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LQD - On Monetary Structure

by ATinNM Fri Feb 20th, 2015 at 12:06:02 PM EST

Paper:  Is Our Monetary Structure a Systemic Cause for Financial Instability? Evidence and Remedies from Nature

(Directly linking is beyond my power, have to Google it.)


Abstract:

"Fundamental laws govern all complex flow systems, including natural ecosystems, economic and financial systems. Natural ecosystems are practical exemplars of sustainability: enduring, vital, adaptive. The sustainability of any complex flow system can be measured with a single metric as an emergent property of its structural diversity and interconnectivity; it requires a balance in emphasis between efficiency and resilience. The urgent message for economics from nature is that the monoculture of national currencies, justified on the basis of market efficiency, generates structural instability in our global financial system. Economic sustainability therefore requires diversification in types of currencies, specifically through complementary currencies."

[Emphasis added]

Teaser quote:

It is critical to understand that the findings described in natural ecosystems arise from the very structure of a complex flow system, and therefore that they remain valid for any complex flow network with a similar structure, regardless of what is being processed in the system: it can be biomass in an ecosystem, information in a biological system, electrons in an electrical power network, or money in an economic system.  This is precisely one of the strong points of using a web-like network approach instead of machine-like metaphor.

[Emphasis original]

Display:
Paste this [www.lietaer.com/images/Journal_Future_Studies_final.pdf] in the command line of a new window and hit the triangle on the far right. It should download the PDF, or it does for me. But It is no longer in a window I can switch between with ease. I access it from the bottom toolbar icon for Adobe and then have to minimize to get back to ET or anything else on Firefox browser.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 20th, 2015 at 08:01:27 PM EST
European Tribune - LQD - On Monetary Structure
Economic sustainability therefore requires diversification in types of currencies, specifically through complementary currencies."

So lots of little regional currencies then? What's the happy medium here?

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by melo (melometa4(at)gmail.com) on Sat Feb 21st, 2015 at 10:22:55 AM EST
I don't think our lack of currency diversity is the problem.  The problem is we're dumb animals who have built a complex system of financial interactions that necessitates greater information and intellectual capacity than we possess at this stage.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 21st, 2015 at 11:40:57 AM EST
... of missing the point of money.

Money is an extension of the political system, and cannot be separated from it. Studying money without considering the political system which creates it is almost completely analogous to a cargo cult building a landing strip and control tower out of bamboo and expecting it to attract supply planes.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 21st, 2015 at 04:37:01 PM EST
One can revert the argument upside down and suggest that a monoculture of political nature is a problem in itself. Or that a single political system (whatever it is) does not fit all.

The argument can be extended (and in my opinion should be) to a political perspective.

by cagatacos on Sun Feb 22nd, 2015 at 05:36:55 PM EST
[ Parent ]
"Politics" is the polite word for "the activities of the armed men who come to your house every once in a while to take some of your stuff."

Abandoning "political monoculture" is what normal people call "civil war."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 23rd, 2015 at 01:34:38 AM EST
[ Parent ]
That is going a bit too far don't you think?

Ancient greek city/states. Switzerland in the present. These are example of the absence of political monoculture that works.

Ah, and Western Europe after WWII until the 70s.

by cagatacos on Mon Feb 23rd, 2015 at 06:47:53 AM EST
[ Parent ]
Classical Greece actually makes my point rather nicely.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 23rd, 2015 at 03:14:58 PM EST
[ Parent ]
Well we could have orderly overlapping systems, just as we have different political levels.

You could pay your local taxes in city currency, regional in regional currency, state in krona and European taxes (should they be introduced) in euros. It would be a bit messy though.

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by A swedish kind of death on Wed Feb 25th, 2015 at 05:06:48 AM EST
[ Parent ]
That is true.

That is not, however, a plurality of political systems operating in the same jurisdiction. That is a dominant political system which pools or devolves policy areas to a junior policy level. It is rare, very volatile, and normally extremely unpleasant to live in a society where different levels of administration can effectively contest power as equals.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 25th, 2015 at 04:46:54 PM EST
[ Parent ]
Money is a social construct and involves assessment of relative values of different goods, amongst other things. So discussion of money in systems occurring in nature has to be limited to social species, for starters. But that has little to do with the possibility of observing patterns of energy flow, which money in human societies certainly involves, and how they affect the overall stability of natural systems. Quite the contrary, I would think. And the overall conclusion as to the desirability of multiple pathways for money and money equals to operate seems reasonable.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 22nd, 2015 at 07:27:22 PM EST
[ Parent ]
Money is the major hierarchal determinant in the modern human society. That is how democracy, social progress have been cracked. The flip side of the social-economic monoculture is the social hierarchy we have.

Nature surely developed smarter structures than hierarchy -- and pathway diversity is definitely is an important factor. Though that does not mean that hierarchy (or "monocultural" utilization if resources) does not occur often in nature.

by das monde on Sun Feb 22nd, 2015 at 08:59:42 PM EST
[ Parent ]
The abstract itself is a misrepresentation of natural ecosystems, which are not any more stable than the economic system, just on a different time scale.

It's like saying that geology is an exemplar of sustainability. Not on "geological" time scales it is not.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Tue Feb 24th, 2015 at 04:12:49 AM EST
Perhaps the target of the analogy is the problem.  Rather than a single currency being the monoculture that creates instability, perhaps it is the monoculture of wealth-holders that is the source of instability.  Divide it up evenly, and you have a healthy and competitive ecology, but when it's all concentrated into the hands of a small enough group of people that we could fit them all on a cruise liner, there is the problem.
by Zwackus on Tue Mar 3rd, 2015 at 04:27:46 AM EST


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