Money for the Common Wealth of the Multitude

* PhD Thesis: MONEY FOR THE COMMON WEALTH OF THE MULTITUDE. TOWARD A USER-MANAGED CURRENCY AND PAYMENT SYSTEM DESIGN. Thesis submitted for the degree of Doctor of Philosophy at the University of Leicester (School of Business). by Marco Sachy

URL = https://lra.le.ac.uk/bitstream/2381/40788/1/2017SACHYMPhD.pdf

Abstract

"This thesis will begin with a critique to the orthodox paradigm in monetary economics.

Secondly, I will offer a theoretical, economic, structural and biopolitical analyses of the origin, nature and effects of money on society. After a critique to conventional paradigm of money, I will then propose a semiotic genealogy of money followed by an analysis of the Common, the Multitude together with a tentative fourfold proposal for monetary reform, i.e. a monetary dispositif for the socio-economic emancipation of the Multitude from the rule of capital to build a new paradigm of money.

In particular, I will discuss the literatures on basic income and the emerging notion for bottom-up welfare named Commonfare; the Neo-Chartalist approach to money; complementary, viz. subaltern currencies; and crypto-currencies and distributed ledgers technology. In turn, I will present the two qualitative methodologies that I endorsed to design and research four sites of inquiry in Iceland, Spain, Finland and Italy: Participatory Action Research and Critical Muti-Sited Ethnography. A discussion of fieldwork findings will follow. Moreover, I will offer a comparative analysis on fieldwork findings by identifying not only commonalities and differences among the four sites, but also by eliciting the limits of methodological choices. I will conclude this thesis by arguing to refine the theoretical framework introduced in the literature review; and notwithstanding personal and objective limitations to the application of the monetary dispositif in the real world, I will advocate for further inquiry on Money for the Common Wealth of the Multitude to increase the quality and effectiveness of the debate on suggestions for monetary reform."

Contents

1 A Critique to the Orthodox Monetary Paradigm

• 1.1 Introduction
  • 1.1.1 Making the Orthodox Monetary Paradigm explicit
  • 1.1.2 The Monetary Blindspot

• 1.2 Three Theories on the Ontology of Conventional Money
  • 1.2.1 Menger’s Commodity Exchange Theory - Objectual Genealogy of Money
  • 1.2.2 Simmel’s Philosophy of Money - Sociological Genealogy of Money
  • 1.2.3 Keynes’ Treatise on Money - Instrumental Genealogy of Money

• 1.3 An Economic Critique of the Orthodox Monetary Paradigm: five economic and structural shortcomings

• 1.4 A Bio-political Critique of the Orthodox Monetary Paradigm: the debt structure of control and the loss of trust in it

• 1.5 Conclusions

3 The four components of the dispositif to frame Money for the Common Wealth of the Multitude

• 3.1 Top-down 1: Basic Income within Commonfare, a bottom up emerging form of welfare provision for the Multitude

• 3.2 Top-down 2: the Neo-Chartalist approach

• 3.3 Bottom up 1: Complementary Currencies
  • 3.3.1 A brief History of Complementary Currencies
  • 3.3.2 Complementary Currencies Benefits and Best Practices
  • 3.3.3 A Critique of Complementary Currencies
  • 3.4 Bottom-up 2: Crypto-currencies and Distributed Ledgers Technology
  • 3.5 Conclusions

4 Methodology: Participatory Action Research and Critical Multi-Sited Ethnography

• 4.1 Introduction
• 4.2 Participatory Action Research and Critical Multi-Sited Ethnography
• 4.3 Conclusions

5 Fieldwork Findings

• 5.1 Introduction

• 5.2 DCENT, PIE News and the Freecoin Social Wallet

• 5.3 Vignette No 1: Social Krónas
  • 5.3.1 Context
  • 5.3.2 Social Krónas - a complementary crypto-currency and meritocratic basic income provision system in Reykjavik
  • 5.3.3 Relevance of Social Krónas for the Freecoin Social Wallet test in the fourth site

• 5.4 Vignette No 2: Eurocat
  • 5.4.1 Context
  • 5.4.2 Eurocat - a Micro-Endorsement and Mutual Credit System for a regional currency in Catalunya
  • 5.4.3 Relevance of Eurocat for the test of the Freecoin Social Wallet in the fourth site

• 5.5 Vignette No 3: Multapaakku
  • 5.5.1 Context
  • 5.5.2 Multapaakku - a Decentralised Self-remuneration system for Community-Supported Agriculture in Helsinki
  • 5.5.3 Relevance of Multapaakku for the test of the Freecoin Social Wallet in the fourth site

• 5.6 Vignette No 4: Commoncoin
  • 5.6.1 Context
  • 5.6.2 Commoncoin: a multi-signature self-remuneration complementary crypto-currency and basic income provision system in Milan
  • 5.6.3 Commoncoin: Test Description and Results

• 5.7 Conclusions

6 A Comparative Analysis among the Four Sites

• 6.1 Common Aspects among the Three Sites
  • 6.1.1 Shared Sense of the Role of Money as a Catalyst for Socio-economic Emancipation
  • 6.1.2 Money for the Common Wealth of the Multitude as a Bottom-up Practice of Monetary Constituent Governance
  • 6.1.3 Common Willingness to Experiment in Software for Monetary Innovation

• 6.2 Differences among the Four Sites
  • 6.2.1 Objective Differences
  • 6.2.2 Different Money Creation and Allocation Processes
  • 6.2.3 Different Complexity in Technological Design

• 6.3 Conclusions

Excerpts

Explaining the Contents

From the introduction:

by Marco Sachy:

"In the first chapter of the thesis, I will operate a critique of the current paradigm of money, i.e. a critique of the conventional monetary system. In the introduction to the first chapter in section 1.1, by drawing from Arsperger (2010) and Lietaer et al. (2012), I will identify three issues that a theory and practice on Money for the Common Wealth of the Multitude is intended to tackle: single-currency thinking, the false opposition, at least at the monetary level, between capitalism and socialism and the resulting institutionalised status quo. Secondly, to open the black box of the monetary domain, in section 1.2, I will perform a philosophical critique of the core academic literature on the nature of money by analysing what I consider as an inadequate definition of the ontology of money in both the history of economic thought (Menger 1871 and 1892; and Keynes 1930) and philosophy (Simmel 1900).

After such philosophical critique, in section 1.3, I will narrow the scope of critique to the realm of orthodox monetary economics by presenting five economic and structural shortcomings inherent to the dominant monetary paradigm. Finally, and in order to show the adverse effects of philosophical and economic inadequacy of the orthodox monetary paradigm on the Multitude, in section 1.4, I will offer a biopolitical critique of such paradigm (Foucault 1976; Vitali et al., 2011; Gillespie and Hurley 2013; Hurley et al., 2014; Nienaber et al., 2014). Section 1.5 will conclude this chapter. After a critique of the orthodox monetary paradigm, in the second chapter I will present what I consider to be a more suitable - albeit not perfect - definition of the ontology of money, if compared to the ones supplied throughout the histories of philosophy and economic thought. If the latter proposed either objectual, sociological or still instrumental genealogies of money, by drawing from Italian semiotician Carlo Sini (2005), in section 2.2, I will propose a semiotic genealogy of money as a writing system, which offers in my view a more convincing account of the origin and nature of money at a conceptual level.

This will enable me to propose a working definition of money understood as an inter-subjective agreement (Lietaer 2001), rather than an object, a social relation or a tool. After clearing the field with a fresh definition of the genealogy of money coupled with a new working definition of money, in section 2.3, I will give the elements around which such definition will be applied, i.e. the notions of Common (Hardt and Negri 2009) and Multitude (Hardt and Negri 2004) as the main theoretical pillars of a new worldview on the money issue together with four elements for monetary reform. Chapter 2 will conclude with section 2.4.

In chapter three, I will elicit the details of the four components for monetary reform, i.e. a monetary dispositif for substantiating Money for the Common Wealth of the Multitude as a tentative theoretical strategy to encircle what I will define as monetary biopower from both the top-down and the bottomup. As fieldwork will focus more on bottom-up dynamics of such strategy, in section 3.1 and 3.2, I will briefly present the literature on the two top-down components of the monetary dispositif: basic income (Atkinson 1996; Van Prijs 1991 and 2004; and Huws 2016) within the context of Commonfare (Fumagalli 2015); and Neo-Chartalism (Wray 1998). Secondly, in section 3.3, I will discuss more robustly the literature on the first bottom-up component of the monetary dispositif, i.e. complementary (Lietaer et al, 2009 and 2010), viz. subaltern (North 2010b) currencies by chiefly drawing from Peter North’s work in this field in that it helped me to theoretically link my bio political concerns to the field of money in general and subaltern currencies more in particular (North 2016; 2010a; 2010b, 2007, 2006 and 1999).

Finally for this third chapter, in section 3.4, I will introduce and discuss crypto-currencies and distributed ledgers technologies by reviewing the literature on the field relevant to conceive the theoretical framework for this thesis (Nakamoto 2008; Antonopoulos 2014; Sachy et al., 2015; Rio and Sachy 2015; and König and Duran 2016). Indeed, I will argue that the sections of Money for the Common Wealth of the Multitude. In section 4.2, I will introduce both Participatory Action Research and Critical Multi-Sited Ethnography with special focus on the limits of the latter qualitative approach to research (Burawoy 2000). Indeed, during fieldwork research, I applied the tools that critical multi-sited ethnography, i.e. ethnographic research in multi-sites with a political purpose offers such as observation and self-observation, semi-structured interviews and journaling (Walford, 2009). These tools found application from a critical standpoint, a position that allowed different roles to coalesce in the same individual. As I stated above, I was a political activist, a currency designer and also a researcher all at once.

This provided me both points of strength and points of weakness during my academic work, which I conducted while striving to maintain a detached approach. To cultivate detachment from my political position has been indeed a challenge sometimes, and only self-reflexivity helped me to fine-tune my ‘positionality’: “positionality is vital because it forces us to acknowledge our own power, privilege, and biases just as we are denouncing the power structures that surround our subjects. A concern for positionality is sometimes understood as “reflexive ethnography”: it is a “turning back” on ourselves “ (Madison 2004: 7). By stressing my awareness about both my own positionally as an activist in academia and the limits of my methodological choices, I will conclude this chapter in section 4.3.

In chapter five, I will present the fieldwork part of this thesis by describing the research in four different sites in Iceland, Spain, Finland and Italy within the works of two EU-funded projects, i.e. Decentralised, Citizens Engagement Technologies, or the DCENT project and Poverty Income and Employment News, or the PIE News project. In section 5.2, I will introduce both projects’ contexts and their object of design and technological development, i.e. the Freecoin Social Wallet, a social-purpose crypto-currency wallet. In particular, in the DCENT project I developed the design elements for the Freecoin Social Wallet, which I will present in sections 5.3 (Social Krónas - Icelandic site), 5.4 (Eurocat - Spanish site) and 5.5 (Multapaakku - Finnish site). Furthermore, in the PIE News project I had the possibility to also test in the real world such design elements of the crypto-currency wallet prototype whose results will be presented in sections 5.6 on the fourth site (Commoncoin - Italian site). Section 5.7 will conclude this fieldwork chapter.

By approaching the conclusion of the thesis, I will propose a comparative analysis among the four sites. In chapter six, I will highlight both commonalities (section 6.1) and differences (section 6.2) among the four sites together with reflections on the limits of my methodological choices. The common themes will document, first, a shared sense within the sites’ communities around the role of money as a catalyst for socio-economic emancipation. Secondly, I will underline that in all sites Money for the Common Wealth of the Multitude manifested as a bottom-up practice of monetary constituent governance. I will phrase a last theme present in all four sites as a common willingness of each community to experiment with state-of-the-art software for monetary innovation. By contrast, I will analyse three main differences emerged after a comparative analysis among the four sites of this research such as objective differences, different money creation and allocation processes and, finally, the different complexity in technological design. I will complete this chapter with section 6.3.

Chapter seven will conclude this thesis, whereby I will invite the reader to understand this research as an invitation to further focus efforts in academia in the direction of the betterment of the monetary system, especially by others more adapt to work in academic research than the author, a political activist and currency designer, rather than a vocational academic aspiring to a career in the Business School. Hence, as I will state in the conclusions below, this thesis is not intended to demonstrate a successful attempt of a paradigm shift in the monetary domain as the need for further refinement of the theoretical framework coupled with both personal and objective limitations emerged after fieldwork did not allow to aspire to such an unrealistic outcome, especially within the span of a PhD. Indeed, both my theoretical framework and practical research findings presented below should be understood as attempts to open the curtains on the window of the future about a new reality and experience of money, rather than pretending to have already reached such reality both within and without academia. Notwithstanding the limits of this thesis, I am firmly convinced of the genuine value of both germinal theoretical framework and embryonic practical findings that I will discuss in this thesis. Therefore, I will conclude by advocating for the development of further theoretical, policy and practical efforts toward monetary reform to build constituent governance structures for the socio-economic emancipations of the Multitude."

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