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Towards a Monetary Ecosystem Workshop

Towards a Monetary Ecosystem Workshop. Madison, WI March 30, 2013. Objectives of Workshop?. Next level of Complementary Currency Implementation Becoming Financially Sustainable in US$ + Develop a Long-Term Resilient Governance. Objectives => Proposed Solution.

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Towards a Monetary Ecosystem Workshop

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  1. Towards a MonetaryEcosystemWorkshop Madison, WI March 30, 2013

  2. Objectives of Workshop? • Nextlevel of ComplementaryCurrencyImplementation • BecomingFinanciallySustainable in US$ + • Develop a Long-TermResilientGovernance

  3. Objectives => Proposed Solution • Nextlevel of ComplementaryCurrencyImplementation=> Towards a MonetaryEcosystem • BecomingFinanciallySustainable=> MonetaryEcosystemincludes a B2B currency (« US$ Cash Cow ») • Develop a Long-TermResilientGovernance=> ManagingCurrency as a Commons

  4. A Tale of 3 Cities • Santa Barbara, CA • Tucson, AR • Madison, WI

  5. Complexity Theory • Breakthrough: Sustainability is measurable with a single metric as an optimal balance between “efficiency” and “resilience”. • Scientifically Solid:4 Peer-reviewed articles • See www.lietaer.com/research

  6. Sustainability 100% 0% Towards brittleness (Too little diversity) Towards stagnation (Too little efficiency) Optimal Balance Greater Efficiency (streamlining) Greater Resilience Diversity & Interconnectivity Sustainability in Natural Ecosystems

  7. Sustainability in Natural Ecosystems Window of Viability Sustainability Real-life sustainable ecosystems 100% 0% Towards brittleness (Too little diversity) Towards stagnation (Too little efficiency) Optimal Balance Greater Efficiency (streamlining) Greater Resilience Diversity & Interconnectivity

  8. Complex Networks • Diversity and interconnectivity are 2 structuralvariables => applies to all networks with similar structure, including money system! • Structural variables are independent from what is being processed in network • biomass in an ecosystem, • electrons in electrical circuit, • information in immune system, • moneyin an economy…

  9. Resilience Efficiency Balance in Natural Networks

  10. (In)Balance in Our Financial Network Efficiency Resilience

  11. Sustainability Window of Viability 100% 0% Towards brittleness (Too little diversity) Optimal Balance Current operation of financial system Greater Efficiency (streamlining) Greater Resilience Diversity & Interconnectivity Application to Monetary System

  12. After a CrashRecovery in Natural Ecosystems Sustainability Window of Viability How natural systems recover Towards brittleness (Too little diversity) Optimal Balance Survival, Very Diverse Inefficient Exchanges Diversity & Interconnectivity

  13. After a CrashReinstating Bank-debt Monopoly Sustainability Window of Viability Re-establishment of monetary monoculture Towards brittleness (Too little diversity) Optimal Balance Survival, Barter Exchanges Collapse of Financial system Diversity & Interconnectivity

  14. 3D Views 100% Sustainability Optimum Diversity n n 0% Connectivity c

  15. Phase 1: ProposedLegal Structure • L3C: Low-profit Limited LiabilityCompany • Corporation with a social purpose • Lowceiling on profit (e.g. max dividend 2%) • First legislation in Vermont on April 2008 • Now 9 states available for L3C incorporation • 26 other states interested • Can operateanywhere in US • January 11, 2013: 711 active L3Cs are in operation • Qualifies as investment for Foundations • Requires a viable business plan (« Cash Cow »)

  16. Phase 2: Viable business plan • Phase 3: Identify social purposesystems • Phase 4: Governance • Phase 5: Legal Incorporation • Phase 6: Software Adaptation • Phase 7: Implementation

  17. Evaluation as « Cash Cow » • Advantages • Simple • Choice of softwares • Disadvantages • US$ come fromoutside the system • US$ Incomefrommembershipfee and transaction fees • Transaction feesdiscourage use of system • No possibility for acceptance in taxes

  18. The Problem of beingsmall… $100K 90 days Cash or 30 days

  19. C3 Solution: Phase 1 $100K 90 days 100K C3

  20. C3 Solution: Phase 2 US$ Minus interest + fees 100K C3 C3

  21. C3 Solution: Phase 390 days have passed… US$100K

  22. ood US$ No interestcosts

  23. Evaluation as « Cash Cow » • Advantages • US$ come frominside the system • US$ Incomefrom exit fee and potentiallydemurrage • Bothfees encourage « good » behavior • Possibility for acceptance in taxes • Disadvantages • More complex • Requires participation of insurancecompany and bank • Initiallyrequires use of Cyclos software

  24. Currency as a CommonsElinorOstrom’s 7 Criteria for Managing Commons • Clearlydefinedboundaries • Congruence with local conditions • Hyper-democratic: Most individualsaffectedcanparticipate in modifying the operationalrules. • Monitoring: Monitors are accountable to Users or are Users. • Conflict-resolutionmechanisms: rapidaccess to low-cost local arenas to resolveconflicts • Graduated sanctions: Userswhoviolateoperationalrules are assessedgraduated sanctions by otherUsers, by officialsaccountable to theseUsers, or by both. • Minimal recognition of rights to organize: No contradictions with State of FederalLaws

  25. Sequence of NextSteps • PrepareProposal for 3 cities • Find an InsuranceCompany for C3 • Prepare business plan for « Cash Cow » • Agree on Governance Structure • Legal Incorporation, probably in Vermont • Invite participation of all relevant parties • Take Off…

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