"Timid voices have started to conceptualize money and its underlying new technology as a commons (Meyer and Hudon, 2017, 2019; Rozas et al., 2018; Barinaga, 2019). Seen in this light, the main insight from the financial crisis of 2008 was that money is a common resource but that its management was privatized. Comparably to how the privatization of common land from mid-sixteenth century England led Marx to develop his theory of accumulation and class exploitation, the realization of the privatized nature of today’s money governance is leading to much analytical development on the nature of money and on alternative modes of governing it (Wray, 2012; Fantacci, 2013). Money, this article argues, can be regarded as a commons to the extent that it is a “sufficiently large (resource system so) as to make it costly (but not impossible) to exclude potential beneficiaries from obtaining benefits from its use” (Ostrom, 1990, p. 30). Anybody entering a national currency area can access the money used in that area through labor, rent, trade, or exchange3. It would be difficult (if not impossible) to, say, exclude a continental European from using the Sterling pound when entering the United Kingdom. Money can also be regarded as a commons to the extent that someone’s use of a resource unit subtracts it from the pool of resource units other can access. The money I have in my bank account is for my use alone. This—Ostrom’s—definition of a commons moves the emphasis away from property rights and onto the nature of the resource. In this line, money fulfills the two variables Ostrom identified as defining a common-pool resource: (1) difficult to exclude potential beneficiaries from accessing the resource system and (2) substractability of use of the resource units.
Continuing with this reasoning, another Ostrom distinction may help us shed some light on the relationship between the constitution of money (how money is created and governed, and by whom) on the one side and, on the other side, the shape of social relations and the economy at large. In her analysis of both natural and man-made common-pool resources, Ostrom distinguishes between resource system and resource units. While a resource system refers to “what generates a flow of resource units or benefits over time” (Hess and Ostrom, 2003, p. 121; italics added), resource units are “what individuals appropriate or use from resource systems” (Ostrom, 1990, p. 30; italics added). In natural commons, this distinction is easy to observe. Take a fishery. The resource system is the river, lake, or water basin whilst the resource units are the fishes living in that habitat. There is a direct relationship between the health of the resource system—the river, the water basin—and the flow of resource units—the number of fishes the system can sustain. Or, if you prefer, the rate of appropriation of resource units (how and how many fishes are fished) has an impact on the resource system (degree of biodiversity in the river).
Translating Ostrom’s distinction to the money commons, the resource system would be the particular constitution of the monetary system and the resource units would be the coins in our pockets or the digits in our bank accounts. Note the instancing adjective “particular” in the previous sentence. Like other man-made common resources, money differs from fisheries or other natural commons in the fact that the resource system needs not only to be governed but it is also produced. Whereas rules and processes for appropriation of resource units need to be similarly decided in both natural and made commons, a man-made resource is a resource system that is constituted by a community and, as such, its architecture, its very internal design, is also a matter of governance. In other words, in a man-made commons such as money, the rules governing the flow and use of units as well as the rules constituting the resource system are the objects of decision. Monetary history clarifies how the form of the monetary system, its particular attributes, are, indeed, determined by those given the authority to design it (see, for instance, Kirshner, 2003; Martin, 2014; Desan, 2017). This insight, too, was one of the outcomes of the financial crisis of 2008. Money was denaturalized; the form of the monetary system laid open to a different “particular” design.
Herein, I argue, lies the productive strength of Ostrom’s system-unit distinction. When we start looking at money as a commons that can be designed, a resource that is intentionally made and constituted to attend particular needs and priorities, then it is relevant to look at distinct levels of design. Or, to use the language of the regulatory regime recurrent in discussions of money and monetary policies, Ostrom’s distinction can be helpful to understand the level of intervention/coordination—where community governance rules are made to stop and other actors, external to the community of users, are made to take over. In man-made commons, Martin’s historical question “who gets to decide?” is thusly unfolded into two questions: “who gets to decide the rules governing the flow of monetary units?” and “who gets to decide the rules governing the monetary system?” These two questions are pivotal to understand the extent to which new monies in general, and the Kenyan community cryptocurrencies in particular, are anchored in the people that use them.
In sum, Ostrom taught us that the rules for governing the commons can be designed by communities to attend their particular needs, priorities, and features. She and her team taught us that communities successfully design governance institutions for the management of their commons. Crypto-entrepreneurs and grassroots currency innovators tell us that the same can be true for the management of money. Certainly, the current wave of monetary innovation is experimenting with various ways of designing money and its governance institutions. Crypto-entrepreneurs have come with tech systems such as smart contracts and bonded curves to govern money; grassroots currency innovators do instead work with community-based organizational forms to govern local monies. These are two different strategies to governing money—reliance on the technology the first, on the community the second; coding standardizing rules in the blockchain ex-ante the first, adapting the rules as issues emerge ex-post the later (Rozas et al., 2018). When these two versions of governing money meet, like in the case of the Kenyan community crypto-currencies, how do their distinct approaches to governing money merge? What aspects of monetary design are left to the community of users and what to the external engineers coding the currency? In what sense is their new way of organizing money suggesting a route to a commons-based, democratic economy? And in what sense does their suggestion still retain some of the features of our current private-bank-made capitalist money? More to the point, what are the rules and who gets to decide?" (https://www.frontiersin.org/articles/10.3389/fbloc.2020.575851/full)
On The Commons
"On the Commons is exploring the question of what could commons-based investment in farmland and local food enterprise look like. Weaving direct, mutually supportive relationships among farmers, households, and businesses by transforming our thinking about security, money, investing and our connection to land and food is our focus during this project.
We are partnering with co-ops, community banks, investors, organizations and regular commoners to imagine and pilot new (as well as build on values-aligned existing) investment mechanisms to deepen our relationship and connection to local food sources and increase the flow of currency and connections for our food system.
We are also thinking about farmland and the larger question of what is security – and how can we have security when land ownership is concentrating into the hands of a few? On the Commons convened a national gathering of farmers, investors and sustainable agriculture and land trust leaders for a conversation fostering new ideas, tools, strategies and partnerships to convert more land to ecological forms of production, increase farmer access to the land, and transform our thinking about the nature of land ownership.
We are now looking at how to create new methods for community members to financially invest in a local and sustainable food economy as an alternative to a traditional IRA. Such a model could not only provide food security to a growing body of people but also stop the corporate land grab underway across the country." (http://onthecommons.org/sites/default/files/OTC_Update.pdf)
"Perhaps the simplest thing to say is that Money is part of the Commons, like Water, Air and Land.
We see how the Transnationals are now attacking Water as part of the Commons. Water is ‘not a human right’. Land has long ago been privatized. But Land and Monetary Reform are in many respects the same fights and we can add Water to the equation too.
Money has never been fully appreciated as an intrinsic part of the Commons. Because so few people actually realized that the nature of Money was something we could think about. And those that did were mostly led astray by the silly ‘theories’ the Money Power keeps inventing.
The rape of the Commons, our Human Heritage, must end and we must reclaim what rightfully belongs to us. Why are we paying rents on Land and Money and soon Water to ancient families, Corporations and Governments?
Instead of benefiting from our fair share we are simply exchanging ever more of our labor for it. The invisible slavery to artificial scarcity.
The Commons by nature should serve the individual, families, tribes and the Commonwealth and no one can own them or exploit them for their own purposes.
The Commons are public and they must be exploited in the public interest. Meaning they provide all commoners equitable access to their fair share.
When we look at monetary reform, we want interest-free, stable money. We need local communities to be able to have a say in where the money is going to. We need equitable individual sovereign access to capital.
This is what it means to optimally exploit Money as part of the Commons in the mutual interest of all individuals.
Relating to the public vs. private issue this means the question is never that private entities can ‘own’ the Commons. That kind of private is not to the point and to be rejected.
The Commons are, or should be owned by none. Not by the Government, nor by private interests. Government perhaps has a mandate to protect the Commons from private usurpation. But that is not ownership.
Exploitation of the Commons in the interest of the commoners can be done by both private and public entities. Private entities don’t automatically serve private interests, nor do public entities automatically serve public interests. They should have a clear charter explaining their goals: low cost Water, Land or Money services to the commoner.
Both can have their place and have their own problems. Bureaucrats love rules, Businessmen love cutting costs, hurting quality. They like rents. Both will continue to try to grab control beyond their needs.
Ultimately the commoner needs to know his rights and duties and the Money Power’s mind controllers have a great grip on our collective consciousness. It remains a great challenge coming to terms with all of this.
Money is part of the Commons. This is what I suggest is behind the Public vs. Private dialectic.
There is a great struggle going on in which the Money Power is privatizing more and more of the Commons. Land was robbed from the commoner long ago and nowadays they’re after Water.
But in reality the Commons cannot be really be privatized. For instance: Land should be reasonably made available to the commoner. This is the basis of Henry George’s work.
Money never was a conscious part of the Commons as most people didn’t realize it was possible to even consider its nature, let alone come to sound conclusions. But its crucial importance, the very fact that it depends on the agreement of those using it for its existence, makes it so.
The question is how to manage the Commons. Practice shows that having the Government do it leads to problems. The Government takes rents, centralizes power and is usually just a big &^%$%^&$# to deal with, especially for the less credulous.
It’s usually certainly better than private ownership of the Commons or control for profit. But to firmly entrench Money Power in the Commons, we need to look beyond Government and rationally look at what role private market players have to play in providing the necessary services to the commoner.
Because everything that centralizes power in the hands of the State will simply empower Leviathan. And Leviathan will always look to turn against its master." (http://realcurrencies.wordpress.com/2013/07/19/the-public-vs-private-dialectic-or-money-as-part-of-the-commons/)
“Another Commons we all share is the money system. Money would not function without the trust of the community. We gave banks the monopoly on money creation, and then when they failed, we bailed them out. Unfortunately, we forgot to bail ourselves out. The money system is broken, but maybe the concept of the Commons can be used to fix it.
Remember the Gold Standard? Well, that’s history. Money these days is based on debt. Money enters into the economy when it is lent into circulation by private banks. Ironically in our money system, even with the recent complaints about the national debt, one person’s financial debt is literally another person’s financial asset. We are programmed to think that debt is bad, but when a debt is paid off, money is taken out of circulation. Economic growth (taking out more loans) is the only thing that keeps the money supply from contracting and pushing into recession. The other part of the growth imperative is that loans must be repaid with interest, but the money to pay the interest must be found from other people’s loans. This creates scarcity and a competitive system, where some amount of bankruptcy is inevitable. But it doesn’t have to be this way.
The key to moving from a fragile debt-based economy that subjects people to boom-bust cycles, economic dislocations, and constant societal anxiety and fear of scarcity, is to change the money system. One way to do this is by spending money into circulation instead of lending it. In 2011 Rep. Dennis Kucinich introduced the National Employment Emergency Defense Act, HR 2990, a/k/a the NEED Act, a monetary reform bill by that would abolish the Federal Reserve, end fractional reserve banking, prohibit compound interest, and give 25% of money created to the states. In a nutshell, it would change the way money enters into the economy. Instead of entering the economy as debt that is owed to the private banks, money would enter as infrastructure spending. This could help reduce state and local government budget deficits, an approach the late economist Richard Douthwaite called ‘deficit- easing’.
The NEED Act would also give people money, in the form of Universal Citizens Dividends to every US citizen. The bill reads: “the Secretary [of the Treasury], in cooperation with the Monetary Authority, shall make recommendations to the Congress for payment of a Citizens Dividend as a tax-free grant to all United States citizens residing in the United States”
Skeptics of the NEED Act will quickly assert that government spending money into circulation will lead to runaway inflation. In certain circumstances this is true. But many economists believe we are currently in a deflation, which would make the NEED Act’s approach to money creation benign as long as it is reined in before inflation takes hold.
Citizen’s dividends could even be implemented within existing laws by Federal Reserve Chairman Ben Bernanke. Starting after the 2008 financial crisis, Bernanke has implemented a program called “Quantitative Easing” (QE). QE is a form of bailout where the central bank purchases bank assets with newly created money. By flooding Wall Street (big banks) with money, it may have prevented more bank failures, but it is unclear if any of that new money is being lent to the productive parts of the economy, or that it goes any farther than bonuses to the 1%, which may end up sitting in tax-haven accounts in the Cayman Islands. If the Fed wants to really stimulate the economy, it needs the money to actually reach the actual people who will spend it into circulation and create the demand so that employers will begin hiring again. The answer is simple: send the money to the people as a citizen’s dividend.
William Greider, in an article in The Nation wrote that Bernanke should focus on Keynesian infrastructure spending instead of big bank bailouts. Greider writes, “If Ben Bernanke can create trillions of dollars at will and spread them around the financial system, could government do the same thing to finance important public projects the people want and need? Daring as it sounds, the answer is, Yes, we can.”
Roads and bridges are great, but with a citizen’s dividend some of those trillions would go straight to the people. Chairman Bernanke just announced the third round of quantitative easing, QE3. He should make QE4 a citizen’s dividend.” (http://www.onthecommons.org/magazine/money-commons)
Money Commons in Utilicontributism
The Money Commons is a network of banktrusts, governed democratically, that safeguards the exchange of value between all members. The precise form of governance is agreed upon by the trustees of the networked republic of trusts and commons, but must honor the Principles of Organization. The Money Commons, like its constituent banktrusts, aims to make money as liquid as possible, and make transactions as secure as possible. Also, like the banktrusts, the Money Commons does not allow interest.
The economic arrangement the Money Commons creates, in conjunction with the other Vested Commons, establishes the economic model of Utilicontributism.