Principled Societies Project

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= "The Principled Societies Project offers a practical, affordable, and politically viable path to change based on societal systems engineering".



"Modern human societies face monumental environmental, financial, economic, and political sustainability problems. Many realize that we must change, but given the inertia of our institutions and resistance by vested interests, the question remains, How do we change?

The Principled Societies Project offers a practical, affordable, and politically viable path to change based on societal systems engineering.

It proposes to create a safe, structured, science-based proving ground that allows innovative financial, economic, and governance systems to be examined and refined. Rather than attempting to implement change at the national level, it takes the more practical approach of testing new systems at the smallest workable scale: a volunteer subpopulation within a metro area. Further, it designs the new systems to be complementary, and even beneficial, to current ones."


The Principled Societies Project is a science-based effort to design and test pioneering systems of finance, economics, and governance that improve well-being and speed the transition to a sustainable society. The goal is to create fully functional, metro-scale pilot trials in which the impacts of new systems can be assessed.

The first pilot trial will be implemented on a volunteer basis in one willing host city. Subsequent pilot trials will follow in other host cities. In a host city, those individuals and businesses interested in participating are asked to form a local membership club. Club members interact with the greater society through normal financial, economic, and political means, but some portion of their behavior occurs through the pilot systems. In this way, the pilot systems complement current systems.

The duration of a pilot trial in a host city is approximately two years. At the end of the trial, participants vote to decide whether to continue the club or dissolve it. Should the club dissolve, financial bonds established at the onset help protect participants from financial harm. Should the club continue, the bonds expire and the club assumes full financial risk.

The products of the Principled Societies Project are data, knowledge, and a sophisticated Internet-based software system that acts as the IT infrastructure for the new financial, economic, and governance systems. The software will be offered to the public under an open-source license. Upon completion of a pilot trial, a local club would be free to change the code as desired.

Principled Societies Concept

The starting framework for new financial, economic, and governance systems is the Principled Societies concept, as described in Creating Sustainable Societies: The Rebirth of Democracy and Local Economies, by John Boik. A synopsis and free PDF copy of the book is available on this website.

A Principled Society is a local volunteer-membership club that implements and tests new systems. The framework contains three interdependent elements:

Token Exchange System. Tokens are a local electronic currency. Their volume and circulation rate are managed so as to maintain a steady purchasing power over time—tokens are designed to be free of deflation and inflation. The token system generates interest-free loans for local businesses, as well as donations for local schools, nonprofits, and public services. Both loans and donations occur through a mandatory crowdfunding operation. Members must use a certain percentage of incoming tokens as interest-free loans and as donations to support the organizations of their choosing.

Further, a negative interest rate is applied to tokens that are stored too long in a member’s account. This encourages members to spend tokens on goods and services, or to store them in loan portfolios. A trading system allows retrieval of tokens from loan portfolios when additional tokens are needed.

Principled Business Model. A Principled Business is a for-profit corporation that retains the social mission, transparency, and accountability of a nonprofit. It is a community-centered business model that builds upon the B-Corporation and Yunus Social Business models. Principled Businesses are legally organized as socially responsible L3Cs, B-Corporations, or similar, but in addition must meet another set of criteria that ensures they will remain highly transparent, act consistent with their social mission, and maximize community benefit. Principled Businesses receive preference for the interest-free loans generated by the crowdfunding operation.

Collaborative Governance System. A Principled Society makes its decisions, develops its rules, and sets its policy through the Collaborative Governance System. This is a form of direct democracy in which ultimate legislative authority is held by the membership. To maintain efficiency, councils handle day-to-day and uncontroversial issues. Controversial ones are decided entirely by the membership through an efficient, secure, fair, and effective online process.

A fourth meta-component that intertwines the other three is a reputation system. In a Principled Society, reputation is a form of currency. Members can build their reputation by participating in governance activities, by assisting others, by making wise funding decisions, by building successful businesses, and in numerous other ways. The high degree of transparency present in the three core elements serves to inform the reputation system, and the reputation system builds community.

Activities and Costs

Once the Principled Societies Project is legally formed, first-year efforts will focus on fundraising, building organizational capacity, and planning and conducting the first preliminary study. This preliminary study is to create an agent-based computational economics (ACE) model of the Token Exchange System. The purpose of the mathematical model is to further develop the token concept, to identify operating parameters and data needs, and to investigate economic outcomes that might be produced in a live trial. Douglas White, Ph.D., Professor of Anthropology, Graduate Director, Social Networks at the University of California, Irvine is a collaborator on the modeling project.

First-year costs for startup and operation of the Principled Societies Project and completion of the initial ACE model is estimated at $350,000.

If the ACE model suggests that the Token Exchange System could be beneficial, the Project will continue forward with its plan to develop, run, and assess the first live pilot trial. The estimated time from founding the Project to completing the first two-year pilot trial is six years." (