A series of articles, inspired in ongoing alternative economical proposals, advancing a comprehensive market and monetary framework to inject solidarity to the desperados, and building at the same time the embrio of a new economy.
Unemployed should be strongly encouraged to create their own, legal, micro-enterprises, for profit enterprises, preferably co-operatives. Entrepreneurship should be strongly encouraged. Insulae should provide support, advise and training. As soon as possible, microcredit schemes or investment mechanisms should also be put in place.
We assume that these co-operatives pass all the legal validations. They have a VAT, sign legal working contracts with the employees or cooperative workers, pass work inspections and pass sanitary inspections. They only differ on how they trade.
We explain below the economic principles and the money circulation.
However, Insula Cooperatives may need to work for a time in a mixed economy. That means that only a percentage of the total provisions of materials, services and payslips, will be traded in community currencies. It means also that only a part of the sales will be initially traded in community currencies.
Many countries have a legal limitation to the salary that can be paid in kind. This sets a legal limit to the volume of business that can be run within the new monetary system, in which currencies represent goods but will not comply as legal tender money for a long period.
The only almost absolute prevention is not to acquire debt in the Fractional Reserve Banking world, or limit it to the minimum necessary.
General enterprise model
Nevertheless, to explain the principles, we start with a simple approach, assuming that all business happens with community currency.
- Each enterprise issues its own Community Currency worth the redemption of the total sales for the next period.
- It pays with this currency the labour, the raw materials and supplies and the services.
- It uses a part to pay the taxes.
- It reserves a part for the foreseen profit. A profit is needed cause we need accumulation to launch new enterprises.
- The payees use this money to go to the market and exchange it for currencies representing the goods they need. They exchange it with people that need the goods this company produces.
This is the basic principle.
In practice, if we talk about micro enterprises, this may make the money exchange market too cumbersome, and enterprises may associate to use a union currency along those providing the same kind of products or services.
All Insula businesses work with the same economic principles and the same monetary system. What is described hereafter applies for the Desperado Jobs, the Insula Social Enterprises, the Cooperatives and even the Insula Administration dealing with the taxes and the citizens salary.
- The Desperado jobs are paid with bonds representing goods of the Associated Industries they work for. They trade these bonds with other people inside the Insula market.
- The Insula Social Enterprises pay their volunteers with their currency. For example, social cantinas distributing free meals pay their volunteers with bonds representing meals. The volunteers exchange them with desperados that have been paid their citizens salary by tax money in order to be able to pay their Insula taxes. At the cantinas, the desperados pay with these bonds for meals.
- The Insula administration pays the citizens the citizens salary in tax currency, the highest amount devoted to the unemployed, and collects in the tax currency the taxes from all Insula economic agents.
Priority sectors: Urban agriculture
Urban agriculture is the practice of cultivating, processing and distributing food in, or around, a village, town or city. Urban agriculture in addition can also involve animal husbandry, aquaculture, agro-forestry and horticulture. These activities also occur in peri-urban areas as well. Urban farming is generally practiced for income-earning or
food-producing activities, though in some communities the main impetus
is recreation and relaxation. Urban agriculture contributes to food security and food safety
in two ways: first, it increases the amount of food available to people
living in cities, and, second, it allows fresh vegetables and fruits
and meat products to be made available to urban consumers. A common and
efficient form of urban agriculture is the biointensive
method. Because urban agriculture promotes energy-saving local food
production, urban and peri-urban agriculture are generally seen as sustainable agriculture. The recognition of environmental degradation within cities through the relocation of resources to serve urban populations has inspired the implementation of different schemes of urban
agriculture across the developed and developing world. From historic
models such as Machu Picchu to designs for new productive city farms, the idea of locating agriculture in or around the city takes on many characteristics .
Hydroponics has developed a wide spread industry of hydroponic parts used by the marihuana home cultivators. The same parts can be used to cultivate tomatoes.
Priority sectors: Micro-Renewables
Renewable energy is for many reasons another strategic sector. Micro-renewables programs are eligible for national and European funding, like the European Regional Development Fund (ERDF) .
Micro-renewables has still low barriers for new entrants. Enterprises with a DIY (Do it Yourself) services approach using low cost material like home appliances waste and/or expensive parts bought by the customer are still on time to enter the market with very low capital requirements. Most what is needed is an investment in training and small workshops.
Priority sectors: Telecommunications
As recent events in Tunisia, Egypt, and Libya have illustrated (and Myanmar demonstrated several years prior), democratic activists around the globe need a secure and reliable platform to ensure their communications cannot be controlled or cut off by authoritarian regimes. To date, technologies meant to circumvent blocked communications have focused predominantly on developing services that run over preexisting communication infrastructures. Although these applications are important, they still require the use of a wireline or wireless network that is prone to monitoring or can be completely shut down by central authorities. Moreover, many of these technologies do not interface well with each other, limiting the ability of activists and the general public to adopt sophisticated circumvention technologies .
Rather sooner than later, Desperado Insulae will be the goal of different kinds of attacks by the system. Very early, Insula enterprises should be created to
put in place alternative telecommunication services that offer communication continuity and safety for the Insula citizens under eventually very severe attacks. These services are to be considered strategic. Transaction services should be guaranteed by them, to ensure economy continuity.
New monetary systems
system proposals are blooming. One thing is clear: we must get rid of the
Fractional Reserve Banking system (FRBS).
For the state
money, several proposals exist, like the monetary reform proposed by the
American Monetary Institute  or the very similar NEF Creating New Money - A monetary reform for the
information age .
In both approaches the state issues the money (Seigniorage) and puts it into
circulation for purposes not yet agreed (public spending, replacing public
debts, interest-free loans, etc.). Some others, like Digital Coin , which foresee a
proliferation of barter systems in form of Credit Coin, see the state money as
one more amongst other Credit Coin systems, the money issued by the state to pay
public spending and collect taxes, ideally with currencies by country, state or
city, much in line with a localization of economy.
"little big bang", when the legal tender money moves away from the
Fractional Reserve Banking, is going to happen at the end. I almost all
proposals, Parallel and Unofficial Currencies, play a role before and after the
50 mark from Jewish ghetto in Łódź 1940
There is the increasing
use of non-official currencies, quasi-currencies and vouchers, initiated by
businesses and communities. Business examples include WIR (the currency of a
co-operating group of Swiss businesses). Community examples include several
hundred LETS (local exchange trading systems) and similar schemes like Time
Dollars and Ithaca Hours  .
There is no
need to arrive at the final clarity about how all this will be set in the
future. Probably the right balance between state currency and parallel
currencies will become a non controversial, very practical, monetary policy
issue, once that the Fractional Reserve Banking is abandoned.
What is clear
is that the new economy islands will need to work with this new money, having
probably several currencies.
Local Exchange Trading System currencies
trading systems (LETS), also known as LETSystems, are locally initiated,
democratically organised, not-for-profit community enterprises or local for
profit companies that provide a community information and transactions services
for members exchanging goods and services by using the currency of locally
created LETS Credits . Historically, they had a boom at the
financial crisis of the 1930's. Hundreds of LETS systems exist today, many
promoted by governments. In Africa, MobileMoneyAfrica  reports
14 million users.
should be as little dependant of a central server as possible.
One of the most
convenient and consistent definitions of LETS credits can be found at the Digital Coin
mainly because it´s a conceptual explanation clean from technical implementation
details. In particular, LETS credits have a very comprehensive description in
the Document "Digital Coin – Bejond Money"  where the definition of the Credit Coin applies especially well. To make the
long story short:
- Each enterprise (or association of
enterprises) issues each year a number of LET CC, or Credit Coins,
expressing value equivalent to the foreseen sales.
- Every Coin has an expiration date,
not too far from the end of the commercial cycle. LET CC cannot be
accumulated. They expire.
- The enterprise LET CC, or Credit
Coins, are only redeemable in goods or services of the enterprise. The
value at the Coins is expressed in terms of quantities of goods or
services of the enterprise. When the enterprise produces a range of
products or services, each of them may have a different price, also
expressed in that particular coin or currency. Company ACME expects to
sell products they fix to have global value of 1.000 ACMEuros. ACME issues
1.000 ACMEuro coins. Production of product A is 50 units priced 10
ACMEuros each, production of product B is 100 units priced 5 ACMEuros
- Monetary theory  can be applied very straightforward to find out the optimal dimensioning
of coins to be issued.
- These LET CC are spent to pay all
suppliers of the enterprise, labour, machinery, consumables, etc.,
including the profit, if any. The profit part requires some elaboration
not worth expanding here.
- The suppliers use this particular
currency, as any other currency, freely and anonymously in the market. It
is voluntarily accepted (or rejected) based on the trust (or mistrust) of
the issuing enterprise.
- Finally, the consumers of the
products or services of the issuing enterprise will seek these coins in
the market, exchanging them with other currencies.
- There are two pricings involved in
this market, the price of the product expressed in the enterprise Credit
Coin, and the price of that particular Coin in the coins exchange market.
The benefits of
the LET CC, is that "Credit Coin is
directly backed by real products and services, not an artificial intermediary
of value like gold or silver. And, the Issuer of Credit Coin is only
responsible for providing its own products and or services in return for its
Credit Coin, never “money” in any form. This is a very important point. In the
Credit Coin System, an Issuer’s ability to honor its credit is never dependent
on the general availability of “money” in the economy, the way the ability to
pay back bank loans are. The Issuer’s sole responsibility in issuing Credit
Coin is that the Issuer must be able to redeem its own Credit Coin with its own
products and/or services."
In order to
facilitate the coexistence of different currencies at multiLETS economy
islands is important is that all LETS
currencies express the commitment about redemption of goods or services in the
same common format, like, for example, a Ricardian Contract.
Describing digital value for payment systems
is not a trivial task.
Simplistic methods of using numbers or country
codes to describe currencies, and ticker tape
symbols to issue bonds, shares, and other financial
instruments soon run into shortcomings in their
ability to handle dynamic and divergent demands.
The seemingly arbitrary variations in the
meanings of different instruments are best
captured as contracts between issuers and
Thus, the digital issuance of instruments
can be viewed as the issuance of contracts .
In the simplest possible terms, a Ricardian
Contract is a formatted document
that is both human readable and program
parsable. It identifies a Legal Issuer and
an Issuance Server, and includes (OpenPGP)
keys for those parties. The document
is signed in (OpenPGP) cleartext form by the
Legal Issuer's contract signing key. A unique identifier is formed by a canonical
message digest (hash) which provides
an unforgeable link to the accounting system .
In the market
cases we have discussed for the desperado islands it works very well.
- At the Osmotic pump of value
business, volunteers are paid with Credit Coins worth services of the NGO
they volunteer for. They
go to the exchange market to buy desperado island taxes CC to pay their
taxes and get their civil rights.
- At the Desperado employment business,
workers are paid with CC of that particular enterprise association. They
spend whatever they need in these products and with the rest. They go to
the exchange market to get CC to buy other goods.
- At the internal barter of services
business and at the internal barter of goods business, probably all what
is needed is the CC used at that market.
is a long tradition of on-line banking with Community Currencies, and there is
plenty of software development and open source available programmes.
proportion of desperados will not have the skills or the means to deal with
electronic money. The model is conceived as electronic, supported on wallets at
PCs, tablets, mobiles or whatever, with very strict data modelling rules, but
with a version in paper vouchers as well.
fact, and until a number of enterprises is running at the Insula market and the
relationships are understood intuitively, probably at the beginning its safe
to issue the currency contracts electronically but the circulation is all in
paper vouchers. That is, to conceive the Community Currency as electronic
by design but with a stamping of the electronic records in paper vouchers.
option to be considered is to avoid a central printing and print shop, start
with an electronic initial distribution, and let the HOLDERS decide when they
convert their money into printed paper vouchers printed at their office or home
traditional approach to digital CC is to keep a central database that can be
accessed remotely at the PC via the internet, and lately also mobile. The
central database keeps a record of all account balances of all participants and
the transactions are managed through this database.
has several drawbacks:
- It is vulnerable. It can be easily attacked and dismantled.
- It works on totals of the balance, as an annotation on a
record by user indicating the current total. The time depreciation and
extinction that is so substantial to Community Currencies is poorly managed. All
money of the same currency is mixed up whatever its time of issuing. Time is
better managed, like in paper, in individual "coins", that have an
issuing and extinction date. The contract may change slightly at each issuing.
For example, the description of committed merchandises may slightly change by
season or year.
- Transactions are not anonymous. This is not a severe problem
in local currencies.
is an intensive development by the crypto community on P2P alternatives of
totally encrypted, totally anonymous, totally P2P digital coins, the best known
a local economy, the security requirements are not as high as for electronic
money aimed at the global economy. Each Insula decides the security
at least one of the parts of any transaction is known, that is, the legal
issuer that commits his products with the currency. We can take advantage of
this to simplify the systems. For example, the full text of the CONTRACT can be
provided as a link to a site where the issuer keeps it safe and public. There
is no need to sign it digitally, its available at the issuer server.
are plenty of possible software and web technologies settings that can be used
to support the currency, the accounts and the transactions. W3C approaches and
tools are strongly recommended in order to guarantee a clear and homogeneous
semantic, that is, what the money actually means, and eventually provide
legally valid proofs.
also permits transactions with discrete quantities (coins), and transactions
that do not necessarily pass any central server. A simple .RTF, .DOC or .ODT
document, a document that can be send by email as an attachment to a file,
containing an .XML file able to be exported to a personal wallet, or just saved
at a particular directory, and digitally signed, will do the job.
finally it allows for different levels of security, some of them with very
simple and generic implementations like standard digital signature of
LETS have been traditionally protected against double spending by adding handwritten signatures on
the paper vouchers at every new transaction, so that any double spending can be
easily and quickly traced back to the "replication branch". The same
approach can be taken electronically. Each HOLDER can add its own digital
signature of the “coin” or “voucher” as it arrives. Double spending is not 100%
avoided, but can be very detected, - as soon as vouchers with the same serial numbers
are redeemed-, and easily traced back. Additional security may be added by encryption
and authentication of the emails sending coins.
what is needed as transaction tool is a common digital signature system at every
Capital, investment and loans
Sooner or later, the Insula Enterprises will need to do
investments of small scale (say a little truck), and increasingly of larger
scale. Sooner or later there will be a need of Banks lending money, be it in
the form of microcredits.
After all, the Fractional Reserve Banking crisis, is not a
crisis of money circulation. It is a crisis of accumulative creation of money
out of nothing. Putting in place Community Currencies dos not solve the
problem, just anchors the liquid money into goods, making the gambling more
Community Currencies are not suited at all for capital,
investment or credit, as they extinguish in the period of one production cycle.
Another type of contract is needed. In the Digital coin Draft proposal  it is said that "Shares in the
enterprise is the obvious answer for venture capitalists. “profits” seeking
further investment would be channeled into long term equity investments in
Issuers and investments of all types in non-Issuers, including new enterprises
lacking a track record that would allow them to be Issuers themselves."
We have already seen that, even at a one production cycle,
these profits are better saved at another type of currency, with the properties
of something like BitCoin: detached form concrete goods, detached from a production
cycle. This applies even stronger if the value has to travel to another
industry and longer terms.
In the long run, builders of large products or constructions
could pay with their own currencies with their own build-in long term timings
for redemption , obtaining like a smoothed social lending of all participants in the value
chain. In the Digital coin Draft proposal  it is said that "Instead of
additional bank financing, as is the current practice, special ‘Investment
Coin’ could be issued."
However, at an initial stage we will need to import these
expensive equipment from the outside world. This requires that the investment currency
can be EXCHANGED in the FRB world by FRB currencies.
In summary, it looks that for Capital, Investment in expensive
products to be bought outside, Savings and Loans, we need another kind of
- Is detached
from a concrete good or enterprise
no extinction date
be exchanged in the global market of currencies but is independent of any
to be encrypted to be suited for global operation
All in all, a good candidate to play that role looks to be
BitCoin . Note, anyhow, that BitCoin does not represent any good, does not embody any Ricardian contract committing products or services, and is therefore not suited for internal Insula barter trade.
Crypto-Coin used to spare the profit and sign transactions
The for profit enterprises or cooperatives operating in the new economy, in a system based on currencies representing goods, the money to pay the profits has to be put in circulation in CC at the beginning of the cycle. Instead of paying the stakeholders, we propose to invest in a Crypto-Coin like BitCoin , use them to feed the transactions circuit as a "transaction tax", and redeem them at the end of the sales cycle to pay the stakeholders.
This transaction tax feeding a parallel circuit at each transaction may provide an additional channel to sign all transactions, to protect against double spending, without the complications of a local P2P crypto-system and without the need of a central server.
Desperado registry and citizenship
We foresee that
there will be as many LETS systems in any community (a new economy island) as
people find useful: large and small systems, some related to products and some
based on hours, some charging "tithes" and some not, some with
"credit" limits and others without, and so on. This leads us to the
design and implementation of what we have termed multiLETS, which includes the
introduction of registries to meet the diversity of needs within the community.
However, electronic wallets, to be convenient, would need to be one per person.
These wallets would require then a Registry  which is independent of the particular LETS used for a transaction. The
Registry maintains a list of people who wish to maintain their personal money
accounts by using the services of that Registry. The list includes name,
contact address, phone number (where appropriate) and a short name tag to help
with reporting and recording of transactions (if need). This Registry has to be
kept by some authority of the island.
transactions can be made, if needed, in full anonymity, using a LETS so called public key
address (an identifier). No one but the Registry will know the correspondence
between the person and the address. The registry does not need to know about
the transactions. If the transactions are managed by the P2P network, the P2P
network has only to certify transactions between public keys.
In a way, the
registration gives the citizenship to the new economy island. The registry
could extend ID cards or desperado passports showing your citizenship. Nothing different as the affiliation card to a party or a Union. People
could use this passport at voting, debating, posting opinions. The citizens
status may be graded or ranked according several civil rights that can be
bought paying the corresponding taxes.
Each island may
define who deserves the citizen’s income pay, but a good approximation could be
any unemployed person registering. Desperados deserving the full or part of the
citizen’s income pay monthly their taxes to renew their full democratic rights.
People at risk,
like people at risk of being expropriated of their homes, may win LETS by
participating into actions to support others, and pay a community insurance to
guarantee they get all the support when and if their turn comes.
supporters, net solidarity providers, may pay their taxes with the LETS they
receive as payment for the time spend at volunteering, the goods or money they
give as donations.
In this way, we
create a current of "immigration" into the desperado island
Insulae and currencies
has to find out how to define the landscape and frontiers of each island and
corresponding citizenship, together with the rights associated with the
the importance at the Great Transition of the "Great Localisation and
Engagement", chances are that the most effective approach is the
geographical approach. The region around a city looks promising. The movement
has also chosen the territorial criteria as the preferred criteria for the
citizens agora and "asambleas".
currencies to use at each desperado island is a matter of good economy
management. Probably a good start is issuing multiple LETS close to the
granularity of the solidarity institutions, in order to have a close monitoring
period to analyze how it works, to slowly progress towards more abstract barter
markets. Even a currency per NGO, association, Union, industry, should not be a
problem if we have a fluent exchange market, and if the electronic money uses
the same or interoperable personal wallets.
exchange rates should not be fixed. Each island may provide with a market,
online and physical, for the exchange of the multiLETS employed in the island.
This will smooth the management. The desperados will fix the value they give to
each of the services represented by each LET currency.
Taxes and citizens salary
The fixing of
the citizens salary has a very special role to play. At the far end of the
desperado citizenship we have to figure out the extreme case of people that
have cannot volunteer, cannot get desperado employment, have no services to
barter, and have no goods to barter.
the largest amount of citizens salary. The currency to be used cannot be other than the currency used for taxes, as they do not participate as provider of any other issuing institution. The total amount of citizens salary in form of tax currency received by the extreme desperado cases has to be one part of the value of all net surplus of goods injected to the system by the osmotic pump business. Taxes guarantee that part of these goods is redistributed to the extreme desperado cases.
Taxes can take the form of goods donations or money donations to the volunteers from the outside world. Money donations would be converted into the local taxes currency. However, in times of crisis, the quantity can remain low.
Much more valuable is the volunteering time. An estimation of volunteering capacity can be taken from the statistics published by the European Foundation for the Improvement of Living and Working Conditions - Second European Quality of Life Survey – Participation in volunteering and unpaid job – 2011 .
taxes money gives them the unique opportunity to benefit not only form the
products and services of the charity NGOs, but also to get products from the
enterprises running desperado employments and services and goods at the other
We are not going to make any comment about the political form of the Insula governance. At its constitution, it´s clear that all Social Enterprises, cooperatives and SME associations taking part should take a role. It seems also reasonable that they write a kind of “Carta Magna” describing the principles.
The only additional recommendation to be made is that they plan the jump very carefully, in special by making very detailed business plans modelling how the economy will behave in the short and in the longer term.
By Social Enterprises we understand Third Sector
enterprises, also called non-governmental organizations (NGO), that is any
non-profit, voluntary citizens group which is organized on a local, national or
international level. Task-oriented and driven by people with a common interest,
NGOs perform a variety of service and humanitarian functions, bring citizen
concerns to Governments, advocate and monitor policies and encourage political
participation through provision of information.
Many reports and studies exist, most of them  agreeing that the social enterprise remains a very broad and
often quite vague concept. Many reports would also agree that there is space
for improvement in the accountability of such organisations . Of course, most will have totally correct audited accounts. However, in
average, we have less information or performance indicators about their outcome
in goods that are generally not measured in money, and even if they can be
expressed in money.
There is no doubt that this lack of transparency is a strong demotivator for participation.
Even very comprehensive reports like the VOLUNTEERING IN THE
EUROPEAN UNION , contain very little information about the economic dimension or value of this
volunteering, given for free. The Johns Hopkins University Center for Civil Society Studies (CCSS)  developed the first-ever internationally
sanctioned approach for gathering official data on the amount,
character, and value of volunteering. In March 2011, the ILO adopted
the Manual on the Measurement of Volunteer Work . The European Volunteer Measurement Project of the EUROPEAN VOLUNTEER CENTRE  is promoting the implementation of the manual in Europe.
One exception is the statistics published by the European Foundation for the Improvement of
Living and Working Conditions - Second European Quality of Life Survey –
Participation in volunteering and unpaid job – 2011 . Some degree of prudence has been applied as the new social working only
partly overlaps with the old one, and can be reconverted.
It is doubtful that many of the existing Third Sector
Enterprises can be used for the purposes of channeling solidarity to the
have fields of interest of different nature (sport is the single most common
form of voluntary activity).
charity oriented social enterprises are focused on providing solidarity abroad, to other
many of the remaining Social Enterprises have strong links to banks and
other conservative forces and will hardly accept the new rules of the
game, not least the operation through Community Currencies.
It is clear that Insulae will need to found new Social
Enterprises, of course duly legalized. They should be crystal clear about their social achievements in terms of providing the desperados with basic needs. All publications should strongly highlight the achievements per month in terms measurable quantities of food, clothes, shelter, energy, volunteering hours, value of barter goods and services.
In the deflationary scenario of everyday news, they should offer the good, refreshing, optimistic news of the day, the light providing some hope.
They operate, as any Insula Enterprise,
with their own Community Currency. To give an example, Desperados eating at a free meal
distribution Social Enterprise should pay with the cantina enterprise currency, obtained
in the Insula market exchanging citizens salary currency, the citizens salary pay
they get from the Insula, in turn obtained from the Insula tax collection.
Precisely the lack of requirement of law about a proper
accountability of the activities of the NGOs should give the legal gap to work as
entities of the Insula market operating with Community Currency to "keep track".
Currently solidarity works are
not paid. Why are volunteers not paid? They do the most valuable social work.
Why not pay them with the new money? All NGOs should pay all the contributors
with a desperado Community Currency. If nothing else, the volunteers paid with
this money could gain recognition in the movement. It could easily be redeemed
as political assets, rights to speak, to vote, to provide opinions.
Volunteering should be paid, in local Community Currency, and the
payment cannot be redeemed or reconverted into FRB money. It has to be spent
in any service or good of the Insula new economy or else to buy status and
rights as New Economy citizen. The procedure to get the citizenship is to pay the corresponding taxes.
Paying taxes buys the citizenship in the Insula. Nothing prevents that the tax is close to 100% of the volunteers incomes, keeping in this way the net value of uninterested donation of work, but recognized as civil rights and circulated as local money, thus visible in the economy. It also provides an easy way, if so wished, to regulate the rights at the Insula according the intensity of the contribution.
At estimating the economic value of volunteer work,
the Manual on the Measurement of Volunteer Work , recommends to use the replacement cost approach — because it comes closer to measuring
the value of volunteering to the recipient of the volunteer effort, and hence
to society at large. It does so by assigning to the hours of volunteer work
what it would cost to hire someone for pay to do the work that the volunteer is
doing for "no pay". To do so, previously all volunteer works have
been assimilated to the International Standard Classification of Occupations
(ISCO-08) . The best way of keeping
these accounts is certainly to pay volunteers the equivalent of this value in Community Currency. Tables
can be kept with conversion rates to EUR or USD to facilitate comparisons. An example of such a table can be found at Values of volunteering work.
Equally, any donation in old
money has to be converted into goods by the island authorities, bought in the
old economy with the old money, and offered for sale in one of the new economy
island for the island LETS. Old money should never
contaminate the new economy islands. Goods produced in the economy
islands should in principle not be sold to the external FRBS world by any
individual island citizen. Exports should be regulated and managed carefully by
the island authority.
The water feeding the new
economy islands, could be the basic income guarantee (basic income, citizen’s
income, Basic Income Earth Network ),
paid, initially, at least to all desperados. Citizens salary components could be basic salary, family works like child care and education, caring of the elderly, home works, and unemployement. For a detailed explanation see Economy simulation, Salaries and taxes.
Priorities for the social enterprises: Food preparation and distribution
Comune di Torino and Amiat have implemented the "Good Samaritan"
project , which collects uneaten meals from school canteens and products that are still
edible form supermarkets and donates them to charity organizations to prevent
them from being sent to landfill sites. Every day it is possible to recover 150
kilos of bread and 50 kilos of fruit to prepare approximately a thousand meals.
Priorities for the social enterprises: Shelter
There are many approaches to support shelter to the homeless, from practical organization of homeless camps, to architectural, construction and urban designs. Do it yourself teaching of shelter construction with discarded materials is a priority. Great attention should be given to common infrastructures like toilets, showers, cantinas, kitchen, fridges and others.
Priorities for the social enterprises: Marketing of Insula services and Desperado jobs
In the THE END
OF MONEY AND THE FUTURE OF CIVILIZATION , Thomas H. Greco talks about the competitive advantages that alternative
currencies can provide to local companies, and in special SMEs. In chapter
sixteen, he talks about a "A Regional Economic Development Plan Based on
- Doesn’t it therefore make more sense to nurture the businesses
that are already part of the local economy? Doesn’t it make sense to
support those companies that are locally owned or managed and have a stake
in the prosperity and quality of life in their home communities?
Communities that have a high quality of life, an able workforce, and a
clean and pleasant environment do not need to offer bribes to outsiders.
Relocalization efforts cannot get very far without the creation of
metasystems that support buying locally, selling locally, investing
locally, and saving locally.
- Based on the principles we have outlined, it is now possible to
engineer and build exchange systems to carry heavy economic loads within
local bioregions and to operate them according to sound business
- The first stage of the development program might look rather
conventional and similar to some “buy-local” programs of the past, but it
will be more comprehensive in its social, economic, and political aspects.
It begins by organizing solidarity groups that include all sectors of the
constituent communities—particularly the locally owned and controlled
businesses, municipal governments, the nonprofit sector, social
entrepreneurs, and activists. By building bridges between these groups and
identifying common objectives, it should be possible to achieve the
commitment to do the hard work necessary to move together toward greater
regional economic self-sufficiency.
Island volunteers and unemployed could definitively help at implementing
this. The desperado jobs
is one of the components of this range of measures to promote local economy.
Local economy agents, and in special SMEs, have to be provided with a smooth entry into the new economy. The desperado “job” pretends to provide the bridge. It builds the alliance of the alternative economy with the local SMEs.
Most companies, in special SMEs would not be able to offer new posts. They would not offer these posts even offered for free, because they would mean an increase in production, with the associated increase in raw materials, and because they have already excess of production capacity and in many cases excess of stock. Even part of the minimal stock is not sold. In food distribution, keeping a minimum portfolio of products is bound to have a percentage unsold and outdated, send to the trash.
Even if they would like to pay in kind the salary of such posts, most legislation in advanced countries would not allow it.
A desperado job provides an alternative. A desperado job is a volunteering occupation of an unemployed at an Insula Social Enterprise at activities aiming at achieving the enterprise mission, that is, at getting food, clothes, energy, shelter etc. for the desperados. The Insula Social Enterprise will pay the desperado job with a local currency, for example with a currency that represents a bond on products of shops associated to the Insula Enterprise.
Priority job: Support to local commerce, "buy local"
In the THE END
OF MONEY AND THE FUTURE OF CIVILIZATION , Thomas H. Greco talks about the competitive advantages that alternative
currencies can provide to local companies, and in special SMEs. In chapter
sixteen, he talks about a "A Regional Economic Development Plan Based on
The step one,
the take off move, is to provide local companies that associate with such a
program with services in the commercial phase in this line of "buy local”.
Entertainment (shopping nurseries), services to customers (loading the cars,
home distribution of shopping), art performances, publicity, videos, local
radio presence, web presence, are simple tasks that can be performed by the
less qualified unemployed desperados, if properly organised, and can mean a
difference in sales. These services can be paid as external services and mean
no official job.
Publicity is a
very expensive resource only available to big corporations. The best brains in
marketing of the Insula could work at designing a portfolio of professional
promotion campaigns for local industries with creative approaches not based on
media, but on the availability of unoccupied time of the desperados. Others
could organise, train, dress, the desperados to do the job in a skilled manner. Invent a label that shops and companies can stick at a visible place to show they collaborate with the solidarity works.
desperados could volunteer helping at marketing the services to commerce and
industry associations, and organize the local currency systems that can allow
for a larger scale second step, aiming at commerce between companies.
best legal coverage is an Insula Social Enterprise registered as NGO.
The idea is
that these services are paid with currencies designed as bonds of the
associated companies products. Even if the amount devoted by the companies to
these bonds is not larger than their current out of date products, it may build
up to a substantial value of goods. This zero level kind of agreement, in which
the local companies have nothing to lose, can be increased bound to increases
in sales. We call these works, organized by Insula Social Enterpises and paid
with "product bonds", Desperado
Once this first
step of positioning Insula Social Enterprises in the marketing of local
companies products has been covered, and local industries get used to trade
part of its sales through Community Currencies, the second step of setting up a
meta-system for brokering or barter trade amongst local producers will come up
very naturally. SMEs associations could easily take over.
Priority job: Treatement of waste, in special food waste
Waste treatment is a
strategic sector to the movement. It belongs to the end of the lifecycle of all
products and involve social, economical and environmental costs. These costs
are currently not accounted. They are externalized by the companies producing
the products to society as a whole. It’s a socialization of the costs to this
and to future generations. Any action in the direction to diminish these costs has
at least one merit, it makes the costs visible and accountable, and contributes
to a green concept of economy. Any action that can make out of these costs a
benefit diminishes the legitimacy of the unsustainable wrongdoing of the
economic actors and legislators of today with proofs that it can be done
Waste treatment has been
a traditional occupation of outsiders and the poor.
Waste treatment is now
managed by large, mostly public owned, companies, funded with public money,
that simply destroy garbage with high energy consumption and dissipate any
opportunity of reusing or recycling.
There are many forms of
waste that offer many opportunities for reusing. For example white goods,
appliances and devices, furniture, clothes, etc. We will focus on one, because
its relation with one of the most urgent needs of the desperados, which is
EUROSTAT estimates that annual
food waste generation in the EU27 at approximately 89Mt, or 179kg per capita. Food
waste occurs across all sectors involved in food, like Agriculture, Manufacturing,
Wholesale/Retail, Food Services and Household cooking. The PREPARATORY STUDY ON
FOOD WASTE ACROSS EU 27 European Commission (DG ENV)  contains estimations about how and how much is wasted at each. One of the
recommendations of the report is the "adoption of separate collection of
food waste or biodegradable waste, for the household and/or food service
sector. Subsidy for the development of separate collection and treatment
infrastructure". It contains an inspiring inventory of initiatives.
Another inventory can be found at Best
practice - Waste management good practice examples, European Commission, Environmental
Communication Networks .
For example FareShare in the
UK , collects food that would otherwise be discarded by retailers, because it is
damaged or nearing expiry, and distribute it to a variety of groups in need,
including the homeless, the elderly, children and other communities in food
poverty. Quantities of edible food waste in the Wholesale/Retail sector are
very large and present enormous opportunities to increase this sort of critical
activity. Early 2012, the news report that Around
Athens and through out the country 250,000 free meals are distributed on a
daily basis .
Such a food collection
can be considered as part of the deal with the local food industry around the
Other industrial uses
include transformations to feed animals, industrial use or compost creation.
These new economy islands have to grow in the silence of the background of the protest and set trading systems that become no return to the money gambling economy arena. Once these activity areas start as new economy areas, they have to disappear from any economical statistics, and have no reconversion into the ordinary economy. It’s an Outsiders business by definition.
P2P principles  should be applied as much as possible, so that it becomes vey little vulnerable to attacks to visible heads.
P2P methodologies would make the return to usual hierarchical systems difficult. Even the expression and consolidation of political ideas should align with P2P methods  so that no new bureaucratic "casta" could try to ride the movement.
In order that all this can be connected and capitalize we need to provide the movement and the new economy islands with an alternative monetary system. A new monetary system is the citizens passport in the land of the new economy.
In summary, the fusion, consolidation and capitalization of the movement depend critically of the successfully launching a new monetary system (not a new currency) to provide the glue of the new economy solidarity trades and give the means for capitalization.
Desperado island markets
The Insula economies have to be conceived as an osmotic pump of solidarity from the 99% that still have in the old economy, towards the desperados. This solidarity takes the form of action or voluntary services, goods or monetary donations.
The desperados themselves should also become active and work on desperado jobs. By difference to the shameless invitation of the governments to engage unemployees into unpaid social volunteering works, even at public servant posts just revoked , as an additional means to depreciate the still employed workforce, a unscrupulous invitation to do slavery works to capitalize others ownerships, these jobs would be paid in goods, and would capitalize into desperado ownership.
The priority of these economies is the injection of goods, basic goods. Solidarity services cannot be eaten. Therefore, the first priority is to organize things in order to obtain, prepare and distribute:
- Shelter for the homeless
These are the survival priorities for the Desperados. Solidarity works are mainly focused to obtain this collective net result. The Insula reporting should, firstly, show the outcome in these terms, for example, in the number of distributed meals .
In order to avoid the birth of any totalitarian embrio, this economy has to be designed as a set of free Insula local internal markets operating on a new monetary system.
An internal market for all desperado economy players
Local industries starting to operate with barter, social enterprises and NGOs, cooperatives, are like small ships navigating over an ocean of legal tender monetary systems serving the interests of the Fractional Reserve Banking sharks.
This makes that all efforts revert in the final end into the Fractional Reserve Banking debt creation system.
Moreover, Social Enterprises tend to run comprehensive collections of different social businesses, in order to avoid passing the legal tender money cold waters, planning them internally with not that sound criteria, allocating resources with subjective standadrds. Instead, a much more transparent policy would be to break them into consistent businesses, and let the new economy market regulate the value of each of them to the desperado "clients".
What is needed is islands of internal markets where social enterprise affairs can be traded on an isolated background of a monetary system made out of Community Currencies representing goods.
The number of transaction grows exponentially with the number of enterprises, associated local industries, social enterprises, barter markets and cooperatives that trade within that Insula.
Barter and localisation of economy
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable (e.g., hyperinflation or deflationary spiral) or simply unavailable for conducting commerce (Wikipedia ).
In fact, there is an unnoticeable continuity between pure bartering and trade with a currency that is closely linked to the concrete goods it does represent. Most bartering websites use anyhow a unit of value to establish an initial comparison of value between the goods offered for exchange.
In this case, this unit or currency is circulated only on one transaction.
Again, there is an unnoticeable continuity between bartering with community currencies circulated at one single transaction or a more flexible trade in which the community currency circulates for a limited number of transactions, because its local trade and the currency has a time extinction.
It is all about anchoring the trade on the value of goods and anchoring the trade on local economy. Both are closely related.
At “The Great Transition”  it is said:
“When we talk about localisation and scale then, we are not simply saying that everything should be smaller. Appropriate size is what we are looking for in the Great Transition. Economies of scale are vital for efficient production in some areas. It makes no sense for every town in the UK to produce its own computers. But we have gone too far the other way, and assumed that nothing can be produced efficiently on a local scale. This obviously turns on what we mean by efficiency of course, but the key point is that just as there are economic benefits to producing some things on a large scale, there are major environmental, economic and social benefits from doing many others things on a more human, local scale. There are also very big costs associated with relying only on the large scale.”
Minimum size units for adequate economies of scale
Energy-efficiency, housing retrofitting
Renewable energy (wind, hydro, solar)
Small machines & components
Oil, gas, coal
Books, films, bicycles
|Bulk commodities, e.g., grain
‘High street’ and local banking
It is precisely the sectors that have optimal size of scale at district and region the ones needed to fill the basic needs of the desperados.
The process has started already. RIPESS is an intercontinental network that connects social and solidarity economy networks throughout the world. As a network of networks, it brings together continental networks, that in turn bring together national and sectoral networks. RIPESS believes in the importance of global solidarity in order to build and strengthen an economy that puts people and planet front and center. From Lima to Quebec, from Dakar to Luxembourg, RIPESS organizes global forums every four years ad is a nexus for learning, information sharing and collaboration.
Islands of Solidarity Economies start to bloom everywhere. Solidarity Economy is conceived as the socio-economic, cultural and environmental system developped individually or collectively through practices of solidarity, participatory, human shareholders and non-profit development of the human being as the end of economy, initiatives of association, business, economic and financial, committed to the following principles:
- Equality. Promote equality in relationships and meet in a balanced manner interests of all the protagonists in the activities of the company or organization.
- Employment. Create stable employment, especially favouring the access of people in or at risk of social exclusion, ensuring each person working conditions and decent pay, encouraging personal development and the assumption of responsibilities.
- Environment. Encourage actions, products and production methods that respect the environment.
- Cooperation. Promote cooperation instead of competition within and outside the organization.
- For profit. Solidarity initiatives are primarily aimed at promoting human and social, so they are essentially non-private-profits. The benefits or profits accrue to society by supporting social projects, new initiatives solidarity or development cooperation programs, among others.
- Commitment to the environment. Initiatives are committed to solidarity social environment in which they develop, which requires cooperation with other organizations and participation in networks as a way to experience how solidarity can generate an alternative economic model.
Priorities: Barter market for the associated industries
A fundamental sector to be organised as soon as possible is a barter market for local SMEs.
As the Internet grows as a means of exchange, it will increasingly liberate people from the formal market and barter and swapping will complement and, in some cases replace, consumption of new and increasingly expensive goods. Already, people sell their own houses and organise holidays, often, without money changing hands in the latter case. But we can also often get tools and fancies for free as people offer up things they no longer need.
Last year IRTA Member Companies  using the “Modern Trade and Barter” process, made it possible for over 400,000 companies World Wide to utilize their Excess Business Capacities and underperforming assets, to earn an estimated $12 Billion dollars in previously lost and wasted revenues.
In terms of income, Excess Business Capacity represents the difference between actual cash revenues received, and the cash revenues and profits that would be realized, if a business operated at 100% of its capacity. Most businesses are operating at less than 100% of their potential business capacity.
Helping the local SME´s to build a barter system to trade their excess capacity and further helping them at the commercial circuit with “buy local”, “buy with solidarity” publicity are the two strong partnerships between the desperados economy and the local SMEs, currently working in the FRB world, that will facilitate them a smooth transition towards the new economy.
In the THE END OF MONEY AND THE FUTURE OF CIVILIZATION , Thomas H. Greco says:
The first major task is to launch a “buy-local” campaign in which the economic resources and business relationships within the region are clearly mapped. That database can then be used to assist businesses in finding local sources for the things they buy and local customers for the things they sell. The services of brokers can be employed to help match up supplies with wants and needs. Critical gaps are identified and local entrepreneurs can be encouraged to find ways to fill them, perhaps with support from a local microlending agency. As this process proceeds, the community becomes less dependent upon outside entities and more resilient and self-determining.
Community Currency Exchange
Using multiple currencies transaction costs may become high.
The transaction costs associated with multiple currencies would be low as virtually all transactions could be completed electronically with smart cards, or mobile phones and other internet-enabled devices. In addition, electronic commercial barter would become more prevalent, with companies with excess capacity or inventories trading with other firms in mutual exchange networks. Already there has been rapid growth of these type of non-interest bearing credit schemes in the United States and elsewhere with the growth of the internet and since the financial crisis.
This is another argument for a system that is conceived as electronic money, in which exchange sites can facilitate the exchange transactions. However, while paper representation of electronic money is being used, the Insula has to make sure that enough currencies exchange posts are available at every physical Insula market.
Historically, the original trade unions organized much more than conditions of employment collective bargaining. They provided a range of benefits to insure members against unemployment, ill health, old age and funeral expenses, professional training, legal advice and representation. They even provided housing through housing cooperatives   .
Much of all this has been absorbed by the modern welfare state.
The unions role has been narrowed to collective bargaining, increasingly a bargaining at global level with the employers’ associations, and further at political level within the stable social dialogue bodies, a part of the global state governance institutions (see the European Economic and Social Committee  thus becoming not quite parties, with decreasing affiliation at the enterprises, and Unions Staff increasingly seen as belonging to the privileged class of paid politicians.
At the current financial crisis it is all these social benefits absorbed by the modern welfare state the ones under the first and strongest assault to pay the state debt.
The alternative economy islands would need to redo the work that was done two centuries ago. And never give it back to anybody that is not the democratic governance mechanisms invented and used to create them.
In particular, it should not be the Unions to lead the process. Unions focus is by definition labour "market". We need to put into the economy all the resources employed, included the external environmental costs, but also all the social contributions to the general well being. To start with, housekeeping labour should be paid, although not through market. To continue with, the voluntary works on community goods and community services. The red cross volunteer, the social volunteer, the NGO collaborator, the basket ball trainer, the Halloween organizers, the charity works, should all be paid.
Therefore, the labour situation in the Fractional Reserve Banking world enterprises is not the right observation angle, and therefore the Unions have not the right point of view to take the lead. Our kingdom does not belong to the Fractional Reserve Banking economy world, and our ultimate goal is not to get a job at this economy.
Having said that, there are movements, like the GLOBAL LABOR INSTITUTE , that have the purpose to support the efforts of the labour movement to deal with the globalization of the world economy and its social and political consequences and, to this end, to strengthen links and networks between trade unions and other civil society organizations with similar or converging interests, particularly in the defense of human and democratic rights and social justice in all its aspects.
Program: the beginnings for a program for a new democratic world order exist: for example, various proposals for a social clause in international trade and social charters, or for the taxation of international flows of capital. There also exists a critical analysis of the present capitalist “new world order” in the form of a number of books and articles. There does not exist, however, a coherent program with proposals that would present internally consistent alternatives at various levels (economic, social, political, cultural, ecological, etc.) representing, as a whole, a global alternative. This work remains to be done. The GLI will contribute to developing a program for an alternative society in cooperation with institutions and movements where such work is already taking place, by word or by deed. This program will emerge from discussions with a wide range of organizations and institutions not excluding the social counterparts (selected companies and employers) prepared to cooperate with the labour movement and other partners to secure a democratic and sustainable world society.
Alliances: depending on the issues, the GLI will seek to facilitate alliances and networks between trade unions and potential partners in civil society, such as organizations focusing on human rights, education, women’s rights, environmental protection, social movements of the rural dispossessed and of the urban informal sector, progressive student movements, community organizations, consumers’ associations and others.
These links deserve to be reinforced at all levels.
The movement cannot grow and solidify mainly by putting in writing changes that would need to be implemented by the authorities, as a protesting movement demanding the authorities to do the changes, hoping to convince the majority, although this may help at building consensus thinking around a limited number of proposals, a kind of draft electoral programme.
There are little hopes that the movement may grow big, strong and consistent enough, and be able to pass the swamp of all traps of the traditional left parties, until reaching a sufficient parliamentary representation, in a peaceful way.
Much before, the financial casino owners will throw substantial quantities of money and influence into provocation and fascist movements. The desperados anger expressions will provide the excuse. As a last resort, our so called democratic governments will manage to give legal coverage to mass terror.
Instead, the movement has to gain momentum and gain credibility by providing de facto support, help, solidarity, solutions, for the "desperados" by the means foreseen for the new economy.
It has to grow by providing islands where the alternative economy demonstrates its usefulness. It has to grow by creating a large scale show case that is difficult to attack without causing on one hand the revolt of the desperados (destroying their last, still legal, subsistence means) and risk on the other hand a total loss of legitimacy at the vast majority of the population. Any attack to the desperado new economy islands has to be perceived by the vast 99% majority as a totally illegitimate and unfair attack. Health services, food for kids, shelter for the homeless, volunteering civil works, and solutions at all areas where social services have now been cut in budget, are difficult to assault without providing the last drop of irritation making the revolt explode.
This is the big challenge and radical filtering mechanism for the new economy proposals. End with academic papers. Time is over. It is now or never. This is the extreme conditions test bed where the new ideas have to demonstrate their impact.
These islands have to convince those belonging to the 99%, but still live in the system and vote conservative left, that the transition can be a useful and peaceful and safe transition.
This will be the moment were the conservative voting may totally reverse, the moment to take parliamentary action.
It has to be left to the movement's creativity to find out which means of alternate economy to put in place. If anything, we have thousands of proposals, …, in paper, websites, etc. Much of it will be made out of philanthropic solidarity . But much of it will also be about setting up new trading schemes. What is important is that they address burning needs of the desperados. Examples can be the support to the people losing their homes at not being able to pay the mortgages , payment of public services , volunteering , or barter systems , or many others.
However, all these actions are now being implemented as unconnected systems. In many cases, like solidarity actions or volunteering, they volatilize at the moment the action ends or the volunteering service finishes. They would need to leave a deposit that can be capitalized, an asset of the new economy. This deposit has to be knowledge assets in ways to do things. These pathways are settled at best as market circuits in the new solidarity economy. These roads are build as circuits for a new desperado money.
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The means for the Great Transition
 towards a new economy will, at the end, be political. A party o parliamentary coalition will need to win elections at each country to make it become law with full democratic legitimacy.
In most countries, the Great Transition will require a constitutional change . A referendum will need to be formulated and won.
It will take some time for the current "Indignados", or OWS, or similar movements, to give birth for such a structured party or parliamentary representation and fuel it until parliamentarian victory.
The social composition of the protest will change. From the well educated, young, and socially supported average profile of the first wave of protesters, which has lost the future but has means to survive, the protest centre of gravity will move towards the more severe victims of the crisis, the poorest, the less educated, to the older unemployed with no hope, to families with not a single employment, no income, no support, no shelter, to families in which children may suffer hunger. We move from "indignados" to "desperados".
As desperation of the thrown out, - the desperate, the desperados - , mounts, the movement will have it very difficult to stay peaceful. This example of a desperate unemployed calling a Spanish radio ,
represents well probably millions, and is rising. Greece riots , are only the beginning.
The desperados are an easy flank for tactics of creation of wars between the poor: immigrants against local, men against woman, Muslims and Christians, employed and unemployed, clean jobs and polluting jobs; they are an easy flame under provocation; they will easily slip into outlaw survival means, and systemic incrimination. We have seen how social degradation comes along with engagement in mafias that provide survival trough drugs and robbery.
This unavoidable explosion in violent terms, or outlaw means for a living, puts at risk the legitimacy of the movement, makes it much more vulnerable to propaganda and repression, and will make its progress towards the Parliament much more difficult. In the presence of violence, votes of many layers of the 99% will turn towards the social democrats and even the right.
For these desperados, political debate comes second. A lower level of education facilitates also more primitive reactions. First come the solutions for today. Else, what remains is expressing anger.