couldn't redeem (say) a Swedish Equity Share/Land Rental Unit against occupation of land in Norway.

The necessary framework of trust would be provided simply by an agreement - the Guarantee Society - and would be backed by provisions made by both sellers and buyers (who both benefit from the mutual guarantee) into a "Pool" in mutual ownership.

A "service-provider-formerly-known-as-a-Bank" would manage the system in return for a fee, including a performance based element to keep them honest.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Jan 2nd, 2009 at 03:41:26 PM EST

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