Charles Hugh Smith: What Would A Better System Look Like?

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A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet.

The main mission behind Peak Prosperity is to focus on new, more regenerative and sustainable models that will better serve humanity than the old models which are currently falling apart. Charles posits a new way of living that is a) achievable with existing resources and technology, and b) much more equitable and resistant to abuse.

We very much need new alternatives like this at this time. Because, once the system breaks in earnest, our ‘leaders’ will be desperate – and as Jared Diamond wisely observed “Nations in crisis borrow and adapt solutions already devised”. So getting good ideas on the table now, so that they’re available to be adopted when needed, is critical.

The principal idea is we need a new system. Now, it doesn’t have to replace the existing system entirely. It just has to be an effective alternative that people can choose if they so desire to.

In my opinion, it needs to be decentralized, anti-fragile, yet connected with other like-minded people. But right now, we’re having to start from scratch, basically reinventing the wheel. We’re fighting a kludgy, broken, unfair, rigged system every step of the way if we want to create a decentralized community-based economy.

So what would a system be like if we designed it from scratch to actually make it easy to join a community economy? Well, we want a system that’s opt-in and voluntary, not like the one we have now. We want it be fair, not like the one we have now. We want it to have it’s own money supply that comes from the bottom. Money should be created at the bottom of the economy, not at the top.

And we also want it to be human. In other words, like that it recognizes the value of dignity and our contributions, i.e., purposeful work that meets the needs of the community.

We all know it’s a finite world we’re on and that our resources are being depleted. And so we’re going to have to make some sort of concerted effort to share this somewhat equally, or at least not as un-equally as it is now.

To me, the obvious solution is take your own resilient homestead and lifestyle, multiply it by 100,000 similar oases around the world that are connected to a global community economy. Wealth can be more equitably shared because we’re all sharing the same value system: de-growth. Becoming more efficient, becoming more localized, not wasting resources, and not chasing profits as the only incentive in the system.

Click the play button below to listen to Chris’ interview with Charles Hugh Smith (46m:28s).

This is a companion discussion topic for the original entry at

Simple question. It was mentioned in the video that crypto could be the “new” system. I know this is being closely looked at by many governments too. The question is, wouldnt you have some concern about big brother managing that new system? The way I see it, if the money system all goes electronic, that concentration of power only goes up. Theoretically, the government would have near full control of everything at the push of a button, no?

The longer I listened to this conversation the more discouraged I felt. But by the end I noticed the encouraging ray of hope running through it.
What I found discouraging is that it’s pretty obvious to anyone significantly involved in the cryptosphere that Charles wants to reinvent the wheel.
First, let me point out that there is a long modern history of “community money” arising in locales for very local trade that bypasses the larger economy while greasing the wheels of small local entrepreneurial work and local labor. It’s particularly vibrant in pockets in the northwest. If that were all he’s after, it exists and there are articles and books written about various ways it’s been done and how to do it for one’s own community.
But Charles goes further, envisioning some pan-local network of such communities learning from and trading with one another. So his conception needs another level; the coinage needs to be pan-local, yet not managed by some elite that can bend it to their advantage at the expense of the people actually doing the work.
But there, too, he’s reinventing the wheel. This is what the cryptoverse is already doing. He doesn’t need to invent a new coin protocol, he just needs to apply one that already exists. I think he could fruitfully look at the Ethereum platform, for example, that allows the development of coinage and associated contracts by which the coinage is released when the contact is fulfilled. The Ethereum platform will let anyone design a new coin with its own rules. And already there are prototype programs to let these coins interact with one another; an agreed relative value between two or more communities about each group’s coin’s value would complete the linkages. There ya go. But, hey, that’s just begging for the existing fiat system and arbitrage all over again.
Also, Ethereum isn’t really decentralized, which Charles says is an important element. When it comes to crypto, there is only one truly decentralized, democratic, from-the-bottom-up coin, which began with people voluntarily and with great passion pursuing exactly the vision Charles is coming to like a latter-day saint. That, of course, is Bitcoin.
Charles objects to Bitcoin even though it hits every concern he raised, and meets every interest he expressed. He faults it for being generated by miners rather than arising from “labor.” Clearly he doesn’t understand the role of miners. It is, first, to create and release the coin on a scheduled basis over a long period of time. Anyone can become a miner, so there’s a democratic element to it. But because of the schedule, throwing more mining power at the task of creating more Bitcoin doesn’t increase the rate of coin creation, because the algorithm that has to be solved to reward a miner with a coin automatically adjusts - also on a regularized, predetermined schedule - to account for the computing power being thrown at the process.
In addition, there is nothing miners can do about the fact that there is built in a total number of coins to be mined, after which there will be no more mining. No amount of computing power will change that. It’s what makes Bitcoin a true hard money; ultimately the hardest (scarcity principle).
Now, as miners sell their coins into the system, they earn the money to keep their computers operating, which is how the “AI” of blockchain keeps going. Someone has to pay for the computer time, whether in Charles’ new system or in existing Bitcoin. Charles hopes for some benefactor who feels guilty about how much s/he has made in the extractive economy to want to fund getting his new system off the ground. He uses the sum of $10 million as a “for instance.”
That’s nowhere near enough for a pan-local system. Yes, it might get a local or regional system off the ground - but barely. Any computerized system that takes off beyond the local level is going to require hundreds of millions of dollars of computer equipment and power to operate efficiently to track and reward millions of people’s “labor,” and provide them the (in Charles’ system) democratically approved number of coins. The Bitcoin system is estimated to be worth several billions of dollars of realized investment already. It would take at least that much to duplicate its reach. Yet, thousands of individuals at first, and then consortia later, put up their own money in good free-market style, and either made a go of it or failed. Either way, they built out the existing system. It’s so large now that no one - not even a country with the wealth of the US - could afford to finance its duplication.
Who is to pay for Charles’ system and its electrical use? Are the people operating his system - or just maintaining the various nodes and troubleshooting issues - engaged in “labor” by his definition? If so, why aren’t miners?
Also, how do we assure that the people in Charles’ system don’t corrupt the AI protocol to benefit themselves, or to seize monetary control? They are the weak point; the point of systemic power, and therefore will attract the sociopaths. Charles wants to rely on the good graces of an angel investor at first; and then he “hopes” for some emergent ethos or group of ordinary people who will arise to prevent anyone or any group from corrupting the system.
Talk about “hopium”! I’m remembering that Google was founded on the principle “Do no harm.” And I remember seeing an interview with Eric Schmidt, back while he was CEO of Google, on TV with doubtful Glenn Beck assuring Beck and all those watching that there was simply “no way” Google could ever do anything bad because “it’s just not in our corporate ethos.” How’s that working out?
Bitcoin is immune to that kind of outcome because of the wide dispersal of the system. There are an unknown number, but known to be over 10,000, computer systems spread around the world on which the blockchain protocol operates to prove the algorithm that adds a block to the Bitcoin chain, and it’s all open source and transparent; there’s the integrity of the system. There is no pinch-point; there is no place at which someone can take over the system.
The miners facilitate the system’s development; that’s their “labor”. They don’t control it. They do the “good” of gradually releasing coin into the ecosystem according to an immutable predetermined schedule they cannot cheat, to create a liquid, hard money regime as the ecosystem builds out and increasing numbers of people join the usage community.
Yes, today there are a lot of people in Bitcoin who are holding coins as an investment, because they rightly expect the value of each coin to skyrocket as the number mined slowly reduces and the demand for coin increases. Never-the-less, that’s only a function of building the system to a sufficient level of expansion and adoption that provides the liquidity a successful money system has to have, especially if it’s meant to be pan-local. The day will come when people don’t buy Bitcoin but earn it for work performed, and pay it out for work or goods received. In fact, that day is already emerging: there are increasing numbers of people who are paid in Bitcoin for their daily labor. Those people then have to spend some of their wages to purchase the items they need and want - and that is how a new economy is created. It’s happening.
Furthermore, because of how Bitcoin is designed, it has all the privacy (another key feature Charles wants) of a current fiat cash transaction. It can have even more privacy than Charles envisions for his ideal money - and it can exactly match his ideal, too. The great thing about blockchain as a protocol is that it allows those who use it to control their own data, and to release only what they want to release and only to those to whom they want to allow access.
There is nothing Charles wants to do that isn’t already done by Bitcoin and the blockchain that makes it possible. And it does it better, by eliminating the obvious pinch-points Charles seemingly can’t see a way past except by trusting to the good graces and noble intentions of human actors.
Bitcoin, by contrast, does not need to rely on hopium, nor to believe in the (demonstrably non-existent) natural goodness of the human soul. It is both disappointing and frustrating that he doesn’t understand, and that Chris apparently fails to grasp as well, that the new monetary system that dethrones sociopaths, democratizes the economy, and empowers ordinary people to make and keep their wealth has been right under their noses for a decade.
I can hypothesize that the economic drama of the Bitcoin birth process has blinded them to what the project is all about - as if starting up any new money can be done without a roller coaster ride of acceptance and rejection, especially one that’s emergent from the constantly churning chaos of ordinary people operating on ordinary mixes of greed and altruism. But guys, c’mon. It’s time to update your respective understandings of what’s going on in the crypto universe as a whole, and also in regard to what Bitcoin really is beneath all the drama of its birthing process.
On the other hand: that this conversation even took place inspires hope. It suggests a new level of openness, and that’s the prerequisite for seeing more clearly and understanding more deeply.

Not much new here. Utopian ideas. Lack of understanding of BTC. And lack of interest in the hunker down gold bug militia.
Going back on vacation.
Nice post VT

Reading the Bitcoin gushing here is a little to me like listening to religion.
The Hackers Teleology is about using AI for a number of things that go beyond accumulating a crypto in one’s account out of reach of authorities.
Charles personal-history filled book explains the cracks in the system and points out areas that can benefit from AI to provide real value for real labor, which is denigrated presently by our society wherein financial gamesmanship and getting rich quick by not contributing (which includes most of the bitcoin discussions these days) are minimized by proper application of AI. In this context, comparing Charles’s AI proposals to a limited resource based on extreme consumption of electricity and primarily feeding the free-shit something for nothing bitcoin story is not justified. For starters total bitcoin volume and valuation is not related to value added work. That is a fundamental premise of the Hackers Teology. And looking around the *coin blogosphere, the only labor backed cryptos that I can find are loss leader activities used to entice clients to use financial services for payroll service providers, without any notion of an AI structure to address the problems pointed out in the book.
You have to read the book.

It has always seemed to me that the weak point with bitcoin-type currencies, is the demand for electricity for it to work. If we are truly looking at a breakdown of the system, won’t part of the system breaking down, be the grid? Haven’t there been losses already, where peoples’ “wallets” disappeared? I have a problem getting involved with things that don’t make sense to me, and I’m afraid digital currency is one of those things. That’s not to put it down, just saying I’m not understanding the attraction. In a small community, barter, exchange of whatever currency works for the person you’re dealing with, and even just free stuff, keeps a lot of things afloat. We have a virtual noticeboard where anyone needing something for a project can put it out there - “anyone have some spare fencing wire?” “I’ve got too many tomatoes and they’re going bad - come on over and pick some.” “I need something picked up in Victoria - anyone going down there this week?” This works SO well - it’s the very essence of the trust that a small community operates on.
So I guess I would say, the primary currency is trust. Everything else is dressing.
Having said all that, I did enjoy the conversation. It made me want to recommend again Dmitry Orlov’s description of the collapse of Soviet society. Extremely instructive.

I read the whole interview but I haven’t had a chance to read more details about the economic system that Charles is proposing. I love the idea of treating everyone equally and totally agree that it’s good for us to experiment with these systems now to get some of the bugs worked out before they become critically needed.
If we set aside the whole crypto/AI element, it seems the core of the proposal is that people do some work in their community and get paid for it in a local currency, which is exactly what a Local Exchange Trading System (LETS) or Ithaca Hours system or a time bank is - these were (are?) popular in many towns starting in the 1980s. Can anyone compare/contrast these systems with the one that Charles is proposing?
A local currency is very interesting but I’ve also read reports of how it takes a lot of effort to make it work in practice. Just one example (from Ithaca Hours, I think): some very popular businesses (e.g. the food co-op) that accepted the local currency accumulated many more currency units than they could use because many/most of the co-op’s suppliers didn’t accept the local currency. One guy had a nearly full time job just thinking up creative ways to keep the currency moving so it didn’t just sit there in these popular businesses. (Of course, in a collapse scenario, that might not be a problem because everyone will probably jump onto the local currency bandwagon.)
A variation on LETS is a time bank where the unit of “currency” is an hour - e.g. performing a service for X hours or making something that takes you Y hours. Most time banks honor everyone’s humanity by counting everyone’s time the same - no type of work is given more units of credit than another - and people are encouraged, over time, to give about as much as they receive so their balance of hours doesn’t get too high or too low. The hOurWorld online system ( says it’s framework is supporting time banks in 380 communities with a total of over 45,000 members.
I helped set up a time bank in my community during our Transition Town years; I modified some open source software to make a web-based system for our members. A few dozen people used the system and many people liked it a lot, but it didn’t get much traction in the community - it’s hard to explain exactly what it is, what it is not, and why it’s a good idea to the general public - so our time bank didn’t get a critical mass with lots of variety in goods and services and it’s no longer active.
I still remember one meeting when we were organizing our time bank. We decided to ask our members for a small one-time fee in U.S. dollars (something like $5 or $10) to support the system (web hosting fees, advertising, etc.) and to encourage people to have some buy-in. In exchange, we credited each new account with 25 hours so they could start getting services or goods from other people right away. Anyway, at this meeting I realized that we were our own “Fed” - we could credit people with 500 or 1000 hours if we wanted to, or give people more credits every year… who cares? All it means is that people have more credits to mediate exchanges with their neighbors. A local currency (whether in dollars or hours) avoids the Depression-era problem where some people had goods and other people had needs but there just weren’t enough U.S. dollars to mediate the exchanges between people. And giving away credits encourages people to use their hours, not hoard them - which means they’re contacting other people in the community, chatting with them, making exchanges and new social connections.
A few other points:

  1. Our time bank supported both “offers” (goods or services you were willing to give) and “requests” (things you’d like to get but are not being offered by anyone). This helped people see where there were new opportunities to provide an in-demand item.
  2. A time bank or LETS can be web- or app-based today but can pretty easily become low-tech as complex systems break down. Some people ran these systems years ago where members telephoned their offerings or their requests into a central person who typed them up and mailed them to all the members. Or we could have a few people who host the system in an office in the middle of the communty with a huge whiteboard that records the offers, requests, and the account balance of each member.
  3. Today, bartering partners are supposed to report the value of their trades to the IRS as income, but you can run a time bank (IF you value everyone’s time equally) right now without this problem because the IRS has specifically ruled that time bank exchanges are not bartering and need not be reported as income. [But I’m not a lawyer, so there may be exceptions.]
    Looking forward, every service that the government can no longer provide becomes an opportunity for us regular people to step up and provide a similar service in a creative way.
>> Most time banks honor everyone's humanity by counting everyone's time the same
Is any allowance made for the fact that an hour spent doing some jobs could only happen if the person spent many, many hours on skills development first? Not to mention the cost of tools or other overhead?

Charles och Chris,
Thanks for sharing a topic that happens to be in the center of my radar screen. I’ve downloaded the excerpt, ordered the book, and made a donation to the oftwomind-site. I simply want to encourage you Charles to continue with your service as a great independent thinker.
The reason why this topic is in the center of my radar screen of attention, is that I’m the chairman of a foundation that has at its core to create a community for the future. The foundation was founded approx 25 years ago with the acquisition of an old farm property in the Skåne region in Sweden. A community was formed with a very resourcefull leader in the centre. Lot’s of extremely hard work has been put in by many people over the years on the land, in the buildings and in the infrastructure. What has been built with limited resources (private donations and cash-flow from the “business”-side of the foundation) is impressive.
The whole “project” has lost steem in the past 10 years. The founder has developed health problems. Many have lost “faith” in the whole idea and left. Pursuing an alternative path to the existing societal set-up and norms, is a very, very demanding path to follow.
We are now entering into a second wave in our development as a community. One aspect of that development is that we are starting to reconfigure the set-up of governance. We had in the first 20 years one Foundation that catered for all issues: Living, rules for the community, all the different businesses (restaurant, two shops, yoga-classes, B&B, conference, health treatments, etc). I truly think that this was needed in order to get sufficient focus for the first wave. But the “running out of steem” has indicated for me that we need to reconfigure this monolistic construction in order to even have a chance for a second wave of development. In the past year, we changed this set up with creating a central governing Foundation that effectively has the power of all four legal entities (in the past 5 years 3 more legal entities have been formed). The power in the end is exercised not via ownership but via the “statues” of all the legal entities. So the central foundation in our case has the full control of who is part of each legal entities board of directors and the statues of each. We’ve also created an Association in which all the legal entities are members. This Association is a forum for power sharing and idea-generation across the “sphere”. This Association has as one, of many features, the power to “kick” me as chairman of the central foundation. We had our constituent meeting in the Association on Zoom just two months ago. It felt as such a relief for me personally that this Association came to live before my eyes on Zoom.
What I’m looking into now with two colleagues in the central foundation, is to create a vehicle for the community that is separate from all the other legal entities. Our initial hypothesis is that we will design an Association for all the people that live on the property. I want that Association (for private people) to have lots of power. That Association will probably also be a member of the Association for all the legal entities.
Perhaps some of you think we are just creating a complicated mess of something that you should just keep simple. You might be right. :slight_smile:
My answer to that argument, is that we kept it “simple” in the first 20 years with one legal entity. But it lost steem and can not be reinivigorated unless we change the whole set-up of the governance of the community.
There is much more to say about what we are trying to do. I hope that this site will even more focus on the experiments in creating the new. I understand that many are interested in the failings of the old, and gets upset of the craziness of different actors behaviour in the current system. I personally have moved on from that, to exactly the exciting topic you scratched on in this discussion. Keep on with that great work, Charles and Chris!

My experience with communities have all centered around a charismatic leader. The leader held the vision, decided things, and was the interpersonal glue that held things together.
But personality conflicts eventually arose. The leader-follower glue (mostly admiration for the leader) came loose and the communities splintered.
The problem is worse if the leader is smart, well liked, and has a charismatic personality.

AI…vs…DI? maybe instead of artificial intelligence we need guidance from Devine Intelligence. Is the religious model so crazy or archaic?
There is a sub society in our small town that operates on volunteerism, gifting, helping, and many non-selfish modalities. Is hard to quantify this in monetary terms which is probably the reason that it works so well. The example of good deeds is very compelling and when someone truly gives without the expectation of receiving something in return, it is a very powerful action. And it’s breeds more good action. This does not replace the laws that we live under, or the government but it is a powerful sub-culture. The existing “dollar” system undergirds this and is a necessary evil but most of the local effort tries to bypass the strict pay-for-labor…or pay-for-service when possible.
If the shit hits the fan (do I smell something?)…My spiritual intuition and guidance will tell me to choose my associations based on Devine Intelligence. Who is following a path of charity? Compassion? Honesty? Who do I want to associate with? This type of vetting creates a powerful society.
I don’t need another human construct to guide my life. There is a good roadmap to follow already. Unfortunately…Yes …we still have to “give to Caesar what is Caesars”

…and close to my heart. I have a couple comments, from reading the discussion so far.

  1. Extrapolating from my own limited experience with local currencies, vshelford and psebby have it right. So much is dependent upon local trust and shared good will to make the typical local currency concept work. The great thing about such systems is that they are self-selective: those who want to work cooperatively and to value labor equally are drawn to such projects while those who think it’s all b.s. steer clear. So, in general, it works at a small and local scale - within the limitations psebby points out: some (critical) resources become repositories of lots of scrip, which is not as liquid as needed in order to trade outside the local setting. That is part of my critique of Charles’ presentation.
    Joel Salatin could set up an internal scrip to lubricate transactions at Polyface Farms between the various entrepreneurial ventures he has helped his family/tribe incubate there, if he wished, and it would work pretty well internally. Not well externally. Chris could do something similar with his emerging endeavor. Again, it wouldn’t work off-campus, although he and Joel could possibly work out an exchange regime that uses their shared LocalScrip for trade between their two communities. Neither would find many, if any, local merchants who had much appetite for their scrip, unless those local merchants were purchasing products from their communities to resell to the general public. In that case, those merchants would be the final arbiters of the value of LocalScrip, and it might very well be different from product to product and merchant to merchant.
    Really, as vshelford notes, this is a formalization of the barter board. I think it’s a great concept, but it works as well as it does (when it does) as a secondary market, not as a primary.
    To reach outside the local, self-selected, insular community, what’s needed is a pan-local currency. If, as Charles proposes, that pan-localism is going to be international in scope, that currency has to have universal attributes; even in a closed system of sharing between self-selected groups separated geographically there will be necessary touch points with non-participants - shipping, for example. psebby’s example of needing to buy in food for the popular grocery store is another case. Similarly, feedstock garnered from outside a community to grease the production of goods made available within the network will be a constant need until/unless the system becomes highly adopted, hence the scrip becomes highly liquid.
    The problem is getting from here to there. How does that happen in fact, not fancy? Let’s not gloss over that process; it’s crucial. If it doesn’t work at the granular level, the whole project collapses. So it can’t rely on the good nature of self-selected community members. It has to account for the full array of human behaviors and motivations - for the sinners as much as for the saints, and perhaps more for the sinners because they’re not saintly.
    As I said, Charles appears to propose reinventing the wheel. This work, this experimentation, is being done. Ethereum contracts are being designed just for this purpose: no time-sucking community deliberation about the proposed value of each kind of job is required; rather, two or more people agree to trade value, they agree on the terms of the exchange and execute it by way of a digital contract that verifies the parties meet the terms before it releases the associated counter-value.
    Charles doesn’t need to create a new system for that, he just needs to understand Ethereum. He also doesn’t need some repentant financial angel to get it up and running; the platform exists, internationally, ubiquitously. And, hey, for those who see something malignant about Bitcoin, it doesn’t require any Bitcoin!
    I’m saying Charles’ book (assuming it hews close to his presentation here) would be better if its purpose was not to propose some new scrip to liberate us from fiat currencies and State dictat, but introduced some practical ways to use Ethereum - or some similar extant platform - to facilitate non-fiat transactions. It could be vshelford’s barter board, applied locally or internationally with equal ease and in a truly free market way.
  2. All the same, mots is completely wrong to assert that the point of Bitcoin is to get something for nothing. The whole point of the cypherpunk revolution that led to Bitcoin after several failed predecessors was to lock out “something for nothing” in favor of “something for something.” Key to that transformation is scaling up quickly and broadly. Without scale, any alternative collapses.
    The issue is how to get broad, non-niche adoption fast enough to sustain the upfront costs of scaling. Idealism is a great motivator - and that does require what mots denigrates as religious fervor. I submit that the only way Charles’ proposal will work is if enough people develop enough religion-like commitment to and faith in the project to stick with it through thick and thin, for better or worse, until it solidifies. Kinda like what’s happening among the “Bitcoin maximalists.” But like the Bitcoin true believers, those who hang in there with Charles’ LocalScrip will not be doing it for the money they make or lose in the process, but because of the vision they embrace, with a tribe of like-minded believers, of a better world.
    Of course, some people will get into LocalScrip out of pecuniary interest. Some will see in the early days of its adoption the potential to ride a wave of embrasure that promises a future payday. If LocalScrip starts to catch on, some smart investor-types will figure out some scheme to arbitrage LocalScrip, to use it as collateral for loans in dollars, or to run futures contracts. Will that then invalidate the LocalScrip project? I don’t think so; I think it would be a sign of the project’s promise and maturation. It would mean it is, indeed, moving beyond a niche preoccupation and is entering into the mainstream, where it can actually change economic lives on a large scale.
    So mots is right that at the moment we see people speculating in Bitcoin: buying in and holding with the anticipation of making a profit when the coin’s price goes up. Which it will. But here is the essential element I’ve tried to express: that works only as long as Bitcoin (and by extension, any alternative money) is priced in another “coin of the realm.”
    Today, the value of Bitcoin is denominated in one or another fiat currency, which is why it’s treated as a commodity. Perhaps someone can explain to me how to get away from that at the beginning of any scrip. Even in the LETS programs psebby referenced, people were making at least mental calculations of the value of a local scrip in terms of dollar equivalents. Certainly the grocer was; as would, also, the local carpenter who had to buy wood from outside the system.
    My point is that the scrip used in such systems always represents some fiat currency even if it doesn’t use that currency, and anyone who would think they were being undervalued for the work they performed would argue in terms of “my work is worth more dollars than this allocation of LocalScrip recognizes.”
    As far as I can see, this kind of comparison is endemic to developing an alternative. Even the famous purchase of Manhattan Island for wampum is debated in terms of “about $24 worth of beads.” But if your local currency is beads, that’s not $24, it’s a fortune in local monetary units.
    The moment that LocalScrip, or Bitcoin, becomes stand-alone money - a true alternative to fiat currencies - is when people can sustainably buy and sell in the scrip itself; when it has broad enough adoption that people stop calculating its value in dollars or yen or rubles, and simply give and receive it as valid payment for goods and services. That happens when those parties to the transaction have confidence they can turn around and spend the coin for the things they want and need. Hence, broad adoption is key, and that only happens if people outside the original “true believers” find a self-interested reason to embrace it. Greed, ie. acquisition of some kind, is certainly a powerful, very human motivator, common among early adopters and risk-takers.
    If I understand Charles correctly, what he wants to do away with is the current financialization of money. He wants to end the rent-seeking games that steal money from the productive people for the pockets of the leeches who don’t contribute real value to the economy in exchange for their outsized rewards.
    The best means I know of to prevent that gratuitous rent-seeking is a hard money. My worry about printing LocalScrip according to productive labor - which is what Charles seemed to be suggesting (although I didn’t hear him clearly say that) - is that it’s dependent upon the good will and angelic nature of the persons in charge to prevent inflationary printing. After all, the rationale for unpegging from the gold standard was to facilitate liquidity in the rapidly growing US economy. GDP was to be the new peg for the dollar. And if dollars were added and subtracted from the economy based on GDP expansion and contraction it could conceivably work. So what went wrong?
    Yep. Why would that not also go wrong with any new non-hard money regime? Control of the money-printing press would be a key pinch point, attractive to the sociopaths.
    These considerations really did go into the design of Bitcoin. They were primary concerns of the cypherpunks, and Bitcoin’s ability to solve the problem through it’s hard money creation regime (total cap, regulated release, scheduled reduction in mining’s unit-value) is a very large part of the reason the early “believers” - who, let’s not forget, torpedoed previous efforts - believed in it. It’s why they still do, despite the less-than-angelic market-driven, rent-seeking masses who have entered into the space. The rent-seekers’ ability to milk the system is an interim phenomenon. It has the benefit of encouraging wide adoption that democratically finances the infrastructure’s build-out. But rent-seeking reaches a ceiling when all of the Bitcoin is mined. From then on, rent-seeking on Bitcoin is no more (or less) possible than is rent-seeking when gold is backing every dollar printed.

A few issues categorize this discussion, at least in my mind, as a distant future option. First, as everyone knows, we have a rapidly dwindling resource issue, along with a growing environmental dilemma and not just climate change. Second, 7.5 billion people is not an ideal number on a planet with dwindling resources and an already compromised environment.
My short term expectation is that people and governments are going to dig in and fight over what is left, further depleting resources and causing even greater environmental challenges.
The other thing I see when I look around is that the majority of people are not capable of participating in the society discussed, nor would they willingly give up the lifestyle they have lived so far.
Lifestyle induced chronic health issues have become the norm in modern society. High energy lifestyles are the norm.
From what I can see, it is going to be an incredibly painful and long transition. I personally don’t expect to see the solution in my lifetime. I doubt my children will see things turn around.
Charles, there are more than a few people who live around me that would not be familiar with the word instantiate. They will have to be accommodated in the new society, for it to work.

Yoxa: no, the time banks that I’m aware of do not take into account any special skills, training, or tools one might have. That keeps the system simple: one hour of my work time is the same as one hour of yours. To do otherwise invites lots of calculations about the value of everything - and that value is relative for each situation, e.g. if someone cannot walk, the value of having someone come over and dig up their garden plot is very high, though other people might value that task very low.
One way to think of it is that a time bank sets up a local service sharing economy, like you probably have with your immediate family and neighbors. If you have a chainsaw and a neighbor needs a tree cut up, you’d be happy to help him out for free, and he’ll probably help you out sometime in the future. One goal of a time bank is to set up lots of these service sharing connections across a wider community, which builds a tight web of social connections and friendships across the community.

A few groups have been looking at ways to combine the benefits of time/labor-based alternative currencies with the AI benefits of blockchain.
Seva Exchange has partnered with TimeBanks USA and Andrew Yang to use exchangeable hours as an alternative digital currency.
BlendTBS by Binghamton University researchers:

The Lilliputians are being wiped out by Bill Gates, Somehow I don’t think “local currency” will make a difference.

This is a cool conversation being had here… we had the same conversations 8-10 years ago as well as I was first learning about the nature of money. I did some research on the local currencies, one in particular called, “Ithaca hours”. You can read about it here;
I came to the conclusion, similar to what VTGothic describes, that these can only function very locally based on trust. They in no way present a model that can have broader application for one simple reason; Lack of scarcity integrity. The creation mechanism behind the Ithaca hours was ill defined and non-transparent. It functioned for a time based on the energy and evangelism of one person, then it died out.
We all understand why Gold is useful as money (you cannot print it, only mine it) and how it’s price is controlled, with varying success, by producing and trading paper equivalents that work to expand supply of, “Gold”. Regardless of the paper games, Gold does have true scarcity integrity.
This is where Bitcoin comes in… it is a highly elegant solution to the need for a digital currency that has real, Gold-like scarcity integrity. If a large enough cross section of the world’s inhabitant’s agree that it is money… and we seem to have crossed that goal line years ago… then it is money. It’s creation mechanism is completely transparent. It is not dead money… it can hold and house information as well.
The elegance of it goes beyond the fact that it has scarcity integrity - it extends to the fact that miners, who have the computing power, are motivated by the rewards of mining more, “money” for themselves while in the process maintaining and updating the blockchain. Yes, this consumes a lot of energy… but what is the price of Freedom?

If you have not already, study the structure of the Findhorn Foundation in Scotland. They have developed a structure that seems to be similar to what you described. Findhorn (and The Farm, here in the US) went through the same energy depletion with loss and changes from the “leader”.
Findhorn has also developed their own local currency. It appears to be “bleeding” outside the community itself to local businesses. I think this could happen organically as the currency matures and the surrounding community finds it can be trusted.
Ithaca, New York is another example of a successful local currency. I haven’t read Smith’s book yet but I would imagine that he has looked at these examples.
I’ve studied the schemes as a part of my certification in Sustainable and Ecovillage Design and I am fascinated by them. As the dollar is devalued, as it certainly will be, I think the demand for time banks and local (state level?) currencies will become more and more attractive and useful. Time to get a leg up and get something started.

Thanks, CindyB!
I will actually talk on Zoom, in a few minutes, with an old-timer that have been part of both Findhorn and some other communities across the globe. :slight_smile: