epsilon

I will survive

2010-04-06T12:39:00.003-07:00

At first I was afraid, I was petrified
Thinking I'd be kidnapped gagged & tied & likely fried
Then I saw those mustard shirts, of G4S meet&greet
Was whisked off by Dispatch driving down Port Moresby's streets

To the CP, My new possie
Then to Induction I must go but first I'll take my Malerone
So I call for Charlie Base, it's Juliette eight three
There's guards & dogs & TAFs & logs it's high security

It's LNG, in PNG
There's Defense House Credit Corp and don't fortget that B&D
We're the Social Programmes team, and our work has life
We're here to make a difference, we're the ones to calm the strife
In PNG

(Acknowledgements to Kiara and our gleefilled nights on POM balcony)

Global tools enhance local exchange through community currency in an alternate economy (expanded)

2009-09-01T08:30:00.000-07:00

1 Introduction 2
2 Reciprocal Gift E-conomy 2
2.1 “The High-Tech Gift Economy” 3
2.2 Money 2:0 4
2.2.1 Money as memory 4
2.2.2 Community Currency 4
2.2.3 Impact of ICTs on community currencies 5
2.3 Community Exchange System 6
2.3.1 How it works 6
2.3.2 Use and Abuse 7
3 Mutual trust and reciprocity in (online) Community Currency Networks 7
3.1 Generalized Exchange 8
3.2 Features to encourage online reciprocity 9
3.2.1 Identity 9
3.2.2 Transparency 10
3.2.3 Recognition and reputation 10
3.2.4 Online social networks – Facebook & Ning 10
3.3 Building community offline 11
3.3.1 Scale 11
3.3.2 Offline links – markets, shops and slips 12
3.3.3 Building community across the digital divide 13
4 Conclusion 13

1 Introduction

This paper discusses the way in which Information and Communication Technologies (ICTs), traditionally renowned for enhancing global reach, can be used to build and strengthen local exchange systems using community currencies. The relevance of such currencies in today’s economic climate is stressed by its coverage in CNN Time’s business pages, where it is noted that “[al]ternative means of trade often surface during tough economic times.” (Schwartz, 2008) The paper looks particularly at the Community Exchange System (CES), which is a community-based, global trading network using a local, alternative, community or complementary currency system. The system was developed in Cape Town, South Africa, and is currently used by 145 exchanges in 19 countries, with the majority in Australia (44), the USA (25), South Africa (23), and New Zealand (21) (CES Website, 2009)
The Internet has long stimulated thought and discussion around the idea of an alternative economy based on reciprocal exchange. When Barbrook first noted the emergence of what he termed an ‘anarcho-communist high-tech gift economy’ emerging in cyberspace in 1998 he was considered controversially leftist (Barbrook, 2005). Today the terms ‘giving’ (Anderson, 2009) the ‘gift economy’ (Fox, 2005), ‘reciprocity’ (Suntrader, 2008) and ‘relationship economics’ (Deragon (2007) are featured regularly in mainstream media and the blogosphere, all the more in the light of the plight of the ‘conventional’ economy.
To date however the benefits of this gift economy have been largely virtual. Examples of gifted ‘goods’ include contributions to the development of open source software, knowledge and specialist advice, wikipedia, file sharing, reciprocal comments shared on blogs and in online social and business networks. Yet, despite the dramatic changes in social interaction and exchanges facilitated by online networking, and the evolution of what may be referred to as a “high-tech gift economy”, the potential of the Internet to really revolutionize economic systems has been limited, as the gifting involved did not extend beyond the realms of cyberspace.
In contrast to this global, virtual, gift economy that has developed online, the CES provides an online trading platform and ‘payment system’ for real goods and services amongst local communities using an alternative, valueless ‘currency’.
In comparing an alternative money system like the CES to the emergence of a ‘gift-economy’, the paper draws on Mauss’ description of the ‘gift’ as essentially reciprocal in nature. It is argued that by providing an online record of exchanges, the CES serves merely as collective memory of ‘gifts’ of goods and services exchanged, thus enabling a form of generalized reciprocity between members of a community. Like gift economies, community currencies are founded on relationships. By taking traditional ‘money’ – created by banks as interest bearing debt, hence by its nature inducing scarcity – out of the equation, the system aims to encourage a more ‘giving’ economy based on abundance.
The paper looks specifically at the Cape Town Talent Exchange (CTTE), which was the first exchange established under the CES network. The extent to which exchange in this network may be considered reciprocal is examined, noting features built in to encourage reciprocity and build community by encouraging face-to-face interaction, as well as through the CES’ use of online social networking tools. Online-offline linkages are explored, noting how the system aims to encourage community-building across the digital divide, and the extent to which it succeeds in doing so.

2 Reciprocal Gift E-conomy

The concept of ‘gifting’ has received much attention in Western anthropology, particularly since Mauss's theorizing on The Gift in the 1920s. Mauss (1990 [1923]) emphasizes the role of reciprocity (i) as critical to gift exchange. Mauss’s tripartite formula for “total prestation” involves the obligations to 1) give, 2) receive, and 3) repay. Carrier (1991: 122).expands on Mauss’s conception of the gift, which he defines as “(1) the obligatory transfer, (2) of inalienable objects or services, (3) between related and mutually obligated transactors.”
Reciprocity in gift giving and receiving places emphasis on the relationship between giver and receiver. A gift economy is one driven by social relations rather than price according to Bell (1991), who examines ways in which individuals can increase the benefits of their exchanges in gift as well as commodity economies. He notes that benefits in a gift economy are derived from improving the ‘technology of social relations’ by, for example, increasing the range and diversity of one's social network. By contrast, benefits in commodity economies are derived from making improvements in the technology of production. Gift economies are thus driven by social relations while commodity economies are driven by price (Kollock, 1999).

2.1 “The High-Tech Gift Economy”

The Internet has long been argued to provide the technology required for the formation of what might be called a gift economy (see Rheingold 1991; Barbrook 1998; Raymond 2000; Crawford 2001; Ippolito 2001, Ghosh 1998; Kollock 1999; Offer 1997; Pinchot 1995). Rheingold (1991) described the exchange system fostered by the Internet as “a kind of gift economy where people do things for one another out of a spirit of building something between them, rather than a spreadsheet-calculated quid pro quo.”
Barbrook argues that, despite its military origins, the Internet was in essence constructed around the gift economy as early developers shared ideas, and that the free exchange of information has thus been firmly embedded within the technologies and social mores of cyberspace since its origin. While the commodification of information through a tightening of intellectual property rights has become an increased concern of politicians and corporate leaders in the developed world over the past decades, online networks geared to information sharing have simultaneously sprouted in cyberspace. “[A]t the 'cutting edge' of the emerging information society, money-commodity relations play a secondary role to those created by a really existing form of anarcho-communism… In the absence of states or markets to mediate social bonds, network communities are instead formed through the mutual obligations created by gifts of time and ideas” (Barbrook, 1998:5).
To date however the benefits of the gift economy espoused by Internet researchers have been largely virtual, exchanging gifts of knowledge, information, ideas and comments. Commonly cited examples include the development of free and open source software, and alternative licensing practices to promote freedom of information (Barbrook 1998; Ghosh 1998; Raymond 2000). Despite the dramatic changes in social interaction and exchanges facilitated by online networking, and the evolution of what may be referred to as the “high-tech gift economy”, some feel the full potential of the Internet to revolutionize economic systems is not being reached.
“I want to see somebody set up a barter network where I could trade poetry for turnips. Or not even poetry--lawn cutting, whatever. I want to see the Internet used to spread the Ithaca dollar system around America so that every community could start using alternative labor dollars. It is not happening. And so I wonder, why isn't it happening?” (LambornWilson, 2004).
LambornWilson recognizes that technology cannot change the essence of a society, and despite its potential to connect, can in fact alienate people to such an extent that they mistake technological and symbolic action for social/political action. Some basic limitations of the gift-economy relate to a) its accessibility (or lack of) for a large proportion of the human race, and b) its dependence on the ‘money-economy’, without which it cannot exist.
To overcome such limitations we need to look at how the Internet does or can impact on what may be considered the most fundamental means of exchange of everyday goods and services in the off(and on)line world: money.

2.2 Money 2:0

This section provides an overview of the concept of ‘money’, which is defined in essence as an ‘information system’ or collective ‘memory’ device for recording transactions. This is followed by a look at community currencies, and particularly the impact of the Internet on such ‘people-centred’ means of exchange.

2.2.1 Money as memory

In tracing the origins of money, one can look back beyond traditional theories of its birth in barter networks, to the actual origins of human exchange, proposed by Mauss (1990 [1923]) to lie in the (reciprocal) gift. This leads to a personalised conception of money, whereby markets can be seen as “a form of symbolic human activity rather than as the circulation of dissociated objects between isolated individuals.” (Hart, 2005: 3).
In tracing the origins of the modern economy and the money that sustains it back to the gift, rather than barter, Mauss supported the idea of money as personal credit. In this sense money may be seen as a means of collective memory mediating the need to keep track of proliferating connections with others (Hart, 2005). This indeed correlates with the root of the word ‘money’, named after the goddess of memory, Juno Moneta, at whose temple in Rome coins were once minted. Moneta’s name was derived from the Latin verb moneo, meaning to remind, or bring to ones recollection (Hart, 2005). Tracing the origin of the word money to ‘moneta’, Hart argues that one of money’s chief functions is remembering, referring to it as a ‘memory bank’ (2000), which he describes as “a store allowing individuals to keep track of those exchanges they wish to calculate and, beyond that, a source of economic memory for the community” Hart (2007: 15).
Seen solely as a way of keeping track of people’s exchanges, new possibilities present themselves in an age of electronic money. Hart (2005) predicts that central powers will in future be devolved to regional or local government bodies as people are more likely to fund public projects nearer to home, and that the territorial dimension of society will thus devolve to more local units. With the erosion of territorial power people will have to turn to their own forms of association and to more informal means of regulation which could lead to participation in many forms of money, and in the circuits of exchange corresponding to them. In a world where money resumes its role as collective ‘memory’ of individual debts, Hart believes that people will voluntarily enter into circuits of exchange based on special currencies. As digitalization encourages a growing separation between society and landed power, appropriation of ‘money’ by ‘the people’ becomes a natural step in society’s drive to a more equitable world in which “we can make our own money, rather than pay for the privilege of receiving it from our rulers” (Hart, 2005: 9).

2.2.2 Community Currency

“The origin of the word "community" comes from the Latin munus, which means the gift, and cum, which means together, among each other. So community literally means to give among each other. Therefore I define my community as a group of people who welcome and honor my gifts, and from whom I can reasonably expect to receive gifts in return.” Lietaer, 1997: 2)
In the context of currencies, the term community can be used to describe any association of individuals, groups, or businesses agreeing to use an internal payment mechanism. Under this definition a community need not be defined by geographical proximity, as demonstrated by the emergence of Internet-based communities in which transactions take place in cyberspace and participants are scattered all over the world.
A community currency does not require physical ‘money’ (e.g. notes and coins), and can be as simple as a set of entries in a notebook recording the values of trades, with the currency consisting of the numbers comprising members’ account balances. “In essence, then, a community currency means that members of the group empower themselves to create their own “money,” which they agree to use in paying for purchases made among themselves.” (Greco, 2001: 14)
Schraven, (2001) refers to three archetypes of community currencies, namely the Backed Currency (ii), the Fiat Currency (iii), and the Mutual Credit System Currency (iv). The Community Exchange System (CES) discussed in this paper is an example of a Mutual Credit exchange, providing a credit clearing service to members. Mutual credit is the generic term used to describe an association of traders who have agreed to create and utilize their own exchange medium (Greco, 2001). Members of a mutual credit system empower themselves by creating their own money in the form of credit, but saving the cost of interest, while distributing the money amongst themselves according to their own needs. Holding credits in such a system is evidence that so much value has been delivered to the community, while a debit balance shows that a member has received more from the community than delivered. “A debit balance thus represents a person’s commitment to deliver that much value to the community sometime in the near future” (Greco, 2001: 68). In this sense, mutual credit systems depend strongly on reciprocal relationships between members, and commonly have built-in systems whereby such reciprocity can be encouraged.

2.2.3 Impact of ICTs on community currencies

Speculation on how the Internet will impact on the future of money started in the 1990s, in both cyber and economic fields. In 1997 Howard Rheingold devoted two parts of his Tomorrow column to an article on The Internet and the Future of Money, in which he explores the work of Bernard Lietaer, later published in The Future of Money: Beyond Greed and Scarcity (Lietaer, 2001). Rheingold (1997, Part II) expects the Internet to lead to “a radical change in the future of money, if [its] technical mechanisms are used to support the creation and maintenance of 'local currencies' – a medium of exchange that many communities around the world are beginning to experiment with.”
The development of computerized telecommunications technologies and the Internet has the potential to impact community currencies through enabling a) the organization of grassroots communities of interest transcending barriers of distance, language, and culture; and b) the development of new nonmonetary, nonpolitical ways of exchanging goods and services. (Greco, 2001)
Rushkoff (2009) emphasizes the fact that “[m]oneys are programmed”, showing that the way these moneys behave and their impact on society is the result of certain biases embedded into their design. In this light the current credit crisis can be considered the result of underlying biases of the centralized, monopoly currencies in use. In response to this realization a growing population of citizens and businesses are turning to the use of complementary currencies, which Rushkoff (2009: 2) describes as “alternative, net-enabled, bottom-up money systems that let them accomplish what money loaned out by the Fed just isn't letting them do anymore”. Rushkoff argues that Internet-enabled complementary currencies can revive the decentralized marketplace, with networks providing a way to verify transactions and develop trust. He emphasizes the fact that many of the tools we use are the result of programs, proposing that “[w]e are proving more likely to treat our money as software, and to write our own” (2009: 3) (v).
The following section examines an example of an online mutual credit clearing money system that has been thus programmed to function as the means of exchange between local communities networked across a global, web-based platform. Local mutual credit trading systems have traditionally operated offline, posing obstacles in terms of administration as well as establishing sufficient ‘connectedness’ between members to facilitate easy exchange. The Internet has revolutionized the potential of such systems in a number of ways, including (Squires, 2009):
• Reduced administrative burden of record keeping.
• Search engine functionalities for goods and services offered and required.
• Communication tools providing the ability to instantly connect with others’ wants and offerings.
• Networking tools to build community between users, in turn strengthening the network and the types of services exchanged.
• A web-based system allows for transparency, as users have instant access to each others’ trading records and account balances.
• Expanding geographical scope as different local exchanges can be networked in a web-based trading platform.
The paper explores the use of the Internet by the Community Exchange System, with particular focus on the first local exchange for which this system was designed in Cape Town, South Africa.

2.3 Community Exchange System

The community Exchange System (CES) was initiated by the South African New Economics (SANE) Network, an organization modeled on the New Economics Foundation in the UK, which encourages complementary currencies as a means of promoting local economic activity. Initial proposals were to establish a paper-based LETS (Local Exchange Trading System)(vi) group. Founding member Tim Jenkin had recently designed an internet-based trading system for a Cape Town hiking club which, while failing to gain popularity amongst hiking club members, was immediately taken up by members of the SANE Steering Committee as platform for the proposed system. The currency was called ‘Talents’, and its value based on the South African Rand, though this was to be taken merely as a reference for pricing as the Talent would not be ‘tied’ to the Rand and was expected to deviate from it over time. The system became known as the SANE Community Exchange System (CES).
The CES was launched as a pilot project in February 2003, with 11 participants - all members of the Steering Committee. Very little trading took place initially, as commonly experienced by LETS start-up groups when little is on offer. Membership, and with it the number and range of offerings began to increase after a public meeting was held and Talents were introduced at a few public markets. The system gained momentum as membership approached three hundred, and the South African CES was renamed the “Talent Exchange”, with the motto “Your Wealth is your Talent”. (Jenkins, 2004).
The system quickly spread to exchanges around South Africa, and in 2005 the first international exchange was added when a LETS group in Australia asked to become part of the CES. (CTTE Newsletter, March 2005) This was rapidly followed by more groups in Australia, New Zealand, the USA, and Europe. These group each function as separate exchanges with their own local currencies, all linked via a common platform that enables inter-group trading.
In 2008 a split occurred between the CES and SANE, who were responsible for managing the Cape Town Talent Exchange (CTTE). While membership of this exchange was by this time sufficient to sustain trading despite managerial difficulties, a number of initiatives that relied on SANE’s involvement were abandoned, particularly in terms of community building and efforts to promote social development in disadvantaged communities.

2.3.1 How it works

The CES home page can be found on http://www.community-exchange.org/, providing links to numerous public information pages, and requiring members to log in. An online application form requires full contact details and three offerings for the applicant to be considered. There is no membership fee, but members pay a levy per trade which is accumulated in a CES administration account. This levy was initially set at 4%, but was reduced to 2% as membership and trade volume grew.
Beyond the login page the site can be regarded as an online ‘bank’ or ‘clearing house’ (similar to online banking services offered by commercial banks) as well as providing membership lists, ‘offering’ and ‘wants’ directories, and trading statistics. Users can update their account, profile information, offers and wants, browse and respond to others’ offerings via phone or email, or send an order directly through the site. Sellers enter transaction information into a transaction form on the site and account balances are immediately updated.
As the site expanded first across South Africa, and later globally, a remote trading facility was introduced to allow for exchange with members of other networks, both nationally and globally. This was done through the introduction of an intermediate ‘virtual member’ when trading outside the group (Jenkins, 2004). New features were systematically introduced to allow searching and trading with, as well as advertising offerings and wants on other exchanges.(vii)

2.3.2 Use and Abuse

By August 2009 over thirty thousand trades had taken place on the Cape Town Talent Exchange, amounting to a total of over seven million Talents exchanged. Of a total of 3795 members of the CTTE, a total of 2391 (63%) have actively traded on the system. Of these traders 65% have ‘sold’ (given), while 84% have ‘bought’ (received) goods/ services through the exchange. It is worth noting that 25% of sellers have not bought anything on the exchange, while 41% of buyers have not sold anything. Takers thus seem to outnumber givers.
As the system expanded and some users were found to abuse it, a limit of T5000 for credits and debits was introduced, although this is not rigidly imposed. While users are encouraged to go into debit as it is essential for some to be in debit to keep the system flowing, members are discouraged from trading with others who have exceeded a T5000 debit limit. The (nominal) credit limit was instituted as 'hoarding' of Talents by some members deny others the opportunity to earn. It is hoped that the credit limit feature will remind those heavily 'in the black' to spend more on others’ offerings.
Statistics for August 2009 show that 45% of CTTE members have a positive balance, and just over half (53%), a negative balance, while 2% have what may be considered the ‘ideal zero’ balance. What is worth noting is that 67 traders have exceeded the T5000 debit limit by an accumulated total of T414 009, while 66 have more than the official T5000 debit limit, by a total of T347 280. The difference between excess credit and debits thus stands at -T66 728.70, which may be considered as a quantification of the extent to which the system is being abused by some members free-riding on others’ efforts. Currently members who have exceeded their monthly limits by significant amounts are blocked from using the system. While there have been intentions to follow up on such free-riders, this has not yet happened due to lack of administrative capacity and staffing for what is essentially a volunteer run system.
It is worth noting that, while these statistics date back to the origin of the exchange in 2003, only 1136 (30%) of the members currently listed on the exchange have accessed their accounts in the past year. These figures show that although trade figures indicate active use of the system by many, there is room for improvement in terms of both the proportion of members actively engaging in trade, as well as the prevalence of free-riders taking more than they give back. These factors emphasize the critical importance of reciprocity as a fundamental factor of a community exchange, discussed in more detail below.

3 Mutual trust and reciprocity in (online) Community Currency Networks

Mutual trust and reciprocity is essential for the effective circulation of goods and services using a community currency, and its lack is one of the most common factors that reduce motivation to partake (Greco, 2009). Problems arise around the issue of trust in whether or not others in the system will reciprocate, which will determine if the currency can procure sufficient exchange for services rendered. Those who do initially dedicate time to providing goods and services for alternate currency, thus earning credits in the system, are often unable to spend these as the services available do not meet their needs. By contrast, others go into debits without providing services in return, or decline from trading at all as they either do not have the time, or the inclination, to provide services. Unable to exchange their credits as the supply of available services is limited, many initial enthusiasts eventually drop out or become less inclined to offer their services, thus detracting value from the system as a whole.
Lack of trust can be most effectively addressed through conscious community building by designing means whereby real relationships can be fostered between members. In a reasonably small and close knit community some degree of social pressure can be exerted on those perceived to be taking more from the system than they are putting in. While geographically proximate ‘communities’ have been known to encourage community building through market days and other activities where members can meet face to face, this becomes more complicated when the ‘communities’ in question are virtual, expanding over vast geographical distances.
The ability of the Internet to expand the scope of community currencies, which traditionally cater for small, geographically close-knit communities, is well illustrated by the Cape Town Talent Exchange which, with its membership approaching 4000, may be considered a very large network, spread across a vast geographical area. While much of the focus in designing the (CES) system has been on technical factors to provide an online platform that can be linked to similar networks across the country and globe, more attention may be required to overcome problems pertaining to reciprocity between members of the local (CTTE) exchange. This section explores the concept of reciprocity in an online environment, noting how this relates to the web-based community currency context. This is followed by a look at features built into the CES site to encourage reciprocity, and mechanisms to promote community building.

3.1 Generalized Exchange

The reciprocation of online ‘gifts’ of information can be subject to various complexities, especially when considering the anonymity of the recipient(s). Such anonymity makes a direct giver-recipient relationship impossible, as highlighted by Kollock (1999:3) who notes that “[t]he relative or absolute anonymity of the recipient makes it all the more remarkable that individuals volunteer valuable information – one cannot realistically count on the reciprocity of the recipient in the future to balance the gift that has occurred”. However, while a balanced reciprocity with a particular individual may not be possible, balance might be sensed to occur within a group as a whole.
A similar conception of reciprocity can be seen to hold for community currencies such as the CES, in which members provide goods and services to the community for what is essentially ‘free’ (up to the nominal limit of T5000). These services are provided based on the trust that goods and services of similar value can be obtained, or in ‘reciprocation’ for benefits already received. In this sense the currency is regarded by its founder and those with similar ideas as nothing more than a record of favors exchanged between community members (Jenkin, 2009). Thus, similar to online groups, community currencies involve reciprocation from the community, rather than the individual.
Ekeh (1974: 52) refers to this type of network-wide accounting system, in which a benefit given to a person is reciprocated not by the recipient but by someone else in the group as “generalized exchange”. Kollock (1999) believes this system of sharing to be both more generous and riskier than traditional gift exchange, on both accounts due to the fact that an individual provides a benefit without the expectation of immediate reciprocation. The temptation therefore exists to gather valuable information and advice in online groups, or obtain goods and services using a community currency, without contributing anything back. If everyone succumbs to this temptation to ‘free-ride’ on others’ efforts, everyone is worse off than they might have been otherwise, leading to what may be referred to as a social dilemma whereby individually reasonable behavior (taking without giving) leads to collective disaster (Kollock, 1999).
Veale (2003) believes that failing to provide tangible, quantifiable rewards, the ‘gift economy’ claimed to exist on the Internet faces the risk of breaking down as the presence of ‘free riders’ could make ‘givers’ of information more reluctant to contribute. Demonstrating ways whereby sharing can continue to thrive in an online environment, Veale argues that reciprocity is operationalized in the Internet’s gift economy through a variety of guises, including voluntary payments schemes, allowing participants to send tangible gifts to the giver. This section will now examine some tangible and intangible motivations for online sharing, noting how these are also relevant in the (online) community currency context, which it may be argued provides an alternative means of ‘quantifying’ gifts circulated in an Internet enhanced economy.

3.2 Features to encourage online reciprocity

Wellman & Gulia, (1999: 8) highlight the fact that “many of the exchanges that take place on-line are between persons who have never met face to face, have only weak ties, and are not bound into densely-knit community structures that could enforce norms of reciprocity” as a challenge to motivation for giving support in virtual communities. A variety of factors that could motivate people to be active, sharing participants in online community networks despite these potential challenges of physical distance have been cited in research on Internet exchanges. Some of these that may be considered equally applicable for exchange in alternative/ community currencies, particularly those that operate online, include:
 Anticipated Reciprocity (Kollock 1993, 1999, Haung 1999, Wellman & Gulia 1997, Rheingold 1993, Barbrook 1999, Ghosh 1998, Ostrom 1990, Kollock & Smith 1999).
 Expressing Identity (Cutler 1995, Constant, Sproull & Kiesler 1996, Wellman & Gulia 1997, Meyer 1989)
 Reputation (Rheingold 1993, Kreps 1994, Raymond 1998, Kollock 1999, Haung1999)
 Sense of efficacy (Bandura 1995, Kollock 1999)
 Attachment/ Group Dynamics (Haung 1999, Cutler 1995, Kollock 1999, Constant, Sproull & Kiesler 1996, Wellman & Gulia 1997), and
 Fulfilling a need of the community. (Kollock 1999, Osteen 2002)
Recognizing these core motivational factors, methods have been proposed to encourage online reciprocity through the design of appropriate features to promote identity persistence; ensure transparency by providing visible records of past interactions; provide recognition; expand group size, and build community. Kollock (1999) shows that reciprocity in online networks can be encouraged through use of a broadcast communication mechanism whereby posted messages are readable by all. This section now looks at some of the features that have been built into the CES website to encourage reciprocity, focusing on issues of identity, transparency, and recognition, as well as the use of online social networking platforms, while the next section highlights issues of scale and offline community building for the CTTE.

3.2.1 Identity

Expression of identity is considered a key element in the formation of online social networks on sites such as Facebook, My Space, Ning communities and many others (viii). The CES does not claim or attempt to be a social networking site, and hence keeps its profiling features limited to what is considered essential, notably name and contact details (including location), and offerings (ix). While users are encouraged to describe their offerings in detail, which can to some degree provide a sense of identity, there are no specific features on the site to encourage expression of identity. This was recently enhanced to some extent through the addition of a new feature enabling users to upload a profile picture, though few have made use of this facility. Users are encouraged to join the Community Exchange Network on Ning, thus hoping to harness the power of an established social networking platform to provide identity features.

3.2.2 Transparency

Detailed accounts of member balances are visible to all logged in members, and updated in real-time as trades are recorded. Statistics provided on the site include trading statistics and current balances of all members, as well as a list of traders who have exceeded their debit and credit limits. Although this information is available on the site, only a very small percentage of users access it. In an online survey conducted with members of the CTTE less than half the respondents indicated that they use the website to check their own trading records monthly or more, and less than 20% are likely to check others’ records. Thus, while this information is provided on the site, it is not actively used and hence of limited effectiveness in promoting greater trust and encouraging reciprocity. Although members may not spend time looking up others’ trade information, the fact that this information is available does provide some members with a greater sense of security in using the system.

3.2.3 Recognition and reputation

Referencing systems are commonly used by social networking sites to encourage reciprocity amongst members (x). A recommendation feature on the CES site allows members to comment on the quality of others’ offerings. The feature has a strong positive bias, and only one user has used it to post negative comments. Since the introduction of this feature in July 2005 a total of 137 comments were submitted by 77 members, pertaining to the services of 99 members. Seen as a proportion of the total 24 687 trades that took place over this time, this feature does not appear to have had a significant impact on trading.
The phenomenon of “bad traders” was first highlighted in a CTTE Newsletter in July 2005. From February 2006 until 2008 a list of ‘worst abusers’ was published in CTTE newsletters, and members were encouraged to avoid selling to such persons.

3.2.4 Online social networks – Facebook & Ning

In recent years there have been a number of attempts by the CES to utilize the Internet’s potential for online networking. While some attempts were made to create a discussion forum on the CES site in 2008, these were abandoned in favor of closer links with existing social networking platforms.
A Community Exchange Network group was created on Facebook in 2007, and attracted membership from networks around the world. Early discussions in this group related to ways whereby the CES payment system could be more closely integrated with Facebook applications. Although this suggestion drew interest and support, it was not further pursued, and the relationship to the CES is limited to a link to its log-in page. The Facebook CEN group currently has 692 members. Following active interest for about a year, discussions petered out towards the end of 2008. By this time increased effort was going into the introduction of groups features and a discussion forum on the CES site itself, as well as the creation of the www.communityexchange.ning.com network, which administrators felt would replace the Facebook group.
In addition to its role as a discussion forum, the Ning site provides links to log into a designated CES site, as well as to registering new exchanges, and new users on existing exchanges. Members can also join or set up groups for their respective exchanges, which it is hoped will encourage more local community building. To date however limited membership prevents active use of this feature. The Ning group currently consists of 320 members from around the world, and appears to be growing slowly. The idea of closer integration between the CES and social networking sites that was discussed in early postings to the Facebook group has been reiterated on the Ning site, where one user envisions a future in which people would be able to switch immediately from the social networking site to a CES online system for trading. It is proposed that “people would use the Ning site to advertise their immediate offers and needs, and do networking, but the CES site would have the permanent "directory of services" and do the accounting.” (McNamara, 2009).
While such developments may arise in the future, to date activity in both the Facebook and Ning groups has been limited to ideological discussions around alternative economics, and technical matters pertaining to setting up of new exchanges. Discussions on both these networking sites have involved members of exchanges around the world, as well as others interested in the concept of community currencies, looking for guidance into starting similar systems, or integrating their own local exchanges with the CES payment system. In this manner these sites have provided a valuable platform for exchange of ideas and global networking. From a more localized perspective however the limited number of members of any one local exchange on the network has not allowed for significant local community building efforts using these forums.

3.3 Building community offline

Ayley & Ayley (2005) believe that many local currencies fail because the founders do not place sufficient emphasis on facilitating the development of personal contacts and one-to-one relationships essential for the community building required for such currencies to thrive. They argue that the corporatization process has reinforced a view of trading in which monetary exchange is seen as primary, and personal relationship, if it exists at all, is secondary.
“Conditioned by this situation, it is easy to focus on the ‘trading’ aspect of local currencies, and forget that it is people who are making those trades, and it’s also personal relationships that underpin people’s willingness to trade with one another. Successful systems usually provide ongoing opportunities for social connections between members, fostering a sense of community and the personal contacts that facilitate trading.” (Ayley & Ayley, 2005: 3).
One way to encourage such personal interaction required to build relationships is through the facilitation of social gatherings where members can meet and interact with each other. Such interaction forms the basis of future trading and exchanges as people become aware of each others potential offerings and needs.
While regular social gatherings may be feasible for networks with members within reasonable geographical proximity, this becomes more complicated when the ‘community’ is spread over a vast area, as becomes increasingly possible with a web-based platform. This section will examine issues of scale, followed by a look at measures that have been taken by the CTTE to build community and promote inclusiveness.

3.3.1 Scale

Increasing membership is noted as means to encourage reciprocity in online networks, where a larger audience has implications for reputation, as well as need based motivations to reciprocate (Kollock, 1999). In a community currency increased membership similarly provides users with an increased ‘audience’ or ‘market’ for their services, as well as greater variety of offerings allowing for reciprocal exchange.
Greco (2009: 143) notes a number of potential constraints relating to the appropriate scale and scope of a community exchange network:
• Failure to achieve critical size of the participant base
• Too narrow an assortment of goods and services offered
• Failure to attract participants from all levels of the supply chain (production/ distribution circuit), and
• Failure to gain wide acceptance among the mainstream business community.
Although the CTTE has grown rapidly, less than a third of its 3795 members have accessed their accounts in the past year. The assortment of offerings remains relatively limited (xi) as does reach across the supply chain, and acceptance amongst mainstream businesses.
Concerns raised above point to the need to grow the exchange in order to increase the diversity of goods and services supplied, thus making the currency more worthwhile. Larger exchanges however come with increased administrative burdens, as well as greater difficulty in maintaining the ‘community’ aspect of an alternative currency. Douthwaite (1996) notes examples of community currency administrators taking special initiative to encourage reciprocal trading by approaching those with substantial debits or credits, assisting where possible to find appropriate ways in which units may be earned or spent to restore equilibrium and stimulate exchanges. However, Schraven (2001) shows that, as membership increases beyond the lines of social control, such monitoring becomes more difficult and expensive, as transactors do not know each other. This trend is noted by Ellickson (1991:283) who finds that people start resorting to the law when the social distance between them increases.
During consultation with some CTTE members, the issue of geographical distance was noted to limit the feasibility of exchange, as traveling long distances across the city to obtain something for Talents often makes buying it for cash at a nearby store more economical. Distance is also a factor when it comes to partaking in the community building efforts such as markets and meetings. In an attempt to ‘localize’ the exchange further sub-areas were introduced and local area co-ordinators assigned to promote activity within these areas (CTTE Newsletter, July 2004). To date trade within these sub-areas remains limited. It is hoped that by continuing to grow the network, and maintaining the intended emphasis on more locally based exchange, sub-areas will eventually reach the critical mass to be able to function more independently as greater variety of offerings become available in these areas.

3.3.2 Offline links – markets, shops and slips

Recognizing the need for face-to-face interaction as a key element in building community, attempts were made in earlier years to have at least one ‘Market Day’ each month (Jenkins, 2004). While earlier markets were organized by SANE members, the hope was that once the system grew and sub-areas became more active, members would take over this initiative to organize markets in their areas. This has not happened to the extent intended, and as the pressure on volunteer administrators became too much, coinciding with the split between SANE and the CES, markets diminished. Although a total of 8 markets have been held in various venues across Cape Town in 2009, these only last for approximately 3 to 4 hours, and tend to attract the same small, core group of traders.
As an additional means to promote ‘real-life’ interaction, an attempt was made to introduce Talent only shops where members could bring their goods to trade, and buyers could come to spend their Talents. The pilot for this initiative opened in October 2005 using SANE premises in what was thought to be a central and accessible location. (CTTE Newsletter, October 2005). The hope was that members would eventually take the initiative to open more such shops in their sub-areas. The split with SANE in 2008 resulted in loss of these premises, and no attempts were made to open another.
To encourage the use of Talents amongst those with no or limited access to the Internet, a parallel paper-based system was designed for use at markets, as well as individual exchanges between members. A range of documents that can be printed out is provided for this purpose, including trading sheets for use by sellers at fairs and in shops, and trading slips that can be cut out to make ‘cheque books’. Trades thus recorded would then be captured into the system by area coordinators or others with Internet access, who would act as mediators, thus extending the Internet’s benefits to those without access. The role of such ‘mediators’ extending access to Internet technologies is highlighted by Geser (2001: 15) who believes that “the Internet may well have an extensive impact on the whole mankind, because even highly marginal population segments profit at least indirectly from it: by having relationships to sympathetic users.” (xii)

3.3.3 Building community across the digital divide

Although the CES is essentially a web-based platform, among the primary objectives of its creators was to reform the monetary system in a way that would benefit those lacking access to Internet technologies (Jenkins, 2004). In South Africa this currently comprises approximately 90% of the population. (Internet World Stats, 2009). A review of CTTE members’ account details shows that while 14% do not have email accounts listed, a further 36% have addresses of either their local sub area network administration, or other members’ addresses, indicating that these members do not have their own email accounts, or access to the Internet. Although many more have cell phones, few know how to access the mobile system.
In an attempt to bridge the digital divide SANE embarked on a project to take the CES to disadvantaged communities, targeting three areas (xiii) that were intended to serve as pilots for a much broader roll out (CTTE Newsletter, October 2005). Residents of these communities attended New Economics courses explaining the principles of New Economics and the Talent Exchange. Local market days were organized, and offices were established where administrators entered offerings and trades into the system, and members could browse offerings.
SANE’s initiative initially sparked significant interest in communities, resulting in a substantial increase in membership. Activity declined following the split between the CES and SANE. Through its non-profit status SANE had accessed funding (xiv) for the social development component of the exchange. Without further funding (xv) and support following SANE’s withdrawal, offices closed down and markets were abandoned. The hope that community members would take over the initiative for organizing their own markets and opening a shop was never realized. Without own access to the Internet, the majority of new members could no longer participate in the exchange.
It is worth noting that a few traders in these areas who do have Internet access continue to act as mediators for others in their communities, and hope to stimulate more interest in the system. Talent enthusiasts Toni Khulule and William Kambeva from Khayelitsha township recently started a food garden initiative which they intend to run on Talents, although administration and Internet access remains a challenge. Likening the Talent Exchange to the spirit of ‘Ubuntu’ (xvi) – which they and their neighbors grew up with before migrating to the city in search for work – they believe such a relationship-centered system can form an important buffer against economic hardship.

4 Conclusion

The word ‘ubuntu’, used by Khayelitsha township residents to describe a life philosophy based on relationships and sharing, entered the IT world as name of a major open source operating system. Open source software has been the quintessential example of the ‘high-tech gift economy’, a concept that has been discussed in Internet research since the 1990s. This paper proposes that the concept of an Internet enabled ‘gift economy’ can be extended beyond the realms of cyberspace, by looking at the emergence of web-based community currencies. ‘Gifts’ are defined as essentially reciprocal, and a ‘gift-economy’ as one based on relationships. By defining money as ‘memory’ or information only (thus excluding all inherent value added in its creation as interest-bearing bank debts), it is argued that a mutual credit currency serves as the community’s collective memory of ‘gifts’ given and received.
The Community Exchange System (CES) is examined as an example of such a web-based mutual credit currency. First piloted in Cape Town in 2003, the system quickly expanded across South Africa and then the world, where it is now used by many local community exchanges to record transactions. Simultaneous to the CES’s global expansion, its pilot Talent Exchange in Cape Town (CTTE) grew rapidly, largely through the efforts of SANE who organized markets, provided premises for a shop, and promoted the Talent Exchange as a social development initiative in local townships.
Reciprocity is noted as a key prerequisite of the online ‘gift economy’ as well as community currencies, in both cases involving a form of ‘generalized exchange’ whereby the giver can expect reciprocation from the community as a whole, rather than directly from the receiver. Such reciprocity poses the risk of ‘free-riding’ whereby some yield to the temptation to take without giving. Ways to encourage reciprocity in such a system, using both online tools, as well as offline initiatives to build the ‘community’ element essential for community currency, are examined.
Features on the CES site provide some encouragement for reciprocal exchange, as they include information on identity, promote transparency, and provide a mechanism for recognition. Online social networking tools are also used to build community amongst members, although to date membership of and activity in the Ning community and Facebook groups created for this purpose is limited.
Emphasis on offline community building initiatives for the Cape Town exchange waned following SANE’s withdrawal from the CES. Despite these difficulties, the network appears to have reached a sufficient size allowing trading activity to continue, and new members still join every month. Access however remains largely limited to those with Internet access, thus excluding approximately 90% of South Africa’s population. Despite attempts to bridge the digital divide through social development initiatives, without ongoing external support these have been largely unsustainable. Some do however still express hope that the system can be revived, citing the emphasis on relationships and gift exchange as a traditional survival strategy many forgot when they moved to the city.
Despite its limited success in straddling the digital divide, the CES provides an ideal example of a way whereby theories on the gift economy enabled by the Internet can move from cyberspace into the real world of food gardens, lift clubs and massage treatments (xvii). In addition to providing a searchable online directory of offerings and wants, and a ‘memory’ of exchanges, the Internet also provides tools for building community online. While use of these tools has been limited to date, increasing interest in alternative economics could result in rapid growth of this and similar systems fostering real-life local exchange through web-based global payment systems linked with online social networks.

Notes

i) The American Heritage Dictionary of the English Language defines reciprocity as: “a mutual or cooperative interchange of favors or privileges. Something is reciprocal when it is performed, experienced, or felt by both sides.”
ii) Backed Currencies are directly backed by, and can be exchanged at a fixed fee for, either real goods or legal tender. Some of the earlier Backed Community Currencies were based the ideas of economist Silvio Gesell (1862-1930), who argued that money should have a carrying cost (referred to as ‘demurrage charge’), in order to increase the rate of circulation. This would enable more exchanges to be facilitated with the same stock of money, thus alleviating the problem of local money shortage. (Schraven, 2001: 3) An example of a modern-day backed currency are the Liberty Dollar (Lesnick, 2007) and the Phoenix Dollar (Herpel, 2006), both backed by precious metals.
iii) The Fiat Community Currency is similar to legal tender in that it is neither backed by real goods, nor by labour. The most famous Fiat Community Currency initiatives include the Capitol-hill baby-sitting co-op (see Sweeney and Sweeney, 1977), and the Ithaca Hours system in New York State (Schraven, 2001: 6).
iv) Mutual credit systems (MCS) are a completely different means of issuing money, based on 19th century French social-anarchist Proudhon’s idea of mutual banking (See Dana, 1896). All members of such a system open an account with a central administration unit, which records transfers in ‘units’ between these accounts. Transactions are facilitated by members running down balances or going into debt, thus ‘creating’ money according to transaction need. In a well-administered system, all accounts sum to zero. The system operates as a pure accounting system of exchange (Black 1970, Fama 1980, White 1984) without an initial stock of cash. (Schraven, 2001: 6) The most renowned of such systems operating as Mutual Credit System Currencies is the Local Exchange and Trading System (LETS) developed by Michael Linton (Cohen-Mitchell, 2000).
v) Confirming Rushkoff’s belief in alternate moneys programmed by the people for the people, a variety of Internet based currencies, including specialized software to facilitate alternate forms of exchange have proliferated in cyberspace in recent years. Some examples of these include: Open Money/ Community Way (http://www.openmoney.org/cw/); QQ coin in China (http://www.businessinsider.com/virtual-currency-in-china-is-a-2-billion-economy-2009-7); Ripple (http://ripple.sourceforge.net/); Cyclos (http://project.cyclos.org/); Drupal (http://drupal.org/project/marketplace) & Community Forge (http://communityforge.net/); Friendly Favours (http://www.favors.org/FF/); Ven (Hub-Culture) (http://www.hubculture.com/groups/hubnews/news/96/); Freeconomy (http://forum.justfortheloveofit.org/); CuroMuto (http://www.curomuto.com); Universal Currency (http://www.ucci.biz/); Google open source virtual currency (https://docs.google.com/Doc?id=dfjcf7w4_10ddst9xd9&hl=en); and The Community Exchange System (www.ces.org)
vi) Local Exchange Trading Systems (LETS) also known as LETSystems are local, non-profit exchange networks in which goods and services can be traded without the need for printed currency. LETS networks use interest-free local credit so direct swaps do not need to be made. In LETS, unlike other local currencies, no scrip is issued, but rather transactions are recorded in a central location open to all members. As credit is issued by the network members, for the benefit of the members themselves, LETS are considered mutual credit systems. Michael Linton originated the term "Local Exchange Trading System" in 1982 and, with his wife Shirley, for a time ran the Comox Valley LETSystems in Courtenay, British Columbia. The system he designed was intended as an adjunct to the national currency, rather than a replacement for it, although there are examples of individuals who have managed to replace their use of national currency through inventive usage of LETS (NationMaster Encyclopedia)
vii) While the web-based platform technically expands access to offerings in other exchanges, less than 20% of respondents to an online survey of CTTE members have actively traded with members of other exchanges. Thus, although the potential scope of offerings is increased, it does not appear as though this is yet having a significant impact on members’ experience of the exchange.
viii) An example of a site which, while not an alternative ‘currency’ per se, is specifically geared towards the reciprocal exchange of ‘gifts’, in this case of accommodation and companionship, is CouchSurfing. The nature of the ‘gifts’ exchanged on this site places particular emphasis on the question of identity, a key determinant of compatibility for anyone choosing to let a stranger into their house for free, or choosing to stay on another’s “couch” in a foreign country. For this reason the profile information requested of new members probes much deeper than what is commonly required of more ‘casual’ social networking sites, and honesty is expected in responses. Requests from members with fully completed profiles carry a significantly greater likelihood to be accepted by potential hosts, or selected by surfers.
ix) New members are required to submit three offerings upon signing up, where after they can update these offerings, register wants, browse others’ listings and start trading
x) Examples of such uses include the reference feature on the business networking site LinkedIn whereby connections can provide each other with references for work conducted or general professional experiences. Such references heighten the value of a personal profile on this site, which is largely used as a networking tool for business promotion. The recommendation feature also forms a critical component of the CouchSurfing website, where members can provide references for others they have hosted, surfed or traveled with, met through the site or know from elsewhere. These references (which can be both positive and negative) are prominently displayed on members’ profiles, and can be a deciding factor in assessing whether or not to accept a request for meeting or hosting. In both LinkedIn and CouchSurfing members are alerted of recommendations placed by others, and a tacit expectation exists that such recommendations will be reciprocated. In this way these features can be regarded as an important factor in building reputation in these networks, thus encouraging active, reciprocal, participation.
xi) As with many similar exchanges across the world, membership of which predominantly comprises what may be considered alternative communities, a large proportion of offerings on the CES exchange involve holistic healing treatments.
xii) Examples of mediators extending the power of the Internet to those without access cited by Geser (2001) include opposition groups in Burma communicating their messages orally to people in Thailand border villages which then feed it into the net, as well as the Zapatista National Liberation Army (EZLN) in Chiapas (Southern Mexico). While the Zapatista communities themselves are indigenous, poor and often cut-off not only from computer communications but also from the necessary electricity and telephone systems, they have had a mediated relationship to the Internet through volunteering intermediaries from various Western countries. This has involved handwritten reports passed on to reporters for typing or scanning into digital format for online publication (Cleaver1998). In his assessment of the use of the Internet by the South African Treatment Action Campaign (TAC) Wasserman notes that while the TAC uses traditional media to promote its cause, it also uses a website and email to communicate with supporters and establish links with solidarity networks.
xiii) Delft, Masipumalele near Hout Bay, and Harare in the Khayelitsha township,
Funding for these interventions was obtained from the Ford Foundation, the Embassy of Finland, and the German Development Bank.
xiv) In an attempt to revitalize the development component of the system without the backing of SANE, the CES recently formed a Section 21 Company that would entitle them to funding for similar ventures into the future, and has also registered with the online donation system GivenGain (www.givengain.com).
xv) Derived from the Zulu phrase: “umuntu ngumuntu ngabantu" which, literally translated, means a person can only be a person through others. (Mbigi & Maree, 1995)
xvi) Or poetry, turnips and lawn cutting as LambornWilson would have it.

References

American Heritage Dictionary of the English Language, 4th edition.
Anderson, C. 2009 “The Economics of Giving It Away” in Wall Street Journal 3 February 2009. http://online.wsj.com/article/SB123335678420235003.html, accessed 30 August 2009
Ayley, F. & and Ayley. L 2005. Abundant Money: Fourth Corner Exchange Brings Time Dollars to Whatcom County. http://www.complementarycurrency.org/ccLibrary/0506%20Abundant%20Money.doc, accessed 30 August 2009
Bandura, A. (editor). 1995. Self-Efficacy in Changing Societies. Cambridge: Cambridge University Press. Cited in Kollock, 1999. “The Economies of Online Cooperation: Gifts and Public Goods in Cyberspace” In Communities in Cyberspace: Perspectives on New Forms of Social Organization, edited by Peter Kollock and Marc Smith. Los Angeles: University of California Press.
Barbrook, R. 1998. “The High-tech Gift Economy” in First Monday Volume 3, Number 12 - 7 December 1998. http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/631/552, accessed 30 August 2009
Barbrook, R. 2005. Comments from authors. First Monday Special Issue #3: Internet banking, e-money, and Internet gift economies, published in December 2005. http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/1517/1432#d3, accessed 30 August 2009
Bell, D. 1991. “Modes of Exchange: Gift and Commodity.” The Journal of Socio-Economics 20(2):155-167. Cited in Kollock, 1999.
Black, F. (1970), “Banking and Interest Rates in a World Without Money: the Effects of Uncontrolled Banking”, Journal of Bank Research, Autumn, 9-20. in Schraven, 2001.
Carrier, J. 1991. “Gifts, Commodities, and Social Relations: A Maussian View of Exchange.” Sociological Forum 6(1):119-136. Cited in Kollock, 1999.
CES Website, 2009. http://www.community-exchange.org/, accessed 30 August 2009
Cleaver, HM. (1998): “The Zapatista Effect: The Internet and the Rise of an Alternative Political Fabric.” In: Journal of International Affairs 51. pp. 621ff. Cited in Geser, 2001. “On the Functions and Consequences of the Internet for Socal Movements and Voluntary Associations”. In: Sociology in Switzerland: Social Movements, Pressure Groups and Political Parties. Online Publications. Zuerich, March 2001
Cohen-Mitchell, T. 2000. “Community Currencies at a Crossroads - New Ways Forward”. New Village Journal, Issue 2 2000 http://www.newvillage.net/Journal/Issue2/2commcurrencies.html, accessed 30 August 2009
Constant, D., Sproull, L. and Kiesler, S., 1996 “The Kindness of Strangers: The Usefulness of Electronic Weak Ties for Technical Advice.” Organization Science 1996. 7: 119-135.
CTTE Newsletters, 2003-2009. http://www.ces.org.za/cen/ctte/index.htm, accessed 30 August 2009
Cutler, RH 1995. “Distributed Presence and Community in Cyberspace” in Interpersonal Computing and Technology: An Electronic Journal for the 21st Century April, 1995 Volume 3, Number 2, pp.12-32. http://www.helsinki.fi/science/optek/1995/n2/cutler.txt, accessed 30 August 2009
Crawford, W. 2001. "Sampling the Circle of Gifts," eContent Magazine (December), at http://www.econtentmag.com/Articles/ArticleReader.aspx?ArticleID=876, , accessed 30 August 2009.
Dana, CA. 1896. Proudhon and his "Bank of the People",New York: Benj. J. Tucker. http://dwardmac.pitzer.edu/Anarchist_archives/proudhon/dana.html, accessed 30 August 2009
Deragon, J. 2007 “Relationship Economics” The Relationship Economy http://www.relationship-economy.com/?p=84, accessed 30 August 2009
Douthwaite, Richard, 1996, Short circuit: strengthening local economies for security in an unstable world, The Lilliput Press, Dublin. 2004 edition online at http://www.feasta.org/documents/shortcircuit/contents.html, accessed 30 August 2009
Ekeh, P. 1974. Social Exchange Theory: The Two Traditions. Cambridge, MA: Harvard University Press.
Ellickson, R. (1991), Order Without Law: How Neighbours Settle Disputes, Harvard University Press, Cambridge. in Schraven, 2001.
Fama, E. (1980), “Banking in the Theory of Finance”, Journal of Monetary Economics, 6:39-57. in Schraven, 2001. Economics of Community Currencies: a Theoretical Perspective
Fox, 2005. “Internet banking, e-money and the Internet gift economy” First Monday's Special Issue #3: Internet banking, e-money and the Internet gift economy. http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/1508/1423, accessed 30 August 2009
Geser. H. 2001. “On the Functions and Consequences of the Internet for Socal Movements and Voluntary Associations”. In: Sociology in Switzerland: Social Movements, Pressure Groups and Political Parties. Online Publications. Zuerich, March 2001 (Release 2.0). http://socio.ch/movpar/t_hgeser3.pdf, accessed 30 August 2009
Gesell, S. 1906. The Natural Economic Order. http://wikilivres.info/wiki/The_Natural_Economic_Order, accessed 30 August 2009
Greco, TH. 2001. Money. Understanding and Creating Alternatives to Legal Tender. E-book Excerpted Version CHELSEA GREEN PUBLISHING COMPANY White River Junction, Vermont. http://www.appropriate-economics.org/materials/greco_money.pdf, accessed 30 August 2009
Greco, TH 2009. The End of Money and the Future of Civilization. Chelsea Green Publishing. UK
Ghosh, R.A. 1998. "Cooking Pot Markets: An Economic Model for the Trade in Free Goods and Services on the Internet," First Monday, volume 3, number 3 (March), at http://www.firstmonday.org/issues/issue3_3/ghosh/, accessed 30 August 2009.
Hart, K. 2000. The memory bank. London: Profile. Republished in 2001 as Money in an unequal world. New York: Texere. In Hart, 2007. “Money is always personal and impersonal Anthropology Today Vol 23 No 5, October 2007
Hart, K. 2005. “Notes towards an anthropology of money” in Kritkos an international and interdisciplinary journal of postmodern cultural sound, text and image Volume 2, June 2005, ISSN 1552-5112
Hart, K. 2007. “Money is always personal and impersonal Anthropology Today Vol 23 No 5, October 2007
Haung, J. 1999. Knowledge Sharing and Innovation in Distributed Design. http://faculty.arch.usyd.edu.au/kcdc/journal/vol2/dcnet/sub5/knowledge.html, accessed 30 August 2009
Internet World Stats. 2009. Internet Usage Statistics for Africa http://www.internetworldstats.com/stats1.htm#africa, accessed 30 August 2009
Ippolito, J. 2001. “Whatever Happened to the Gift Economy?” Leonardo, volume 34, number 2 (April), pp. 159–160.
Jenkin, T. 2004. The SANE Community Exchange System. http://www.appropriate-economics.org/africa/ces.htm, accessed 30 August 2009
Jenkin, T. 2009. Interviews conducted on 27 January and 25 August 2009.
Khulule, Toni and Kambeva, William. 2009. Interview with CTTE representatives from Khayelitsha township, 22 June 2009.
Kollock, P. 1993. “An Eye for an Eye Leaves Everyone Blind': Cooperation and Accounting Systems.” American Sociological Review 58(6):768-786.
Kollock, P. 1999. “The Economies of Online Cooperation: Gifts and Public Goods in Cyberspace” In Communities in Cyberspace: Perspectives on New Forms of Social Organization, edited by Peter Kollock and Marc Smith. Los Angeles: University of California Press.
Kollock P and Smith, M. (ed). 1999. Communities in Cyberspace: Perspectives on New Forms of Social Organization, edited by Los Angeles: University of California Press.
Kreps, DM. 1994 “Corporate Culture and Economic Theory.” In James Alt and Kenneth Shepsle, eds., Perspectives on Positive Political Economy. Cambridge: Cambridge University Press, 1994.
LambornWilson, P. 2004. Interactivist -- Jennifer Bleyer. In conversation with Peter LambornWilson (http://www.16beavergroup.org/mtarchive/archives/001164.php)
Lietaer, B. 1997. “An interview with Bernard Lietaer by Sarah van Gelder”. YES Magazine, April 1997. http://www.transaction.net/press/interviews/lietaer0497.html, accessed 30 August 2009
Lietaer, B. 2001, The Future of Money: Creating New Wealth, Work and a Wiser World, Century: The Random House Group Limited, London
Mauss, M. 1990 (1923) The Gift: forms and functions of exchange in archaic societies. London: Routledge. (originally published as Essai sur le don. Forme et raison de l'échange dans les sociétés archaïques ("An essay on the gift: the form and reason of exchange in archaic societies"), in the Annee Sociologique 1923-1924.
Mbigi, L. and Maree, J. 1995. Ubuntu: The Spirit of African Transformation Management Sigma Press Johannesburg. 1-7.
McNamara, G. 2009. Discussion “Future needs of LETS” on CommunityExchange.Ning group. http://communityexchange.ning.com/forum/topics/future-needs-of-lets, accessed 30 August 2009
Motavalli, J. 1996: “The virtual Environment.” In: E – Environmental Magazine 7 (32), pp. 28ff. Cited in Geser, 2001: 14. “On the Functions and Consequences of the Internet for Socal Movements and Voluntary Associations”. In: Sociology in Switzerland: Social Movements, Pressure Groups and Political Parties. Online Publications. Zuerich, March 2001
NationMaster Encyclopedia. 2009. Local Exchange Trading Systems. http://www.statemaster.com/encyclopedia/Local-Exchange-Trading-Systems accessed 30 August 2009.
Offer, A. 1997. "Between the Gift and the Market: The Economy of Regard," Economic History Review, volume 50, number 3, pp. 450-476.
Osteen, M. 2002. “Introduction: Questions of the gift,” In: M. Osteen (editor). The question of the gift: Essays across disciplines. London: Routledge, pp. 1–42.
Pinchot, G. 1995. "The Gift Economy," In Context, number 41, at http://www.context.org/ICLIB/IC41/PinchotG.htm, accessed 30 August 2009.
Raymond, E.S. 2000. "Homesteading the Noosphere," at http://www.catb.org/~esr/writings/cathedral-bazaar/homesteading/index.html, accessed 30 August 2009
Rheingold, H. 1991. ``A Slice of Life in my Virtual Community'' in Big dummies Guide to the Internet. Indiana University Press. Indiana. Obtained from http://www.nectec.or.th/net-guide/bigdummy/bdg_255.html#SEC258, accessed 30 August 2009
Rheingold, H. 1993. The Virtual Community: Homesteading on the Electronic Frontier. New York: Addison-Wesley.
Rheingold, H. 1997. “The Internet and the Future of Money” Tomorrow column © by Howard Rheingold.
Rushkoff, D. 2009. Program Your Own Money http://www.realitysandwich.com/program_your_own_money, accessed 30 August 2009
Schraven, J. 2001. The Economics of Community Currencies: a Theoretical Perspective http://www.strohalm.net/media/economicscommunitycurrencies.pdf . Complementary Currency Resource Center http://www.complementarycurrency.org/materials.php, accessed 30 August 2009
Schwartz, J. 2008 “Alternative Currencies Grow in Popularity” CNN Time http://www.time.com/time/business/article/0,8599,1865467-1,00.html, accessed 30 August 2009
Squires, L. 2009. Skype Interview with Les Squires on 11 February 2009.
Suntrader, 2008 “Law of Reciprocity in Social Marketing” Suntrader Networks 19 November 2008. http://www.suntrader.com/law-of-reciprocity-in-social-marketing, accessed 30 August 2009
Sweeney, J. and Sweeney, R. (1977), “Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis”, Journal of Money, Credit and Banking, 9:86-89. Cited In Schraven, 2001. The Economics of Community Currencies: a Theoretical Perspective
Veale, KJ. 2003. “Internet gift economies: Voluntary payment schemes as tangible reciprocity” in First Monday, Volume 8, Number 12 - 1 December 2003. Republished in First Monday Special Issue #3: Internet banking, e-money, and Internet gift economies — 5 December 2005
http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/1518/1433, accessed 30 August 2009
White, L. (1984), “Competitive Payments Systems and the Unit of Account”, The American Economic Review, 74:699-712. In Schraven, 2001. The Economics of Community Currencies: a Theoretical Perspective
Wasserman, H. 2005. “Connecting African Activism with Global Networks: ICTs and South African Social Movements” in Africa Development, Vol. XXX, Nos. 1 & 2, 2005, pp. 163–182 © Council for the Development of Social Science Research in Africa
Wellman, B. and Gulia, M. 1999 “Virtual Communities as Communities.” In Kollock & Smith (eds). Communities in Cyberspace: Perspectives on New Forms of Social Organization, edited by Peter Kollock and Marc Smith. Los Angeles: University of California Press.

Social Impact Assessment lecture

2009-08-07T08:04:00.000-07:00

Rough summary of the past decade of my 'professional' life:

SIA Lecture

Money Makes the World go Around

2009-07-13T14:41:00.000-07:00

Table of Content
1 Introduction 2
2 What is money and where does it come from? 2
2.1 Barter or gift exchange? 3
2.2 Government credit: fines, levies and taxes 4
2.3 How does it work? 4
2.3.1 Impact of currency design 5
2.3.2 Banks create debt 6
2.3.3 Debts bear interest… 6
2.3.4 Interest creates scarcity 7
2.3.5 All backed by Legal Tender 8
2.3.6 E-money for the Information Age 8
2.4 Whose is it anyway? 9
2.4.1 States, Markets and Central Banking 9
2.4.2 The people…? 10
2.4.3 Impact of ICTs 11
3 Alternative Complementary and Community Currencies 12
3.1 Complementary currencies 14
3.2 Community Currency 15
3.2.1 Types of Community Currencies 15
3.2.2 Mutual Credit & Credit Clearing 16
3.3 Conscious currency 16
3.3.1 Interest free abundance 17
3.3.2 Keep the benefits local 18
3.3.3 Create employment 19
3.3.4 Enhance social capital 20
3.3.5 Valuing ‘non-monetary’ services 20
3.4 Potential obstacles 21
3.4.1 External: Powerful interest groups and Legalities 21
3.4.2 Internal: Maintaining momentum and motivation 24
4 Conclusion 26
5 References 27

1 Introduction

“The word money comes from Juno Moneta, whose temple in Rome was where coins were minted, and most European languages retain money for coinage. Moneta was the goddess of memory and mother of the Muses. Her name was derived from the Latin verb moneo, whose first meaning is to remind, bring to ones recollection. For the Romans, money, like the arts, was an instrument of collective memory that needed divine protection. As such, it was both a memento of the past and a sign of the future.” (Hart, 2005: 8)
The previous chapter looked at the economic evolution over the past two centuries, focusing on the work of Karl Polanyi, in particular his concept of The Great Transformation (1944) in which the modern market is thought to have been disembedded from social relationships. In this chapter the focus moves to the issue of money, the ‘stuff’ that facilitates trading and exchange. Within anthropological circles, Maurer (2006) feels that, though useful within its time and context, the continued (almost exclusive) emphasis on the “great transformation” and the formalist-substantivist debate initiated by Polanyi does not do justice to the dynamic evolution of economic, and particularly monetary, processes and their relationship to society. This he does however also believe to be in the process of changing, noting that “[r]ecent years have seen new attention to money […] even more than in the heyday of the debate in economic anthropology between the formalists and substantivists.” (2006: 18) A possible explanation for this revived interest cited by Maurer is the advent of what Gregory (1997) calls “savage money” – increasingly detached from both political control as well as from material goods and labour that formerly provided its backing – over the past three decades. Maurer questions the traditional anthropological perspective of money being abstracted and ‘disembedded’ from social relations, emphasizing the social roles and meanings of modern money as much as more traditional forms of exchange studied by anthropologists.
This chapter provides an in-depth look into the origins and meanings of money, continuously emphasizing its essentially social functions transcending the official purpose with which it is endowed. The chapter begins with an overview of the origins of money – where it comes from, how it works, and who controls it. This is followed by a look at the alternative and complementary currency movement, particularly looking at the (re-) emergence of community currencies, described as ‘conscious currencies’ as they are specifically designed to promote human well-being. Potential obstacles to the proliferation of such ‘conscious’ alternate currencies are also noted.
While this chapter provides a contextual overview of the evolution of money as we know it, as well as alternate currency systems, the next chapter will look specifically at the potential impact of the Internet on community currencies.

2 What is money and where does it come from?

Greco, (2001: 28) distinguishes between what he calls practical, functional and essential definitions of money. The practical definition of money is that: “Money is anything that is generally accepted as a means of payment. According to this definition, money is whatever people collectively say it is.”

2.1 What does it do?

The functional definition of money focuses on ‘what money does’, citing it to be: 1. a medium of exchange; 2. a standard of value; 3. a unit of account; 4. a store of value; and 5. a standard of deferred payment. Polanyi (1957) distinguished between ‘general purpose’ money as money that serves three (or four, or five) of these functions, and ‘special purpose’ money, serving only one or two.
Greco, (2001: 28) believes that the ideal money should be purely a medium of exchange, noting that storage of value can best be accomplished in other ways , while use of money (in its modern form) as a standard of value invites confusion and mismanagement. While former money either consisting of or backed by gold or silver could effectively serve as a standard of value, the value of current money is determined more by monetary management policies than by market forces. (Greco, 2001: 28)
The key function that transforms a chosen object into a currency is its role as a medium of exchange. While modern money tends to perform numerous other functions (such as store of value, unit of account, tool for speculation), Kinney regards these other functions as secondary, noting that “there have been perfectly effective currencies that did not perform some or all of these other roles.” (Kinney, 2004, 3)
According to Kinney “[t]he magic of money is bestowed on something as soon as a community can agree on using it as a medium of exchange. Our money and monetary systems are therefore not de facto realities, like air or water, but rather are choices, like social contracts or business arrangements, and, as such, are agreed to, and are subject to, review and amendment.” (Kinney, 2004, 3)

2.2 Money as memory

While the definitions above explain what money does, they do not describe what it is. For this reason Greco draws attention to what he calls the essential definition of money, adopted from Michael Linton, originator the “LETS” (Local Employment/ Exchange Trading System), whereby money is defined as “an information system we use to deploy human effort.” (quoted in Greco, 2001: 28) Seen in this light it becomes apparent that our acceptance of money is based on its informational content, and that money can essentially be seen as an accounting system.
Hart (2005: 8) emphasises the informational essence of money, noting that even what might be described as “money proper” continues to evolve “towards ever more insubstantial versions, from precious metals to paper notes to ledger entries to electronic digits. Money is revealed as pure information; and its function as money of account takes precedence over its form as circulating objects or currency.”
Going back to the origin of the word money in ‘moneta’, Hart (2007) argues that one of money’s chief functions is remembering. Memory also featured prominently in John Locke’s philosophy of money (Caffentzis 1989), in which a person made the resources provided by nature his own by performing labour on them. To sustain a claim on his property through time, the person must remain the same, and personal identity depends on consciousness. In order to be property, such property must endure and its endurance depends on memory. “Money thus expands the capacity of individuals to stabilize their own personal identity by holding something durable that embodies the desires and wealth of all the other members of society.” Hart (2007: 15). Hart refers to money is a ‘memory bank’ (2000), which he describes as “a store allowing individuals to keep track of those exchanges they wish to calculate and, beyond that, a source of economic memory for the community.” Hart (2007: 15).

2.3 Where does it come from?

2.3.1 Barter or gift exchange?

The origin of money is traditionally thought to lie in barter networks in which people initially exchanged surpluses of their own produce for that of others. When difficulties arose in finding exact equivalents in desired goods and services between reciprocal partners, certain objects became recognised as tokens that most people would be willing to hold to swap with something else from someone else in future. While various objects could be used in this way, certain metals were most commonly used due to the fact that they were durable, portable, divisible and thus useful, as well as being attractive and scarce, which made them desirable. “The money stuff succeeded because it was the supreme barter item, valued not only as a commodity in itself, but also as a ready means of exchange”. (Hart, 2005: 2).
Hart questions the traditionally accepted origin of money in barter networks, choosing instead to go even further back looking for the actual origins of human exchange. For this he believes it more plausible to locate the origins of exchange (and money) in the gift, as Mauss (1990 [1925]) suggested. This he however notes would lead to a personalised conception of money, whereby markets would be seen as “a form of symbolic human activity rather than as the circulation of dissociated objects between isolated individuals. The general appeal of the barter origin myth is that it leaves the notion of the private property complex undisturbed.” (Hart, 2005: 3).

2.3.2 Government credit: fines, levies and taxes

The myth of money’s origin in barter was questioned by John Maynard Keynes who in 1930 asserted that modern money originated with the rise of cities and states about 5000 years ago, around the start of agrarian civilisation (Hart, 2007). Keyes believed money to always be both an idea and an object, virtual and real. He distinguished between what he called money’s insubstantial form (money of account) and its substantial form (money proper). While Smith and Marx stressed money's substantial form, money proper, Keynes believed this to be less important than the emergence of a formal, state-defined money of account. (Hart, 2005).
“Once this existed, people began to transact business using both money proper, issued by the state, and the obligations of individuals and corporations. Presently, the bulk of these obligations are issued by banks; they far outweigh money proper in circulation, and Keynes calls them 'bank money'.” (Hart, 2005: 7)
While ‘bank money’ is thought to be as ancient as government credit, it gained significance for Western economic history in the Renaissance (de Roover 1999). Modern national currencies can be considered the result of a merger of state and banking systems (Hart, 2007).
Tygmoigne and Wray (2006) note that while ‘money’ viewed primarily for its exchange function can indeed be seen to have originated in markets as alternative to direct barter, when looking at its functions as unit of account or store of value, different origins emerge. In these functions ‘money’ becomes directly related to the concepts of ‘credit’ and ‘debt’, the origins of which Innes (1913, 1914, 1932, cited in Tygmoigne and Wray) suggest to be in the elaborate system of tribal wergild fines to prevent blood feuds. Polanyi (1957: 198) notes the ritual/ ceremonial aspect of debt, indicating that “the debt is incurred not as a result of economic transaction, but of events like marriage, killing, coming of age, being challenged to potlatch, joining a secret society etc.”
While initial wergild fines referred to indebtedness between people, Tygmoigne and Wray argue that these were gradually converted to payments made to an authority. In this manner these fines were replaced by tithes, tributes, and eventually fines for transgressions against ‘society’ could be levied for almost any activity, payable to the rightful ruler. Most fees, fines, and tributes were eventually replaced by taxes in the nineteenth century (Maddox, 1999). In this sense what initially started as a debt to a victim was transformed into “a universal ‘debt’ or tax obligation imposed by and payable to the authority. The next step was the standardisation of the obligations in terms of a unit of account – a money.” (Tygmoigne & Wray, 2006: 2) The argument is thus that the standardisation of money ‘stuff’ as we know it today originated in the central authorities’ need for a common unit of account to simplify the process whereby resources could be extracted from and disseminated to the population. This relates closely to what Polanyi (1957) describes as the redistribution principle of resource exchange, distinguished from reciprocity and market exchange as forms whereby production is integrated in society. Whereas pure application of the redistribution principle could imply equitable sharing of resources through payments for essential services rendered, aspects designed into the money system to artificially enforce its scarcity, while simultaneously rendering it essential as sole legal means to service debts have resulted in less than equitable redistribution of resources`, as will be shown below.

2.3 How does it work?

Trilling illustrates the fact that money is essentially the belief that others will accept a particular denomination of a specified currency as valuable.
“In essence, money is a confidence game. Like the emperor with no clothes (i.e., whenever a “crisis of confidence” looms), everybody just hopes that no untrained kid will make an improper remark. Under such circumstances, it may indeed require a lot of regal confidence, mystery and decorum to ensure that a long and fragile chain of beliefs will hold.” (Trilling, 2004: 8)
Money (especially money that is not backed by real goods or services) is essentially a trust existing only in the hearts and minds of the people that use it. Money systems abound with mechanisms and symbols aimed at keeping that trust alive. Trilling believes this trust to be fundamental to the self-confidence required for a civilization to grow and survive. “Conversely, when a society loses confidence in its money, it loses confidence in itself. Entire civilizations have collapsed with the collapse of their money systems.” (Trilling, 2004: 8)
Writing in 2004 Trilling noted modern civilisation to be a transition period, described as an interval of great risk as well as enormous opportunity. Now, five years later, the risks inherent in the ‘confidence-based’ money system have played out in a global financial meltdown. This section will provide a brief overview of the basic features of our current money system, beginning with a look at how the design of a currency can have far-reaching implications for the very essence of a society.

2.3.1 Impact of currency design

“Money is merely a social agreement, a story that assigns meaning and roles. […] Physically, it is now next to nothing: slips of paper, bits in computers. Socially, it is next to everything: the primary agent for the coordination of human activity and the focusing of collective human intention.” Eisenstein (2009)
Values and relationships within a society are deeply moulded by the type of currency it uses as the design of the currency can serve to encourage or discourage specific emotions and behaviour patterns. All types of money facilitate as means of exchange among people. The remarkable motivating power of money however means that the design of a specific money system is invariably loaded with numerous other objectives as well. These may be conscious, but are often unconscious, and range from prestige of the Gods or a ruler to collective socio-economic motivations. (Kinney, 2004, 1)
According to Bilgram and Levy (1914: 95): “The one quality which is peculiar to money alone is its general acceptability in the market and in the discharge of debts. How does money acquire this specific quality? It is manifestly due solely to a consensus of the members of the community to accept certain valuable things, such as coin and certain forms of credit, as mediums of exchange.” (Quoted in Greco, 2001: 29)
Kinney defines money may as an agreement, within a community, to use something as a medium of exchange. “As an agreement, money lives in the same space as other social contracts, like marriage or lease agreements. These constructs are real, even if they only exist in people’s minds. The money agreement can be attained formally or informally, freely or coerced, consciously or unconsciously” (Kinney, 2004, 2). This agreement is valid only within a given community, which may range from a small group of friends to the entire global community (as the U.S. Dollar as long as it is accepted as reserve currency.)
Hart, (2005: 8) also describes money as a type of ‘agreement’ on a means of exchange, noting that “[c]ommunities exist by virtue of their members’ ability to exchange meanings that are substantially shared between them. People form communities to the extent that they understand each other for practical purposes. And that is why communities operate through culture (meanings held in common). Money is, with language, the most important vehicle for this collective sharing.”
Key characteristics common to all Industrial Age currencies that still persist as unquestioned features of “normal” money systems today, are: 1) geographic attachment to a nation-state; 2) its creation out of nothing (fiat money); 3) by bank-debt; and 4) incurring interest (Kinney, 2004).
According to Robertson (2009) “the way money is created and issued, who creates it and in what form—as debt or debt-free, in one currency or another—largely determines whether a financial system works fairly and efficiently or not.” Money shapes the lives of those in the global village at personal, household, local, national, and international levels. Robertson shows that the current money system encourages or compels people to acquire and spend money “in ways that work against the planet, against other people, and against ourselves.”
The following sections will look at the process whereby money in the current financial system is created through the issuing of interest bearing loans backed by the concept of Legal Tender, followed by a brief look at the implications of electronic transfer on the finance industry.

2.3.2 Banks create debt

“The process by which banks create money is so simple that the mind is repelled.” —John Kenneth Galbraith (in Greco, 2001: 16)
Modern monery is created as bank credit that must be borrowed into circulation. Greco (2001) shows how conventional money exists as bank deposits, reflecting balances in checking or savings accounts, which are secured by interest bearing debt. Money can thus be seen to be the product of a private banking cartel. Greco distinguishes between ‘wealth creation’ (involving the application of human skills to natural resources in ways that produce useful goods and services) and ‘money creation’, described as a human contrivance; “a symbol created by a deliberate process involving entities called banks” (in Greco, 2001: 18). It is thus important to see that debt provides a means of creating entirely new funds. (Greco, 2001: 20)
According to Robertson (2009) the money supply in national economies is created by “profit-making banks writing [the money] into their customers’ accounts out of thin air as bank loans in electronic bank-account money.” The fact that money starts out as (interest bearing) debt, paying the interest in addition to the principal requires more money to be earned than has been created. The supply of money and the accompanying indebtedness in society must thus essentially keep growing, which has damaging systemic effects for both the environment and society. Such growing indebtedness favors those who lend money into existence at the cost of those who borrow and pay interest. Robertson believes that the economy is distorted by granting the privilege of deciding the first use of money when it enters circulation to profit-making banks.
Hock describes the nature of banking as taking low-risk assets (deposits) and investing them in higher-risk assets. “When these risks pay off, the bank owners reap the rewards. When the risk does no pay off, and a bank fails, the losses are spread between the bank owners and the depositors (or the governmental insurance safety net that now protects the depositors).” (Hock, 2004: 6) This results in a built-in temptation for banks to take high-risk/high return gambles, as gains can be significant, while losses are externalised, which in bank jargon is referred to as “moral hazard”.

2.3.3 Debts bear interest…

“Throughout most of history, the circulation of money has been based on the payment of interest. Interest leads to compound interest. Compound interest leads to exponential growth. And exponential growth in turn is unsustainable.” (Kennedy, 2005: 1)
Kinney identifies three side effects of charging interest on money as competition, the need for perpetual growth, and wealth concentration, noting that it was prohibited on both moral and legal grounds for more than 20 centuries. The prohibition of interest (usury) ended during the reign of King Henry VIII who first legalized interest in Britain in 1545, after his break with Rome. “For most of history, all three “religions of the Book” (Judaism, Christianity, and Islam) emphatically outlawed usury, intended here as any interest on money.” (Kinney, 2004: 5)
Greco (2001: 36) distinguishes between charging interest on money that has been earned through labour/ provision of actual goods and services, and the interest charged by banks on newly created money that they authorize based on debt.

2.3.4 Interest creates scarcity

“That is the essence of interest: I will only "share" money with you if I end up with even more of it in return. On the systemic level as well, interest on money creates competition, anxiety, and the polarization of wealth.” (Eisenstein, 2009)
An essential feature of money that is created as interest bearing debt is that it is ‘programmed’ to maintain its value based on scarcity and, by definition, inadequate supply. As banks only create the principal amount to be lent out, and not that required for the interest to be repaid, borrowers are forced to compete with each other for an insufficient amount, and the debts of some can only be repaid based on the ruin of others whose assets are repossessed.
“To put it simply, to pay back interest on a loan, someone else’s principal must be used. In other words, the device used to create the scarcity indispensable for this type of bank-debt money system to function, involves having people compete with each other for the money that was never created—and penalizes them with bankruptcy should they not succeed.” (Kinney, 2004:5)
Thus the system enforces a situation whereby it is mathematically impossible for everyone to ultimately benefit. As Greco (2001: 36) notes: “the prevailing system guarantees that there will be a steady parade of losers. This is the fundamental flaw in the present monetary system.” Economists Jackson and McConnell (1988) summarise this built-in scarcity aspect of bank-debt, fiat money systems, noting that “Debt-money derives its value from its scarcity relative to its usefulness.” (Quoted in Kinney, 2004: 4). Greco, believes that, in contrast to the current system which is based on what he calls the ““myth of scarcity,” the world needs systems and structures that affirm the truth of an abundant universe.” This requires structures that are efficient, self-regulating, democratic, and unbiased, “structures that enhance the prospects that each person will able to satisfy his or her basic, real needs” (2001: 22).
As former Head of the Organization and Electronic Data Processing Department of the Belgian Central Bank, responsible for the design and implementation of the convergence mechanism to the Euro, as well as President of the national Electronic Payment System (rated as the world’s most comprehensive and cost effective of such systems according to the Bank of International Settlements (BIS), Bernard Lietaer can be considered an expert in the field of conventional monetary policy. Lietaer emphasizes the fact that scarcity is artificially introcused by the banking system, noting that:
“I have come to the conclusion that greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.” (Lietaer, 2004: 1 emphasis original)
The scarcity element required for a bank-debt based currency to function at all must be artificially and systematically introduced and maintained by the banking system. By reinforcing competition rather than cooperation, this induced scarcity has profound effects upon our society and nearly every aspect of our lives according to Kinney (2004). Maintaining the system of artificial scarcity, despite the detrimental impacts that one might expect to lead to more optimal alternatives, has been the function of what is known as ‘Legal Tender’ as described below.

2.3.5 All backed by Legal Tender

All conventional national currencies operating today are fiat-based currencies, meaning that they are created by an authority who declares that something is to be a currency or valid “legal tender” although it may be worthless in substance. These fiat currencies are created under the hierarchical authority of a national Central Bank as bank-debt. (Kinney, 2004: 4)
The concept of ‘Legal Tender’ has come to replace the former commodities (e.g. grains, gold etc.) against which less substantial forms of money (e.g. paper notes) were backed. “Legal Tender” means that such notes must be accepted as payment by anyone to whom money is owed, be it an individual, a corporation, or a government agency. The currencies issued by central banks are in essence backed by government’s promise, which is rendered credible due to government’s power to levy and collect taxes (Greco, 2001: 19)
Zube (1999: 1) describes Legal Tender as “the enforced circulation of an exclusive currency at a forced paper par value, a currency against which competition is outlawed and […] which any creditor may demand.” This leads Zube to identify Legal Tender as “one of the greatest destroyers and wrongs”, showing that it “leads to inflation, unemployment, dictatorships, even wars [...] It is a totalitarian means leading to totalitarianism.”
Some of the ills caused by Legal Tender include, according to Zube, officially forged money, monetary inflation, as well as money shortages, and taxation without consent. It is considered a confiscatory means that leads to over- and under-issues of currency, misdirects the people's opposition against monetary malpractices, and brings about industrial unrest. It also outlaws the price mechanism for currencies, allowing what may be termed as ‘bad money’ to drive out the good. Zube furthermore notes that it allows the financing of unjust wars and despotic regimes, claiming it to be “one of the most anti-social acts any government could commit.” (Zube, 1999: 1).
By contrast, Zube proposes greater liberalization of currency, believing the solution to lie in currencies that are freely issued and allowed to compete against each other, which would require free market rates for all of them. This he believes would preserve the values of such currencies precisely because they could suffer a price fall. In such a situation he suggests that local currencies and private money tokens could be issued by all productive people who want to clear their services or goods freely and easily whenever and wherever needed.

2.3.6 E-money for the Information Age

Trilling (2004) describes a number of fundamental changes that have taken place in the world’s evolving monetary systems in recent decades, noting that there has been: 1) a structural shift as the dollar was disconnected from the gold standard in 1971 to inaugurate an era of currencies determined by market forces alone; 2) financial deregulation that enabled a much larger array of participants to become involved in currency trading than was ever previously possible; as well as 3) technological advancements including the computerization of foreign exchange trading and the creation of the first 24-hour, fully integrated, global market. Occurring in tandem with the structural shift and financial deregulation, the technological shift accelerated the speed and scale with which currencies could be moved around the world to an unprecedented level. According to Glyn Davies (1997) this technological shift can be regarded one of two exceptional innovations in money. While the first shift took place at the end of the Middle Ages when the printing of paper began to supplement the minting of coins, the second involves the invention of electronic money transfer. (Trilling, 2004: 1)
In The Rise of the Network Society Castells (1996) notes that the freedom of electronic transfer resulted in major mergers between financial firms throughout the world, leading to “the consolidation of the industry in a few mega-groups, capable of a global reach, covering a wide range of financial activities, in an increasingly integrated manner.” (Castells 2000 (1996): 154). Information technology also changed the way financial transactions were conducted qualitatively, as powerful computers, and advanced mathematical models allow for sophisticated design, tracking and forecasting of increasingly complex financial products operating in as well as future time. In this manner Castells believes that financial trade (between firms, between investors and firms, between sellers and buyers, and, ultimately, the stock exchange markets) was revolutionised by electronic communication networks and the wide-spread use of the internet.
Some examples of changes in the financial sector noted by Trilling includes the emergence and proliferation of credit markets, both in the issue of credit cards, as well as other financial products, as large corporations have been empowered to issue their own commercial paper, bypassing the commercial banks in the process.
“A titanic struggle has begun in relation to the control of emerging forms of money. Banks are now acting mostly like computerized telecommunications companies, while companies involved in telecommunications, computer hardware and software, credit card processing, Internet shopping, even cable television, have discovered that they can perform many of the services of the banks” (Trilling, 2004: 3).

2.4 Whose is it anyway?

This section looks at what might be thought of as the ultimate ‘ownership of’ or ‘authority over’ the mediums used as currency, looking at the interplay between the state and the market, the banking and emerging financial industry, and, ultimately, the people who use it. This is followed by a look at the potential of information and communication technologies to shift the basis of power in terms of money creation from central authorities to the people and businesses involved in transactions.
2.4.1 States, Markets and Central Banking
“Take a look at any coin. It has two sides. One contains a symbol of political authority, most commonly the head of a ruler, hence heads. The other tells us what it is worth, its quantitative value in exchange for other commodities. Rather less obviously, this is called tails. The two sides are related to each other as top to bottom. One carries the virtual authority of the state; it is a token of society, the money of account. The other says that money proper is itself a commodity, lending precision to trade; it is a real thing” (Hart, 2005: 7)
Hart highlights an obvious tension between the two sides of a coin, illustrating the dynamic interplay between the state and the market as ultimate monetary authority. Following a more market oriented approach in Victorian civilisation when money was backed by gold, political management of money became normal for a while during the twentieth century, particularly with the abandonment of the gold standard and consequent increased emphasis on legal tender. In the early 21st century the process of globalisation has again led to a shift towards the market as states lose control over their national currencies.
State money essentially involves government: a) offering a currency of little or no worth to a people in payment for real goods and services; b) designating this currency as the sole legal means of exchange within the territory; and c) stipulating this currency to be the required medium for payment of taxes (Hart, 2005: 7).
While the creation of money through debt was traditionally a government function, towards the end of the 17th century this process became outsourced to the commercial, privately-held banking system. Agreements were reached whereby private banks were granted the right to create money as “legal tender” in exchange for a commitment to provide whatever funds the national government needed. This gave commercial banks the power to create new money through a process based on issuing loans to their customers. The amount of money that the banking system could loan out, together with the amount of new money that would be created by the banking system, would be determined as a percentage of the bank’s stores of deposit (Hock, 2004).
Borsodi (1977) found the way banking is viewed as a “business” with its implications as an enterprise conducted for profit to be unfortunate, arguing that in essence banking should be seen as a profession, and as such should be conducted with the primary motivation of rendering a service. While the people involved should be compensated for their work, this should be seen as a professional fee, as opposed to a business profit.
Greco notes how the politicization of money, banking, and finance has led to abuses of the human population, as private banking interests and the central government became intertwined and mutually dependent. In return for its privileged position as sole issuer of money, the banking cartel must assure that government can borrow and spend virtually any amount of money it wishes. To do this the banking system will create enough new money to allow the market to absorb new government bonds that must be issued to finance any deficits, thus allowing the government to spend as much as it wishes without directly raising taxes. The destructive power of such almost limitless power to spend is illustrated by Riegel who notes that “it permits ambitious or designing or fanatical men who are in control of government to light the fires of war.” If governments were required to raise money for fighting from the people to obtain the money to fight, it could be argued that there would be few if any wars. A further impact of monetizing government debt is that it causes a general increase in prices known as “inflation” resulting from the lesser worth of a more ample supply of money not linked to any real increase in productivity, goods and services (Greco, 2001: 23).
The association between money and the state, markets, and the banking system has become so all-pervasive in modern society that, until recently it has been almost universally accepted as the natural norm. But what if money came from the people instead? Some have said that it does.

2.4.2 The people…?

In the early 19th century the German romantic, Miller (1931 [1816]), argued that money expressed the accumulated customs of a nation or people (Volk). Others (see Bagehot (1999 [1873]) and Simmel (1978 [1900])), view money as “an expression of trust within civil society, locating value in personal management of credit and debt” (Hart, 2005: 7). Reminding us that money is principally a way of keeping track of what people do with each other, Hart notes that new possibilities present themselves in an age of electronic money, predicting that central powers will in future be devolved to regional or local government bodies as people are more likely to fund public projects nearer to home, and that the territorial dimension of society will thus devolve to more local units. With the erosion of territorial power people will have to turn to their own forms of association and to more informal means of regulation. Hart (2005) believes that this could lead to participation in many forms of money and in the circuits of exchange corresponding to them, as suggested by Greco (2001:7).
In tracing the origins of the modern economy and the money that sustains it back to the gift, rather than barter, Mauss (1990 [1925]) supported the idea of money as personal credit. Seen as such it is linked more with the acknowledgement of private debt (wergild), and less to the history of state coinage that emerged once such ‘debts’ became centralised by central authority. In this sense money may be seen as a means of collective memory mediating the need to keep track of proliferating connections with others (Hart, 2005).
In a world where money resumes its role as collective ‘memory’ of individual debts, Hart believes that people will voluntarily enter into circuits of exchange based on special currencies, on the one hand, while simultaneously participating as individuals in global markets using international moneys such as electronic payment systems or even direct barter via the internet:
“It will be a world whose plurality of association, even fragmentation, will resemble feudalism more than the Roman empire. In such a world, one currency cannot possibly meet all the needs of a diversified region's inhabitants. The changing technical form of money has exposed the limitations of central banks, reduced now to maintaining a national monopoly whose economic inadequacy is exposed on all sides. In response, people have started generating their own money, offering individuals a variety of community currencies linked by increasingly-sophisticated electronic payment systems. (Hart, 2005: 7)
After several thousand years of state money linked to scarce commodities, embracing another form of “people’s money” will take some effort. However, as digitalisation encourages a growing separation between society and landed power, such appropriation of ‘money’ by ‘the people’ becomes a natural step in society’s drive to a more equitable world in which “we can make our own money, rather than pay for the privilege of receiving it from our rulers” (Hart, 2005: 9).

2.4.3 Impact of ICTs

“The development of computerized telecommunications technologies and the Internet have put into the hands of ordinary people an information matrix and ability to communicate that was undreamed of just a few years ago. Among other things, such tools have enabled the organization of grassroots communities of interest that transcend barriers of distance, language, and culture, and, as we shall see, they have also enabled the development of new nonmonetary, nonpolitical ways of exchanging goods and services.” (Greco, 2001: 11)
Speculation on how the Internet will impact on the future of money started in the late 1990s, in both cyber and economic fields. In 1997 avid Internet and Virtual Community enthusiast Howard Rheingold devoted two parts of his Tomorrow column to an article on The Internet and the Future of Money, in which he explores the work of Bernard Lietaer in The Future of Money: Beyond Greed and Scarcity, a book he was working on at the time, and published in 2001. Rheingold (1997, Part II) expects the Internet to lead to “a radical change in the future of money, if [its] technical mechanisms are used to support the creation and maintenance of 'local currencies' – a medium of exchange that many communities around the world are beginning to experiment with.”
Greco (2008a) believes that by making available the necessary tools and infrastructure to easily implement them, new computerized telecommunications technologies provide a means whereby the money monopoly can be transcended, a theme on which he expands in the recently published The End of Money and the Future of Civilization (Greco, 2009).
Rushkoff (2009) emphasizes the fact that “[m]oneys are programmed”, showing that the way these moneys behave and their impact on society is the result of certain biases embedded into the design of the money. In this light the current credit crisis can be considered the result of underlying biases of the centralized, monopoly currencies in use. In response to this realisation a growing population of citizens and businesses are turning to the use of complementary currencies, which Rushkoff (2009: 2) describe as “alternative, net-enabled, bottom-up money systems that let them accomplish what money loaned out by the Fed just isn't letting them do anymore”.
In today’s “networked, hi-tech, and decentralized world” Rushkoff (2009: 2) notes that there has been a move away from central administration in many spheres, including the way transactions and exchanges are processed.
“The laws and regulations requiring us to run our finances and resources through tremendous industrial age corporations are more obsolete than ever. And real people are beginning to catch on to how inefficient and risky it is to conduct their transactions in this way. They are starting to trust the real world around them more than the mythologies created by the public relations departments of distant corporations.” (Rushkoff, 2009: 2)
Companies can now barter directly with each other using more than 250 exchange services available through the Internet, or earn US-dollar-equivalent credits for the merchandise they supply to others. In 2009 such bartering has been estimated to account for 3 billion dollars of exchanges annually in the United States alone (Rushkoff, 2009: 2). At a time when, faced with the global meltdown, larger corporations can no longer acquire the credit they need to do business, Rushkoff argues that Internet-enabled complementary currencies can revive the decentralized marketplace of real businesses. Networks provide a way to verify transactions and develop trust, and also emphasise the fact that many of the tools we use are the result of programs. While it could be argued that printing presses encouraged counterfeiting of official currencies, the availability of computers and networks is encouraging the creation of altogether new forms of money. In this context Rushkoff believes that “[w]e are proving more likely to treat our money as software, and to write our own” (2009: 3).
The next section examines the evolution of currencies that can be considered alternative and complementary to the predominant money system.

3 Alternative Complementary and Community Currencies

“Money can be made to serve rather than to rule, to be used -- rather than profit-oriented -- and to create abundance, stability, and sustainability… [W]hile money is one of the most ingenious inventions of mankind […] it has the potential to be the most destructive or most creative.” (Margrit Kennedy, quoted by Utne, 2004)
Examples of exchange alternatives can be found throughout history. Rushkoff (2009: 2) traces the origin of complementary currencies to local, grain-based currencies used throughout Late Middle Ages Europe before Renaissance corporatism and centralized money schemes were invented by monarchs. Greco (2009a) cites numerous historical precedents for nonbank currencies—such as the 1930s Great Depression–era scrip issues, and the mutual credit clearing system that was organized in Switzerland as the WIR Economic Circle Cooperative (since renamed WIR Bank). According to De Meulenaar (2000) communities have issued their own money as a community-based response after every major monetary crisis since 1820. The fact that the great cathedrals of Europe were built using community currency, not funds from the Vatican as might be expected, is frequently emphasised in the literature on alternate currency (See Lietaer 1997, De Meulenaar 2000, Rushkoff, 2009 et al). The motivation behind spending locally created currencies in this way was to leave something for future generations, which indeed succeeded as these cathedrals continue to draw tourists and thus attract economic benefits to this day. De Meulenaar also cites ancient Athens and the wealthy city-states of Hong Kong and Singapore as examples of economies that were organised at the local level.
Following a decline in alternate money systems as local currencies were outlawed and centralised ‘bank’ currency became enforced as means of exchange, there has been an upsurge in innovation and implementation of exchange alternatives in recent decades. This trend started in the 1970s with the advent of commercial “barter” or “trade” exchanges, followed by the grassroots emergence of mutual credit clearing associations (LETS), Time Dollars, and various local currencies. Greco (2009a).
Amongst the most influential early proponents of alternative money systems in the 1970s was Erich Fritz Schumacher. Schumacher defined appropriate economics as:
“[A] process of applying broad-based community determined values through an ethical system that has an impact on the economic lives of people. Unlike conventional economic thinking which divorces social concerns from economic thinking, appropriate economics sees economic relations fundamentally as social relations. It provides a means for people to relate economically with each other as they would want to relate with each other socially. In this way, money is seen as media, a form of communication between people. One can use money that talks down to people, or one can use money that speaks on even terms with people.” (Schumacher, 1979)
Following the theorizing of Schumacher and others in the 1970s, the new generation of community currencies began in 1982 with the Local Employment and Trading System (LETS) rolled out by Michael Linton across British Columbia in Canada. Although LETS did not gain popularity in the United States, it inspired Paul Glover and his colleagues to develop a time-based paper currency system known as ITHACA HOURS, which is now the most widely replicated model for community currencies in North America. (Cohen-Mitchel, 2000).
While in the past alternative currencies were introduced solely to alleviate monetary crises and the resulting social impact, DeMeulenaere (1998) noted that these were increasingly being consciously introduced with the purpose of simulteneously affecting structural change and bringing stability to the global monetary system. Examples of such currencies consciously striving for structural change and greater stability cited by DeMeulenaere include the Public Transit Currency in Curitiba, Brazil; the ‘Bons de Travail’ Currency in Dakar, Senegal; the ‘Tianguis Tlaloc’ Currency in Mexico City; the “Creditos” Currency in Argentina; and various Local Currency Systems in Thailand.
By the millenium parallel currencies were arising in communities all over the world to fill an increasing need for stability in the face of the destabilisation caused by globalisation. By 2000 Lietaer (2001) noted over 2500 community currencies in operation around the world, while Schraven (2001) referred to over 3000 by the end of 2001, and Kirschner (2006) to over 4000 by 2006.
While initially primarily attracting the interest of alternative communities, Rushkoff (2009) notes that local currencies have now spread far beyond the experimental fringe, citing such systems operating in over 2100 towns in the United States alone. Reasons for this increased interest include the new scarcity of dollars as well as the availability of software and tools. “Beginning a local currency requires no store of capital -- it is as easy as visiting the websites for local economic transfer (LETS) systems or Time Dollars.” (Rushkoff, 2009: 3)
Interest in alternative exchange has escalated exponentially over the past year since the credit crisis paralyzed business lending. Rushkoff (2009) notes a significant increase of companies “signing on to barter networks in droves” since October 2008. Within that month alone one system called ITEX, which allows businesses to trade merchandise directly without ‘money’ mediation, reported a 37% increase in registrations.
Inspired by the work of Schumacher, The E. F. Schumacher Society employs the term “local currencies” to refer to place-based monetary tools for building sustainable local economies. Other terms that have arisen include “complementary currencies,” “community currencies,” and sometimes “alternative currencies.” (Witt & Lindstromm, 2004:2). Since the 1980s local currency proponents have debated the use of the terms “local,” “alternative,” “community,” or “complementary” to describe their moneys. According to Maurer (2005: 25) these adjectives often mark “subtle ideological differences, regional variations, and the political-economic intention of the currency.” The term “alternative,” for example, tends to be used by those who envision the creation of a wholly new “economy”, separate from national economies. “Complementary” is mostly used to suggest the new money as supplementing the use of the national currency, especially for people who rely on activities in an informal economy to meet their needs. The term “local” is used by those who imagine "a world of localities, in each of which wealth is circulating internally, occasionally reaching beyond to form loose, interconnected networks. Despite these subtle differences, Maurer notes that these preferences are not cast in stone, and the same person will often use these terms interchangeably (Maurer, 2005: 25).
Throughout this chapter and thesis these terms will be used interchangeably, but with specific emphasis on what might be called ‘complementary’ and ‘community’ currencies. These terms are discussed below, followed by a look at elements that make such a currency ‘conscious’ of human needs, before concluding with a look at some potential obstacles to the alternate currency movement.

3.1 Complementary currencies

Lietaer (2009: Part 2) believes the systemic solution to the current monetary crisis to be increasing the resilience of the monetary system.
“Conventional economic thinking assumes the de-facto monopolies of national moneys as an unquestionable given. The logical lesson from nature is that systemic monetary sustainability requires a diversity of currency systems, so that multiple and more diverse agents and channels of monetary links and exchanges can emerge. This is the practical lesson from nature: allow several types of currencies to circulate among people and businesses to facilitate their exchanges, through the implementation of complementary currencies. These different types of currencies are called complementary because they are designed to operate in parallel with, as complements to, conventional national moneys. The problem is the monopoly of one type of currency, and replacing one monopoly with another isn't the solution.” (Lietaer, 2009: Part 2),
Throughout the literature on alternative currencies there is consensus that such ‘local’ currencies should operate alongside a national (or global) currency, rather than replacing these standardised currencies. DeMeulenaere (2000) believes that community currencies can fill an important role, by maintaining some stability in the domestic economy while the national currency may be detrimentally affected on international money markets. While it is acknowledged that a ‘standardised’ currency is required for general transactions, the value of community currencies lie specifically in their specific orientation towards such a ‘community’, however it may be defined. Lietaer emphasises the ‘complementary’ nature of sucu currencies, which he believes should exist alongside rather than replacing national currencies:
“I don't claim that these local currencies will or should replace national currencies; that is why I call them "complementary" currencies. The national, competition-generating currencies will still have a role in the competitive global market. I believe, however, that complementary local currencies are a lot better suited to developing cooperative, local economies.” (Lietaer, 1997: 2)
Greco, (2001) also defines community currencies as complementary to, and operating in parallel with, the dominant national money systems. Circulating among a limited group of associated traders – who may be in close geographical proximity, or widely dispersed – they are intended to serve purely as a medium of exchange.

3.2 Community Currency

“The origin of the word "community" comes from the Latin munus, which means the gift, and cum, which means together, among each other. So community literally means to give among each other. Therefore I define my community as a group of people who welcome and honor my gifts, and from whom I can reasonably expect to receive gifts in return.” Lietaer, 2004: 2)
In the context of currencies, the term community can be used to describe any association of individuals, groups, or businesses that enter into an agreement to use an internal payment mechanism. Under this definition a community need not be defined by geographical proximity, as demonstrated by the emergence of Internet - based communities in which transactions take place in cyberspace and participants are scattered all over the world. Greco (2001) refers to experiments with so-called e-cash or cyber cash as examples of the emergence of payment systems that are global in scope and beyond the control of any government or bank.
A community currency does not require physical ‘money’ (e.g. notes and coins), and can be as simple as a set of account pages in a notebook (called a ledger) recording the values of trades. In such a case the currency consists of the numbers comprising members’ account balances. “In essence, then, a community currency means that members of the group empower themselves to create their own “money,” which they agree to use in paying for purchases made among themselves.” (Greco, 2001: 14)

3.2.1 Types of Community Currencies

Schraven, (2001) refers to three archetypes of community currencies, namely the Backed Currency, the Fiat Currency, and the Mutual Credit System Currency:
• Backed Currencies are directly backed by, and can be exchanged at a fixed fee for, either real goods or legal tender. Some of the earlier Backed Community Currencies were based the ideas of economist Silvio Gesell (1862-1930), who argued that money should have a carrying cost (referred to as ‘demurrage charge’), in order to increase the rate of circulation. This would enable more exchanges to be facilitated with the same stock of money, thus alleviating the problem of local money shortage. (Schraven, 2001: 3) An example of a modern-day backed currency are the Liberty Dollar (Lesnick, 2007) and the Phoenix Dollar (Herpel, 2006), both backed by precious metals.
• The Fiat Community Currency is similar to legal tender in that it is neither backed by real goods, nor by labour. The most famous Fiat Community Currency initiatives include the Capitol-hill baby-sitting co-op (see Sweeney and Sweeney, 1977), and the Ithaca Hours system in New York State (Schraven, 2001: 6).
• Mutual credit systems (MCS) are a completely different means of issuing money, based on 19th century French social-anarchist Proudhon’s idea of mutual banking (See Dana, 1896). All members of such a system open an account with a central administration unit, which records transfers in ‘units’ between these accounts. Transactions are facilitated by members running down balances or going into debt, thus ‘creating’ money according to transaction need. In a well-administered system, all accounts sum to zero. The system operates as a pure accounting system of exchange (Black 1970, Fama 1980, White 1984) without an initial stock of cash. (Schraven, 2001: 6) The most renowned of such systems operating as Mutual Credit System Currencies is the Local Exchange and Trading System (LETS) developed by Michael Linton (Cohen-Mitchell, 2000).
Seyfang & Pearson (2000: 2) distinguish between three main types of community currencies operating in different parts of the world, namely Local Currencies, Volunteer service credits, and Community barter currencies:
• Local Currencies refer to locally-issued notes or tokens, circulating freely among individuals and businesses in an area, with the most commonly cited examples being the ‘Hours’ issued in Ithaca in New York State (Seyfang & Pearson, 2000; Douthwaite, 1996; Cohen-Mitchell, 2000 et al) and BerkShares operated in Great Barrington, Massechussets (Kirschner, 2008; Cohen-Mitchell, 2000, Douthwaite, 1996, Witt, 2004 et al)
• Volunteer service credits are specifically focused on the provision of social and community services, for which credits can be earned based on the amount of time spent engaging in such socially responsible activities. The Time Dollar scheme developed in the United States in the 1980s is the most well known example of this type of currency. (also see Douthwaite, 1996 et al)
• Community barter currencies are a form of ‘mutual credit’, meaning that the currency is issued by individual users and is generated by the act of exchange itself as described under Mutual Credits Systems above. As such these currencies exist as purely notional credits and debits in a set of accounts which keeps score of trade in goods and services among members. LETS --or Local Exchange Trading Schemes which have been widely adopted in the UK and Canada, with variants including SEL in France, and Green Dollar Exchanges in Australia and New Zealand are examples of this type of currency. (also see Douthwaite, 1996; Cohen-Mitchell, 2000 et al).
This paper and thesis will focus primarily on the Mutual Credit System or Community Barter currency type, which forms the basis of the Community Exchange System discussed in the following chapter.

3.2.2 Mutual Credit & Credit Clearing

According to Riegel (1976) the substance of money is comprised of the composite credit of private competitive traders, based on the actual exchange of goods and services (Greco, 2001: 66). Greco (2001) defines mutual credit as the generic term used to describe an association of traders who have agreed to create and utilize their own exchange medium. Mutual credit systems are designed to surmount the limitations of barter by provides an intermediary device that allows two parties to trade even though one of them may have nothing the other wants in the same way as money.
Members of a mutual credit system empower themselves by creating their own money in the form of credit, but saving the cost of interest, while distributing the money themselves according to their own needs. In this way they essentially do what banks have done for years. Holding credits in such a system is evidence that so much value has been delivered to the community, while a debit balance shows that a member has received more from the community than delivered. “A debit balance thus represents a person’s commitment to deliver that much value to the community sometime in the near future” (Greco, 2001: 68). In this sense, mutual credit systems depend strongly on reciprocal relationships between members, and commonly have built-in systems whereby such reciprocity can be encouraged.

3.3 Conscious currency

“We have the ability to create a new system with new values inherent in it. A network of local and complementary currencies, whose money is created interest free, would dramatically alter our national behavior and culture. A wealth of dormant and disenfranchised capacity would be unleashed as citizens became engaged maximizing creative utilization of already existing local resources. This is not a dream; it has happened thousands of times in the past and today there are over 4,000 local currencies now strengthening local economies around the world.” Kirschner, 2006)
According to Schumacher (1979) alternative community currency systems naturally encourage cooperation, reciprocation, self-reliance, and mutual aid – four elements he considered to be the foundation of social interdependence and socio-economic solidarity.
By shifting a degree of economic control from remote external agencies to people within the community, community currencies empower people. Greco (2001) believes that such currencies can provide a strong component in building economic equity and participatory democracy, provided they are properly designed and managed. The greater degree of economic independence thus acquired allows a community to set its own quality-of-life standards. The fundamental advantages distinguishing community currencies or mutual credit systems from conventional money can be summarised as follows:
1. Being created interest-free, they are low in cost, and thus able to provide an abundant medium of exchange, (Greco, 2001)
2. Created locally, in accordance with the needs of the local economy, they stimulate the local economy and promote local self-reliance. (Greco, 2001)
3. They help to creating employment by unleashing local productivity (Lietaer, 1997)
4. By building and strengthening relationships and networks, they enhance social capital. (Seyfang & Pearson, 2000; Lietaer, 1997)
5. They assign value to skills and services not traditionally recognised by the market (Seyfang & Pearson, 2000; Squires, 2009)

3.3.1 Interest free abundance

Rushkoff (2009: 2) emphasises that, throughout history, local currencies were earned -- not borrowed -- into existence, reflecting the abundance of the season's grain, and not depending on artificial scarcity for their value. By contrast, official currency is created by central authorities external to the community, which have been shown to have little sensitivity to or concern for the needs of the local population. Furthermore the supply of such money is artificially limited. According to Greco (2001) the destructive effects of official money is in large part due to its intentional scarcity, which can be alleviated by the creation of supplemental community currencies.
The use of complementary currencies to overcome the scarcity problem is echoed by Ayley & Ayley (2005), who argue that by allowing people to trade what they need at a local level, local currencies bridge the gaps in the conventional money system. For this reason they cite many local currencies as examples of money systems based on abundance. Describing the LETS system, Ayley & Ayley note that trading depends on what goods and services are being offered by other people, rather than being limited by how much currency people have in their accounts.
“The idea that money could be so plentiful as to allow us to meet all our needs is a shock to many people. We have become so accustomed to our usual currency of scarcity that it is hard to imagine money could be abundant. In accepting our present limited supply money system, we have accepted a limited way of thinking about and using money.” (Ayley & Ayley, 2005: 1)
A distinguishing feature of complementary currencies noted by Rushkoff (2009) is that they treat money as a utility, rather than an asset class, and are thus biased towards functionality instead of savings, and transaction instead of speculation. Rushkoff demonstrates how historically local currencies backed by grain actually lost value over time, as grain stores needed to be paid, and some grain was always lost to moisture or rats. For this reason people wanted to spend the money as quickly as possible, rather than holding on to it, resulting in constant spending and reinvestment of money. Consequences of this approach, according to Rushkoff, were that people paid more attention to preventative maintenance of their equipment, and paid their workers well which improved motivation and productivity. “They worked less and ate better than we do today. (Women were taller in Late Middle Ages England than they are in 2009.) People had so much extra wealth that they invested in their futures by building cathedrals.” (Rushkoff, 2009: 3)
The key factor contributing to the abundance versus scarcity of alternate currencies is the fact that they are created interest free. As shown in Section 2.3.4, the artificial scarcity of money is due largely to the fact that its very creation depends on interest bearing debt. While alternative currencies, particularly those based on mutual credit, also essentially involves a debiting and crediting of accounts, the fact that no interest is charged (or earned) encourages spending of an essentially abundant resource, rather than hoarding of one designed to be in short supply. A further means to encourage abundance-based spending would be to build in a negative interest or demurrage into the money system, as evidenced from mediaeval grain-based currencies noted above. A more recent example of the positive impacts of such a demurrage based currency is the WIR in Switzerland (Douthwaite, 1996).

3.3.2 Keep the benefits local

Schumacher (1974) referred to a system in which the goods consumed in a region are produced in the same region using local resources and local labour as “an economy of permanence,” emphasising that such local emphasis is essential for sustainability. His 1974 book Small is Beautiful: Economics as if People Mattered, is often cited as the most compelling case for building vibrant regional economies as a counterpoint to our increasing reliance on far flung global production systems. (Witt & Lindstrom, 2004:1)
The fact that official currency can, and does, circulate far and wide further aggravates scarcity of money in the local economy. Money can easily be spent to buy goods and services from remote regions, and spent outside the local community, such money is no longer available to facilitate trading within the community. It must thus be replaced by attracting more money from outside, which is done by either exporting products, receiving government transfer payments, or attracting tourists and businesses to come and spend. (Greco, 2001). Seyfang & Pearson (2000) argue that community currencies “respond to situations of market failure or economic exclusion, by circumventing the problems in conventional money-based market systems which have seen money being systematically withdrawn from peripheral localities and regions for investment elsewhere, leaving a shortage of local liquidity and a lack of effective demand for local goods and services.” (Seyfang & Pearson (2000: 2)
Witt & Lindstrom (2004) show that in the global economy of the late 20th and 21st century, national currencies have undermined local communities by centralizing ownership of wealth and thus widening the gap between rich and poor, while devastating indigenous peoples, and polluting the environment. To counteract these destructive effects of globalisation, they believe that decentralized regional currencies can help to redistribute wealth more broadly while supporting unique regional identities, cultures, and communities. “A local currency defines a regional trading area, favouring those small independent businesses willing to trade in the currency. Local businesses, unable to compete with the products of an increasingly predatory global economy, become strong players in resilient, regional marketplaces.” (Witt & Lindstrom, 2004: 1).
By emphasising local exchange, alternate currencies promote local self-reliance by “building up a locally provisioned economy, rather than relying on imported and transported inputs and commodities” (Seyfang & Pearson, 2000: 2). In addition to its social benefits, such localised emphasis is also considered to be central to visions of more environmentally sustainable ways of living and working.
While the universality of national currency may be considered its greatest advantage in terms of flexibility and spendablity, is also its greatest disadvantage when it comes to local self-reliance and integrity of the local economy. Greco (2001) argues that local unemployment and business stagnation most often result from the fact that the money necessary to connect needs with supplies has gone elsewhere, rather than from lack of skills or physical resources.
By contrast, a local currency is, by its nature, limited in scope, as it is only recognized within a limited area, and can therefore only be created, earned, and spent within that area. According to Greco this fact tends to favour local producers who have agreed to accept the currency, and due to its narrow range of circulation the spender will be more likely able to earn it back. In this way local currencies can be seen to stimulate local production and employment. Greco frequently uses the image of a breakwater protecting a harbour from the extreme effects of the open sea, to describe the manner in which a local currency “protects the local economy from the extreme effects of the global market and the manipulations of centralised banking and finance.” While total reliance on national currencies and the global market’s competitive conditions “tend to force all communities to the lowest common denominator of environmental quality and working conditions”, local currencies “provide a buffer that allows local communities to set their own standards and maintain a higher quality of life.” (Greco, 2001a: 53)
Robertson (2009) believes local currency development to be an important aspect of monetary reform required to deal with the current financial crisis, noting that such currencies can make a significant contribution to economic decentralization. In addition to facilitating local trade, the spread of community currencies can also promote greater local economic self-reliance by supporting new institutions like local banks, credit unions, and investment funds.

3.3.3 Create employment

Community currencies contribute to employment creation in that they provide a means whereby un- or underutilised potential within a community can be utilised to fulfil the needs of others in the community, who in turn could compensate for such skills with similar offerings, despite the scarcity of ‘official’ money currently preventing such exchanges. By compensating services that would otherwise be exchanged for free (e.g. caring) or not at all due to lack of money, they have the potential to unleash productivity and well-being through the additional parallel ‘income’ provided.
In 1997 Lietaer predicted that local currencies would become a major tool for social design in the 21st century. Lietaer believed the main reason for such an expected move towards local currencies to be employment creation, as such local economies could provide a form of employment that would not be threatened with the extinction of ‘jobs’ in an age of information and technology driven production. He cites the example of France where, at the time, there were already 300 local exchange networks, called Grain de Sel, literally "Grain of Salt." These systems, which facilitate exchanges of everything from rent to organic produce, arose exactly when and where the unemployment levels reached about 12 percent. Lietaer distinguishes between ‘work’, which he believes local currencies can create, and ‘jobs’, which he expects will become obsolete:
“Local currency creates work, and I make a distinction between work and jobs. A job is what you do for a living; work is what you do because you like to do it. I expect jobs to increasingly become obsolete, but there is still an almost infinite amount of fascinating work to be done. For example, in France you find people offering guitar lessons and requesting lessons in German. Neither would pay in French francs. What's nice about local currency is that when people create their own money, they don't need to build in a scarcity factor. And they don't need to get currency from elsewhere in order to have a means of making an exchange with a neighbor.” (Lietaer, 1997: 2)

3.3.4 Enhance social capital

Another important impact of community based currency is the fact that they have been noted to build trust and social capital, and foster mutually supportive community networks. This is accomplished through interpersonal transactions and face-to-face contact which many people feel is missing from conventional economic relations and society. (Seyfang & Pearson, 2000)
According to Ayley & Ayley (2005) a thriving local currency revives the elements of community, relationship and goodwill in our transactions. Once the limitations of a scarce money supply are removed, emphasis shifts from “Do I have enough money?” to “Do I want to trade with this person?” This leads to a heightened emphasis on goodwill between people, as this becomes the basis on which community members will choose to trade with each other. “As relationships, rather than money, become primary to exchange, the social alienation fostered by our current monetary system is replaced by the connections between people that build and strengthen community.” (Ayley & Ayley, 2005: 3)
Although the majority of local currencies are started with the primary purpose of creating employment, Lietaer (1997) notes a growing group of people who are starting local currencies specifically to create community. The community building power of such exchange is illustrated in the following example:
“I would feel funny calling my neighbor in the valley and saying, "I notice you have a lot of pears on your tree. Can I have them?" I would feel I needed to offer something in return. But if I'm going to offer scarce dollars, I might just as well go to the supermarket, so we end up not using the pears. If I have local currency, there's no scarcity in the medium of exchange, so buying the pears becomes an excuse to interact.” (Lietaer, 1997: 2)

3.3.5 Valuing ‘non-monetary’ services

By valuing and rewarding services and skills that are not recognised by the market economy, Seyfang & Pearson (2000) believe that community currencies can reinvent or restructure the market. Examples of such services include caring socially reproductive services, as well as the labour of the unemployed for whom the market currently has no demand.
Avid community currency and social networking enthusiast Les Squires is passionate about the potential of community currencies to put an end to ‘volunteerism’, which he believes to be one of the major scourges of society. Squires describes volunteers as people who put their hearts and souls into something because they are passionate about it, noting that they are usually used by organisations until they burn out, at which point they are replaced without having gained anything but their experiences over that time. Volunteerism is thus regarded as exploitative, especially of women, as in many cultures it is the female who volunteers. In more traditional cultures, the husband goes out and brings home the money for which he renders his labour, while the woman renders her labour in terms of childcare and household duties which are uncompensated. Women are also more inclined to volunteer for social causes outside the home. As this work is unpaid, it is not recognised as equal to what the man is doing. Community currencies have the potential to reward such work in a manner that can be of value to those involved in it, thus potentially adding to the total supply of services focused on social care:
“I want for instance, say to teach a class, volunteer to teach a class, teach some kids how to read or take in an elderly parent and I want to be compensated for that, not in Dollars or Rands but I want to be compensated. I want to be able to go to the grocery store and buy some food for the value I’ve given to others.” (Squires, 2009, telephonic interview).

3.4 Potential obstacles

Much evidence points to the fact that complementary currencies can provide people with a partial response to immediate economic crises such as that currently experienced globally. Robertson (2009) believes that such currencies should be encouraged to expand after mainstream monetary reform whereby the national money supply should be created as a public service under democratic supervision. Despite the potential for such sustainable currency reform, there are a number of obstacles that could prevent the true benefits of community based money from being unleashed. External obstacles include opposition from powerful interest groups, as well as issues related to legal implications and taxation, while internal obstacles pertain to creating sufficient awareness and maintaining the momentum of alternate currency systems, and building of trust within networks. These are discussed below.

3.4.1 External: Powerful interest groups and Legalities

Why Central Governments and Central Banks don’t like Local Currencies

Despite the immense potential for alternate money systems to address the current economic crisis and promote social justice and well-being, Robertson (2009) believes that, in the absence of monetary reform, private banks will do everything possible to prevent the expansion of such locally controlled currencies in order to maintain their profits, just as they did after the 1930s Great Depression. “As a result, most people will probably remain too dependent on earnings, pensions, benefits, etc., all denominated in a national currency, to commit themselves to decentralized alternative currencies instead.” (Robertson, 2009:PAGE?) The issue of commitment and motivation is discussed in more detail below in terms of obstacles to maintaining momentum of local currencies.
Lietaer (2009) agrees that the first objection to any form of alternate money system will come from the banking system, which would prefer to keep the status quo. A likely objection would be that such alternate currencies may be seen as excluding the banking system from their usual function; thus "disintermediating" the banks. Such an objection Lietaer argues is only valid if the banks themselves choose not to get involved in providing accounts and transactions using alternative currencies. To show that such exclusion is not as essential as one might think, he cites examples of several (particularly local and regional) banks that have gotten involved in providing account and payment services for complementary currency projects. These include the Bank of Ithaca, which deals with Ithaca HOUR accounts in the city of Ithaca, New York; the GLS Bank in Germany, and the Raiffeissenbank in Vorarlberg, Austria. The logic behind these banks’ decision to assist with the administration of local currencies is that local or regional banks can only compete with giant national and global banks by providing services that the big ones do not bother to provide. This is thus seen as a way to attract clientele, based on the assumption that a client with (for example) an Ithaca Hour account with the Ithaca Bank, will tend to open a dollar account with the same bank. (Lietaer, 2009)
Another possible objection banks could have to alternate currencies is that using multiple currencies within a national economy could reduce the efficiency of the price formation process and of the exchanges among economic agents. While this argument is valid, Lietaer emphasises the fact that this overarching emphasis on efficiency is precisely what has reduced the resilience of the system, and made it so brittle, leading to the current economic crisis (2009).
The type of opposition that may be expected from central authorities towards alternate currencies can be evidenced from the raiding of the Liberty Dollar in Evansville by The United States’ Federal Bureau of Investigations (FBI) in 2007. FBI agents seized gold, silver and platinum used to back the currency, as well as currency notes, files and computers, and froze the group’s bank accounts (Lesnick, 2007).
On the other hand, the possibility of banks collaborating with local currency proponents is illustrated in Brazil, where the National Secretariat for Solidarity Economy has encouraged the establishment of Community Development Banks, as non-profit organizations responsible for issuing “social currencies for local circulation”. The Secretariat has gone to great effort to establish a regulatory framework for a solidarity financial policy, using social currencies throughout Brazil at the federal, state, and municipal levels of governments (MTE, 2006, in Freire, 2009: 78)
Fully aware of these events, the Central Bank of Brazil has engaged in a project to research and evaluate the main theoretical and practical aspects of worldwide experiences with social currencies. The Bank hopes to use this research create mechanisms to enable permanent monitoring of developments in the field of issuing and use of social currencies in Brazil.
In presenting the preliminary results of an investigation into social currency systems to be used as a reference for the study currently being undertaken by the Central Bank of Brazil, Freire recommends that social currencies should be regarded as public policy instruments for local development, which he shows to be compatible with monetary policies to be taken under the responsibility of the Central Bank.
According to Freire “the use of social currencies neither affect the power of central banks to control the money supply nor poses a serious threat to the role of central banks in relation to national payment systems, nor even jeopardizes the stability of the financial system.” On the other hand, he argues that “the use of certain social currency systems […] may endow greater effectiveness to a differentiated compulsory deposits policy implemented in line with the credit needs of local economies, and thus contribute toward a better distribution of the supply of credit within the national financial system and, consequently, toward lower costs of bank credit for selfemployed workers and micro and small businesses within the local economy.”

Legal implications, taxation

In examining the legal and regulatory framework of social currencies in Brazil, Freire (2009: 92) finds that “each social currency system corresponds to a particular set of legal and contractual arrangements that acknowledge common interests and establish mechanisms for participation of members, and the methods for coordinating and managing local economic activities, thus enabling individuals to exercise greater control over the creation and use of the social currency, in accordance with the political will of the community.” Freire shows that this makes it possible to legally structure social currency systems in various ways, some of which can be compatible with the objectives of monetary policy and with banking regulations, as well as with “public policies for solidarity finance, targeted at generating jobs and income, fostering social inclusion, and promoting solidarity and fair local development.”
In addition to the potential legitimate benefits of community currencies, Schraven (2001) also notes some potential illegitimate benefits, the most commonly cited being the use of such currencies for underground or black economy transactions, thus evading taxes and regulation. Schraven argues that tax-evasion is not more prevalent with Community Currencies than with the national currency, citing the findings of research conducted by the Inland Revenue (1996) who note that they were not aware of any particular problems with Local Exchange Trading Systems and had no plans to evaluate these schemes. The Inland Revenue review emphasizes the fact that traders who operate within a Local Exchange Trading system are taxable on their trading profits, just like traders who operate outside of such a scheme.
Douthwaite (2000 (1996)) notes that in practice the question of tax rarely arises for members of LETS networks because either a) their national currency incomes are insufficient to place them in the tax net in the first place or, b) if they are income tax-payers, they do so little of any one thing within the system that the tax authorities are happy to ignore the tiny amounts of imputed income involved. As Angus Soutar, who worked with Michael Linton to set up Greater Manchester LETS, and advised British LET systems on tax comments: "There's nothing like a detailed account of dog-walking or granny-sitting to convince and inspector that further investigation is likely to be less than cost-effective." (quoted in Douthwaite, 2001: 12)
For this reason Douthwaite argues that only those members who do part of their normal business or profession through a LET system are liable for income tax on their local currency earnings. In such a case it is essential to determine appropriate valuation of services rendered for local currency payment. As Douthwaite describes, even with currencies that are nominally tied to the national currency, actual prices charged cannot necessarily be said to reflect a direct national currency equivalent. An example of such discrepancies in valuation include alternative healing practitioners who provide treatments in local currency to those who would not otherwise be able to afford such treatment at all. The comparison to ‘real income’ would thus not be between the local currency and its direct ‘monetary equivalent’ for the same treatment in national currency, but between the alternate currency charged, and nothing. Another example cited by Douthwaite involves differential rates paid for the time of service provided, whereby the value of the currency may be said to be determined by the service on which it is spent, and not the actual income earned.
Douthwaite believes that the optimal solution to the valuation problem would be for revenue authorities to agree to accept any income tax due on a local currency income in the unit in which it was earned, though noting that this is unlikely to materialize as, throughout the world, such authorities insist on payment in the national currency. Members of LET systems are adamant that if a transaction is completely in the local unit, that unit should also be used to settle any tax liability incurred, as such a system designed to enable people to manage with less official money is weakened if users are obliged to earn national currency to make their alternative arrangements work. The issue of taxation of local currencies, and the units in which such taxes should be paid, is considered particularly critical, as it has implications for the currency’s credibility, as well as its potential to optimize benefits to the local economy. As Douthwaite notes: “[I]f governments accepted locally-produced money in payment of taxes, it would give that money enormous credibility. Moreover, since this revenue could only be spent in the area from which it came among members of the group which generated it, the area would benefit twice: first in terms of the jobs created when the tax was spent and, second, as a result of whatever the spending achieved.” Douthwaite furthermore argues that the payment of taxes in local units could be beneficial to local councils too, since it would give them an additional source of income independent of central government. The most powerful opposition for such a move can be expected to come from national governments which, Douthwaite notes, will be “very unhappy to see even a trivial part of their financial power slip away.” (1996: 13)
Lietaer (2009) also notes the possibility of governments accept partial payment of taxes in money other than exclusively bank debt money, noting that the decision of whether to do so resides completely within a specific government’s own political decision power. Lietaer notes that the strategy according to which this may be achieved is very flexible, in that a government can decide to accept payment of certain taxes only, only for a given percentage, for specific types of complementary currencies chosen for their robustness and other positive effects, and/or only for specific fiscal years. In this sense he believes that complementary currencies can be tailored to be acceptable for payments of taxes, which in turn help to address monetary shortages faced by an increasing proportion of the world population in 2009 (Lietaer, 2009).

3.4.2 Internal: Maintaining momentum and motivation

Although the rise of the community currency movement has provided ample learning opportunities for a great many people, Greco (2001) believes these opportunities to still be the exceptions rather than the rule. While commercial "barter" exchanges involving business-to-business transactions have had some notable success, Greco (2008) notes that the grassroots alternative exchange movement remains fragmented and has not yet made a significant economic impact nor involved more than a handful of individuals. The typical pattern for grassroots-based mutual credit, LETS, and community currency systems according to Greco, is characterised by “strong initial enthusiasm and rapid growth in participation, followed by a slow decline and volunteer burn-out, followed by the system either going defunct or limping along at a minimal level with little trading and a much diminished participant base.” (Greco, 2008a)
One reason for such difficulties in maintaining momentum cited by Greco (2008a) is the fact that participants in local currency networks often have different motivations for becoming involved. While some aim at monetary reform, accepting as given the socio-political foundations of the present regime without question its basic assumptions, others wish to transcend the dominant structures of money and banking, taking little for granted and seeking to reinvent money and banking to better serve their intended purposes. Greco believes that despite the fundamental differences between these approaches, they may be brought into alignment toward a common goal, namely "empowerment of the people" (Greco, 2008).
Two key reasons for the waning momentum and motivation commonly noted about alternative currency networks include: 1) ongoing dependence on the national currency, and 2) lack of mutual trust of reciprocity between network members.

Dependence on national currency

In terms of dependence on the national currency, it was noted in 3.4.1 that central authorities can be expected to, and do, suppress alternate money systems wherever possible, maintaining the supremacy of national, bank-dominated, currencies. As people remain caught up in the ‘conventional money’ system – compelled to work for national currency as this is the only means whereby many obligatory payments (e.g. taxes) can be made, the time and energy they have available to partake in fledgling new systems requiring much initial nurturing is often limited. Limited time available was frequently cited as reason for non-participation in response to an online survey conducted with members of the Cape Town Talent Exchange, which forms part of the Community Exchange System (discussed in the next chapter) as part of this research.

Mutual trust and reciprocity

The other problem relates to the issue of trust in whether or not others in the system will reciprocate, which will determine if the community currency can procure sufficient exchange for services rendered. Those who do initially dedicate time to providing goods and services for alternate currency, thus earning substantial credits in the system, often find it unable to spend such credits as the services available do not meet their needs. By contrast, others go into debits without providing services in return, or decline from trading at all as they either do not have the time, or the inclination, to provide services. Unable to exchange their credits as the supply of available services is limited, many initial enthusiasts eventually drop out or become less inclined to offer their services, thus detracting value from the system as a whole. In a reasonably small and close knit community some degree of social pressure can be exerted on those perceived to be taking more from the system than they are putting in. Examples have also been shown of system administrators taking special initiative to encourage trading by approaching those seen to have substantial debits or credits in their account, assisting where possible to find appropriate ways in which units may be earned or spent to restore equilibrium and stimulate exchanges (Douthwaite, 1996). However, Schraven (2001) shows that, as membership increases beyond the lines of social control, such monitoring becomes more difficult and expensive, as transactors do not know each other. This trend is noted by Ellickson (1991:283, cited in Schraven, 2001: 49) who finds that people start resorting to the law when the social distance between them increases.
Ayley & Ayley (2005) feel that many local currencies fail because the founders do not place sufficient emphasis on facilitating the development of personal contacts and one-to-one relationships essential for the community building required for such currencies to thrive. According to Ayley & Ayley the corporatisation process has reinforced a view of trading in which monetary exchange is seen as primary, and personal relationship, if it exists at all, is secondary.
“Conditioned by this situation, it is easy to focus on the ‘trading’ aspect of local currencies, and forget that it is people who are making those trades, and it’s also personal relationships that underpin people’s willingness to trade with one another. Successful systems usually provide ongoing opportunities for social connections between members, fostering a sense of community and the personal contacts that facilitate trading.” (Ayley & Ayley, 2005: 3).
One way to encourage such personal interaction required to build relationships is through the facilitation of social gatherings where members can meet and interact with each other. Such interaction forms the basis of future trading and exchanges as people become aware of each others potential offerings and needs. Lietaer (1997) cites the example of an exchange in the Ariege, in southwestern France where a big party is held every fortnight where only local currencies are accepted. People come to trade produce including cheeses, fruits, and cakes as on normal market days, but also exchange (or agree to exchange) hours of plumbing, haircuts, sailing or English lessons.
Kirschner (2008) emphasizes the importance of trust, and the credibility of currency organizers to ensure the success of any alternative currency, noting that “[a] local currency is a financial instrument that only has as much power as the people who use it. We put our trust in banks with cherry furniture and marble counters. The measure of the strength of a local currency is not its physical assets, but the dignity and connectedness of those who lead and participate.”
The next chapter will discuss the impact of ICTs on extending the potential scope of community currencies, noting the implications such increased scope has on relationship building amongst often dispersed communities.

4 Conclusion

This chapter focused on the concept of ‘money’, beginning with a historical overview of where the concept of currencies come from, followed by an alternative perspective on currency design to promote human wellbeing. Throughout the chapter the socially embedded nature of money in society was emphasised, noting how the design, or ‘programming’ of a particular currency or system of money impacts on the society in which it is used. In this manner, the current conventional money system, in which money is created by banks creating interested-bearing debt, was shown to reinforce the concept of scarcity (shown in the previous chapter to have been placed at the centre of modern economics), which in turn promotes greed as basic condition for survival. By contrast it was shown that alternate money systems charging either no interest, or ‘negative interest’ (demurrage) have historically been shown to encourage spending rather than hoarding, thereby promoting a spirit of abundance rather than scarcity.
The essence of money as an ‘information system’ or ‘collective memory’ whereby debits and credits can be accounted was highlighted throughout the paper. Moving into the Information Age the essence of money is evolving rapidly as people are empowered to create alternative means of exchange required to keep account of transactions. This chapter touched briefly on the issues of electronic money, and the way ICT’s enable a shift in the power of money manipulation from central banks to the people who use it.
The remainder of the chapter looked at the rise of alternative and compelentary currencies, focusing specifically on what may be called community currencies, baseed on mutual credit clearing. Such currencies were shown to be more socially ‘conscious’, being interest-free, and promoting a spirit of abundance that enhances wellbeing by keeping benefits ‘local’ (defined as within a specific community that may or may not be geographically based), creating work, enhancing social capital through relationship building, and acknowledging services that are commonly offered for free.
Despite their potential to promote a more just society, alternative currencies face some significant obstacles. The most significant external obstacle is opposition from powerful interest groups, notably central banks and governments. While legal implications, particularly around issues of taxation, could become a problem when these currencies grow, these could be most effectively overcome if taxes on income earned in alternate currencies could be paid in these as well. Internal obstacles relate to maintaining momentum and motivation for alternate currencies, complicated by continued dependence on official currencies reducing the time and energy people have available to partake in al alternate economy.
Lack of mutual trust and reciprocity, essential for the effective circulation of goods and services using a community currency, also reduces motivation to partake. This can be most effectively addressed through conscious community building by designing means whereby real relationships can be fostered between members. While geographically proximate ‘communities’ have been known to do this through market days and other activities where members can meet face to face, this becomes more complicated when the ‘communities’ in question are virtual expanding over vast geographical distances. The next chapter examines the potential of the Internet to expand the scope of alternative currencies by providing a web-based platform where offerings and wants can be registered and accounts can be kept. While such extended scope becomes technically possible, the potential for larger groups spread across vast distances does have implications for the fostering of relationships essential for the reciprocal aspect of community currencies to thrive. These will be discussed in the following chapters.

5 References

Bagehot, W. 1999 (1873). Lombard Street: a description of the money market. New York: Wiley. Cited in Hart, 2005.
Bilgram, Hugo &Levy, L. E. 1914, The Cause of Business Depressions. Philadelphia: J.B. Lippincott Company, In Greco, 2001.
Black, F. (1970), “Banking and Interest Rates in a World Without Money: the Effects of Uncontrolled Banking”, Journal of Bank Research, Autumn, 9-20. in Schraven, 2001.
Borsodi, R. 1977. Green Revolution, Vol. 34, No. 10, December 1977. Cited in Greco, 2001.
Caffentzis, G. 1989. Clipped coins, abused words and civil government in John Locke’s philosophy of money. New York: Autonomedia. In Hart, 2007
Castells, M. 2000 (1996) The Rise of the Network Society: The Information Age: Economy, Society and Culture, Volume I. MA: Blackwell. Cambridge
Cohen-Mitchell, Tim. 2000. “Community Currencies at a Crossroads - New Ways Forward”. New Village Journal, Issue 2 2000 http://www.newvillage.net/Journal/Issue2/2commcurrencies.html
Dana, Charles A. 1896. Proudhon and his "Bank of the People", by. New York: Benj. J. Tucker. http://dwardmac.pitzer.edu/Anarchist_archives/proudhon/dana.html
Davies, G. 1997. “Monetary Innovation in Historical Perspective Why Revolution always Boils Down to Evolution.” Paper presented as the Keynote Address at the First Consult Hyperion Digital Money Forum 7th-8th October 1997, London, Digital Money: New Era or Business as Usual?
De Roover, R. 1999. Money, banking and credit in medieval Bruges: Italian merchant-bankers, Lombards and moneychangers – a study in the origins of banking. London: Routledge. In Hart, 2007.
DeMeulenaere, S. 1998 Alternative Currencies and Community Development in the Majority World http://www.appropriate-economics.org/materials/alternative_currencies_and_community_development.pdf
DeMeulenaere, 2000 Principles of Complementary Currency Systems http://www.appropriate-economics.org/materials/principles_of_ccs/index.html
DeMeulenaere Stephen, 2000 A Pictorial History of Community Currency Systems
Douthwaite Richard, 1996, Short circuit: strengthening local economies for security in an unstable world, The Lilliput Press, Dublin. 2004 edition online at http://www.feasta.org/documents/shortcircuit/contents.html
Eisenstein, C. 2009. “Money and the Turning of the Age” Reality Sandwich 12 March 2009 http://www.realitysandwich.com/money_and_turning_age
Ellickson, R. (1991), Order Without Law: How Neighbours Settle Disputes, Harvard University Press, Cambridge. in Schraven, 2001.
Fama, E. (1980), “Banking in the Theory of Finance”, Journal of Monetary Economics, 6:39-57. in Schraven, 2001.
Francis and Lia Ayley June 2005 Abundant Money: Fourth Corner Exchange Brings Time Dollars to Whatcom County http://www.appropriate-economics.org
Freire, MV. 2009. “Social Economy And Central Banks: Legal And Regulatory Issues On Social Currencies (Social Money) As A Public Policy Instrument Consistent With Monetary Policy” International Journal Of Community Currency Research Vol 13 (2009) pp. 76 – 94. http://www.uea.ac.uk/env/ijccr/pdfs/IJCCRvol13(2009)pp76-94Freire.pdf
Galbraith, J.K. 1995 (1975). Money: Whence it came and whither it went. London: Penguin. In Greco 2001 & Hart, 2007.
Gesell, S. 1906. The Natural Economic Order. http://wikilivres.info/wiki/The_Natural_Economic_Order
Greco, TH 1994, New Money for Healthy Communities. Tuscon, Arizona.
Greco, TH. 2001. Money. Understanding and Creating Alternatives to Legal Tender. E-book Excerpted Version CHELSEA GREEN PUBLISHING COMPANY White River Junction, Vermont. http://www.appropriate-economics.org/materials/greco_money.pdf
Greco, TH. 2001a. Money. Understanding and Creating Alternatives to Legal Tender. CHELSEA GREEN PUBLISHING COMPANY White River Junction, Vermont. Accessed on Google Books: http://books.google.co.za/books?id=SYbBxpqxx8MC&dq=Money.+Understanding+and+Creating+Alternatives+to+Legal+Tender+Greco&printsec=frontcover&source=bl&ots=VRM0XjELnM&sig=8MiowniVzwvqdsQJVjKeM-DvTok&hl=en&ei=3a5USprdLIusjAfph4WYCQ&sa=X&oi=book_result&ct=result&resnum=1
Greco, TH. 2008 Toward a New Economic Order Reality Sandwich. 26 November 2008 http://www.realitysandwich.com/toward_new_economic_order
Greco, 2009a The End of Money and the Future of Civilization. Chelsea Green Publishing
Greco, 2009b Evolving Toward Local Credits Reality Sandwich. 8 June 2009. http://www.realitysandwich.com/evolving_toward_local_credits
Gregory CA. 1997. Savage Money: The Anthropology and Politics of Commodity Exchange. Amsterdam: Harwood Acad. Publ. Cited in Maurer, 2006
Grignon, P. 2006. Money as debt. Available at: www. moneyasdebt.net. In Hart, 2007.
Hart, Keith. 2000. The memory bank. London: Profile. Republished in 2001 as Money in an unequal world. New York: Texere. In Hart, 2007.
Hart, Keith. 2005. “Notes towards an anthropology of money” in Kritkos an international and interdisciplinary journal of postmodern cultural sound, text and image Volume 2, June 2005, ISSN 1552-5112
Hart, Keith. 2007. “Money is always personal and impersonal Anthropology Today Vol 23 No 5, Octo ber 2007
Herpel, M. 2006. “The Phoenix Dollar Digital Silver Currency” in American Chronicle. October 05, 2006. http://www.americanchronicle.com/articles/view/14374
Hock, D. 2004. Money – A brief History THE TERRA (TRC) The Trade Reference Currency. http://www.terratrc.org/PDF/Sup1-MoneyABriefHistory.pdf
Inland Revenue, 1996. Mr. Jack, answering a written question of Mr. Martyn Jones (Commons Hansard Written Answers text for Tuesday 5 Nov 1996) (cited in Schraven, 2001)
Innes, AM. 1914. “The credit theory of money”, Banking Law Journal 31(2): 151-68. In Tymoigne & Way, 2006.
Innes, AM. 1932. Martyrdom in our Times. London. Williams & Norgate. In Tymoigne & Way, 2006.
Innes. AM. 1913. “What is Money?””, Banking Law Journal, 30(5): 377-408. In Tymoigne & Way, 2006.
Jackson and McConnell. 1988 Economics McGraw Hill. Sydney
Kennedy Prof. Dr. Margrit. 2004. Keynote address at Local Currencies in the 21st Century conference. Quoted by Utne, 2004.
Kennedy Prof. Dr. Margrit. 2005. Why Do We Need Monetary Innovation? Three common Misconceptions Three threatening Results Three possible Solutions
Keynes, J. M. 1930. A treatise on money. London: Macmillan. Cited in Hart, 2005.
Kinney, 2004, In Whose Interest THE TERRA (TRC) The Trade Reference Currency. http://www.terratrc.org/PDF/Sup2-InWhoseInterest.pdf
Kirschner (2008) Sense Beyond The Dollar - A Primer On Local Currencies. http://www.vtcommons.org/journal/2008/10/amy-kirschner-sense-beyond-dollar-primer-local-currencies
Kirschner, A. 2006. Local Currency - A Revolution That Sounds Like a Whisper. http://www.vtcommons.org/journal/2006/10/amy-kirschner-local-currency-revolution-sounds-whisper
Kranton, R. (1996), Reciprocal Exchange: A Self-sustaining System, American Economic Review 86 (4), pp. 830-851. (cited in ???)
Lesnick, G. 2007. “Liberty Dollar office raided” in CourierPress. November 15, 2007 http://www.courierpress.com/news/2007/nov/15/liberty-dollar-office-raided/
Lietaer, B. (2001), The Future of Money: Creating New Wealth, Work and a Wiser World, Century: The Random House Group Limited, London
Lietaer, B. 1997. “An interview with Bernard Lietaer by Sarah van Gelder”. YES Magazine, April 1997. http://www.transaction.net/press/interviews/lietaer0497.html
Lietaer, B. 2009. ADD reality sandwich
Lietaer, B and Hallsmith, G. 2006. Community Currency Guide. Complementary Currency Resource Center http://www.complementarycurrency.org/materials.php
MTE (2006) Economia Solidária como Estratégia e Política de Desenvolvimento - Documento Final. I Conferência Nacional de Economia Solidária. Brasília, June 26-29. Available at . Accessed on July 1, 2007. In Freire, 2009.
Maddox, Thomas, Esq. 1969. The History and Antiquities of the Exchequer of the Kins of England in Two Peiods, Vols 1&2, 2nd edn, Greenwood Press, New York. In Tymoigne & Way, 2006.
Maurer, Bill. 2005. Mutual Life, Limited. Princeton University Press
Maurer, Bill. 2006. “The Anthropology of Money” Annu. Rev. Anthropol. 2006.35:15-36. Downloaded from arjournals.annualreviews.org
Menger, K. (1892), “On the Origin of Money”, The Economic Journal, 2:239-255. In Schraven, 2001.
Miller, A. 1931 (1816). Elemente der staatskunst: theorie des geldes. Leipzig, A.Krne. Cited in Hart, 2005.
Polanyi, K. 1944. The great transformation. Farrar & Rinehart Inc. New York, Toronto
Polanyi, K.1957 Trade and Market in the Early Empires: Economies in History and Theory, edited by K.Polanyi, C. M. Arensberg, and H. W. Pearson, The Free Press, Glencoe, Illinois.
Popp Dr. Edward E, 1970; MONEY, BONA FIDE OR NON-BONA FIDE, by Previously available from the Wisconsin Education Fund, PO Box 321, Port Washington Wisconsin, 53074
Rheingold, H. 1997. “The Internet and the Future of Money” Tomorrow column © by Howard Rheingold.
Riegel.EC. 1976 (2003). The new approach to freedom. Together with Essays on the Separation of Money and State. Edited by Spencer Heath MacCallum. The Heather Foundation. San Pedro California.
Robertson James 2009 Money from Nothing: Supplying Money Should be a Public Service by Summer: The New Economy http://www.yesmagazine.org/article.asp?ID=3498
Rushkoff Douglas 2009. Program Your Own Money http://www.realitysandwich.com/program_your_own_money
Schraven Jorim 2001 The Economics of Community Currencies: a Theoretical Perspective http://www.strohalm.net/media/economicscommunitycurrencies.pdf . Complementary Currency Resource Center http://www.complementarycurrency.org/materials.php
Seyfang Gill And Pearson Ruth. 2000 Time for Change: International experience in community currencies SID Society of International Development. (Appropriate Economics)
Simmel, G. 1978 (1900). The philosophy of money. London: Routledge. Cited in Hart, 2005.
Squires, L. 2009. Skype Interview conducted on 11 February 2009.
Sweeney, J. and SWEENEY, R. (1977), “Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis”, Journal of Money, Credit and Banking, 9:86-89. Cited In Schraven, 2001.
Trilling, L. 2004. Money in Crisis. THE TERRA (TRC) The Trade Reference Currency. http://www.terratrc.org/PDF/Sup3-MoneyInCrisis.pdf
Tymoigne, E. & Way, R. 2006. “Money: an alternative story”. In Arestis, P & Sawyer, M (eds.) 2006. A Handbook of Alternative Monetary Economics. MPG Books Ltd,, Bodmin, Cornwall.,
Utne Joel Stonington. 2004. Local Currencies Aren't Small Change News from the Local Currencies in the 21st Century conference
White, L. (1984), “Competitive Payments Systems and the Unit of Account”, The American Economic Review, 74:699-712. In Schraven, 2001.
Witt, S & Lindstrom, C. 2004. Local Currencies in the Twenty-First Century: Understanding Money, Building Local Economies, Renewing Community... E. F. Schumacher Society 140 Jug End Road Great Barrington, MA 01230 USA. http://www.appropriate-economics.org
Witt, S. 2004. “Time to Rekindle Local Currrency Concept” from Berkshire Trade and Commerce, June 2004. http://www.appropriate-economics.org
Zube John. 1999 Stop the X000 Million Dollar Legal Tender Crime. Monograph No. 1 of the Research Centre For Monetary And Financial Freedom, written, printed and published in the Peace Plans series, as No. 19A, by John Zube, 7 Oxley St. Berrima, NSW 2577, Australia. http://www.acenet.com.au/~jzube/app23-lt.htm.htm

Social Economics – a Polanyian perspective

2009-06-23T19:26:00.000-07:00

Table of Content
1 Introduction 2
2 Economics as a (Social) Science 2
2.1 Origins of “Homo Economicus” 4
2.2 What motivates man? 5
2.2.1 Scarcity, Choice, 'Methodological Individualism’ and ‘Creative Destruction’ 5
2.2.2 Satisfy material requirements 6
2.2.3 Pluralist Principles and Property Forms 7
3 Market and Man 8
3.1 ‘The Great Transformation’ 9
3.2 ‘The Second Great Transformation’ 11
4 The Network Society 12
4.1 Relationship Economics 14
4.2 Value in the Relationship Economy 14
4.3 Competition versus cooperation 15
4.4 Relationship Capital 16
4.5 Towards a socially just networked world 17
4.5.1 Community Values 17
4.5.2 Consciousness and Knowledge 18
5 Conclusion 20
6 References 21

1 Introduction
This paper aims to explore the evolution of ‘economic man’ since the late 18th century. Over this period some (see Polanyi, 1944; Curtis, 2002) argue there has been a systematic devaluation of humanity’s intrinsically social nature, founded on what we might call the spirit of ‘Ubuntu’ , in favour of an emphasis of an emphasis on man’s propensity for greed, motivated primarily by desire for self-gain. The greed-motief was found to be a particularly effective tool for crowd mobilisation (motivation) by the free-market economy that has served as the dominant paradigm for the study of production, distribution, and consumption of goods and services over the past two centuries.
Though essentially defined as a ‘social science’, the discipline of Economics has increasingly veered away from other social sciences. The paper explores the positioning of economics in the social science field, examining the divide from more ‘human-centred’ disciplines such as sociology, and particularly anthropology. The anthropological debate with economics comes out particularly clearly in the work of Karl Polanyi, which is used as a contextual basis throughout the paper.
The paper begins with a historic overview of the evolution of economics as seen from the social science perspective. This is followed by a specific look at the relationship between ‘market and man’, and the way this relationship has evolved over the past century during which human relationships were systematically dissociated from processes of production and exchange in what Polanyi (1944) described as the Great Transformation. The final section examines the evolution of what Castells (1996) termed the Network Society, in which the development of information and communication technologies (ICTs) is shown to have created the techno-social base of another evolution of production, consumption and exchange, reintegrating relationships with the study of economics.

2 Economics as a (Social) Science
Economics is defined by Wikipedia (2009) as “the social science that studies the production, distribution, and consumption of goods and services.” The term economics is derived from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") comprised of οἶκος (oikos, "house") and νόμος (nomos, "custom" or "law"), hence denoting "rules of the house(hold)". (Harper, 2001) Current economic models developed out of the broader field of political economy in the late 19th century, resulting from a desire to use an empirical approach more similar to the physical sciences. (Clark, 1998) A definition that can be considered to capture much of the current conception of modern economics is that of Lionel Robbins: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." (Robbins, 1945: 16) Scarcity is defined as a situation whereby available resources are insufficient to satisfy all wants and needs. Thus defined the subject of economics involves the study of choices as they are affected by incentives and resources, aiming to explain how economies work and how economic agents interact. (Wikipedia, 2009b).
The history of economics as a scientific discipline has been impressive in its extended reproduction. Its mathematical formalization of human behaviour, public prestige and Nobel Prize awards have led to the discipline’s wide regard as the most advanced of the social sciences. Despite this acclaim, mainstream economics has been the subject of critique within the social science field since its origins. In an assessment of the position of the discipline of Economics within the Social Sciences, Ioannides & Nielsen describe mainstream economics as having developed an “autistic condition; that is, ‘withdrawal, fantasies and delusions stemming from an inability to relate to and perceive the environment realistically’ (Levey and Greenhall, 1984: 56) It is characterised by a withdrawn state in relation to both real-life economic problems and the social science disciplines.” Ioannides & Nielsen (2005: 1)
The sharp distinction between Economics and other social science disciplines is evident in its language and methodologies, more closely resembling those used in the mathematical and physical sciences, and thus rendering dialogue and communication with other social sciences impossible. It is worth bearing in mind that, despite its claim to be closer aligned to the natural sciences, modelled after physics, glaring differences between economics and physics have been pointed out by Pool (1989) who notes that, while physicists are absorbed in the task of finding explanations for the wealth of ‘real-world’ data they collect in their research, the lack of actual ‘data’ in economics places far greater emphasis on rigorous assumptions. “The economists thought that science meant mathematical proofs of theories and econometric tests. The physicists spend most of their time trying to explain phenomenon, such as agricultural economists and economic historians.” (Pool, 1989: 701). The absence of actual ‘facts’ from the ‘science’ of economics is highlighted by Gintis (2006) in a review of Beinhocker (2006)’s The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. Comparing the graduate microeconomics text to popular graduate texts in quantum physics, Gintis notes that, while physics texts postulate theories to explain phenomena, they are replete with examples of anomalies and exceptions, thus urging scholars to refine their search for more appropriate explanations for ‘real-world data’. “By contrast, the graduate microeconomics text, despite its brilliance, did not contain a single fact in the whole thousand page volume (actually, there were two references to facts, both in footnotes). Rather, the authors build economic theory in axiomatic fashion, making assumptions on the basis of intuitive plausibility or consonance with the principles of ‘rational action’.” (Gintis, 2006: 1027). In this manner the discipline of economics can be seen most closely related to mathematics, but bearing little resemblance to either the physical sciences on which it claims to be modeled, or the social sciences amongst which it has claimed a position of superiority based ‘rational’ methodologies.
While integration between disciplines may be considered essential for the in-depth understanding required to solve real-life problems, the ‘self image’ of the Economics discipline has appeared to make it indifferent to and disinterested in closer interaction. The dominance of one paradigm through the neoclassical purification of economics departments and the main journals has furthermore meant that alternative approaches within the discipline were in effect excluded from its core institutions. Ioannides & Nielsen (2005) highlight both the need for, as well as early evidence of the emergence of, a ‘post-autistic’, more pluralist and practically relevant economics, emphasising that such a development requires “the reinsertion of economics in the context of the social sciences.” (Ioannides & Nielsen, 2005: 2)
McNeil (2005: 163) uses the concepts ‘social capital’ and ‘sociality’ to “explore the middle ground between economics and what has been considered its polar opposite in the social sciences – anthropology. The term ‘social capital’ has gained popularity in recent years amongst economists, political scientists and sociologists. In a review of the concept of social capital McNeil concludes that its focus on networks and norms, does not represent significant methodological progress. By contrast, the concept of ‘sociality’, viewed as both 1) an empirical phenomenon (as in child psychology) and 2) an analytical concept (as in anthropology) are thought to provide more promising grounds for methodological innovation. McNeil first explores a reformist position in which analytical focus remains on individuals, but emphasises their drive to connect with other individuals over that of self-interest. This is followed by an exploration of what is described as a more radical position, in which the analytical focus shifts from entities to relations.
“Can something other than entities – relations, for example – constitute a ‘motive force’? I wish to suggest that they may. My hypothesis is that there is an innate propensity for interaction between human beings, and for them to create shared rules and meanings, and that this may be regarded as a ‘motive force’.” (McNeil, 2005: 178)
This paper will now provide a historic overview of the origins of the discipline of Economics as we know it today, beginning with classical economics thinking of the 18th century, and neoclassical developments of the 19th century. Debates around the central focus of economics, and the validity of its underlying assumptions are explored, particularly through the work of Karl Polanyi.

2.1 Origins of “Homo Economicus”
Classical economics, commonly regarded as the first modern school of economic thought, is associated with the idea that free markets can regulate themselves. (Iggy & Sheffrin, 2003) Its major developers include Adam Smith, David Ricardo, Thomas Malthus and John Stuart Mill. (Wikipedia, 2009c)
Adam Smith's The Wealth of Nations in 1776 is usually considered to mark the beginning of classical economics. Smith placed the origins of market exchange in the barter networks of our ancestors, claiming that the wealth of nations resulted from the slow working out of a deep-seated propensity in human nature, to “truck, barter and exchange” one thing for another.
“It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts ... Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that” (Smith 1961 [1776]: 17, cited in Hart, 2005: PAGE).
The claim of humanity’s essentially ‘economic’ nature as espoused by Smith led to the conception of ‘homo economicus’, a creature controlled by the need to trade (juxtaposed against what might be thought of as ‘homo socialis’, emphasising the need to connect with others). The study of Economics subsequently became known as the “Queen of the Social Sciences” (Ioannides & Nielsen, 2005: 1), through which what was thought to be humanity’s single most distinguishing characteristic could be mathematically plotted and manipulated. In the Age of Reason such rational recourse to explain social processes triumphed in reaction against former church dogma.
Following on Smith’s identification of trade as intrinsic to human nature, David Ricardo elaborated on the benefits of trade through his theory on ‘comparative advantage’, considered a fundamental argument in favor of specialization among individuals as well as free trade among countries Ricardo argued that even if one party (e.g. a highly-skilled artisan or resource-rich country) is more productive than its trading counterpart (e.g. unskilled laborer or resource-poor country) in every possible area, trade will result in mutual benefit as long as each concentrates on the activities where it has relative productivity advantage (Roberts, 2003).
Another key contribution to the evolution of classical economic theory was Thomas Malthus’s warnings about the possible dangers of population growth: "The power of population is indefinitely greater than the power in the earth to produce subsistence for man". (Malthus. 1798: 13). By drawing attention to the limited capacity of the earth to sustain a rapidly growing human population, Malthus paved the way for subsequent theories on scarcity that formed the basis of neoclassical economics in the 19th and 20th century.

2.2 What motivates man?
Once the ‘inherent’ nature of barter and exchange as a fundamental human characteristic had been identified, and the possibility of explaining, predicting and influencing human behaviour through rational calculation became evident, the question of ‘what motivates mankind’ became the focus of economic theory. Two schools of thought that have emerged in this regard emphasise respectively the issue of maximisation of scarce resources aimed at individual gain that formed the basis of neoclassical economics on the one hand , and the essential human need to satisfy material needs (regardless of scarcity or opulence) on the other.
The meaning of the word ‘economy’, as we currently use it to designate a certain kind of human activity, swings between two poles, distinguished by Polanyi as ‘formal’ versus ‘substantive’ economics. “The first, ‘formal’ sense stems from the logical character of means-end relations: the definition of economy in terms of scarcity comes from this. The second, ‘substantive’ sense emphasises the relations of interdependence between people and the natural surroundings from which they derive their material being. In this definition, such substantive conditions are basic to the economy.” (Laville, 2008: 3). While the substantivist approach to economics can be described as being culturally relativist, the formalist view espouses a universalist position.
The origins and approaches of these two schools of thought are discussed in more detail below:

2.2.1 Scarcity, Choice, 'Methodological Individualism’ and ‘Creative Destruction’
The Classical School of Economics was active into the mid 19th century and was followed by neoclassical economics in Britain beginning around 1870. The formalist approach to economics described by Polanyi is that propagated by neoclassical economic theory, which was established on the premise of Carl Menger that:
“[T]he appropriate concern of economics was the allocation of insufficient means to provide for man’s livelihood. This was the first statement of the postulate of scarcity or maximisation.” The importance of this statement “was enhanced by a superb relevance to the actual operation of market institutions which, because of their maximizing effect in day-to-day activities, were by their very nature amenable to such an approach.” (Polanyi, 1977: 21, 22)
The defining issue of the economic discipline since, still cited in text books today, has been the need to economize due to insufficient means. From this assumption Menger made significant contribution to theories on price, based on demand and supply, regarded as the basis on modern economics.
Another founding feature of neoclassical economics was the concept of ‘methodological individualism’, a term coined by economist Joseph Schumpeter in 1908 as ‘Der methodologische Individualismus’, and translated into an article for the Quarterly Journal of Economics, where the term first appeared in 1909 (Hodgson, 2007). This approach provided economists with a methodological approach to analyze collective action in terms of "rational", utility-maximizing individuals, in accordance with the Homo economicus postulate adopted from classical economics. (Wikipedia, 2009 “Methodological Individualism”.)
Schumpeter is also remembered for identifying the lifeblood of capitalism as “creative destruction”, whereby he believed that the rise and fall of companies would strengthen the economy by unleashing entrepreneurial innovation. (Schumpeter, 1942)
The combination of Menger’s early views on scarcity and choice, followed by the ‘methodological individualism’ and ‘creative destruction’ of Schumpeter, firmly rooted ‘economic man’ in a system centred on competition over scarce resources for individual gain, the fundamental underpinnings of market capitalism.
Cultural values are not considered as important within the formalist school, as it is felt that regardless of an economic actor's values, s/he will rationally order them in a list of preferences and then try to maximize his/her own utility with a minimum of effort. According to Graeber the formalists “were working with tools originally designed to predict individual behaviour in a market setting; by twisting them around, they could sometimes predict the behaviour of individuals in other cultures but not the values that motivated them, or, for that matter, the shape of society as a whole.” (Graeber 2001: 12).
Polanyi was particularly critical of the formalist position, arguing that “[...] only in the historical development of the modern West had the two [formal and substantive] come to have the same meaning, for only in modern capitalism was the economic system fused with rational economic logic that maximized individual self-interest. [...] In the economic systems of other cultures, however, the economy is embedded in other social institutions and operates on different principles from the market” (Wilk and Cligget, 2007: 10). Other critique included the points that human beings are not always rational or self-centred, but that they act in ways which can be considered altruistic, social and other-oriented.

2.2.2 Satisfy material requirements
The neoclassical assumptions described above have historically been questioned by anthropologists, sceptical of the reduction of human existence to formulas based on what was assumed to be always rational choice. Refuting the exclusive emphasis on individual gain postulated on these assumptions, Polanyi noted that:
“Cultural anthropology revealed a variety of nongainful motivations that induced man to take part in production; sociology refuted the myth of an all-pervading utilitarian bias; ancient history told of high cultures of great wealth that had no market systems.” (Polanyi, 1977: 22)
According to Polanyi (1977), Menger himself acknowledged later in his life that another motivating factor determining economic life stems from the need to satisfy physical requirements whatever the means.
“As Menger explained it, the economy has two “elemental directions,” one of which was the economizing action stemming from the insufficiency of means, while the other was the “technoeconomic” direction, as he called it, derived from the physical requirements of production regardless of the sufficiency or insufficiency of means.” (Polanyi, 1977: 22) According to Menger these two approaches to the possible development of the human economy proceed from “essentially different assumptions…. (but) both are primary and fundamental” (Menger, 1923 : 77, cited in Laville, 2008: 3).
Though the later insight was published in a posthumous edition of Menger’s Grundsatza (Principles), the fact that this work was largely ignored by economists at the time, and not translated into English until the 1980s, thus fading into oblivion.
According to the substantivist economic school the fundamental aspect to understand about any economy is that in most societies it is not a separate sphere of individual actors, but entirely embedded in other social subsystems such as religion, lineage or even class structure. From a relativist standpoint of early Anthropology, they emphasized that the systems of production, consumption, exchange and distribution should be analyzed specific to different cultures; each is guided by its own logic and culturally-specific values (Wilk and Cligget, 2007). While the substantivist approach could be credited for its critique of euro-centric assumptions about how economies work, it had the disadvantage of making human economic behaviour basically incomparable, as it was seen to be tied to each particular “exclusive” culture.
In search for ‘general’ though not ‘universal’ principles that could be used to describe the functioning of economic society, Polanyi identified different ‘forms of integration and supporting structures’ underlying production, consumption and exchange amongst human societies. Such pluralist approaches to principles, as well as forms of property, as discussed by Mauss, are noted below.

2.2.3 Pluralist Principles and Property Forms
Citing extensive research of ancient cultures’ forms of exchange, Polanyi (1977) distinguishes between three principles that determine economic processes, namely reciprocity, redistribution and exchange:
 Reciprocity refers to the exchange of gifts and counter-gifts, as described by Malinowski (1921) in his study of Trobriand Islanders. In such arrangements “reciprocal movements of goods require adequacy in terms of gift and countergift. Adequacy, in this case, means primarily that the right person at the right occasion would return the right kind of object… Adequate behaviour is often that of equity and consideration, or at least a show of it – and not the stricti juris attitude of ancient law, as in Shylock’s insistence on his pound of flesh. Hardly anywhere do we find the habit of reciprocal gifts accompanied by hard bargaining practices. Whatever the reason for the elasticity which gives preference to equity rather than stringency, it clearly tends to discourage the manifestations of economic self-interest in the give-and-take relations of reciprocity.” Polanyi (1977: 39)
 Redistribution occurs within a group when goods (including land and natural resources) are collected by a central authority, and distributed to others “by virtue of custom, law, or ad hoc central decision. In this way, the reuniting of a divided labour is achieved.” (Poloanyi, 1977: 40). Polanyi notes some degree of centricity is to be imperative to redistributive integration of resources, and shows the taxation system in modern states to be a form of such redistribution.
 “Exchange is a two-way movement of goods between persons toward the gain ensuing for each from the resulting terms.” Polanyi described barter as “the behaviour of persons who exchange goods on the assumption that each makes the most of it”, noting the process of bargaining to be essential in this activity as it is the only way each person can ensure optimum gain from the bargain. “Haggling, in this case, is not the result of some human frailty, but a behaviour pattern logically required by the mechanism of the market.” Polanyi draws particular attention to the fact that the price production function of market only comes into play once a market pattern has been established to make the bartering intent of participants effective. In this sense he likens barter to reciprocity and redistribution in that he principle of behaviour requires the presence of some institutional structure in order to become effective. “The market pattern is never traceable to the mere desire of individuals to “truck, barter, and exchange.” Its origins come from other directions.” (Poloanyi, 1977: 42)
While Polanyi revealed a plurality of economic principles, Mauss emphasised a plurality of property forms, insisting that economic organization is always a complex combination of economic types that are often opposed, and furthermore postulating that these are shaped by evolving social institutions. “Property, law, the organization of work – these are all social facts, real things corresponding to the real structure of society. But they are not material objects; they do not exist outside individuals or the societies that make them and keep them alive. They only exist in the minds of men brought together in a society. They are psychic facts. Economic facts, such as property rights for example, are themselves social (value, money etc…) and therefore constitute psychic facts like all the other social facts to which they are connected, conditioning and being conditioned by them” (Mauss, 1923: 76, cited in Laville, 2008: 5). Mauss also referred to the concepts of reciprocity and redistribution defined by Polanyi, noting in the conclusion to The Gift that the relationship between reciprocity and redistribution is a particular feature of modern market society.
The next section explores the changing nature of the relationship between ‘market and man’, particularly through the process described by Polanyi as the Great Transformation of the 20th century.

3 Market and Man
The pervasiveness of consumer culture in modern society could easily lead one to conclude that the human experience is essentially all about acquisition. Polanyi disputed this assumption, arguing that while meeting the basic material needs of its members is the focus of every society, modern capitalist societies are unique in their intense focus on greed and material. By contrast, pre-capitalist societies more typically emphasised aspects such as family, clan, religion, and honour
Polanyi argued that the most basic human characteristic, found in every human society around the world throughout time, is not material acquisitiveness, but rather the need to relate to other humans, and to feel part of a larger community. Like Aristotle, he emphasised the essentially social nature of man as more fundamental than the desire for material wealth. (McQuaig, 2005: 2) Polanyi emphasised the constitutive elements that define us as social beings, claiming that the atomistic individual motivated by self-interest is a social artefact. “Society is not something between men, nor over them, but is within them....so that society as reality ....is inherent within the consciousness of each individual”. (Polanyi Levitt and Mendell,1987:24).
The inherently social nature of the original market is noted by Searls and Weinberger (1999), who describe markets as essentially being ‘conversations’.
“The first markets were markets. Not bulls, bears, or invisible hands. Not battlefields, targets, or arenas. Not demographics, eyeballs, or seats. Most of all, not consumers […] The first markets were filled with people, not abstractions or statistical aggregates; they were the places where supply met demand with a firm handshake. Buyers and sellers looked each other in the eye, met, and connected. The first markets were places for exchange, where people came to buy what others had to sell -- and to talk. […] Some of these conversations ended in a sale, but don’t let that fool you. The sale was merely the exclamation mark at the end of the sentence. […] For thousands of years, we knew exactly what markets were: conversations between people who sought out others who shared the same interests. Buyers had as much to say as sellers. They spoke directly to each other without the filter of media, the artifice of positioning statements, the arrogance of advertising, or the shading of public relations. […] Conversation is a profound act of humanity. So once were markets.”
The ‘conversational’ nature of markets began to change with the rise of industry. Alvin Toffler wrote in ‘The Third Wave’ (1981) that the rise of industry drove an "invisible wedge" between production and consumption, over a hundred years after Friedrich Engels had noticed the same thing. (Searls & Weinberger, 1999).
According to Polanyi, the 19th century market economy was distinctively ‘economic’ in the sense that it chose to base itself on the motive of individual gain, which had never before been raised to the level of justification of action and behaviour in everyday life. (Polanyi, 1944). Like Marx, Polanyi was concerned about the organisation of economic life by the universalisation of the market principle. While Marx believed that inherent economic contradictions would result in the eventual breakdown of the capitalist order, Polanyi emphasised the contradiction between the capitalist market economy’s need for limitless expansion and the human need for sustenance through mutually supportive social relations. (Polanyi Levitt, 2004)

3.1 ‘The Great Transformation’
The ‘Great Transformation’ of the market involved the systematic destruction of the social relationships essential for human sustenance, to be replaced by ‘atomistic’ individualism. While claimed to promote greater ‘freedom’, the emphasis on individualism serves to strengthen the market, which comes to provide an alternative form of sustenance to isolated individuals severed from their social support systems.
“To separate labour from other activities of life and to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organization, an atomistic and individualistic one. […] Such a scheme of destruction was best served by the application of the principle of freedom of contract. In practice this meant that the noncontractual organisation of kinship, neighbourhood, profession, and creed were to be liquidated since they claimed the allegiance of the individual and thus restrained his freedom.” (Polanyi, 1944: 163)
Polanyi particularly emphasised the fact that free market capitalism did not arise of its own accord, as the ‘natural progression’ of an evolving human race, as much of the prevailing political economic rhetoric was prone to claim. “There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course.” (Polanyi ,1957:139, cited in Hettne, 2004).
In his essay on ‘Post-liberal democracy’, Macpherson argued that the theories of the market, of demand-and supply economics, and of consumer-led choice “were mere rhetorics which masked the essential transformation in capitalist economics between the eras of liberal free trade and of monopoly and state-regulated capital.” (Cohen, 1994: 148) The rhetoric “still asserts the ultimate moral worth of the individual” (Macpherson, 1964: 491). However, defined as choice-makers in the market, ‘individuals’ are regarded as objects to be managed and manipulated, the choices they make being those permitted by producers, at prices those producers dictate. In this manner “the market system… creates the wants in satisfies.” (Macpherson, 1964: 491)
The conscious process of ‘individualisation’ in what can be described as a ‘divide and conquer’ strategy of powerful business and political interests is highlighted by British Documentarian Adam Curtis in ‘The Century of the Self’ (2002). This BBC documentary describes the impact of Freud's theories on the perception of the human mind, particularly pertaining to the individual, the subconscious and psychoanalysis, on the political economy of the 20th century. Ways in which public relations agencies and politicians have used these theories during the last 100 years to "engineer consent", through an emphasis on the ‘individual’ as prime target for the all consuming market are exposed. The ‘engineering’ process intended is aptly described by Paul Mazer, a Wall Street banker working for Lehman Brothers in the 1930s, who is cited as saying "We must shift America from a needs to a desires-culture. People must be trained to desire, to want new things, even before the old have been entirely consumed. [...] Man's desires must overshadow his needs."(Curtis, 2002).
Weber (1981 [1927]) believed the primary motivation for making markets impersonal to have been the fact that rational calculation of profit in enterprises depends on the capitalist’s ability to control product and factor markets, especially that for labour. As human work could not be regarded as an object separable from the person performing it, people had to be taught to submit to the impersonal disciplines of the workplace. In practice the war to impose such submission through separation of the spheres of ‘home’ and the ‘workplace’, has never been completely won. Hart (2005) notes that “just as money is intrinsic to the home economy, personality remains intrinsic to the workplace, which means that the cultural effort required to keep the two spheres separate, if only at the conceptual level, is huge.” (Hart, 2005: 5)
Maintaining the unnatural equilibrium required by the artificial separation of human ‘interference’ and the ‘self-regulating market’ required what Polanyi referred to as a ‘double movement’ to mitigate the essentially inhumane effects of the market left to its own devices. This ‘double movement’ was actively implemented by the very proponents of the free market, inducing an inherent schizophrenic tendency to economic activity.
Polanyi warned that the self regulating market “could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life and thus endangered society in yet another way.”(Polanyi (1945) 2000:3) The inherent contradiction in continuous mitigatory measures to soften the effects of tyrannical markets was described as a ‘double movement’, with on the one hand the explosive spread of market economy, and on the other checks to its expansion by legislative measures enacted by national states, as well as protective labour, civic, social and political movements. (Polanyi Levitt, 2004)
A prolonged period of relative economic stability and strong economic growth in Europe and North America after the Second World War encouraged a reading of Polanyi’s ‘double movement’ as a kind of self- correcting mechanism within the capitalist system. The impact of globalisation in the 1980s and 1990s shattered such illusions as liberalisation of capital from national control accelerated social dislocation and exclusion on a global scale. Despite the creation of polarising inequalities never before experienced in human history, Polanyi Levitt (2004) notes that there have been no international institutions to offset or check the law of accumulation as one might expect if the free-market’s inherent capacity for self-correction were believed.

3.2 ‘The Second Great Transformation’
By the end of the 20th century the process of market led globalisation, accelerated by the development of new information and communications technologies (ICTs), led to the emergence of a new organisational logic based on ‘networking’ (Castells, 1996). Hettne likens the significance of the resulting transformation of the globlal economic system to that described by Polanyi half a century ago, believing that: “This is indeed a Second Great Transformation.[…] In economic terms, and in its current neoliberal form, globalization can be conceived as a further deepening and expansion of the market system, in fact an attempt to institutionalise the self-regulating market in a global scale; in other words a replay of the original Great Transformation (in its first movement).” (Hettne, 2004 PAGE)
The first Great Transformation was seen to disrupt traditional society and provoke various kinds of political interventionism via the resulting social disturbances. By contrast, the current process of market expansion, including its social repercussions, is taking place on an unprecedentedly global scale. Hettne (2004 PAGE) shows how the new global dimension “is likely to make the social and political countermovements even more varying in the different regions of the world, and therefore even harder to predict.”
Echoing Polanyi’s skeptical approach to the ‘naturally ordained’ importance given to the market, Hettne emphasises the importance of identifying the political actors behind the seemingly deterministic process involved in these transformations. Pointing out some of the dangers of market-led globalism, he particularly notes the changed role of the state, who “(as organisation) becomes the disciplining spokesman of external economic forces, rather than the protector of society against disrupting consequences of these forces […] The retreat of the state from its historical functions also implies a changed relationship between the state and what is called ‘civil society. Inclusion as well as exclusion are inherent in the networking process of globalization, and benefits occurring somewhere are therefore negatively matched by misery and violence elsewhere, creating divisions not only between but also within societies.” (Hettne, 2004: PAGE)
While the social disruption resulting from the Great Transformation of the 20th century could to some extent be mitigated by functional states whose clearly stated purpose was the protection of society, what might be described as the ‘dissolution’ of states in a global marketplace leaves little buffer against market tyranny.
Polanyi Levitt (2004) also comments on the changed role of the state in relation to business which, in contrast to the democratic ideals of the 20th century to ensure the well-being society, resemble the conquest and unequal trade regime dynastic empires.
“[T]he mutually advantageous relationships between large trans-national corporations and their home governments in the current globalisation is reminiscent of that of the great trading companies and monarchs of the mercantile era. Mercantilism was about conquest and unequal trade. There was essentially no technical progress.” (Polanyi Levitt (2004: 9)
While the diminishing role of the state as protector of society against the forcer of free market capitalism can indeed be considered cause for concern, the development of new information and communication technologies has led to another development that could, in some sense, be seen as a potential alleviating factor, namely the empowerment of the general population. It is interesting to note that, although initial critique of computer mediated communication (CMC) included concern over its potential isolating factors (e.g. see Ronnel, 2001), within the fist decade of the 21st century the rapid proliferation of essentially social software appears to indicate instead a trend towards greater connectedness, following what has been shown throughout this essay to have been a century of increasing isolation prior to the new technologies. The next section will discuss the implications of what has become known as the “The Network Society” (Castells, 1996), particularly as these pertain to the economic sphere.

4 The Network Society
The last quarter of the 20th century has seen the emergence of a new force that has rapidly revolutionised human interaction with the outside world. The advent of Information and Communication Technologies, and continuing evolution of how they are being put to use in connecting people to the world and each other, has led to what Castells (1996) refers to as “The Rise of the Network Society”. Castells describes the new economy that has emerged over this period as informational , global , and networked . (Castells, 2000: 77).
By transforming the processes of information processing, new information technologies impact all realms of human activity, making it possible to establish endless connections between different domains, as well as between elements and agents of different activities. Castells shows how this is resulting in the mergence of a “networked, deeply interdependent economy that becomes increasingly able to apply its progress in technology, knowledge, and management to technology, knowledge, and management themselves. Such a virtuous circle should lead to greater productivity and efficiency, given the right conditions of equally dramatic organisational and institutional changes.” (Castells, 2000: 78)
By transforming the manner in which humans communicate, Castells argues that ICTs have and are in the process of fundamentally reshaping culture.
“The potential integration of text, images, and sounds in the same system, interacting from multiple points, in chosen time (real or displayed) along a global network, in conditions of open and affordable access, dopes fundamentally change the character of communication. And communication decisively shapes culture, because, as Postman writes, “we do not see… reality… as ‘it’ is, but as our languages are. And our languages are our media. Our media are our metaphors. Our metaphors create the content of our culture.” (Postman, 1985: 15) Because culture is mediated and enacted through communication, cultures themselves – that is, our historically produced systems of beliefs and codes – become fundamentally transformed, and will be more so over time, by the new technological system.[…] The emergence of a new electronic communication system characterised by its global reach, its integration of all communication media, and its potential interactivity is changing and will change forever our culture.” (Castells, 2000: 357)
The most significant impact the Integration of Electronic Communication can be said to have on what Castells calls the “Culture of Real Virtuality”, is what he refers to as “the End of the Mass Audience, and the Rise of Interactive Networks.” (Castells, 2000: 355) The most distinguishing characteristic the Internet has over television as mass media device is the fact that it is interactive. This means that, in contrast to a medium that allowed central media authorities to decide and dictate the information and ideologies to which people were exposed through daily broadcasting, networked individuals can now source and disseminate information containing countless perspectives on an infinite array of subject matter across the globe. Furthermore, while television could be seen as an isolating media, urging its audience to passively absorb the messages projected into their living rooms, the Internet gives people the power to interact and connect with others, not only in their geographical neighbourhoods, but across the globe. In this manner individuals ‘network’, establishing relationships across the World Wide Web, and thus reintegrating the fundamentally social principle of human nature. Locke highlights the power of such increased connectedness to create a population more resistant to market onslaught and domination.
“Because the Net connects people to each other, and impassions and empowers through those connections, the media dream of the Web as another acquiescent mass-consumer market is a figment and a fantasy.[…] The Internet is inherently seditious. It undermines unthinking respect for centralized authority.” (Locke, 1999, 2001: 5)
While tools provided by the ‘early Internet’, notably email and the ability to communicate with others via user groups initiated the revolution towards more sociable media, the development of the World Wide Web by Tim Berners-Lee in 1989, and subsequently the proliferation of social media in what has become known as ‘Web 2:0’ has clearly demonstrated the power of technology to transform the very basis on which humans interact. The intrinsically social emphasis of the new technologies is demonstrated by Wikipedia (a prime example of new, participatory, information sharing mechanisms’)’s definition of Web 2.0:
“"Web 2.0" refers to what is perceived as a second generation of web development and web design. It is characterized as facilitating communication, information sharing, interoperability, User-centered design and collaboration on the World Wide Web. It has led to the development and evolution of web-based communities, hosted services, and web applications. Examples include social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies.” (Wikipedia, 2009 “Web 2:0”)
The following sections will discuss the implications of the networked society on what is rapidly becoming a new approach to economics, emphasising the value of relationships, shown by Polanyi to have been consciously suppressed through the past two centuries of market capitalism.

4.1 Relationship Economics
In recent years the term ‘Relationship Economics’ has become increasingly popular in referring to the trends in social media, and their impact on means of exchange. When Barbrook first referred to the ‘(high tech) gift economy’ in 1999, he cited as prime examples the free and open source software movement, and the GNU General Public Licence ‘copyleft’ (Rosen, 2004), or Creative Commons model of licensing rights for intellectual property. Such ‘high tech’ examples of a model of a more collaborative form of exchange developing within the information economy emphasised exchanges of knowledge and information, tools and trade of the new economy. The new focus on ‘Relationship Economics’ goes far deeper, reaching into the essence of business and marketing, the domain of the corporate empire that has grown larger than nations over the past century.
Paterson describes the new model that is emerging (early adopters of which are noted to be Wal*Mart, Amazon and Dell) as one in which the flow is reversed from that of the production model, in that the customer sets the product agenda. “It is the customer who decides what they want and who drives the production process back into, not simply one organization, but into a network of suppliers organized by the host company. This is not simply a re-engineering of the process but a shift in culture. It involves the giving up of the idea that the market can be controlled by head office. Head office in these organizations does not pretend to be able to predict customer behaviour, instead it works to have the best sensory system possible. It uses this acutely sensitive information system to track trends and to react immediately.” (Paterson, 2003:1)
It is interesting to note that, although the term ‘Relationship Economics’ may conjure ideals of a more co-operative society, its first uses were cited with the primary goal of better understanding of how the new social media impacts culture, thus to develop more effective tools for targeting the now-more-dynamic consumer market.
While profit interests still predominate in many discussions combining the terms ‘relationship’ and ‘economics’, there has also, in recent years, been increasing emphasis on the more ‘non-monetary’ motives of the Relationship Economy, particularly evident throughout The Emergence of The Relationship Economy The New Order of Things to Come by Allen, Deragon, Orem and Smith (2008), and frequently featured by contributors to Jay Deragon’s “Relationship Economy. Com’ website.

4.2 Value in the Relationship Economy
Castells describes the virtually operated financial marketplace as the site where value is assigned to any economic activity, noting that companies’ value, which determines their capacity to attract investors (or to fend off hostile takeovers), depends on the judgement of the financial market. How such judgement is formed, and the underlying criteria for market valuation, are what Castells considers to be the cornerstone of the political economy of the Information Age, “[b]ecause only if we know how value is assigned to economic activity can we understand the sources of investment, growth, and stagnation.” (Castells, 2000: 156) While capitalism’s relentless search for profit might lead one to believe that profitability of a firm or economic activity would determine its value, Castells shows that, “in the turn of the millennium capitalism, this is simply not the case. The most often cited example is that of Internet-related companies, with little or no profits, yet posting phenomenal increases in the growth of value of their stocks.” (Castells, 2000: 156) By contrast, Castells describes the global networked business model pioneered by Cisco, using the power of new communication technologies to produce products exactly in line with customer requirements, and focused on timely delivery, as the emerging new business model for industry.
Deragon believes that the value of our relationships and the quality of our transactions are what drive gain in the Relationship Economy. “The “system” with which we build relationship capital creates economic rewards that come in many different forms. As The Relationship Economy matures, finding opportunities to achieve monetary gain will be limited to those who understand these core factors that create value—the quality and quantity of relationships formed in the social networking space, and the mediums used to facilitate those relationships.” (Deragon, 2008: 65)
The future of the Relationship Economy is described as one based on “value taken vs. value given.” “In a world connected to everything everywhere, we as individuals have the ability to profile and exchange our value and our values. […]In the new model of the “networked world,” we buy tokens of economic value. When someone provides us value, it is assumed and expected, but not written in contract form, that the receiver would reward us according to the perceptions of our value to him or her. The receiver would simply credit our token account with a value they deem appropriate for the benefit gained. In turn, we would do the same for those that deliver us value.” (Deragon, 2008: 69)
The luxury of efficiency and effectiveness provided by the technology of the networked world, makes it possible to produce value to the degree we choose. Deragon envisions a future in which “some will work overtime because others will compensate them for their ability to produce, while others will receive and not compensate. The latter will be identified quickly as takers, not givers, and the entire network will know the difference.” (Deragon, 2008: 69) It is thus believed that the social pressure to reciprocate will drive future exchange in the global network, as once it did in its dispersed villages, a process considered significant enough to be described as the ushering in of a ‘new world order’ driven by value exchanges and relationships:
“The Relationship Economy will create new mediums, new measures, and accelerated exchanges that will displace traditional mediums and totally disrupt and displace existing paradigms. A new world order, which is driven by value exchanges and relationships, will emerge, and humanity will learn to adapt or lose. Those companies and individuals that do not adapt and create value will be identified and set apart from the larger network very quickly. Value migration will build momentum and create economic significance, individually and collectively.” (Deragon, 2008: 70)

4.3 Competition versus cooperation
The concept of “healthy competition” on which our current economy is based has historically been justified by citing competition as a motivator and way to ensure forward progress. An unfortunate side-effect of such progress is the fact that there are always losers. More significantly, their numbers continue to swell as benefits go to the “survival of the fittest”, comprising increasingly smaller proportion of the world’s population. This, according to Kovitz (2008: 144), “creates an unhealthy paradigm, as people at the top do not stay in that position for very long.”
Kovitz shows that The Relationship Economy, and what he cites as its centerpiece, ‘relationship capital’, allows a move away from the intrinsically competitive spirit characterizing modern economy, in which, by definition, there are always losers, towards a more collaborative approach recognizing interdependence and the need for cooperation.
“The Relationship Economy takes into account that even the most rugged individualists who yearn for independence, at the end of the day, still remain interdependent upon one another. Therefore, the “win-win” model of cooperation built into Relationship Capital states in the end that no one wins unless everyone wins.” (Kovitz, 2008: 144)

4.4 Relationship Capital
Kovitz outlines a series of ‘laws’ of relationship capital, suggesting a new approach to business as well as the way in which people perceive the world in general. While these laws are regarded as flexible and subject to change as social network science evolves, Kovitz believes and hopes that they will spark debate, conversation, awareness as well as further research and the identification of new fields of study. The laws are as follows: (Kovitz, 2008: 146-156):
1. “All organic entities (living or at one time having lived) possess and have the potential to create relationship capital.
2. Non-organic entities do not possess relationship capital, but reflect the collective relationship capital of those relationship capital-possessing entities that have relationships with them.
3. Relationship Capital is derived from the collective relationships an individual has with other relationship capital-possessing entities.
4. Relationship capital value increases or decreases proportionally as the perceived quality of relationship increases or decreases.
5. Relationship capital can never be destroyed.
6. Relationship capital of an organization is the aggregate of the individual relationship capital of its constituents.
7. Intellectual capital can only be created by one or more relationship capital-possessing entities.
8. Intellectual capital can be used to change an individual’s relationship capital, either positively or negatively.
9. Financial capital is merely a reflection of and cannot exist without some combination of relationship and intellectual capital.
10. Relationship and intellectual capital always conform to the laws of nature and humankind. Financial capital does not...necessarily.”
Of particular relevance to this research is Kovitz’ last two laws distinguishing relation ship capital from the ‘financial capital’ that has dominated the past two centuries of human development, and currently stands at a precarious point in its evolution. The laws prioritise relationship capital over financial (9), emphasizing it to be more closely aligned with ‘the laws of nature and humankind’ (10), a statement Polanyi would surely have agreed with.

4.5 Towards a socially just networked world
This section explores some of Polanyi’s ideas as these have been applied to the new economy, looking first at the issue of ‘valuation’ and the emergence of community initiatives expressing alternate values from those ascribed by the predominant economic paradigm. This is followed by a look at the for: intensified study into processes of popular transformation; the intellectual and cultural development of the working class; and a radical reorganisation of knowledge to dispute the inevitability of the current paradigm.

4.5.1 Community Values
A central theme emerging throughout Polanyi’s work is the conceptualisation of values, as captured by MacIver in the foreword to The Great Transformation:
“What our age needs is the reaffirmation, for its own conditions and for its own needs, of the essential values of human life. Tradition fails us and will betray us if we trust to it. We must not abandon the principle of individual freedom but we must re-create it. We cannot restore a past society, even if the haze of history hides its evils from us; we must rebuild society for ourselves, learning from the past what lessons and what warnings we are capable of learning. Perhaps in doing so we might also bear in mind that the causation of human affairs is too deeply tangled to be wholly unraveled by the wisest minds. There is always a point where we must trust our values in action, so that the urgent forces of the present world may release themselves in new directions towards new goals.” (MacIver in Polanyi, 1957: x)
Polanyi Levitt believes that resolving the contradictions between the requirements of the capitalist economy for unlimited expansion on the one hand, and the requirements of people to live in mutually supportive relations on the other will require civilisational change to transform the institutions governing economic life. Such change would involve a drastic revision of current conceptions of value to align these with the needs of people and the environment.
“The transformation of the capitalist order requires a new calculus of the value of work, the value of human needs and the value of nature.[…] the value system must be one that accords with the realities of real people living in real societies, and a very real dependence on the natural environment and its very real limitations. Economics has to return to some very basic questions of use value and exchange value. We have to take into account the real value of human effort and work, and that is very different from its market value. We have to protect nature and our social and cultural heritage.” (Polanyi Levitt , 2004. 12)
Perhaps the most significant ‘value-change’ required in such alternate conceptions of society concerns the importance attached to human relationships. Polanyi’s recognition of relationships as the ’key loci’ of the self can be considered a powerful conceptual tool with which to reject a methodological individualism that “denies the essence of individuals as socially constituted, without sliding into a collectivist approach that erases individuality.” (Mendell, 2003:2) Seen as agents of social change, individuals are not passive actors constrained by their institutional settings. This is increasingly confirmed in today’s reality as “new institutional arrangements emerge and become part of a complex and interwoven institutional order that is increasingly fragile, despite pretences to the contrary.” (Mendell, 2003:2). It features a great deal of experimentation “with old and new forms of politico-economic rearrangement” that cannot easily be reduced to any simple notion of transition. (Amin et al, 2001:570, cited in Mendell 2003:2)
According to Harvey, the separation of the economy from society calls for continuous intervention to ensure the survival of the system, as well as for what can be called instituted subsystems or “liberatory alternatives” resulting from a different conceptualization of humanity. (Harvey 2000:186, cited in Mendell, 2003:5). While such alternatives, the emergence of which is documented extensively around the world, currently still exist within the dominant system, they are forcing change, though be it uneven. Examples of such economic alternatives cited by Mendell include the participatory budget in Port Allegre or the Grameen Bank in Bangladesh. (Mendell, 2003:5). Non-profit civil society initiatives can be seen as examples of social solidarity based on cooperation and association, as opposed to competition and individual gain. (Polanyi Levitt, 2004). Mendell (2003: 7) shows that “[c]ommunity based or locally organized socio-economic initiatives are developing viable organizational forms with functioning economies that challenge the prevailing model through practice.” (Mendell, 2003: 7, emphasis added)
The implicit rules (customs) of communities differ from state-made laws in that regulation of members usually occurs informally, “relying on the sanction of exclusion rather than punishment.” (Hart, 2005: 8) Amplified by the internet and fast transport, the networks of the global market economy offers more direct access to the world at large than centralised states, and relations at a distance are personalised through cheap information allows. These changes in what may be thought of as the techno-social basis of society in the 21st century calls for the devolution of social organisation to less rigidly organised communities or regions. (Hart, 2005)

4.5.2 Consciousness and Knowledge
In attempts to reconciliate criteria of technical efficiency with distributive justice and democratic process, Polanyi Levitt (2004) believes that her father’s research into institutions of non-market exchange, the use of single purpose moneys, and reciprocal and redistributive arrangements of various kinds may expand the boundaries of the possible. This sentiment echoes that of Mendell (2003) who draws on the work of Polanyi for measures to create a more just society:
“In his proposal for a functional democracy that was dynamic and interactive, Polanyi designed an institutional arrangement of associations of producers and consumers and an overarching “kommune”, a citizen’s assembly of sorts, to work in the collective interest. For this functional democracy to succeed, it required both the commitment to the collective well-being as well as the “effective performance of each individual within his particular occupation and function”. This, however, is only possible if each individual is conscious of his particular function.” (Mendell, 2003: 7, emphasis added)
Consciousness of particular economic functions requires, according to Polanyi (1922, cited in Mendell, 2003: 7), an overview and collective understanding of all the elements of the economy. To attain what he described as the ’inneroverview’ or democratic surveillance ubersichtleitung Polanyi advocated the study of the processes of transformation in which people participate and how these processes respond to needs.
The importance of informed analysis of economic transformation through a study of the institutions that form the basis of society was also highlighted by Mauss (1923), who argued that social action and practice are the result of individual representations that are standardised by political institutions, and that these define a framework within which practices unfold, influencing their representation in turn. Institutions are social conventions which simultaneously express and limit the field of possibilities, thus forcing them to constantly change. He believed that the study of these institutions allows us to gain “sharp awareness of the facts and a grasp, if not certain knowledge of their laws”, as well as helps us also to free ourselves from the ‘metaphysics’ in which ‘–ism words’ like capitalism are soaked (Mauss, 1923: 535, cited in Laville, 2008: 6).
Polanyi emphasised the need to develop the intellectual and cultural equipment of the working class to enable it to transform society, and the creation of a body of valid knowledge denying the inevitability of a class society and the impossibility of democratic planning. This he believed would require a radical reorganization of knowledge to reflect the reality of working-class experience. Thus, through active engagement in altering persons’ ‘lived reality’ he hoped that the structures by which this reality is governed may be transformed. “Lived reality challenges the dominant paradigm. Equipped with this knowledge, ‘the individual is himself, economically as well as epistemologically, a different individual” (Vickers, 2002: 177)’” (Mendell, 2003: 8).
Mauss and Polanyi agree that information and analysis should be based on practical experience. This requires a focus on “real economic movement”, as opposed to “a programme of social reform given a veneer of realism” (Laville, 2008: 12). This conception of social change as self-expression “is by no means committed to revolutionary or radical alternatives, to brutal choices between two contradictory forms of society” but “is and will be made by a process of building new groups and institutions alongside and on top of the old ones” (Mauss, 2001 : 265, cited in Laville, 2008: 12).
In his 1989 lecture on receipt of the Nobel Prize, econometrician Trygve Haavelmo argued that existing economic theories are misconceived in their emphasis on the study of individual behavior under various conditions of choice, followed by the construction of a model of the economic society in its totality by a so-called process of aggregation. Haavelmo feels that this process should be turned around to emphasise the individual’s position within society, including the analysis of historically specific institutions from the outset of analysis: “Starting with some existing society, we could conceive of it as a structure of rules and regulations within which the members of society have to operate. Their responses to these rules as individuals obeying them, produce economic results that would characterize the society.” (Haavelmo, 1997, 15, cited in Hodgson, 2007: 327). Hodgson commends this approach, noting that such a reformulation would “stress the evolution of institutions, in part from other institutions, rather than from a hypothetical, institution-free “state of nature” (Hodgson, 2007: 327).
In terms of knowledge creation as well as dissemination, the Information revolution of the late 20th century may be thought of as a most significant means whereby Polanyi’s ideal for an alternate body of knowledge, created by interconnected networks of citizens across the globe, is currently being constructed. ICTs are instrumental in disseminating knowledge and information that was formerly the sole domain of central authorities to all with access to the Internet. While such access is still far from universal, its impact on citizen empowerment has been immense and can be expected to continue being a reckonable force in human evolution in the 21st century. Furthermore the rapidly changing institutional base of society provides ample scope and opportunity for research into how the newly evolving institutional structures do and will continue to impact on the social and economic spheres of human life.

5 Conclusion
The purpose of this paper (chapter) has been to explore the evolving study of economics - defined to involve the production, distribution, and consumption of goods and services - from a social perspective. The paper draws extensively on the work of Karl Polanyi who, in the mid 20th century, drew attention to the manner in which the discipline of economics had become detached from the real lived reality of the human experience. Polanyi’s central argument is that during what is described as the Great Transformation of the 19th and 20th century, the market principle was raised to unprecedented import in describing the stimulus to produce, consume and exchange. Polanyi disputes the exclusive emphasis on individual greed as primary motivating force for human action, reminding us instead of the fundamentally social nature of humans who, at the core, are shown to be driven by the need to relate to others. This essential driving force is captured by the Zulu maxim umuntu ngumuntu ngabantu ("a person is a person through (other) persons", encapsulating the philosophy of Ubuntu.
In the 20th century the process of globalisation, exponentially expedited by new information and communication technologies, has led to what Hettne describes as a Second Great Transformation in that the free market system that dominated nations has now been expanded to truly global reach. The nation states which provided a buffer against the socially destructive elements of market capitalism are declining in significance, replaced by global corporations as key economic role players. The implications for human well-being in a world dominated by the material desires of an increasingly powerful minority could be considered bleak.
Yet, the same technological developments that have expanded the reach and power of multi-national corporations, have simultaneously been appropriated by people who are using the new technologies to do what Polanyi has shown to be the true incentive for human activity: building relationships with others. The paper argues that the rise of the Network Society described by Castells created a context in which social relationships are being firmly re-entrenched in the economy. The Relationship Economy is increasingly recognised as the new dominant paradigm to which business leaders will need to adjust if they wish to maintain market share. Beyond the market people are using the Internet to connect with others, forming virtual communities that stretch across the globe. While the first instinct of business has been to view the world wide web of connected humans as a new market to exploit using the tried and tested tools of free-market capitalism, research on the evolving relationship economy increasingly recognise that the emerging new world requires new tools and approaches. The current economic crisis clearly demonstrates the destructive potential of what has been the predominant school of thought around production and trade for the past two centuries. Simultaneously it serves as a stimulus for the newly connected and increasingly well-informed web of world citizens to build the alternative body of knowledge endorsed by Polanyi to demonstrate ways and means of interaction and exchange that would promote a more just society. Following the evident failure of the systematic, artificial separation of the essentially human factor of relationships from production, consumption and exchange, new technologies developed at the end of the 20th century and rapidly evolving into the 21st provide the means for a globally connected population to realign its value system with essential human needs.
While this chapter has explored the evolution of basic economic processes and theories, the next chapter will discuss the role of money as the means whereby these processes are put into practice.

6 References
Allen, S. Deragon, JT. Orem, MG. & Smith, CF. 2008 The Emergence of The Relationship Economy The New Order of Things to Come. Link to Your World, LLC Silicon Valley, California, USA
Amin, Ash and Ronen Palan. 2001 “Towards a Non-Rationalist Political Economy” Review of International Political Economy. Vol.8, No.4:559-577.
Aristotle, Harris Rackham (ed), 1944. Politics. Harvard University Press,
Harvey, David. (2000) Spaces of Hope. Berkeley. University of California Press. 293p. cited in Mendell, 2003.
Hettne, Björn. 2004. Karl Polanyi and the Search for World Order. Karl Polanyi Institute of Political Economy. http://artsandscience1.concordia.ca/polanyi/pdfs/Hettne-2004.pdf
Castells, M. 2000 (1996) The Rise of the Network Society: The Information Age: Economy, Society and Culture, Volume I. MA: Blackwell. Cambridge
Clark, B. (1998). Political-economy: A comparative approach. Westport, CT: Preager. Cited in Wikipedia http://en.wikipedia.org/wiki/Economics#cite_note-etymology-0
Cohen, AP. 1994. Self Consciousness: an alternative anthropology of identity. London. Routledge
Curtis, 2002, The Century of the Self. BBC Documentary
Deragon, JT. 2008. “The Economic Factors” in Allen, S. Deragon, JT. Orem, MG. & Smith, CF. 2008 The Emergence of The Relationship Economy The New Order of Things to Come
Derek, I.; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 395. ISBN 0-13-063085-3. Cited in Wikipedia http://en.wikipedia.org/wiki/Classical_economics#cite_note-0
Gintis, H. 2006. “Review of Eric D. Beinhocker. 2006 The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (Boston, MA: Harvard Business School Press).” Journal of Economic Literature, 44: 4 (December): pp. 1018-31. cited in http://michaelperelman.wordpress.com/2007/06/22/the-purported-queen-of-the-social-sciences/
Graeber, David. 2001 Toward an anthropological theory of value: the false coin of our own dreams . New York: Palgrave.
Haavelmo, Trygve. 1997. “Econometrics and the Welfare State” In American Economic Review, 1997, vol. 87 No. 6, Nobel Lectures and 1997 Survey of Members (Dec., 1997), pp. 13-15. American Economic Association, cited in Hodgson (2007: 13)
Hart, K. “Notes towards an anthropology of money” in Kritkos an international and interdisciplinary journal of postmodern cultural sound, text and image Volume 2, June 2005, ISSN 1552-5112 http://intertheory.org/hart.htm
Harper, D. (November 2001). "Online Etymology Dictionary - Economy" (HTML). http://www.etymonline.com/index.php?term=economy. Retrieved on October 27 2007. Cited in Wikipedia http://en.wikipedia.org/wiki/Economics#cite_note-etymology-0
Hodgson, Geoffrey. 2001. How Economics Forgot History. London, Routledge. 422p. Cited in Mendell, 2003: 8
Hollander, S 1979. The Economics of David Ricardo. University of Toronto Press. Cited in http://en.wikipedia.org/wiki/David_Ricardo#cite_note-1
Ioannides & Nielsen (eds), 2007. Economics and the Social Sciences Boundaries, Interaction and Integration. Chelternham, UK. Edward Elgar ISBN: 1840647906, ISBN13
Kovitz, AJ. 2008. “The Relationship Capital Factors” in Allen, S. Deragon, JT. Orem, MG. & Smith, CF. The Emergence of The Relationship Economy The New Order of Things to Come
Laville, 2008. “Towards a theory of plural economy: in the footsteps of Mauss and Polanyi.” Rethinking economic anthropology: a human-centred approach, London, 11-12 January 2008
Levine, Locke, Searls & Weinberger (eds). 1999, 2000. The Cluetrain Manifesto: The End of Business as Usual Copyright © 1999, 2001 Levine, Locke, Searls & Weinberger http://cluetrain.com/book/apocalypso.html
Locke, C. 2001. “Internet Apocalypso” in Levine, Locke, Searls & Weinberger (eds) The Cluetrain Manifesto: The End of Business as Usual Copyright © 1999, 2001Levine, Locke, Searls & Weinberger http://cluetrain.com/book/apocalypso.html
Macpherson, C. B. 1964. The political theory of possessive individualism. Oxford: Clarendon Press.
Malinowski, B. 1921 The Primitive Economics of the Trobriand Islanders. The Economic Journal 31:1-16.
Malthus T.R. 1798. An essay on the principle of population. Chapter 1, p13 in Oxford World's Classics reprint. Cited in http://en.wikipedia.org/wiki/Thomas_Malthus#cite_ref-1
Mauss M. 1923. “Essai sur le don. Forme et raison de l'échange dans les sociétés archaïques“, Année sociologique, Paris, 1923. Cited in Laville, 2008
Mauss M. 2001. L’essai sur le don, sociologie et anthropologie Paris Presses Universitaires de France, 9th edition, 2001 (1st edition 1950). Cited in Laville, 2008
Mauss, Marcel 990[1923–1924] The Gift: The Form and Reason for Exchange in Archaic Societies. Translated by W. D. Halls. W. W. Norton, New York
Menger C., Grundsätze der Volkwirtschaftslehre, Vienne, Edition Carl Menger, 1923. Cited in Polanyi, 1977 and Laville, 2008
McQuaig, L. 2005. “More than just consumers” This article first appeared in the Toronto Star of January 9th, 2005. http://artsandscience1.concordia.ca/polanyi/pdfs/McQuaig-article.pdf
Mendell, M. 2003 “Karl Polanyi and Instituted Process of Economic Democratization” Karl Polanyi Institute of Political Economy, Concordia University, Montreal, Quebec, Canada. Paper for conference proceedings: Polanyian Perspectives on Instituted Economic Processes, Development and Transformation ESRC, Center for Research on Innovation and Competition, University of Manchester October 23-25, 2003. Published in PEKEA Newsletter N° 14, April – June 2008 http://www.pekea-fr.org/PubliSurNLetter/Mendell-En-NL14.pdf
McNeil, Ioannides, Stavros & Nielsen Klaus (eds) 2005 (2007) Economics and the social sciences. Cheltenham, UK ; Northampton, MA. : Edward Elgar.
Mill, John Stuart. 1963. Utilitarianism. London: Parker, Son, and Bourn, West Strand.
Paterson, R. 2003. The Customer Revolution - The Relationship Based Business Model - Turning Our World Inside Out. Accessed on\: http://smartpei.typepad.com/robs_thoughts/2003/11/the_relationshi.html
Polanyi, Karl. 1922. “The Functionalist Theory of Society and the Problem of Socialist Economic alculability”. Translation from German by Kari Polanyi Levitt of “Die Funktionelle Theorie der esellschaft und das Problem der Sozialistichen Rechnungslegung”, Archiv fur Sozialwissenschaft und ozialpolitik, vol.52,no.1:218-228. Cited in Mendell 2004.
Polanyi, Karl "The Essence of Fascism," in Christianity and the Social Revolution, edited by John Lewis, Karl Polanyi, and Donald K. Kitchin (London: Victor Gollancz, 1935). Cited in Mendell 2004.
Polanyi, K. 1944. The great transformation. Farrar & Rinehart Inc. New York, Toronto
Polanyi, K.1957 Trade and Market in the Early Empires: Economies in History and Theory, edited by K.Polanyi, C. M. Arensberg, and H. W. Pearson, The Free Press, Glencoe, Illinois.
Polanyi, 1977. The Livelihood of Man. Academic Press. Ed. Harry W. Pearson. New York, San Francisco, London,
Polanyi Levitt, Kari 2004. “The Transformation of the World System: Some Insights from the Work of Karl Polanyi” Inaugural Lecture. International Conference on Development and Regionalism. Karl Polanyi’s Ideas and the Contemporary World System Transformation. November 5-6, 2004. Budapest http://artsandscience1.concordia.ca/polanyi/pdfs/Kari-Budapest-2004.pdf
Polanyi-Levitt, Kari and Marguerite Mendell. (1987) “Karl Polanyi: His Life and Times” Studies in Political Economy. Spring: 7-39.
Pool, Rt. 1989. “Strange Bedfellows.” Science, vol. 245 (18 August): pp. 700-5. Cited in http://michaelperelman.wordpress.com/2007/06/22/the-purported-queen-of-the-social-sciences/
Robbins, Lionel (1945) (PDF). An Essay on the Nature and Significance of Economic Science. London: Macmillan and Co., Limited. http://www.mises.org/books/robbinsessay2.pdf. , p. 16 Cited in Wikipedia http://en.wikipedia.org/wiki/Economics#cite_note-etymology-0
Roberts, PC 2003. "The Trade Question", Washington Times 2003-8-28) http://en.wikipedia.org/wiki/David_Ricardo#cite_note-1
Ronnel, Avitel. 2001 “A Disappearance of Community” in Trend, D. (ed). 2001. Reading Digital Culture. Blackwell Publishers. Oxford, UK; Massachusets, USA.
Rosen, L. 2004. ‘Copyleft and Reciprocity’. In Open Source Licensing: Software Freedom and Intellectual Property Law. Prentice Hall.
Schumpeter, JA. 1942. “Creative Destruction” From Capitalism, Socialism and Democracy (New York: Harper, 1975) [orig. pub. 1942], pp. 82-85: http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/materials/schumpeter.html
Searls and Weinberger 2001. “Markets are Conversations” in Levine, Locke, Searls & Weinberger. (1999, 2001) in Levine et al (1999)
Toffler, Alvin. 1981. The Third Wave. New York: Bantam, 1981. cited in Searls & Weinberger, 2001.
Vickers, D. 1994 Economics and the Antagonism of Time. Time, Uncertainty and Choice in Economic Theory. Ann Arbor, University of Michigan Press, quoted in Hodgson, 2002:177.
Weber Max 1927/1981, "General Economic History", Transaction Books, New Brunswick, NJ, .
Wilk, R & and Cligget, L. 2007. Economies And Cultures: Foundations Of Economic Anthropology. Boulder, CO: Westview Press.
Wikipedia 2009a “Economics” http://en.wikipedia.org/wiki/Economics#cite_note-etymology-0
Wikipedia. 2009b “Classical Economics” http://en.wikipedia.org/wiki/Classical_economics#cite_note-0
Wikipedia. 2009c“Web2.0” http://en.wikipedia.org/wiki/Web_2.0
Wikipedia, 2008d. http://en.wikipedia.org/wiki/GNU_General_Public_License

Tinctures for Talents

2009-05-22T09:55:00.001-07:00

The following tinctures are available for CES currency (or rands) in Cape Town.

Arnica montana, Centella Asiatica, Echinacea Purpurea, Ginkgo Biloba, Panax Ginseng, Pelargonium Sidoides, Rosmarinus officinalis, Sceletium Tortuosum, Sutherlandia Frutescens, Trigonella Foenum-Graecum, Warburgia Salutaris.

Arnica montana
Arnika
Use for: Bruising, swelling, sprains, sore muscles, heart failure, coronary and artery health, as well as boosting the immune system and as a throat gargle.
A compress soaked in an arnica infusion may relieve the inflammation of phlebitis. A few drops of arnica tincture added to warm water in a foot bath will relieve fatigue and soothe sore feet. A hair rinse prepared with arnica extract has been used to treat alopecia neurotica, an anxiety condition leading to hair loss. Studies have determined that arnica has properties that act as an immunostimulant. The extract of arnica has been shown to stimulate the action of white blood cells in animal studies, increasing resistance to bacterial infections, such as salmonella.
USE EXTERNALLY: Arnica tincture should not be ingested without supervision of a qualified herbalist or physician.
http://www.ageless.co.za/herb-arnica.htm
http://www.herbcompanion.com/Health/Natural-healing-Arnica-montana-Natural-Magic.aspx
http://www.answers.com/topic/arnica

Centella Asiatica
Gotu Kola/ Indian Pennywort /Mandookaparni/ Brahmi
Has been used for: Wound healing, better circulation, memory enhancement, cancer, vitality, general tonic, respiratory ailments, detoxifying the body, treatment of skin disorders (such as psoriasis and eczema), revitalizing connective tissue, burn and scar treatment, clearing up skin infections, slimming and edema, arthritis, rheumatism, treatment of liver and kidneys, periodontal disease, strengthening of veins (varicose veins), blood purifier, high blood pressure, sedative, anti-stress, anti-anxiety, an aphrodisiac, immune booster, anabolic and adaptogen etc.
Can assist in overcoming the negative effects of fatigue and stress.
In traditional African health it has been used for the treatment of leprosy (the asiaticoside content dissolves the waxy coating of the leprosy bacteria - allowing the immune system to destroy the bacteria), bronchitis, asthma, syphilis and wound healing; in India it has for the last 3,000 years of Ayurvedic medicine been used for wound healing, a mild diuretic, increasing concentration, alertness, as well as anti-anxiety and anti-stress; in the Far East it is used for treatment of depression, longevity, (in China it is called the "Fountain of Youth")
Often used as an active ingredient in tonics, oral slimming formulas, body-beautiful preparations, body firming products, wound healing, anti-aging skin care products
Besides its use as a general memory aid, gotu kola has become popular in the Western world for its calming effects as well as for improving concentration.
http://en.wikipedia.org/wiki/Centella_asiatica
http://www.ageless.co.za/herb-centella.htm
http://www.anyvitamins.com/centella-asiatica-info.htm
http://centella-asiatica.101herbs.com/

Echinacea Purpurea
Purple coneflower
Echinacea is popularly believed to be an immunostimulator, stimulating the body's non-specific immune system and warding off infections.
Echinacea contains active substances that enhance the activity of the immune system, relieve pain, reduce inflammation, and have hormonal, antiviral, and antioxidant effects. For this reason, professional herbalists may recommend echinacea to treat urinary tract infections, vaginal yeast (candida) infections, ear infections (also known as otitis media), athlete's foot, sinusitis, hay fever (also called allergic rhinitis), as well as slow-healing wounds.
http://en.wikipedia.org/wiki/Echinacea
http://www.umm.edu/altmed/articles/echinacea-000239.htm

Ginkgo Biloba
Ginkgo
Ginkgo has many alleged nootropic properties, and is mainly used as memory and concentration enhancer, and anti-vertigo agent.
It is used to promote mental alertness, improving memory and to treat asthma and also a role in male sexual functioning.
It is used internally to combat asthma, allergic inflammatory responses, senile dementia, to aid in mental alertness, improving memory, circulatory complaints and varicose veins.
The leaves are used to stabilize an irregular heartbeat and the seeds are useful for coughs with thick phlegm and urinary incontinence.
http://en.wikipedia.org/wiki/Ginkgo_biloba#Medicinal_uses
http://www.umm.edu/altmed/articles/ginkgo-biloba-000247.htm

Panax Ginseng
Ginseng
Used in connection with many conditions such as cancer, anxiety, colds, flu and for lowering blood levels of sugar and cholesterol, as in type 2 diabetes and high cholesterol. Most commonly known as an adaptogen, panax ginseng is currently being used in Asian countries to treat heart conditions and lungs, as well as for an overall health enhancer. Panax ginseng has been known to have a relaxing effect on the muscles in the lungs. The resulting airway relaxation may help to calm asthma symptoms and other airways constricting lung conditions. In some studies a combination of panax ginseng and gingko seemed to increase memory and thinking processes.
A crude fraction of American ginseng was found to inhibit the growth of human breast cancer cells in culture. At high doses, this ginseng fraction was also able to kill cultured human breast cancer cells.
http://www.nutrasanus.com/panax-ginseng.html

Pelargonium Sidoides
Rooirabas
The traditional use of Pelargonium sidoides for coughs and chest troubles may be explained by the presence of essential oils. It has not yet been established which ingredients contribute to its antibacterial properties.
Extracts of Pelargonium sidoides have clear antibacterial characteristics against Streptococci, Staphylococci and Bacillus cereus.
Pelargonium sidoides is also rich in phytochemicals, vitamins, minerals and amino acids that enhance the body’s functioning and protects it against diseases. Treatment with Pelargonium sidoides rapidly improves the typical symptoms associated with infections such as cough, fever, sore throat, fatigue and weakness.
http://www.herbalafrica.co.za/HerbsPelargonium.htm

Rosmarinus officinalis
Rosemary
Rosemary in culinary or therapeutic doses is generally safe; however, precaution is necessary for those displaying allergic reaction or prone to epileptic seizures.
The herb in folk usage signifies friendship, remembrance and loyalty, but in cosmetic application has a variety of uses.
Internally it is used for depression, apathy, nervous exhaustion, and headaches as well as poor circulation and digestive problems caused by anxiety.
The therapeutic properties of rosemary include that of tonic, astringent, diaphoretic and stimulant as well as reducing skin fragility
Topical use includes a help for rheumatism, arthritis, neuralgia, muscular complaints, wounds, dandruff, hair loss and reducing skin fragility while boosting the skin in general, since it has a great ability to increase circulation and also contains antioxidants which have anti-ageing properties as they reduce the damage caused by free radicals.
Rosemary helps to relax muscles, including the smooth muscles of the digestive tract and uterus. Because of this property it can be used to soothe digestive upsets and relieve menstrual cramps. When used in large amounts it can have the opposite effect, causing irritation of the intestines and cramps. A tea made form the leaves is also taken as a tonic for calming nerves and used as an antiseptic.
Use an infusion as a rinse to lighten blond hair, and to condition and tone all hair. Try mixing an infusion half and half with shampoo to strengthen hair. An infusion can also be used as an invigorating toner and astringent. Rosemary added to a bath strengthens and refreshes, especially when used following an illness.
http://www.gardenguides.com/plants/info/herbs/rosemary.asp
http://www.ageless.co.za/rosemary4.htm
http://www.cellulite.co.za/rosemary-extract.htm

Sceletium Tortuosum
Kanna/ kougoed
Tablets and capsules of Sceletium are being used successfully by a number of psychiatrists, psychologists and doctors with excellent results for anxiety states and mild to moderate depression; and they can also be used by the lay public as supplements to elevate mood and for stress and tension.
In addition to Sceletium's common use for the stress and mental fatigue of modern industrial living, Sceletium has been used as a natural supplement that: uplifts the mood; decrease anxiety; stress and tension; gives you energy.
Sceletium elevates mood and decreases anxiety, stress and tension, and it has also been used as an appetite suppressant by shepherds walking long distances in arid areas. In intoxicating doses it can cause euphoria, initially with stimulation and later with sedation. Long-term use in the local context followed by abstinence has not been reported to result in a withdrawal state. The plant is not hallucinogenic, and no severe adverse effects have been documented.
Sceletium is also being used as a natural anti-depressant that is said to be safer than many pharmaceutical alternatives. Individuals suffering from depression and anxiety can benefit from Sceletium.
http://www.sceletium.com/sceletium-uses.asp
http://www.sceletium.org/

Sutherlandia Frutescens
Kankerbossie/ Cancerbush
The Sutherlandia plant grows native in South Africa. It has been used for hundreds of years by the native population and, later, by European settlers, who all attest to it's effectiveness. Now, scientific trials are proving that the complex chemical compounds in the plant indeed do have application in the treatment of many serious ailments.
The indigenous, folk, and contemporary uses of Sutherlandia include use as a tonic for: enhancing well-being; immune support; longevity; stress, depression and anxiety; wasting from cancer, TB, and AIDS; quality-of-life tonic for cancers, HIV/AIDS and TB; appetite stimulant in wasted patients, but not in healthy people. Also: influenza; Chronic Fatigues Syndrome, ME Syndrome and Yuppie Flu; viral hepatitis; asthma and bronchitis; type 2 diabetes; mild to moderate hypertension; rheumatoid arthritis; peptic ulcer, gastritis, and reflux oesophagitis; hot flashes and irritability in menopause.
For many hundreds of years, the Zulu warriors returning from battle used the plant to relax themselves. Grieving widows used it as an anti-depressant to help them through their loss. The old Zulu word of "insiswa" means "that which takes away the dark", referring to the ability of the plant to help with depression and sadness.
http://www.sutherlandia.org/
http://www.sutherlandia.com/sutherlandia_frame.htm

Trigonella Foenum-Graecum
Fenugreek
Fenugreek is a bitter herb that increases milk-flow, stimulates the uterus, soothes irritated tissues, lowers fever, reduces blood sugar, improves digestion, promotes healing, and has laxative, expectorant, diuretic, anti-parasitic and anti-tumor effects. Fenugreek sprouts are also used to promote hair growth, especially in men.
Fenugreek is used internally for a variety of problems, such as to treat diabetes in adults (late-onset diabetes), poor digestion, gastric inflammation, digestive disorders and tuberculosis. It is also used for painful menstruation, labor pains and insufficient lactation. Men on the other hand benefit from it for loss of libido, painful testicles and premature ejaculation. It is often used for weight loss, anorexia and for poor appetite. In Chinese medicine it is used for kidney related pain - such as back ache, as well as premature ejaculation, loss of libido, painful testicles, hernia, painful menstruation and edema of the legs. In Ayurvedic medicine it is used for rejuvenation and as an aphrodisiac, as well as for digestive and bronchial complaints, gout and arthritis.
Fenugreek seed has been used for stomach upset, swelling (inflammation) of the upper air passages or throat, appetite, for lowering blood sugar, and for softening the stool. It also has been used as a gargle to relieve sore throat, and as an external dressing for swelling (local inflammation).
http://www.ageless.co.za/herb-fenugreek.htm
http://www.medicinenet.com/fenugreek_trigonella_foenum-graecum-oral/article.htm

Warburgia Salutaris
Pepperbark tree
In Southern Africa, the medicinal plant Warburgia salutaris is commonly used for the treatment of inflammatory and other diseases.
This species is highly regarded as an expectorant for the treatment of dry cough and as a remedy for colds, chest infections, sinusitis, malaria, venereal diseases, stomach ulcers, toothache and dermatological disorders.
As an expectorant or smoked, they are a widely used remedy for common colds. Dried and ground, they make a snuff used to clear the sinuses. Taken orally are believed to cure spots in the lungs. Both stems and root bark are a remedy for malaria. Powdered and mixed with water, they are believed to cure sores in the mouth.
http://het.sagepub.com/cgi/content/abstract/27/11/827
http://www.sahealthinfo.org/traditionalmeds/monographs/warburgia.htm
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6T8D-41C2RT3-P&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=32d0c7b5b94a055c34fbe3d07d4779e5
http://www.plantzafrica.com/plantwxyz/warburg.htm

Global tools enhance local exchange through community currency in an alternate economy

2009-02-16T00:59:00.000-08:00

So... the thesis - outline of issues to address as follows:

The thesis will look at the way in which Information and Communication Technologies (ICTs), traditionally renowned for enhancing global reach, can be used to build and strengthen local exchange systems using community currencies. I will look particularly at the Community Exchange System (CES), an initiative of the South African New Economics Network (SANE). The CES is a community-based, global trading network using an “alternative, parallel, local, community or complementary currency system.” The system is currently used by 123 exchanges in 17 countries, with Australia (35 exchanges), South Africa (23), America and

New Zealand

(20 each) most active. The relevance of the CES in today’s economic climate is stressed by its coverage in CNN Time’s business pages, where it is noted that “[al]ternative means of trade often surface during tough economic times.”

The Internet has long stimulated thought and discussion around the idea of an alternate economy based on reciprocal exchange. When Barbrook first noted the emergence of what he termed a ‘high-tech gift economy’ emerging in cyberspace in 1998 he was considered controversially leftist. Today the terms ‘giving’ the ‘gift economy', ‘reciprocity’ and ‘relationship economics’ are featured regularly in the mainstream media and technology blogs, all the more in the light of the ‘conventional’ economy’s plight.

To date however the benefits of this gift economy have been largely virtual, exchanging gifts of knowledge, information, ideas and comments. Examples of gifted ‘goods’ include contributions to the development of open source software, specialist advice published online, wikipedia, reciprocal comments shared on blogs, and in online social and business networks. Yet, despite the dramatic changes in social interaction and exchanges facilitated by online networking, and the evolution of what may be referred to as the “high-tech gift economy”, the potential of the Internet to really revolutionize economic systems has been limited, as the gifting involved did not extend beyond the realms of cyberspace.

By contrast to this global, virtual, gift economy that has developed online, the CES, which is closely related to the Local Exchange Trading Systems (LETS) model developed by Michael Linton in the early 1980s, is very much focused on physical, local, community-based exchange. Local trading systems have traditionally operated offline, posing obstacles in terms of administration as well as establishing sufficient ‘connectedness’ between members to facilitate easy exchange. The impact of the Internet has revolutionized their scope in a number of ways, including:

Reduced administrative burden of record keeping
Search engine functionalities for goods and services offered and required
Communication tools providing the ability to instantly connect with others’ wants and offerings
Networking tools to build community between users, in turn strengthening the network and the types of services that are exchanged. Social features were originally built into the CES trading site, but are now primarily concentrated in the the communityexchange.ning group. This forum encourages discussion and educates members on how to establish community exchanges in their area.
A web-based system allows for transparency, as users have instant access to each others’ trading records and account balances. This encourages a spirit of reciprocity which is essential in exchange systems where users can take out, but must also give back to, the ‘community pool’ of goods and services.
The geographical scope of a community exchange is extended, allowing for certain types of services (notably the virtual kind more commonly associated with the online gift economy) to be exchanged globally, and making it possible to use community currency while traveling, connecting with users of local currencies in distant destinations.

While the last point above notes the advantages of global scope, community currencies essentially retain a local focus. In this light the research will focus specifically on the Cape Town Talent Exchange (CTTE), which was the first exchange established under the CES network.

The principle of social justice forms a crucial foundation of the CES philosophy. In this regard the digital divide must be considered as a critical limitation of a ‘gift economy’ using tools only accessible to some. Yet it has been shown in the evolution of New Social Movements (NSMs) like the Zapatista in Mexico and the South African Treatment Action Campaign (TAC) over the past decades that even the disconnected can benefit from ICTs through mediators providing indirect access to Internet utilities. In a similar manner the CTTE has expanded the CES to include those without access to the Internet through the use of a parallel paper-based system on which transactions are recorded, and then entered into the web-based system by administrators. The thesis will explore such online-offline linkages, noting how the system aims to encourage community-building across the digital divide, and the extent to which it succeeds in doing so.

Hot & bothered

2009-02-07T04:00:00.000-08:00

Shwee... been slow...

A most magical last weekend at Origin festival, followed by a week of itching. Believe, possibly... finally... sandfleabites that haunted many party goers may finally be healing. And just possibly managed to not get my whole house infested as I somewhat feared earlier in the week. May be too soon to tell but so far at least I don't seem to have any new bites...

Still pretty stiff-backed tho - not sure whether from 3 days & nights of quite vigorous dancing, about 600km on the road to Agulhas and back on Wednesday, or my perhaps not too ideally heighted workchair & desk at home. Or perhaps even my bed though really hoping it's not that... hmmm...

Anyway, a little overwhelmed right now I must admit. Workstuff's really gotto be done - most notably the Agulhas project - assessing the social impacts of expanded public works programme (EPWP) implemented by SANParks on poverty relief in surrounding communities. Had a planning meeting with park managers on Wednesday that went down well. Now a preliminary progress report on activities to date along with fieldwork tools to be developed due in less than a week. So best get on with that... Then some weeks of fieldwork in the not too distant future. Promises to be quite an adventure - to be staying all by my lonesome in a mammoth historic old farm mansion that's just been renovated. About 30km from civilisation, the last 15 km along a dusty gravel road. Exciting stuff. (Having confirmed that there's at least some (though slow) wireless netconnectivity out there it should most likely not be too unbareably isolated and lonely...)

Should also be getting on with the studystuff - now the idea of reciprocity through generalised exchange across cyberspace, and more specifically in the alternate currency environment of particularly the Cape Town Talent Exchange, and more broadly the Community Exchange system in general is pretty fixed as topic for the thesis. But how to expand on that... hmmm... will require some serious thought and much more interaction with exchange participants.

And thenthere's the Cairo conference - funding confirmed. Still waiting for detail about travel arrangements. Much look forward to wander the streets of Cairo again, thouh be it only briefly. But that requires still writing the paper to be presented at the conference. Hmmm... Roughly concerning monitoring and evaluation of South Africa's population policy. Somewhat similar to something I presented in Denver last year, but definitely still needs some work to adapt, update, make more relevant for this conference, and also much shorter than what Denver proved to be way too much for way too little time.

So... those be the things to focus on. Any moment soon... Meanwhile I'm melting... Summer really is quite completely upon us - more so in the past 2 days than any others in recent months. Still with gusts of wind (one of which crashed a window yesterday. Just had that fixed. Also had my car washed this morning. Way overdue. But oh so lovely now - all clean inside and out like she hasn't been in... would say 'months', but 'years' may be more accurate... So, at least something constructive has been done on this heated day. Also washed some dished and packed away some clean laundy. Arbitrar tasks one might say, but these too have been... erm... somewhat overdue one might say... Now there's still the matter of the 'office-corner' of my li'l bachelor's tower pad. The corner I've somehow neglected to address in all recent attempts at housecleaning (few and far between as those have been.) But tja.. .this corner - completely swamped with papers and documents and a bunch'o otherstuff I really have no idea what exactly to do with. Some boxes to just stuff it all into might be handy right now. Alternatively a concerted effort at figuring out what's what and then deriving a plan for a place to put it all. Oi... not quite sure where to start really...

Guess the only way is to "just do it"... Perhaps a li'l bit'o external order might filter into psyche too and boost inspiration to get to the most uregent priorities of SANParks, community currencies and conference paper...

Any moment now... Really...

How online can facilitate an offline gift economy

2009-01-22T11:45:00.000-08:00

Tim O'Reilly's "Work on stuff that matters" recently struck to heart. Been faffing much with thoughts and ideas and reading oh-so-much-and-then-some about the High tech Gift economy / Relationship Economy and online networking and how it all pertains to the current economic crisis and and... And much as all these things indeed seem to 'matter', I was left quite overwhelmed at what I, personally, really could possibly have to add to all of this. Feeling quite out of my depth really. Also, much beautiful as these conceptions of an alternate economy evolving in cyberspace, I couldn't quite get how this e-volved economy based on relationships, reciprocity and exchange of informational and technological gifts can translate into actual bread and butter issues essential for survival. Which, as social development researcher/ consultant down at the southern tip of Africa is the type of thing that seems to me would really matter.

A g-chat with my dear frien Foom, who suggested I look around on .ning for local inspiration proved most inspiring when my curson stumbed on the Community Exchange Network .ning group, and from there to the CES exchange site. This is not the first time I come across them. Joined the Facebook group awhile back, and been intermittently following and in principle agreement with the SANE philosophy and principles behind LETS systems for years. So why this didn't strike me before one might wonder... But never mind. Now it has and for the first time in awhile I feel a sense of deeper purpose awakening with this research focus I'm to be developing into a thesis in coming months.

For here it would seem is a system that can, just maybe, translate the benefits of a new economy facilitated through ICTs into real benefits for real people, for some of whom actual access to these technologies and the world they represent is (and could remain for some while to come) unfathomable. And yet through the help of others like the CTTE bankers/brokers in Khayelitsha, Cape Town they can benefit from a system made ever so much easier through such technology.

So, I've joined the .ning group, created an account with Cape Town's Talent Exchange, added some offerings on the site, checked out some wants - earned myself some talents and went to a community market in Delft on Saturday to spend some. More on that later. It's late - much to do before this week ends.

EpsilonSD - how this blog got its name

2009-01-22T08:10:00.000-08:00

"Epsilon" is a word/ idea I've always held great affinity for for its symbolic value. Derived from the formal proof of mathematical limits, based on:

"For all epsilon greater than zero" (epsilon is always positive), "as epsilon tends towards zero" (epsilon is veryvery small - the smallest value you can imagine, squeezing up the tangent to the axis) "|f(x) - L|" (the absolute (i.e. always positive) value of whatever the function of 'x' you're trying to prove minus the value you're trying to prove it can never surpass but will tend to with ever greater values of 'x') is less than epsilon (i.e. less than this very small, positive thing that's as small as you can possibly imagine it but still the difference between the function and limit is smaller so it must be darned near zero so it might as well be the same and hence the limit...)

OK that's a lot of words for what mathematicians put ever so much more gracefully in a few symbols, but just to roughly illustrate the mathematical relevance of 'epsilon' - something by definition as small as you can imagine, but positive, the founding concept on which a proof for 'limits' (quite a lofty concept really) is based. The touchy feely social development researcher/ anthropologist in me just loves that. It makes me think of the Grameen Bank of Professor Muhammad Yunus. A huge benefit from a relatively so small input.

The SD... when I created this blog in 2007 I was partly toying with the idea of opening a cc through which to run the freelance consulting I was doing at the time. Never got round to all the admin part and ended up joining Southern Hemisphere (SHC) which turned out as perfect solution to still do what I was doing plus a greater range and variety of interesting work and loads of learning and team support without losing the flexi-freelance lifestyle.

At the time I was playing with a possible name I might give such a cc. 'Epsilon' had to be in there somewhere as it's been with me for years (remaing as relic and reminder of the mathdegree I did a decade ago before moving into social development consulting careerwise flowing from the BA I also did at the time.) But I had to make it somewhat relevant to the work I thought to be promoting if indeed this blog was to serve as quasi-website for this up&comin cc of mine. So the SD would have stood for 'Social Development' in a way. I'm not so fond of the term 'social development' and whatever connotations it might have in many minds (including my own in many ways.) But it most accurately described the type of work I do. At the time it was mostly social impact assessments (SIAs) as part of environmental (EIAs) for various big developments - power stations, golf courses, mines etc. - Not exactly the most 'social development' oriented clients one could boast of but in a way I justified it (and still do when those projects come in though SHCs clients have generally been more 'goodly' NGO's and government/ donor funded projects geared to human upliftment ('development') in some way or other.)

Going with the 'mathematical' theme helped me get over 'development' connotations... I thought a possible business card would have the ESD all in Greek capitals. With S = 'Sigma' which mathematically signifies "the sum of" (unity, coming together, adding, joining etc.), and D - 'Delta' - the symbol for "change". So EpsilonSigmaDelta would really, as my personal 'mission statement' refer to a 'very small, positive thing', 'unity', and 'change'. (The nitpicker in me wasn't entirely happy with the order of these symbols - SE=D might make a more powerful (well, more 'mathematically correct' anyway) statement: "the sum of very small positive actions resulting in change" - but I kinda made peace with the compromise - "very small positive actions, joined together, result in change". And since I hadn't actually done any math since 1999 and don't move in circles where the position of 'Sigma' makes any difference whatsoever, I figured it could work.

Never did start the cc so never needed the name. Or the 'website' for that matter. In retrospect I could probably have started using it as a blog before but... got caught up in other things I guess... Now that it's revived and I suddenly see the purpose of such a space, guess the name remains as relevant as ever to encaptulate what I'm about - well... try to be about... we all have our moments and the ideals we strive towards. Guess this is mine. (Along with my motto's for daily living: "observe; be aware; don't judge"; "do to others as you'd have them do to you"; "from each according to abilities, to each according to needs" and the Serenity Prayer ("God grant me the serenity; to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference. ")

hope?

2009-01-18T00:45:00.000-08:00

On finally (somewhat reluctantly) waking this morning, I fumbled my way to laptop, logged into email. Nothing too urgent on this Sunday am, so skimmed through some newspaper headlines. Which, I'm happy to say (for this day) suddenly seem unusually filled with possible positivity:
"Gaza skies calm as Israel halts offensive"
"Optimism over DRC peace deal"
"Washington gears up for dawning of Obama era"

I'm not as naive as to think the world's problems are over, that peace will reign into the future or that all is well in any way, but, just for today anyway, it's quite nice to, for once, scan through headlines that actually bring a glimmer of hope rather than despair. (Reading a bit further into said articles for yet another glimpse of the extent of carnage wrecked in Gaza in recent weeks, and onto some others e.g. "Hungry Zimbabweans see even leaner times ahead" quickly reminds that all is still far from rosy in this world we live in.)

But for a personal perspective on this day think I'll try cling to the glimmer of hope (elusive though it may seem) for the moment.

Reciprocal relations between role players in social networking

2009-01-16T09:35:00.000-08:00

What I've been thinking much about lately is how 'reciprocity' (you give something you gain something or, conversely, you get something you gotta give something) works in the online networking world. Facebook in particular.
Who all contribute to Facebook? What do they get in return?
Who gains from the service? What do they give in exchange?

So, looking at the various role-players involved.

There are the founders and ongoing creators of the site. Mark Zuckerberg and those who work with him.
Then there's 'civil society' - the users. All ~150mil of them - can imagine there are quite a range of motivations and uses there.
And business - advertisers, partners (notably Microsoft), those investing in the service for future profit motives.
And when we have civil society and business, the natural flow of thought leads to the state sector. One can pretty much guess what government agencies could gain from a massive and growing database of identity information willingly submitted by users. What are they prepared to (/ do they) give in exchange?

I'll be exploring these ideas further in months ahead.

random ramblings to overcome the blogofear

2009-01-16T07:20:00.000-08:00

Having started this blog I suddenly find myself quite fearful to do anything with it. What to do, what to say? What if people see? (Wait... they're supposed to see it) What if they dont? What if what's on here drives them away? What if, what if? All quite ridiculous really. So... to just get over this damned phobia to say anything I'm going ahead and just blabbering out what comes to mind in this awkward moment. What got me to this place and where I am now. Beyond which will see how this space can be best used into the future.

Once upon a life I was very shy and fearful of people. Did some travelling, met fellow travellers who seemed less scary for the brevity of contact, exchanged addresses, sent and received the odd postcard. One of them contained (my mother's at the time) email address. About 7 months later a travelfriend met in a desert oasis, also back in home territory, responded via (her mother's at the time) email. Over the next 10 years (a few email and many physical addresses later) we had exchanged about 2000 pages (she printed it all at one point) of our most intimate thoughts, feelings, experiences, hopes, fears, desires, joys and woes. In a way it felt like the first 'friend' I ever had. Growing more comfortable to share of myself in the relatively 'safe' space of email started to make actual 'talking to people' back in the real world a lot easier. Learnt much about general 'girlie chitchat', something I'd always felt quite inadept at, in this manner. It also paved the way for numerous other friendships created and strengthened through cyber communication.

When blogs became a craze I briefly considered the idea. Some initial inhibiting factors were slow and irregular netconnections, though could certainly have gotten around that. More truthfully, I was sharing my life in diarylike detail through email every day. Couldn't imagine sharing with 'the world' the things I did in this private space. Shyness surfaced again. How much and what to expose to whom in what way? And so the years went by.

My daily diarystyle email relationship since faded as, about 12 years down the line, I guess both our lives just became too full of other things and people, and sharing every detail with one other across the world somehow less of a priority. By this time there were a number of others I emailed reasonably regularly, occasionally going in depth on certain issues but more and more intermittently. Having grown more comfortable with face-to-face interaction, the urgency to communicate through the computer had diminished as nurturing RL friendships became a priority.

Along came Facebook. There were other networks before it, but none of them had had particular impact in South Africa, hence they never really crossed my path. When FB initially did I avoided it. Feeling mostly that I'm in touch with enough people in RL (where, in addition to a much more active than it once was social life, I work as a social development consultant - talking and listening to people (and writing reports about it) is what I do for a living) and through cyberspace (email based). The supposed selling point of getting in touch with old classmates... hmmm... alas can't say highschool sparked any great nostalgic desires to reconnect with people whom I'm pretty sure wouldn't have called me 'friend' then.

[First a little aside: I'd taken up studying (verymuch part-time) again in 2006 after a ~6 year break. MPhil Anthropology requiring completion of number of coursework modules and a thesis. Browsing Anthro journals for a suitable topic for assignment 1 I stumbled on an article referencing William Gibson and Neal Stephenson. I love those guys. The Anthro prospect suddenly brightened from something most likely related to some third world development issue (which, don't get me wrong, I'd been happily engaged with academically and professionally for about a decade), to something... different... What exactly it would be was unclear at the time (still is a bit I must confess), but that it would somehow relate to human 'E-volution' using Internet technologies in the information age. Used this as a guideline for all subsequent modules, integrating issues of identity, relationships inequality (the digital divide), power dynamics (ala Foucault), public spheres (Habermas), and reciprocity (notably Mauss) covered in the modules with elements of cyberspace. Hoping to eventually integrate it into something coherent for a thesis (which is where I'm sitting now...) Along the line I submitted one of the assignments (looking at potential for Public Access facilities in city libraries to cross the digital divide, which, at the time, I'd thought to look at in more detail for the thesis) for a Communities & Technologies conference in Michigan. It was accepted and seemed a perfect opportunity to try get myself a US visa. For all the travelling of years back had never been very far off the African continent, and if indeed I was going to be studying issues around ICTs' impacts on humans getting a glimpse of life in a place where these technologies are more pervasive than here on the southern tip of Africa seemed appropriate. Got the visa and a fortunate wellpaid social plan for a diamond company along with some assistance from the anthro department helped pay for the ticket.]

So there I was, heading to a conference on 'Communities and Technologies', when another FB invite popped into my inbox. Sensing (rightly) that better understanding of such social networking platforms would likely increase my appreciation of the conference, I signed up. Within weeks the dreaded nightmare of old school acquaintances who found me via the one link I didn't mind remembering, now listed as 'friends', along with the 2-3 line message or 3 with each - 'hi, how are you, what've you been up to' etc., then nothing more had materialized. Initially with some rather disconcerting flashbacks of teenage angst. Seemed a good way to just come to terms with and get over it all. Have subsequently slowly collected more friends, some i know in RL, others I don't. Have sent and accepted some requests from strangers who have seemed potentially interesting. Some of those I've now met face to face, some I've conversed with upon occasion online, others are just 'there'. Have added and experimented with applications, removed some, some I still check, others are just there.

Almost a year ago I thought to change the thesis focus from public access issues to look at social networking, particularly FB, since it's the one I've been using most frequently (though curiosity had me joining a number of others to see what they're all about.)

[When I way this studything has been happening verymuch parttime I really mean it. Social development is a booming field here in southern Africa, and it seems not too very many people are doing it, so, most of the time, I'm pretty fulltime tied to consulting assignments. All the more so in early years as independent consultant and now with a small company on a commission structure where basically, when there's work (which there always seems to be a lot of) you do it. Also been moving around quite a bit, establishing new reallife social networks and ties in new places, which in itself can be quite time-consuming. So really, must confess, the online networking research has been very much on hold for most of the past year.]

New year, new motivation, drive, etc. Now it's really gotto be done. So I've spent the past weeks googling and quite obsessively reading articles and, mostly, blogposts on issues related to FB, social networks and networking in general, and a range of most fascinating, inspiring, and somewhat overwhelming, related issues. Feeling all the more insecure while doing so on the one hand, thinking 'What am I getting myself into? I don't know much (anything really) about all this.' While on the other hand growing ever more inspired as ideas filter and digest and spark thoughts leading to new ideas and possibilities to explore and... I'm sure any researcher knows the story. And really when I look over the past ~10 years of my life as consultant there are very few (if any) projects I've known much about when starting out. (Much as I've been plodding away at this M for years, guess in many ways I really am only just starting out now, with some pretty serious motivation to get it done.) But that's the whole exciting thing about doing research - delving into the unknown to illuminate unfamiliar territories.

So... in a nutshell (which this whole random rambling post so hasn't been so excuse the irony) I realized that if I'm to have any understanding of social media and networking at all I must have a blog. That it could be a platform for sharing ideas (once I start formulating them.) More relevantly perhaps it could be a place for such formulation to take place. Also to link to the so very many so very fascinating blogs of others that have kept me up days and nights over the past weeks to get up to date on what's going on in the field right now. Most importantly to gain more in-depth understanding of the online networking universe.

Having created this blog now (technically signed up in 2007 but never been back), I was suddenly seized with panic as to 'what to put on it'. For all the emailed communication and the FB world I'd grown so comfortable in, this really is a 'whole new world' of sorts. One with its own etiquette and uses and what to say/ not and so forth to get into. And so... to break the ice... I've rambled on here to somehow make sense of how I've come to this and what's causing this underlying fear. Knowing a pretty personal mini-dissertation like this most likely won't be read. Somewhat embarrassed at the thought that it might, feeling ever-so-self-aware about pressing publish to expose my drivel to the world. Yet feeling perhaps that's really just the way to treat this space for now - to let out stream-of-consciousness whatever comes to the mind, put it out there for the world to see (if it wants). And take it from there.

Guess the hesitance is all around the 'popularity' issue. The fact that all this social media, profiling, publishing of whatever comes to mind is all so geared around following and followers and how one appears to others. The fear that people will actually read what I had to say. The fear that they won't. The fear that it will matter, one way or another. Having come this far (still unsure whether to click the 'publish' link) I wonder whether it does? How much? and to whom?

Nuff for now. Perhaps something more specifically topical/ relevant/ concise when I do this again.

Devil's Peak from the tower I live in

2009-01-16T04:27:00.000-08:00

Day 1

2009-01-16T03:58:00.000-08:00

Created this blog (well, signed up)... quite a while ago. Never used it.
Never felt I had anything to share in such a space I suppose.
The time seems appropriate now. Supposedly doing a thesis on online social networking and doing so without first-hand experience of blogging suddenly seems quite impossible.

In all honesty said thesis has been bit on hold for the past... erm... while... Been busy(busybusy) with other things. Still am. But it must happen now. And so I must blog...

(Still not sure what it is I'm to say, but figure when it comes it be appropriate to have a place to do so. Meanwhile get brain, fingers and keyboard working together in some synch and trust the 'something' will manifest itself i guess.)

For now still figuring out the settings...