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Pointers and commentary on emerging futures issues collected by Z + Partners
Social Currency
Ithaca Hours currency holders agree that all hours of labor are worth the same amount.
The Z+ blog recently did a feature on breakthrough developments in the science of cryptographic protection. As these developments occur, electronic currency transactions become safer and safer. Today, most of these transactions begin and end with currency issued by national central banks. But why stop there? There's no reason that a community can't legally issue its own currency as long as everyone can agree on its value (something that cryptographic protection can ensure).
Initiatives like frequent flyer miles and Sony's FeliCa smart card system have allowed modern consumers to make the leap from "representations" of money into more abstract conceptions of "value". One innovative example of this is Ithaca Hours
Arguably more ambitious, the BBC recently reported
Bernard Lietaer, one of the most exciting thinkers on the subjects of sustainability and money, wants to create a social currency at the global level. Lietaer, formerly with the Central Bank in Belgium, was the original designer of the single European currency system. He is convinced that recent developments in technology provide unprecedented opportunities for creating a "supra-national currency". Here are some excerpts from his proposal for TerraCurrency
Many fundamental components of our current monetary system were agreed to, mostly unconsciously, not by the many, but by a vested few; not in today's world with its present requirements and realities, but rather in an age impervious to pollution, overpopulation or sustainability. It was in pre-Victorian England that today's money system was introduced, institutionalizing "interest" on money and also playing the role of a catalyst to the unprecedented achievements of the Industrial Revolution; but it was also through that same system that we learned to systematically discount our future. Recalling that money is an agreement, which sanctions re-evaluation, surprising solutions emerge when we re-think money.
One proposal is Terra (Latin for Earth), a supra-national currency whose unique characteristics would make long-term financial thinking automatically rewarding, while assisting in stabilizing the world economy.
Characteristics include:
1. The Terra is defined as a standard basket of the most important commodities and services in the global market for which futures markets can be established (e.g. oil, wheat, copper, etc., and some standardizable services, or for example Carbon Emission rights). Because it is fully backed by a physical inventory of commodities, the Terra would be a very robust international standard of value.
2. The Terra is designed as an inflation-proof currency. Inflation is always defined as the changes in value of a basket of goods and services. Therefore, by selecting the appropriate ingredients in the basket, the Terra can be made inflation-proof.
3. The Terra currency is complementary to conventional national currencies, operating in, parallel to, and without replacing them. It basically would amount to introducing some standardization to the international countertrade activities which grow by 15% per year, three times faster than conventional currency denominated trade.
4. The cost of storage of the physical commodities would be applied to the bearer of the Terra at an estimated 3.5-4% per annum. This makes the Terra a 'demurrage' charged currency (the opposite of a positive interest rate currency), and insures its use mainly as a trading device, as it costs the bearer to store or hold onto it. Therefore, it is beneficial to keep the Terra in circulation, which in turn benefits all.
5. The Terra is a public service project, with profits earned used to fund other projects for economic development globally. In short, the Terra would be an inventory receipt that can be used as a supra-national trading currency.
The warning signs are all there...
Foreign Policy and the Fund for Peace, an independent research organization, have conducted a global ranking of weak and failing states. Using 12 social, economic, political, and military indicators, they have ranked 60 states in order of their vulnerability to violent internal conflict. (For each indicator, the Fund for Peace computed scores using software that analyzed data from tens of thousands of international and local media sources from the last half of 2004.)
The index does not provide any easy answers for those looking to shore up countries on the brink. Elections are almost universally regarded as helpful in reducing conflict. However, if they are rigged, conducted during active fighting, or attract a low turnout, they can be ineffective or even harmful to stability. Electoral democracy appears to have had only a modest impact on the stability of states such as Iraq, Rwanda, Kenya, Venezuela, Nigeria, and Indonesia. Ukraine ranks as highly vulnerable in large part because of last year's disputed election.
What are the clearest early warning signs of a failing state? Among the 12 indicators we use, two consistently rank near the top. Uneven development is high in almost all the states in the index, suggesting that inequality within states, and not merely poverty, increases instability.
Criminalization or delegitimization of the state, which occurs when state institutions are regarded as corrupt, illegal, or ineffective, also figured prominently. Facing this condition, people often shift their allegiances to other leaders, opposition parties, warlords, ethnic nationalists, clergy, or rebel forces. Demographic factors, especially population pressures stemming from refugees, internally displaced populations, and environmental degradation, are also found in most at-risk countries, as are consistent human rights violations. Identifying the signs of state failure is easier than crafting solutions, but pinpointing where state collapse is likely is a necessary first step.
