inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #0 of 62: (dana) Mon 3 Aug 09 11:46
A warm welcome to our next author, a returning WELL alumnus.

Winner of the first Neil Postman award for Career Achievement in
Public Intellectual Activity, Douglas Rushkoff is an author, teacher,
and documentarian who focuses on the ways people, cultures, and
institutions create, share, and influence each other's values. He
teaches media studies at the New School University, serves as
technology columnist for The Daily Beast, and lectures around the

He has just released his most important book to date: an analysis of
the corporate spectacle called Life Inc. for Random House, as well as a
series of short films called Life Inc Dispatches.

Leading the discussion is Jon Lebkowsky.

A Social Web Strategies Founding Partner, Jon Lebkowsky is a culture
and business strategist and thought leader focused on the Internet, the
World Wide Web, and the social uses of digital technologies. An early
online community moderator on The Well, and a founder of Fringeware -
one of the first Internet businesses - Jon has been a direct
participant in the formative conversations that have generated our
contemporary global digital society. Writing on digital culture,
technology, media, and global sustainability, he was one of the web’s
first bloggers, having blogged regularly since 2000. He is an
acknowledged authority on the social web, online communities, web
development, public wireless broadband, and e-democracy. (see 

Thank you for joining us here, gentlemen!
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #1 of 62: Jon Lebkowsky (jonl) Tue 4 Aug 09 07:57
Most people, if they were mugged, would file a police report, take a
pill, maybe get some therapy, or take a stiff drink and a long nap and
chalk it up to experience. You got mugged and wrote an critique of
corporatism and its impact on life and community. How did you get from
the mugging to the book? What other forces and interests inspired you
to write _Life Inc._?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #2 of 62: Douglas Rushkoff (rushkoff) Tue 4 Aug 09 10:12
Well, I was writing one book before I got mugged, and decided to change my
focus a bit afterwards. Not immediately after the mugging, mind you. It was
about an hour or two later, after I had posted what had happened to me on
the Park Slope Parents list (the East Coast equivalent of the Berkeley
Parents List). The first two emails I received in response were from people
angry that I had posted the approximate location of the event. They were
concerned about the effect on their property values, and considered it
insensitive of me not to have considered this.

I suppose it was a teaching moment for me. I had originally set out to write
a book about money as a medium, and the way centralized currency and
corporate capitalism were accepted as given circumstances of business,
rather than inventions of particular people at a particular time.

But I realized that my neighbors had internalized these sensibilities so
deeply that they were behaving like corporations, themselves. Or banks. They
cared more about the short-term asset value of their houses as property than
the long term value of their homes as part of a neighborhood. The short-term
brand value of Park Slope meant more than the experiential value of their
streets. And this is precisely the way and debt-laden corporation looks at
its own human and physical assets.

It was the dark underbelly of the mortgage boom - before the housing
"crisis" began. People needed their property value to go up in order for
their refinancing strategies to go up another notch. And anyone who called
attention to any of this may have as well been an enemy of the state.

The other forces and influences, well, it would take a good five years to
tell you all of them. (How long should these responses be? I figure anything
over a few thousand words is bad Well ettiquette. At least it used to be in
my day.)

Anyway, other influences. I was fascinated by the way no one seemed to be
talking about the way the bubble really did destroy the economy. And
in ways that no one was taking into account. The beauty of the net is that
people can just make stuff - make money, create value - without a huge
amount of capital. You can start and run a business without ever borrowing
from the bank. So not only did the boom lead to a whole lot of money
getting printed and then wasted, but it funded an industry that no longer
required big investment.

So the banks had no real customers. That's why they turned on homeowners.

Finally, though, the real influence for me was our utter incapacity to see
the rules of our economy as the rules of a game, written by people, for very
specific reasons. Left and Right perspectives aside, what mattered to me was
that people understood our economy is not some part of nature - it's a very
specific economic system, invented by very specific people, and defended
with guns.

I thought if people found this out, they would be more willing to open
source economic solutions.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #3 of 62: Jon Lebkowsky (jonl) Tue 4 Aug 09 10:37
(Responses in this context could be longer, but we have two
asynchronous weeks - which I was thinking would let us cover a lot of
ground, though it's not quite five years...)

I want to be clear about something you say later in the book: the Fed
produces money, and lends it to the banks, and they have to pay it back
with interest, which means that multiples of the money must be
returned. You make the point that, since more money must be returned
than is produced, somebody has to lose - bankruptcies are inherent. Is
that completely correct? I'm not an economist or a historian, but I
felt you covered so much ground in the book - which is clear and well
written - that you can't have addressed the real complexity of the
issues you discuss.

If you had written the whole book about currency, what complexities
might you have addressed that you didn't have room for in a more
expansive history of corporatism?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #4 of 62: Douglas Rushkoff (rushkoff) Tue 4 Aug 09 11:33
Again, I could easily produce forty or fifty thousand words in response to
that. Some of the subjects I'd look at would be:
How money and death are related psychologically.
The complementary currency systems of Ancient Egypt, the Ottoman Empmire,
and Late Middle Ages Europe.
The invention of centralized currency - comparing their exploitation by
kings in Western Europe with their more appropriate application in Florence.
The scarcity-based model of centralized, debt currency. How does the kind of
money we use necessitate a certain kind of market? How would our economy
cope with a plentiful or renewable energy source? (Hint: it could not.)
The growth imperative of central fiat currencies, and how they require more
production and consumption.
How metrics such as the GNP don't accurately measure societal health.
The history of currency-mandated economic expansion, from colonialism
through derivative colonialism as practiced by the World Bank and IMF.
The influence of currency on investment capital, how investment works, and
the demands of shareholders for faster returns.
The outsourcing of investment and savings to Wall Street, and why financial
firms get money cheaper than others.
The possibilities for alternative currency models, who was killed for using
them in the past, and whether we will get shut down forcibly for trying to
use them again.

It just goes on and on. Money is a very big topic.

But yes, the gist of it is that there were once a lot of different kinds of
money. Monarchs made them illegal, because these currencies allowed people
to create and exchange value directly. This was bad for kings, who wanted a
total monopoly on value creation. People were getting wealthy.

Central currency of the kind we use today is lent into existence. It must be
paid back at interest. The additional funds have to come from somewhere.
They are either borrowed or won. If money circulates fast enough, this
doesn't have to be such a problem. But once it touches the bank, it's as if
it is grounded again. It can't get out unless it's loaned. And thus the need
for even more.

This is why we had the industrial age, it's why we have consumerism, it's
why we had NAM (National Association of Marketers) and why we have destroyed
the environment and our relationships with the rest of the world.

If it were eocnomics, that would be one thing. But it's not. It's a
particular game that doesn't work for what we want.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #5 of 62: Jon Lebkowsky (jonl) Tue 4 Aug 09 18:05
Isn't it working for some? I.e. why do we perpetuate a system that
isn't working for us? Or is this a case of boiling the frog, where
we've been sitting in hot water for so long we don't get that it's
killing us?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #6 of 62: Douglas Rushkoff (rushkoff) Tue 4 Aug 09 18:26
That frog analogy isn't true, you know. The frog jumps out every time.

Of course centralized currency works for some. Hammers work for some. They
just suck at brain surgery. Centralized currency is not the only kind of
currency there could be, and it has certain biases to it. It would work a
whole lot better if there were other currencies that promoted circulation
over hording, and abundance over scarcity.

Yes yes yes. Some things are scarce, and scarce currencies can help
orchestrate scarce markets for scarce things. They also help very wealthy
people stay wealthy without working - and I make no judgment on that. There
are many people who we might want to keep rich, even though they create no
value. Or businesses that are just going through a rough century or two and
need to be able to stay afloat by investing and growing rather than creating
or innovating. And they should be entitled to use whatever they can.

But we - people who create value, who work, who innovate - should also be
able to work with currencies that reflect the value we have created. Just as
people used to get a grain receipt for every pound they brought to the mill
- a receipt that could be traded - we, too, should be able to work currency
into existence. We shouldn't have to work *for* someone who has borrowed
money at interest from the bank in order to pay us; we should be able to use
a kind of money that reflects the abundance of our output rather than just
the artificial scarcity of the treasury.

We've got a currency system that could not support the introduction of a
renewable energy source. That should give us pause. We don't have to destroy
the Fed. We simply need additional mechanisms for value exchange.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #7 of 62: Jon Lebkowsky (jonl) Tue 4 Aug 09 20:27
I'm relieved to hear that those frogs were really okay. I'll feel
better about jumping hereafter.

Wondering if there are examples of contemporary complementary
currencies, legal or illegal, that are effective? If you could
prescribe a path to more equitable global currency policy or practice,
what would that look like?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #8 of 62: Douglas Rushkoff (rushkoff) Wed 5 Aug 09 07:04
Hundreds - and many great books written about them, even though most
local currencies are still poo-poo'd by major news reporting as a
fringe activity.

If you go to something as crude as barter, start with, which
orchestrates barter between businesses. They only account for a few
hundred million dollars of exchanges, but they are only one of the many
b2b networks out there, and they are growing at 40% or more per month
right now during the crisis. Businesses can't borrow from banks, so
they trade with one another. Then they realize it's cheaper to do it in
this old-fashioned way, and keep doing it.

Ithaca Hours is one of the oldest and best currencies out there, and
the time dollars concept has spread from crunchy towns doing it as a
way of life, to hard-hit cities doing it as a way to survive. 

Read Greco, End of Money; Lietaer; The Complementary Currency Manual,
and many many others. 

Go to the Lets system site,

Find out about the Japanese healthcare dollar, developed during the
long recession.  There, people who were unemployed and incapable of
finding the funds they needed to care for their elders in distant
cities set up a system through which people could earn credits by
taking care of people locally, and then spend those credits to get
someone else to care for their loved ones far away. The system ended up
providing hundreds of millions of dollars worth of healthcare, and the
elderly grew to prefer this care over that provided by traditional

In my own town, Hastings on Hudson, a local organic restaurant called
Comfort seeks to expand to a new location. But the owner/chef can no
longer borrow money from the bank. Instead, he is selling "Comfort
Dollars" to local residents. For a hundred dollars of regular cash, the
customer gets $120 of Comfort Dollars to spend at the restaurant. The
customer gets 20% return on the dollar, and the chef gets the money he
needs a lot cheaper than he can get if from the bank. He pays for it in
food and labor.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #9 of 62: Jon Lebkowsky (jonl) Wed 5 Aug 09 07:46
Here we have the Austin Time Exchange, described in its mission
statement as "a local exchange system designed to validate and reward
the work of respecting equality and rebuilding community while
providing an alternative means for its members to meet their needs." We
also have a group that's met to discuss expanded uses of complementary
currencies, to the extent they're not limited by law.

This may be on the fringes, but so much of our reality mainstreams
from the fringes. But as you argue in the book, there's powerful
opposition to local currencies.

What are people/critics saying about the book so far?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #10 of 62: (dana) Wed 5 Aug 09 09:59
(Note: Offsite readers with questions or comments may have them added
  to this conversation by emailing them to -- please
  include "Life Inc." in the subject line.)
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #11 of 62: Douglas Rushkoff (rushkoff) Wed 5 Aug 09 10:41
I guess they're divided. The ones who aren't entrenched in corporatist
culture - the ones who haven't lost touch with the idea that something
may have gone fundamentally wrong with the banking model - are really
inspired. They think the book is very optimistic, perhaps too
optimistic in its appraisal of real people's ability to learn skills
and provide value for one another. But they love the idea of reclaiming
the economy a piece at a time, and are glad to see the history
explained. Most of them are inspired most by the idea that our economy
didn't just happen - that decisions were made by certain people at
certain times, and that this is the result. The economy we are born
into is just an operating system; it is not a given circumstance.

The negative critics see exactly the opposite: they think I'm angry
and railing against everything that America and capitalism are based
on. They think I'm anti-market, because they have no way to distinguish
between commerce and corporatism. They don't understand that
corporations were developed not to promote the free market, but to
defeat it. They don't understand that centralized currency has certain
biases, making it much harder for players on the periphery to create or
exchange value. 

So they don't understand that I'm writing much more in the spirit of
Adam Smith. And they get really upset that I'm some sort of communist.
Or that I want things to be the way they were in 1100.

I am interested in the common misperception - of a market-hypnotized
culture - that if I say anything good about the Middle Ages, it means
we have to go back to the Middle Ages. 

It's a bizarre leap that people make. 

I write about how before the implementation of centralized currency,
people were beginning to get rich. They created value and exchanged
value directly, so kings took this ability away, and gave it to
corporations and banks. Somehow, though, when people read this, they
think I am saying we have to abandon all technology and culture that
has developed for the past five hundred years. 

How does that logical, synaptic error happen? Why does re-introducing
a monetary mechanism that was made illegal in 1300 mean that we have to
go back to the middle ages? It's the main thing right-wing reviewers
use to criticize the book, and it makes absolutely no sense. 
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #12 of 62: Steve Bjerklie (stevebj) Wed 5 Aug 09 11:25
>>> They don't understand that corporations were developed not to
promote the free market, but to defeat it. <<<

I don't know if I agree with this statement. Corporations were
developed and grew to take advantage of the free market and to
manipulate it to their advantage, I think, not necessarily to defeat
it. (Though I wouldn't strongly argue with someone who said
manipulating the free market is tantamount to defeating it.) 
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #13 of 62: Jon Lebkowsky (jonl) Wed 5 Aug 09 11:31
They're just not being rational, or I should say, using a choosing to
create a rhetorical fog that will divert reasonable discussion into
emotional territory. I was just watching a news report about the right
organizing disruptions of town hall meetings, discussions of healthcare
reform. No valid logical arguments - just fearful, angry shouting -
more fog.

Healthcare reform and your ideas have something in common. They both
threaten a status quo that works for some who will aggressively defend
it.  While they're not shouting you down, they misrepresent your points
because you're advocating against a reality they've accepted and
internalized. They won't, or can't, listen.

This also reminds me of my more recent conversations with global
warming deniers - in fact they're no longer denying the warming trend
because it's undeniable, but they still deny that human action is a
source of the problem... therefore denying that we can or should take
any action to mitigate, such as cap and trade or emission controls. 
They don't want to see the problem, because acknowledging the problem
subverts their sense of what's real.  

And at some level, of course, there are powerful interests whose money
and power would be undermined by acknowledging the various issues
that, to many of us, feel particularly urgent. But I'm not thinking
they're mindfully and knowingly protecting their own interests, at
least not universally - I think it's way more complex. I think it's
being invested in a belief system and way of experiencing reality.
Isn't that why they haven't even considered that money can be biased?

The real and difficult question, I think, is how to get people to have
a conversation and listen?  And how do we question our fundamental
assumptions? That's a problem for both the left and the right, and I
think it's crucial.

Who else is thinking along the same lines as you? What else should we
be reading?

(Note - <stevebj>'s comment was posted while I was writing mine.)
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #14 of 62: pardon my amygdala (murffy) Wed 5 Aug 09 12:58
>They created value and exchanged value directly,
>so kings took this ability away, and gave it to
>corporations and banks.

This strikes me as very interesting. Is there a reasonably succinct
example you can offer here of this happening?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #15 of 62: Adam Powell (rocket) Wed 5 Aug 09 13:50
(Great conversation so far!)
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #16 of 62: (dana) Wed 5 Aug 09 15:23
J Clark writes:

Any time people "barter," the IRS wants to know about it so they can
determine a taxable value and extract taxes from the transaction. How
will any of the alternative currencies fare in this climate? What's
the IRS' role, or rather what should it be?

The notion of a Japanese healthcare model works in Japan for cultural
reasons that don't map in the US. That said, the time is now and
people share this need -- politicians are not stepping up to help
recreate our broken healthcare system. How do we reorient people who
share a common need (e.g., care for our elderly) to share a common good
(e.g., the care) without being compelled to game the system?

Thanks. Looking forward to your thoughts.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #17 of 62: Douglas Rushkoff (rushkoff) Wed 5 Aug 09 17:01
The most succinct example is how trade happened in the late Middle
Ages. People brought grain to the grainstore, and got a receipt for
however many pounds they had produced. The receipt served as cash. They
could break the foil receipt into fractions. A hundred pound receipt
could be spent as a series of tens, and so on. 

So their money was not borrowed. It was literally earned, or grown,
into circulation. A currency system based in the abundance of crop. And
it lost value over time, because the grain store had to be paid, and
some crop was lost to spoilage or rats. This meant that the bias of the
currency was towards spending - towards circulation - rather than
hording. And so they ended up with great wealth. Extra money, that they
invested in huge, long-term projects like cathedrals. Cathedrals were
funded by towns as an investment in tourism for future generations. 

Central currencies were developed by monarchs who were unable to
participate in the wealth creation happening locally, in a
decentralized fashion. Local currencies were made illegal. Wars were
fought, blood was shed. It was a big deal, and people knew it. 

The other kind of transaction unique to the late Middle Ages was the
kind that happened directly between people. Someone could grow a crop
and sell it to someone else. Chartered corporations were really
chartered monopolies, handed out to the merchants and companies that
promised the king a piece of the action in return for exclusive control
over an industry or sector. 

In the American Colonies, it was the British East India Company that
had exclusive right to extract value. So now colonists were no longer
allowed to grow cotton and sell it to one another. They couldn't make
mittens or clothes out of the cotton they grew. They were all in the
employ of the Company, and had to deliver the cotton to the Company
boats. The cotton was shipped to England where it was made into fabric
and clothes by another monopoly, and then shipped back to the colonists
who could buy it from the company. 

So direct commerce between people was replaced with indirect commerce
through corporations, who could extract value from the work everyone
else was doing. 

Sometimes, of course, the corporate structure allowed for certain
kinds of products to be produced that might not have happened
otherwise. Big complicated stuff that required many people. But the
bias from then on was towards working as an employee, and consuming
from a corporation, rather than trading directly. 

As far as barter, yes - barter is taxable. So far, in the cases that
have come up, complementary currencies are not taxable in this way
because people don't actually get anything for what they have given.
They get credits in a system, but they don't get legal tender. They get
hours credited to their account. It's still a gift economy, in legal
terms. So it's not taxable. 

As far as how to reorient people, well, I think the need to get stuff
we need to survive will serve as our motivation. The inability for the
restaurant in my town to get money from the bank - and our community
need for the restaurant to survive and expand - led to our local
investment in the restaurant's micro-currency. We got our restaurant
out of debt, and we got 20% return on our investment in restaurant
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #18 of 62: Ed Ward (captward) Thu 6 Aug 09 03:17
Two possibly mildly irrelevant things here. 

First, I would dispute that cathedrals were investments in tourism.
They were only allowed to be built in cities where there were important
ecclesiastical authorities, most notably bishops, and were kind of a
regional home office for the church. Where the "tourism" comes in is
that each city competed to build the most ornate and beautiful
cathedral and stuff it with as many relics of the True Cross and
suchlike as they could in hopes that pilgrims would come. But their
chief function was as a symbol of local power. 

Second, I'm curious about these grain receipts. Clearly the miller
gets to keep some flour from my grain in order to fund his labor and
life. Now, I assume I have an account with him, in that maybe I've
delivered 1000 lbs. of grain to him and only need 100 back home. Having
packed that onto the wagon, do I have 900 lbs. credit with him? If
there is a baker in town, can I spend some of my receipts with him so
that he can obtain flour and provide me with bread? I'm just curious
because I've never heard of this system before, and it interests me
from the social end of it all. 
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #19 of 62: Jon Lebkowsky (jonl) Thu 6 Aug 09 05:02
I get from the book that there were all sorts of biases, concessions,
propaganda campaigns etc. that empowered corporations, but was this
motivated primarily by cynical corporate greed, or by a real belief
that the corporate model creates a better world?  (Or maybe it was
both?) Given that the corporate model is so firmly entrenched, can we
dispense with it? Or is the way forward a rethinking of the model?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #20 of 62: Douglas Rushkoff (rushkoff) Fri 7 Aug 09 10:50
@18 - Yes, that's basically the idea. These local grain-based
currencies were in place for longer than we've had centralized
currency, and led to generally more stable growth. 

You brought your grain, and received a piece of foil with a rather
ornate stamp on it. It was called a bracteaten, and it could be torn
into smaller segments. Yes, it was just like what we call money today.
You give a piece to a person who has something of value, and then they
give you the thing of value (chicken, a tuna sandwich, sex) in return
for the piece of receipt. The recipient of the receipt can either bring
it to the grain store for grain, or spend it just like you did. 

The big difference between this money (no banker today would
understand that receipt as money - it takes most bankers much longer to
even understand what we're talking about here than it takes regular
people) and our money, is that it does not require anyone to go into
debt. That is why it does not necessarily enslave people over time to
central authorities. That is why it had to be made illegal. 

@19 - Was it cynicism? It depends who you mean. The guys founding NAM
really did believe that people are stupid. That the masses are
horrible, unsophisticated dolts who should not be entrusted with making
any real decisions about anything - even for themselves. Bernays was a
firm believer in the idea that people should be told what to do - and
convinced by higher, smarter authorities that this was good for them. 

These business leaders who we might call cynical honestly BELIEVED it
was best for us, the same way we believe training our pets is good for
them. It will make sure they don't get hit by traffic. Of course, we
don't question whether traffic is itself a problem that needs to be

FDR BELIEVED that the soldiers returning home from WWII would be
likely to cause civil unrest. He also believed that the economy needed
to expand, and that the way to do this was to get people to buy more
stuff. So he worked with the Levitt brothers to build Levittown and
other towns where men could be controlled, and families would buy lots
of stuff to fill their homes. FDR did not know this would ultimately
make people unhappy, energy-dependent, or racist. 
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #21 of 62: pardon my amygdala (murffy) Fri 7 Aug 09 11:00
>a bracteaten

The idea of a local currency is intriguing, but a bracteaten doesn't
seem very portable. I might have trouble spending it in Texas or
Poland. Isn't there significant advantages to more universal
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #22 of 62: Bob (bob) Fri 7 Aug 09 11:44
I also wonder about the practical potential for bartering. The one person I
know of who does significant bartering is a Montana "Libertarian" who
largely does it to dodge taxes. It's something he's able to do because he's
well off, and doing this may (if there is ever again an effective agenda to
redistribute wealth via the tax code) largely insulate him and others like
him from the kind of systemic reform that once helped bring the US out of
the Great Depression.

The Cafe-bucks scheme seems smart, and I like that it allows the business to
avoid a bank loan, but other than that it seems to rely on universal
currency to establish the value of the product; it ends up being little more
than pay-in-advance-for-a-discount.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #23 of 62: Bob (bob) Fri 7 Aug 09 12:35
More generally: I've been enjoying this book quite a bit. I have to say
though, that amid all the fairly straightforward history and reasonable
explanations for more recent economic phenomena, I keep thinking to myself,
why do I need to read out-of-mainstream books (and see fringe documentaries
like "The Corporation") to get straightforward explanations that one would
think would be the basics of economic science?

Yes, I kind of know the answer, but it's still astonishing. We've got people
who are developing a detailed understanding of the changing nature of
gravitation during the first fractions of a second after the Big Bang,
Geology busies itself testing some pretty esoteric theories, and so on.
Information theory has advanced to the point where it starts to get into
spirituality's turf.

And we also have an academic discipline called "economics", with
professionals called "economists" (and I know from reading John Perkins just
what being a "cheif economist" entails). Meanwhile we quite recently have
this guy pretty much running the world's monetary system largely based on a
philosophy he got from Ayn Rand.

I guess what I'm wondering is: Is there an actual science of economics that
is reality based (and based to some degree on the idea of making things good
for people and society), and if so, why aren't the fundamentals of that
science at least accessible enough so that the big-business pimps can be
more difinitvely countered?
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #24 of 62: Brian Slesinsky (bslesins) Fri 7 Aug 09 21:10
Here's an interesting paper on what the authors claim is a dual
currency system in Bali. (They also compare it to shell money in

I'd be interested in hearing whether experts in these countries would
agree with the paper that this really counts as currency.


Where can we read more about economics in the Age of Cathedrals?


As I said earlier in email, I think the claim about bankruptcies being
an inherent result of centralized currency is incorrect. Money paid as
interest to a bank flows right back out into the economy so long as
the bank spends the money for expenses, pays it out as dividends, or
loans it out. If banks or their shareholders hoard it then it could be
a problem, and that might be part of what happened last year when
credit dried up. But that's not an inherent flaw of the system.
inkwell.vue.359 : Douglas Rushkoff, Life Inc.
permalink #25 of 62: Douglas Rushkoff (rushkoff) Sat 8 Aug 09 10:48
@21 - Right. The bractean was really great for the 11th Century, when
they didn't even have a printing press. Luckily, we've got new
technologies today. Local and complementary currencies could be
exchanged securely through cell phones, web sites... And they wouldn't
have to be based in grain, either. The best for the last few decades
have been based on TIME. So a person works for an hour and has earned
credits - hours - for the labor. Some systems value all time equally.
Others allow people with particular skills to value their time more
highly. This way, brain surgeons and garage sweepers can be in the same
system, if the brain surgeon feels the time, cash, and energy that
went into his education or skill set merits him a higher rate of pay. 

But using a currency system other than US dollars doesn't require
people to walk around with foil receipts. 

They worked so well in the Middle Ages because the people living in
that period had different technological capabilities than we do. The
receipts were a bit more durable than paper, somewhat harder to
counterfeit, yet still capable of being broken down. It was quite

Long distance, or what became known as "centralized" currencies served
a different purpose than local currency. Long distance currencies were
better for long distance exchanges, since they didn't only retain
their value in the town from which they were issued. This is why the
Florin was such a successful coinage: it was minted from what amounted
to a port city in the middle of Europe's greatest thoroughfare. People
needed a portable currency.

Centralized currencies were made out of gold, though, because nobody
trusted them otherwise. They didn't *mean* anything, the way local
currencies did, so they had to have some proof of value. Gold content,
and the imprimature of the King. 

These currencies did some things really well, and other things really
poorly. They helped rich people save and horde, they helped
corporations and non-local businesses expand. They simply didn't do
everything; that's why it's a shame all the other kinds of currency
were made illegal. It sometimes takes more than one tool to do
different kinds of jobs. 

All this is in my own book, as well as the books in my bibliography at  

That's also where you can read more about economics in the age of
cathedrals. Or read Braudel. 

I don't think economics is a science. That's part of the problem, and
what I'm writing about today for the site. If I get to it.
It's really game theory. There are some people looking at value
exchange, but very few get that they are accepting market principles of
renaissance-era kings as underlying assumptions. 

As far as why this information is relegated to fringe books, it's
because people don't want to hear it. My book is RandomHouse, so it's
not fringe. It's simply that BN didn't buy a lot. But I got on Colbert.
So did Nassim Taleb. I think. He gets on CNBC, anyway. 

As for the comment about banks, I don't agree. Banks are in the
business of debt. The money they get from borrowers is loaned out
again. If not, then the bank is losing money. The rate at which the
lending expands more than outsizes the amount they pay in dividends.
The leverage itself expands asymptotically. 

It is an inherent flaw of the system. It is why European nations
needed to conquer the rest of the world. And when colonialism stopped
working, why they met at Bretton Woods to create a World Bank to do the
same. They lend out money to debtor nations, now that our own
economies don't have enough borrowers. 

But we have begun to see those debtor nations begin to push back. They
understand that the indebtedness is not in their interest. We push
back with guns when necessary. 

This is all quite simple, and I totally get why it seems preposterous
that we'd have an economic system that doesn't work on the most basic
level. But it DID work - as long as we had a majority of the planet and
its peoples to exploit or destroy. It worked, we expanded, we

You are right in that bankruptcies are not required - as long as there
are more people to borrow. That's where the money has to come from.
It's not a matter of more circulation - it's a matter of more money.
That's why the money supply is expressed in two figures - one for
actual cash created, and the other for virtual cash leveraged. 


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