The Stockholm Syndrome of Most Alternative Currencies

By Marc Gauvin

Copyright 17/09/2013 Updated 14710/2013

The Passive BIBO Currency project is about the technical standards to achieve representation of measures of "value"  in a stable and reliable fashion intended by alternative currencies and mutual credit. Unfortunately most alternative currencies have a sort of Stockholm syndrome with conventional economic theory, in that they unwittingly assume either directly or by ommission the definition of money that is provably incoherent.

The idea that we have to preserve the value of money’s unit, to guaranty a minimum value in return at the moment of forfeiting goods and services, is born out of the idea that money can be both a measure and itself the value it measures. For example, the fact that we may use salt as a standard "currency" means that we are measuring the value of goods and services in terms of the relative access to salt, but if salt is scarce, then that measure can be manipulated as a function of hoarding and then it ceases as a valid measure. Therefore, such a proposition is logically untenable as the definitions of measure and scarce commodity are mutually exclusive.   If money is to be a measure of “economic” value it logically cannot be a commodity itself of varying negotiable economic value.

This means that the expectation of being paid upon receipt of money is wrong, at most money can only be mutual recognition of an amount of value forfeited by the holder, but true "payment" can only be associated with the receipt of reciprocal goods and services of equivalent value in the future.   The moment we decide that money is a negotiable (interim) value itself, then it becomes a commodity that can be hoarded destroying its function of measure.   Thus, any proposal for alternatives that directly or indirectly view money as a circulating object of value assume wittingly or not, the very paradigm they are ostensibly trying to transcend. Examples are arguments in support of the control of money, sufficient supply of money, “ownership” of its creation or any idea that units are a tool socio/economic control, all these reflect an adherence to the same flawed definition of money as something other than just an annotation of value, that is the basis of the current flawed de facto money standard.

This also means that conventional money cannot be used as a value peg for Passive BIBO* compliant mutual credit, and that there can be no floating conversion rate to conventional currency. 

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